Organizational Culture

In the definition of organizational culture, as presented in the literature review, the emphasis is on the pattern of shared basic assumptions, and if these assumptions are considered valid, they are thought to new employees as the correct way to perceive, think and feel (Schein, 1997). Herzog (2011) uses Schein’s definition of organizational culture to distinguish different levels of organizational culture, which consists of practices, created by artefacts and behaviours, norms and shared basic values that can be distinguished into different levels of visibility in the organization. For a better overview, the analysis will be divided into each of the three levels.

Artefacts

When analysing on artefacts an interesting one was mentioned in the interview with the respondent from Festina Finance regarding the creation of the culture. The company has a Ping-Pong table where the employees often play. When asked about this artefact, it was explained as a conscious choice with a touch of coincidence (Interview 2: 14:10). The respondent elaborated by saying that they have it because they want to be a company where they do not take things too serious and where it should be fun to be at work.

Concluding on this, he said that this is a part of their identity. Through several of the other interviews conducted, it is clear that artefacts are important for creating a culture in the SMEs. Trustworks have what they call knowledge days six days a year, where they share information among the employees and every Friday the employees meet to share knowledge about new technology or new ways to approach projects (Interview 6: 13:32). In Trustworks, time is also set-aside for what they call ‘speed dates’, which enables the employees to know their colleagues' competencies and personality (Interview 6: 35:26). In Shape, they have an artefact in the form of regular status meetings (Interview 5, Part II: 20:50), where they get information from the other projects in the company.

Norms

Behavioural norms seem to lie explicitly in the culture of the SMEs. In Festina Finance, there is a norm for the employees not to speak out loud about being good at something (Interview 2: 31:10). Instead, a culture of saying

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“we did that” is wanted. In the same way, it is in Move Innovation expected not to go around and complain about something if it is not true (Interview 4:

03:05) and if it is, then it is addressed.

Shared Basic Values

How the different SMEs are working with values seems to differ a lot. In Abtion, values are something embedded in the way of living and working. It is about the adaption of changes (Interview 1: 40:23), and that is something that the management is aware of. In Shape, values are represented by the importance of never compromising on the product delivered to the customer (Interview 5, Part II: 24:19).

In Festina Finance, the culture is created by the use of values (Interview 2:

08:10). These values are not written down, but the core value in the company is about creating great systems (Interview 2: 08:50). This is elaborated by a second value, which is things that impede building great systems (Interview 2: 10:13). This can be rules for the sake of rules, bureaucracy, meetings and processes for the sake of processes.

In the same way, values are not formalized in Move Innovation. Values are more represented by the way they act in the company (Interview 4: 30:50), but it is acknowledged that there is a need for more communication about their values, internally as well as externally.

A completely different approach to values is represented in Invokers, who believes that values are hollow and do not believe it is the right way to approach it (Interview 3: 52:16). Getting the employees to know each other and thereby generate a common language should rather constitute values.

Valuable, Rare and Imperfectly Imitable

As presented in the theory section, Barney (1986) argues that in order for a company to have a competitive advantage, the culture needs to be 1) valuable, 2) rare and 3) imperfectly imitable. In the conducted interviews, different examples of a valuable culture can be identified. The culture in Abtion was valuable, as working in here was compared to hanging out with the boys (04:09), as formulated by the respondent and by that, the culture can also be argued to be rare and imperfectly imitable.

51 In Festina Finance the culture can also be identified as valuable, rare and imperfectly imitable as effectiveness permeates almost every aspect of the company’s culture and they explicitly talk about effectiveness (Interview 2:

35:46).

What defines the culture in Invokers is the use of Design Thinking. It is not only a method apparatus but also a toolbox for hiring new employees (Interview 3: 09:35). The use of Design Thinking is by the respondent explained as a method for solving wicked problems from a designer’s mindset with a scientific approach. Design Thinking, as the fulcrum for the culture in the company, can be argued to be valuable, but not necessarily rare and imperfectly imitable as other companies can adapt the approach of Design Thinking. The execution of Design Thinking can though be argued to be both rare and imperfectly imitable.

The culture as a competitive advantage seems to be the case in Move Innovation where the familiar atmosphere has a great impact on the culture.

When asked about the culture, the respondent links the DNA of the company with the familiar tone and identify it as something they strive for (Interview 4:

03:04). The perception of the company as a big family is further mentioned in the importance of the employees (Interview 4: 24:58) and in the company’s strategy (Interview 4: 55:34). But the respondent is also aware of keeping this family-like culture, as it can be difficult when the company grows in the number of employees.

Culture as a competitive advantage seems to be the case in Trustworks, where there is no measurement of KPIs, sales, or the number of invoices the individual employee is sending out (Interview 6: 06:29). This can be combined with the fact that they do not want anybody to be better than others, and this creates a culture, which - according to the respondent – is not are seen in many other consultancies. This statement is supported by how the company through time has dismissed employees who were extremely productive but did not fit the team (Interview 6: 30:07).

What provides the competitive advantage in Shape does not seem to lie within the culture of the company but rather the structure of the company.

Being both a venture business and a consultant house - and thereby be a two kind of businesses – is innovative in the eyes of the respondent (Interview 5,

52 Part I: 04:36). Here the culture can therefore, with the words of the respondent, be argued not to be valuable, rare or imperfectly imitable.

