Your prof posted this... a few people are responding... it doesn't appear to be required though: As many of you know this is an important week in the United States. Thanksgiving, which we celebrate this Thursday, is a time we take the day (or 2 days), gather with friends and family, and give thanks for all of the good things we have in our lives. No matter our stature in life or socio-economic standing, everyone celebrates in their own way. It is based in our historical development that goes back to founding of the colonies in the US by the British. (Some might call it an invasion, but that is another issue.) Although our course continues, papers are due, and we will continue our discussions online, I hope each of you will take some special time with family and friends, wherever you are, this week and tell them how much you love them and cherish them. When we lived in Italy in 1991-1992 we invited our new Italian friends to join us in our typical United States style Thanksgiving and shared with them our tradition. I hope you can do the same wherever you are around the world. I have created a special thread this week as a place for you to share with us how you are celebrating this time or to share with us a particular holiday or festival that is meaningful in your culture. I look forward to learning more about your cultures. HAPPY THANKSGIVING! Oh and I lied... Roy hasn't responded back... I was just refering to his initial responce. Good luck. I will be watching for your postings!!!

Team? (Theoretical Wonders) The Microsoft (MS) case study is about the following organizational issues: model of organizational behaviour; structure and design; culture and climate; organisational change. Microsoft’s human resource philosophies, polices and practices were primarily developed in 1980’s. The model of organizational behaviour those days was as shown below: Model of organizational behaviour: [they provided a chart] Structure and Design commercial tradeoffs; Highly competitive, success • The CEO Bill Gates considered that all structural elements or building blocks in his organization facilitated the most effective coordination of tasks oriented environment; (OB, page 418). Through development Gates worked hard to keep the configurational building blocks of the organization in a shape of a small • Limited education and company. He restructured the organization into small units further dividing it into work groups with the responsibility for a product, project and training opportunities; program, rather than having an integrated entity. • too many levels of carrier ladders Gates hired extremely intelligent but not necessarily experienced new college graduates. He never considered mediocre candidates, only the best, highly-driven people were selected. Employees were challenged and stretched and working 14-hours day was a norm. Company's very structured performance review process ensured that only high performers stay in the company, those with rating 2.5(low) opted to look for other opportunities. As noted in the Wall Street Journal, a number of the top managers left the company because they couldn’t cope with the pressure any more. However, when Steve Ballmer 'mandated' work-life balance, many found it difficult to re-balance their lives because they were used to and loved pressure, deadlines and being constantly pushed. The company had good technically capable people, however, the company was struggling due to the lack of experience/ well-trained management – as it states in the case “there were a lot of managers at that time who lacked the necessary skills to manage people”. The promotion and rewards were done based on technical knowledge and skills but not on leadership competency. Training and development of managers weren’t valuably considered by the management assuming that leaders in company are "absolutely developed and matured". Gate’s operational building blocks were based on “hands-on style” management style, where the manager stays in touch with the company essential business (OBp.479). Through the 1980s and into 1990s, much of the direction settings, coordination and control was managed by Gates personally; he monitored around 100 bi-weekly status reports from project and program teams. He wanted to raise competitiveness of its product portfolio and make the tough technology vs. commercial tradeoffs. Microsoft had a charismatic leader. Robert House suggests that charismatic leaders are likely to have a lot of self confidence, firm confidence in their beliefs and ideals, and a strong need to influence people (OB, page 337). He further argues that this type of leaders also tend to communicate high expectations about follower performance and to express confidence in their followers. From the case, we can see that Bill had all these characteristics. He was sure that smart people had the most potential to deliver and respond to challenges. Bill used the optimal level of stress to energise people and drive performance of his organization (OB, page 173). Gates used a typical contingency organization designed approach (OB, p435). His organization was designed through so-called rigorous multi- staged recruitment process. He said: “I’d have to say my best business decisions have had to do with picking people”. Gates and Steve Ballmer, the company’s president and COO used to hire the future employees from elite educational institutions. They also were famous head hunters in 1980s relentless in getting professionals from other companies on board. Although the company was growing fast, Gates implemented the “n minus 1” staffing philosophy of hiring less people than it was actually required. Even in 1990s, despite the fact that Microsoft had huge financial resources; the “n minus 1” rule remained in force. This was done not to save costs but to hire only the best. Gates always raise the median and at the same time wanted to have a leaner organization. As the OB textbook suggests, the smaller organizations have lesser number of hierarchical levels and short lines of communication. They also have higher team spirit, improved productivity and higher profits. It was Gate’s organizational strategy to recruit the hard core, brightest and smartest people and let them stretch their abilities that made him to relentlessly use the ‘n-1’ rule. “Manager’s choice for organization structure are affected by the organizations’ strategy (purposes and goals) and imperatives (contextual factors [size, technology, environment]), and the manager’s personal value system and experience. (OB, page 464). As it is described in the case study, the Forbe’s assessment said “The deliberate way in which Gates has fashioned an organization that prizes smart people is the single most important, and most consistently overlooked aspect of Microsoft’s success”. We believe hiring only the best allowed Gates to have an organization full of passionate, creative people (as discussed in Gary Hamel's book, p.59). Culture and climate: Despite of the hard working style in Microsoft, the company had common goal and vision – “computer on every desk in every home – running on Microsoft software”. As cultural values – employees were happy to work for Microsoft and move the company toward to success. They were united by a common goal. One of the ex-Microsoft employees said: “We were literally changing the world. You felt you were at the centre of the universe. It was an invigorating feeling - and all this pounding by Steve Ballmer and yanking by Bill was just the price you paid to be there". Another employee said that Gates created 'a culture where everyone felt that their excellence was material to the bottom line". Organizational Change in Microsoft Microsoft’s continues development led to changes in the way their HR polices were managed in 1983 and 1984: “ladder levels” were established to assist managers in recruiting developers and in offering salaries based on skill level. Carrier development methodology has been first formed those days. They applied so-called “lessons learned approach” to failed project, rather than firing a person who failed it. “If you fire the person who • failed, you are throwing away the learning.” Microsoft changed their approach to development of its personnel. They put great faith in development through personnel mentoring, • experienced colleagues of Microsoft took over teaching responsibilities in addition to their work. They also promoted the on-job trainings for its personnel. In order to raise motivation and retention of employees Microsoft established the linkage between individual performance and reward. • Each Microsoft employee had a set of performance objectives agreed with their line managers and their performance was evaluated • against those objectives. They provided frequent and honest feedback to its employees during semi-annual performance reviews and there were no surprise for • employees in terms of their performance. Employees’ performance was rated from 1 to 5. In 1990’s Gates was confused that he was loosing some of the values and spirit that had made him successful. He hired several experts • qualified in designing, conducting and interpreting on organizational climate and employees satisfaction. “Organizational Health Index” was developed that could be administered as part of employee survey. The attrition level in Microsoft had never been high, but 1997 it became widespread and Microsoft HR put in place the “Terminator • Study”. The idea behind the study was interview the ex-employees to find out why they left the company. Culture and Climate in Microsoft organization started changing from bureaucratic and red tape to clear direction one, employees had a • sense of freedom. Employees could talk about leadership quality. Ouchi framework (OB text pg 475) can be perfectly applied to organizational culture of Microsoft in 1990’s. Microsoft can be mostly classified as a Type Z company based on the following facts of the case: [table analyzing data to come to the Type Z conclusion] Can the organizational changes in Microsoft be compared with BP organizational process? There are noticeably many similarities between the HR processes applied by Microsoft and those utilized by BP today, such as: semi-annual performance reviews against SMART objectives agreed with management; performance rating (below expectation, meet • expectation, exceed expectation and exceptional performance). BP employees’ salary increase depends on the performance rating achieved throughout the year; • • • • different types of people surveys; Upward feedback process, whereby BP employees evaluate their managers; ‘ladder’ levels; People development through: training and international assignments, coaching and mentoring, on-job trainings, switching jobs internally, etc. HR competency models to guide supervisors, linkage between individual performance and reward, SMART objectives • Were changes taken place in Microsoft organization positive or negative? In general the organizational changes undertaken by Microsoft were very positive. The way they processed the changes reminds Lewin’s Change Process model. Microsoft organization was moving from one condition to another and it was multi-staged process (OB, p499).As any change the Microsoft Organizational changes created problems and concerns from people side, who could not easily rebalance their lives. There was a question in people’s mind whether softening of Microsoft’s hard-core macho culture would not compromise the very heart of its competitive advantage. Microsoft management was sure that they established a very delicate balance through planned and gradual approach to the change.

