Organisational Change Management Volume 1

Case Study 4 - (Hierarchical, tradition-bound and union-dominated organisation)

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Background to Organisation

Organisation is over 100 years old and has won many quality awards

The culture of the organisation is characterised by one word - strong, ie strong traditions, strong history, strong operational excellence/focus, strong camaraderie, strong loyalty/faithfulness and strong teamwork, etc; other features include

- 'hierarchical' (such as many rules and regulations ' both formal and informal, eg 'don't speak until spoken to'; centralised decision-making with most staff having very limited decision-making power; loyalty/faithfulness demands conformity and works against accountability, innovation, etc)

- 'command and control' is the preferred leadership/management style for most managers, ie dictatorial or authoritarian approach

- 'custodians of the traditions' (this behaviour is exhibited by most of the 1500 staff - especially management and union officials)

- 'status quo thinking' (living in the past which supports 'custodians of the traditions' behaviour)

- 'arrogance' (the organisation perceives itself as a successful one with its services in constant demand and, as a result, it has 'an undeniable right to its continued existence in its present form'; compared with competitors they see themselves as the professionals, yet their competitors have the same professional competency standards)

- 'flat head society' (this is linked with concepts of learned helplessness, blame culture, impression management, organisational defensive routines, survival behaviours, etc)

- 'macho' (the organisation has been described as one of the last bastions of male domination)

- "brotherhood/family" (with second and third generation family members in the organisation plus brothers/cousins; the organisation is the 'family', etc)

- 'mateship' predominates (loyalty to a friend or tradition is more important than doing 'what is right' and/or supporting the organisation's new direction; favours employing 'mates of mates')

- 'silo mentality' and 'us v. them' attitude (such as operations v. support, head office v. stations, management v. unions, males v. females, etc; silo mentality is reinforced by adversarial industrial environment that has had a very aggressive/turbulent history, lack of staff rotation, financial structure (protective approach to budget), lack of diversity, eg few women (around 2% of the workforce is women), rigid and hierarchical management structure, territorialism with people being very defensive of their territory/patch and perception of empire building, vocational arrogance (each specialty claims superiority), and differing geographical location

- 'aging senior/middle management' (most members of middle to senior management are over 50 years old and heading towards retirement; this and their length of service, ie most over 20 years, has blocked the career paths for younger staff; the average age of staff is 43 years old)

- 'union domination' (the union leadership perceives itself as the "custodian of the traditions" with the power of veto over all management decisions; the union's activities are very successful in demobilising the organisation by using such tactics as misinformation, intimidation, stifling debate, etc)

- staff members 'lack commitment/accountability/responsibility for actions' (high absenteeism, ie sometimes as high as 25% and costing the organisation tens of millions of dollars; staff having second jobs that are more important to them than their position in the organisation; many reasonable reasons for not doing the right thing, etc)

- 'lacks performance-based culture' (performance management is almost non-existence; promotion has been based upon seniority and loyalty rather than performance; furthermore, there is no differential in bonus payments, with the same bonus being paid to all staff members at each level of the organisation; reward structure does not encourage the learning of new skills)

- 'averse-therapy' (such as organisation does not learn from mistakes; discourages innovation as one could make a mistake that 'would remain with you for the rest of your career')

- 'task focused' (do not think beyond the immediate activity/task at hand; not good at prioritising tasks and as a result take on new tasks that are added to those tasks already being done; this results in 'burn-out' of most capable staff as they are given most of the tasks to perform)

- 'shift system' (it is not 'operationally efficient nor family-friendly')

- 'bullying and harassment' is wide-spread (a career in this organisation is not attractive to either women or people from ethnic/cultural minority groups)

- 'paralysis by analysis' (instead of making a decision, the problem is put to a committee to solve, or pushed 'upstairs' to more senior managers; too much planning and not enough implementation,; very process-orientated; don't meet deadlines, etc)

- 'folklore (heroes, anti-heroes, stories, icons, etc)' is important

- 'inwardly-focused' and 'incestuous' (such as not accepting that they are there to serve the wider community; recruiting for similarity and not for diversity so that the organisation is not representative of its stakeholders/community; most managers, especially on the operational side, spent all their working life with the one organisation)

