The evolution and influence of thinking in management Part 4: Organization
The evolution and influence of thinking in management Part 4: Organization
An unpublished series of management ideas
The fourth part covers ideas and practices which have shaped the way we think about organization today.
Organisational Thought
Confucius was born with the name K’ung Ch’iu in the Lũ Kingdom of China in 551 BC, and was in later life called K’ung Fu-Tzu (Master Kung) by his followers. He is probably the most famous Chinese moralist, intellectual, philosopher and educationalist known outside China and his teachings have had great influence on China’s social and political thought over the last 2500 years, as well as spreading to East and South-East Asia[i]. Confucius developed a system that saw man as a social being, interconnected to society through a system of moral and social ethics, concerned with perfecting human character to create a virtuous social order.
While the traditions of Confucianism have historical and regional variations, there are certain central ideas and values which are common. These values have constituted the key elements of the traditions of societies which have endured history and political upheavals. The basic Confucian concepts embraces a dynamic cosmological worldview for promoting harmony amidst change, where individuals exist in concentric circles of relationships with ethical responsibilities that place importance on the family, within a hierarchical social system, where loyalty to elders is paramount and a generational concept of gratitude and respect for earlier ancestors exists. Education is the mechanism where individuals are cultured and developed as a means to enrich society and create a social and political order. History is valued as continuality and a basis for moral reflection and learning.
The worldview purported by Confucius is characterized by four key elements;
an anthrop cosmic perspective of the great triad of heaven (a guiding force), earth and humans,
an organic holism where the universe is seen as unified, interconnected and interpenetrating, where everything interacts and affects everything else,
a dynamic vitalism of underlying units of reality which is constituted of the material energy force of the universe (chi), the natural force of the universe, which creates reciprocity between man and nature and is the substance of life responsible for continuing process of change in the universe and
ethics embracing man and nature.
Within this context, Confucian thought sees the person in relation to others and not as an isolated individual. Thus, in Confucian society, the common good is more important than individual good. In this view, self interest and altruism for a common cause is not always mutually exclusive.
Confucius was more concerned about the process of human development, rather than theological concepts and ends[ii]. He believed the principals of relationships could be extended from that of running a family to the governing of a kingdom or nation; “Those who want to be a leader or ruler have to have their own house in order”[iii]. Through education and rituals which signified respect, man would develop five inner virtues; integrity, righteousness, loyalty, reciprocity and human-heartedness, which once developed would radiate externally from the individual, so that society could be governed by man, rather than rules of law. To this end, Confucius defines five primary relationships that will achieve this; ruler and subject, parent and child, elder and younger brother, husband and wife, and friend and friend. As a child develops and learns, he or she will first learn to love and respect the parents, then brothers and sisters, then relatives, and later all of humanity. This piety is called Hsiao, which is considered the root of all humanity.
This philosophy was able to change the family in agrarian China from a unit of production to a collective moral dimension, with a social code for each rank of the family hierarchy, very different from the Western concept of individualism[iv]. This led to the concept of guanxi , much written about in Western literature, “a focus on relationships with a shared history, respect for the past, a value that many – not all – Chinese cherish”[v].
Two other concepts in Confucianism are Tao, the way of life and Te, potency and self-sacrificial generosity with humility, with the moral power of attraction and transformation, associated with these qualities. The humanistic attribute required to achieve the above is through Jen, which means love, kindness and goodness, qualities of the perfect individual. This is the essence of what makes humans different from other members of the animal kingdom. Failure to develop Jen would lead an individual to quickly develop forgone conclusions, dogmatism, obstinacy and egotism, which would block wisdom and prevent people from making new insights and discoveries, as one’s mind must remain open to become wiser. Li is the expression of Jen in a social context through norms, rites and rituals governing ceremonies according to one’s social position. Through Li, the individual expresses his respect and reverence for others[vi].
Confucius was not influential in government during his time, serving only in minor positions, and wondering around China giving advice to those few that listened. However, he attracted a number of followers, who later held office in government, advised by Confucius on matters of ethics and piety. However he became quickly disillusioned as they didn’t take his counsel. Confucius spent most of his last years working on his classics.
After his death, Confucianism had to contend with other philosophies of Taoism and Buddhism during the 3rd to 7th Centuries, creating a blend of philosophies creating Neo-Confucianism, dominating philosophical thought in China during the Tsang Dynasty (618-906 AD), the Sung Dynasty (960-1279 AD) and later during the Ming Dynasty (1472-1529 AD). Confucian institutions in China slowly disintegrated after the overthrow of the Last Emperor in 1911, although it survived in practice in Taiwan, Hong Kong, Macao and parts of South-East Asia after that time.
