The cultural web shows the behavioural, physical and symbolic manifestations of a culture that inform or are informed by the ‘taken-for-granted’ paradigms of an organisation. Staff retention is high and employees rarely leave Cordia for other opportunities. As a result Cordia’s policy is for its employees to work until 65 years of age and then retire. Symbols: These refer to the visual representations of the company including logos, state of the offices and dress codes. Cordia has a 9 to 5 work pattern and has a ‘Directors Corridor’ which is described as the walk way to the Managing Director and Operations Director’s offices. * Power Structures: These are the pockets of real power within the company. It may include senior executives or even a whole department. It basically refers to the person or group of people who have the most amount of influence on decisions, operations and strategic direction.
Cordia has highly established norms and places heavy reliance on implied authority. * Organisational Structures: Includes the structure defined by the organisational chart and the unrecorded lines of authority and influence that indicate whose contributions are most respected. According to Cordia staff the organisational structure within Cordia is very formal, strict and relies heavily on historical values. * Control Systems: This refers to the way that the organisation is controlled. It includes financial and quality systems.
At Cordia, emphasis on top level accounts is done only by senior management. This means that if the summative impact of total performance for each division is satisfactory then there is no deeper analyses into individual cost centre performances. * Rituals and Routines: Includes the daily behaviour and actions of people that signal acceptable behaviour. This is utilised to determine what is expected to happen in given situations and what is valued by management. The Operations Director at Cordia holds yearly conversations with HQ staff.
This means that he meets with groups of HQ staff (100) at a time in a theatre room and presents to them the results of the business for the previous year and lays out the challenges that lie ahead. This is his opportunity to explain the strategy of Cordia, reflect on actual strategic outcomes and compare these with planned strategic outcomes. The culture web is used to identify the company’s culture as it is currently. This will then enable the company to identify the ‘webs’ of norm and culture that is prohibiting it from moving forward.
Through the culture web of Cordia is can clearly be seen that the company places high value on historical practices and the company is managed accordingly. Some of the key strategic issues arising from a cultural analysis of Cordia include: * Strategically Cordia is still too focused on one area of industry fulfilment – 85 % of its trading operations are with one client, i. e. Glasgow City Council. The council comprises of departments that are currently primarily interested in providing a service within budget as opposed to increasing the bottom line.
Thus being 85% affiliated to departments like these ensures that Cordia has no manoeuvring room with regard to price negotiations and cost efficiencies etc. Cordia’s biggest challenge within the cultural perspective is to redirect the view of its divisions towards efficiency and competitive strategy. Wakefield, a west Yorkshire Town in the UK, is currently undergoing a discreet revolution3. Sate services are increasingly being contracted out. Spending cuts have forced local authorities to find efficiencies and the coalition (Labour and Conservative parties) has plans to reshape and restrict what the state does.
Even though this contractual process is different from the Cordia case, it still leans toward governments trying to find more efficient ways of operating. 3 http://www. economist. com/node/21550290 * An important element to consider is the extent to which the delivery of council services remains a central part of the model. The concept of competition is not well established within Cordia as most employees still view the company as a council division. If the employees are unconsciously averse to a new Cordia Way then the likelihood for success in the company strategy are much lower. Cordia has a culture that is particularly resistant to change.
The culture web reflects the privileges and the paternalistic nature of the Council. It is widely highlighted that the Council will always provide the facilities, practices and processes and terms and conditions that enable Cordia to keep trading as an appendage of the Council. The continued alignment to the heritage of Council dominance is manifested in many of the routines and control systems. Effectively, the ways of operating remain those of the past.
In view of this, Cordia will never be able to break completely free of certain cultural mind-sets that the council has nurtured. This makes fostering a new strategy very difficult. * Another important point to consider is how the Cordia leaders perceive themselves. In keeping with the companies deep connection with history and seeing their jobs as being 100% secure, do the leaders have the view that they are still within the protected shield of the council or do they believe that they are part of a more fluid social network.
It is imperative that the leaders understand the Cordia Way and what it implies to the company. This will ensure that work effectively to increase revenue rather than break even with the view that everyone is safe. Cordia’s strategic position as per the case describes a company that relies on the past to make decisions in the present. It also implies a high regard for formality and structure and little regard for fluidity in strategy and decision making. Cordia has outlines a change management plan to deal with these issues.
