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PLEASE COMPLETE THE FOLLOWING QUESTIONS
Questions
- Explain the term ‘corporate (or organizational) culture’ and discuss its importance to the operational success, or failure, of organizations.
- Examine and summarize the cultural shifts that occurred in the ANZ over this period and the benefits they brought to the various stakeholders.
- Evaluate the leadership style/s that would have been used by McFarlane and other senior executives in ANZ to implement this cultural shift in the ANZ and describe another leadership style/s that may not have been beneficial in doing so.
- Discuss the challenges faced by McFarlane and his executive team in introducing change across the ANZ.
- Discuss whether or not the executive management instigated changes to the culture of the ANZ are ethical.
- Determine the organizational structure that would best facilitate the implementation of these new practices.
- Explain the importance of informal groups in achieving the managerial objective of cultural change.
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Contents
Management Concepts
Introduction
The task of overseeing a cultural shift in an organization as large as ANZ is a daunting one. The main difficulty lies in bringing all stakeholders on board in order to facilitate a smooth transition into an entirely new way of doing things. For CEOS and other top managers, the most arduous task involves choosing the best way of pleasing the employees in order to show that all the changes that are underway are for their own best interests.
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The choice of leadership style is also extremely beneficial. Although autocratic leadership styles are often frowned upon in today’s corporate world, they are said to be immensely popular with some CEOS. However, it would be better to consider a style that is more responsive to communication exchange. In the case of ANZ, the leadership style that was used seems to have succeeded.
Explain the term ‘corporate (or organizational) culture’ and discuss its importance to the operational success, or failure, of organizations
Corporate (organizational) culture refers to the combined values, beliefs, procedures, ethics, and atmosphere of an organization. Corporate culture is constituted by norms, values, and behaviors that are largely unspoken. These norms, values, and behaviors eventually become the natural way of doing everything. An organization’s culture is more clearly noticeable to an external observer than an insider.
The main difficulty in identifying all elements of culture and transforming arises from the fact that culture refers to much more than mere power, climate and politics (Gareth 2009, p. 113). It consists of all these things and much more (Pierce &Delbecq 1977, p. 27). Many subcultures may exist in an organization. Ranson, Hinings& Greenwood (1980, p.3) says that changing the organizational culture in order to achieve new goals is one of the most difficult tasks that an organization’s leadership can encounter. Such change is exceedingly hard to achieve without the support of everyone, or at least the majority of stakeholders within an organization (Greenwood &Hinings 1996, p.1050).
Organizational culture is an extremely crucial aspect of an organization since it determines what is right or wrong, workable or unworkable, important or unimportant. It also determines the manner in which an organization responds to unexpected change, jolt or crisis. All new employees often find it imperative to know about an organization’s culture in order to fit into the corporate setting (Schneier 1994, p. 211). The organizational culture describes how they ought to behave under different circumstances while they are undertaking their day-to-day duties.
Examine and summarize the cultural shifts that occurred in the ANZ over this period and the benefits they brought to the various stakeholders.
First, all stakeholders were engaged in the cultural shifts that took place at ANZ. For employees, the most critical task was to change their mindset. Executives rebuilt the trust of all their staff in order to win their support in the implementation of cultural change initiatives. Towards this end, the employees were offered an opportunity of purchasing a computer for use at home. This was a signal of a new era in terms of the relationship between employees and management. in other words, employees were responding positively to requests for change. This led to operational efficiency during the change process. Additionally, the introduction of leave was meant to enable employees to volunteer for various community endeavors of their choice.
Moreover, with regard to financial literacy, a new approach to ANZ’s customers was developed and adopted. Staffs were no longer unwilling to assist customers who were in need of financial literacy. All of a sudden, the staff became acutely passionate about this area of customer service. In other words, the cultural shifts that took place at the organization were all-round. They affected the shareholders, customers, employees and the community in a significantly positive way. These cultural shifts were aimed at establishing enduring principles for the operations of a typical efficient bank.
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Changing a culture that was founded on negative perceptions was the greatest thing that can happen to a company of ANZ’s organizational magnitude. Not only was it a difficult undertaking, but it was also a historical one that will be remembered for many days to come. Not only did the change transform the perceptions of the employees, but it also changed the attitudes of the customers who benefited from financial literacy.
