See

discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/242022521

Organisational culture and quality

improvement

Article in International Journal of Operations & Production Management March 2001

DOI: 10.1108/01443570110364614

CITATIONS READS

90 2,354

3 authors, including:

Roger Maull
University of Surrey
71 PUBLICATIONS 1,507 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

HALL (HAT Living Labs) View project

Servitization; manufacturing focused work View project

All content following this page was uploaded by Roger Maull on 16 December 2014.

The user has requested enhancement of the downloaded file.

ORGANISATIONAL CULTURE AND QUALITY
IMPROVEMENT

DR R MAULL*, DR P BROWN1, PROF R CLIFFE 2

*Department of Management, University of Exeter.

1
Senior Consultant, AXEL Consulting,
2
Strategic change and quality management director, Lloyds TSB Bank

Abstract

This paper has two main sections. The first section presents the theoretical underpinnings for the devlopment of a
cultural analysis model that companies should undertake prior to embarking on a TQM programme. The PCOC
model, (Personal, Customer orientation, Organisational and Cultural issues) ) which is derived from the Hofstede
approach to cultural analysis, was used to determine whether the development of a questionnaire to measure the
culture and the organisational environment could be achieved. The model also provides an organisational climate
analysis which can then be compared with results from the cultural analysis. The paper describes a seven step
approach whereby companies can operationalise the PCOC model to their organisation. The second section of the
paper presents the findings from the use of an organisational culture assessment model, PCOC, within four
Financial Services Organisations (FSOs). The returns for each of the FSOs was analysed against the returns for the
four organisations as a whole. The results for each FSO are presented seperately. The major issues for each FSO
are drawn out using a t test to analyse the differences for the FSOs as a whole.

KEYWORDS
Total Quality Management, Organisational Culture, Financial Services, Change Management,

BACKGROUND

This paper describes the results of a research project which began with the recognition that
many companies undertaking Total Quality Management (TQM) programmes have, in recent
times, switched their attention from applying the tools and techniques of TQM to attempting to
align their TQM programme with their prevailing organisational culture. This leaves practising
managers with the difficulty of identifying their organisational culture or cultures and tailoring
their TQM programmes to match. In this paper the authors seek to provide a model for
organisational culture and provide results from the application of the model within four
separate business units of a Financial Services Organisation.

Experience within our case study company has shown that the change issues associated with
TQM were not contingent upon management techniques or skills but, as observed by McNabb
and Sepic (1995), "may be attributed to deeper, more critical sources: the fundamental,
pervasive culture of the organisation and the operating climate that culture instils in its
employees.

The importance of culture in understanding TQM is also widely supported in the literature.
Authors such as Patten (1992), Kim, Pindur and Reynolds (1995) and Hildbrandt et al (1991)
have all encouraged the acceptance and the recognition of the organisational culture construct
within quality management, especially as a primary condition for its successful implementation.

1
Vanisina (1990) argues that "successful implementation of TQM requires an assessment of the
organisational culture and the implementation of an integrated process for change in
organisational behaviour. Crofton and Dale (1996) highlight the organisational culture
problems associated with TQM implementation and the effect that culture can have. Bright and
Cooper (1993), however, decry the lack of empirical and theoretical work examining the
connection between organisational culture and TQM, particularly with regards to the use of
"hard" tools, techniques and systems in the implementation of TQM.

In this paper we address the need for empirical and theoretical research which seeks to connect
organisational culture with TQM. Firstly, we set out to provide a model which enables
practitioners to make an assessment of their culture and its related concept, climate. Where the
climate represents the business context within which the culture exists. Secondly, we developed
a process using focus groups to operationalise the culture/climate model in a format which
could be used in the organisation. Thirdly, we developed a questionnaire which aims to help
companies undertake a culture/climate assessment prior to their TQM implementation.
Fourthly, we provide the results of the questionnaire and comment on some general
implications for the development of TQM programmes.

THEORETICAL PERSPECTIVES ON ORGANISATIONAL CULTURE

The term "organisational culture" has proved extremely popular with management theorist and
managers alike since the publication of In Search of Excellence (Peters and Waterman, 1982).
The term 'culture' has its theoretical roots within social anthropology and was first used in a
holistic way to describe the qualities of a human group that are passed from one generation to
the next. It was described by Tylor:

culture ... taken in its wide ethnographic sense, is that complex whole which includes
knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by
man as a member of society. (Tylor, 1971)

Organisational culture provides a people-centred, theoretical perspective on the management of

change that is seen to offer some insight into the "intangible" nature of organisations and their
behaviour: a contrasting approach to the traditional management view of organisation (formal
structures, rules and procedures and rational argument). The problem lies in the generation and
use of new tools and techniques within the organisational culture perspective which makes the
people management, the management of change and the realisation of strategic objectives,
easier to accomplish. (Brown, 1992, p 3)

An examination of organisational culture raises crucial and unavoidable philosophical issues in

advance of proposing frameworks or frames of reference. There are two main areas within
which philosophical issues must be addressed, namely the theoretical perspectives of
organisational culture and the research approach to organisational culture. They are simply
expressed as:

1 . Whether organisational culture is an independent or dependent (internal) variable

(i.e. is organisational culture something an organisation has or is?).
2. The epistemological grounding of the research method which affects the tools,
methods and interventions that users have at their disposal.

