Master Thesis The role of Organizational Culture in Operations Strategy: Findings from a systematic literature review and an empirical investigation

Abstract

Purpose- The purpose of my thesis is to investigate on the influence of organizational culture (OC) on operations strategy (OS). Further, I try to find actions taken by organizations to change their OC with regards to their OS. Design/methodology/approach- First, a systematic literature review (SLR) was carried out to identify the influence of OC on OS, including top ten operations management (OM) journals, over the course from 2000 to 2017. Second, an empirical investigation based on a case study took place to identify actions to change OC. Findings- The findings from the SLR revealed that literature on the influence of OC on OS is scarce and needs further investigation. Moreover, OC seems to have a positive as well as negative impact on OS, whereas this relationship is two sided, OC is influencing OS and vice versa. The empirical investigation revealed actions taken by organizations regarding ‘Behavior and Leadership’, ‘Communication and Information’, ‘Training and Empowerment’ and ‘Structures and Reward system’. Originality/value- This study provides a SLR of the literature on the influence of OC in OS, combined with a case study to give insights into the limited researched area of actions to change OC with regards to OS.

Keywords- Systematic literature review, organizational culture, operations strategy, actions

Table of Content

ABSTRACT ... 2 1. INTRODUCTION ... 5 2. DEFINITION OF CONCEPTS ... 7 2.1 ORGANIZATIONAL CULTURE ... 7 2.2 OPERATIONS STRATEGY ... 10 2.2.1 View on OS: Market vs. Resource perspective ... 11 2.2.2 The two dimensions of OS: content and process ... 12 3. METHODOLOGY FOR THE SYSTEMATIC LITERATURE REVIEW ... 14 3.1 JOURNAL SELECTION AND KEYWORD SEARCH ... 15 3.2 ARTICLE SHORTLISTING AND SELECTION ... 15 3.3 ARTICLE CLASSIFICATION AND ANALYSIS ... 16 4. FINDINGS FROM THE SYSTEMATIC LITERATURE REVIEW ... 17 4.1 DESCRIPTIVE FINDINGS ... 17 4.1.1 Publication details ... 17 4.1.2 Research method and context ... 17 4.2 THE INFLUENCE OF ORGANIZATIONAL CULTURE ON OPERATIONS STRATEGY ... 20 4.2.1 Impact of OC on OS ... 20 4.2.2 Impact of OC on OS by topic ... 22 4.2.3 Impact of OS on OC ... 23 4.2.4 Cultural fit ... 23 4.2.5 The use of theories ... 24 4.2.6 The actions to manage OS on OC ... 25 4.3 DISCUSSION AND RESEARCH AGENDA ... 26 5. THE EMPIRICAL RESEARCH: CASE STUDY ... 31

5.1 METHODOLOGY FOR THE EMPIRICAL RESEARCH ... 31

6.2.2 Changing an organizational culture: Communication & Information actions ... 41 6.2.3 Changing an organizational culture: Training & Empowerment actions ... 42 6.2.4 Changing an organizational culture: Structures & Reward system actions ... 43 6.2.5 Changing an organizational culture: Further actions ... 44 6.2.6 Conclusion on the actions to change an organizational culture: Company B ... 44 7. CROSS-CASE ANALYSIS AND DISCUSSION ... 47

BEHAVIOR & LEADERSHIP AS PART OF A CULTURAL CHANGE ... 47

1. Introduction

Albeit not specifically recognized, organizational culture (OC) is omnipresent in every organization, influencing every aspect of an organization (Yauch and Steudel, 2002), including the operations. Culture is not only present, moreover it is a key driver for performance and the mental decision making of managers (Byles et al.1991; Denison and Mishra 1995). Whereas the impact of OC on an organisations performance can be both, positive and negative (Chan et al., 2014). As globalisation is opening new markets and the needs of customers are constantly changing, operations must adapt and are in a constant need of change and improvement (Hope and Mühlemann, 2000). This need of change and improvement often requires a change in operations strategy (OS) as it is the key driver of the decision-making process as a guiding set of general principals within the operations (Slack et al., 2010). Although, the impact that OC has on an organizations performance shows to be crucial, research regarding the influence of OC on OS is diverse and limited and clear conclusions enabling practical guidance and theoretical contributions are missing. Therefore, this thesis examines the influence of organizational culture on operations strategy.

The concept of OC has been extensively investigated throughout the last decades

(Barney, 1986; Schein, 1990; Marshall et al. 2016). The same accounts for the relationship of OC and organizational practices (McDermott and Stock, 1999; Prajogo and McDermott, 2005; Mohammad Mosadegh Rad, 2006; Baird et al., 2011). OS has also gathered a lot of attention by scholars and several literature reviews on OS have been published (Dangayach and Deshmukh, 2001; Boyer et al., 2005). Yet, the relationship between these two concepts has not been investigated in a structured manner. Several studies have been published examining the relationship of these two concepts but a comprehensive picture of the influence of OC on OS is missing. As Tranfield et al. (2003, p.207) state: “Undertaking a review of the literature to provide the best evidence for informing policy and practice in any discipline, is a key research objective for the respective academic and practitioner communities.” However, a review of

Systematic literature review: What is the influence of organizational culture on operations

strategy?

The aim of the SLR is in classifying and comparing papers published throughout

2. Definition of Concepts

The following section provides insights into the main concepts, OC and OS, used in both the SLR and the empirical research to support the understanding of the following chapters. The relationship between these concepts and further insights will be elaborated on within the findings of the SLR. 2.1 Organizational culture Culture is a concept which can be clustered into different levels, from national culture (NC) down to the organizational level, which is subject of this work. The origins of OC can be traced back to the 1980s when it first became a “business phenomena” provoked by the publishing of the four books by Ouchi (1981), Pascale and Atho (1982), Deal and Kennedy (1982) and Peters and Waterman (1982) (Baker, 2002). OC is a concept highly researched and multiple, sometimes competing definitions are existent. As early as in the 1990s Smircich (1983) investigated five different classes in organization and management research which attempted to identify and define OC, which shows its diversity at this early stage. Instead of trying to find a universal definition in my thesis, a few definitions are displayed here which share the same elements of OC and are of high importance in literature. Deshpande and Webster (1989), after reviewing a set of organizational behavior, sociology and anthropology studies, define OC as the pattern of shared values and beliefs that enables the members of the culture to understand the organizational procedures and provide guidance for behaviors. This is in alignment with Schein´s (1985) definition of culture as a pattern of shared assumptions, learned by a group through their experience, perceived as the correct way and passed on to new members.

