ORGANISATIONAL CULTURE: A FORGOTTEN CONTRIBUTOR TO ORGANISATIONAL SUCCESS

MATT STEVENS PHD AND ROBERT OSEI-KYEI PHD SHARE THEIR OBSERVATIONS OF THE FOUR MOST COMMON TYPES OF MANAGEMENT MODELS AND THE INFLUENCES EACH EXERTS ON AN ORGANISATION’S CULTURE.

All outcomes are facilitated by people. In most cases, they are motivated and guided by their organisation’s culture. In our experience, high performing construction firms have a strong and smart organisational culture which is produced by purposeful action of its leadership.

Organisational culture is often seen as observed behavioural consistencies, team expectations, rules of the system, embedded competencies, cognitive ideologies, universal principles and primary metaphors which demonstrates the intricacy of cultural context Schein (1990). More importantly, organisational culture indicates the standard practices of organisational team members, their interests, attitudes and beliefs. (Williams et al. (1993) Generally, culture is a rational outcome of a company’s chosen management model.

The chosen operation approach has consequences, some of which are unintended. The core idea of this article is to highlight the significance of organisational culture in achieving organisational success, particularly for construction firms. Very often, construction firms fail to commit to a management model and instil an organisational culture. The problem with a failure to commit to both approaches generates additional difficulties in managing the business.

We have witnessed the results: suboptimal outcomes. We believe executives are responsible for determining the best management model and inspiring a strong organisational culture in many respects. This resulting culture can make each employee an emotional owner of the company giving it a robust future. Now, let’s explore the characteristics of four common types of management models.

MANAGEMENT MODELS SUMMARISED

Management models are the approach that senior management takes to lead the people of a firm. They can be intentional or unintentional, but always help us to answer the question, “How do firms approach the business of construction?” We have witnessed these common ones in our industry:

1. Owner-Operator

An Owner-Operator Management Model is one in which one individual – the owner – makes all the major decisions. He or she operates the firm with minimal input from others. It is often the force of the owner operator’s personality that drives the success or failure of the firm. This person is the largest constraint to the improvement of operations and growth of revenue.

Of course, others help such as acquiring work, constructing work and tracking the operations, but the owner is the person who determines largely by himself what the company bids, the adoption of a software package, or the answer to a field problem. On any one day, each one of us can be too conservative, too lax, too emotional, etc. If there is no balancing by another person(s) of this human tendency, it is a hazard to the health of the firm since the industry is the second riskiest of all. We have observed this culture is most evident in the smallest firms.

2. Family

A Family Management Model tends to be evident in smaller firms that have grown a little too large for an owner to oversee all operations directly. Sometimes relatives or trusted employees form the senior management group. Employees are “looked after” in professional and personal ways by the owner(s).

For some employees, this is a significant value. Whether they come from a split family or not, a sense of togetherness appeals to many. In a family model, the chain of command is less critical since the owners tend to talk to any employee regardless of rank or tenure. Consensus building, although quietly practised, keeps relations strong inside the company. Bonuses tend to be discretionary.

3. Team

A Team Management Model models itself after sport dynamics. The team consists of some stars, a few tier two and less talented players. However each person supports winning. Winning is defined as a completed project within the contract requirements with a satisfied owner.

No one person does everything, but each does something(s) to improve outcomes. Getting the potential out of each employee is done. Bonuses tend to be determined by measurement and reward both project and corporate success. This model is evident in parts of each construction firm we know. Although, a company is rarely totally immersed, and so, it exhibits elements, sometimes a majority of the other management models.

4. Bureaucracy

A Bureaucratic Management Model, as the perception goes, are based on a government like process of using forms and facilitating meetings. This is the approach for all processes and decisions, no matter how trivial. An unreasonable amount of paperwork and time spent in meetings is a trademark.

We have observed an over reliance on planning, checklists, monitoring and measurement (not faith in people) which makes working for a construction contracting firm a “check the box” exercise. When the paper process is not followed, questions about the employee’s competence and diligence emerge. From our observations, firms adopting this model tend to be built on loyalty and not merit.

SUMMARY

Many leaders and managers think they understand their organisational culture. In reality, culture is not obvious, and what the project leaders see may not be the whole story. All substantial construction firms are informally organised with a management model that influences the thinking of their people. The method by which human resources are coordinated significantly affects their mentality towards the firm and creates the organisation’s culture.

This culture appears to play a large part in the commitment employees make to the company. Commitment is another way of stating the level of intellectual and physical energy each staff member expends on the company’s behalf. Our observation has been that a “team” mentality by staff is often desired by leaders in construction. A Team Management Model enables better-than-peer efficiency. People pick each other up. Employees many times, support the organisational goals with their individual actions.

Additionally, teams “self-police” or remove under-performers that hurt the group’s success. From these features, a distinct organisational culture should emerge. Nevertheless, it is obvious that most companies want to improve performance. However, this cannot occur because they are confused about their basic operating mentality. Sometimes it is simply choosing an appropriate Management Model.

Authors: Matt Stevens PhD and Robert Osei-Kyei PhD research and teach construction industry issues at Western Sydney University.