2
Culture As An Independent Variable

Viewing culture as an independent variable looks at how it is imported into the organisation
through the membership. This view takes as its key premise there are specific characteristics of
"good" cultures that are universal and easily imported into the organisation. Modern
management theory exhorts managers to create corporate cultures which dovetail with effective
corporate strategy (Davis, 1984). This is also considered to be one of the main success factors
for 'Excellent' or 'Theory Z' organisations (Ouchi, 1981). Organisations are told to apply
generic formulae in order to obtain a corporate culture of an appropriate and productive form.

The crucial assumption here is that culture is an objective and tangible phenomenon which can
be changed through the application of direct intervention methods. Appropriate research
methods attempt to analyse and audit culture and seek to provide a basis for action in changing
culture.

Culture As A Dependent Variable

From this perspective organisations are themselves culture producing phenomena and are
essentially social instruments which produce goods (Smircich, 1983). As such, each culture is a
unique product of its history, development and present situational issues. Cultures also produce
distinctive artefacts, such as rituals, legends and ceremonies as by-products. While
organisations are embedded within a wider cultural context, this view emphasises the
sociocultural qualities that develop within organisations.

Authors who adopt this perspective construe the culture concept within a systems theory
framework which holds that the organisations exist largely in a determined relationship with its
environment. According to Deal and Kennedy (1982), culture adds to the systemic balance and
effectiveness of the organisation i.e. "through a strong culture." The key is to achieve sufficient
cultural integration across the varied areas of the organisation in order to effect sufficiently co-
ordinated strategy or action, whilst maintaining the unique value systems at the local levels.
Culture is the glue that holds the organisation together. It expresses the values or social ideals
and shared beliefs, manifest in the specialised language that is unique to each organisations and
that are a product of the history and operational experience within the organisation.

Culture as shared values and beliefs gives identity to members and generates commitment
beyond the "self", and enhances social system stability. It is also a sense-making device that
guides and shapes behaviour. Firms that have cultures supportive of strategy are likely to be
successful, while firms that have insufficient "fit" between strategy and culture must change
since it is the culture which supports the strategy (Pascale, 1990).

PERSPECTIVE OF THIS RESEARCH

It is difficult to make categorical statements about the nature of organisational culture. Both
perspectives have their supporters. Indeed, at the highest conceptual level it is reduced to the
positivist/functionalism vs. interpretivist/phenomenologist perspective in cultural analysis.

We recognise the importance of taking an interpretivist perspective on organisational culture.

Indeed, we are aware of many ethnographic studies currently being carried out (see for example
an ethnographic study with implications for designers Parsons, 1998). However the aim of this

3
research was not confined to description and understanding. We were seeking to provide
practising operations managers with a process which would enable them to understand their
organisational culture prior to TQM implementation.

As researchers seeking to inform practising operations managers, we have taken the view that it
is difficult to envisage the sort of project which would directly aim at changing an
organisations culture. A direct attempt to identify and then change a culture so that the culture
is then more amenable to a TQM programme is not what this research attempts to do. Our view
is that it is important to know about the culture before implementing a TQM programme. That
is not the same as changing the culture first. We are more concerned with matching the TQM
programme to the culture. If a cultural analysis method (with a particular emphasis on the issues
associated with TQM) can be developed this might lead the practising operations manager into
a more informed choice on the type of TQM intervention. It is therefore important to
understand before we set out on TQM programmes what the current state of the organisational
culture is. To do that we must first examine the different models of culture provided in the
literature.

ORGANISATIONAL CULTURE LITERATURE

We have identified four main themes in the organisational culture literature.

Firstly, some authors view culture as a learnt entity. At a basic level, culture may be defined as
'the way we do things around here" or 'the way we think about things around here.' (Williams et
al, 1994). In general, learning definitions of culture deal primarily with the way we act or the
way we think. A widely accepted definition of culture provided by Schein (1984) is:

"The pattern of basic assumptions that a given group has invented, discovered, or developed in
learning to cope with its problems of external adaption and internal integration, and that have
worked well enough to be considered valid, and, therefore to be taught to new members as the
correct way to perceive, think, and feel in relation to those problems."

The key feature is that culture is taught to new members as the correct way to behave, thus
perpetuating organisational survival and growth.

A second perspective from the literature is one that views culture as a belief system. According
to Davis (1984) corporate culture offers a contrast to the past rigidity of management models.
He defines culture as:

"the pattern of shared beliefs and values that give members of an institution meaning, and
provide them with the rules for behaviour in their organisation.'