Confucius
Confucianism has been examined and debated about its significance to Asian Economic development by Western scholars, over the last few decades. Confucianism is often misunderstood, as to its real interpretations. Most have believed that Confucianism is completely worldly and humanistic, lacking any divinity. However Confucius last book The Annals of Spring and Autumn (chũnqĭu) is full of references to the divinity of heaven and its influence upon man and reason for existence. Some scholars have criticized Confucius works as being nothing more than a reaffirmation of earlier thoughts, with no originality[vii], although Confucius himself stated the need to look back to learn history as examples of models and acts of piety. Many misunderstand the concept of holism, not necessarily meaning holism of society, but holism of the worldview from a family perspective[viii].
During the 1980’s and 1990’s many academics became interested in the connections between Confucianism and the spectacular rise of the Asian Tigers. Some argued that Confucius was opposed to modernization as it didn’t advocate individualism, common to the Western characteristics of entrepreneurship, was too dependent on guidance, emphasized an all round development of personality to harmonise with the environment, which discouraged aggressiveness and encouraged traditionalism, rather than modernisation[ix]. However Tu suggested that individualism is a Western mode of capitalism and East Asian had developed another model based on relationships to develop change through consensus and networks, with a sense of personal discipline[x]. Confucianism was criticized for lack of profit motive, as his philosophies discouraged self-motivation and that merchants were not included in Confucius set of key relationships. However, through responsibility and obligation to family, other motives exist, such as their well-being[xi], and treatment of those inside and outside an individual’s universe of relationships will be different, i.e., treated with respect but caution, more adversarial, rather than brotherly relationship. Confucianism is also criticized for its lack of innovation, whereas the reality of Chinese business has been to seek ways to control an existing market, rather than create new value through innovation[xii].
It can also be argued that Confucianism actually has little influence on the way Chinese business is operated, at least in South-East Asian countries like Malaysia. Although Chinese business sustains and nurtures family members and maintains a paternalistic and hierarchical nature of authority within the enterprise[xiii], there is little evidence that Malaysian Chinese businesses rely on guanxi networks for growth and development, have little interest in long term sustainability and little adherence to the Chinese philosophies associated with Confucianism[xiv]. It is also unlikely that many contemporary Chinese have a thorough understanding of the Confucius philosophy or the will or want to fulfill the piety and wisdom defined by Confucius in everyday life, as one of Confucius followers Mèngzî warned, Jen is a concept not easily achieved by man. However modern life and business may tend to be judged by old values, creating a complexity of behaviour that is often hard to understand[xv], especially by the older generation that is Chinese educated. Finally, John Naisbitt in his prophecy book Megatrends Asia predicted that the unique strengths of Chinese business networks, able to make speedy decisions and able to obtain resources through connecting people would make the Chinese business model the ideal flexible form of social organization for the globally connected world of the future[xvi]. However this would assume that harmony doesn’t exhibit restriction on individuals from criticism of strategy, even though it may be constructive, as the practice of authority in Chinese companies means obedience rather than careful questioning of the status quo[xvii].
Max Weber is one of the earliest modern scholars who studied the relationship between religion and economic behaviour. He found a connection between the rise of capitalism in the West and the Protestant work ethic. Weber believed there was a strong influence on economic and work behaviour from religious beliefs – i.e., religious values spill over to all areas in one’s life[xviii]. Weber compared this to Confucian ethics and found that people following Confucianism tended to harmonise themselves with their environment and develop a collective form of social relationships. Weber postulated that different philosophies and religions in East and West would lead to different types of entrepreneurial spirit and managerial styles[xix]. These ideas have great relevance to the scenario on entrepreneurship in Malaysia due to our diverse multicultural, ethnic and religious makeup.
Weber also studied the nature of organisations, which influenced thinkers on bureaucracy and organisation throughout the whole 20th Century. Weber concluded that the most efficient type of organisation was a mechanical bureaucracy, which was based on the following premises[xx];
There was a division of labour where each job was broken down into simple, routine and well-defined tasks,
There was a well defined hierarchy of authority along a multi-level formal structure, ensuring each person had a person of authority over them,
The hierarchy operated upon formal rules and procedures to ensure uniformity and objectivity to regulate the behaviour of employees,
Sanctions are used uniformly and impersonally to avoid personal preferences of employees,
Employment and promotion decisions are based on merit and qualifications, competence and performance of potential candidates,
Members of the hierarchy have the opportunity to pursue a career path through the hierarchy, and
There is a distinct separation of members’ organisational and personal lives.
The central idea in Weber’s ideal organisation was standardisation and objectivity. Weber’s model is very similar to the type of organisation in government and large corporations. Small companies will also usually display an organisation chart somewhere in the front office. But this is usually as far as Weber’s ideal type of organisation goes as personal issues, politics, conflicts over goals and objectives and informal groups with their own agendas will develop. One cannot dispute that Weber’s influence still influences management today in the way they view the organisation of a firm, non-profit organisation or government department.