Cameron and Quinn (2006; p.17) define culture as: “An organizations culture is

reflected by what is valued, the dominant leadership styles, the language and symbols, the procedures and routines, and the definitions of success that make an organization unique.”

The definitions show that culture is a crucial part of understanding the behavior within organizations. They also display the phenomenon of how difficult it is to pinpoint OC due to its intangibility based on shared values and assumptions.

OC does not only show its complexity within the diversity of definitions, moreover

plenty of models conceptualizing OC are existent. Jung et al. (2009) show the difficulties when it comes to conceptualizing OC which is evident by the quantity of dimensions related to OC exceeding more than a hundred. Cameron and Quinn (2006) relate that phenomena to the broad nature of OC with a degree of interrelatedness and complexity.

For this study the Competing Values Framework (CVF) as proposed by Cameron

and Quinn (2006) is used for several reasons. First, the definition of OC proposed by Cameron and Quinn is used for this study as it encompasses the elements of OC as presented by Schein (1985) and Deshpande and Webster (1989), extended by the leadership style and the definition of success as determinants of OC which is highly related to OS. Further, the definition by Cameron and Quinn (2006) is consistent with the CVF. Moreover, Denison (1990) provides four hypotheses to explain OC, namely:

- Consistency hypothesis, common beliefs and values and a shared perception among all members of an organization increase internal consistency and provide sense for the members

- Mission hypothesis, shared meanings with regards to direction and strategy can link the organizational members and make them move towards shared goals - Involvement/Participation hypothesis, involvement and participation of

organizational members will increase their commitment and responsibility

identify OC types with regards to OS and is highly applicable for this thesis as it is used to cluster the different papers of the SLR and their investigated culture in section 4.2.1, with regards to the aim of understanding the influence of OC on OS.

The CVF encompasses two dimensions, the organizational focus with an internal

2.2 Operations Strategy Research as well as experience from the practical world has shown that the alignment of OC and strategy, allowing for an interplay of both can result in a competitive advantage and an organizations success (Voss, 1995). Moreover, OC shows to have a strong influence on the implementation of a strategic change as it can hinder or foster its success (Prajogo and McDermott, 2005; Del brio et al., 2008). As this thesis examines the influence of OC on OS the following presents a description of the concept of OS. OS is a term which evolved out of the manufacturing strategy to provide a more

comprehensive view, accounting for all kind of businesses (Slack and Lewis, 2002). Skinner (1969) is noted as one of the first to define manufacturing strategy. As presented by him, manufacturing strategy is a competitive weapon as it is highly linked to a firm’s performance. Further, he noted that a firm’s competitive strategy sets specific needs to the manufacturing department, therefore they should be aligned and designed to accomplish those needs.

For my thesis, the generic model of operations management (OM) as proposed by

Slack et al. (2010) is adopted. OM thereby describes the management of the processes creating the services (including goods) within an organization (Stevenson, 2001). The generic model of OM as presented by Slack et al. (2010) represents four main areas, namely: Operations Strategy, Improvement, Planning and Control and Design as presented in Figure 2. For my thesis, the focus is on OS representing the fundamental component guiding the decision making of OM.

Figure 2: Generic Model of OM following Slack and Lewis (2010)

Slack and Lewis (2002: p.16) define OS as: “[…] the total pattern of decisions which

shape the longterm capabilities of any type of operation and their contribution to overall strategy, through the reconciliation of market requirements with operations resources.”

This underlines the generic shape of OS in that it is steering the decisions of all operations within an organization and is not limited to manufacturing. Slack and Lewis (2002) further define OS as the link between the market requirements and the organizations capabilities. Herewith, OS is a long-term decision-making process based on a macro level with an aggregated and philosophical direction (Slack and Lewis, 2002).

2.2.1 View on OS: Market vs. Resource perspective

OS is a concept which can be viewed from two different perspectives influencing the strategy forming process, the market and resource perspective (Lowson, 2002; Slack and Lewis 2002; Boyer et al., 2005).

The market perspective or market driven view (MDV) sees the importance of strategic decisions based on the nature of the organizations place to compete in and describes an outside in view to strategy (Lowson, 2002). Porter (2008) describes five forces which shape the strategic decisions within the market, namely:

- Bargaining power of buyers - Threat of substitute products - Rivalry among existing competitors The resource based perspective or resource based view (RBV) is the counterpart to the market driven view, representing and inside out view to strategy. The RBV sets a clear focus on the core competencies of a company based on their individual resources which cannot be purchased externally and provide a firm’s competitive advantage (Lowson, 2002; Slack and Lewis,2002).

Though, one might argue that the MDV and RBV are competing in its nature, there

is the possibility that a company has a market position which is desirable but still can maintain this position through its individual resources which allow for a competitive position (Slack and Lewis, 2002). Further, the strategy formation process is reconciling in its nature due to the constant need of alignment of both views as the forces shaping the market to compete in and the individual resources need to be coordinated and matched to gain the desired competitive advantage (Slack and Lewis, 2002). 2.2.2 The two dimensions of OS: content and process The OS literature distinguishes between the content and the process of OS. The content describes the substance of strategy on how to achieve a competitive advantage by giving a direction on what to include when formatting an OS. Content decisions include the overall OS definition, performance objectives and decisions regarding capacity, supply networks, process technology and development. The process describes the way on how to implement and formulate the OS, the method used to produce the content decisions (Slack and Lewis, 2002).

