In order to implement the culture appropriate for a company at a particular point in time, a series of questions must be asked. These questions are fundamental to the success of a business and reach right to its core.
What business are we in today and do we see ourselves as being in five to ten years from now? This is the difference between being in the telephone or the communications business, or between being in the hotel or the tourism business.
What are the most important characteristics of these businesses? Here it is important to identify how fast these businesses are growing, what the present market share is, and what the competition is like.
What are our goals and strategies for these businesses? Certain basic decisions must be made. Do we intend to lead the industry, to develop a strategy for short or long-term profitability?
What shared values will help implement these strategies? A short-term profit strategy will require a certain type of value system; an emphasis on employee development as the key to long-term profitability will suggest a different set of values.
Implementation of a culture takes place at three levels within the organization: the mission and strategy, the organizational structure, and human resource management.
At the first level, the concern is with developing a culture that is consistent with the overall mission and strategy of the business. At this stage it is also necessary to understand that the mission of the business may very well be influenced by the personal values of the people at the top. There have been instances in which the founders of certain hotel and restaurant companies have held strong beliefs against drinking alcohol. These personal beliefs have translated into policies prohibiting the serving of alcohol in their company-owned properties. In a situation like this, no amount of feasibility analysis will result in a change. The issue is one of values, not economics.
As for organizational structure, there are three concerns. First, there is the need to develop a managerial style consistent with the technical and political structure of the organization. As an example, we can contrast the cultures necessary for a functional or a matrix organization. In the functional organization, the traditional straight-line organizational chart holds true. An example is given in Exhibit 13. In a matrix organization, power is balanced by both product and function (Exhibit 14). A manager is appointed for each specialized project and given sufficient staff to complete the job. The project manager is given authority over the staff within that project. The manager in charge of marketing the budget division is responsible to the vice president for the budget division, while indirectly reporting also to the vice president of marketing. While a more traditional chain-of-command management style is appropriate for the functional organization, the matrix format requires more emphasis on negotiation.
A second concern with organizational structure is in the development of subcultures appropriate to the particular function of a department. Sales and accounting are two obvious extremes. The accounting function concentrates on cost reduction and efficiency. The sales function focuses on filling rooms or seats and making deals. The culture for each will be different. We would not want a conservative sales department or an adventurous accountant.
The third concern is how to blend the various subcultures so that they can coexist for the good of the whole. The key is to develop a company culture strong enough to transcend any departmental subcultures—one culture that everyone can identify with over and above the system within each department.
In the third level, human resource management, an impact on culture can be made in selection, development, and rewards. In selecting employees, attention can be placed on how a particular person would fit into and reinforce the culture of the business. Candidates should be turned down if it is felt that their personality was inconsistent with that of the organization. Companies that use the human resource system to reinforce the culture spend a great deal of time and effort on training and development. The orientation and socialization process involves a great deal of emphasis on the values of the company. The Disney organization is particularly adept at this. Every employee takes a course entitled Traditions 1, which traces the development of Disney and stresses the qualities that the company emphasizes in itself and its employees.
Finally, companies reinforce the preferred values system by rewarding and promoting those employees who exemplify what the company wants to champion.
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