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Transforming Culture at Volvo Company’s IT Case Study


Organizational culture is an important aspect of any company. It is a system which includes beliefs and values of those who work for that company, and it has a strong influence on the behaviors and attitudes of the organization’s personnel. This paper considers the importance of organizational culture for implementing change in an organization. Next, several examples of how an organizational culture is expressed in Saudi Arabian/GCC enterprises are provided. Finally, an example of change that could be implemented in a company is supplied, and the ways for introducing it are discussed.

The Importance of Organizational Culture in Encouraging Change, and the Role of Top Management in Presenting Reasons for Change

Organizational culture plays a crucial role in encouraging and leading change in a company. It reflects the way in which processes take place within an organization, and, to a considerable degree, defines the attitudes of workers to these processes (McCalman & Potter, 2015). Therefore, it is clear that in order to implement change in a business, it often may be needed to also change certain elements of the culture (McCalman & Potter, 2015); otherwise, the employees may not be able to develop a positive attitude towards the processes that were changed, which is likely to result in worker disengagement, dissatisfaction, and, consequently, lead to a drop in their performance and to lowered customer satisfaction, which is rather probable to cause a negative financial impact on the company.

In addition, it should be stressed that an organizational culture which encourages positive attitudes towards change is possible (McCalman & Potter, 2015). However, such a culture is rather unlikely to emerge on its own; in order for it to develop, it is of great importance to purposefully direct it towards the desired goal. For instance, the given case study of Volvo IT provides an example of an organization in which a culture was successfully developed and later utilized so as to stimulate positive attitudes towards changes, even in situations when these changes were not beneficial for employees; e.g., when the company had to lay off approximately 2,000 out of 7,000 workers due to the economic crisis, the rates of employee satisfaction still remained very high (nearly 90%). There is little doubt that the attention which was devoted to the development of organizational culture in Volvo IT played a key role in maintaining the high rates of both employee and customer satisfaction.

It is also noteworthy that the top managers of a company play a crucial role in presenting the reasons for organizational change (Barratt‐Pugh, Bahn, & Gakere, 2013). In most cases, it is the top managers who decide what kind of change is to take place in an organization; even if the initiative is not theirs, large-scale changes usually will not take place when the top managers do not agree to it. Therefore, it is the top managers who should persuade the employees that the changes are needed. This should be done by creating some rationale for change and distributing it from the top of the company to its bottom, possibly via the managers (Barratt‐Pugh et al., 2013). If this is not done, employees in most cases will not see the reasons for change, and will be likely to resist it, at least because it usually requires that they adjust their routines and adapt to the new situation in the company (Barratt‐Pugh et al., 2013).

The Expression of Organizational Cultures in Some Saudi Arabian / GCC Companies

Saudi Aramco

The company of Saudi Aramco is a large national, state-owned Saudi Arabian company which mines crude oil and natural gas. It can be used as an example of an enterprise that develops and implements its own culture. Saudi Aramco has five key corporate values that provide the basis of that culture; these values are “Excellence, Safety, Integrity, Citizenship, and Accountability” (Saudi Aramco, n.d.b, para. 1). It is stated that the value of accountability means that the goals and objectives of the enterprise are developed by the president and CEO of the business, and then they are spread through the entire company (Saudi Aramco, n.d.b).

It is, therefore, possible to conclude that when organizational change is needed so as to accomplish certain objectives, it also comes from the top of the business and is then spread throughout the company. Combined with the value of excellence, this promotes a culture which is aimed at maintaining high performance and quality. In order to spread certain elements of the culture, such as the value of safety, the company purposefully organizes campaigns – for instance, a safety awareness campaign (Saudi Aramco, n.d.a). There is no doubt that this requires special training for those who deliver the campaign. Therefore, even though the term “cultural ambassador” is apparently not utilized inside the company, there are individuals who play this role in the organization.

