No Turning Back:

An Analysis of the Organisational Transformation of Business
and Government in the
Information Age

 

by:
Dr Christopher Reynolds

 

Change has itself become a characteristic of a changing world. If there is one thing that is certain it is that things

are changing. So radical is the change effecting the world’s economics, politics and social paradigms that Alvin

Toffler suggests that the world is experiencing the creating of a new civilization. Such a transformation is not

national or international but global and non-national. Everyone on earth is effected and this, in itself, is a

characteristic of the new era. The change is so extensive and pervasive that it equals, and surpasses, the

cultural and technological changes of both the agricultural revolution and the industrial revolution. (1) The

world is experiencing the dawn of the information age where knowledge is wealth and communication is

power. While technological advance is making the new age possible, the paradigm shift is not restricted to

technology. The new civilization brings with it new family styles, changes in the nature of work and even an

altered social consciousness. (2) Corporate and public service culture are not isolated from such

transformation. As the nature of work change and as people become more empowered to do their work, so

organisational culture will change. There is no going back, and the extent of the change that is occurring will

involve conflict not so much in politics or even business, but for organisations and workers who draw their

meaning and subsistence from the fading industrial era.


Both the agricultural and the industrial revolutions involved the growth of a knowledge base. New technology

allowed for the development of social structures and interrelationships, shifts in the ownership of wealth and

created of new power struggles. The agricultural era took thousands of years and the industrial era has taken

some three hundred years. But this knowledge era will be complete within only decades. Toffler says that this

new era “...brings with it a genuine new way of life based on diversity, renewable energy sources; on methods

of production that make most factory lines obsolete; on new, non-nuclear families; on a novel institution that

might be called the “electronic cottage” , and on radically changed schools and corporations of the future.” (3)


A clear illustration of knowledge era technology overwhelming industrial era technology is found in the Gulf

War of 1991. Newt Gingrich, Speaker of the US House of Representatives, in commenting on the advances

in the knowledge era, say that Desert Storm was an annihilation of an industrial era technology arm, ill

equipped to stand up against the sophisticated technology and information systems of the American army. (4)


In this context of this growth in knowledge and improvements in communication and production, the nature of

work is changing. Rising specialisation and professionalisation of the workforce means that work and labour

are not as interchangeable as they were in the industrial era. At the same time, corporations are struggling to

try and dismantle the bureaucracies they have built for themselves in the industrial era. “Economies of speed

replace economies of scale”, says Toffler. (5) Indeed, change itself is a characteristic of the new era and

processes within business and government will be ‘reengineered’ to manage change.


On this issue, Hammer suggests that the set of principles laid down two centuries ago as America began to

grow in the industrial era and gave it its structures, management and business achievements need to be

discarded. He believes that the new organisations of the present era won’t look much like those of the

industrial era. Like Toffler, he suggests that conventional wisdom is being replaced and new knowledge and

the empowerment of both the workforce and the consumer will change the assumptions that business

organisations are built around and, accordingly the organisations themselves. (6) The notion of the division of

labour, as first introduced by Adam Smith in his Wealth of Nations, has served the industrial era well but at the

end of the twentieth century , organisations find they are over divided with dis-economies of scale and gross

dysfunctionalism. (7) The division of labour has resulted in the over production of work and management

functions and meant that workers are powerless to make decisions or be creative in the tasks for which they

are employed.


While Hammer is not a prophetic as Toffler in describing the world as it is like to be, he does discuss at length

the changes to work, management and the workplace. As the nature of work changes and as workers are less

controlled and more empowered to be responsible and professional, then the hierarchical structures and the

managerial mandarins have to change themselves or be made redundant. Managers are less like foreman and

more like coaches. Structures are more downward focused rather than upward focused. This all means that

job preparation changes and shifts away from training to education. Performance evaluation also shifts away

from activity toward achieving results. (8) All of this means that organisations will change: Innovation,

creativity, leadership and individual responsibility all become characteristic of a new corporate culture.


Peter Drucker in his recent book, Managing in a Time of Great Change, accepts Toffler’s analysis of the

changing era. Specifically, he addresses the nature of change for business in the context of global markets and

competition. In this context, he too, notes the changing nature of work and business organisation. He says;


“In another ten or fifteen years, organisations may have outsourced all work that is ‘support’ rather than

‘revenue producing’ and all activities which do not offer career opportunities into senior management. This

would mean that in many organisations a majority of people who work for it might not be its employees but

employees of an outsourcing contractor.” (9)

Drucker suggests that the nature of business is changing away from large corporations with mass produced

lines and structured workforces, toward flexibility in marketing and production, network organisational society

and decentralisation of work and authority.