Team 5: “Microsoft: Competing on Talent (A)” Case Study In the podcast “Story of Globalization and Culture”, LG Executive Thomas Linton states that “Culture is like the wind, we resist culture and it will just go around you”. If we do not know which way it is going, how we can expect ourselves to affect it and make it work for the organization?! The actions, behaviors, styles, and ‘ways of working’ that Gates and co-founders established from early days set the culture of Microsoft, which hasn’t wavered throughout time. This perspective of culture helps to illustrate some of the typical definitions of culture stated in Organizational Behavior (Griffin/Moorhead) such as ‘the way we do things around here’ and “Collective understanding”, and also led us to further thoughts and discussions on how culture was created, changed by the leadership and organizational structure of Microsoft; which type is the best to describe Microsoft’s culture and what is the best way to enable culture change. How was Microsoft culture created? Microsoft created its unique culture and values which marked them out of other companies at the time through following the step-by-step process of creating the organization culture (Griffin/Moorhead, 2010). Step 1 and 2: Formulate strategic values and develop cultural values Microsoft strongly believed employees were the most valuable asset in the company. Bill Gates and his team created a powerful ‘hunting’ network to get the ‘best minds’ from the most prestigious universities in the US and outside (Canada, Japan). The rigorous hiring process established in the company supported the strategic value to get the most talented young brains. Innovation – as Microsoft’s core cultural value – started with the company and also continued to be the constant focus. Step 3: Create VisionAfter the strategic and culture values were well established and developed in Microsoft, although its vision ‘have computer on every desk in every home with Microsoft software’ was so ambitious to the world, it set perfectly well for the group of ambitious people who are highly motivated and performance driven. Step 4: Initiate Implementation Strategy Microsoft implemented its strategy toward the vision by creating the stretch and challenging environment (n minus 1 philosophy). They believed by creating a challenging work environment people would be best developed. It should also be noted that with all this ‘push at work’, Microsoft maintained the high motivation and morale within the organization by creating a friendly atmosphere at work and feeling of ‘one family’. Step 5: Reinforce Cultural behaviors A good example brought in the case is the managers reminded newcomers about the philosophy of success, to ensure people are focused on core, priority issues while working under stretching conditions. Which is the best type to describe Microsoft’s culture? Are most of the characteristics of Microsoft’s culture associated with the ‘Type Z Company’? One of the cultural values is Evaluation which indicates that in Z type companies appropriate evaluation takes a long period of time. In Microsoft, it usually takes 2-3 years to be promoted where employees’ quantitative and qualitative aspects of performance are intensively evaluated. Another value is Careers which is characterized by the broad career paths of employees. Microsoft case references that ‘development also occurred by encouraging horizontal transfers and employees were encouraged to develop themselves by switching jobs’. On the other hand, people may argue that Microsoft is a ‘Typical U.S. Company’. Although it doesn’t really take a short-term view of its commitment to employees, the way the Company targeted, recruited and retained the talents and the pace they operated business and reviewed employees’ performances seems fit the ‘Typical U.S. company’ characters more. Or does it actually indicate the changes Microsoft was undertaking at that moment of time – changing from a ‘Type Z Company’ to a ‘Typical U.S. Company’? What made Microsoft change and what were they trying to change? From Microsoft case study, we can clearly see the value-based leadership approach. Microsoft's key value were their employees, at that employees were the company’s both espoused (explicit) and enacted (implicit) value (Week 4 module, p16). It was coming from the company’s founders who truly believe that "We're in the intellectual property business," and "It's the effectiveness of our developers that determines our success." Attracting best talent to the company was a common goal of all Microsoft managers across the company, including the CEO (the examples of actual enacting the strategic values are: CEO regularly calling wavering star prospects, CEO personally reviewing and intervening in project and program teams progress, CEO personally reviewing the high potential leaders, etc). This value was embedded in the Company from top down; although the company increased dramatically over a decade, both strategic and cultural values never fundamentally changed. As Microsoft continued to grow, the top management realized that one of the greatest drawbacks was a lack of sufficient capable managers and leaders (Recognition and Definition of Problem). After Steve Ballmer became the president of the company (Change Agent), he made leadership development as his top priority and periodically reviewed high-potential people list. Other changes also followed: introducing new training programs, increasing mentorship, more job transfers, including international assignments (Problem-solving Process and Implementing the Change). A competency model based on six "success factors" (core values) was developed to allow managers to use consistently in interviews, performance reviews or career-development sessions, and the feedback and reward systems were reviewed and changed, too. All these changes in leadership development, ladder levels and compensation philosophy resulted in underlying individual and organizational behavior changes (attempts to modify some aspects of the company's "hard core" culture). Such changes were driven by the change agent and the approaches were various. But once again, the company’s strategic and cultural values were not changed. It was the company’s cultural values that became the base for resistance to change (many people did not want to rebalance their work-home balance, some managers strongly believed that without traditional ‘hard core’ culture Microsoft will not succeed, etc.). The talent people and their great innovatory capabilities remained the key. From that, we could actually say all these years’ changes made in Microsoft were merely the change of organization climate, but the underlying culture did not change from its original values. Is it better to change people to enable a culture? “Culture has deep historical roots that tie the organization to its past and determine its future”, it takes time to create and change. In order to change the culture of an organization (such as was initiated in the Microsoft case), is it better to change the people (or significant portion of those people that display strong culture connection) to enable a cultural change? For Microsoft case, we can even argue that its culture was developed simply based on the values and believes of a few company founders and that was cloned time and time again by the recruitment process targeting identical people that are managed through a tightly controlled mechanistic organizational structure. Changing the people maybe the easier and quicker way to fundamentally change or even replace its existing culture. The real challenge is how to recreate a culture which distinguishes the organization from others, and most importantly how it can (if not extend, then at least) maintain the company’s success within a limited period of time. This may be the main reason why Microsoft chose to change company’s vision, strategies, organizational structure, management styles but not changing the way they recruited people. That said, they might actually try to create an internal environment which allows all individual and organizational behavior changes and expect the culture change to follow naturally. From the above, it is not difficult to tell the importance of organization culture. Not unlike Microsoft, debates around how to create, maintain and develop the suitable organizational culture is and will always be a main challenge for most of the organizations. Other topics were raised and discussed during the team discussions: • How individual behavior, organizational factors, internal and external factors linked and interacted with each other• Peters and Waterman Approach • Did Microsoft culture create groupthink?• Did BP really change its culture after Texas City? Where were we in the process of that when Macondo happened?• If fishmen were throwing the fishes in the market, what people in BP are throwing? We agreed to explore these and some other discussion points during the second part of the week 4.