Evaluate the leadership styles that would have been used by McFarlane and other senior executives in ANZ to implement this cultural shift in the ANZ and describe other leadership styles/s that may not have been beneficial in doing so.
McFarlane and his senior executives could have used various leadership styles in order to implement a cultural shift in ANZ. There are three classic leadership styles: the laissez-faire, democratic and autocratic leadership styles. Choosing a leadership style is a tricky undertaking that should be pursued with caution since not all leadership styles can work for a particular organization.
The Laissez-faire style entails low control; the autocratic style entails high control while the participative style lies in between these two styles. In Laissez-faire, a ‘hands-off’ approach is adopted. It works out well when there are highly motivated and trained employees. An autocratic style is a centralized form of leadership that is characterized by a low level of participation. The democratic style is characterized by involvement, high participation, and feedback. It is the best choice for ANZ because it entails a precarious balance between control and freedom. This is what is required of a leader in order for organizational change efforts to succeed.
In terms of strategic leadership, two styles are worth considering. These include team leadership and facilitative leadership. Large corporations such as ANZ tend to use these approaches in order to operate competitively with the aim of outwitting competition. In team leadership, supervisors are transformed into team leaders. Today, many companies continue to become smarter as far as the idea of team leadership is concerned. However, strong leadership skills are needed in order for a group to be transformed into a team. Facilitative leadership is a distinct style that can be employed by anyone who runs a meeting. The styling emphasizes the use of a number of indirect communication patterns instead of directives in the consensus-building process.
Discuss the challenges faced by McFarlane and his executive team in introducing change across the ANZ
The employees were opposed to the idea of being controlled by the management with regard to the areas where they intended to carry out community volunteer activities. Ordinarily, it is difficult to institute cultural changes within an organization without facing resistance from employees. One of the greatest difficulties presents itself when employees seem to be cooperative, while, in fact, they are not.
Lewis (2000, p.4) describes the Lewis Model, a cross-century tool for defining and simplifying the blueprint for cultural analysis. Here, culture is defined through the action mode, whereby three categories are derived. These categories or modes include interactive, multi-active and reactive modes. The linear-active mode is data-oriented while the multi-active mode is dialogue-oriented. Although the definition of these modes is approached from the ‘national culture’ perspectives, the idiosyncrasies involved can be applied to organizational culture. In particular, the model is important for defining the problems that are encountered. From an analysis of this model, some problems are organization-specific while others are universal. In this regard, both external and internal forces cause problems for any organization that is undergoing a cultural shift.
Miles (1978, p. 552) says that, in every organization, the political atmosphere will always generate elements that resist change. In attempts to deal with this resistance, the senior managers tend to have no other option than to adopt autocratic leadership styles. This style may make them look awful in the eyes of all stakeholders.
In order to counter the influence of negative-minded elements that always oppose change, the issue of discussing and reaching an agreement is always a strategic issue for every top manager. Therefore, there is a need for careful planning. However, the greatest difficulty lies in the fact that these strategic decisions may need to be changed at any time in response to the prevailing mood among the employees.
Sometimes it is easier to spell out elements of change on paper than in practice. In this regard, the ability to excel at convincing the board of directors as well as the employees about the rationale for change lies in the oratorical skill of the CEO. While doing this, it may be difficult for the top managers to create a sense of purpose and direction, especially when employees are not familiar with the new strategies.
Discuss whether or not the executive-management-instigated changes to the culture of the ANZ are ethical
The cultural changes that were introduced at ANZ are ethical since they brought about the satisfaction of customers. They are also ethical in the sense that employees started engaging in volunteer activities that benefited the local community. No serious ethical concerns were raised with regard to the process of implementing the changes.
The positive outcomes of the cultural changes instituted are a clear indication that the senior management at ANZ did their work in an ethical manner. Additionally, the reputation of the company has improved, largely as a result of a high level of customer satisfaction. Focus on the community was a marvelous ‘corporate social responsibility’ undertaking. It was an excellent way of giving back to the local community.
