3. Organisational culture at VWF 2013
Industries
1. Executive Summary
This report delineates the key issues related to the organisational culture, and
relates it to culture of a manufacturing organisation, VWF industries in India. We
will discuss about the key internal and external factors which affect the
organisational culture of an organisation and compare culture of two different
units under VWF. We shall also see how culture of an organisation can be
changed and evaluate the role that organisational design, leadership and some
other factors play in facilitating cultural change.
2. Introduction
Vijay Wires and Filaments private limited is a medium sized manufacturing
company based in India. Since its inception in 1979, it has developed a
reputation as world class manufacturer and supplier to the lighting industry.
VWF offers high quality tungsten and molybdenum wires and wire products like
tungsten to the lighting industry and diamond dies for the wire drawing industry.
Products manufactured in VWF are exported to more than 16 countries including
U.S, Europe and other Asian countries. Exports constitute more than 50% of the
total production.
Raw materials are imported from Japan-Nippon, Osram-Germany and China-
Xiamen. From raw materials to finished products VWF incorporates its own
quality checking process in every stage.
Employees in the lower level are not highly skilled and educated, as the process
of production is not complex. Members in managerial level and maintenance
department employees are well educated.
VWF industries operated through six units including the main unit. They are (1)
VWF main unit, (2) Vijay halocoils, (3) Vijay precision dies, (4)Vijay Literonics,
(5) Unique wires, (6) Vijay Inspections (VWF Industries 2010) .
3. Case background
Vijay Wires and Filaments industry was started by B.R.Pai with a bunch of people
around 6 or 7 in 1979, in a small garage type building. The excellent
management philosophy of Mr Pai emphasizing respect to individuals,
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contribution to customers and the community brought up the organisation from
a bunch of employees and a small unit to around 600 employees and 6 units at
present. B.R.Pai headed the company as managing director from 1979 to 1991.
The organisational structure contained fewer levels, as the organisation and
number of employees were small in the beginning. There was direct contact
between the employees and the owner. Mr Pai adopted the „Management by
walk around (MBWA)‟ policy from the beginning. MBWA is an approach to hands-
on, direct participation to hands-on, direct participation by the managers in the
work-related to their subordinates or spending significant amount of their time
making informal visits to the shop floor and listening to the employees (Business
dictionary 2011). He also practised management by objective (MBO). According
to Odiorne MBO is, “a process whereby the superior and subordinate managers
of an organisation jointly identify its common goals, define each individual’s
major area of responsibility in terms of results expected, and use these
measurements as guides for operating the unit and assessing the contribution of
each of its members” (Kondrasuk 1981). These types of practises made the
employees to get the sense of owning the company.
He demonstrated excellent leadership style as a mixture of autocratic and
democratic leadership style in different situations. In autocratic leadership style
manager alone exercises decision-making whereas in democratic style all the
members including employees have a greater say in decision making (Mullins
2005). Decisions like increasing the capacity of shop floor, changing of shifts was
done in a democratic way. This again makes the employees to feel the belonging
and make them to work hard to achieve the targets set by them.
Every year during a famous festival celebrated in the factory, best employees
were awarded with gold and silver coins and were praised for their work done.
This motivated the employees both extrinsically and intrinsically. According to
Mullins (2005), another classification of motivation to work is Social relationships
– such as friendships, group works. This also was satisfied by celebrating all the
festivals in the factory and by arranging trips early once for the employees
where they could come along with their families.
His way of management can be compared to the Hewlett and Packard way of
management where they relied on terms like integrity, trust, respect to
individuals and teamwork (Dong 2002)
As time passed, organisation grew rapidly from one to two, two to four and four
to six units. Organisational structure was no longer simpler like before. Three
best employees in every unit were promoted as shift managers and shift
managers were appointed as production head for every unit. As the technology
improved specifications in machines and processes improved. So, maintenance
engineers were hired to rectify the breakdown of machines.
