MGMT20001 Study Guide - Final Guide: Usability, Job Satisfaction, Quality Management
17 May 2018
School
Department
Course
Professor
Culture
The “customary and traditional way of thinking and doing things which is shared to a greater or
lesser degree by all members and which new members must learn in order to be accepted into
the services of the firm”
Integrationist Theory of Culture
● Organisations have uniform cultures
● A single, uniform strong culture is better
● An organisation’s culture influences its effectiveness (functionalist)
● Provides a common set of values to enable members to work together; reduces need for
formal rules
● Culture is reproduced; organisation is stable
● Culture enables the organisation to survive in the environment in which it operates
Differentiationist theory of culture
● Organisation is a cluster of sub-culture related to particular challenge, task, responsibility
of a unit group
● Consensus is found not at organisational level but in sub-cultures
● Relations among subcultures can be complementary, conflicting or independent
● Boundary between “inside” and “outside” is permeable
Critical Theory of Culture (purely an analysis tool)
● Both integrationist and differentiationist theories are functional (look at culture from
management’s point of view)
● Critical theory looks at how employees are affected
● Focuses on the way in which power is embedded in culture
● Especially interested in how strong culture is a way to control employees
Enron
● Culture of innovation:
○ “Most innovative company” 5 years in a row
○ Ability to embrace uncertainty
○ Invented radical new business concepts
○ Charismatic/visionary/revolutionary leadership
○ “Intensely stimulating environment”
○ Cut staff and recruited young talent for new thinking/ideas
● Culture of “best practice”:
○ On list of best companies to work for
○ Extremely high level of employee talent
○ High quality management
● Cut-throat culture:
○ “Make money at all costs”
○ Had to endure a punishing workload
● Observable symbols:
○ Rituals/ceremonies: Major spectacles using theatrical costumes and settings;
rode on an elephant to promote India ventures
○ All Enron traders looked similar
■ Most employees had a goatee, or were clean cut
■ Outdoorsy look
■ All employees wore the same blue shirt
■ Enronians like a members of the same“club”
● Communication Patterns:
○ “Aggressive” nicknames for executives e.g. Rebecca Mark the the Shark
○ Nicknames of employees: “Enronians” - the best and brightest in the world
○ Employee’s in the ‘A’ category called ‘water-walkers’
○ Has particular terms/language e.g. “metrics” instead of “numbers” or “come to
shore” instead of “build a consensus”
○ One way channel: top-down
○ Major presentations/spectacles on stage by leaders
● Practices and Behaviours
○ Recruitment process: initial interview; “Super Saturday” - interviewed for 50
minutes by 8 different interviewers
○ Employees “Enronized” - fierce competition, no loyalties other than Enron
○ 80 hours of work per week is normal
○ Performance appraisal: ranked twice a year into A, B or C
■ C’s have to improve or be fired. Almost impossible to get out of C.
■ People in category B or C faced threat of being fired
■ 15% of employees were regularly fired or quit
○ No seniority-based salaries, highly leveraged compensation in the form of huge
cash bonuses and stock option grants to top performers
● Values, assumption, feelings and beliefs
○ Hiring young people because they didn’t mind long hours, did not question
authority and did not care about things being kept as they always had been
○ Consistent message to employees that they are the brightest and best
○ Employees who performed were compensated well, “if you were smart enough
and tough enough to work at Enron, you deserved to live like last year’s Oscar
winner”
○ Each employee for himself “if I step on a guys throat and he doubles my
compensation, well I’d stomp on the guy’s throat” - no cohesion
○ Corrective feedback stifled - employees need to be consistent with their leaders
Integrationist Theory
● Same culture of being innovative, being the best and cut-throat culture organisation-wide
● Consensus on culture throughout the organisation
● Top-down - Ken Lay dictates the culture through his procedures e.g. punishing
employees who speak out
● Boundaries of in and out - it is very exclusive, like a “club” to be a trader at Enron
● Extremely strong organisational commitment - loyalty to Enron is first and foremost
● Weaknesses:
○ Patterns do not tell the whole story - although employees all look to be in
uniform, they certainly do not work as a unified team
○ The strong culture of not speaking up is hindering the organisation
Differentiationist Theory
● Subcultures exist between traders vs other divisions - other divisions see the traders
being favoured with big bonuses and holidays
● The sub-cultures do seem to be complementary but there is some animosity between
them
● A definitive boundary between traders and other workers - more elite/exclusive
● Weaknesses:
○ Balkanization - each culture seems to be working for themselves
○ Not so easy to move between trader culture and other cultures
○ Although there is more scope for middle managers to manage culture, it is not
utilised
Critical Theory
● Employees seem to enjoy being apart of the Enronian group as they feel apart of
something special that is contributing to society and they have it good, happy to conform
● Employees want to resist the culture of not speaking up as they believe there are critical
issues, however they cannot for fear of losing their job
Document Summary
The customary and traditional way of thinking and doing things which is shared to a greater or lesser degree by all members and which new members must learn in order to be accepted into the services of the firm . A single, uniform strong culture is better. An organisation"s culture influences its effectiveness (functionalist) Provides a common set of values to enable members to work together; reduces need for formal rules. Culture enables the organisation to survive in the environment in which it operates. Organisation is a cluster of sub-culture related to particular challenge, task, responsibility of a unit group. Consensus is found not at organisational level but in sub-cultures. Relations among subcultures can be complementary, conflicting or independent. Boundary between inside and outside is permeable. Critical theory of culture (purely an analysis tool) Both integrationist and differentiationist theories are functional (look at culture from management"s point of view) Critical theory looks at how employees are affected.