An examination of organisational culture begins by distinguishing between fundamental

guiding beliefs and daily beliefs. Guiding (loftier) beliefs provide the context for the practical
'nitty-gritty' beliefs of everyday life i.e. guiding beliefs give direction to daily beliefs. As
fundamental precepts, guiding beliefs rarely change since they are in the realm of universal
truth. Daily beliefs are also part of the company culture and can be described as the rules and
feelings about everyday behaviour. However these are dynamic and situational, they change to
match context.

4
A third perspective is seeing culture as strategy. Bate (1995) in a wide ranging analysis,
fundamentally disagrees with the distinction between strategy and culture. To Bate, the
separation of the two has no validity, since the two concepts are synonymous. He makes it
clear that he was: not suggesting that culture is like strategy (and vice versa), nor am I saying
that culture and strategy are closely related... What I am saying is that one is the other.. culture
is a strategic phenomenon: strategy is a culture phenomenon."

The implications of such beliefs are twofold:

1. Strategy formulation of any kind is a cultural activity (the development of strategy

is cultural development), and
2. Culture change is strategic change.

The rational outcome of these statements is that any suggestion of attempting to set up a
separate "culture change" programme is fundamentally flawed since culture change is already
taking place within formal and informal strategic planning processes. A more detailed outline
of these arguments are contained in Bate (1995).

A fourth perspective which incorporates many of the elements of the previous types is to view
culture as mental programming. One of the key supporters of this perspective is Hofstede
(1980) who defined culture as the "collective programming of the mind, which distinguishes the
members of one category of people from another." This definition stresses that culture:

1. Is collective and not a characteristic of individuals (shared values)

2. Is mental "software", therefore invisible and intangible as such
3. Is interesting only to the extent that it differentiates between categories of people.

Hofstede attempted to develop a cultural typology for the relationship between organisational
cultures and their local national cultures. He developed this work through research at IBM.
Figure 1 shows the onion diagram model of organisational culture developed by Hofstede et al.
It has four main elements; symbols, heroes, rituals and values. The core of culture is formed by
values which are broad tendencies to prefer certain states over others and are the deepest level
of culture. Rituals are collective activities which are considered socially essential and heroes
are persons who possess characteristics which are highly prized and are often the "winners' or
those who get on in an organisation. Symbols are the most overt element of culture and are the
gestures, objects or words recognised by those who are part of the same organisational culture.

TAKE IN FIGURE 1

The Hofstede process for the measurement of organisational culture involves two interlinked
steps: in-depth open interviews in each area or business unit, and a questionnaire survey of
stratified samples of managers and workers. Whilst Hofstede was originally associated with
assessing culture across countries (Hofstede 1980) in later years he has adopted this approach to
investigate internal organisational culture (Hofstede et al 1990).

In our view all of the culture models presented above follow the same basic structure with
regard to the tangible elements of culture and we have summarised them for the purposes of
this research using the Hofstede framework of symbols, artefacts, structure and systems, and
daily beliefs etc.

5
The literature also indicates that it is not sufficient to attempt to understand and measure the
culture of the organisation. It is also imperative to measure the impact that the culture has on
the everyday operations and workings of the organisation, that is how the organisation
organises itself, its relations with customers (internal and external) and how the organisation
treats staff. To further understand these cultural impacts we have drawn on a wide variety of
literature. This includes;

Dastmalchian et al (1991) who points out the roles of overall environment (effectiveness),
communications, and supervisory support (innovation and problem solving) in an
organisations ecology.
Kim et al (1995) identified the importance of the organisational decision making within the
overall framework of the organisational environment.
McNabb and Sepic (1995), stress the importance of work satisfaction.
EFQM Model for Business Excellence gives highest priority (in terms of criteria weighting)
to Customer Satisfaction, People (Management and Satisfaction), Results, Processes and
Leadership. The model is based on the premise of business results achieved through
leadership driving policy and strategy, people management, resources and processes.
(British Quality Foundation, 1995, p 5).

In the creation of the PCOC (Personal, Customer orientation, Organisational and Cultural
issues) model we bring together these threads as described below.

The PCOC model (Personal, Customer orientation, Organisational and Cultural issues)

The PCOC model has two interrelated aspects: the cultural element and three identified
elements which make up the climate (or atmosphere) in which it exists. Table 1 represents the
headings, sub-headings and a general definition of the terms.

TAKE IN TABLE 1

The relationship between each of the elements of the PCOC model is shown in Figure 2;
It is important to stress that the PCOC model is a holistic one. It is impossible to determine
causality, i.e. whether culture drives climate or climate drives culture. In our view culture plays
the central role in binding together these elements of the organisational climate. Consequently,
by operationalising the model in the questionnaire (see later) we ask questions about all cultural
and climate elements and analyse them together looking for inconsistencies between the various
elements of the model.

TAKE IN FIGURE 2

Using the PCOC Model

To operationalise the PCOC model in a form which the organisation could use the authors
developed a seven step process.

