Culture of the Organization

Ishpreet Singh – 12P139 Karan Jaidka – 12P141

Lucky Sharma – 12P145 Prabhat Singh– 12P154

Vignesh Patil – 12P177 Viswanath Kuppa – 12P180

PGPM – Section C – Group 9

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What is Organizational Culture?

• Culture is the set of values, norms, guiding beliefs and understandings that are shared by members of an organization and taught to new members as the correct way to think, feel and behave

• It generally goes unnoticed• Two critical functions in organizations:-

▫To integrate members so that they know how to relate to one another and

▫To help the organization adapt to external environment

Theories applicable to Cultural Change (1/2)

•Materialistic variable approach▫It involves conceiving culture as an object,

a thing or a part of a bigger thing

▫McKinsey’s 7-S framework places culture (as shared values) alongside structure, strategy, skills, staff, style and system

Theories applicable to Cultural Change (2/2) •Anthropological or

Holistic view▫The view is that culture

is not something the organization has but something the organization is

▫According to Schein’s Framework, there is no discrimination between a culture and an organization

Why Change Culture•Interpreting Schein’s Framework, there is

no discrimination between a culture and an organization

•Culture and Strategy are substitutable for one another. They are two sides of the same coin

•So, change in culture is required to:-▫Change strategy▫Change structure▫Bring change in organization

Existing Culture at Schlumberger

• Scientific research was given precedence over financial ones

• Senior level managers were involved in recruitment. Training was very rigorous

• There was empowerment and decentralization in the company

• A history of long tenure CEOs in the firm, led to emphasis on long term planning and on consistent corporate values

• Acquired companies could retain their own cultures despite being a part of Schlumberger

Need for Change (1/2)

•By 1996, the company had a complete portfolio of technology in oilfield services to offer. However, the real revenue growth had stagnated

•Deep divisions in businesses precluded the firm from broadly leveraging success in one product area into a competitive advantage in another

•No horizontal integration. Company’s various businesses used to communicate via customers

Need for Change (2/2)•Potential synergy existed to provide end-

to-end solutions to global customers. However, the activities remained independent▫There were 6 businesses in oilfield services▫Their operations were supposed to be

integrated and provide solutions to customer problems

▫There was lack of awareness and information on the customer’s side

The Process of Change

Forum 2005

Action 2000

The Rollout

Workplace 21

Forum 2005• In 1996, Baird made a task force named “Forum

2005” of around 36 engineers and managers who had high potential and were diverse

• They were to find out how industry will turn out in next 10 years and then where they see Schlumberger in that industry

• The team was to focus on the ‘vision’ for the future and not to spend time on implementation

• The change team’s findings were:▫To leverage its IT technology and provide a platform

“One Schlumberger” to provide solutions to customers

▫To create a more employee-friendly workplace and more flexibility in new assignments

Action 2000 (1/2)• In November, 1997, a team of 150 top managers of

the company was brought together to execute the change

• Action 2000 came up with a structure of the organization▫ The whole world was split into 29 Geographical

Markets known as GeoMarkets headed by General Managers

▫ They were provided complete independence of decision making in terms of business planning in their areas

▫ Product Lines were renamed segments▫ The local managers were to act according to the local

customer needs and changing circumstances▫ Technical experts assigned to different segments were

now more visible to one another throughout the domain

Action 2000 (2/2)• Segment superiors’ were to work on solutions

to customer problems• The GeoMarket managers were now

responsible for all products in their area• Marketing and Sales, previously organised by

individual product lines were merged• Technology centres were required to work

more closely with one another. They were also supposed to come up with ‘solutions’ to customers instead of ‘products’ for individual segments

The GeoMarket StructureNSA

President

IPM/Exploitation

Legal Controller

Marketing

Personnel QHSE Global

SalesIndustry Affairs

GeoMarket Managers

(USL)

Business Manager

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GeoQuest

Anadrill Dowell WireLine WCPDrilling

Bits

Vice Presiden

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The RolloutLevel managers met with GeoMarket managers to explain them how organization will work

The rest of the management and staff were told their new roles and things expected of them

The management and support levels were changed first without any disturbance in operations

Later on, operation organization was changed

GeoMarket managers contacted customers and explained them the new structure, how it will lead to better service quality and client satisfaction

They were also told to contact only one person to know any information or get services

Workplace 21

•Developed by Forum 2005•Designed to better use the resources of IT

& Internet and was aimed at reinforcing the “people oriented culture” at Schlumberger

•A team of 45 members was formed to investigate business trends and best HR practices in the industry

•The team investigated for six months and gave eight recommendations

Recommendations by Workplace 21Create the infrastructure for employees to do their work

Allow employees to choose their own workplace and style

Manage employees by results, not by methods

Adopt technologies that allow employees to collaborate with information and with people in a way that is simpler, faster and more exciting

Adopt technologies that allow the Personnel Department to become a community of career facilitators, rather than being the first people to have to say no

Pay closer attention to the quality of employees’ lives

Consider the needs of employee families in the decision making process

Inspire creativity by incubating new ideas and innovation

Conclusions from the Case

• The case of Schlumberger is an interesting example of change in organization during a healthy period

• The case tells how much “both-and” approach to change has value where the organization and its culture are intimately entwined

• They addressed the change from strategy, political and cultural perspectives simultaneously

• The naming convention of different teams reflect that the managers understood the different time horizons needed for them

• The most important lesson that this case teaches is that the leaders of a company understand clearly that organisational change is equivalent to cultural change and recognising this, managers have the discipline to act accordingly

Some Generalizations about Change

• Sustained change requires mutual agreement between change recipients and change implementers

• The best change implementers will be power holders in old organization

• Failure to keep focus on near term operations can thwart change initiative

• Leaders in new organization must be change agents• Clear communication and management visibility are

critical• It is as important to embrace the elements of

organization’s existing culture that are conducive to change as it is to deal with those that inhibit the change