- 'closed shop' in operational areas, (for example, there is no lateral entry in the management level in operational areas, which prevents the recruitment of new staff into management positions in operations; furthermore, in the operational area, if someone leaves the organisation, they are only able to return at the recruitment level, ie the lowest level in the organisation)

- 'mono-dimensional recruitment' in operational areas, (for example, selection of recruits is focused on re-enforcing current culture, ie 'like selecting like')

- 'no political will for charge' (unless there is a disaster or major technologic change, major shareholders (State Government) not keen to change things; staff are satisfied and have a well-developed sense of complacency)

- 'an organisation of conversations', (as exemplified by the expression 'leaks like a sieve' because the informal communications network dominates the formal lines of communications)

- 'crisis junkie', (for example, reactive to situations; much sitting around waiting for a crisis to happen and when it happens there is an adrenaline rush ' 'red flashing lights, racing trucks, equipment and flames', ie the 'sexy part of the job')

There is much "idle" time, especially at the low levels of the organisation; as a result, many staff members have second jobs and/or are undertaking external studies, such as post-graduate work. At times, these outside activities take priority over their work in the organisation. Furthermore, much idle time allows for 'boxing at shadows', 'developing conspiracy theories' and 'playing office/union politics'

Public polls consistently show the high regard the community has for the organisation and its staff; in fact, the community attitude is like 'hero-worship'. This is demonstrated by the number of people responding to recruitment at the lowest level in the organisation, ie over 10 times the number required

The main union is very aggressive, with management being reactive rather than proactive in industrial relations. 'Roll-over' is the nickname of the Senior Operations Manager who is the decision-maker on industrial relations matters, ie too much appeasing of the union with deals, etc. The union's officials claim to have a "veto" power over management decisions and regularly use this power. In fact, the staff trusts the unions more than management as the former are perceived as having better track record of delivering results than the latter. It was claimed that the recently-signed EB has given away 'managerial responsibility to the unions', especially at supervisory level. The unions claim the exclusive right to represent staff at the lower levels of the organisation and do not want management involved at this level.

Middle management has lost respect for, and trust of, senior management owing to the lack of feedback, and poor handling of industrial relations by senior management, eg lack of senior management support in industrial disputes, such as middle management being instructed by senior management not to visit work sites as the union officials not want them there; previously, senior management had sacrificed some middle managers for union 'peace'; OH&S issues, etc). All this has encouraged an attitude of
"learned helplessness".

The 'rank and file' of the organisation value their independence and dislike interference from management; they cannot see the relevance of governance, transparency, etc to their jobs; management has too much 'bureaucratic speak'; non-traditional activities are seen as secondary to traditional activities - even though the non-traditional are the future; attitude of most 'rank and file' is that the management will come and go but 'rank and file' will always remain.

The market is changing, with stakeholders demanding different emphasis on services provided. Furthermore, competitors are recognising and acting upon these changes more quickly and effectively than the organisation

Traditionally the CEO is a person who is promoted from within

The new CEO joined the organisation in a senior management role (non-operational) for around 12 months before he was appointed CEO

In his previous job, the new CEO had successfully handled the amalgamation of several organisations within a different industry, ie local government

CEO has a very supportive Board, especially the Chairman; most Board Members are from outside the industry and include 2 women

The role of the CEO is to revitalise the organisation, especially management, and modernise its culture, ie change from 'mate-ocracy to merit-ocracy'. His appointment is for 5 years; with a possible extension for another 5 years

Main issues (some are in addition to those stated above)

- market demanding changes in services

- changing technology

- competitors are in stronger positions to handle the future as they are closer to their stakeholders

- threat of merging several similar organisations into one

- lack of active management as shown by the absence of effective station management including poor industrial relations strategies, 'us and them' attitude between management and staff; high absenteeism; reactive management; no incentive to perform; non-performing staff tolerated, etc

- lack of succession planning to handle the management vacuum created by the aging senior and middle management leaving the organisation

- how to get staff to think corporately but act locally?

Your Role

To help the CEO revitalise the organisation, especially management, and modernise its culture, ie change from 'mate-ocracy to merit-ocracy'

Timeframe is 5 years with a possible extension for another 5 years


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