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Crisis started in the year 1991, when B.R.Pai took retirement from the
company‟s processes. He was still the managing director of VWF industries, but
for the decision making process of the organisation he appointed Mr
Radhakrishna as the President of VWF industries. Mr Radhakrishna was serving
as divisional manager in VWF industries. This change in authority disappointed a
few employees for losing Mr Pai as their leader and few top management staff
like Rajendra Pai- nephew of B.R.Pai. The new head Mr Radhakrishna was not
able to hold the same type of bond between employee and management like Mr
Pai. He led the organisation with autocratic leadership skills, which made the
employees to lose confidence on him and the organisation. This created de-
motivation among the employees. As time passed employees felt that they were
losing the type of organisation for which they worked before.
From then till now company has grown with ups and downs. Radhakrishna took
the company global by attracting a lot of foreign customers. One of the units,
Litreronics was merged with a US company and manufactured bulbs and CFL
lights. This unit was locked down in late 90s by the labour union for a demand to
pay rise which was solved eventually. Mr Radhakrishna made the organisation to
grow in his way, not in the way company ran from the beginning. He just looked
after company‟s financial and marketing and knew very less about the employee
problems. This was managed by the divisional manager for production Mr
Poovanna, who had similar leadership behaviour like Radhakrishna. Poovanna
was also the production manager for unit one. This type of management has
created discomfort in employees, due to which the permanent employees are
not giving their best for the production and quality.
Whereas in the second unit, „Vijay halocoils‟ the production was looked after by
Mr Jayram who was reporting to Mr Poovanna. Poovanna did not have so much
involvement in the production of second unit, and everything was looked after
by Jayaram. This unit had highest production of 92% than all other units.
VWF industries were the only company manufacturing tungsten wire till 1991,
when Wolfra-tech was incorporated. Being developed as a brand name as
biggest supplier of tungsten wires in South India, having a single competitor was
not a big deal at that time. But now due to the cultural conflict in VWf
environment, it is losing its grounds to Wolfra-tech which is attracting the
customers with better quality and contract employees with better pay and a
better environment.
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4. Key findings
A popular way of defining culture is „how things are done over here‟. But
organisational culture is seen in various aspects by different authors:
Atkinson explains organisational culture as reflecting and underlying
assumptions about the way work is performed; what is acceptable and not
acceptable and what behaviour actions are encourage and not encouraged
(mullins 2005)
Deal and Kennedy (1982) argue that culture is the most important factor which
accounts for the success or failure in organisation and Peter and Waterman
(1982) suggests that culture can be looked upon as a reward of work: we
sacrifice much to the organisation and culture is a form of return (Fincham and
Rhodes 2005).
In order to understand the culture of an organisation, many theories have been
proposed like: Johnson presents a cultural web, which brings together different
aspects (Mullins 2005); and Hellriegal et al (1988), had recognised why people
behave as they do at work by viewing an organisation as an iceberg. Let us see
the keys issues which caused change in culture of VWF industries by analysing
these two theories.
4.1 Cultural Web
Rituals and Routines: Rituals include informal and formal processes in the
organisation and a routine is the way members in the organisation behave
towards each other. In VWF, at present situation there is no such bonding
between the management staff and employees like how it was in Mr Pai
regime and also to bring pressure on permanent employees canteen
facilities were stopped, chairs in the shop floor was removed and festival
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celebration was stopped. Al these things brought a change in the culture
of VWF.
Stories: These are things told by the members of the organisation about
the past of the company. One senior employee remembers his earlier days
and says “It was very nice to work before in the organisation, we were
actually feeling home and all the employees had a feeling of we are part
of „VIJAYA‟ family. But things changed and we are afraid we will not be
getting that environment again”.
Symbols: VWF industries do not market its product directly to the people
so it has very less to do with logos, offices, titles etc. Here, type of
language or terminology used can be seen as symbol of the organisation.
Power structures: This is most powerful individual or group in the
organisation. In this case Mr Radhakrishna and Poovanna can be
considered as power structures of VWF industries. As we saw both of them
follows autocratic leadership style which may render any aspirations of
involvement impossible, and this style can be considered as negative and
even a source of bullying and harassment. Bullying is referred as the
negative behaviour by the perpetrator on the employees, causing
humiliation, offense and distress and which may affect the job
performance or create an unpleasant working environment (Hoel et al
2010).