As a leader in business management for nearly fifty years, Peter Drucker believes that the world economy is

changing to such a degree that no nation of itself is in control of its own destiny. Nations now exist as a part of

a world economy (10) It is not just that fifty percent of the world’s trade now comes out of South East Asia,

demonstrating a shift in power and wealth, but that the emphasis in trade itself is moving away from

manufactured goods to services. Intelligence, skill and managements are now international business

commodities. At the same time international politics is changing as governments are less able to manage their

national economies and required to learn and speak international commerce. International politics has moved

away from geocentric military alliances to ecocentric commercial alliances.


Like Toffler, Drucker believes that the changes to society are radical, global and knowledge driven. He also

believes that knowledge is increasing at an alarming rate and that the workforce will need to be in almost a

constant program of education and training: Redefining itself continually. He say; “ In the society of

organisations, however, it is safe to assume that anyone with any knowledge will have to acquire new

knowledge every four or five years or become obsolete.” (11) Like the great changes in technology and

knowledge of the past, new ideas are likely to come from outside a domain and organisation. New knowledge

will come from outside an organisation and people will not learn skills common to the organisation but different

and foreign to the organisation. Indeed, this will be the nature of conflict for business and government.


The radical change in paradigm will not be technological. New equipment and electrical processing of itself

does not effect an organisation or its culture. The change in paradigm will be an acceptance of the inevitability

of change and the incorporation of the notion of change into the process of organisation and business. The

concept of continual improvement, or what the Japanese refer to as, kaizen, (12) will become the essential

part of corporate culture. In this paradigm, the past will be continually abandoned and innovation and creativity

will be organised and built into the systematic processes of an organisation. Drucker believes that it is the

nature of the task, and not the community, that determines the culture of an organisation. (13) As the task is

redefined and becomes more decentralised and contracted to others, so too, corporate culture will be

redefined. The distribution of power, authority, finance, responsibility and achievement will all move from the

top to the bottom, as it were, as the workforce is empowered and liberated from industrial systems of

command and control.

The society of the imminent future is a knowledge society. As people have more knowledge, they have more

power over their lives and their work. While knowledge workers will not be a majority of people within a

society, and may not the ruling class, they will be leading class. This not to say that manual labour will

disappear, but rather that manual labour in itself will become more highly skilled and require more knowledge

to work in the majority of industries: From hospitals to hotels, from schools to sports, people will approach

their field will more knowledge and more skill. From all this, the knowledge society will be an employee

society. From the agricultural era to the industrial era, the vast majority of people have worked or been

subservient to some other authority or owner of wealth and power. Previous societies have been ‘master’

dominated societies. Both the gemeinschaft (community) and the gesellschaft (society), as Tonnies depicted

German society last century, will change as the employee takes charge of their time, skill, and tools of

production. (14) What alienated the worker in the industrial age, Marx suggested, was their inability to own

their tools of production. But in the knowledge age, knowledge itself is the tool or production and the means

by which work will be redefined.

Still, Toffler and Drucker speak in sweeping terms. They describe a changing world and suggest

characteristics and prospects for the future but are not directly concerned to address the effect such change

will have on organisational culture or, indeed, how organisational culture will respond and even resist change.

This consideration needs special attention.

Geert Hofstede, in his famous survey of the value systems of some 40 nations and while drawing conclusion

about the organisational profile of these single nation states, his analysis aimed to give a clue as to the culture of

organisations with those states. (15)

Hofstede compared organisational culture by four categories: power, uncertainty avoidance, individualism, and

masculinity/femininity. (1) High power distance he defined as the acceptance without question by less

empowered people within a culture of the authority and power of the more empowered. (2) Uncertainty

avoidance the extent to which of a culture try to avoid that which is unclear, uncertain, unstable and untested

and in response try to establish strict codes of procedure and laws of absolute truth. (3) Low individualism

refers to the bonding and cultural expectation of an individual by the group of culture. The interests of the

group have precedent over those of the individual and at the same time the individual is expected to remain

loyal to the group. (4) Masculinity/Femininity refers to the roles of individuals as defined by their gender and

the expectation that the males and females have different functions and relationships of authority and access

within a culture. (16)

The implication from Hofstede’s study is that the culture of an organisation is a power determinant of the

behaviour of the individual within that culture and that the culture, as known to the organisation through

tradition, expectation and procedure, will resist change to behavioural norms. New technology in computing

and communication of itself will probably not effect organisational culture. Fear, power and procedure as

expressed through the values of the members of an organisation can and will remain dominant traits or

organisational culture. While change in technology and even the nature of work may weaken organisational

culture, it may also cause the organisation to close rather than to open: The organisation may (1) restrict

access and privilege - as evident in confidentiality agreements and security passes for organisations (2) avoid

uncertainty - as evident in an ever growing legislative/policy procedure for government and business, (3)

require more of an individual in terms of loyalty and commitment - as evident in the team player philosophy of

contemporary business culture. Given that there are obvious and generally accepted changes in gender role

expectations occurring across the world, the other features of Hofstede’s study indicate that the emergence of

a knowledge era may not necessarily bring the kind of organisational cultural changes they suggest.

