Role of the Organisation's Culture and Design in the Change Process
The process of choosing and implementing a structural configuration is referred to as organisational design. Some particular factors will have impact on the choices made when designing the organisation: scale; technology; environment and strategy. Organisational design involves the choices made about how to structure the organisation, and the implementation of those choices.10
An effective organisational design reflects powerful external forces as well the desires of employees and managers. In time of change, investments quickly become outmoded and internal operations no longer work as expected. The obvious organisational design response to uncertainty and volatility is to opt for a more flexible structure. However, these pressures may run counter to those that arise from large size and technology and the organisation may continue to struggle while adjusting its design a little at a time. In a change process, it is imperative to consider the organisational design for an effective organisation.
Based on Flood4, it has been argued that organisational change2 can be classified into four types of which changes in organisational functions, their organisation co-ordination and control are one of them. For example, there may be changes in horizontal and vertical structures; in the decision systems or policy and resource allocation mechanisms; and in the criteria used for recruitment, appraisal, compensation and career development3.
In developed industrial societies, for example, there is evidence that organisational forms tend to be changing from the rational bureaucratic structures to a flexible, network-based configuration, characterised by a flat authority structure and multiple horizontal linkages between the inner core of a firm and its outside suppliers, contractors and customers.6
Organisational culture refers to a system of shared meaning held by members that distinguishes the organisation from other organisations. This system of shared meaning is a set of key characteristics that the organisation values.7 Culture performs a number of functions within an organisation.
First, it has a boundary-defining role; that is, it creates distinction between one organisation and others. Second, it conveys a sense of identity for organisation members. Third, culture facilitates the generation of commitment to something larger than one’s individual self-interest. Fourth, it enhances the stability of the social system. Finally, culture serves as a sense-making and control mechanism that guides and shapes the attitudes and behaviour of employees.
Culture is a liability when shared values are not in agreement with those that will further the organisations’ effectiveness. This is most likely to occur when an organisation’s environment is dynamic.8 Historically, the key factors that management looked at in making acquisition or merger decisions were related to financial advantages or product synergy. In recent years, cultural compatibility has become the primary concern.1
The merging of distinct cultures also presents challenges for an organization implementing a merger. When a cultural change is pervasive, permanent, and implemented suddenly, the transformation for people in the organization can be troubling.9 While a favourable financial statement or product line may be the initial attraction of an acquisition candidate, whether the acquisition actually works seems to have more to do with how well the two organisations’ cultures match up. Fulop et. al 5 in their study of the context and processes of provider mergers in the NHS in England found that the difficulties in the merger process included perceived differences in organisational culture and perceptions of ‘takeover’ which limited sharing of ‘good practice’ across newly merged organisations. Merger policy was based on simplistic assumptions about processes of organisational change that do not take into account the dynamic relationship between the organisation and its context and between the organisation and individuals within it.
1. Buono, AF & Bowditch, JL 1989, The Human Side of Mergers and Acquisitions: Managing Collisions Between People, Cultures, and Organizations, Jossey-Bass, San Francisco
2. Cao, G, 2001, Contemporary Systems Thinking and Organisational ChangeManagement, PhD thesis,University of Luton
3. Cao, G & Mc Hugh, M 2005,’A systemic view of change management and its conceptual underpinnings’, Syst. Pract. Action Res., vol.18, issue 5, pp. 475–490
4. Flood, RL 1995, Solving Problem Solving, Wiley, UK, cited in Cao, G & Mc Hugh, M 2005,’A systemic view of change management and its conceptual underpinnings’, Syst. Pract. Action Res., vol.18, issue 5, pp. 475–490
5. Fulop, N, Protopsaltis, G, King, A, Allen, P, Hutchings, A & Normand, C,’ Changing Organisations: a study of the context and processes of mergers of health care providers in England’, Social Science & Medicine, Jan, vol. 60, issue 1, pp. 119-130
6. Reed, MI & Hughes, M 1992, Rethinking Organization: New Directions in Organisation Theory and Analysis, Sage, London, pp. 1–15
7.Robbins, SP & Judge, TA 2009, Organizational Behaviour:13th Edition, Pearson Prentice Hall, New Jersey.
8. Sorensen, JB 2002,’The Strength of Corporate Culture and the Reliability of Firm Performance’, Administrative Science Quarterly, November, pp. 70-91
9. Trice, H & Beyer, J 1993, The Culture of Work Organizations, Englewood Cliffs, Prentice-Hall,
10. Wood, J, Zeffane, R, Fromholtz, M & Fitzgerald, J 2006, Organisational Behaviour: Core Concepts and Applications, John Wiley & Sons Australia
Role of the Organisation's Culture and Design in the Change Process, Written by Christopher Lim