1. Identify what needs to be measured, what functions should be examined and how the results
are going to be analysed and published. In our case study companies the PCOC model was used

6
prior to a major new TQM initiative as a general means of tailoring and focusing the TQM
programme.

2. Identify appropriate members for the focus groups and agree the appropriate culture
framework for the groups. As an example, two independent focus groups were run within our
case study company each consisting of different sets of managers. The total number of
managers involved was sixteen, all from different units within the bank. Different grades were
represented from senior Directors through to more junior local line managers.

3. Run the focus groups and ensure that the information from each group is collated as
accurately as possible and the key themes from the sessions are recorded. As a means of
independently validating the organisational culture element of PCOC we ran two focus groups.
Each were presented with a different organisational culture model. The group run by the authors
used the Hofstede model while a second group facilitated by an outside consultant used the
Schein (1984) model. Each group was asked to identify the culture of the case study company
based on the structure of their model.

The outputs from the two focus groups were very similar. An indication of the kind of outputs
obtained is shown in Appendix one .

4. Design the questionnaire. The first inputs to the questionnaire development process were
the outputs from the focus groups detailed above. As well as using many of the common
outputs from the two groups as the basis for questions, the authors also sought to test a small
number of the non-common outputs from the focus groups. The questions which relate to the
outputs of the focus groups are provided in Appendix one. A copy of the whole questionnaire is
in Appendix two.

5. Analyse questionnaire (see results section).

6. Publish the results. This ensures that staff receive feedback on the results of the
questionnaire.

7. Integrate staff feedback and identify the areas that need to be addressed when implementing
organisational change.

RESULTS

The reader will be aware that much of the work leading to the results presented here, is
commercially confidential and we cannot release the names of the organisations. However, we
would like to state that these results represent the organisational culture within four separate
parts of one very large Financial Services Organisation. Two (FSO I and II) are branch
networks. The remaining two (FSO III and IV) are dedicated to the processing of the same type
of financial services product (examples of financial services products are insurance, credit
cards, mortgages etc.). At the time of the analysis the four FSOs were part of the same
organisation. Subsequently, FSO III has been sold.

7
Demographic Breakdown of Results
In total 235 staff returned the questionnaire. Of the total, 138 women and 97 men responded.
60% of all respondents were aged 30 and over 16% were aged 25 or below. Overall, 50% of all
respondents had been working for more than 10 years. Interestingly, of the branch respondents
66% of Network I staff and 39% of Network II staff had been working for more than ten years.
This disparity reflects a general difference in age profile between the two branch networks.

The overall breakdown by grade and function are shown in tables 2 and 3 respectively.

TAKE IN TABLES 2 AND 3

RELIABILITY OF THE QUESTIONNAIRE

An often used test of internal consistency for multi-item scales is Cronbachs Coefficient
Alpha. The Cronbachs alpha scores for the 4 PCOC elements are recorded in Table 4.

TAKE IN TABLE 4

RESULTS OF QUESTIONNAIRE

A substantial amount of data was collected on each of the four FSOs. This has been reported
back to each of the business units in question and has informed subsequent TQM programmes.
However, this truncated analysis provides a summary of the main points and enables some
general conclusions to be drawn. The responses were scored so that a high score represented a
positive attitude and a low score represented a negative attitude.

FSO I
FSO I was the lowest scoring group of the whole of the survey. In every single aspect of the
questionnaire excepting behaviours the results for FSO I were significantly different from the
mean at p<1%.

FSO I was not only very different from the sample as a whole but also it had low scores across
the whole profile. Particularly low scores were identified in Personal outcomes and Customer
Delivery scores, as well as below average Culture and Organisation ratings. The general results
for FSO I are shown in Figure 3. Variables whose means for this group are significantly
different from the population mean according to a t test are marked with + signs. The t
test was also carried out for three other FSOs.

The FSO I profile was characterised by particularly low scores in Work Satisfaction and
Innovation and Problem Solving and Power Structure, very low Service Delivery and Heroes
scores, and low Communications. Investigating further into the data the profile presented was
complex. Staff did not feel they were involved in the decision making, planning and future of
the organisation. Staff were unempowered, (there were particularly low scores on management
actively seeks new ideas), dissatisfied, (see the overall low scores on work satisfaction), felt the
organisation had poor internal processes (low scores on employees treat internal teams and
people as important customers) but motivated with some areas of real customer services values.
For example there was a strong score on all employees understand who our customers are and
their requirements. All this was carried out in an environment, which valued sales over
customers and staff: quality and service is more important than volume and sales scored very
low compared to the population mean. FSO I staff consistently rated their pride in working for

8
the company higher than the extent to which they believed the organisation showed loyalty and
respect to them.

The four lowest scoring questions were

Everyone looks forward to going to work,
There is no time to examine problems that affect us,
My branch has a lot of influence
Budget pressures have no impact on decisions being made.

Of the 98 rating-scale questions, FSO I staff rated 21 of them below 2.5 and another 42 below
3.0.

