PROBLEM STATEMENT It is July 2008 and Sally has been the London MD of , a consultancy, for three months. She finds it difficult to balance the challenges to her decisions from ’s Global Chairman Barlow, with her requirement to meet profit targets set by ’s parent company, . SYMPTOMS 1. Barlow assertively challenges Sally’s decisions as MD privately and publicly as well. 2. Some staff are beginning to question and sidestep Sally’s authority, preferring to align themselves with Barlow instead. 3. This comes to a head when Barlow and a Senior Strategist sidestep the new business discussions officially led by Sally with a high profile client and undertake their own parallel fee negotiations. This demonstrates to the client that (or at least Barlow) is willing to do the work for much less remuneration that previously articulated by Sally. PROTAGONISTS Barlow, the Global Chairman, was previously a key shareholder in and sold his shares to in 2002. Although not an original founder, Barlow has been with the company since the 1960s and is seen by staff and clients as a cornerstone of . Barlow is driven by the creation of quality work on high profile clients above all else (including company profits) and is described as “utterly genius” by clients. Barlow continues to provide incisive strategic advice on the most difficult problems facing ’s blue chip clients on an ad hoc basis. Despite the acquisition, Barlow considers himself the “moral owner” of and the guardian of ’s work, reputation and culture. He is revered but also sometimes feared by staff. Sally, the London MD, has worked at for 20 years since first joining the business as a graduate and is well-versed “in the way works”. Previously Head of Account Management before her promotion to MD, Sally is responsible for the day-to-day running of ’s London office. Barlow and Sally are both responsible to ’s parent company for meeting the profit targets set each year for the London office. Continual failure to meet profit targets would result in looking to replace management or look into closure or divesture of ’s London office. Sally is accountable internally within to Barlow and externally to the CEO. The key KPI by which Sally will be measured by the CEO is whether she has met the London office’s profit targets that year. Company Y C ompany Y Company Y Group X Company Y CASE BACKGROUND is a consultancy founded in . With three offices in London, and , provides strategic services to a range of blue chip clients. Following near bankruptcy in , reluctantly approached , one of the world’s largest groups, for acquisition and capital injection funding. As one of the then main partners, Barlow sold all his shares in to . The London office comprises 90 staff and is organised into four different teams, as shown by the organisational chart below. The author joined London in April 2008 as legal counsel reporting to Sally: Chart 1: Organisational Structure POLITICAL FRAME The political frame will be used to explore if and how power used by Sally and Barlow is contributing to the problem. Bases of Power Sally and Barlow hold differing bases of power (French and Raven, 1958). As her line manager, Barlow holds legitimate power over Sally. Barlow also exercises legitimate power over employees, expert power in relation to his strategic expertise and reverent power through the force of his charisma. London MD Account Management Design Strategy Operations (Finance, Legal, IT, HR) Global Chairman Company Y Company Y Company Y Company Y Sally in turn holds legitimate, reward and coercive power over employees. However, Barlow’s public challenges to Sally’s decisions appear to reduce employees’ perception of her authority and power as London MD. When power is viewed as a property of the relationship (French and Raven, 1958), it is often the perception of the situation by the people involved, not the formal structures, which determines the power forces at play. Barlow is exercising Lukes’ first face of power by openly criticising Sally’s decisions (2005). Furthermore, Barlow has excluded the appropriateness of his behaviour from discussion with Sally, paradoxically by his encouragement to employees to “speak your mind when it is in the best interests of the business”; although when it is appropriate to speak your mind appears to be largely determined by Barlow himself. In line with Lukes’ second and third faces of power (2005) and Bacharach and Baratz’s “nondecision making” (1963), Barlow has defined his behaviour as normal and in the interests of the business and Sally has kept quiet about the appropriateness of Barlow’s behaviour although it is impacting her ability to do her job. Viewed through this lens, Barlow’s power has become institutionalised (Lukes, 2005) and it is possible that Sally, and other employees, are imposing a form of self-control in self-regulating their behaviour in accordance with Barlow’s definition of normal (Foucault, 1979). It is possible that Barlow simply does not recognise Sally’s power, potentially because over time in leadership roles he has come to believe that his views are superior compared to subordinates. Indeed Barlow may not fully appreciate the role his power has played in acquiescent behaviour by subordinates (called the Metamorphic Effect by Kipnis et al, 1976). Barlow may possibly be challenging Sally’s decisions simply because he believes that his views are more worthy than hers. Although Sally was previously Head of Account Management, it appears that Sally has not sufficiently developed her own