Mechanistic and Organic Organizations

As presented in the literature review, Burns and Stalker (1961) distinguish between two types of cultures, the mechanistic and organic. Mechanistic and organic cultures are further distinguished on the basis of five different areas;

communication, locus of influence, job responsibility, information flow and conduciveness to innovation (see Appendix 1 for a description of the five areas).

In Festina Finance communication is being described as very important as knowledge should be as accessible as possible by being open and transparent (Interview 2: 35:27).

In Shape, communication in a non-hierarchical way is just as well identified as being important (Interview 5, Part II: 05:32).

Communication also happens among employees in Trustworks, not only at their weekly Friday meetings but also when they are not working on the respective projects (Interview 6: 13:52).

Regarding the locus of influence, both mechanistic and organic cultures are represented in the studied SMEs. In Abtion a mix of the two types of cultures can be identified. In the company, a project leader mainly has the responsibility for internal optimization (Interview 1: 14:52). He though needs, and often has, the empowerment of the management. However, the respondent says that management does not tell which new products that need to be developed and therefore, an organic culture can be identified.

Having both a mechanistic and organic culture seems to be the case in Invokers as well. Here the implementation of innovative ideas is by the respondent described as something the whole company is responsible for (Interview 3: 36:50).

The client approach seems to be the case in Move Innovation as well, as it is the client who chooses the processes they would like (Interview 4: 06:50).

When further elaborating on the responsibility, the CTO of the company is mentioned as responsible for developing new ideas (Interview 4: 09:36), but the respondent mentions the employees - together with other members of

53 the management - as the ones being responsible for anchoring these (Interview 4: 10:28).

The management seems to be responsible for developing innovative ideas in Shape as well. When asked about this, the respondent mentions the four partners (Interview 5, Part II, 03:13) as the ones having the responsibility.

When asked about implementation, two of the four partners are again mentioned as the ones having the strategic considerations (Interview 5, Part II, 06:12). But to design and build it, the employees have free rein of how to do so (Interview 5, Part II, 06:50). Here a general mechanistic culture can therefore be identified as the prominent one, but parts of an organic culture can be identified as well.

The opposite can be identified in Trustworks, where the respondent describes the responsibility of developing innovative products or services as very bottom-up, adding that it should never be the management who dictates the innovative part (Interview 6: 19:16). The same is the case regarding the responsibility of implementation of new ideas, but it is by the respondent mentioned that sometimes the employees seek the approval of the management (Interview 6: 20:30).

In Festina Finance, a mechanistic culture is clearly the dominating one. When addressing the responsibility of developing innovative ideas, the respondent states that it is mainly a management responsibility (Interview 2: 19:50).

When asked how this is expressed in the daily operations, he mentions that leading employees sit, very unstructured, together and discuss how things can be done differently. He specifically mentions that it does not come from the bottom to the top (Interview 2: 20:04). When asked about the implementation of these ideas, the management is again mentioned as a key factor (Interview 2: 20:12).

The next area distinguishing the two types of culture is job responsibility.

Here an example of organic culture is provided by the respondent from Invokers, as the employees sometimes have time off from projects and an example here, is a team who created a competency app (Interview 3: 58:30), which was their own initiative.

An organic culture regarding job responsibility seems to be the case in Festina Finance too. When asked if the employees choose their work tasks

54 themselves, the respondent answers that they choose a lot themselves (Interview 2: 36:20).

In Move Innovation a more mechanistic culture on this area can be identified, as the management distributes work tasks when a new project comes in and it is very rare that it changes from this distribution (Interview 4: 34:12).

The same is the case in Shape, as the employees do not get to choose a lot of work tasks (Interview 5, Part II: 21:46).

When asked about this, the respondent in Trustworks says that a lot of it is driven by the employees (Interview 6: 34:56).

Regarding information flow, a general way of informing can be argued to be dominating. In several of the interviews, a flat hierarchy is mentioned, and this can be identified as an organic culture. An example of organic culture is represented in Festina Finance, as they do not have a hierarchical organization because it ties things up (Interview 2: 36:05).

In Move Innovation, a focus on a flat structure is mentioned too, as the employees are defined as almost a family (Interview 4: 24:58).

In Trustworks, they have a flat structure too, because their employees mean everything to them (Interview 6: 30:30).

The same is the case in Abtion, but it is not necessarily identified as the best structure, as the employees must know there is a direction and that they are in the pursuit of a common goal (Interview 1: 37:58).

Regarding the last area, conduciveness to innovation, a clear tendency emerges. From the interviews conducted, all the SMEs seem to identity their cultures as innovative except from one.

In Festina Finance, the respondent does not identify the culture as being innovative but rather identifies the culture as a high-performance culture (Interview 2: 17:00).

As discussed in the literature review, it is argued that the different phases of the innovation process require a move from organic to mechanistic structure in accordance with the different phases of the innovation process (Hauschildt

& Salomo, 2007, p. 114). A clear tendency of such a move cannot clearly be identified. A move to a more mechanistic structure is in Trustworks, when asked if there is a systematic approach to the development of innovative

55 ideas, not seen as advantageous, as the biggest fear for the company is to become a corporate organization (Interview 6: 46:00). A complete opposite approach to this is formulated by the respondent from Move Innovation, who is of the belief that a systematic approach for the development of innovation is needed in order to grow (Interview 4: 1:02:24).