TAKE IN FIGURE 3

FSO II

The profile of FSO II seems to present an organisation that was relatively happy with what it
was doing, and doing what was required to get by. In only two aspects of the model, planning
and decision making and heroes were the means significantly different from the population
mean at p<5%. The profile is presented in Figure 4.

A number of specific points are worth detailing. Planning and Decision Making (3.55,
significant at p<5%) and Relationships and Process (3.52) all scored high but the rest of the
scores were around the overall mean. Work Satisfaction was slightly above the mean (2.98)
although Q35, In my department everyone looks forward to going to work each day, scored
considerably below the mean at 2.21. This Branch Network also had low Power scores, which
suggested that they felt that power was concentrated elsewhere. The people who worked in the
network tended not to be in a position to, or be involved in, making any kind of important
decisions. The environment within FSO II appeared, generally, to provide reasonable
challenges to staff within their jobs, although answers to other questions pointed out they did
not have the time or opportunity to examine problems properly.

Service Delivery scored just below the PCOC element mean (2.99). Staff understood who their
customers were, and believed that the organisation was organised to meet customer need. The
concept of the internal customer was generally not understood and answers to the specific
question on quality and service is more important than volume and sales were very close to the
population average at 2.4 (towards tending to disagree). There were above average Values
(3.3) and Heroes (3.07, significant at the p<1%) scores - they were able to identify and specify
clear organisational role models.

The PCOC elements are shown in Figure 4 compared to the overall mean.

TAKE IN FIGURE 4

FSO III
FSO III was the highest scoring organisation surveyed. In every single aspect of the
questionnaire excepting behaviours the results for FSO III were significantly different from the
mean at p<1%. Interestingly, whereas FSOI had a similar profile of results below the mean FSO
III has a similar profile above the mean.

9
The comparison with the overall mean scores is shown in Figure 5. Work Satisfaction was very
high (3.60 against a mean of 2.97), staff were involved in areas of Innovation And Problem
Solving (3.95 against a mean of 3.02), they were trained to use quality tools and techniques and
their managers actively appeared to solicit their ideas. Time was put aside to deal with
problems that affected them.

Service delivery scored exceptionally high (4.0), compared to a mean of 3.01. Staff knew who
their customers were. The organisation was organised to meet customer needs. In FSO III
employees treat internal teams and people as important customers (this scored 3.9 for FSO III
as against 3.1 for the sample as a whole) and the largest single difference in the whole
questionnaire, Quality and Service were more important than Volume and Sales (3.9 for III as
against 2.6 for the sample as a whole). Staff felt that they were involved in Planning And
Decision Making (3.93), they had a strong understanding of Relationships And Processes
(4.01), decisions were made with the long-term in mind and there was an emphasis on customer
needs when planning.

In terms of Mission and Vision almost everyone understood the FSO III mission, there was a
clear vision for where they were going, and staff were committed to the achievement of the long
term goals. The lowest scoring element was heroes (3.13), although it was well above the 2.86
average. Only two questions scored below 2.5. They were Successful people do not work long
hours and Budget pressures have no impact on decisions being made. Given that every other
area also highlighted Q90 (budget pressures), it was clear that there was a company wide
emphasis on cost control.

FSO III presented a profile of a company that had successfully implemented quality principles
and philosophies throughout the company. They had, in reality, actually transformed from an
organisation on the brink of closing only four years ago, through the application of TQM. They
had recently been externally recognised through success in one of the major quality awards. The
FSO III profile consistently exceeded the overall mean profile, often by 1 clear point (25%).
This profile was one of an excellent company, committed very strongly to excellence in
customer satisfaction and where continuous improvement was a priority.

TAKE IN FIGURE 5

FSO IV
FSO IV was the second highest scoring organisation in this survey. The results are shown in
Figure 6. It scored higher than any other FSO on Work Satisfaction (3.23), yet the second
lowest on Heroes (2.75) and the lowest on Behaviours. Work satisfaction, Service Delivery
(3.27), Communications (3.24), Relationships and Processes (3.64), Heroes and Behaviours
(3.18) were significantly different from the mean at p<5%.

There were 10 questions that scored below 2.5. The two lowest scores were Advancement is on
the basis of Job Performance only (i.e. they felt that it was not), and budget pressures have no
impact on decisions being made which scored 1.79 although the average was only 1.9. Other
very low scoring questions were, Decisions were not made in meetings, to get promoted you
had to work long hours, Pay and bonus were not designed for team performance, and Not
everyone had a personal development plan. Controversial issues did not appear in the staff
magazine, Results were more important than procedures and Projects were not implemented by

10
the agreed dates. On the issue of whether quality and service is more important than volume
and sales FSO IV scored 2.7 as against the sample average of 2.6.