Team 3: The nature of Organization Structure: In the 80’s Microsoft’s Organizational Goal (vision) was: “a computer on every desk in every home, running on Microsoft software”. Bill Gates, Paul Allen and four programmers had created a hot house of innovation and hard work – the core values of Microsoft of the start-up days. From the start they had focused on recruiting the best. With Microsoft going public the focus still remained on recruiting the best talent (i.e. people who are intelligent) with more refined and structured way of recruitment. The vision and strategic direction of the company changed to: “to empower people to do anything they want, any place they want, and on any device”. Microsoft was still the hot house of innovation and hard work but expanded to the six success factors. We look at how Microsoft transformed into a structured organization with appropriate balance between technical and leadership mix to support its business. The processes were put in-place to run biggest multinational computer Software Company in the world. In this summary we will analyze its organization structure, culture, other organization processes and how it coped with the business growth to sustain its business in the harsh competition market. Structural Configuration The configuration of an organization is its shape which reflects the division of labor and the means of coordinating the divided tasks. Gates worked hard to keep the “small company” feel. He continually restructured the organization into small units – typically with 30 to 200 people – further dividing these into workgroups with responsibility for a product, project or program. So, conscious attempt was to have a collection of small groups rather than an integrated entity. The model had limited cross unit coordination. Software developers dominated the company. Employees were provided separate office cubicle that could be decorated to individual tastes. College like atmosphere was kept; just out of college employees could be given a sense of social belonging. This gave raise to the ‘caffeine culture’. In the growth phase, effectively the same model was imported without much change. Responsibility & Authority Through out the 1980s and much of 1990s, much of the direction setting, coordination and control was managed by Gates personally. Perhaps there was no focus around the contextual factors. His legendary intellect, high energy involvement and intensely competitive nature led him to adopt very hands on style. He saw his role as assessing the fit and competitiveness of the entire product portfolio and making the tough technology versus commercial trade offs. In Later years, in order to develop leaders Microsoft saw advantage in pushing authority down the line and replace it’s traditional hands-on control with coaching – what it termed as “turning over the keys”. To ensure focus all VPs were required to make OHI focus of their first slide in their annual business review meeting. Strategy, Structural Imperatives and Strategic Choice Startup As mentioned earlier Microsoft’s strategy around people focused on hiring the best. For Gates, acquired knowledge was less important than “smarts” – the ability to think creatively, and experience was less important than ambition and to raise the bar continually. One of the prime responsibility of Steve Ballmer, since he was hired in 1980 as assistant to the President was recruiting coordinator. His mantra was: “We want people who are smart, who work hard, and who get things done”. Microsoft had a standing policy “If you get a kick-ass guy, get him”. Initially due to lack of proper training, Microsoft strategy was to put employees in demanding situations to unearth their true potential. The concept being that this would either be an opportunity for growth or death for the employee. People could grow as individual contributors or advance on the management track but obtain same recognition, compensation, and promotion opportunities. Microsoft had a long tradition of promoting people who were in charge of failed projects they believed that – “if you fire the person who failed, you are throwing away the learning’s”. New hires understood that it was their responsibility to learn from a whole range of experienced people including team leads, experts, and particularly their formally appointed mentors, often equally young but more experienced colleagues Gates believed that employee having stake in the company raised motivation and retention, therefore key employees were given equity in lieu of high salaries; a strategy that conserved cash for growth. Later in the years a well established linkage between individual performance and rewards was created. Gate’s style of providing brutal, honest feedback got institutionalized in a process of direct, clear semi annual performance reviews tied to pay increases, bonus awards, and stock option grants. Setting specific quantifiable objectives every six months was the norm. Eventually, the acronym SMART was applied to performance objectives. Merit increases were awarded on the basis of one’s present skills while bonuses rewarded achievements in the immediate past period. Options were awarded to the future potential and high value at Microsoft. This I consider was source of Motivation for employees through awards. Growth: From small personal start up, Microsoft had started to transform into a full fledge Company and there was a desire to hold on to the underlying people philosophies that many felt were at the heart of the company’s success. Recruitment was still viewed as a prime responsibility of everyone in the organization and the “n-1” rule for staffing the projects remained. To undertake this task Microsoft hired a set of professionals. They would hunt for talent in colleges, universities and would even look for mature hires. It was in the 90’s that periodic employee surveys were designing, conducted and results interpreted to give data on organizational climate and employee satisfaction. Job satisfaction was consistently around 80% (compared to 73% in other IT firms). However, amongst employee who have spent 7 years or more, and in senior positions, attrition was close to industry average. So, in 1997, internal experts developed “Organizational Health Index (OHI). The focus of