Organisational structure: This reflects power structures discussed above
and outlines important activities and relationships in the organisation. A
poor organisational structure reduces the efficiency of an organisation. For
instance, in VWF Poovanna is divisional manager for production, he is
responsible for all the production activities in all six units but also, he acts
as production manager for unit one. This means he has to concentrate a
lot on unit one which reduces his efficiency in tracking production of all
other units.
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4.2 Organisational iceberg
Fig: Organisational Iceberg.
According to Hellriegel, Slocum and Woodman (1988), “One way to recognise
why people behave as they do at work is to view an organisation as an iceberg.
What sinks a ship isn’t always what sailors can see, but what they can’t see”.
In VWF industries also internal factors are more responsible for change in the
environment and in-turn sinking of the company. Let us identify and discuss
some external and internal factors responsible for change in the culture.
4.2.1 External factors
Competition: Competition is increasing with Wolfra-tech and small similar
industries providing similar products with better quality and cheaper price. Due
to this there was huge decline in profit margins and created worries among the
management, which pressurised them to put pressure on employees.
Resources: The raw materials were imported mainly from Japan- Nippon and
China- Xiamen. Xiamen quality was comparatively low than Nippon, and due to
the earthquakes and tsunami in Japan in 2011, flow of input was hugely
affected.
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Customers: VWF was losing its customers to its competitors, due to which
company‟s turnover was decreased and employee turnover was increased. This
caused employee lay off‟s and cancellation of pay rises, which created conflicts
between the employees and management.
Rules and regulations: This can be seen as rituals and routines which were
discussed in previous topic. Strict rules were imposed on the employees to
create pressure.
Organisational design: VWF‟s organisational design can be seen as purely
Mechanistic model except the fact that labour is not highly specialized.
Mechanistic model emphasizes importance of achieving high levels of production
and efficiency through: Extensive use or rules and procedures, Centralised
authority. The characteristics of mechanistic management system are similar to
those of bureaucracy (Mullins 2005).
4.2.2. Internal factors
Attitudes: This can be seen as the way management behaves with their
employees as well as, employee‟s behaviour towards management. This affects
adversely on the culture of an organisation. Attitude towards the employees has
been changed since Radhakrishna has taken the authority. He and Poovanna
also follow MBWA but not with a friendly attitude like Mr Pai, they go to shop
floors and behave negatively with the employees and put pressure.
An attempt to change the attitudes of the employees can sometimes result in a
change that is opposite to what is expected. According to Heller (1973), nobody
likes to feel easily manipulated, and if a great deal of visual pressure is put on us
to change our attitudes we are likely to exert pressure in return, perhaps by
doing opposite. This is often referred to „Boomerang effect‟ (Rollinson 2008). The
Boomerang effect was seen in VWF industries, more the pressure put by
management on employees to increase production they were decreasing
production and quality. This was happening in unit one, whereas in second unit
Jayaram did not threaten or forced employees to change their attitude. He
showed positive attitude by explaining the outcomes of the tasks and motivated
the employees to work over-time and reach the target.
Communication patterns: According to Varey, culture and communication
cannot be separated. „For us to communicate and cooperate, we must share
some common assumptions about the world we live in and some common
standards by which to judge our own and each other’s actions’ (Mullins 2005).
There are different types of communication network like wheel, circle, all-
channel and chain network which is suitable for different type of businesses. In
VWF, communication pattern is of chain network type where lower level
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employees do not interact with the high level management directly and the flow
of information flows in a predetermined channel.
Conflicts: Conflicts occur when perceptions of two individual vary. Few
employees in the organisation were in favour to Mr Poovanna and were loyal to
him, mainly due to some personal benefits and were reporting him all the
informal processes on the shop floor. This created conflicts between the
employees.