Max Weber
Chester Barnard, an executive with AT&T and later President of New Jersey Bell Telephone Company in the 1930’s further added to our understanding of organisations by seeing that function was more dependent on the intangibles of personal relationships. Barnard postulated that loyalty was the most important factor in an organisation running smoothly and the most important role of the executive was to create shared values within the organisation[xxi]. Barnard’s ideas were almost totally ignored for 50 years, but became an important aspect of the cultural paradigm, the Japanese management romance and a number of other ideas in the 80’s and 90’s.
One of the most eminent management commentators of the 20th Century Peter Drucker in 1954 developed the concept of Management by Objectives (MBO). Drucker saw that there was great risk that managers lose sight of the original purpose of their function with executives daily schedules and they needed a planning process that would develop coordinated objectives for each member of the organisation to achieve so the organisation could meet its overall objectives[xxii]. The planning process would involve all executives, which would help in gaining their personal commitment to achieving their individual objectives and the results could be measured against the set objectives. If things weren’t travelling towards those set objectives, these problems could be diagnosed and modified objectives set if necessary. MBO became very popular during the 1960’s and 1970’s with many authors publishing books extolling it’s virtues and consultancies thrived on educating corporate America on the system. One of the first of many management acronyms SMART was popularised, meaning; specific, measurable, achievable, realistic and time related. MBO seemed to completely disappear by the end of the 1970’s.
Peter Drucker
Systems Theory originally came from the natural and physical sciences, accredited to Ludwig von Bertalanffy[xxiii]. However, Kenneth Boulding applied systems theory to management in 1956, where Boulding thought it could be applied to all general relationships within and externally to the organisation[xxiv]. It was never meant to replace all other specific theories, but rather act as a general roadmap to view organisational dynamics and processes. The general components of systems theory are as follows;
Every system is made up of a number of interdependent sub-systems,
Every system is open and dynamic,
Every system transforms inputs into outputs,
Every system seeks to maintain equilibrium,
feedback will modify inputs or transformations to adjust processes to manage equilibrium,
Every system has multiple purposes, objectives and functions, which are often in conflict,
Every system is unique, and
If a system does not adapt to changing circumstances it will be in threat of survival[xxv].
Systems theory is not concerned with goals, but process orientated towards maintaining long term survival, through resource acquisition, processing dynamics and outputs. A number of hybrid models were developed for organisational research purposes[xxvi] in quantitative modelling of organisational effectiveness. Systems theory influenced further models of the organisation and environment in the 1960’s and 1970’s (see Lawrence & Lorsch, James Thompson) and there is some influence of the systems approach in Porter’s work. Systems theory was also utilised in early management information system (MIS) development during the 1970’s and 1980’s[xxvii]. The author also believes that systems theory has an application in product development (see Chapter xx). An adaptation of systems theory, contingency theory [xxviii]took over bringing the concepts of external stakeholders into management theory.
Kenneth Boulding
During the 1960’s a number of important studies were made looking at the most optimum type of structure required to operate successfully within various environments. These studies partly explain the different forms of firms existing in different industries and the studies gave insights upon strategy and organisational development.
The type of environment has great bearing on uncertainty for the firm, and thus survival. It was hypothesised by Burns and Stalker that different types of environments would influence the type of organisation within it, in-order to cope with the degree of turbulence. They studied English and Scottish industrial firms to determine how their organisational structure and managerial practice might differ according to the environment. The type of environment was defined by the rate of change in technology in the firms’ respective product markets. They found that the type of structure of the firm that existed in rapidly changing environments was dramatically different from the structure of a firm in a stable environment[xxix]. Burns and Stalker characterised firms in stable environments as mechanistic, where they tended to be centrally controlled, highly formalised procedures and job descriptions, where staff would carry on routine functions and the firm would be relatively slow in responding to uncertainty. This type of situation could be equated to a manufacturing company producing plastics to industrial customers, the car industry in Malaysia during the 1980’s and 90’s, utility companies or the Government service. In a rapidly changing environment, firms where organically structured where they would be more flexible and adaptive with more lateral and informal communication within it. Influence in the organisation would come from experience and knowledge rather than formal authority of position, with more loosely defined job functions than a mechanistic organisation. This could be equated to the computer industry in Malaysia.
Fred Emery and Eric Twist described four types of environments that firms could operate within[xxx];
A relatively unchanging placid-randomised environment which has the least threat to a firm as uncertainty is low. Such an environment would be a food stall or restaurant business.
A slowly changing placid-clustered environment where threats can come from time to time and have to be dealt with by the firm. Such an environment would be a manufacturing operation that has a need to release waste effluent into the environment and can occasional face community protest or changing Government regulation, or an insecticide manufacturer where regulation could affect the products the company manufacturers, so must undertake some long term planning.