which was “to keep alive the entrepreneurial spirit, ability for individual action, and the opportunity to make difference”. When Steve Ballmer was appointed the President in 1998, Staff strength was about 30,000. He conducted one to one interviews with a cross section of 100 employees and concluded that the company needed two things: • A greater sense of clarity and excitement about the company’s direction, and • More freedom to act without bureaucracy or red tape. He also proposed changing the company’s vision: “to empower people to do anything they want, any place they want, and on any device”. His second priority was to develop leaders and that he thought could be achieved with top management pushing authority down and replace it’s traditional hands-on control with coaching – what he termed “turning over the keys”. To ensure focus on this Ballmer insisted that all VPs make OHI focus of their first slide in their annual business review meeting. This was major change in philosophy and culture, however, Gates and his team ensured well; they complied with “6-steps of changing culture”. The company also decided to put in more effort on leadership and management development, a change from the past. They hired Chief Operating Officer, Robert Herbold, from P&G, where leadership development was taken very seriously. He convinced top executives to review Microsoft’s key people more systematically. Around 1994, the company set out to identify the core skills, capabilities and values. Six “success factors” were identified: taking a long term approach to people and technology; getting results; individual excellence; a passion for products and technology; customer feedback; and teamwork. These competencies, printed on cards, became the tool kit for performance review process, recruitment interviews and career development sessions. Salary was moved from 50th percentile of the industry to 65th percentile. The numbers of nonexecutive ladder levels were increased from 12 to 22 to reward high performers more frequently with promotions. Along with that the new culture promoted work life balance. Microsoft in its journey from start-up to its growth went through the complete cycle of an organization which is Formulate Strategic Values, Develop Cultural Values, Create Vision, and Initiate Implementation Behavior & Reinforce Cultural Behaviors. Also our assessment is that Microsoft exhibited an Organic organization structure. It had both espoused values and enacted values. Overall Microsoft did a great job while going through Organizational change, the change was systematic, with no signs of resistance to change, with “7- keys of managing change”. Company has done well to change its pressing culture causing retention issues for experienced staff. To further divulge into understanding Microsoft as an organization, I had called up one of my friend who happens to works at Microsoft and ask him a few questions. These are given on the next page. Telephonic Interview with a current Microsoft Employee– 24th Nov 2010: Q1: A: How would you define the culture at Microsoft? Microsoft is an organization that takes up bold challenges and big bets and at the heart of this are its employees: smart, motivated folks that allow the company to take on these challenges and win. In addition to all this, Microsoft is big on philanthropy and promoting a culture of giving in its employees. Q2: A: How does it transfer that culture to its employees? Every year there is a giving month at Microsoft where all employees raise money for various causes. I haven’t seen that big a focus on philanthropy and community service in any other organization. Managing work to life balance has made it easier of the staff to spare time for such activities. Q3: A: The core values that employees would generally ascribe too? (Turning to Ethical Behaviors) The core values that the employees ascribe to are: • Passionate about technology • Respectful and open • Accountable • Honest • Self-critical • Eager to take on real challenges • Open to making mistakes and learning from them Q4: A: Can you please describe the structure of teams at Microsoft? The core structural unit is a combination of three disciplines (called a triad’s) namely Program Management, Development and Quality Assurance. Program Managers define what we need to build by collaborating with partners, customers, marketing and sales folks and the product managers. Developers are the ones who actually build the project. Testing certifies the quality of the product. The triad organization based on discipline is replicated as the top as well, as high as the VP’s. Q5: A: What are the growth opportunities available for the employees? There are two types of career paths that one can take at Microsoft these being: An individual contributor or a Manager. Both can go as high up as partners/VP’s. It’s a personal choice and Microsoft provides support for both paths. Microsoft is a great place to learn and grow with many opportunities and challenges. Q6: A: What is that Microsoft does for employee’s development? Microsoft has a culture that acts as a breeding ground for innovation. Microsoft is huge and has so many products that people move frequently between products to seek change / learn new skills and Microsoft is very supportive of that. It has an elaborate internal training program to allow folks to gain expertise in what they don’t know. Also the high potential plan encourages individuals to compete and become part of succession planning for senior positions. Q7: How is the reward structure? Microsoft has a performance based compensation model where your performance is evaluated in comparison to your peers and plotted on a bell curve. Other than that, Microsoft really takes good care of its employees with some of the best benefits in comparison to the industry. Their medical benefits are amongst the best in America. Overall Microsoft has done well to manage its environment. This starts from individual’s role, well integrated with internal environment factors through Team performance. Today people stay in Microsoft in spite of big rich and financially sound, as there are less pressing environment and better work to life balance. Today the company is capable to compete with the external market and industry factors.