Saudi Basic Industries Corporation (SABIC)

SABIC is a Saudi Arabian manufacturing enterprise which focuses on the production of chemicals, polymers, intermediates, and so on. The company devotes much attention to the issues of organizational culture; it recognizes that such values as integrity, quality, innovation, sustainability, and environmental friendliness are of paramount importance for a successful industrial company (SABIC, n.d.). The business created its own Code of Ethics (SABIC, 2013), which was adopted as a basis for the development of an effective organizational culture, a “compliance culture,” as it was named in SABIC.

Therefore, SABIC realizes that the development of an appropriate organizational culture is of paramount importance if a business is to be successful, and specifically devotes much attention to the creation of such a culture (SABIC, n.d.). The culture is purposefully promoted among employees, and they are required to follow the enterprise’s Code of Ethics. It is clear that in order for this to work properly, the business requires some of its employees to play the role of “cultural ambassadors,” spreading the values and other elements of corporate culture among the rest of the personnel.

Change to Be Introduced in an Organization, and Ways to Reduce Resistance to This Change

In a company, job design plays a crucial role in the effectiveness of a company’s personnel. A good job design might permit for an efficacious work/rest schedule, increased performance, and enhanced employee engagement (Truss, Delbridge, Alfes, Shantz, & Soane, 2014). Therefore, if a job design in an organization is suboptimal, the latter might benefit greatly from its improvement.

In order to implement a change in job design, it will be needed to carefully consider the changes and calculate all the possible benefits and drawbacks of the new design in comparison to the existing one. If it is found out that the new design should work better than the old one, it might be possible to implement it in a part of an organization so as to test its effectiveness. If the new design works better than the old, it is apparent that it is worth spreading it in the whole organization. Also, change should be implemented in phases, so that it does not come as a shock to the workers.

In order to reduce the employee resistance to this change, it is possible to use the managers so as to adapt the company’s culture to the new changes. The managers should be provided with appropriate training, which would allow them to spread the new culture as well as to train the employees where it is needed (Miles, 2013). The managers ought to be able to let the employees see that the change is for the better, and that without it, the organization might suffer a drawback, which would ultimately harm the workers as well. Managers should also collect feedback from the personnel so as to consider the possible drawbacks that might have been overlooked previously (Van de Ven & Sun, 2011). Therefore, the managers might play the role of “cultural ambassadors,” working with employees and helping them see how the new rules and the new culture may be beneficial both for the organization and for them.

Conclusion

Therefore, organizational culture is of great importance for a company. An appropriate organizational culture might allow a business to successfully adapt to change and survive even in dire times. As the example of Volvo IT shows, an appropriate organizational culture can help a company to survive even in the direst of times, still maintaining high employee and customer satisfaction rates. Therefore, it is paramount to devote attention to the development of a high-quality organizational culture and its promotion among the employees.

References

Barratt‐Pugh, L., Bahn, S., & Gakere, E. (2013). Managers as change agents: Implications for human resource managers engaging with culture change. Journal of Organizational Change Management, 26(4), 748-764.

McCalman, J., & Potter, D. (2015). Leading cultural change: The theory and practice of successful organizational transformation. London, UK: Kogan Page.

Miles, A. (2013). Agile learning: Living with the speed of change. Development and Learning in Organizations, 27(2), 20-22.

SABIC. (2013). Code of ethics: Performance with integrity. Web.

SABIC. (n.d.). . Web.

Saudi Aramco. (n.d.a). Building a culture of safety. Web.

Saudi Aramco. (n.d.b). Web.

Truss, C., Delbridge, R., Alfes, K., Shantz, A., & Soane, E. (Eds.). (2014). Employee engagement in theory and practice. New York, NY: Routledge.

Van de Ven, A. H., & Sun, K. (2011). Academy of Management Perspectives, 25(3), 58-74. Web.

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IvyPanda. 2020. "Transforming Culture at Volvo Company's IT." September 11, 2020. https://ivypanda.com/essays/transforming-culture-at-volvo-companys-it/.

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