An environment where there are a number of competitors seeking the same objectives, where one or two firms can influence the market is a disturbed-reactive environment. In this environment, prices can change or other events which potentially can drastically change the fortunes of the firm. An example of this type of environment would be the soft drink or coffee market. In this type of environment, the firm will have to be tactically alert and calculate competitor reactions to any initiatives the firm made, thus survival requires flexibility.
The most dynamic and uncertain environment is the turbulent-field environment, where there is continual change and elements of the environment become more interrelated, i.e., customers and suppliers are also competitors, product life cycles are extremely short, etc. Change is not easily predicted, so planning is extremely difficult, if not impossible. This environment would be similar to the computer market.
Many believe that more business will be undertaken in the turbulent-field environment in the future, especially with technology based firms in the electronics and biotechnology industries. If this is the case, then the type of firm that operates in this type of environment, must be structured to match the uncertainty that will generated. If this is correct, then the types of firms we know will drastically change in structure and style in the future, from the traditionally structured firm we know.
Paul Lawrence and Jay Lorsch took the previous studies further and sort to find out whether more successful firms in an industry would have better organisational type matches with the environment, than less successful ones. They assumed that the internal organisation was complex and not singular as in the previous studies. The external environment was measured by the degree of uncertainty to the firm and the internal environment of the firm was measured by how differentiated it was between different departments in their views to the environment and how integrated the departments were through common goals and coordinating mechanisms. They found that various department have to meet the demand of their sub-environments, as differentiation and integration are opposing forces within an organisation. Firms in uncertain environments tended to be very differentiated in their outlooks, but the successful firms were also highly integrated through planning and external goals. Firms in more stable environments tended to be more homogeneous, and the more successful firms were also more integrated than less successful ones. This concluded that differentiation between departments was necessary to solve their particular problems of manufacturing, sales or R&D, but at the same time needed to be coordinated to achieve the overall firm goals in the external environment. Thus it is important for success to be internally coordinated and have a structure that suits the degree of uncertainty in the external environment[xxxi].
Up until the 1950’s, most organisational theorists viewed an organisation with clear lines of authority, high formalisation, centralised decisions making, a high division of labour, with a wide span of control at the supervisory level. Joan Woodward found in her study of firms utilising different technologies in manufacturing that more effective firms developed specific forms of organisation. Mass production technology firms were highly differentiated and thus relied on extensive formalisation and delegated little authority. Unit and process technology firms, were structured much more loosely and flexible, which was achieved through less vertical differentiation (i.e., less levels in the organisational hierarchy), less divisions of labour, more group activities, more widely defined job responsibilities and more decentralised decision making within the firm. High formalisation and central control did not appear feasible in unit production, custom made and non-routine technologies as was the case in continuous process technology of mass production. Woodward’s studies indicated a relationship between technology, structure and effectiveness and thus argued that organisational effectiveness was a function of an appropriate structure-technology fit[xxxii]. Woodward’s studies dispelled the belief that there was one universal type of organisation and management, which led to further studies in this area.
Joan Woodward
James Thompson sort to create a classification system that would categorise technology types found in organisations. He proposed three types of organisation that are differentiated by the tasks an organisational unit performs;
Long Linked Strategy – tasks or operations that are sequentially interdependent as technology is characterised by a fixed sequence of repetitive steps. This type of technology would include mass production and fast-food outlets. Such organisations need management to focus on controlling inputs and outputs, i.e., acquiring raw materials through purchasing and selling the finished production, sales and marketing. Procuring raw materials and finding customers is the type of uncertainty these organisations face.
Mediating Technology – is one that links clients, which are both part of the input and output of the organisation. These types include banks, post offices, courier services, etc. Organisations in this category act as a mediator, performing an interchange activity linking individuals or other organisations, thus the activity requires standardisation. The organisation’s success will depend on attracting clients on both sides of the process, i.e., a bank needs deposits and people to lend money to. The dependence on clients creates uncertainty in these types of organisations.
Intensive Technology – requires a customised response to a diverse set of requirements, which depends on the nature of the particular client problem. Uncertainty is generated by not being able to predict the types of problems coming to the organisation by clients. This type of organisation includes hospitals, repair shops, research & development organisations or management consultancy firms. Such organisations will require resources continually available in various departments of their organisation on stand-by for particular problems that arise. Each department through coordination will make a contribution to the solution of the client’s problem. What specific technologies are needed will depend on the nature of the problem and this is coordinated through a feedback mechanism developed and managed for this purpose.
