Managing People and Organisations - Essay Example

Managing People and Organisations Question Culture and Consequences Yes, it is clear that the culture at Gillman Autos is quite strong and is more or less shared by all individuals working at the company but the consequences of that particular culture are turning out to be very negative for the company. However, these consequences do not mean that a strong culture is bad because a strong culture is neither good nor bad on its own. A strong negative culture is what a company must avoid and a strong positive culture is what a company should be looking for. The culture of an organisation is not a static entity which exists in a vacuum. It can change, it can grow and it can develop into something which is larger than the organisation itself. The literature on company cultures as well as other examples from companies such as GE and Apple shows us that having a strong culture is a good thing only if the culture is positive and leads to the objectives of the company being met. In a situation where the culture is strongly negative the environment can become toxic and the symptoms mentioned in the case certainly point towards that happening in Gillman Autos. Things such as shiftitus, covering ass and passing the buck are perfect signs of a negative culture and the stronger it is the worse off a company would be. For the company itself, it seems that the culture is certainly a result of the 2x4 management style. As per the literature on company culture, the formation of the culture depends on the leadership of the company (Gardner, 1995) and the present situation as described for Gillman Autos is simply a result of their ineffective management system. The controls which should have been in place to prevent this from happening seem to have been ignored altogether. Without effective control, a company will end up with bad leadership and a bad leader will not only bring down his/her own output but also of those who fulfil the role of subordinates (Armstrong, 1999). Culture, social responsibility, ethics and the work environment all flow from the leadership of a company. This was realised by GE when the company saw high turnover in their international communications department and even though the department was not one of the primary departments of the company, significant junior level turnover caused the senior managers to get worried. After making some inquires and revaluations of exit interviews, the company discovered that a line manager was causing problems for others by creating a negative culture within the department. The department could not be made productive until that manager himself was not taken out of the picture (Welch, 2005). Gillman Autos seems to be suffering from the situation described by Edwards and Kuruvilla (2005) as line managers are taking the culture too far. They are also creating a negative confrontational position for the employees of the company and from the evidence presented in the case; they seem to be using company policies as a means towards solidifying their individual positions within the company rather than cooperating with each other for the benefit of the organisation. In such a toxic environment, the policies which are supposed to align the culture for a common purpose become negated. The macho culture of Gillman Autos seems to be dependent on how much power individuals have at their disposal. Between individuals as well as groups, power can be established in many different ways as discussed by Burrell (1979) and Armstrong (1999) but with respect to the situation under discussion, power is established when one person has the ability to influence the behaviour of others in the company. Since individuals are assumed to behave rationally, power is given more or less voluntarily. Of course any discussion of a culture power also assumes that the individual exercising power has the legal and ethical authority to exercise that power but it seems that the people working as managers do not recognise that their influence is being taken negatively. Even if they see that they ignore it because they have their little empires within the system of the company that they feel they have to maintain control over. The case does not mention anything about rewarding those who show good performance but it does suggest that those who work with the 2x4 management style are promoted within the company. This situation is probably making matters worse because the employees within the company are being given the message that whatever the supporters of the negative culture are doing is perfectly fine. At the same time, those who might wish to change the culture are being marginalised by stronger individuals who are good at playing with the system. If seems that the structure of rewards as well as punishments for negative performance is not being upheld by the managers who should be actively working towards rapidly changing the overall culture of the company. Rewards alone may not be enough to motivate all individuals to change their behaviour and company needs to understand that some individuals might need to be shown the negative side of not performing and following the bad culture settings (Schmitt, 2001). This threat comes in the form of employee differentiation whereby the bottom the employees are politely asked