Though the content and the process are common dimensions within the OS

literature its investigation effort is of unequal distribution as the majority of publications focus on the content. This is evident by Dangayach and Deshmukh’s (2001) literature review on OS which found that of 260 articles only nine percent dealt with process issues. Further, Boyer et al. (2005) in their review on OS found that only 22 percent of their investigated papers dealt with the process.

3. Methodology for the systematic literature review

This section elaborates on the methodological design for the SLR.

A SLR was conducted to find articles investigating the influence of OC on OS. A SLR has several advantages over a general literature review as it allows for legitimate and clear conclusions as well as evidence based on solid investigations (Tranfield et al., 2003). Further, a systematic approach enables transparency, reduces search bias and brings the chance to identify research gaps.

The SLR was carried out in three phases, namely keyword search, article

3.1 Journal selection and keyword search

The search was limited to the top ten journals, based on the results of eight respected OM journal rankings (Soteriou, Hadjinicola, and Patsia 1999; Barman, Hanna, and LaForge 2001; Gorman and Kanet 2005; Olson 2005; Holsapple and Lee-Post 2010; Meredith, Steward, and Lewis 2011; Petersen, Aase, and Heiser 2011; Fry and Donohue 2013). A list of the identified journals can be found in Appendix A. The search was further limited to the keyword *cultur* (allowing a greater search range including i.e. ‘culture’, ‘cultures’ and ‘cultural’) using the ‘title-abstract-keywords’ search in the Scopus database (www.scopus.com). Further, the search was limited to the years 2000 to 2017. Resulting in 301 articles. 3.2 Article shortlisting and selection The second phase was done using a coding process based on pre-specified inclusion and exclusion criteria. This process was carried out by four researchers whereas every of these four researchers investigated 75 of the identified articles. The process included reading the abstract carefully as well as the whole text if the abstract mentioned OC. Only papers explicitly mentioning OC were included. Papers were excluded based on the following:

- Articles investigating national culture only (focus is on OC) - Articles that did not used OC as a variable, but only mentioned it

- Articles representing a literature review to prevent from double inclusion of papers

- Articles that did not investigate in an operations environment (e.g. educational setting)

This process resulted in 99 articles related to OC.

3.3 Article classification and analysis

4. Findings from the systematic literature review

This section displays the findings from the SLR. In 4.1 descriptive statistics are presented. 4.2 provides the analysis of the influence of OC in OS and the proposed actions to manage a fit or misfit. The section concludes in 4.3 with a discussion of the results and a description of available work on changing OC to present a starting point for the empirical part. 4.1 Descriptive findings 4.1.1 Publication details Seventeen papers were found to investigate on OC in OS in the period of 2000 to 2017. As displayed in Table 2, there is no clear increase in papers on OC in OS throughout the examined period. However, in 2001, 2003, 2005, 2008, 2013 and 2014 no articles were published in the reviewed journals whereas a peak with three articles is in 2007. IJOPM and IJPE were found to be the most frequent journals with six and five publications, followed by JOM with three, IJPR with two and JSCM with one. The remaining reviewed journals did not publish any articles throughout the examined period with regards to OC and OS. 4.1.2 Research method and context As shown in Table 3, the majority of papers used primary data with 16 out of 17 articles. Qualitative and quantitative methods were equally distributed with case studies and surveys each being used in eight articles. Only one article used secondary data. Most of the papers investigated in the manufacturing sector with 12 of the articles. The rest used

4.1.4 Topics and dimensions of OS

4.2 The influence of organizational culture on operations strategy

The SLR revealed that the articles had different approaches to study the relationship between OC and OS. Articles can be grouped by investigating on the impact of OC on OS, the impact of OS on OC and cultures for specific strategies (Table 5). 4.2.1 Impact of OC on OS The CVF (as proposed in section 2.1) was used to categorize the impact of the different cultural types on OS. However, only Smith & Smith (2006) used the CFV. Therefore, a comparison among the papers based on the cultural dimensions is difficult. Though, four more articles could be clustered into the CVF by the provided information about the investigated culture. Table 6 provides an overview of the articles and impact. Specific cultures, not included in the CVF, are listed in ‘others’.

Table 5: Grouping of articles based on investigation approach

Table 6 shows that Adhocracy culture, with three articles, has the strongest evidence for a positive impact. This can be explained by this culture being mostly evident in small to medium size companies, which due to their size have an easier implementation process for strategy as well as more flexible and adaptable dynamics allowing for easier implementation of new strategies (McAdam, 2000; Wiklund and Wiklund, 1999; Gunasekaran, 2000).

Hanson et al. (2011) were the only ones to find a negative impact of OC on OS. In

their article, they investigated on the measuring of alignment in performance management. Their case revealed that a market culture with a strict result orientation prevented the implementation of a new strategic focus. A lean strategy was executed and measures for that existent, while the company tried to implement innovation. However, the prevalent culture inhibited the implementation as they did not want to let go of existent measures due to past success.

The specific cultures represented in the column ‘others’ all show to have a positive impact. However, these results need to be used with caution as these cultures were investigated in related topics (further discussed in section 4.2.2). For example, Goebel et al. (2012) who investigated on the effect of ethical culture on supplier selection in the context of sustainable sourcing. Where in fact the results displayed that ethical behavior and the related ethical culture have a positive effect on sustainable supplier selection. Wiengarten et al. (2015) were the only ones to investigate on both, NC and OC while exploring the importance of cultural collectivism on the efficacy of lean practices. Their investigation revealed that an organizational collectivistic culture (based on Hofstede’s dimensions) has a positive impact on the implementation of lean strategies. Their results also indicate that a collectivistic OC cannot compensate for an individualistic NC.