The significance of Thompson’s studies is that in every organisation, technology creates a type of interdependence that must be addressed. Thompson’s ideas can be translated into organisational structural design, where different levels of demand upon decision making and communications as the result of technology application will require different forms of coordination through rules and procedures. Each of the above interdependencies requires a certain type of organisation type to facilitate organisational effectiveness[xxxiii];
Long Linked Technology is accompanied by sequential interdependence, where procedures are highly standardised and must be performed in a specific serial order, best managed through moderate organisational complexity and formalisation.
Mediating Technology requires pooled interdependence, where two or more units contribute separately to the whole organisation, best managed by low organisational complexity and high formalisation.
Intensive technology creates reciprocal interdependence, where the output of individual units influence the overall result in a reciprocal fashion, best managed by high organisational complexity and low formalisation.
James Thompson
Charles Perrow postulated that technology across organisations needs to be categorised, if the above concepts are to have more meaning. Perrow took a wider view of technology, looking at the knowledge required to operate it, rather than the actual technology itself[xxxiv]. Perrow identified two underlying dimensions of knowledge related to technology;
Task Variability, comprising of two sub-types
a) Few in number if the job is high routine, like in manufacturing or fast-food, and
b) Large variability, where the job is non-routine and requires different activities like management, consulting, fire fighting or police work.
Problem Analysability, where the type of problem diagnostic procedures followed to find successful outcomes requires different types of analytic approaches
a) Well defined problems where an individual can use logical and analytical methods in searching for a solution, i.e., accounting and bookkeeping, and
b) Ill defined problems where problems vary according to task, such as an architect, researcher, advertising executive, where prior experience, judgement and intuition to find a solution through guess work and trial and error.
These two dimensions of knowledge related to technology can be applied to four types of technology;
Routine Technologies – where there are easy to analyse problems with few exceptions, i.e., mass production processes, petrochemical refining or bank teller,
Engineering Technologies – which have specific problems requiring specific application of knowledge, but can be handled in a rational and specific manner, such as construction and tax accountants,
Craft Technologies – which deal with relatively complex problems but with a limited set of exceptions, such as car repairs or performing artists, and
Non-routine Technologies – which are characterised by many exceptions and difficult to analyse problems, such as research and development in universities and strategic planning.
Perrow argued that in routine and engineering technologies, problems can be solved using logical and rational analysis and in craft and non-routine technologies, problems need to be solved with intuition and guess work based on experience. In engineering and non-routine technologies, the mode of analysis would need to switch to a more intuitive framework. In routine and craft technologies, the mode of analysis would need to switch to a more analytical and logical framework.
Charles Perrow
Perrow further postulated that control and coordination methods should vary with the type of technology utilised within the organisation. The more routine the technology, the more highly structured the organisation should be. Conversely, non-routine technologies would require greater structural flexibility. Four key aspects of structure could be aligned to the type of technology utilised; 1. the amount of discretion that can be exercised for completing tasks, 2. the power of groups to control the unit’s objectives and basic strategies, 3. the extent of their interdependence between the groups, and 4. the extent of coordination of their work.
The studies above on environment and technology showed that organisational design is much more complex and multi-dimensional that was generally accepted by theorists at the time and organisational design has a bearing and influence on organisational effectiveness. Many management ideas and theories in subsequent years based their ideas on various organisational designs as a means to develop organisational effectiveness (this will be discussed in much more detail later).
During the 1970’s, some organisational researchers began applying psychological, sociological and anthropological approaches to look intrinsically at the organisation and how it functions. Anthony Pettigrew’s prior work on organisations looked at the context of who exercised power[xxxv]. To further understand how power develops, he studied how organisations evolve, utilising the cultural paradigm as an analytical tool[xxxvi]. Although the idea was not new, Peter Berger and Thomas Luckman had back in the 1960’s written about culture as a basis of a common perception, legitimater of behavioural patterns, and source of collective identity[xxxvii], while others had used organisational artefacts as a method of organisation analysis[xxxviii], Pettigrew had used a cultural framework in holistic context.
This led to a great amount of interest in the topic by researchers, who began writing on the subject. Terence Deal and Allen Kennedy published Corporate Cultures in 1982 talking about strong cultures and values as a key to success, using examples from some of the most successful US companies[xxxix] and Ralph Kilmann with Beyond the Quick Fix, espoused culture across five corporate elements as paths to improving the bottom line; strategy, structure, rewards, skills and teams[xl]. During 1980’s corporate culture quickly became a mainstream management theory which attracted numerous management consultants offering cultural change as an ‘off the shelf item’ for instant cures to corporate ills. The cultural paradigm however has found its way into many other management theories over the last two decades, and is considered an important aspect of organisation success by most, if not all.