to leave the company since they could not be a useful fit in terms of culture and the level of commitment wanted from them (Grote, 2002). Overall, while it is certainly true that the culture of the company is strong, the culture is also a very negative one and it does not affect my assessment for the need of a strong positive culture. Had the culture been strongly positive, it is very likely that the company could reap the benefits of high quality, high output, high performance and more loyalty from the employees. The present culture is lacking in a lot of ways but if the company is willing to take a few steps to change it, it will certainly improve with time. Question 2: Changing the Culture Changing the culture of an organisation is never an easy task since a lot of hard work effort needs to be put into making that change (Boxall and Purcell, 2003). It seems that Gillman Autos will be able to successful change itself if it has two things. First, it needs a leader in a high position which can use anti-organisational tactics and the humanist paradigm to bring about a fundamental shift in how the company operates. Second, it needs line managers and foremen to support the manager with either a personality cult or through the belief that the decisions of the leader are going to be the right decisions. The best example of cultural change which can be given in this respect is the change brought by Steve Jobs to the culture of Apple when he returned to be the CEO of the company. When he came to lead the company he founded he had the board of directors give him a complete free hand to make changes as he saw fit and ensured that his hold on the company was absolute and unquestioned (Smith, 2006). He became famous for his summary ‘executions’ where he was known to fire people working for the company in the time it takes to go from one floor of the building to another in an lift. His presence on the company campus was affectionately known as the reign of terror in which anything can happen anywhere at anytime (Deutschman, 2000). This is the sort of leadership Gillman Autos needs to ensure that those individuals who do not fit with the new culture are removed from the company as soon as possible. In the case of Apple, while the company was being run by previous CEOs like Scully, it had developed a relaxed atmosphere which was good for morale but it was hurting production and output. Deutschman (2000) describes the conditions before Steve’s return to the company and says: “Before Steves takeover, the campus had a leisurely atmosphere. Staffers loved to hang around smoking and chatting in the courtyard of the R&D complex, which always had ashtrays stocked at the outside and inside doors of all six of its buildings. Some employees seemed to spend most of their time throwing Frisbees to their dogs on the lawns (Deutschman, 2000, Pg. 3).” Steve changed that for the better with new rules that prohibited smoking anywhere on Apple property. Dogs were banned from the campus and it seemed as if, “Steve were pushing his own lifestyle on 10,000 others (Deutschman, 2000, Pg. 3).” These steps made quite a few employees unhappy since smoking in the courtyard allowed individuals of different departments to interact with each other and people who worked nights and weekends for Apple had hardly any time left to be with their pets (Deutschman, 2000). Given sudden change in HRM styles, it would seem that Jobs’ decisions were wrong and could lead to disaster because such changes can affect individuals very negatively. Strangely enough, these steps appeared to work at Apple and the company began turning itself around. The record breaking profits, the sale figures and the brand value appreciation as Steve Jobs returned to Apple all show that the culture change and organizational restructuring worked wonders (Deutschman, 2000). From behaving like members of a civil service that did what it wanted without paying attention to short lived CEOs at the top, the company became proactive and employees began to interact with the boss at the top on a deeper level as discussed by Deutschman (2000) who says: “People started to realize that Steve could assert his authority over seemingly any aspect of the companys life. Apple was going to follow the vision of a single person, from the no-smoking rules to the editing of the TV advertisements. Steve was clearly in charge, and Steve was seemingly everywhere (Deutschman, 2000, Pg. 3)”. Going against the established culture was only possible with effective leadership and superb HR management skills. Primarily because there was a person in charge who others in the company could trust completely and who could get away with things like using foul language in board meetings as well as firing people on the spot (Deutschman, 2000). Playing on the edge of ethics and legality may be seen as something most people would like to avoid, but some individuals seems to relish this location and they should be easy to find within Gillman Autos itself since the 2x4 management style has been in place for years. If results are what matters most then removing a few people and replacing them with those who can follow a newer and better culture will certainly show the much needed results. If Gillman Autos makes their company mission to obtain a better culture then the words of Welch become