Team One – Microsoft: Competing on Talent (A) We performed this week’s case analysis by using topics presented in chapters 16-19 of our Organizational Behavior textbook. First, we present a summary of the case. Second, we present our findings on the organizational structure of Microsoft, followed by an analysis of the organization design the company implemented from its creation up until 1999. We then discuss Microsoft organizational culture, and finally, we present an overview of the Organizational changes that have taken place during this period of time. Case Summary In 1999 Microsoft was facing one of its biggest challenges to date; losing experienced people and organizational leaders. Bill Gates founded Microsoft under the premise that the company would only hire the best technical people it could find in the market. Under his leadership, college students went through a very strict selection process to ensure that only the best and brightest would be hired. Over the years, and due to the complexity associated with the size of the company, the new management leaders took a more “Humanistic” approach where not only the best technical people were hired, but they also ensured that leaders were properly trained to achieve leadership competences. The changes, driven by both internal and external factors, significantly modified the organizational culture. These very changes have become the primary sources of discontent with employees. Organizational Structure The company evolved from a centralized structure to a decentralized structure. Throughout the 80`s and 90`s, Bill Gates centralized the decision making process for personnel selection and product portfolio. His vision of “A computer on every desk and every home running on Microsoft software” was the initial driving force of the company. Internal competition created a division of labor and departmentalization, where internally, each group had very clear reporting structures and functioned like a team, however, there was no interaction between the different groups and no “supportive relationships”, which is characteristic of the Human Organization structure. In 1998, a new decentralized organizational structure was established when Steve Ballmer took over as the company president and COO. His approach showed strong characteristics of Fayol`s Classic Principles of organizing, where the leaders have more empowerment to make decisions and some of The Ideal Bureaucracy theory, e.g., documentation of the hiring process. While the structure was evolving, formalization continued to be a key aspect of the organizational culture. Very rigorous processes and procedures were still used for selecting personnel, conducting performance evaluations and to assign company shares as a retention policy. Organization Design The design of the organization was influenced mainly by the strategy defined at the time and the three structural imperatives (size, technology and environment). Microsoft’s original organization design was focused on fulfilling Bill Gates’ vision. The size was dictated by the need to hire the best and brightest technical people and the need to fulfill the mission. The technology can be classified as Non-routine (Perrow) and Workflow integration (Aston) and in terms of environment; the company was not threatened by competitors at that time. Ballmer recognized that the company needed a change in strategy to address not only the pressures exerted by the market and the large size of the company, but also the behaviors, and likes and dislikes of the so-called “millenniums”. Another factor that was affecting the design of the organization at the time was environmental uncertainty, which can be analyzed according to two main factors; the rate of environmental change and the environmental complexity. The nature of the market sector where Microsoft operates is very dynamic. Software is changed and written daily to stay ahead of competitors. The sector is also very complex and to fulfill their new strategy “to empower people, to do anything they want, any place they want, and on any device”, they created an additional complexity where standardization could become difficult. Organizational Culture Microsoft’s organizational culture was established in the very early days of the company when its co-founders worked long hours and even slept in their offices from time to time, consuming large volumes of Coca-Cola (presumably to keep them awake and alert while working hours on end). As the company grew, management were intent on maintaining this “caffeine culture” from the early days, even hiring less employees than they knew it would normally take to get the job done. They worked to maintain “frugality” and to ensure that all employees would be “stretched and challenged”. In line with the textbook definition for “Creating Organization Culture”; Microsoft senior management had established some very specific strategic values early on and then, worked to link these with a clear set of cultural values. Gates not only created a vision, but he also led by example by demonstrating the actions that were considered acceptable as well as those considered unacceptable in the company. The case presents several examples were he was reinforcing the culture he created (e.g. the new employees selection process was a key priority for the entire organization). Microsoft developed a set of values that, according to Peters and Waterman, are considered as “attributes of an excellent firm”: Bias for action was encouraged by reluctance to punish failures. In fact, some people were actually promoted even after leading projects that failed. Autonomy & Entrepreneurship was promoted by several restructuring initiatives aimed at keeping Gates’ idea of “keeping alive the feeling of a small company”. Microsoft encouraged Productivity through People by not only valuing employees’ expertise, but also by encouraging their commitment to contribute to the company bottom line. Employees themselves expressed a feeling of material importance in this regard. Since the early days of Microsoft, Bill Gates applied Hands-on Management, demonstrating his interest in knowing the personnel and being involved in the recruiting process and other decisions affecting the company. The company’s development of “CODES” to improve Microsoft products is one example of how they embraced the Stick to the Knitting cultural value. Finally, Microsoft had traits of a Simultaneously Loose and Tight Organization, with employees showing that they understood and believed in the company values and that they were fully committed to achieving the vision that Bill Gates had laid out for Microsoft. This sharing of a single vision by all created a cultural bond within Microsoft. At the same time, they implemented the “n minus 1” policy of hiring less resources than actually required, which showed that they were stretching and pulling resources continuously. The primary challenge that Microsoft management faced as the company grew was to preserve the very culture to which much of the company’s success had been attributed; while still being flexible enough to adapt, where necessary, to ever-changing internal and external environmental conditions. Organization Change and development Microsoft, like many businesses, had a good business model that worked for many years and helped them to become the industry leader. However, environmental factors are constantly changing, requiring companies to change appropriately. Organizations face pressures for change involving people, technology, information processing, communications and competition. Although Microsoft had to deal with several changing forces, people were undoubtedly their greatest challenge. From the beginning, Microsoft valued smart people as the single most important asset of the company. Microsoft utilized a Continuous Change Process Model to ensure employees were motivated and retained. Change agents were instrumental in formulating several change efforts at Microsoft. Bill Gates established the founding principles and a culture where everyone felt that their excellence was material to the bottom line. In order to preserve the human resource philosophies established by Bill Gates, several System-wide Organizational Development changes were implemented, starting with the definition of a new vision that provided both clarity on the new era of Microsoft and the necessary freedom to be more efficient. As the company grew exponentially, Gates continually restructured the organization into small units and work groups in attempt to keep the feeling of working for a small company. Later, with almost 30,000 employees, Microsoft changed its management style from a traditional hands-on control to a coaching style that pushed authority down to lower ranking employees. The ‘quality of work life’ program at Microsoft evolved over time from a hard-core “caffeine culture” to one with a balance that works for every employee. As Microsoft contemplates the loss of several key executives, it must continually develop new motivation and retention methods. Microsoft may need to consider focusing attention on factors such as Total Life Space, Social Relevance to remain successful in recruiting, motivating and retaining extraordinary talent. In order to retain a competitive edge of attracting, motivating and retaining extraordinary talent, Microsoft will need to continually assess and reinvent its organization structure, design, and culture based on forces of change.

