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The core of Culture-Excellence is that culture is at the heart of competitive advantage, particularly when it comes to sustaining high performance. It's mainly a North American perspective, with strong following in Europe and even China.

Culture-Excellence is developed by practising and international renowned management consultants. For example, Tom Peters and Robert Waterman from McKinsey.

Summary of Culture-Excellence

  • Many organisations emphasise on using culture as dominant ideology and practice.
  • The new organisation is flatter in structure, emphasising the removal of hierarchy.
  • Bringing new meanings to careers, skills, and rewards.
  • New forms of organisations brings more responsibility to employees in a humane way. Giving the employee autonomy, clear objectives, and training to make his or her own contribution to the organisation.
  • Culture-Excellence is claimed to be able to grant autonomy and initiative, whilst keeping tight control of their operations.

Criticisms on Culture-Excellence

Researchers have drawn attention to the methodological shortcomings the research of Peters and Waterman was based on.

  • Peters appeared to have admitted he faked some of the data used in the research of the book.
  • Stadler (2007) studied 40 European organisations who survived for more than 100 years. His findings challenged core tenants of the Culture-Excellence movement. The research showed that:
  • Throughout their history, great companies have all emphasised exploiting existing assets and capabilities over exploring for new ones
  • Good companies tend to stick to their knitting, great companies know when to diversify
  • Great companies tell and retell stories of past failures to make sure they don't repeat them
  • Great company very seldon make radical changes - and take great care in their planning and implementation.

The approach shows weaknesses in three areas of crucial operations in organisations:

People: On one hand people are the core asset of the company, on the other hand there are clear grades of employees. Each grade being differently, ranging from core to periphery.

Individual achievement and reward seems to be more important than teamwork. Leading to conflict and motivational problems.

Politics: The struggle for power, resources, and survival is increasingly present at Culture-Excellence organisations.

Culture: Culture is seen by the proponents of the Culture-Excellence as the best way. Assuming the creation of a excellence culture is unproblematic, which isn't the case.

The development of Culture-Excellence is closely related to the rise of neoliberalism. Central to this ideology is the move to insecure, temporary, and part-time employment.

The development of Culture-Excellence

Tom Peters and Robert Waterman's search for excellence

From the authors of "In search of excellence", the selling business book all time

Origins of the book lie in a major study of the determinants of organisation excellence, using the now famous 7 S Framework.

They found that the four soft Ss (staff, style, shared values and skills) held the key to business success.

They argued that the rational approach is flawed, as it leads to:

wrong-headed analysis: situation or information analysis that is too complex and unwieldy to be useful. Tries to be precise on what can be known.

Paralysis through analysis: application of the rational model that stops action and planning runs riot.

Irrational rationality: identification of the right answer according to the rational management technique, but not applicable in reality.

As counteract, Peters and Waterman argue eight key attributes that organisations need to demonstrate to achieve excellence:

1. Bias for action

  • Achieve quick action. Use the philosophy of "do it, fix it, try it".
  • Use chunking, a practice to divide problems in manageable pieces.
  • Chunks need to be handled by a specific group empowered to fix the problem.

2. Close to the customer

  • The customer dictates product, quantity, quality and service.
  • Best companies go to extreme lengths for their customers.

3. Autonomy and entrepreneurship

  • Encourage entrepreneurial spirit among their people, by pushing autonomy far down
  • Excellent companies have a championing system. to foster, promote, and sustain the budding entrepreneur
  • The three elements of the championing system
    • The product champion - a zealot or fanatic who believes in a product
    • Successful executing champion - one who has been through the process of championing a product before
    • The godfather: typically, an ageing leader who provides the role model for champions
  • Autonomy and entrepreneurship are encouraged by free and open communication. Excellent companies exhibit the following characteristics:
    • Informal communication systems
    • Communication intensity is extraordinary
    • Communication is given physical support
  • The information system also acts as a tight control system. People are constantly checking how colleagues are faring.

4. Productivity through people

  • Workers are treated with dignity and respect, referred as partners
  • People are primary source of quality and productivity rather than machines

5. Hands-on, value-driven

  • Excellence companies are clear on what they stand for. They take the process of value-shaping seriously.
  • Implementing the values is a primary responsibility of the individual members of the management team. They set the tone.

6. Stick to the knitting

  • Excellent companies do what they know best.
  • When they acquire, it is in an experimental fashion.

7. Simple form, lean staff

  • Structurally, the most common form is the 'product division'.
  • Project teams or task forces are formed on ad-hoc basis
  • These simple structures require only a small, lean staff at the corporate and middle management level.

8. Simultaneous loose-tight properties

  • Firm and free principle.
  • Individuals are encouraged to innovate autonomously, as a result of the shared values of the excellent company.
  • However, those shared values also act as a firm control mechanism. Individuals know they have the freedom, but that their actions as scrutinised.

Rosabeth Moss Kanter's post-entrepreneurial model

Professor at Harvard Business School at which she studied business organisations. Gained familiarity due to het book The Change Master, providing an antidote against the lack of competitiveness of the US.

Kanter argues organisations need to learn to dance as nimbly and speedily as mice to survive in an increasing competitive and rapid changing world.

Future organisations should pursue three main strategies:

Restructuring to find synergies

Identify and concentrate on the core business, removing all obstacles and impediments. Eliminating all non-core activities.

Authority is delegated to the appropriate levels, those in the front lines

Result is a flatter and more responsive organisation with a greater degree of focus

Opening boundaries to form strategic alliances

Due to slimming-down the organisation and outsourcing some functions, the need arises to pool resources with other organisations. To share ideas and information and exploit opportunities. Three forms of alliances exists:

Service alliance: two or more organisations undertake a special project with a limited lifespan

Opportunistic alliance: Joint venture that takes advantage of a particular opportunity that has arisen.

Stakeholder alliance: A continuing, almost permanent relationship between an organisation and its key stakeholders.

Creating new ventures from within

Innovation as the responsibility of everyone. New cultures are formed to encourage and aid innovation. Removing barriers and restrictions to innovate.

Kanter recognises that the changes will have profound impact on employees. Especially in the areas:

Reward systems: Reward systems will reward those who are able to innovate, but not everyone is or has the opportunity to be an entrepreneur. At the same time seniority and position will highly benefit from the reward system.

Careers and job security: Traditional forms of a career path will diminish as organisations become flatter. Climbing the corporate ladder is replaced by job-hopping. This results in a changing relationship between employer and employee that becomes more and more short-term.

Worker's lifestyle: Rewarding more strongly on increased performance automatically causes employees to be expected to work longer hours. Requiring employees to center their life around work. Research shows that unmarried or divorced executives are preferred by organisation due to their willingness to spend more time and focus on the organisation.

Charles Handy's emerging future organisations

Educated at Oxford and Sloan School of Management at MIT, Handy is one of Britain's leading management thinkers.

Like Peters and Kanter, Handy believes that future organisations will be smaller and more flexible. However, Handy recognises that organisations will need to respond differently to diverse set of challenges. There's not a new best 'one way'.

Handy identifies three generic types of organisations:

  • Shamrock: Having three distinct groups of staff - Core, Contractual Fringe and a Flexible Labour force
  • Federal: A collection or network of individual organisations allied together to achieve a common purpose
  • Triple I: Information, Intelligence, and Ideas = added value