1. ORGANISATIONAL CULTURE Reasons for changes in organisational culture

2. Key definitions /concepts (1)
Static culture: a culture that does not change (evolve or deliberate change) in response to the changing external environment
Dynamic culture: a culture that evolves in response to changes in the external environment and/or a different business strategy / model.

3. Key definitions /concepts (2)
Bonus culture: a culture in which importance of financial rewards is emphasised and celebrated.
Toxic culture: when a workplace culture evolves on its own with little attention given to relationships and employees aren’t held accountable for rudeness or disrespect.

4. Why change culture? To improve business performance
Declining profits and sales
Inadequate returns on investment
Low quality or standards of customer service

5. Why change culture? To respond to significant change
Market changes (growth, competitors)
Political & legal environment
Change in societal views
Change of ownership (e.g. takeover / merger)
Change of management or leadership (e.g. a new CEO)
Economic conditions (e.g. downturn)

6. Classic symptoms that the organisational culture may need changing (1)
Internal fighting; management criticism ("us & them mentality")
High levels of voluntary staff turnover & hard to retain top talent
Greater absenteeism
Processes become more bureaucratic

7. Classic symptoms that the organisational culture may need changing (2)
Innovation is no longer valued
Evidence of declining customer service
Leadership show double standards or decision-making becomes inconsistent
Communication becomes more closed and restricted

8. Examples of a complacent culture that needed to change?
Kodak: too late to embrace the rapid shift from film to digital photography
Nokia: long-time dominant market leader in mobile phones failed to spot fast-moving challengers
Sony: silo mentality arising from market leadership reduced the incentive & energy to innovate

9. Examples of businesses going through organisational change
Royal Mail: regulatory change and potential privatisation force a substantial change programme
NHS: political pressure for “modernisation” & high profile care scandals (e.g. Staffordshire)
BBC: pressure from frozen licence-fee income, restricted commercial activities & fallout from Jimmy Savile scandal. A culture claimed to be driven by “silos” and “empires” & rigid hierarchy.
RBS: significant retrenchment following nationalisation
Santander UK: restructuring & rebranding to integrate three separate financial services takeovers

10. Depends on factors
Organisation culture evolves naturally, but the pace and nature of change will very much depend on the evolving circumstances of the organisation.
Managing that cultural evolution is one of the primary tasks of an organisation’s leadership. Do the leaders have the necessary expertise / experience?

11. Some possible evaluation points
Organisational culture is not an entity or a “thing” that is independent from business strategy; it can’t simply be changed by pulling different levers.
The culture of society (and work in particular) is changing all the time – regardless of whether a firm wants to change its culture.
A decision to make a planned change to organisational culture should derive from a clear shortfall in business performance or a decision to change business strategy.

12. Background Slides, Examples and Other Activities

13. Organisational Culture is Under Attack…

14. Many new CEOs state their intention of “changing the culture”
Project Transform
“My message to those people is simple: Barclays is not the place for you. The rules have changed. You won't feel comfortable at Barclays and, to be frank, we won't feel comfortable with you as colleagues."

15. Another great case study in cultural change

16. Evaluation Points on Culture change
Source: Booz & Co Perspective on Organizational Culture Change

17. Culture change & DNA
“Understand the DNA of the company and what, culturally, led it to be in a failed position. Behind all financial failures is organisational failure”
Source: Archie Norman, interviewed by Boston Consulting Group

18. Visit the tutor2u BUSS4 Organisational Culture Blog for more resources