Organizational Culture

To overcome difficulties in managing its inventories, the Defense Department needs to change its inventory management culture so that more value and emphasis are placed on economy and efficiency. This report provides views from private sector experts on the techniques they use in changing or perpetuating an "organizational culture"--a term referring to the underlying assumptions, beliefs, values, attitudes, and expectations shared by an organization's members. GAO found that an organization's decision to change its culture is generally triggered by a specific event or situation, as was the case at Ford Motor Co. during the oil shocks of the 1970s and subsequent increases in international competition. The experts agreed that cultural change is a long-term effort that takes at least 10 to 15 years to complete. Company officials believe that two key techniques are of prime importance to successful cultural change. First, top management must be totally committed to the change in both words and action. Second, organizations must provide training that promotes and develops skills related to their desired values and beliefs. The nine companies GAO surveyed--AT&T, Corning, DuPont, Federal Express, Ford, IBM, Johnson & Johnson, 3M, and Motorola--also indicated that successful cultural change requires a combination of many techniques in addition to the two just mentioned, ranging from rewards to encourage behavior to the use of slogans to communicate values and beliefs.

GAO found that: (1) experts agree that an organization's decision to change its culture is generally triggered by a specific event or situation and is a long-term effort that takes at least 5 to 10 years to complete; and (2) company officials believe that the two key techniques for a successful culture change are the top management's total commitment to the change and training that promotes and develops skills related to the company's desired values or beliefs. GAO also found that the organizations reviewed indicated that effecting successful cultural change requires a combination of many techniques, including: (1) distributing a written statement of values and beliefs; (2) creating a management style that reinforces the desired values and beliefs; (3) offering rewards, incentives, and promotions to encourage behavior that reinforces those beliefs; (4) holding company gatherings to discuss those beliefs; (5) developing an organizational structure that is compatible with those beliefs; (6) using systems, procedures, and processes to support organizational values; and (7) using stories, legends, myths, and slogans to communicate those values and beliefs.