4.2.2 Impact of OC on OS by topic

As section 4.2.1 shows, a comparison of papers is difficult, due to the use of specific cultures. Therefore, Table 7 presents an overview of the impact of specific cultures with regards to the investigated topic as presented in section 4.1.4, Table 4. However, only topics represented by more than one article are discussed to allow for some generalizability of the topic related cultures.

Table 7 displays that articles investigating on cultural characteristics suitable to risk mitigation and response show several similarities. Cultural traits specific for risk mitigation and response are openness, learning, innovativeness and flexibility combined with an external focus on customers and competitors. These traits are in line with other

literature on risk mitigation such as Miller (1992) who noted flexibility as a factor increasing responsiveness when risk occurs.

Performance management shows a diverse picture indicating an innovative and

flexible adhocracy culture to positively influence the use of performance measures. However, a culture based on results and a strong focus on past success shows to be inhibiting the use of new performance measures. However, as only one article supports each of these results, general applicability is difficult to be assumed.

Regarding the supply network, four articles found traits of culture positively influencing specific strategies. However, as shown in Table 7, these traits serve different strategies such as sustainability and supplier diversity and are therefore not comparable. Thus, specific cultural traits are context dependent and seem to suit a specific OS. Only for risk mitigation and response cultural traits were possible to identify based on a range of results indicating similarities of cultural characteristics. 4.2.3 Impact of OS on OC Two of the investigated articles did not provide information about the impact of OC on OS but did so vice versa by investigating on the impact of OS on OC. Duberley et al. (2000) investigated on the impact of performance evaluation and control systems (PECS) on OC. They found that PECS influence behavior by sending a message on what is valued in terms of performance and this influences culture by creating underlying assumptions and values. This impact can further be classified as an action to change OC, displayed in Table 8.

Ireland and Webb (2006) took a multi-theoretic perspective on the impact of OS

on cultural competitiveness in a strategic supply chain. They propose several factors influencing cultural competitiveness: a recognized authority, shared common identity across the supply chain, utilization of boundary spanners and maintaining organizational justice. However, these results are not yet empirical investigated and therefore need further research.

4.2.4 Cultural fit

characterized by: Individualism, High power distance and Low uncertainty avoidance. The appropriate culture for a flexibility strategy is characterized by: Collectivism, Low power distance and High uncertainty avoidance. Hence, one can argue that these characteristics have a positive impact on these strategies, however further research must validate these results to allow for that generalizability.

Karlsson et al. (2010) investigated on technology integration mechanisms in established organizations. Their results indicate that OC is used as an integration mechanism through communication and management development in high-technology scenarios. This displays the diversity of OC as not only influencing OS but also serving as an integration mechanism. 4.2.5 The use of theories Only two of the reviewed articles used theories. Fan et al. (2017) when investigating on the information processing in supply chain risk management used the information processing theory to base their proposed supply chain risk information processing systems on. This system encompassed risk information sharing, risk analysis and assessment and risk sharing mechanisms. Their results indicate the positive influence of supply chain risk management culture diffusion on these aspects. However, the clear link of culture to the information processing theory is not provided.

4.3 Discussion and research agenda

which explains these positive results. As section 4.2.2 revealed, specific cultural traits are suitable for specific directions of an OS such as risk mitigation and response, performance management and the supply network. However, the examined papers did not show a clear trend on the influence that specific cultural traits have as only a few or just one article supported a specific trait for a specific OS. However, as the CVF shows, cultures are not strictly related to one characteristic but consist of a mix of them. Therefore, a generalizable OC accounting for a specific OS cannot be derived from this review. Further, as Wiengarten et al. (2015) found, national culture (NC) can have a weakening effect on OC. However, other authors such as Naor et al. (2010) found the weakening effect of OC on NC. This can be explained by the convergence and divergence hypothesis whereas the convergence hypothesis claims that OC can weaken the effect of national culture and the divergence hypothesis claims the opposite (Ralston et al., 1997; Von Glinow et al., 2002). Therefore, NC seems to play an important aspect when it comes to the influence of OC on OS as it might have an even greater impact on OS then OC has.

Concluding, the influence of OC on OS is diverse and no clear answer to the research question could be found. However, this SLR displayed current insights into this topic based on the examined literature, showing the mostly positive influence of OC, fostering an OS. Therefore, OC and OS both need to be taken in consideration when wanting to change one of them as they influence each other.

Future research should address these topics by focusing on broader, generalizable

cultures (as indicated in ‘Cultural models’) to allow for generalizable implications on the influence, to clearly show what the specific influence of a cultural trait is on a defined OS. Further, the two-way relationship needs to be further investigated to create an understanding of the interconnection of OC and OS. Moreover, future research should take NC into account when investigating on OC and OS to find an explanation on how NC and OC are connected and its influence on OS.

Methodological approaches

studies could be of high interest and bring the chance of further insights as Marshall et al. (2016) already noted.

Cultural models

The use of well-known cultural models, such as Hofstede, House and the CVF was relatively scarce with only three articles taking use of it. However, the use of such models and their linkage to results would allow for further insights, a generalizable understanding by enabling a comparison between studies and the opportunity to enrich these models. Future research on OC and OS should adopt these models more frequently to achieve these enrichments.

OC and the process of OS

As the results in section 4.1.4 show, research regarding the process of OS is scarce in comparison to the content. A gap in the process dimension was also found in previous literature reviews on OS (Dangayach and Deshmukh, 2001; Boyer et al., 2005), which is in line with the results of my review. Taking OC into account, the content displays an important determinant of OC as it guides its values by, for example, decisions taken regarding PECS (Duberley et al., 2000). However, the process of OS is a critical determinant of OC as well, as actions taken to implement an OS, such as training, communication and structural changes will have a direct impact on OC (Porter et al., 1992; Heide et al., 2002; Chimhanzi, 2004). Therefore, future research should set a clear focus on the process of OS to provide further insights and to overcome this gap. The use of theories Theories were only used in two of the reviewed articles. However, theories serve as an explanation and description of relationships in complex phenomena (Bacharach, 1989). As OC can be seen as such a complex phenomenon, the use of theories to guide research and enrich the understanding seems suitable. Therefore, the adaption of theories and their role in OC can be of high interest and future research should try to incorporate the use of theories more frequent to enrich their value for the field of OM research.