It is the work of the senior managers to bring about changes in the way the organizations that they head are run. For instance, the management did a noble thing to oversee the implementation of mechanisms aimed at bringing about change in order to repair the organization’s reputation. However, as in any other institution, it is always difficult to avoid conflicts between employees and management. In ANZ, a disagreement emerged when the company’s managers attempted to influence the employees’ decisions during charity work. The employees were opposed to the idea of the organization dictating the areas where workers would go to perform community services.
The variables that are significant in the task of determining the extent to which an approach to change is ethical to include acceptance of ambiguity, tolerate of impractical ideas, risk-taking behaviors and conflicts, focus on ends instead of the means, provision of positive feedback, the existence of an open-system focus and human resource variables. When individuals are encouraged to be ‘champions of change’, the transformation process becomes a truly positive one.
On a positive note, no negative changes were made in the way the employees conduct their duties. It is highly that their level of job satisfaction got a boot as a result of the organizational changes. Today, these employees are able to engage with customers in a more professional manner than they did in the 1990s.
Determine the organizational structure that would best facilitate the implementation of these new practices
According to Hannan and Freeman (1984, p. 149), the best organizational structure for instituting cultural change is one whereby attention focused on the relationship between the organization and the environment. The size of the organization is a critical factor in bringing about change.
Other factors to be considered in assessing the best structures include the age and complexity of the organization (Damanpour&Gopalakrishnan 1999, p. 5). ANZ is a well-established organization. Typically, old organizations tend to have complex structures that are intertwined with the cultural and sub-cultural groups within the organization. According to Faulkner (2006, p. 54), the best organizational structure is one that is compatible with the synergies that are required for the new changes to be implemented.
There are three main ways in which all departments within an organization can be structured. They can be structured by function, by product/market or in matrix form. In an organization that is structured by function, everyone who is engaged in a certain activity or function is brought onboard into a single department.
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Product or market organization is sometimes referred to as the organization by division. In this type of organization, everyone who is involved in the production of a single product is assigned to a certain unit or department. When departmentalization becomes a hugely complex issue, as it often does, managers simply create semiautonomous divisions. In the organization by matrix, a multiple command system is often put in place in order for the drawbacks of both the product organization and organization by function to be overcome. This is the best strategy for ANZ to adopt.
Explain the importance of informal groups in achieving the managerial objective of cultural change
The main benefits of informal groups are often explained using two main theoretical approaches: social exchange theory and social identity theory. According to social change theory, individuals always form relationships on the basis of implicit expectation of exchanges that are mutually beneficial. On the other hand, social identity theory propounds that individuals derive a sense of self-esteem and identity based on their membership in a salient group.
Both theories can be used to explain the benefits of informal groups. First, informal groups are not formally constituted. This means that there is a strong sense of solidarity since there is free sharing of information among the members. On the basis of social exchange, the social attitudes that are formed tend to be positive in informal groups as opposed to formal ones.
Informal groups are the best avenues through which interpersonal relationships are built. These informal groups, if well managed, can make it easy for senior managers to inspect the progress of the changes that are being introduced into the organization. Through these groups, feedback flows through various levels of management rather easily.
Informal groups are also essential for the purposes of assessing the level of performance of every individual employee. The informal setting facilitates interactions between senior managers and all staff members (Hage& Dewar 1973, p. 281). As Fiol& Lyles (1985, p. 812) argues, the staff members feel free to contribute to the ‘change debate’ through these informal groups. For this reason, the level of resistance tends to below.
Conclusion
In conclusion, managing change is a skill that top managers have to learn in order to transform negative energies into positive ones. This skill is also necessary if negative perceptions are to be transformed into positive ones. Whenever a change is implemented without any form of resistance is encountered, the top managers involved can authoritatively claim to have succeeded in their work.
An understanding of group dynamics is beneficial during organizational change. In some organizations, informal groups work while in others, they simply don’t. Likewise, the choice between team leadership and facilitative leadership is determined by the nature, size and organizational culture of a company. Efforts at organizational change succeed most when the best leadership style is chosen under the prevailing organizational circumstance.
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