The results of another landmark study, but from a different field, by Jackall of business ethics among American

business organisations in the 1980s, tends to support the analysis of Hofstede. Jackall talks of how ethics, as a

decision making process in the context of others and cultural expectation, is a day-to-day experience for

people in the workplace. He says; “But only an understanding of how men and women in business actually

experience their work enables one to grasp its moral salience for them. ... it regulates people’s experiences of

time and indeed routines their lives by engaging them on a daily basis in rational, socially approved, purposive

action.” (17) Jackall’s research of business management and corporate culture in the early 1980s led him to

the conclusion that the ethical culture, or ethos, of managerial circles emerged directly out of social context.

That is to say, “...that the ethical behaviour of people within a company or organisation directly relates to the

social expectations of the corporate culture. And managers are continually tested even as they continually test

others. They turn to each other for moral cues for behaviour and come to fashion specific situational moralities

for significant others in the world.” (18)

Again, the point is that it is the organisation’s culture and not the individual that determines attitudes and values

for that culture. Individuals define there position and interrelationships within the organisation by how they

uphold the expectations of the organisation. Organisations tend to be far more culturally homogeneous than the

societies they exist within. Accordingly, while Toffler and Drucker may describe societal and even global

change, changing a organisation’s culture may be far more cumbersome.

The work of Paul Bates from the University of Bath from a series of studies between 1975 and 1984,

identified six specific aspects of organisation culture that appear linked to dysfunctional predispositions within

organisations and create resistance to change. The six cultural orientations are: (1) unemotionally - where

expressing one’s real feelings about a problem or issue are avoided resulting in problems being internalised and

unresolved; (2) Depersonalisation of problems - where no individual is ever singled out or blamed for a

problem and formal criticism of individuals is considered as unprofessional; (3) Subordination - where

individuals only do tasks assigned to them and when in doubt wait for directions from superiors; (4)

Conservatism - where change is believed to probably make things worse rather than better; (5) Isolationism -

where individuals keep to themselves, do their own job and never trespass into other people’s areas; and (6)

Antipathy - where individuals assume that others in the organisation will always oppose new and creative ideas

and accordingly other are to be mistrusted. (19)

Perhaps more than Hofstede or Jackall, Bates addresses the nature of change-resistance and, as he calls it,

dysfunction within organisations. He identifies the specific values and attitudes that characterise the milieu of

non-change and malaise of bureaucracies. Similarly, Richard Scott says that organisations ; “... employ

buffering techniques - coding, stockpiling, leveling, forecasting, and adjustments in scale - to seal off their

technical core from environmental disturbances.” (20) Organisations are expert in adapting to the threat of

change or even to change in the course of preserving the organisation at any cost. And so the Bates study

indicates how even change and the creativity of individuals is stifled and controlled through both procedural

expectation and cultural values in order that the organisation be preserved.

Accordingly, if change is to occur as rapidly and as radically as Toffler suggests, than the assumption is that the

redefining of the nature of the task (in terms of knowledge driven), or of work, will be powerful enough to

effect the nature of the cultural interrelationships of power, authority, an change resistance.

An example of the difficulties of reforming an organisation is found in the efforts to remodel the New South

Wales Police Service. When John Avery became Police Commissioner in 1984 he joined together the two

arms of NSW policing: the Police Department and the Police Force. The Department consisted mainly of

civilians who carried out bureaucratic and office functions. The Force consisted of the police officers. The

fundamental problem in combining these two arms of policing was that they had vastly different corporate

cultures. While the Department was typical of other government organisations and displayed the characteristics

of organisational culture as described by Hofstede and Bates, the Force was a paramilitary organisation which

was task driven - law enforcement - and far more regimented than the Department. (21)

Bringing the Force and the Department together meant trying to create a new culture and a different model of

policing as service.

Avery sought to bring change by creating the Police Service and to redefine policing in terms of community-

based policing. The Service aimed to focus police on involving the community in the enforcement and

prevention of crime. This change of focus involved a restructuring of the way the police managed their business

but it also involved reappraising the value and the role of police in service delivery. That is, it was recognised

that if police structures and behaviour were to change then the values and attitudes of people who manage and

work within the structure must also be encouraged to change. Yet, once the role of police had begun to be

questioned, any view that police were beyond reproach was discarded.