The actions to manage a fit of OC and OS

Actions to manage the implementation of OS with regards to OC, fostering a cultural change, are of high importance for the practical world due the constant need to change (Cawsey et al. 2011). However, only five out of the seventeen articles proposed actions which practitioners can take. This is in line with Marshall et al. (2016) who noted: “[…]

OM literature offers almost no guidance to managers on how to create, change, or preserve an appropriate organizational culture.” (p.1506). This shows that the main gap in current

Based on the examined literature, the actions that are necessary for a successful change process can be grouped and classified as “Behavior and Leadership”, “Communication and Information”, “Training and Empowerment” and “Structures and Reward-System”. These are discussed in more detail in Table 9.

5. The empirical research: Case Study

As the findings of the previous chapter (4) the SLR showed, a clear answer on the influence of OC on OS can be hardly made. However, it showed that an influence is evident and OC seems to be highly affecting OS and vice versa. As Marshall et al. (2016) already noted, OM literature provides little guidance on how to change OC, which is in line with the results of this SLR which showed that actions to change an OC are scarce. However, actions to change an OC are of high importance for practitioners, to make a successful use of their OC fostering their OS. As the influence of OC on OS is evident as well as critical for a firms’ performance but actions to change and adapt a culture are missing, the following chapter will investigate on the research question: What are the actions used in practice by organizations to change their culture towards their operations strategy? This research will provide a starting point for future research and will give some insights for practitioners on the possible actions that can be taken to change an OC to adapt to an OS based on the findings of two firms currently undergoing a change of their OC due to a change in OS. 5.1 Methodology for the Empirical Research This section elaborates on the methodology of the empirical research by providing insights into the method, case selection, data collection and the data analysis. As little is known on what actions organizations can take (Marshall et al., 2016),

The case study approach reveals different strengths. While focusing on in-depth investigations by means of studying a small number of cases, the gathered data is rich in quality and provides enhanced information. Moreover, the field of investigation lacks attention throughout the current body of research. Therefore, a case study forms a suitable method to investigate this phenomenon as it serves as an exploratory tool within the early phase of investigations (Karlsson, 2016). This allows the case study to have a very strong ground in construct and internal validity. However, it lacks external validity due to the limitations in numbers of cases studied. 5.2 Research setting

occurred actions. As a cultural change program aims on creating a change of individuals or groups of individuals the unit of observation is employees experiencing the change. 5.4 Case selection Sampling in qualitative research should follow a purposeful approach (Eisenhardt, 1989). Therefore, the cases were chosen based on three central criteria: 1. The organization has a clear, documented OS and is aware of it: Only if the OS is clear, actions can be identified and executed that foster this specific OS, while actions taken without a specific OS as an aim would not provide useful insights for this research.

2. The organization has a clear understanding of its culture: Only if the organization has a clear understanding of its current/previous OC it can develop actions to change the specific culture.

interviews were conducted with senior managers and in Company A with the change leader. In Company A only one interview was carried out, due to accessibility reasons. However, this interview was done with the change leader and therefore seems suitable as he has the richest knowledge about the actions taken. In Company B two interviews were carried out with two senior managers. The interviews all lasted around one hour. Additionally, data-triangulation, the combination of interviews with further data (Eisenhardt, 1989) was performed. Internal company data regarding the change process was provided. This data encompassed change newsletters with information about the actions taken and current change success in terms of performance. 5.4.1 Interview protocol A semi-structured interview protocol was developed as it provides clear instructions and reliable and comparable data, especially when there is only one chance to do the interview (Cohen and Crabtree, 2006). The semi-structured interview protocol consisted of the following topics:

- Information about the company and the role of the interviewee within the company

- Information about the OS that the company is currently implementing

- Information about actions that the company took to change their OC towards their OS

coding scheme can be found in Appendix E. Based on Eisenhardt’s (1989) suggestions, a within-case analysis was done to get unique insights of each case. Based on these findings, a cross-case analysis was performed to search for similarities and differences.

6. Within-case analysis

The previous manager was described as a “black box” as he never communicated with his employees. The new manager is described as the complete opposite as he tries to have regular talks with all his employees. This new behavior already reduced some of the employees’ reluctance towards the new OS and the change “In only a few weeks I see where I ask questions and the response that I get is much faster just because […] the director is generating a completely new way of communicating” (BL_NB). 6.1.2 Changing an organizational culture: Communication & Information actions Action: Implementation of communication channels Intended change: Create an understanding of change/need for change and OS, generate ideas, increase visibility Impact: Increased communication, understanding of change program and new OS

The company implemented several channels/meetings to communicate the change (CI_M):

Committee de pilotage: consists of the board of directors as well as some team members and is held in the beginning of every week. Discussed topics include strategy, results of the week and the last month. The meeting has the purpose of informing the board of directors about current progress and upcoming events. General meeting: encompasses the whole organization and is held once a month. Topics are like the ones in the committee de pilotage, however in a broader sense. Meeting has the purpose of informing the whole company about the progress. Lean council: more strategy related meeting with the heads of the different departments. Meeting is held once a week, in the beginning. Purpose is in the generation of ideas and a progress discussion across departments. Intranet: used to facilitate the communication by providing information as well as serving as a platform for all employees to emit ideas on improving the processes (CI_I). Daily emails: including performance indicators which are visualized and top performers are congratulated throughout these mails, which serves as a kind of reward for ‘right’ (strategy compliant) behaviour (CI_D).