base of power to align with her new MD role. Sally appears to not have exercised her reward or coercive power with employees to full effect. Sally might not have fully considered the ‘currencies’ she controls and how she could better allocate these to increase her power over employees, for example, her ability to appoint employees to select projects and conferring recognition, promotions and personal support to certain employees (Cohen and Bradford, 1991). Although potentially not an effective long-term strategy, Sally also has not exercised coercive power by dismissing troublesome employees who openly challenge her authority (French and Raven, 1958). The ‘power as a property of the individual’ perspective views power as something that can be possessed and built (Pfeffer, 1992). Although Sally has attempted to form relationships with , Sally needs to further identify key alliances internally within . She is also probably not sufficiently “managing up” in her relationship with Barlow, for example by proactively seeking his guidance she could better negotiate some of his expectations thus avoiding his public challenges to her authority (Pfeffer, 2010). Finally, Sally has not embedded controls within the business to build power in less obvious ways (e.g. rewriting policies and rules and retaining tighter controls of the budgets (Hellriegel and Slocum, 1978)). Political Organisation and Resistance Decisions at are often made with conflict and negotiation, suggesting that operates more under the political model, rather than the rational, model of organisation (March, 1962). As MD, Sally needs to make less structured, more complex decisions. This combined with Group X Company Y Company Y Company Y Student ID: 5 the recession and leadership transition suggest that political behaviour by employees is to be expected and Sally must adroitly wield power and influence in order to successfully achieve her goals. However, it is possible that employees who are sidestepping Sally’s authority are exercising resistance by ‘voicing’ their opinions based on perceived deficiencies in her management style or the direction of the company (Hirschman, 1970). Employees who do not choose to actively voice their opinions, may nonetheless choose neglect (disengagement, sabotage, cynicism). Regardless Sally cannot ignore the resistance, but needs to better understand the dynamics behind it if she is to remain MD. Influence and Political Skills As MD, Sally now has a wider, more complex remit and it is possible that deficiencies in her influence and political skills are contributing to the problem of employees sidestepping her authority. Kipnis (1984) noted that ‘tacticians’ tend to have high organisational power use rational appeal frequently. Yukl (2005) also concluded that the most effective influencing tactics include rational persuasion, consultation, inspirational appeal and collaboration. Sally’s efforts to use rational persuasion with Barlow have previously failed, but she could be taking a more consultative and collaboration approach with him by, for example, seeking his input on financial forecasts and client budgets and involving him more in new business pitches. Although Sally previously held a leadership role and has been at for 20 years – suggesting she does possess some political skill - she is probably not employing the full range of influence tactics with all employees in her new capacity as MD. Apart from rational persuasion (e.g. “projects need to earn X% profit in order to survive”), Sally could use a mix of inspirational appeal (e.g. “times are tough and it is only by doing our best work profitably will we get through this”) and consultation/collaboration (e.g. “I need you to deliver a quality, profitable project, but you are free to decide how to do that although I’ll provide you with all the support you need”) to inspire or prompt an employee to agree to Sally’s request (Yukl, 2005). In additional to not utilising softer influence tactics, Sally has not adequately demonstrated that she is key to ’s success and survival (Hickson et al’s strategic contingency theory, 1971). Sally has not told a convincing story of ’s financial pressures and dangers of survival, nor emphasised her unique abilities to steer the new business and finance teams in particular during such turbulent financial times. SYMBOLIC FRAME The symbolic frame will be used to explore whether ’s corporate culture is contributing to the problem. London’s Culture Although culture is complex and cannot often be so neatly categorised, could best be described as having a mix of a task culture and power culture (Handy, 1993). Furthermore, Barlow has played an integral role in shaping ’s culture since the 1960s. Robbins and Judge propose that a company’s values are really the values as endorsed and carried forward by company’s senior management (2013). Viewing ’s culture through these theories helps Sally Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Student ID: 6 understand why Barlow has such a strong presence over , why some “things are the way they are”, and potentially why Barlow is behaving the way he is. New employees at experience a rite of passage on their first project, which often reveal conflict, revisions and budget overruns. Delving deeper, new recruits learn through colleagues’ comments and validated behaviour that “ only puts the best work out into the world” and that in order to do this “everyone at must earn their place at the table”. These values and beliefs are repeated, affirmed and