Change management has been an important area of study for the researchers as the increasing forces of globalisation and the observed clashes between the cultures of companies and countries create issues related to compatibility. Organisational Development and Change management processes are aimed at overcoming the resistances and bringing out the intended changes (Rees & Sharifi, 2002). Organisations face a number of issues in carrying out this process. The research paper by Raz (2009) presents a case study to illustrate the Organisational Development and Change process. This essay attempts to critically review the research article in order to summarise, and identify the critical theories, strengths and weaknesses of the article.
2. Summary of the Article
In the research article reviewed in this report, the author, Raz (2009) focuses on an OD&C process of participative management conducted in 2006-2007 in the South Korean subsidiary of an Israeli-based, kibbutz-owned global corporation.
The research article by Raz (2009) studies Cross-Cultural Organisation Development and Change (OD&C) as a tool for negotiating between corporate cultures and national cultures. The article subjects an empirical case study to qualitative analysis to identify the critical dimensions of corporate culture, workplace culture and national culture, and explains the cross-cultural OD&C process through which changes are brought about in the workplace culture to make it align with the corporate culture without compromising on core aspects of national culture. The article is an advocate of glocolisation which is aimed at aligning the workplace culture to corporate culture without giving up the important dimensions of national culture.
The author begins with a review of theoretical background in which he notes that Western-inspired OD&C processes that are commonly implemented in other countries belong to the genre of “Glocalisation” which reflects a dynamic interplay between global culture and local culture rather than attempting to replace local culture with global culture. The author observes that the theories in this area belong to one of two types – those that argue that the corporate culture should prevail and those that argue against the former group. However, the author suggests a middle-ground of workplace culture between national culture and corporate culture. The author adopts a ‘symbolic interactionist’ point-of-view which recognises that there can be differences between situated meanings within institutional and organisational contexts as well as that there can be negotiations possible between these meanings to arrive at common grounds.
The author presents a real-life case study based on Netafim, an Israeli company which is a global leader in supply of drip irrigation systems. The company has 32 subsidiaries around the world, one of which is in South Korea. The head office had clashes with its South Korean subsidiary due to cultural misfit of the subsidiary. The author presents the basic cultural attributes of Netafim and South Korean subsidiary. Netafim derives its culture from Israel’s which is characterised by attributes such as small power distance, high uncertainty avoidance, economic democracy, collectivism and mutual responsibility. The South Korean subsidiary’s culture is based on the South Korean values of large power distance, Confucianism which emphasises hierarchical relationships and familial values. South Korean management style is authoritarian, hierarchical and centralised. Recognising the need to reorient the South Korean subsidiary employees in order to tackle the problems of poor performance and huge uncollected debts, Netafim organised two OD&C seminars participated by all employees of subsidiaries, the dynamic, young Managing Director of the subsidiary, the logistic managers in Asia who oversee the subsidiary as well as by facilitator. The author explains that the seminars caused significant changes in the cultural attributes of the employees are aligned them better with corporate culture. The participative style followed at the seminar ‘unfreezed’ the employees and created better team values and synergies among themselves and with the Asian managers. However the Managing Director overstepped the limits of participative style and got sacked. On the basis of the case study the author concludes that cross-cultural OD&C allows ‘workplace culture’ to be used as an area for negotiating between national culture and global culture.
3. Cross-Cultural Organisational Development Theories
The article draws supporting arguments from a number of different theories in Organisational Development (OD) which involve cross-cultural negotiations.
3.1. Overlapping Circles of Culture
The article includes three main cultural categories which can be represented as overlapping circles. The first circle signifies corporate culture. Corporate culture is “A system of shared values and beliefs that interact with an organization’s people, structure and systems to produce behavioural norms” (Harvey & Brown, 2005; pp.69). The second circle denotes workplace culture. Workplace culture refers to the usual practices within the organisation and the way of interpretation of culture by the employees. Cummings and Worley (2008) state that national culture can exert powerful influence upon corporate culture. The theory of overlapping circles suggests that the workplace culture is influenced by the interplay of corporate culture and national culture. It is also possible that the workplace culture may have some dimensions which are different from both corporate culture and national culture. Any OD&C process should take into account the uniqueness of workplace culture and extent of influence exerted by other cultures (Burke, 1994).
3.2. Sources of Cultural Gaps
The article focuses on the cultural diversities observed between the Isreali-based corporation and its South Korean subsidiary. The author presents the basis differences between the cultures of these two entities as derived from their national culture in order to emphasise the need for organisational development and change. Many theorists and researchers have studied the importance of cultural differences in impacting the performance of an organisation. Alas and Rees (2006) study the ongoing efforts to transfer human resources management theories from the developed West to the socialist countries which are now undergoing major social and corporate changes in their cultures. The authors state that “practices such as Human Resource Management (HRM) and Organization Development (OD) are inextricably associated with conceptions surrounding culture and society, as well as to variables such as job satisfaction and organisational commitment” (Alas & Rees, 2006; p.1). They compare the attitudes and values of employees in capitalist countries and socialist countries to identify the sources of cultural clashes. They conclude that there are widespread differences found in context-related and job-related attitudes. This research bears special significance to the case presented by Raz (2009) because Netafim, the Israeli company, represents a capitalistic ideology even though some of the practices are emboldened in socialistic model. On the other hand, the South Korean subsidiary is entrenched in sociology. It is seen from the details of case study that many problems that arose between these two entities were on account were context-related or job-related. Thus the case study justifies the conclusions and theory propagated by Alas and Rees (2006)
3.3. Change Interventions
In the article, the author presents a timeline of change management in terms of the events and interventions. These interventions are significant contributors to the change that the South Korean subsidiary managed to achieve at the end of the OD&C program.