6.1.3 Changing an organizational culture: Training & Empowerment actions Action: Implementation of General Training Intended change: Ensuring an understanding of new OS (Lean) and guidance of change in work behavior Impact: Generation of 200+ ideas of what to change and change of mind-set (openness to change) of around 25% of employees Action: Implementation of Special Training

Intended change: Project managers understand need of change and learn how to

lead/implement the new OS and cultural change

Impact: Not yet visible

General Training (TE_GT): every employee attended the training. Within this training the employees were introduced to the Lean strategy and the underlying principles. This training had the purpose of ensuring an understanding of the new strategy as well as guidance of the change in work behavior. These trainings resulted in the generation of over 200 ideas proposed by the workforce and it was indicated that they led to a switch in mind-set for around 25 per cent of the workforce.

Special trainings (TE_ST): project managers were identified as key persons within the company as they were working there for a long time, had good relationships with the employees and served as key persons “Pure from a cultural perspective I think this will help

because the two managers are working already very long time within the organization, so they also have a lot of experience, not only how systems work but also how people work and whether or not they are perceptive in this cultural change”. This training was more

quick wins (FI_QW). It was mentioned that one process was dramatically improved by applying the new strategy. This success led to the conviction of the resistant person which is now transferring this mind-set towards others of her peer group “It is not like that

6.2 Findings Company B Company B has a strong and long-lasting history with the mail-order business, going back to the 1950s. Based on this long history, a hierarchical culture has emerged. However, as the market situation changed and mail-orders are not common anymore as e-commerce is now key, the company faced heavy losses. Due to that, in 2016 the company decided to start a complete overhauling program to realign their culture and regain a competitive market situation. Their new strategy direction, guiding the overhauling, lies in a Platform strategy which requires a more open culture in terms of teamwork and less hierarchical barriers hindering ad hoc decisions. To achieve these goals, several actions have been implemented which are described in the following. 6.2.1 Changing an organizational culture: Behavior & Leadership actions Action: Introduction of informal approach (calling everybody by first name) Intended change: Breakdown of hierarchical barriers, facilitating personal communication Impact: Hierarchical barriers were softened, communication with supervisors facilitated Action: Reduction of fear of mistakes (more open “error culture”) Intended change: Increase of willingness to “try” new things to enable generation of new ideas Impact: Reduction of risk aversion, increased speed of decision processes

The first action, also noted as the most crucial, was the board of directors offering everybody in the company to call them by their first name, which was regarded as a huge step as the company had strong hierarchical barriers “[…] the most obvious thing was that

our members of board offered to any of the employees to call them by the first name.”

One important aspect, mentioned in the provided company data, was the awareness by the board of directors of their roles within the change process. Not only the role of the board of directors was mentioned but the interviews also revealed a complete change of the leading roles, which are now encouraged to take a team-based approach and act as on the same level as their employees. 6.2.2 Changing an organizational culture: Communication & Information actions Action: Implementation of communication channels Intended change: Create an understanding of change/need for change and OS, generate ideas, increase visibility, breakdown of hierarchical barriers, increase of “team thinking”

Impact: Increased communication, understanding of change program and new OS,

Culture change newsletter: send every week to keep the employees updated on what is happening (CI_N). 6.2.3 Changing an organizational culture: Training & Empowerment actions Action: Introduction of leader specific training Intended change: Leaders develop role awareness and learn how to lead based on the new OS Impact: Increased communication, breakdown of hierarchical structures Action: Introduction of mandatory Leader specific training (New Lead) every year Intended change: Leaders develop role awareness and learn how to lead based on the new OS Impact: Increased communication, breakdown of hierarchical structures Action: Introduction of regular workshops/trainings for all employees Intended change: Skill development of employees, development of understanding of OS and according behavior Impact: Increased communication, breakdown of hierarchical structures, idea generation, changed behavior suiting new OS Leader specific training: clear focus on new defined leading roles and training of leaders (TE_ST). Every leader had to go through a one-year training ensuring the readiness and understanding of the new way of leading. A clear focus had been set on the way of communication and how to behave to facilitate the change. This training develops communication skills and teaches how to increase teamwork and knowledge sharing between team members.

New Lead: every leader must attend a mandatory training once a year to ensure the alignment with the new strategy and the change program, which has the same input as the leader specific training (TE_ST).

Regular workshops/training: take place on a regular basis (available every week) and encompass skill and change mind-set development. Especially the skill of speaking up, telling higher positions the own opinion, is trained “[…] the setup is very different and […]

what is included in the workshop is kind of a different aspects. It has a lot of to do with agile working, turning down the barriers and getting inputs and not stop anybody to think about things because he is too shy to say anything, so everybody is encouraged to feel free to say anything that might help in the future to the direction of the platform.” (TE_GT). These

board and regular workforce trained together and treated on one level “[…] one of the members might be a board member and maybe there is one who just started his job. So […] the way they put people together is very much more open than in the past.” (TE_GT). 6.2.4 Changing an organizational culture: Structures & Reward system actions Action: Change of layout and structure of the organization

Intended change: Improved working conditions, facilitate creativity & teamwork,

attracting younger workforce/new employees

Impact: Increased satisfaction of employees, increased teamwork by team rooms etc.,

creativity is improved Action: Introduction of “Mobile working” Intended change: Provide freedom, facilitate creativity Impact: Increased satisfaction of employees, creativity is improved Action: Introduction of Culture change lexicon in intranet Intended change: Create working behavior according to change by providing tools and methodologies on how to solve problem and facilitate change Impact: Tools are used to solve problems

Layout and structure: all buildings have been overhauled to create open workspaces which facilitate creativity and teamwork, oriented at a Google like campus “[…] by

reopening the workspace, I mean you can work wherever you want. Everybody has a laptop and you can work when the sun is out, you can work on the campus outside, if you have a bigger meeting you can go into a totally different floor and you can sit there in sofas or on desks and work there. So it’s very I think, creative setup of working places.“ (SR_S). This infrastructure change was not only done to achieve better working conditions but also to attract a younger workforce “[…] due to the demographical change in the next future we had to kind of repaint our image a little bit. So what we now have, we changed all the offices all the workplaces to quite open workplaces. There are places that are build up very creative.” (SR_S).