There are two views of strategy development; the intended strategy, sometimes referred to as the rational or analytical view of strategy and the emergent strategy which highlights the view that strategies do not develop on the foundation of a grand plan but rather develop over time. Henry Mintzberg describes emergent strategies as such: ‘emergent strategy originates not in the mind of the strategist, but in the interaction of the organization with its environment. ’4 Cordia’s strategy development comes not from an individual but from the organizations relationship with the internal and external environments that it is part of.
On the surface, there appears to be an apparent absence of formal strategic planning and a higher degree of operational planning. There is evidence of an externally imposed strategy from the centre of the council in the advent of Cordia’s new LLP company profile. Strategy within Cordia is also formal and emergent. Cordia’s management respect the politically and externally imposed strategy but also take advantage of strategic opportunities derived from a political and social closeness to powerful stakeholders that reveal opportunities for advancing the business.
Cordia’s managing director Fergus states that Cordia is rooted in good business relations amongst all stakeholders hence the new branding of the company under the name ‘Cordia’ which is derived from the cordial relationships between the company and its stakeholders. 4 http://en. wikipedia. org/wiki/Strategy_dynamics The most appropriate way to describe this mixed bag of strategy development is “logical incrementalism”. This is the development of strategy by experimentation and learning. The five stages of logical incrementalism5 are stated as: General Concern: A vaguely felt awareness of an issue. * Broadcasting of a general idea: The idea is circulated for reactions * Formal development of a change plan * Use of a crisis or opportunity: This is to stimulate implementation of change * Adaptation: the plan adapts as implementation progresses In Cordia’s case, the opportunity arose when in 2008; the Glasgow City council had to settle an equal pay dispute which resulted in a pay increase of an average of 20%. They then utilised this ‘crisis’ to implement change within the organisation.
The four main characteristics of the logical incrementalism model within Cordia are as follows: * Environmental uncertainty: Cordia realised that they cannot rely solely on historical data and perspectives to run the company. They have to be aware of the changes in the environment. To ensure that the company creates revenue they have to manage service provision with business management. * General goals: Cordia did not state specific goals for the company. Instead it went the route of incorporating six, twenty week phases into the Cordia Way.
This ensures that the company moves forward incrementally rather than in leaps and bounds without a specific, clear direction. * Experimentation: Cordia management sought to create a strong, secure and more flexible core business. The case highlights that Cordia is involved in three different operational sectors: Encore, Facilities Management and Care Services. Cordia understand that each of these require different objectives to grow and develop further thus strengthening the overall brand. 5 http://www. 12manage. com/description_logical_incrementalism. tml * Coordinating emergent strategies: Top management of Cordia have highlighted formal and informal processes in order to draw a picture of their emerging strategy.
The formal process includes the twenty week phases which serve not only as part of change management but also to increase the efficiency of the business. Cordia has thus demonstrated a strategy development process that is more similar to the logical incrementalism model than any other. Cordia is not a wary business nor does it burden itself with too much conceptualisation or planning.
It is a management culture which likes action. It is known as a problem solver in large scale manual services. Therefore, in most cases strategy may be considered as the outcome of resolving emerging issues. The political view of strategy is also critically evident as Cordia has powerful factions, divisional leaders, middle managers and political leaders with conflicting political agendas. Cordia’s challenge then arises in filtering out what is important for their strategic purposes and what is not. Question Three What strategy should Cordia accept and why?
This basically meant that the company would start afresh as an organisation but not separated from the banner of the municipality as 99% of the company was still owned by the municipality. Given the recent turmoil over pay disputes, and the fact that the company had to pay-out large sums of money due to inequalities, the council gave Cordia LLP three years in which to improve on their competitive position in the business environment, therefore the organisations strategy focussed on the next three years of its trading life.