TAKE IN FIGURE 6

The profile presented by FSO IV was of a business area that was clearly above the mean in
most aspects and had applied and improved itself through the use and application of Total
Quality principles. It would appear from the profile that the focus of TQM implementation had
been on process, cost and planning and perhaps not so strongly on directly improving the areas
of staff morale and improvement.

APPLICATION OF FINDINGS
In reviewing the findings from the application of the questionnaire we have attempted to
highlight some of the specific issues for the organisation concerned. To make these issues more
meaningful for other practicing operations managers the following section describes these
issues within the context of answering three questions.

Can operations managers identify culture prior to introducing TQM programmes?

What are the implications for the design of TQM programmes?
How do operations managers manage the fit between organisational culture and strategic
direction?

Can operations managers identify culture prior to introducing TQM programmes?

The FSO in which this work was based had run a large TQM programme prior to the research
described here. It was now considering embarking on the second phase of the programme and
understood that identifying the underlying cultual assumptions was an importrant pre-requisite.
By operationalising the PCOC approach the company was able to successfully identify a
number of aspects of both culture and climate prior to its second phase of TQM.

This information was then used to formulate the change programme and the interventions,
focusing them on the key development areas and strengths of the various parts of the
organisation. However, we must point out that an understanding of the organisational culture
will not necessarily make change easier to implement or guarantee success. What it provides is
a frame, which allows understanding of the key issues to develop through a strenuous diagnosis
process, with the concomitant understanding of the areas to address in the intervention process.
This information can then be fed back to individual managers to give them a map of the culture
of their units, groups or departments.

The major benefit of using the PCOC model was in the information it provided about the
differences in culture in different parts of the organisation. This moves us on to answering the
second question.

What are the implications for the design of TQM programmes?

The PCOC model identified that the environment within the four financial service organisations
was not a homogenous phenomenon. Rather, perceptions of the culture and the environment
differed widely by FSO and incidentally by job grade (not detailed in this paper) which
removed the myth of a single organisational culture within the FSO. This lends support to our
earlier statement that companies need to manage change by measuring and understanding the

11
key characteristics of the culture, before interventions are designed and planned. Bate (1995)
also argues that this was an essential task in the change process.

The development of the understanding of organisational culture within the four financial
services organisation served to underline the particular difficulties of managing change at the
most fundamental levels. Since each FSO was unique and had its own particular strengths and
areas for development this gave the TQM team a problem. It was clear that the traditional
sheep dip or one size fits all programmes where each staff member is in turn subjected to
teaching on TQM methods would not be appropriate. FSO III and IV were clealry more
developed in trems of udnerstanding quality principles that FSOII and certainly advanced on
FSO I.

These results led the team to tailor their second phase programme to meet the needs of
individual FSOs. In the first example, the quality team were considering the introduction of a
company wide performance improvement programme using some six-sigma techniques. It was
clear from the analysis of the results that there would be considerable problems in FSOs I and
II in introducing such sophisticated concepts. See for example the lack of understanding of
internal processes. Add to this the clear existing assumption that employees show greater
loyalty to the company than the company shows to them, the results on lack of empowerment,
importance of budgetary pressures and need to work long hours the attempt to introduce robust
six sigma processes might induce some cynicism. However, in the product units (FSO III and
IV) the quality culture is clearly further developed. Process measurement was already
established. Further developments of process measures were used to build on the existing focus
on empowerment and service delivery.

Secondly, the team were considering the adoption of the Business Excellence Model (British
Quality Foundation, 1995, p 5). The team now recognised that it was likely that FSO I and II
would score very low on some elements and might achieve an overall score that would prove to
be discouraging. However, FSO III and IV were clearly much further adavanced in quality
thinking and the BEM may prove useful. Subsequent application of the BEM at FSO III
actually resulted in their achieving a national award. In FSO I attention was placed on
simplifying internal processes and addressing how management could be encouraged to seek
ideas from staff through the use of a very simple local improvement initiative. To support this
activity simple process based improvement techniques were taught.

However, the culture analysis also pointed the Quality team to a more fundamental issue the
tension between what senior executives were publicly exhorting the company to achieve and
how the FSO was managed at the operational level. This draws us on to the third question.

How do operations managers manage the fit between organisational culture and strategic
direction?

In a leading study on the value of cultural strength by Kotter and Heskett (1992), the key
finding was that culture mattered, but strength did not. For them the most important issue was
not whether a culture was strong or weak but whether a culture fitted its present or future
context. There was no direct correlation between strength of culture and success. But there was
a link between success and the adaptiveness and context-fit of a company - or its 'performance-
enhancingness'. Kotter and Heskett identified a clear value for performance-enhancing cultures
- and those companies without performance-enhancing cultures experienced an enormous cost.

12
This issue of appropriateness has been one of the major contentions of this research and has
been the underlying reason why we developed a culture and climate model.

Pascale (1990) developed an associated concept. He identified the organisational paradox of

Fit/Split/Contend/Transcend and the analysis that was undertaken raised important issues of
lack of fit: a lack of consistency and coherence. The fit is seen between the coherence of the
organisation's strategies with the current organisational culture and climate. The issues that
these contentions raise are discussed below, with specific reference to the particular problems
within the branch network at FSO I.

