The role of culture in organizational change

Abstract

Today more companies are developing strategies that require providing total solutions to their customers rather than just delivering products. Many such companies have a strong culture that derives from years of successfully delivering differentiated products. The move toward a more "solutions oriented" business is difficult. The strategic initiative is a critical first step but often belies the cultural transition that must take place concurrently. Some organizational change theorists present culture as one of many variables in the change equation. Others take a more holistic approach where organization and culture are integrated and must change together. In this thesis, we assert that companies focused on the latter approach can be quite successful at organizational change. We look at one such change initiative launched by Schlumberger, Ltd. This thesis studies the successful transition of Schlumberger from a product-based company composed of independent product groups into an "oilfield solutions provider". Through interviews with employees at all levels of the organization, we reconstruct the events that began over five years ago. The cultural transition continues to this day. The study identifies the initial corporate strategy and corresponding transition plan. We include case studies of other large firms attempting similar change for comparison. Further discussion focuses on the reaction of the middle management and others involved in line operations to capture their perception of the vision and their skepticism. In addition to the strategic perspective, the initiative is analyzed from within the political environment (both individuals and organizations) as well as from the cultural perspective. Finally, we pay particular attention to the management tactics in planning and executing the change initiative. The study analyzes these management practices to understand what worked and the lessons learned.