Some ten years after Avery took office, Aptech Australia was asked to conduct a survey of the organisation

culture of the NSW Police Service. They found that police officers were generally discontent with elements of

the Service. The Report showed that 50% of staff believed they were not valued and 46% believed they could

not express their opinions without fear of reprisal. There was a general belief among police officers that there

was a lack of support for beat police by headquarters and that headquarters was out of touch with the patrols.

The survey indicates that the strongest aspect of the organisational culture was the enjoyment people got from

working in teams. The problem was that in the police context, with so much movement of staff and shift work,

people often found themselves excluded by in-groups or power groups. (22)

If anything, the survey indicates that even with all the best intentions, organisation, computer equipment and

strategies, changing an organisation’s culture is a difficult and time consuming activity. Within the rapidly

changing social environment traditional policing methods have become obsolete as the public demands a

different kind of policing service. Public scrutiny of policing in Queensland as well as NSW in recent years

testifies to the general withdrawal of public support and respect. Still, the Aptech Report indicates that a

change in strategy or model for an organisation is not complete and of limited effect without a change in

organisational culture. This is something that the NSW Police Service is still struggling with. (23)

A different kind of organisational culture change is evident in the experiences of Brunei. This small country

located on the north of Borneo has been thrown from an agrarian age into the ‘knowledge’ age or high-tech

age over the past 40 years because of its oil reserves and new found wealth. It is an interesting case study

because it has seemingly totally missed the industrial age: It has virtually no industry or exports to speak of. It

is experiencing extraordinary infrastructural and housing growth and readily accepting the gadgets of an

electronic age as if it was all part of just being modern. Mobile phones, for example, are as common as home

phones.

As a British protectorate from 1906 to 1983, British was involvement in developing the oil fields but also in

developing a British style of government bureaucracy. As one of the wealthiest states in the world, and very

little private sector development, the Brunei Government can afford to employ far more people than is really

requires and the majority of the population. The result is that given the lack of work to maintain a fully

functional bureaucracy and the British legacy of requiring everything in triplicate, nothing gets done in less than

the procedural month. (24)

The combination of Brunei culture and tradition, religious fundamentalism, extensive bureaucracy, Blunt

suggests make for a organisational culture that has a predisposition against hard work or efficiency. (25) The

essential problem for Brunei, and perhaps other parts of Malaysia, is that while it is faced with the

opportunities offered it by the emergence of a ‘knowledge’ era, and the financial resources to embrace it, it is

caught in a crisis between the conflicting government policies of advancement and cultural preservation. While

the tensions within organisational culture as described by Hofstede and Bates probably apply to a greater or

lesser extent, the countries problem with dealing with progress exist predominantly on a macro (national) level

rather than a micro (organisational) level.

With its lack of industrial baggage and antiquated infrastructure along with its natural wealth, Brunei is the envy

of many countries with exactly the opposite predicament. Yet, as a new and emerging nation, it is among the

first to witness the changes in technology and civilization that Toffler speaks about. The question, however,

remains, will greater freedom of movement and increased power and self sufficiency among workers cause

organisations to become more open and trusting or cause them to become more secretive and closed?

In conclusion, Toffler and Drucker may be right; the world may see the emergence of a new civilisation, in the

short term however, organisations are likely to treat change and the threat of change in the usual way, with

suspicion, withdrawal and regulation. The change of a civilisation will bring its conflict as power, authority and

even organisational culture cling to established patterns and traditions.


References:


1. Toffler, A & Toffler H., (1995) Creating a New Civilization, Turner Publishing, Atlanta, p. 19.

2. ibid.

3. op.cit., p.20.

4. op. cit., p.15.

5. op cit., p.47.

6. Hammer. M. & Champy. J. (1994) Reengineering the Corporation, Nicholas Brealey, London, p.3.

7. op.cit. p.28

8. op. cit p.78

9. Drucker, P. (1995) Management in a Time of Great Change, Butterworth-Heinemann, Oxford, p.59.

10. Drucker p.125

11. Drucker p.69.

12. Drucker p.71

13. Drucker p.73

14. Drucker p.125

15 Blunt. P. (1988) “Cultural Consequences for Organisation Change in A Southeast
Asian State: Brunei”, Executive, The Academy of Management, Vol.II, No.3, p. 235.

16. Blunt. p.237

17. Jackall. R. (1988) Moral Mazes. Oxford University Press, New York, p.5.

18. Jackall. p.193

19. Blunt p.239

20. Scott. W.R. (1992) Organisations: Rational, Natural and Open Systems. Prentice Hall, New York, p.225.

21. Aptech Australia, (1994) Cultural Survey Report for the New South Wales Police Service, Sydney, pp. 1-4.

22. Aptech pp.1-4.

23. Aptech pp.1-4.

24. Doshi, T., (1997) Brunei Economy, The Far East and Australasia, 28th ed. p.164.

25. Blunt p.239


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