Mobile working: allows for working everywhere on the campus or outside the organization to allow for more freedom as well as to facilitate creativity “We know that

this is also why it is […] not called home office, but mobile working. […]. So, this is, I think, one of the major changes.” (SR_S). Culture change lexicon: the intranet had undergone a change as well which also impacted structural dimensions. The intranet is used as a chat as mentioned in section 6.2.2, further the company data showed that it now provides a change lexicon encompassing tools and methodologies on how to solve problems and improve efficient team work.

The alignment of the processes and the change vision are indicated to match properly “And […] this is why I think everything is working in the same direction but from

different areas. So […] yes I think everybody knows what is our aim and what we want to work out in the future, […] everybody works within his department with full power and full speed to reach the goal.” (FI_A). Further, the structural change also facilitated

cross-functional team work and the awareness of different departments involved “And I now know things about departments I have never heard about before.” (FI_S). 6.2.5 Changing an organizational culture: Further actions Action: Introduction of change team Intended change: Guiding the change process Impact: No direct impact but introduction of all change processes The change program at Company B encompassed a lot of significant actions. The provided company data revealed that a change team was built in the beginning to lead the overall change. This change team is directly subordinated to the CEO to ensure full implementability of the changes. 6.2.6 Conclusion on the actions to change an organizational culture: Company B Although, the interviews and documents did not mention any serious problems within the change process resistance still occurred which is handled by: “We also discussed internally,

indicated that those cases are quite rare and mostly account for people working in the organization for a very long time and got used to how it was (FI_R).

Overall, the change seemed to work well and the interviews revealed a positive

attitude towards the change “[…] and especially from ‘Company B’, I am really impressed

they managed to come from a little bit dusty old huge company that they actually managed the changed good up to now, so I am impressed by that.“ (FI_S). However, they are still in

the beginning of the change as the internal documents revealed that about ten percent of the change is done by now. Further, the displayed actions are highly specific for the case of Company A, their OC and OS. In this case, the strongest barrier for implementing the new OS was a culture based on hierarchical structures, therefore the presented actions opt on breaking down these structures to facilitate team work, create creativity and improve the overall organization towards a culture of idea sharing and communication.

The following tables, Table 11 and 12 (p.46), provide an overview of the actions presented for both cases, Company A and Company B, to steer the discussion presented in the following chapter.

Table 11: Actions taken by Company A

7. Cross-case analysis and Discussion

The within case analysis in the previous section displayed the actions taken by both companies. It is evident that both companies took different actions to change their OC towards their OS. These differences in actions are mostly based on the different prevalent OC as well as their different strategic goals. Although, these differences exist, the following is comparing the different actions to identify similarities and draw conclusions. The structure follows the proposed clusters of actions as presented in the previous sections.

Behavior & Leadership as part of a cultural change

As shown in the previous section, both companies took actions regarding behavior and leadership. However, the approaches were quite different. Company A took a crucial approach of dismissing directing managers to enable new managers to enter the organization. This approach was chosen based on the reluctance displayed by the directing managers. In contrast, Company B introduced informal approaches to cut down hierarchical barriers and enabling communication, which presents a softer approach. This shows that actions are highly depended on the prevalent situation and neither displays the right approach to change an OC but they must be understood in the context. However, it shows that actions regarding behavior and leadership are crucial to any change program, regardless of the OC and the desired OS which is in line with literature which suggest that leadership is one of the major aspects within a change process (Gill, 2002; Ahn et al., 2004; Belias & Koustelios, 2014). Table 11 and 12 show that both companies took actions regarding leadership and behavior.

company. This shows that actions regarding behavior and leadership can vary and sometimes need to be more crucial as displayed by Company A. However, the most important aspect is the awareness of leaders of their roles and responsibilities combined with commitment. Hence, I propose:

Proposition 1a. The actions regarding behavior and leadership as part of a cultural

emails and newsletters. This is in line with theory which suggests communication through multiple channels to facilitate change (Proctor and Doukakis, 2003). Further, both companies applied communication in a written format (intranet, newsletters, emails) but also personally in terms of meetings which is supposed to provide a greater positive outcome (Chimhanzi, 2004). Based on these findings, I propose:

Proposition 2a. Throughout a cultural change program, actions regarding

communication must take place constantly, to ensure that all members of an organization stay informed about the changes and the aim of the OS.

Proposition 2b. Throughout a cultural change program, communication should take

place using different channels such as meetings, intranet, emails and newsletters to ensure a constant confrontation to the changes and the aims of the OS. Proposition 2c. Throughout a cultural change program, communication in a personal way such as meetings should take place to create a personal relation to the change and providing the possibility to pose questions and suggestions. Proposition 2d. Throughout a cultural change program, the intranet can be used as a

support mechanism providing updates on current changes and enabling the virtual communication between employees. Proposition 2e. Throughout a cultural change program, the intranet can be used to provide tools and methodologies supporting employees in problem solving according to the OS.

Proposition 2f. Throughout a cultural change program, emails can be used as a

support mechanism providing updates and enabling personal involvement and rewarding by direct approaches to individuals.

Training & Empowerment as part of a cultural change

Table 11 and 12 show, that both companies took actions regarding training and empowerment. However, it also displays the difference in the executed training.

Company A had all employees trained in the beginning and the content

encompassed information about the new strategy. This training showed its success in the generation of 200+ ideas. This is in line with Porter et al. (1992) who described the involvement of employees as a process enabler, in this case displayed be the numbers of ideas. However, these trainings were only held in the beginning and no follow-up activities were executed. As Table 11 displays, a special training was only provided to the project managers, a possible explanation for the lack of commitment by the general managers as they did not receive a special training.

