An Examination of the Relationship Between Organizational Culture Determinants and Retained Organizations Growth Stages

Abstract

Empirical research on the maturity of retained IT organizations has remained scarce. IS literature shows that studies do not investigate the effect of organizational culture determinants on the relationship with the growth stage of an retained organization. The aim of this paper is to examine the relationship between organizational culture determinants and retained organizations stages of growth. Data from three case studies was collected and the Social Exchange Theory is used to understand the degree of interaction between the staff of retained organizations. Our analysis identified that culture determinants form a predictable pattern with the growth stage of a retained organization. Specifically, the culture determinants Management and Focus fit with their assumed growth stage in all three case studies. This might indicate that both determinants are interrelated as executive management of a firm has to develop a clear focus to achieve their IT mission and goals. Moreover, from an individual level, the results show that the degree of social interaction between staff is influenced by the perception of IT in the organization.

Appendices

Appendix A: Background to Case Studies

1.1 Case Study 1: Represents a Reactive Stage of Growth

The client under study is a leading global services provider operating in dredging, maritime infrastructure and the maritime services sectors. The company develops innovative all-round solutions to provide major infrastructural projects in the maritime, coastal and delta regions of the world. The company comprises 11,000 staff and is operational in 75 countries across six continents. The retained organization is strongly centralized and hierarchically structured into functional teams: IT infrastructure; application management team, service desk and project management. The size of the retained IT organization is a staff of 90 persons, largely centralized in their headquarters. Information Technology is on the tipping point to become a strategic asset. The retained function operates largely independently and it is directly funded from the Board. It manages its own budgets and investment projects. The majority of IT tasks are coordinated and executed in-house. External vendors are almost exclusively used for hiring specialized skills and/or capacity. The client’s vision is to outsource specialized services gradually.

1.2 Case Study 2: Represents a Proactive Stage of Growth

The client under study is the world largest independent provider of bulk storage and handling capacity of liquid chemicals, gasses and oil products. It operates in 28 countries spread around the globe along the major shipping routes and is comprised of approximately 6,000 staff. The client is acting in a very dynamic and competitive market and their ambition is to excel in a strongly rooted culture of safety, flawless execution, and operational excellence. Information Systems play an essential role and is perceived as a strategic asset and used to develop innovative IT solutions that contribute to the efficiency of terminal operation. The retained organization, which consists of 150 staff, is set-up as a federated matrix type of organization. Divisional IT teams are responsible for both information management and management of local applications. Management of IT infrastructure and companywide type of applications are organized on a central level.

1.3 Case Study 3: Represents a High Performing Stage of Growth

The client under study provides professional publishing services based on information services and decision support systems globally. The client provides services in over 150 counties and is comprised of 19,000 staff. The client’s executive management focuses on acting as a high-performance organization in which they emphasize a customer focus, embrace innovation, clear accountability and integrity, value creation and teamwork. The retained organization, which consists of 300 staff, is based on a federated structure and organize IT tasks in a matrix type of organization. In order to create a competitive advantage in the market the client decided to focus on innovation and develop applications in-house. In addition, the client outsourced their IT infrastructure management and coordinates the delivery of a range of in-house services, namely: data centers, networks and corporate applications.

Appendix B: Organizational Culture Determinants

Planning.

In a responsive organization the central theme in the planning process is the planning of activities of tasks to be done (operational planning). In the proactive organization the planning cycle is targeted around defining long-term results and strategies to achieving them. In the high-performing organization the management’s time sense allows them to plan a continuing evolution of the organization towards an even more promising future.

Communication.

In a responsive organization managers and staff feel free to provide feedback on information, tasks and achievements. In the next level of maturity communication is focused on the future and how the future goals can be achieved (feed forward). In a high-performance organization leaders make sure that information is fed through all parts of the network. Successes are communicated to unleash new energy and drive the organization towards excellence.

Change mode.

In the responsive organization management keeps team efforts coordinated and responsive (adaptive) to changing needs and conditions. Staff in the organization work as cohesive teams, able to adapt as they identify problems. In the proactive organization changes are planned upfront and changes are used by leaders as a method to keep the organization clearly focused on its purpose. In the high-performing state the agility of the organization is ‘programmed’ in the organization’s culture and values and by satisfying the conditions for energy, creativity and innovation to be able to excel.

Structure.

In responsive (hierarchical) organizations the distribution of power is according to a hierarchical organization structure. In proactive organizations authority is distributed along two or more dimensions (matrix). People may have multiple reporting lines. In high-performing organizations the IT organization shares power with other stakeholders (e.g. third parties in the network).

Management.

In a responsive organization management is setting goals and focuses on the coordination of tasks that need to be done to achieve these goals. In a proactive organizations management ensures the alignment and integration of sub-organization objectives within the greater whole. In high-performing organizations leaders focus on strategic navigation of the total organization, also the parts that do not fall under their direct formal power (e.g. networks and partners).

Focus.

In a responsive organization the successful completion of tasks and delivery of related output is seen as the prime purpose of the organization. In the proactive organization the focus is on results recognized and valued by its customers. Not so much the output is the target but the resulting outcome. Ultimately (high-performing) the focus can shift to achieving high standards of excellence by identifying new potentials, seeking out new avenues of opportunities and activating human spirit.

Motivation.

In a responsive organization people are motivated by positive feedback and increased pay, based on merit (rewards). In the proactive organization staff are motivated by the opportunity to make a contribution toward achieving a future they value. Finally in the high-performing organization leaders create a work environment that energizes the staff, who are proud of their accomplishments.

Development.

In responsive organizations staff work in cohesive teams, with a strong ‘we’ focus. Development takes place by the participation of all members in defining new and higher goals and better plans of action. In the proactive state the organization develops by raising the awareness of larger perspective of the organization and the attunement of goals and plans of action accordingly. In the high-performing state the focus on development is on continuing transformation and renewal.

Perspective.

In a responsive organization leaders and members take a team perspective rather than a self-centered one, which results in team members reaching out for each other. In later stages Perspective extends to the entire organization. The interest of the staff in the entire organization comes first. Ultimately leaders include the organizational culture into their frame of reference. They build a strong corporate culture that give members a strong and proud heritage to maintain and reinforce.

Time Frame.

The responsive organization is characterized by a strong focus on present problems that need immediate solving. In the proactive organization the future focused time frames are built around, for instance, annual planning cycles. When in state of ‘flow’ leaders are able to build on rich legacies, proud traditions as valued roots of the organization’s past and sustain and communicate a high-resolution vision of the future they want to create (high performing).

Leadership style.

In a responsive organization leaders coach their followers on the path of organizational growth. They adapt their leadership style to fit the maturity of their subordinates. To reach the proactive state leaders must adopt a value-based leadership style. They focus on developing their followers’ potential and satisfying their needs. The leaders in high-performing organizations follow a holistic view where they not only lead their own organization but the entire environment with which their organization interacts. They push power down to empower their followers so that they gain the freedom and energy to seek creativity and innovation.