Conflict also occurs when two individual or group‟s interest are different and
when one interferes in other‟s activities wilfully. There were divisional managers
for all departments like: Divisional manager for quality- Mr Rajendra Pai,
Divisional manager for production- Mr Poovanna, Divisional manager for
materials- Mr Vasanth Kumar. Mr Poovanna pressurised employees for
production, whereas Mr Rajendra Pai was emphasizing on quality and advised
employees to see quality instead of production. These sometime created
conflicts between the managers for quality issues and improper supply of
materials.
Political behaviour: Organisational culture and political behaviour are inter-
related. Culture is one of the factors which give rise to political behaviour. When
a culture encourages people to view situation in win-lose terms, any behaviour
that facilitates winning can be justifiable. This prompts the employees to engage
in politicking (Rollinson 2008). This can give rise to conflicts.
Let us consider a situation in VWF to explain this: In monthly meeting MR
Radhakrishna was comparing production levels of unit one and two. Production
of unit one being around 80% and unit two of 92%, he was always criticising
Poovanna as loser in front of Jayaram. This gave rise to political behaviour in
Poovanna and being divisional manager he was restricting the flow of raw
materials to unit two, which created conflicts between him and Jayaram.
Personality: Personality is defined by Gordon Allport nearly 70 years ago as,
„the dynamic organisation within the individual of those psychological systems
that determines his unique adjustments to his environment’ (Robbins et al
2009). This affects the culture majorly because; personality is the one which
alters the behaviour of an individual in a business environment.
From all the key findings we can see that culture in VWF industries has been
changed from 1991 and it has to be changed again to increase the profit
margins, to hold on the customers, to create a better environment for the
employees.
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5. Recommendations
When an organisation is facing problems, declines in market share, losing its
customers and employees then it is understood there is some problem in the
culture of that organisation.
The first step in cultural change is to determine the future and have clear vision
of how the organisation is to look like, feel like and sound like. The next step is
to find key findings in the present organisational culture and climate.
Organisational climate, describes the atmosphere within the organisation and
extent to which members work together. Then a plan is made for specific culture
changes needed in particular areas (Dwane 2004). This can be compare to
„Lewin‟s force field‟ theory of change can be used in this case. As we discussed
problems is all with the management and forces needed to the organisational
change is employee‟s emotions. Resisting force is the management itself,
behaviour and attitudes of manager.
Firstly, proper leadership qualities should be adopted by the management.
Management and leadership are closely related. They both overlap and
organisation needs both qualities to get things done through people and create
an enjoyable environment.
According to Drucker(1984), leadership is the most important factor which
determines whether a group or organisation will be successful (Rollinson 2008).
Lord Sieff describes it as, „leadership is vitally important at all levels within the
company, from main board to the shopfloor. Leadership is the moral and
intellectual ability to visualise and work for what is best for the company and its
employees... The most vital thing the leader does is to create team spirit around
him and near him, not in a schoolboy sense, but in realistic terms of mature
adults... To be effective leadership has to be seen, and it is best seen in action’
(Sieff 1991).
Due to variable nature there are many alternative ways of analysing leadership.
Factors like: risk factors, type of business, nature of the tasks can be considered
to decide which leadership style suits the organisation. In VWF there is a need of
transactional leadership for a period of time and needs to change to
transformational leadership. Transactional leadership emphasizes on clarification
of goals and objectives, work tasks and outcomes and is based on mutual
dependence and an exchange process: „I will give you this, if you do that‟.
Whereas, Transformational is a process of engendering higher levels of
motivation and commitment among the followers. Many leaders see
transformational leadership as charismatic or inspirational leadership (Mullins
2005). Mr Radhakrishna with his autocratic leadership skills he should also adopt
democratic leadership skills in few situations to motivate the employees.
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In VWF, production percentage is around 80% and rejection is of 35%.
Transactional leadership can be applied by a mutual agreement with the
employees, „If production is increased and rate to rejection is reduced then pay
rise can be seen proportionate to the percentage in production increase‟. Bass
proposed a theory arguing, leader transforms and motivated people by
explaining importance of the task outcomes, inducing them to outdo their own
self interests for the sake of organisation and by satisfying their high level needs
(Mullins 2005).