Grundy (1993) suggests the use of change interventions to carry out any strategic change within an organisation including a change of culture. It is seen that Netafim used change seminars to carry out change interventions. French and Bell (1995) classify the interventions into different categories on the basis of the size and characteristics of the target groups. Based on this principle, French and Bell suggest different sets of interventions deigned to improve the effectiveness of individuals, Dyads/ Triads, Teams & Grosups, Intergroup relations and total Organisation. Porras and Robertson (referred in Rothwell & Sullivan, 2005), on the other hand, classify the different interventions into four broad categories –
(1) Organising arrangements, which include establishing new task forces, quality circles and work teams,
(2) Social factors, such as team building
(3) Technology, which includes changes in job responsibilities and promotions
(4) Physical settings, such as changing the arrangement of departments within the office premises, moving some departments or individuals from one floor to another etc.,
In the case study in Netafim, it is observed that change interventions used by the management belonged to the categories ‘Organising arrangements’ and ‘Social factors’. These change intervention spanned across the entire set of employees in the South Korean subsidiary.
3.4. 3-Step Change Model and Field Theory
Raz (2009), while describing the change management seminars, refers to Lewin’s (1958) 2-step change model when he specifies that the seminar was a microcosm of Lewin’s classic scheme of unfreeze, chang and refreeze.
Lewin, often cited as a pioneer in the field of change management, states that a successful change requires 3 steps – unfreezing, moving and refreezing (Burnes, 2004). The employees in an organisation are in a state of quasi-stationary equilibrium. In order to implement changes it is necessary to unfreeze the condition of status quo. This is considered the most difficult step as it involves setting the mind in motion from a state of inertia. According to Schein (1987) the unfreezing process involves three steps – convincing the employees of the invalidity of the status quo, inducing the employees to feel guilt or anxiety over the present condition and creating a net of psychological safety from the change. After the unfreezing stage, the employees should be indulged in the “moving” stage during which the employees are taught or made to experience a totally new set of behaviours. Lewin argues that it is not possible to exactly predict the outcome of the planned change programmes as the environmental factors acting upon the change process could play important roles in determining the final outcomes. Thus the moving stage may involve unplanned for consequences as well. It is necessary to create reinforcements so that employees who adopt change would continue to retain it and not move back to their earlier state (Senior, 1997). The final stage “refreezing” involves changing the group behaviour to match the changed behaviour of the employees. The corporate culture should be congruent with the changed behaviour of employees so that there will not be any frictions created (Lippitt et al., 1958). The 3-step model is developed on the basis of the Field Theory propagated by Lewin (1951) which states that individual behaviour is a function of the behaviour of the group environment of ‘field’ and so to understand the individual behaviour it is necessary to study the behaviour of the group to which the individual belongs.
In the case study presented by Raz (2009), it is observed that the Managing Director of the South Korean subsidiary oversteps the limits of participative leadership style and leads to unintended consequences including losing his job. This is a classic example of employees failing to refreeze after going through the freeze and change processes.
4. Strengths and Weaknesses of the Article
The research article by Raz (2009) has a number of distinct strengths and weaknesses in its content, concept and methodology. One of the major strength of the article is that it is focussed on an issue which is central to the problems faced by organisations in modern globalised world (Senior, 2006). With companies from the developed world increasing their presence in developing world, the clashes of cultures between these two worlds are coming to the fore (Rees, 2008). This research article presents very valuable insights into the issue as the social and national culture of South Korea, as portrayed in the case study is not significantly different from that of other important developing countries such as India and China. Thus this research paper could be implications for companies venturing into other developing countries as well. The article follows an empirical methodology coupled with qualitative methods which makes its conclusions readily applicable to the real-world.
In spite of all the above mentioned strengths, the article does have weaknesses which present scope for improvement and further research. One of the weaknesses of this research is the ambiguity surrounding the author’s use of “workplace culture”. While the overlapping model suggested by the author shows that the workplace culture may derive its dimensions from national culture and corporate culture, the author also states that the workplace culture may have some dimensions of its own. However the author has not explained the source and nature of these dimensions. In the case study presented by the author it is seen that there are some employees who do not conform to the national culture. The author needs to explain if it is possible for some employees not to conform to the workplace culture. If such a condition is possible then such employees would be outside of all the three circles (Meglino et al., 1989). These points present scope for further research.
The research article by Raz (2009) presents a case study to illustrate the cross-cultural change caused by OD&C process. The author concludes that between “corporate culture” and “national culture” there lies an arena of “workplace culture” which offers scope for negotiations between the other two conflicting cultures. The research article makes conclusions which could be of significant value to the managers at multi-national companies which have been adapting to the forces to globalisation. The findings by this research open up new avenues for research in this burgeoning area of planned change management. The cultural gaps as identified in the case study could be of particular interest to managers overseeing operations in developing economies such as India and China.