carried forward by Barlow (Schein, 2004 and Robbins and Judge, 2013). In line with these values, it is a basic assumption at that conflict is natural part of the process and you must sidestep colleagues if necessary. There is also a basic assumption, again affirmed by Barlow, that company profits are secondary, what matters most is the quality of the work itself. Therefore the basic assumptions at London are in sharp contrast to Sally’s obligations as MD and are thwarting Sally from fulfilling her obligation to . Furthermore, cultural expectations at are that Sally must “earn her place at the table” as new MD and that questions and challenges to her leadership authority are part of the culture. A differentiation view of culture (Martin, 1992) may also explain some of the tension between Barlow and Sally. Barlow comes from a strategy background and Sally from account management. The different functional teams at have separate, distinct subcultures. For example, teams sit only with each other at lunch, each team has their own particular way of dressing, and each team has their own stories about as an organisation. Under this “cultural pluralism” perspective, Sally and Barlow could be viewed as experiencing at a managerial level the tension which exists within the different subcultures at . In overlap with the power frame the fragmentation perspective on culture acknowledges the inevitability of conflict and differences in organisations (Martin, 1992). It is expected and ritualistic Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Group X Company Y Company Y Company Y Company Y Student ID: 7 as part of the “earning your place at the table” culture for individuals from different teams to clash. The fragmentation between the teams is reinforced through organisation socialisation (Pascale, 1985). Under the fragmentation perspective, conflict within is to be expected and should be considered the norm within organisations. Strength of Culture “’ers” identify at an emotional level with the firm and endorse their “unique ’ness”, suggesting that has a strong culture (O’Reilly, 1989). Although Peters and Waterman (1982) seem to suggest some correlation between strong culture and financial success, here the strong cultural values themselves appear to be contributing to Sally’s problem. In line with Miller’s arguments, ’s strong culture could be causing insularity and inertia in respect of the need for the company to make a profit (1994). Denison et al (2004) noted companies must struggle with getting their employees to work together as a collective entity (internal integration) as well as adjusting quickly to environmental changes (external adaptation). It is possible that is both not sufficiently integrated internally with deep divisions between the different teams and failing to adapt externally as Barlow and many senior staff appear too slow to react to the changing economic conditions and refuse to accept that is now accountable to . Indeed Colquitt et al believe that very strong cultures may make it difficult to adapt to changing environments (2009). Sally’s challenges with Barlow and indeed other staff members could be indicative of the strength of ’s culture, especially its failure to externally adapt to changing conditions. Shrivastava (1985) commented that organisational culture has an important influence on corporate strategy, shaping problem formulation, decision-making and strategy content itself. Cultural Leadership One reason for Sally’s problem could be that she has not exercised enough cultural leadership to promote desirable company values such as commercialism and responsibility for profit, so as to better align the ’s values with her obligations to . To address this, Sally could rely just on bureaucratic control methods (e.g. making bonuses dependent on project profitability) as a way to manage ’s culture, although this may cause resistance and may not in and of itself shift ’s culture in a fundamental way (Ray, 1986). However, fundamentally as a leader, Sally does not appear to “possess direct ties to the values and goals of the dominant elites in order to activate the emotion and sentiment which may lead to devotion, loyalty and commitment to the company” (Ray, 1986 p 294). Trice and Beyer (1993) believe that all levels of an organisation can influence cultural change and that this “cultural leadership” often occurs outside of formal hierarchy and roles. As part of “a changing of the guards”, Sally could make better use of Schein’s first level of culture through the selective use of rites, ceremonies, myths and symbols to align towards more commercial aims (Schein, 2005). However, the more difficult task would be for Sally to encourage employees to internalise select, favourable values so that they are embedded at the second and third level. At an extreme, this could result in employees exercising a form of self-control similar to Rose’s technology of the self (Rose, 1989). Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Company Y Group X Group X Company Y Company Y Company Y Student ID: 8 Cultural management programmes such as this attempt to shape the internal identities of the employees and have been criticised by Willmott, who sees organisational culture as “governance of the employee’s soul” (1993, p517) and an insidious way of manipulating employees to govern themselves. In contrast to Trice and Beyer (1993), Smircich (1983) considers that culture is something that the organisation is, rather than something an organisation has, and therefore is something that cannot be so easily controlled by management. FINAL DIAGNOSIS Sally’s problem is caused by both power and cultural issues. The main root causes of the problem are: Inappropriate exercise of power by Barlow –  Barlow does not acknowledge Sally’s legitimate power given her brief to run the business day-to-day  Barlow is exercising his legitimate and reverent power inappropriately with Sally and employees Sally has not done enough presently to accumulate power or address cultural change needed -  Sally has not leveraged her power sufficiently with either Barlow or employees  Sally has not focused sufficiently on how she can attempt to shift basic assumptions within ’s culture Strong culture with values misaligned to Sally’s objectives –  ’s culture of putting the work above all else, including profit, clashes with Sally’s requirement to meet profit targets set by  ’s culture that everyone must “earn their place at the table” means that Sally must prove her worth in her new role POSSIBLE ALTERNATIVE SOLUTIONS It is important to note that this essay has analysed only two frames, which has limited the perspectives through which the problem can be examined. The limitations of analysing only two frames could in turn influence and bias the final recommendation and plan of action. Nonetheless, alternative solutions to Sally’s problem include: 1. Do nothing and wait until Barlow retires – the problem with this is that the strength of ’s culture has been affirmed by most staff and would continue in Barlow’s absence. Also Sally may find herself removed from the MD role prior to Barlow’s departure. Company Y Company Y Company Y Company Y Company Y Group X Student ID: 9 2. Attempt to restructure Barlow’s role or remuneration so that a large proportion of his salary is linked to achieving profit targets – Sally could try to persuade Barlow or that a more specialised role (e.g. specialist advisor on projects) or remuneration linked to profits may be more appropriate for him (structural frame). However, given that Barlow appears to be motivated by the quality of work rather than money, Sally would need to consider other factors which appeal to him (HR frame). In practice, it may be difficult for Sally to convince Barlow and to pursue this option. 3. Engage in a power confrontation with Barlow to push him out of the business – Sally may be able to convince to confer her with legitimate power over Barlow to retire him from the business. Given the loyalty to which some employees show Barlow, however, any pure surgical removal without alternative attempts by Sally at building power through coalition or an institutional cultural change programme will be futile. 4. Executive coaching – Sally could benefit from independent advice and coaching on the issues at and to progress a personal development plan. 5. Better leverage Sally’s power and influence– Sally could address the power imbalance with Barlow by “managing upwards” and involve him more by consulting and collaborating with Barlow on financial matters (Pfeffer, 2010) . She could also better use organisational currencies available to her (Cohen and Bradford, 1991), embed structural controls and incentives (Hellriegel and Slocum, 1978), and use better influence tactics with employees (Kipnis 1984, Yukl 2005). Sally could also emphasise her unique abilities to steer in particular during such turbulent financial times (Hickson et al, 1971). 6. Attempt to shift ’s culture towards more commercial values – Sally could attempt to do this through using Schien’s level one artefacts (Schein, 2005), but also exercise greater cultural leadership to encourage employees to internalise and embed desired values a deeper level (Trice and Beyer, 1993). Sally could identify individuals who can help Sally in acting as cultural leaders and role models in accordance with new cultural values, although it is important that Sally and other cultural leaders “walk the talk” even on mundane matters (Bligh, 1996). There is, however, a possibility that ’s culture is too strong and embedded and that it cannot be actively managed, at least in the short term. It is feasible that some employees may resist any cultural change programme through exit, voice or neglect (Hirschman, 1970). FINAL RECOMMENDATION AND PLAN OF ACTION Any attempts to restructure Barlow’s role or engage in a power dispute with Barlow would likely meet resistance and not result in long-term change at . Therefore, the author recommends the following multifaceted plan of action for Sally: 1. Executive coaching – As an immediate course of action, Sally should engage a coach to provide her with independent objective advice and develop a personal development plan. Group X Group X Group X Company Y Company Y Company Y Company Y Company Y Student ID: 10 2. Power and influence– Sally needs to shift gears immediately in her approach with Barlow and start “managing up” (Pfeffer, 2010). She needs to also develop a plan for building power and influence with employees, although the steps to achieve this will take more time. 3. Cultural Leadership – Sally needs to exercise greater cultural leadership with the business. As a long-term objective, she should try to shift ’s values towards more commercial aims. She should expect some resistance in her attempts to do this and accept that ’s culture may be too strong to change in the short-term, but should build alliances with individuals who can help Sally as cultural leaders as part of an on-going cultural change management programme.