Team 6: The Microsoft case presented us with insight into the beginnings of the company, and provided information about how changes in structural imperatives influenced the changes Microsoft made in order to remain successful. Our discussion summary is focused on: 1) The “n minus 1” workplace 2) Changing the Microsoft vision; and 3) Success Drivers – employees vs management behaviors 1. Should there have been a mechanism in place to counteract the negative effects of this “n minus 1” workplace? Was this a healthy work environment when it began? How about 10 years later? The rapid growth of the company combined with the use of the “n minus 1” technique ensured that people were thrown into stretching and challenging assignments long before they would have in other companies. This was motivational and inspiring for the young, creative minds that started the company and made it so successful. However, as this generation began to age, it appears that their priorities in life may have started to change as well. The case mentioned “burnout” as a concern, something that started to appear in the mid 1990’s. Now, in 1999/2000, Steve Ballmer is trying to do something about it. For some of the most brilliant minds on the executive team, it was too late. Several had already made plans for their departure from the 14-hour days and 7-days work weeks they had lived with for many years, to pursue other ambitions they now felt a need for. Our textbook (Pg. 501 – 502 and Figure 19.2) discusses a continuous change process model incorporating (among other things) a change agent. Steve Balmer is acting as the change agent circa 1999. He clearly has the authority and the political knowledge to be able to drive forward change; he is meeting all attributes of an internal change agent. The pressures for organizational change were beginning to appear in the mid-1990s, but the executive team didn’t recognize it. What we know from the case is that the main focus on people in the early days was to locate and hire the brightest young talent obtainable and give them a great environment to work. The early key personnel did this well. The company was focused on the short term needs of the workforce, but wasn’t necessarily thinking about long term effects of the “n minus 1” environment. They were a small, young and successful company; there was no recognition of a problem. But there were internal “forces of change” (Griffin & Moorhead pg. 495 – 499) already at work. The workforce was changing it’s mindset about personal values and beginning to think about the benefits of a work/life balance. This change went unnoticed for at least half a decade. By the time Steve Ballmer recognized it, the symptoms of burnout were apparent. If some of the mechanisms and human resource tools that were put in place in the late 1990’s (surveys, Terminator Study, the OHI) had been instituted at the onset of the decade, they may have provided Microsoft with leading indicators of the workforce changes lying in wait. Technologies were advancing rapidly in the 1990’s and customer needs were changing with each new device introduced. This represented more forces of change for Microsoft to contend with as they moved through the late 1990’s. This brought us to our discussion around Question 2: 2. What kind of changes will the organization have to endure to make a change in strategic vision successful? Strategic vision is described as a picture of what the organization will look like in the future (Module p.18) . A good strategic vision is appropriate for the organization and for the times. It should have been expected that Bill Gate’s vision of Microsoft on every computer has worked well in the early computing ages when the commands had to be written by code but had to change as the time and the technology and market environment changed . A good strategic vision also reflects the uniqueness of the organization, its distinctive competence, what it stands for, and what it is able to achieve. The "Terminator Study " and the "Organizational Health Index " prepared afterwards the stuffy were the signs that the vision Gate's had was not valid anymore and the Company needed a new soul, goal in brief a new Vision to show its uniqueness and push the limits to show what it is able to achieve.. Steve Ballmer was tasked with recommending a strategy change. We view this recommendation as one includes departmentalization (Griffin & Moorhead pg. 411) where tasks are combined and allocated to work groups. The new vision focuses on the requirement of end-user so the appropriate type of departmentalization would be "departmentalization by market(customer)" and the structure can base around four customer markets: consumers, large corporations, software developers and small business. The assumption underlying customer departmentalization is that customers in each department have a common set of problems and needs can be best met by having specialists for each. The key to the strategic vision is the strategic planning. To describe the relationship between strategic visioning and strategic planning in very simple terms, visioning can be considered as establishing where you want the organization to be in the future; strategic planning determines how to get there from where you are now. Strategic planning links the present to the future, and shows how you intend to move toward your vision. One process of strategic planning is to first develop goals to help you achieve your vision, then develop actions that will enable the organization to reach these goals. 3. What do you consider the main driver of the long term corporate success, the behaviors of employees or behaviors of management? Both the success of individuals and management are the key drivers for corporate success. In the module (p.30) the successful individuals who built the successful teams are defined as people who understand their roles and motivated to achieve their organizational goals within each integrated team. The dynamics of individual behaviors are categorized as a) organizational factors b) individual characteristics. The key point here is that the power and quality of the organizational factors represent the management success which is one of the two main dynamics of individual success. Organizational factors cover the dynamics including culture, rules, goals, and leadership. The article written by R. Ingbretsen summarizes the Seven Drivers of Organizational Success as • A clear mission statement – Why do we exist? What is our organizational purpose? • A compelling vision – What clearly describes our future desired state? What fulfills the mission? • A solid strategy – What is the logic and tactics that will ensure the mission and vision will be achieved? • A reevaluation or restatement of organizational values – What are the values the organization will both espouse and live by, that will satisfy all stakeholders’ needs? What culture do we want to create? • A greater focus on sustainability, growth and talent – What do we need to be doing today for our survival? What do we need to be doing to ensure future growth? What talent do we need to do both? • A strong emphasis on creativity, innovation and implementation – What products, services or other deliverables will support personal and organizational growth? How do you take these from a dream to reality? • A possible structure change – How do we best organize to bring about the changes needed to facilitate new organizational demands, desires strategies and needs? The seven statements and what they imply set the stage for insightful and proactive thought. It is management’s responsibility to ensure that each individual understands the seven drivers and contributes. They provide the building blocks needed to enhance the possibility of creating and building organizational success. In the Microsoft case we can see the example of management success (in the beginning) to support employees for individual success starting from finding the right people for the right roles, and right profiles that can adopt the culture quickly. The case study indicates employees were given every opportunity to behave as a successful individual. Choosing the young graduates is one of the key behaviors of Microsoft leaders so that these individuals will not bring in old habits and will easily adapt to the Microsoft’s culture. These new hires would be highly motivated for starting a career. With the examples from the case, it appears even with the smartest employees in the world, management success is the key driver for the company success. "Participative management” can be considered as the right structure which is a total management system in which people throughout the organization are involved in decision making process (Griffin & Moorhead pg. 419).