Edgar Schein defined culture as “a pattern of shared basic assumptions that the group has learned as it has solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems”[xli]. Thus a culture is a shared learning of the organisation on how to survive in it’s environment and manage and integrate itself internally. Culture is thus the mechanism (or way) that an organisation determines solutions to all the issues facing it and it’s members. It affects all processes within the organisation, where to some degree the views about things are shared by all its members about the right way about doing things. The ideas about the way of doing things develops through the history of the organisation and exists at three levels;
Assumptions: are the deepest level of culture and tend to be unconscious ideas about broad human issues that are fundamental to the organisation and individual. They include ideas about human nature, human activity, relationships and the nature of reality and truth, concepts of time, space and the nature of things. Assumptions are deep seated and tend to be non-negotiable ideas and truths to people.
Values: are learned and have to do with the way things are done and thus directly influence behaviour. Values influence what things are important to people, how people communicate with others, the standard of work done, punctuality. Once one understands values, one is able to see why an organisation operates as it does.
Artifacts and Creations: are the most superficial aspect of an organisational culture and usually the things outsiders notice most. Artifects include, the physical characteristics of the organisation, such as office sizes and décor, parking spaces, the way people dress, symbols and logos such as organisational charts, stories about the organisation told by employees, rites and rituals during work, i.e., how meetings are conducted, language, basically things that one can see hear and feel[xlii].
Culture is learned through the organisation by rewards, both formal and informal, i.e., acceptance by other employees into the group and as a way to reduce stress and anxiety in coping with uncertainties. Organisational dysfunction occurs when informal group values differ from the organisation as a whole, thus creating friction between formal organisational goals and informal group goals. Thus organisational culture has great influence upon the way work is done, affecting issues like productivity, decision making, perception of risk in making decisions, creativity and innovation. Finally, the founder of an organisation plays a pivotal role in influencing the organisational culture and the understanding of culture has increased the importance of leadership in organisations immensely.
Clifford Geertz
Although most, if not all would agree the culture of an organisation is an important factor in success, managing cultural change is difficult. Firstly, understanding the elements of an organisational culture is difficult because those who try to interpret a culture usually carry their own bias with them in the interpretation. Clifford Geertz warns “that what we call our data are really our own constructions of other people’s constructions of what they and their compatriots are up to”[xliii]. But as Kilmann, et. al. state “even if we learn to decipher organizational culture, it is not clear that full knowledge of our own culture will help us change it”[xliv]. Secondly, as culture takes years to develop and form into assumptions, beliefs and values, and these are reinforced by a strong glue of history, socialised behaviour and supporting rituals, it is extremely difficult to change things that employees have become committed to over this long period of time. Yet as observed in corporate takeovers and mergers, the overall culture of the organisation can change rapidly[xlv] and literature cites successes through various methods of promoting change through consultation[xlvi], changing reward systems[xlvii] and socialising new entrants into the organisation[xlviii]. Culture is considered a critical issue today in management and as Robbins states “there is a great deal riding on the outcome of this debate”[xlix].
Edgar Schein
Gareth Morgan saw that in reality managers have very little power over change in organisations. The complexity of organisations defies any possibility of obtaining a comprehensive analysis of what is actually the reality in place. Existing organisation and management theories are limited because they are based on implicit images or metaphors that may only lead a manager to see and understand the dynamics and flux in a partial way. Thus, Morgan suggests that by using multiple metaphors to view complexity, it will lead to better understanding where leaders and managers can then take steps to steer the transformation of the organisation.
Morgan sees organisations are in continual flux, buffeted by external and internal forces and that in reality an organisation is in a state of chaos, which is more the natural order of things, rather than the hierarchy and control frame we usually view an organisation as. In his book, Images of Organization, Morgan looks at organisations as mechanistic and organic systems, the organisation as a brain, the organisation as a culture, the organisation as an instrument of dominance, the organisation as a physic prison, the organisation as a sea of flux and transformation, and the organisation as a political system. Each metaphor has it’s own strengths and weaknesses, but by utilising multiple paradigms, managers can gain a much more extensive understanding of organisational dynamics, than just utilising a single metaphor[l]. As the process of nature prevents us from planning or predetermining the precise attributes of an organisation, management must learn to manage within this context, where their fundamental role is to shape and create contexts, in which the appropriate forms of self-organisation can occur.
The understanding of change is thus involves the creation of new contexts that would break up the old established patterns, in favour of new ones. Competing invisible forces (attractors) compete with each other to generate a situation where the organisation can travel along different paths in the future. The manager must find the right place and time and create a new context that make the present paradoxes or contradictions irrelevant. Change becomes a dialectic, where potential new futures have their opposites which are resisting any change, for example;
Innovate ----------------------------Avoid mistakes
Think long term--------------------Deliver results now
Cut costs----------------------------Increase morale
Reduce staff-------------------------Improve teamwork
Be flexible---------------------------Respect the rules
Collaborate--------------------------Compete
Decentralize-------------------------Retain control
Managers must recognise that there are benefits in the dimensions of both contradictions and thus find ways of creating contexts that maintain the desirable aspects of both dialectics. Usually the manager needs only make small changes that have the potential to lead to get transformations in the organisation.