It was clear from the high and low scoring questions and the widely varying scores within FSO
I that there was a lot of Pascales Contention. While procedures were very important,
according to some of the high scoring questions, it was also clearly indicated that results were
more important than procedures. And while staff believed that long term success was dependent
on high quality products and high customer service, there was general agreement that Quality
and Service were less important than Sales and Volume this also applies to FSO II. The main
mechanism of control, which appeared strongly in all business areas, was that of cost control. It
was apparent that decisions were made with the influence of strong cost consideration, whether
quality and service issues or not (this was specifically addressed in the questionnaire).

All of the issues outlined above describe areas of contention or of constructive conflict where
seeming contradictions exist. Results versus Procedures, Volume versus Quality, Cost versus
Service all appeared as key decisions to be made on a regular basis. Pascale (1990) believed
that they should not be resolved, rather that they should be used to orchestrate tension or
harness contending opposites. This leitmotif appears across a number of writings on the
difficulties in managing organisational culture. Peters and Waterman (1982) advocated the use
of simultaneous loose-tight properties, Collins and Porras (1994) called for ideological
control and operational autonomy and Hampden-Turner (1994) recognised the idea of
making sense of opposites and reconciling values that contrast.

The quality team recognised that key was not to balance the issues, since balance implies
stability, but rather the management of the dynamic relationships between opposites. Our
analysis has shown that some FSOs are better at managing contention than others and that there
was, particularly in FSO I and II a lack of dynamic balance. In the specific case of FSO I,
management had failed to manage opposing values - instead indications where that they
embraced strongly the Cost/Sales/Results values to the detriment of
Quality/Service/Procedures. FSO I needed, but was lacking, the idea of transcend management
where management can orchestrate and manage the particular issues created by the Fit, Split,
Contend paradigm for the benefit of the organisation. (Pascale, 1990, p 22)

This has induced a major re-think on the strategic alignment of the TQM message. The quality
team have embarked on a major senior management initiative aimed at highlighting the value of
the service quality message. The intention is to cascade this message through the senior team
down to regional and local managers who will then recognise the need to balance cost and
service, volume and quality etc.

CONCLUSIONS

13
In this paper we begin by recognising that many companies are now attempting to identify their
organisational culture or cultures prior to implementing their TQM programme. This raises a
major philosophical point: can organisational cultures be identified? Are they in any sense
separate from the organisation or are synonymous with the term organisation. In short is
culture something an organisation has or something an organisation is?

In recognition of the needs of operations managers we took the view that culture could be
identified and set out to provide users with a model of culture and to develop ways to apply the
results of a cultural assessment which would feed through into changes to a TQM programme.

In developing a model which would help organisations assess their organisational culture prior
to TQM, we recognised it was also important to measure the impact that the culture had on the
everyday operations and workings of the organisation. In other words, how the organisation
organised itself, its relations with customers (internal and external) and how the organisation
treated staff. The model, therefore, has two interrelated aspects: the cultural element and three
identified elements which make up the climate (or atmosphere) in which culture exists.

The specific focus of the PCOC model is to identify areas for intervention within the
organisation. The model does not contain implicit value judgements about "best" or "strong'
cultures or what profile is best to have. The focus is on identifying those areas that can assist
organisational and quality improvement through development and focused interventions.

The PCOC model was used as a pilot in four separate FSOs to determine whether the
development of a questionnaire to measure the culture and the organisational environment
could be achieved. The model identified that each was unique and had their own environment
and culture. In this paper the findings are presented in detail as well as the Cronbachs Alpha
Coefficient. The Alpha scores gave us considerable confidence in drawing our conclusions
from the data.

In summary, the results are in three areas for practising operations managers.

Firstly, the PCOC model does provide the basis for assessing organisational culture prior to
implementing an organisational improvement programme. In this case we tailored the questions
to look at quality issues. The data analysis identified that each of the four FSOs had their own
particular culture and work environment. It was apparent from the analysis that FSO III had
achieved important changes and had created a healthy environment conducive to innovation
from highly motivated, satisfied staff. In contrast, FSO I, a branch network, and therefore the
main point of contact for most of the FSOs customers had a culture dominated, it appeared, by
cost and profit considerations, possibly even to the apparent detriment of staff and customers.

Secondly, the results indicated that in this case the one size fits all change programme is not
applicable. Substantial tailoring would be required to fit the change programme to individual
FSOs.

Thirdly and perhaps most interestingly, the data indicated the problems inherent in managing
organisational tensions. Specifically, those of results versus procedures, quality versus volume,
cost versus service. These all appeared as key decisions to be made on a regular basis. Each of
the four FSOs had different success in managing these tensions. In a competitive environment
where it is not a choice of two alternatives but where both must be balanced daily a reliance on

14
Cost/Sales/Volume (as in FSOI and to some extent FSO II) whilst declaring the importance of
Service/Quality/Procedures may well build up a resistance to organisational improvement based
around practice what you preach.