Gosh that is sure hard to read without formatting... let me know, now that the race is over, if you can recieve info any other way...

Hiya M! Here is the summary that Euan put together for the team: Introduction This paper focuses on 2 key areas related to the case and how both of these combined have contributed to where Microsoft had reached by 1999, which resulted in high attrition rates of senior leaders. The paper ends with some thought provoking questions for the group. Areas for discussion are Human resource policies and practices at Microsoft Culture at Microsoft How both of these have contributed where Microsoft was in 1999 and solutions for the way forward Future discussion topics of discussion Human resource polices and practices at Microsoft Ballmers mantra "we want people who are smart, who work hard, and who gets things done”, this was the key for the recruiting programme at Microsoft. Microsoft hired people with already high growth need. They were new college graduates with high motivation seeking self-achievement. Microsoft hired those who were going to be good Microsoft people, not necessary with software or programming skills, this was so Microsoft could train them the Microsoft way. This promoted people that could work with others who were like them, which would lessen personal conflicts. This along with the rigorous recruitment process and the “n minus 1” staffing levels ensured mangers only hired the best and did not opt for second best. The young college hires worked in an atmosphere they were familiar with. They worked in the “campus” and had their meals at the cafeterias where the food was subsidized, Eating, sleeping and breathing Microsoft was supported as a normal and appropriate behaviour “anything with Caffeine is free” Microsoft created natural work units consisting of 30 to 200 people, which again were divided into work groups. Microsoft gave autonomy to these work groups, so that they could decide when to start to work or when to play volleyball. Thus giving real ownership of the roles to the individuals. Attracting highly ambitious, driven and motivated people offered many challenges around human resources. Motivating these individuals and retention was at the core of the company. Individuals were developed through challenging and engaging work assignments. Horizontal transfers helped personal growth, development and motivation through job switching. The employees were not discouraged by the fear of failure since in the organizational culture of Microsoft, failure was considered as a part of the learning curve. Even the brutal criticisms by Bill Gates became a source of motivation. Coaching and mentoring became part of the manager’s responsibilities. Microsoft quickly recognised the linkage of individual performance and reward (SMART objectives created). Recognising the attrition in higher positions, Microsoft came up with clear ranking/reward scheme, and awarded stock options for long term assets. When company grew beyond the span of Gates personal control, company quickly recognised the need for high potentials and the need to develop leaders. Company started to introduce more rigour to their HR processes, developed six success factors. Company increased the cash percentile and increased nonexecutive ladder levels for more promotions. Culture at Microsoft Bill Gates had a clear vision on what he wanted very early on in the foundation of Microsoft, "a computer on every desk in every home, running on Microsoft”. From the online module culture has deep historical roots that tie an organisation to its past and determine its future. We feel that the heart of Microsoft success can be determined by its organisational culture, the vision of Bill Gates helped lead us to this culture. Reference the Seattle Pike Place Fish Market, they belief "good business beings with good people". This is certainly the case with Microsoft, Gates and Ballmer understood very well that the company's success was due to its ability to "recruit, motivate and retain extraordinary talent". There is a lot of similarities between Microsoft of the 1980’s and the case last week, they were both small startup and the leaders used similar influencing styles to create the culture; Direct The way we do things around here- Everyone travelled coach class, there was no status symbols such as executive dinning or fancy furniture Indirect Shared values- People were from similar backgrounds, clear on the vision Belief system- everyone believed "we were literally changing the world" Symbolic Enclosed offices, cases of coke, subsided food and beverage Bill Gates led by example, Gates knew everyone’s name, tel extensions by heart, he could do most peoples jobs as competent as they could Where Microsoft was in 1999 and solutions for the way forward To summarise where Microsoft had gotten to by 1999 this paper will examine against the Ouchi Framework and Peters and Waterman Approach, both can be found in the Griffen/Moorhead text book p475 and 478 respectively. The Microsoft case study elements fit both models and elements of each develop over time, depending on the demands of the culture & environment Ouchi Framework, this framework analyses Microsoft into three different types of firms, Japanese companies, Type Z US companies and Typical US firms The table bellow summarises the characteristics of each (Taken form P 47g of Griffin/ Moorhead); Please see attached A4 document for table Microsoft as can be seen from the analysis of the cultural values bellow conforms to the typical US Z type firm - commitment - retaining best staff/retention with stock/reluctant to fire for failure - Z type - evaluation - Qualitative as well as quantitative - best creative talents - Z type - careers - variation in career path broad depth of business - Z type - control - through culture - decision making - typical US - Bill's Meetings - responsibility - individual - typical US - concern for people - developed over time from typical to Z type Peters and Waterman Approach - Bias for action - results focused - quick decisions - Stay close to the customer - meeting the customers needs - "every desk etc" - Autonomy & entrepreneurship - company into smaller groups to deliver innovation - Productivity through people - recognising people as the prized asset, recruitment, retention, reward - Hands on Management - Bill's meetings "do the code for you" - Stick to the knitting - software alone - core competence - Simple form, lean staff - n minus 1 lean philosophy - Simultaneously loose and tight organisation - common cultural bond and values The culture at Microsoft attracted those that were comfortable with the 14 hour days & weekend working. Changes at Microsoft by stepping away from the hardcore approach, Ballmer encouraging staff "to find a balance in their lives that works for them". It was difficult for some to rebalance their lives. Question arose as to whether the changes in culture, softening, would compromise the company's competitive advantage. Conclusion Bill Gates long-time vision “a computer on every desk and in every home running on Microsoft software” evolved “to empower people to do anything they want, any place they want, and on any device.” the objective of resetting was to give a new excitement about the direction the company was going. Microsoft was no longer about just a computer at every desk. The new vision placed the priority on, leadership that maintains and rewards employees for their contributions by giving them challenging and achievable assignments to provide/promote learning and growth (directly analysed by the HR competency cards). A large part of Microsoft's success is due to its "ability to recruit, motivate, and retain extraordinary talent", from conception to present day there has been growth within the organisation and a lot changes in the external market yet 'despite' all of these Microsoft is still a place where people are excited about working, it attracts extraordinary talent. We believe this has been through their HR policies and practices and the culture at Microsoft. Further lines of discussion raised from this study include: BP at the moment is trying to change its culture to a more safety orientated culture. How is BP changing the culture and is this working? Looking at Page 19 of the online module "Changing the organisational culture" we are definitely trying to reward the right cultural behaviours by only awarding performance bonuses on safety behaviours but is this enough? Pg 37 of the online model discusses how individual, team, organisation and external environment can be combined to generate performance, resulting in a competitive advantage for Microsoft. External factors wasn't really discussed in the case. Since the commencement of Microsoft its external environment has seen technology advancements, globalisation, changes in suppliers / customers and increasing competition within the markets. Going forward in a external market which has such complexities due to its technological environment how will Microsoft retain its competitive edge? Is it internal environment strong enough or do we need both? How is the culture of Microsoft at the end of the last century and in the last few years similar or different to its main competitors, Sun Microsytems and google as examples?

Hi All, Future discussion topics: Microsoft and its external environment - pg 37 of the online model discusses how individual, team, organisation and external environment can be combined to generate performance, resulting in a competitive advantage for Microsoft? External factors wasn't really discussed in the case. Since the commencement of Microsoft its external environment has seen technology advancements, globalisation, changes in suppliers / customers and increasing competition within the markets. Going forward in a external market which has such complexities due to its technological environment how will Microsoft retain its competitive edge? Is it internal environment strong enough or do we need both? Sarah

Right not got as much done as I wished today at work (sail away is Sunday so it is manic here) but 4 main themes for the report Climate/ Culture at Microsoft (use both the Ouchi and Peters Watermann Approach) Human resource policies and practices at Microsoft How both of these have contributed where Microsoft is in 1999 and solutions on the way forward Future discussion topics Euan

Good to read you are going strong. I hope the weather has improved and it is not too cold. At least you don't need to worry about getting a cold beer at the finish! Go well and safe. Cheers. ken.

Here is the narrowed down focus Euan has provided... comments required by tuesday as per usual... All Sarah has made a great start to this weeks exercise. Following the same format as last week it would be good to get all the initial discussions posted by 2000 GMT on Tuesday to allow me to pull together summary for our telecom on Wednesday. Reading through the online module it would be good to think about the following areas when reading through the Microsoft Case Study; What is the culture at Microsoft? Has it changed, if so how? BP at the moment is trying to change its culture to a more safety orientated culture. How is BP changing the culture and is this working? Looking at Page 19 of the online module "Changing the organisational culture" we are definitely trying to reward the right cultural behaviours by only awarding performance bonuses on safety behaviours but is this enough? What is the individual dynamics within Microsoft? What are the team dynamics within Microsoft? What are the organisational dynamics within Microsoft? Hope this helps to try and promote a good debate in the next few days, speak to you tomorrow evening Euan