Table 12 shows that Company B offers regular employees trainings in a constant

fashion with a special focus on empowerment. Further, within the trainings, a combination of members of the board/managers with regular employees is emphasized to cut down barriers. Scholars as Solberg (1985) show, that those joint activities have positive effects on culture and attitudes towards the change which can serve as an explanation for the success of Company B. Further, Company B showed a special attention to leader specific training, consisting of a one-year mandatory training based on communication skills and on how to facilitate change. This is in line with McEwen et al. (1988) and Porter et al. (1992) who suggest a special attention to leader specific training such that they act in alignment with the desired change. This can be an explanation for the high commitment to the change by leaders, as noted by Company B. Therefore, I propose:

Proposition 3a. Throughout a cultural change program, trainings display a highly

context specific matter and organizations need to develop trainings according to their needs based on their OC and the required OS.

Proposition 3b. Throughout a cultural change program, training must take place as

Proposition 3c. Throughout a cultural change program, training for lower level workers should set a special focus on empowerment in combination with joint activities with higher levels to create empowerment and facilitate the change.

Proposition 3d. Throughout a cultural change program, leader specific training on

how to act in alignment with the change should be a mandatory action to create role awareness and the ability to enable a change. Proposition 3e. Throughout a cultural change program, training should not be seen as a one-time matter but regular trainings must take place to keep the required standards and provide a constant update of skills needed to enable the OS. Structures & Reward systems as part of a cultural change Table 11 displays that Company A did not used any actions regarding structural changes. In fact, it was noted that old systems are in place which inhibit the change which is line with Heide et al. (2002) who noted that barriers with regards to structure are one of the major causes of unsuccessful implementations. Further, structure in terms of a plan/guidance through the change was shown to be missing.

Company B took significant actions regarding structure, displayed in Table 12. A

complete overhauling of their infrastructure was shown in combination with structural changes regarding the way of working, displayed by the ‘mobile working’. It was noted that these structural changes impressed the workforce and facilitated creativity and teamwork which is in line with their new strategy.

Based on these findings, structure seems to act as a barrier and facilitator of a change program. Hence, I propose:

Proposition 4. Throughout a cultural change program, the structure needs to be

aligned with the taken actions and desired change, to work as a facilitator and not inhibiting the change.

General remarks Overall, my thesis shows two different approaches to cultural change with regards to OS. It was evident that both organizations made some progress, however Company B seemed to be more successful. A possible explanation for that is the lack in commitment and role awareness of the leaders of Company A. Company B followed a structured change approach and seemed to take notion of

important aspects such as the alignment of their structure, training and behavior. Company A however, seemed to follow an unstructured approach in combination with a lack of commitment by the leaders. My thesis shows, that actions to manage a change are of high importance and should be made carefully. Moreover, the partial success of both companies showed that a cultural change is possible but it is time intensive. This is evident by Company B with the change process lasting for almost two years, but as noted, only ten per cent is yet accomplished. Although, multiple actions are found and presented, no clear recommendations on specific actions can be made as the context is an important driver to create successful actions. However, the above presented propositions can guide practitioners to develop suitable actions enabling the implementation of cultural changes necessary for the successful implementation of an operations strategy.

7.1 Managerial implications

8. Conclusion

The aim of this study was to investigate on the role of OC in OS by performing a SLR as well as to give a starting point for future research on the actions to manage change by executing an empirical research. Figure 5 provides an overview of the research questions and the answers found in my thesis. As the SLR showed, OC and OS are highly linked concepts. However, OC and OS are also two highly specific concepts depending on the context, the organization, its prevalent cultural traits and the executed OS. Although, similarities between cultures and especially between OS are existent, the SLR showed that there is no clear answer to the question on what is the influence of OC on OS, as a comparison and generalizability of the results was difficult to make, based on the specific cultures investigated and the resulting positive influence shown. Therefore, this thesis shows that future research should address this topic more frequently, using well known cultural models to provide a comprehensive answer to the influence of OC on OS as it is affecting every organization. Moreover, the review showed that actions on how to change the OC with regards to OS are missing. The presented case study aimed to find an answer to this issue by investigating on the actions used in practice by companies to change their OC towards their OS. This case study also

However, both companies took actions from which propositions could be drawn as showed in the cross-case analysis and discussion. These propositions can thereby serve as guidance for practitioners to build actions specific for their context.

Concluding, this thesis showed that OC and OS are two highly interlinked concepts,

influencing each other. If an OC is changed this is influencing the OS and vice versa. Meaning, organizations always have to take that two-way relationship into account when trying to change either the OC or the OS as it can affect the other in a positive or negative way. Moreover, there is no such thing as the best way to change a culture, the actions taken are highly depended on the desired OS, the prevalent OC and the overall aim of the organization. 8.1 Limitations

This study has several limitations that need be taken into considerations when interpreting the provided results.

The SLR only focused on papers including OC and no other cultural levels were

included. Only the identified top ten journals were taken into consideration in the review and the use of other OM journals and journals from different streams of literature might lead to diverse results. Further, it was limited to the years of 2000 to 2017 and the keyword *cultur*. Including a broader time frame could bring the possibility of different results.

Future research should address these limitations to enrich the understanding of

the influence of OC on OS and provide further insights on the impact and the match between these concepts.

The empirical study is limited in several ways. The case study only investigated on two cases with a limited number of interviews. Taking more interviews into account might change the results. In Company A only one interview with the change leader took place, which is highly aware of the actions taken but might not have the full understanding of the impact. Further, adding more cases could have also led to different results as the actions taken by other organizations may vary. Therefore, the generalizability of the results is limited.

As the empirical research was opt on providing a starting point, future research

actions to enable future change programs a higher success rate and provide practitioners as well as researchers with valuable insights about cultural change, especially with regards to OS. 8.2 Acknowledgements I gratefully acknowledge the work of Dr. ir. S. Boscari and Prof. dr. H. Broekhuis, their suggestions and comments. Further, I appreciate the work of L. Hendriks, D. Ensik and X. Xiao, fellow students with whom together the SLR was carried out. I thankfully appreciate the effort by the companies who supported me by providing interviews and further information. All results expressed are mine and not of the mentioned persons.

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