even more important since he said that, “We publicly rewarded people who drove the mission and let go of people who couldn’t deal with it for whatever reason (Welch, 2005, Pg. 16)”. This simply stated idea of culture management means that only the best individuals and most useful are retained by the company while those who are placed in a culture clash have to find other employment. The same methods were used by GE to change the culture of their Hungarian operations when they found that simply telling the individuals to change their culture was not working. GE’s culture in other places was based on individual and intrinsic motivation which helps its employees seek benefits for the company while they seek benefits for themselves. As outlined by Jack Welch in his management related book Winning (2005), GE rewards those employees who are instrumental in helping GE grow and achieve the corporate vision and punishes those who are not performing to the highest level. In fact, layoffs and quarterly removal of lowest performing employees is an essential part of the management style employed at GE. For Gillman Autos this must be done carefully because this could also be dangerous as going with policies which are against the established culture can create bitterness and even a loss of human capital. For example, when GE found it difficult to export their American brand of competitiveness to the Hungarians they had to bring in new employees to replace the ones who could not deal with the new culture (Welch, 2005). Such changes are needed desperately if Gillman Autos is to be saved from the culture it has created for itself. Such replacements are likely to be made with regard to line managers and even department heads that seem to be ruling their own empires at Gillman Autos. In fact, the situation may get to the point that managers at the departmental level may seek to negate corporate culture policies or any HR related guidance coming from the leaders who are driving for change in the company. Department level managers may create hurdles during policy creation or even block the policy from being enacted without informing or discussing it with the top management. Edwards & Kuruvilla (2005) suggest that this tends to happen when line managers see their own influence erode or their departmental culture come to a clash with the larger policies of the company. This would certainly be expected in the case described since line managers form a special part of the overall hierarchy of the company. Their strength comes from their belief that executive managers in their executive offices are dependant on mid level managers. The capacity of these managers to confront orders from the top will be better wherever there are major communication hurdles (Edwards & Kuruvilla, 2005). For all practical purposes, there is a serious gap in corporate communications between the various levels of company management at Gillman Autos and it should be understood that line managers can and might defy those policies which are not devised with their culture in mind. This is where the importance of differentiation becomes apparent. Welch (2005) summarized the differentiation process for that rewarding performers and punishing underperformers by saying: “When all is said and done, differ­entiation is just resource allocation, which is what good leaders do and, in fact, is one of the chief jobs they are paid to do. A company has only so much money and managerial time. Winning leaders invest where the payback is the highest. They cut their losses everywhere else (Welch, 2005, Pg. 38) It seems that this is the correct way to manage employees within a company that wishes to keep the best human resource given to it and remove those who have been recruited as a mistake. Of course the company does not have to like it nor do the people who work for the company but in the larger scheme Gillman Autos will soon be fighting for mere survival if it does not come to terms with the culture that is running rampant in the company. The culture change required by the company may be painful, but if it follows the examples set by Apple or GE it could set things right for the company in the long run. Word Count: 2,683 Works Cited Armstrong, M. 1999, A Handbook of Human Resource Management Practice, Kogan Page. Boxall P. and Purcell J. 2003, Strategy and Human Resource Management, Palgrave & Macmillan. Burrell, G. 1979, Sociological Paradigms and Organisational Analysis, Heinemann Educational Books. Deutschman, A. 2000, ‘The once and future Steve Jobs’, Salon.com, [Online] Available at: http://archive.salon.com/tech/books/2000/10/11/jobs_excerpt/index.html Edwards, T. and Kuruvilla, S. 2005. ‘National business systems, organizational politics and the international division of labour in MNCs’, International Journal of Human Resource Management, vol. 16, no. 1, pp. 1-21. Gardner, H. 1995, Leading Minds: An Anatomy of Leadership. Basic. Grote, D. 2002, ‘Forced Ranking: Behind the Scenes’, Across the Boar, vol. 39, no. 6, pp, 40-46. Schmitt, J. 2001, ‘Welch has a lesson, even for small shops’, Contractor Magazine, vol. 48, no. 10, pp. 16-17. Smith, D. 2006, ‘The non-stop revolutionary’, The Guardian, [Online] Available at: http://technology.guardian.co.uk/opinion/story/0,,1697348,00.html Welch, J. 2005, Winning, HarperCollins. Read More