Hi, Michael. You raise many good points / questions, but I especially like the one regarding what BP does (or, depending on the point of view, does not do) to introduce new employees to the company’s corporate culture and prepare them to join this massive organization before they are actually on the job. I am struggling to draw meaningful parallels between issues at Iggy’s and those that we may be experiencing within BP---perhaps it is sheer size alone getting in the way? After all, we are talking about a private bakery with net revenue of roughly US$6 Million and a workforce of 116 employees on the one hand; and a publicly traded global oil & gas company with an operating income of just over US$26 Billion (2009) that employs 80,000+ people on the other. Nonetheless, I think the underlying question of how organizations prepare individuals to join a specific corporate culture is intriguing, relevant and could certainly apply to companies of every size. The primary question that comes to mind for me is “just how effective can this type of preparation be when done 'in advance' (?)”. Here at BP, I attended an orientation seminar called “Discover BP” about six months after joining the company (it was mandatory at the time, by the way). While it was certainly informative about BP’s business, I didn’t feel like it taught me anything memorable on the corporate culture front. Sure, they showed us several interesting videos and we had some very good (internal) speakers come visit with us, but as I say, there was nothing that stuck with me 'culturally'. Again, that was also quite a while after I was hired, so there was never a chance of it influencing me before I was officially ‘on the job’, even if the material had been geared more in that direction. I believe we must also take into consideration whether or not the company in question actually has a strong, identifiable corporate culture. In Iggy's case, their internal culture seemed to be such an important part of their success that bringing in new people who had trouble adapting to it (e.g. McRae & his team) could have a far-reaching / long-lasting negative impact on the company. Regarding BP, I honestly cannot identify one single theme that defines the current culture of our company. I have only been here (with BP) for a little over three years, but from my perspective, I feel as though we are currently going through something of an identity crisis (I actually felt that way prior to Macondo, so the incident has only served to reconfirm these notions for me). For example; does the current BP identify more with the old Amoco, the old British Petroleum, or neither? True, the company is still headquartered in the UK, but its largest division is BP America and the CEO is now an American as well. Or, are we going to once again strive to be something different altogether such as a “leading alternative energy company” (i.e. in line with the ‘beyond petroleum’ moniker that was so heavily marketed 5-6 years ago). I could easily see this last notion gaining popularity in the wake of the Macondo disaster. Speaking for myself, I only have questions at this point and no definitive answers, so I am very keen to see what others have to say on the subject… Finally, and with all due respect, I disagree with your assertion that Iggy's is "not necessarily a unique bakery". The case is set in the US and, as an American; I can assure you there are not many bakeries like this one around--even today, some ten years on from when the case was first written. Furthermore, the rather distinctive corporate culture that the owners have cultivated in this company sets it apart from any other ‘would-be’ analogues. So, I think the “advice available elsewhere” would not have been as readily available as you imply, and especially not for a company of this size. For all these reasons, I would definitely consider Iggy’s to be a ‘unique’ business. Of course, that’s just my opinion, but the challenge is obviously fair & much appreciated… JP

Mike, This is definitely an exciting area for further discussion. I would start by pointing out our view on the ‘person culture’ that the Ivanovics instilled at Iggy’s prior to the business expansion. This particular culture has its strengths, which have made Iggy’s became so successful, and also its weaknesses, such as not having solid management hierarchies and control mechanisms, as we discussed in the Summary. As the business was expanding and facing new challenges, we concluded that the person value that had worked for them up to 1999 was no longer suitable for Iggy’s. So, do we believe that culture change was compulsory? Yes, we do. Do we believe that Iggy’s needed to completely leave their person culture? We definitely do not. I don’t view a radical change was necessary, person culture can still be Iggy’s underlying ethos however they must adapt to the reality of the business, where management hierarchies and control mechanisms must present. As Ouchi’s and Peters and Waterman’s research indicates, not all firms have cultural values that are consistent with high performance (Griffin and Moorhead, Organizational Behaviour (2010), page 486). In practice, organisations usually appear to alter their underlying ethos only on a gradual basis and the complexity of environmental pressures may itself hinder rapid change (Mullins, Management and Organisational Behaviour (2007), page 729). I can therefore sum up our proposition on the cultural shift at Iggy’s as follow: The culture change should not be radical. Iggy’s must preserve the person culture the as underlying ethos, particular by exploiting its good features, and at the same time adopt another ancillary culture to strengthen their progressions. *In 1999 Boeing made a decision to change from a family culture to a performance culture (Griffin and Moorhead, Organizational Behaviour (2010), page 486). This seems like a radical change, hence in Iggy’s case they can endeavour for adopting the performance culture to supplement the person culture. The alteration of the existing person culture must be done gradually, and, as with other business/management tasks, it is imperative to make sure that careful planning, the right resources and effective communications are devised. *Griffin and Moorhead suggested the following three elements of the cultural change process: - Managing symbols: As culture is understood and communicates using symbols/stories, managers can attempt to substitute the old symbols with new ones that support the new culture/ - The difficulty of change: Making sure that the cultural change was not made more difficult by not inadvertently reverting to old patterns of behaviour. - The stability of change: Making sure that the change of culture is performance-enhancing to keep it in place for a long time.

And another... Thanks, Mike for reading our summary so thoroughly! I'll respond to this post and leave the other team members to participate in the discussion on other points. I don't think that our summary 'stated' that there was no contract in place for McRae. This was our assumption ('this could mean that...') as there is not enough detail in the case to make a statement like that. It well may have been the case that there were no employment contracts with other employees but that only confirms to us that although Igor and Ludmilla were great leaders, at the same time they were quite inexperienced managers. They fit into the upper-right hand 'Team Management' box of the Leadership Grid (OB textbook, p. 314, Fig 12.2), as they achieved common goals through a team of committed people, who viewed their company as a family and worked together to deliver a high quality organic bread to their community. Along with that, Igor and Ludmilla did not possess strong managerial skills, which we can derive from the fact that they never really made any analysis for investment decisions, have probably never identified any internal candidates for succession planning and never had any training programs in place - even for themselves. They learned on the job and their background suggests that they never had any proper business management training, yet the case never mentions what Igor and Ludmilla (and Nikola) did to improve their business management skills. They viewed their employees as a family, so I don't think the thought that their employees will leave with their recipes and techniques has ever crossed their minds. You raise an interesting point. The case does not contain any data on the employee turnover, it would be interesting to see this data. Thanks Gulya

Here is a responce to one of your posts... Hi Mike, I like your post, really interesting comments especially regarding the comparison to the Poilane products. On the difference in pricing strategy between the 2 companies, it is difficult to compare them as they both have very different corporate identities. The Ivanovics are trying to embed a social consciousness attitude to their "for-profit" business, therefore a decision to change their pricing strategy to reflect their premium product (premium product, premium price) would not be a easy decision as it would go against their core values and beliefs. They may be in business, but the business mission is not to maximise profit. On your post around the "transformation" of the PSCM function. I agree it did feel reactionary, it was never clearly communicated as to the 'need' for the change which led to a lot of dissatisfaction / rumours around the why this was happening. In terms of the IBM process, this was costly and very time consuming -> did it really work? We lost some very good staff, yet at the same time we have gained some very good staff who have come out with the industry. What is most interesting is how the change was / is viewed out with the function and I'm not sure if this is the same for all of the SPUs but I would say it has not been viewed favourably and the reputation of PSCM within the North Sea has needed to be rebuilt. Sarah

I hope you are well... and that the sea isn\'t tossing you around too badly. I\'m waiting on the last team summary but here is a bit of reading material for you. Do you want a collection of all the comments also? Or just the ones pertaining to your post?