The company needed to break even in the next few years or risk the council outsourcing the services for other models. There were limitations however, as still being under the council’s banner, they were still bound by the council’s strategy. Under the LLP, Cordia had three divisions of operations; Encore hospitality services, Facilities management and Care services. These three divisions indicated three different strategies: * Encore: The case makes mention that encore is the “sexier part of the business”. Encore is highly competitive and has an aggressive strategy with the expectation of doubling its turnover in the first three years. Facilities Management: This part of the LLP was mainly concerned with leading service delivery and was very cost efficient in the manner in which it employed people on ‘term time’ basis.
This meant that people are only employed for the duration of each school term. This division has to constantly re-invent itself as students are rejecting the menu offering. Calling upon core competences is the key to strategic development in this case as the brand was once recognised as the leading change in school meals programmes. Care service: This is the largest of the business division and also the leader in the care industry with recent innovations to the products offered for example “Equip U”. This division had the potential to be the major contributor to cost reduction within the organisation. Cordia recognised an opportunity for growth. Here key issues for Cordia were twofold.
To develop an understanding on the part of every employee at the organisation (create a culture) and a commercial orientation throughout the organisation to breakdown the structural and cultural differences (the silos that the structure created among the departments) and, To develop Cordia competitive advantage as this will eventually determine whether Cordia retains customers for repeat business and reaches its 3 year goal of proving to the municipality that this is indeed an organisation that can be profitable in an already saturated market of relationship management. According to the case, Cordia decided to develop a brand strategy. This can be highlighted as a marketing strategy that the company was embarked upon. The managing director realised that the company’s core competency was relationship management.
Cordia was, after all, developing into a market leader in relationship management in the catering and care service industries. Part of Cordia’s strategy development was to improve on its core competencies. Competition was inflexible in the other two sectors, but this was not the case for the Care Service industry. Cordia recognised the need to develop this part of the business given that it was a fairly new innovation in the country. Cordia realised that change was in the cards and embarked upon a strategy to seize the moment. The company decided to embark on a strategy to monopolise the market since they already had an established sector.
From the case it can be clearly seen that the main strategy developed in the organisation was aimed at improving their competitive advantage and to become market leaders in their field of operations by focussing on their core competences. The managing director recognised the need for new business to come into the organisation and hence, as part of the organisations strategy for growth through extensive brand development, Cordia has established a commercial strategy department that ensured that all the services offered by the company was of the highest standard.
This refers to employees within of an organization performing specialized tasks and in Cordia’s case, the Care Services in DACS. There was a great historical emphasis on caring for the client (core competences) and not running the unit as a business (strategy). The MD realized that changes in the structure were needed but did not want make any changes at such an early stage of its three year strategy. The managing director realized that this would involve the buy in of management and staff. The case makes mention of various options available to the organization to initiate a structural change to the organization.
In an attempt to restructure and reassess the culture of the organization, the organization launched a program called the “Cordia Way”. The market will thus see Cordia as an LLP and not just merely an extension of the council. The case also mentions of the “Metamorphosis of Cordia” where the MD decided that the current structure might not be appropriate in keeping with the organization’s strategy. The MD envisioned a structure that reflects a more commercial (appealing to all sectors of relationship management) and fluid (be able to flow without hindrance from the council) identity.
At its current state, Cordia reflected a structure, as mentioned above, that was functional and clearly divisional. One of the major challenges facing strategic management was to breakdown these divisions and make the company one entity with one specific goal in sight. The company strategy! The organization enjoys being under the banner of the council for the following reasons: * The organization is quite happy to enjoy the support of the council as this was a source of core business.
The various divisions that served the council basically guaranteed continued business from the council. The opportunities for the LLP were endless as the organization enjoyed the benefit of operating in the free market. * The organization now had the power to set up a commercial division to enhance strategy and growth The need to change the structure is very evident in the case if Cordia is going to be seen as a market leader in the relationship management industry. As previously mentioned, the structure should be commercial and fluid. Although the organization has a current structure typical to that of a functional structure, multi divisional structures are also seen in the three areas of operation within the organization.
Multi divisional structures are not without disadvantages. The clear divisions between the various areas of operations become very evident, that is, employees of the Care service see themselves as “care services employees”. Cordia should seek to adopt a structure that would encourage interaction between the divisions which will in turn satisfy the needs of the organization and will eventually set Cordia LLP up as an organization competing in the open market and not simply a subsidiary of the council.