Morgan’s work is a powerful tool, which although leads to a much better understanding of how organisations function, does not provide easy remedies and methods for organisational change or development, from a practitioner’s viewpoint. It has become an important piece of organisational knowledge, which has led to lots of further research using these ideas in organisational understanding over the last twenty years. Arie de Geus in the late 1990’s, used metaphor and paradigm in his bestselling book The Living Company to liken a company to a living organism to explain survival and the learning process in organisations[li].
During the 1980’s many US firms were operating in other countries and found that they had to adjust their modes of management style to account for the culture of the country they were operating in. Austin stated that as well as a foreign company needing to adjust their financial, production, marketing and products to operate effectively in other countries, managers also had to adapt to the cultural dimension, which governed all relationships, attitudes, values and approaches to work activities of local employees[lii]. Geert Hofstede studied 88,000 employees of one MNC over sixty-seven countries to develop a framework for understanding cultural differences and defined cultural differences along five dimensions[liii];
Individual verses collective orientation: the extent to which people have an individual orientation, concerned primarily for themselves and families, verses to the extent that an individual identifies with a group and feels their interests are best served in a group context, which they will give loyalty,
Power-distance relationships: the extent to which people accept that power is distributed to individuals and institutions unequally, thus in high power-distance relationships there is more respect for authority, where one would not be expected to go over their boss, than in low power-distance cultures where people would be sensitive to people showing authority and seek help from those they believe they could get it from[liv],
Uncertainty avoidance: the extent to which people feel threatened and stressful towards ambiguity and the importance attached to rules and procedures, i.e., workers characterised high on uncertainty avoidance like in Malaysia would tend to value security over self actualisation[lv],
Masculinity: the nature of dominant values in the organisation such as assertiveness and directness, and
View of time: refers to the different time frames used by people and organisations, which influences values about certain actions relating to procedures and decision making, status and rewards, etc.
Hofstede’s work indicates that many motivational theories may not work in certain cultures, which is of great importance to developing motivational policies in the workplace. This somewhat puts a question on the teaching of Western management theory at local universities and the value of Malaysian’s studying management at foreign universities, returning home trying to implement what they have learnt, without any consideration to it’s relevance to the Malaysian context. Hofstede’s work has become a benchmark for studying comparative cultures and is beginning to be used in comparative inter-cultural studies of entrepreneurship.
Geert Hofstede
Fons Trompenaars, a consultant and author teamed up with Charles Hampden-Turner to describe how culture influences people to think and behave in particular situations and how this affects management. Trompenaars and Hampden-Turner argue that culture is an embedded set of rules and ways a society has become organised to deal with recurring problems and issues it comes up against. Thus culture will determine how people deal with these problems.
Fons Trompenaars
Trompenaars and Hampden-Turner postulate that culture is an extremely complex phenomenon which cannot be easily rationalised. Even within a single country a cultural trait can differ significantly within an ethnically homogeneous population. Trompenaars and Hampden-Turner surveyed 15,000 managers in 28 countries to explore the differences in cultures and hypothesised there are seven areas where diametrically opposed paradoxes occur[lvi];
Universalism verses Particularism
Individualism verses Communitarianism
Neutral verses Affective
Specific verses Diffuse
Achievement verses Ascription
Sequential verses Synchronic
Internal verses External Control.
Universalists (US, Canadians, Australians and Swiss) tend to follow sets of rules, seek clarity, and follow logically and systematically, therefore assuming there is one correct way of doing things. In contrast particularists (South Koreans, Chinese and Malaysians) are pragmatic, flexible, make exceptions according to situations and thus act more in ambiguity, therefore focus on the peculiar nature of the situation. Individualists are orientated towards the self and family, while communitarialists are orientated towards a group. Neutralists are orientated towards not expressing opinions and emotions openly, while affectivists are orientated towards giving opinions and showing emotion in public. Specificists tend to separate relationships between business and personal lives, where diffusists tend to blend relationships together. Achievement is orientated towards what one does, whereas ascription is orientated towards who we are. Sequential view time as separate periods and are orientated with the present, while synchronic is orientated to blending in past, present and future together in ones outlook. Internal views dominance over nature, while external views are subservient to nature.