REFERENCES

Bate, P. (1995) Strategies for Cultural Change. Butterworth-Heinemann, Oxford.

Bright, K, Cooper, CL. (1993) Organisational Culture and the Management of Quality. Journal
of Managerial Psychology, Vol. 8 No. 6, pp 21-27
British Quality Foundation. (1996) Guide to Self~Assessment (Business Edition), British
Quality Foundation, London.
Brown, RP, (1997) Organisational Culture and Quality Improvement : A Study, PhD Thesis,
University of Plymouth.
Brown, A. (1992) Organisational Culture: The Key to Effective Leadership and Organisational
Development. Leadership and Organisation Development Journal. Vol. 13, No. 2, pp 3-6
Collins, JC, Porras, JL. (1994) Built to Last. Successful Habits of Visionary Companies.
Century Business Books, London.
Cooper, DR, Emory W (1995) Business Research Methods, 5th Edition. lrwin, Homewood, IL.
Crofton, CG, Dale, BG. (1996) The Difficulties Encountered in the Introduction of Total
Quality Management: A Case Study Examination, Quality Engineering, Vol. 8, No. 3, pp 433-
439. Marcel Dekker, Inc.
Dastmalchian, A, Blyton, P, Adamson, R. (1991) The Climate of Workplace Relations.
Routledge Publishing, London.
Davis, SM. (1984) Managing Corporate Culture. Ballinger, Cambridge, Mass.
Deal, TE, Kennedy, AA. (1982) Corporate Cultures: The Rites and Rituals of Corporate Life.
Addison-Wesley, Reading, Mass.
DeVellis, RF. (1991) Scale Development: Theories and Applications. Sage, Newbury Park,
CA, USA.
Hampden-Turner, C. (1994) Corporate Culture. From Vicious to Virtuous Circle. Revised
Edition, Piatkus, London.
Hassard, J, Sharifi, S (1989). Corporate Culture and Strategic Change. Journal of General
Management Vol. 5 No. , Winter.
Hildebrandt, S, Kristensen, K, Kanji, G, Dahigaard, JJ . (1991) Quality Culture and TQM.
Total Quality Management, Vol. 20, No. 1, pp 1-1 5.
Hofstede, G, Neuijen, B, Ohayv, D D, Sanders, G. (1990) Measuring Organisational Cultures:
A Qualitative and Quantitative Study Across Twenty Cases. Administrative Science Quarterly.
Vol. 35, June, pp 286-31 6. Cornell University, USA.
Hofstede, G. (1980) Culture's Consequences. Sage, Beverly Hills, California, USA.
Industrial Society. (1995) Change Management. Managing Best Practice Series, October. The
Industrial Society, London.
Kim, PS, Pindur, W, Reynolds, K. (1995) Creating a New Organisational Culture: The Key to
Total Quality Management in the Public Sector. International Journal of Public
Administration, Vol. 18 No. 4, pp 675-709.
Kotter, JP, Heskett, JL. (1992) Corporate Culture and Performance. Free Press, Macmillan,
New York
McNabb, DE, Sepic, FT. (1995) Culture, Climate, and Total Quality Management: Measuring
Readiness for Change. Public Productivity and Management Review, Volume 18 No. 4,
Summer.
Nunally, JC. (1978) Psychometric Theory. McGraw-Hill, New York, NY

15
 Parsons R (1998) Supporting the Management of Electronic Engineering Design Teams PhD
Thesis, University of Plymouth.
Pascale, R (1990) Managing on the Edge. How Successful Companies Use Conflict to Stay
Ahead. Penguin Books, London.
Patten, Thomas Jr. (1992). Beyond Systems - The Politics of Managing in a Total Quality
Management Environment. National Productivity Review, Winter, pp 9-15. Peters, TJ,
Waterman, RH (1982) In Search of Excellence. Lessons from America's Best-Run Companies,
Harper and Row, London.
Peters, TJ, Waterman, RH (1982) In Search of Excellence. Lessons from Americas Best-Run
Companies, Harper and Row, London.
Schein (1984) Coming to a New Awareness of Organizational Culture, Sloan Management
Review Winter 1984
Smircich, L. (1983) Concepts Of Culture And Organizational Analysis. Administrative Science
Quarterly, 28: pp 339-358. Cornell University, USA.
Tylor, EB. (1971) Primitive Cultures: Research into the development of mythology, philosophy,
religion, language, art and custom. London: J. Murray, 2 Voiss. (1903)
Vanisina, Leopold S. (1990) Total Quality Control: An Overall Organisational Improvement
Strategy. National Productivity Review, Winter, pp 57-74
Williams, A, et al (1994) Changing Culture: New Organisational Approaches. Second Edition,
Institute of Personnel Management, Cromwell Press, Wiltshire.

16

View publication stats