Motivation can be defined as process that account for an individual‟s intensity,
direction and persistence of effort towards attaining a goal. There are many
theories which attempt to explain how and by which people get motivated. Most
well known theory is Abraham Maslow‟s hierarchy of needs theory which
hypothesises that in every human being there exists a hierarchy of five needs:
Physiological, Safety, Social, Esteem and Self-actualisation. As discussed before
role of the transformational leader is to motivate employees by satisfying lower
needs and activating high level needs (Robbins et al 2009).
An efficient leadership in the management can control all the behavioural
aspects like attitudes of the employees, communication patterns, employee and
interdepartmental conflicts, and political behaviour.
Having proper management and leadership, an organisation then can think
about formulating different strategies to bring cultural change in it.
Organisational design can also be considered to create a neat environment of
working. As we saw before in VWF it is mechanistic model which is similar to
bureaucracy. I recommend it to adopt a hybrid design which is mixture of
mechanistic and organic model. Organic model is a more fluid structure
appropriate for changing conditions. This type of model is required when
unforeseen circumstances arise constantly and requires action beyond the
defined roles (Mullins 2005).
6. Conclusion
Organisational culture is a key issue for the success or failure of any type of
organisation. There are many factors which influence the culture in an
organisation. To maintain a proper culture, a manager needs to concentrate on
the behavioural aspects of an organisation which is not seen to the external
world than the external factors. To do so he needs to see the organisation as an
iceberg.
Leadership and management play an important role in structuring the culture of
an organisation. A manager of an organisation needs to posses excellent and
different styles of leadership in different situations. He should be able to
communicate properly with his subordinates and give them a clear vision of
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company‟s goals and objectives, manage conflicts, motivate and influence
members of the organisation to outdo works beyond their role whenever needed
to reach the goal.
A manager should understand the motivating needs of the employees and
should satisfy them from lower level and keep on motivating them by activating
the higher level needs.
Organisational structure and design also play a key role in the formation of
successful culture in an organisation. Decisions always should not be taken by a
single person. There should be a mixed organisational system of mechanistic and
organic models.
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7. References
Books:
Fincham, R., Rhodes, P. (2005). Organisational culture: Principles of
organisational behaviour, 4th edition. Oxford University Press: New York.
Hellriegel, D., Slocum, J. W. & Woodman, R. W. (1998). Organisational
Behaviour, 8th edition. South-western: Cincinnati.
Mullins, L.J. (2005). Organisational development: Management and
organisational behaviour, 7th edition.
Rollinson, D. (2008). Attitudes and emotions: Organisational behaviour
and analysis-An Integrated approach, 4th edition. Pearson education:
United Kingdom.
Robbins, S.P., Judge, T.A., Odendaal, A., Roodt, G. (2009). Personality
and values: Organisational behaviour- global and South African
perspectives, 2nd edition. Prentice Hall: South Africa
Journals:
Dwane, S. (2004). Changing organisational culture: NZ Business, Vol. 18
Issue 5, p-36.
Hoel, H., Glaso, L., Hetland, J., Cooper, C.L. And Einarsen, S. (2010).
Leadership Styles as Predictors of Self-reported and Observed Workplace
Bullying: British Journal of Management, Vol. 21 Issue 2, p453-468.
Kondrasuk, J.N. (1981). Studies in MBO effectiveness: Academy of
Management Review, Vol. 6 Issue 3, p419-430.
Internet:
Business dictionary (2011). Management by walk around: Definition,
[Online]. Available at:
http://www.businessdictionary.com/definition/management-by-walking-
around-MBWA.html (Accessed on 28th Sep 2011)
Dong, J. (2002). The rise and fall of the HP way: Paola Alto Online,
[online]. Available at:
http://www.paloaltoonline.com/weekly/morgue/2002/2002_04_10.hpway
10.html (Accessed on 28th Sep 2011)
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VWF Industries (2010). Available at: http://www.vwfindustries.com
(Accessed on 28th Sep 2011)
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