culture analysis at a software company

Culture Analysis Paper
Company Overview
I’m studying a software company that shall be known as K. K is not based in Silicon Valley, but elsewhere in the US, with offices around the world. K sells SaaS products in the B2B market and has sales in the hundreds of millions, and over 1000 employees. This company has also acquired several small firms in recent years. Integrating all of those individual cultures into a cohesive one has been one of the organization’s biggest challenges. This paper will outline the culture at K via primary sources, supplemented with secondary source material on organizational culture theory.
Primary research consisting of several employee interviews revealed some challenges, especially the domains of underlying assumptions and values. There is a lack of artifacts that provide meaning, which is another problem that will need to be resolved.
Primary Research
As I know people who work in this company I was able to conduct a few interviews and get a sense of what the culture is like. At the baseline level, K has a culture that blends some of the classic software company culture with a more East Coast business culture. The former is manifested in a fairly casual office atmosphere, and perks that would be familiar to most tech employees. The people interviewed found the company fairly progressive at the lower levels in terms of things like social norms and diversity. At the higher levels, where the senior leadership are older, the culture veers more towards a workaholic old white male culture. Some of that trickles down to the other levels of the company, which results in the curious blending of tech startup culture and old school business culture.
The different companies that have been acquired in recent years have been maintained as distinct business units in order to maintain the aspects of their cultures that made them successful. For some of the employees interviewed, this was seen as a positive because they felt that they were successful companies in their own right and that should be respected. Further, there seemed to be a general understanding among interviewees that it would be difficult to simply impose the parent company’s culture on the acquisitions, at least it would be difficult to do so quickly. However, some interviewees did note tensions where some of the individual cultures within the organization clashed, either with each other, or with the culture of the parent company.
Interviewees also noted some confusion about the overall cultural identity of the organization. Some suggested that they weren’t sure there was a coherent culture, others thought it might be dependent on individual departments. If this is true, it presents a challenge for senior management. It could be that the gap between the culture of the senior management team and the younger workers who make up the bulk of the staff is the originator of these tensions, in particular because these different generations are known to have very different value systems, and because many of the younger workers originally joined startup companies, and are now asked to adapt to a culture more of an older, more mature organization.
Another trend that I noted in the interviews was a bit of a gap where benefits were concerned. Tech companies are often generous with benefits, especially lifestyle benefits like work from home policies, paid time off, and more. Many younger workers expressed displeasure with these policies at K, noting that they seemed either out of line with tech industry norms – or the way that the workers perceived those norms – and also out of step with the needs of younger workers. Older workers seemed more satisfied with K’s policies on benefits, and many took less time off than they were allotted. However, older workers were more likely to get work from home privileges.
Theory Application
Lund (2003) makes the case that organizational culture is central to the success of an organization. In particular, culture change that results from mergers and acquisitions can be especially challenging. Lund notes that mergers and acquisitions tend to be more successful when there is closer alignment between the cultures of the two firms. Because post-merger culture change is correlated with turnover intention, in particular when acquisitions impact employee morale. In those situations, turnover intention can skyrocket (Chambers & Honeycutt, 2009). At K, I did not get the sense that morale was particularly low, but there were some inklings of things associated with decreasing morale, such as increasing workloads and slowness to post openings, again creating more pressure on those who remain. Thus, there are some red flags that turnover intention could increase – not so much at the parent company but at a few of the acquisitions.
However, it should be noted that some research suggests that the approach taken at K is the right one. Yamanoi & Sayama (2013) argue that “the highest level of cultural integration is achieved when social ties are more centralized within each merging firm and the social ties are less concentrated on central individuals.” This supports other theories that posit that individuals are more likely to leave when their social networks are disrupted by co-worker departures and increases in interpersonal conflict. In other words, limiting contact between the different acquired firms and with the parent company is a strategy that is likely to succeed. That some interviewees noted issues were often when dealing with members of other acquired firms, with different cultures and stressors, also supports this hypothesis.
The intergenerational aspect of organizational culture has also been studied at length. Researchers tend to accept that there are differences between generations in the workplace, and that these tensions can have an influence on organizational culture. North and Fiske (2015) note that intergenerational culture conflict takes place on multiple dimensions – individual, interpersonal, institutional and international. Considering the institutional level, the structures by which K manages its organization tend to draw more from baby boomer and maybe GenX influences, whereas the majority of the workforce is from younger generations. These tensions in particular exist where the younger workers have different needs from their roles. The most motivated of these workers seem happier with the workaholic aspects of the culture, but many younger workers seem less invested in the company or its culture for the long term, especially those that work in offices in regions where there are ample other employment options in software, often at companies with more youth-oriented cultures.
The intergenerational challenges that K faces are also found in the domain of benefits. North and Fiske (2015) characterize this as a conflict over resources. Dencker, Joshi and Martocchio (2007) note, however, that generational identities and norms tend to be institutionalized. In a company where the senior management consists mainly of older white men, their values focus on hard work, earning one’s opportunities, and focus on loyalty to the company. Younger workers place more value on lifestyle benefits like work from home and paid time off, and less on things like health care and life insurance packages. This clash of priorities on benefits can be viewed as being related to differences in generational priorities – not just the cultures in which the generations arose but in their life stages as well.
Conclusions
Values is the single most important issue within K culture. The multiple acquisitions and generational tensions leave the company with a muddled sense of what its organizational values really are, and that appears to be resulting in some tensions, especially among employees in the acquired companies. Finding ways to reconcile the different value systems within the company should be a priority going forward, in order to retain the highly skilled younger workers at the heart of the company’s software products.
The relative lack of artifacts is evidence of a company that is still finding its way. Where there are tensions, such as those around values, it is important for a company to have artifacts to latch onto. Better development of cultural artifacts – anything from slogans to mascots would be a good starting point – would help to resolve tensions and to build a better sense of overall organizational culture. Without these artifacts, employment at K becomes more transactional for the majority of the workers, something management may wish to avoid.
The underlying assumptions of management appear to be that they can apply their own cultural norms to the rest of the company and that is probably a mistake, because they are mainly different from the workforce. The underlying assumptions of the culture are rooted outside of the technology sector, but the company competes with other tech companies for talented young workers. If the assumptions of K’s organizational culture were better aligned with the needs of these workers, the company would stand a better chance of achieving its strategic goals over the next several years.
References
Chambers, K. & Honeycutt, A. (2009) Telecommunications mega-mergers: Impact on employee morale and turnover intention. Journal of Business & Economics Research. Vol. 7 (2) 43-52.
Dencker, J., Joshi, A, & Martocchio, J. (2007) Employee benefits as context for intergenerational conflict Human Resource Management Review. Vol. 17 (2) 208-220.
Lund, D. (2003) Organizational culture and job satisfaction. Journal of Business and Industrial Marketing. Vol. 18 (3) 219-236.
North, M. & Fiske, S. (2015) Intergenerational resource tensions in the workplace and beyond: Individual, interpersonal, institutional and international. Research in Organizational Behavior. Vol. 35 (2015) 159-179.
Yamanoi, J. & Sayama, H. (2013). Post-merger cultural integration from a social network perspective: A computational modeling approach. Computational and Mathematical Organization Theory Vol. 19 (2013) 516-537.