Relationships between Georgia Pacific's organizational culture, HR practices, and CEO leadership

Georgia Pacific

The new organizational culture at Georgia-Pacific is driven by the CEO's leadership style. The human resources function has been altered to support the new organizational culture. This paper will show how the three different components are intertwined and support each other.

When Joe Moeller took over as CEO of Georgia-Pacific, he began to revamp the company to make it function differently than it had before. He knew that such profound organizational change would require three key elements. The first is support from the top. The second is a shift in the organizational culture and the third is a change in the human resources practice. His leadership style emphasized the value of all three to the organizational change process and he was willing to be the first to exemplify that change.

Organizational change efforts typically succeed only when they are supported by senior management. Without senior management support, employee buy-in is likely to be less, resources are less likely to be diverted to the change effort and the change effort will have much lower visibility both internally and externally. Simply, top management must lead the change effort (Clement, 1994). Moeller was able to lead the change effort because he not only spearheaded the change, but was highly visible about doing so. The change effort was his project, but it was the way in which he communicated the change effort that allowed for the culture change to take place. When he spoke of breaking down barriers within the company, he removed the barriers that separated him from the workforce. His becoming more accessible to the employees sent them the message that he was serious about breaking down the company's internal barriers.

With managerial support, Moeller was able to initiate shifts in the corporate culture. The structure of the organization became flatter, which emphasized the message of culture change. The firm became oriented towards growth and opportunity, which represented a culture shift. Even something as simple as the Georgia State University situation sent a message to the entire organization that reinforced this culture shift towards growth and opportunity.

Moeller also recognized the role that human resources management plays in supporting organizational culture change. If the company's rewards systems do not support the new culture and strategic objectives, employees will be inclined to resist. Removing obstacles to change is one of the most important factors in implementing organizational change successfully (Strayer, 2007). The old human resources system at Georgia Pacific did not support Moeller's vision for the company. Single digit merit pay raises supported a culture of complacency. When Moeller replaced these with raises based on contribution to the company's bottom line, this encouraged a more entrepreneurial culture. A company full of entrepreneurs was less likely to have boundaries than a company where promotion and raises are based as much on tenure as anything else, and where high achievement was not explicitly encouraged.

Moeller also placed emphasis on building long-term value for the company. To this end, the human resources system was adapted to reflect an emphasis on long-term value. This new compensation scheme supported the new entrepreneurial culture. Moeller insisted on these human resources changes because they supported his vision for the company. He also was willing to be subject to those changes himself, such that he took a view of himself as being on the same level as the other employees.

In addition, the entrepreneurial culture essentially created more leaders within the organization. Having a large number of leaders in an organization committed to the change process has been identified as a key determinant of change success (Yukl, 2008). Under the old HR system, people could end up in leadership positions that they are incapable of filling effectively. As a result, leadership suffered. Under Moeller's entrepreneurial system, leaders could emerge from the ranks and be highly effective. By creating more leaders to support the change, Moeller was able to implement the culture change more quickly and effectively than would have been possible under a non-entrepreneurial system.

Moeller's experience at Georgia-Pacific exemplifies the impact that leadership can have on changing an organization's culture. He made use of human resources to help shift the culture as well, by adjusting the compensation and motivation schemes within the company to lend greater support to his vision than the old schemes had. He also recognized that the old HR strategy was going to be an obstacle to the organizational change effort, so he placed emphasis on HR as a means of affecting organizational change.