Such a framework provides allows understanding of different attitudes, which can assist in understanding how to do business and manage in a different cultural environment. For example, univeralists will want specifics in business negotiations and may feel when they are dealing with those of a particularist orientation that they are getting nowhere with small talk and pleasantries, seeing discussions as irrelevant. It may be best to reward those with an individual orientation for teamwork and those with a communitarian orientation for individual creativity within a team. Neutralist orientated people will be hesitant to tell their superior what they really think, while affective people will be very assertive. Specific orientated people will separate home, family and personal lives from the office, while diffuse orientations will tend to expect personal relationships with superiors. Achievement orientated people will seek status and recognition by achievement and be task orientated, where those with ascription orientation will seek status by position and be process orientated. Sequential people will be task orientated in a specific order, where synchronic people will view the past, present and future together and seek tradition and visions. Internally orientated people feel they can control events around them, while externally orientated people will look for ways to work with the environment around them. The above paradoxes are two extremes and most cultural traits will fit somewhere in between the two. Although Americans, British and Spanish can all be considered to have a sequential outlook, Americans tend to have a much more future orientation than the others and the Spanish tend to have a slight orientation to the past, where this could be summated to mean that Americans have strong visions and designs on the future, whereas the Spanish prefer to keep the traditions of the past in what they do.
Trompenaars and Hampden-Turner argue that the success of the ‘Asian Tigers’ can be attributed to ‘seven major integrations’, where rules are made by exceptions they encounter, all players learning co-operatively[lvii]. This is a fundamental difference to universality, where consistent rule of law is valued. Consequently, based on these observations they hypothesised that the best way for individuals, communities and organisations to advance and create wealth is through reconciliation, rather than negotiation. Trompenaars and Hampden-Turner also postulate that American managerial models cannot be applied to other cultures because of differing cultural paradoxes.
Trompenaars and Hampden-Turner’s work is wide and controversial and attracted criticisms for being too concerned with diversity, rather than culture. The ‘Asian Economic Crisis’ in the late 1990’s also supported detractors of their theories. The concepts however have opened a path to understand issues in managing cultural diversity, but the larger messages have gone unheeded in Western management.
Dr. Asma Abdullah is the only Malaysian included in this chronology. She is an executive in human resources for a major multinational company and also an adjunct Professor in Management at Universiti Utara Malaysia (UUM). Dr. Asma in her book ‘Going Glocal’ reviewed Malay culture in both society and the workplace and concluded that we must develop a deep understanding of our culture to understand it’s strengths and limitations. She believes that there is conflict in the workplace between modernity and the traditional assumptions and values of the Malays. To resolve these conflicts and create new values that will lead to excellence, the very roots of culture (AKAR) must be examined, as just picking up new values such as a competitive spirit, willingness to take risks, doing your own thing, will lead to great stress and anxiety and personal conflict and be rejected.
There are numerous forces acting upon the nation – globalisation, industrialisation, development, Westernisation, Islamisation, modernisation and the Government’s own aspirations of Vision 2020, that’s will require cultural change to meet these challenges ahead. This will require a change in peoples values, but Western values may not be completely suitable for Malaysia. One will have to pick and choose the best ideas and values to assimilate into the work culture. This will require an objective assessment of existing cultural values on work behaviours, and identify what underlying assumptions and values are blocking the development and evolution of more performance orientated values. This will best be done by blending task orientated values with existing people orientated values through what Dr. Asma calls ‘cultural surgery’.
Dr. Asma presents a model of six independent dimensions of culture to explain the Malay culture and use as a starting point in changing values[lviii];
AKAR (Roots): the values and underlying assumptions in society, installed into Malaysians from their upbringing
a) harmony with others in the family, work and community
b) respect for elders and those with knowledge
c) focus on building relationships before undertaking any tasks
d) politeness
e) influenced by a sense of shame rather than guilt
f) spiritual background and orientation
g) sense of group cohesion and identification
h) looking at a person’s character and competence
IMAN (Meaning): Adhering to a set of standards and principals which guide actions and serve as a moral reminder
a) religious beliefs
b) honour
c) harmony with oneself and others
ILMU (Knowledge and Learning): Acquiring knowledge and experience through learning
a) spiritual knowledge
b) vocational and professional knowledge
RASA (Intuition, Sensitivity, Feeling): empathetic feelings for others
a) interpersonal communication
b) emotions
AKAL (Logic): Intellect, understanding and wisdom
a) balance with AKAL so not completely emotive in thinking
b) understanding of issues
c) assists in developing an integrated approach to life
AMAL (Practice): Power to act and accomplish what we want without being dependent on others. The manifestation of other dimensions in action.
Asma Abdullah
Once understanding the cultural dimensions which have bearing on motivation and satisfaction of the individual, the process of cultural change can be undertaken through the following steps;
Removal of extreme interpretations of values
Replacement of current work rituals that are non-productive
Improvement and enhancement of positive cultural values, and
Planting new values by providing a nurturing environment for them to develop.
Dr. Asma’s work is well appreciated and respected in academic circles and large corporations nationally and provides a key through her thorough work in understanding the culture of the Malaysian workplace. Her work is an example of adaptation of Western management theories to suit the Malaysian context.
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