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September 2009

BUILDING A QUALITY-FOCUSED CUL TURE
CHALLENGE A consumer products manufacturer competes in a mature and declining commoditised market with a small number of competitors. As such, the organisation must compete on quality to retain its share of the market. With quality becoming an increasingly important strategic imperative, the organisation wanted to understand how it could execute this strategy more consistently and effectively . RESPONSE Research of high performance companies has shown that one way to improve strategy execution is to build a culture aligned with that strategy Towers Perrin analysed results . from this company’s employee opinion survey to assess how well the current organisational culture supported a quality-focused strategy and then identified how the company might alter its culture to , enable more effective execution of this strategy . RESUL TS Towers Perrin uncovered gaps in specific cultural elements that needed to be addressed to better realise a strategy focused on quality The analysis included a review of the . prior year’s survey data and showed that the company was becoming weaker in critical cultural aspects. This insight helped the company form and conduct a formal process of culture change to improve its strategic focus and retain its market competitiveness.

ALIGNMENT DRIVES STRATEGIC SUCCESS In many years of working with global companies, Towers Perrin has found that for an organisation to be effective in translating its goals into results, there must be alignment between its business strategy and organisation culture. Alignment is achieved when the shared beliefs, values, and ways of working within an organisation drive the realisation of goals and objectives. HOW DOES CULTURE SUPPORT QUALITY? Through research of high-performing organisations that compete on quality, Towers Perrin has uncovered the core cultural characteristics or cultural drivers which contribute to the success of these organisations (see table).

Cultural drivers of quality
Teamwork / best practice sharing Performance management Understanding of customer expectations Empowerment Process focus Training Long-term orientation Career development ✔ Good cooperation across work groups and departments ✔ Clear performance criteria that support customer service ✔ Knowledge of customer needs ✔ Provide quality where it matters most to the customer ✔ Support for change and challenge of tradition ✔ Demonstrated commitment to quality and improvement ✔ Identify and eliminate potential sources of error ✔ Focus on job preparation and continuous skill improvement ✔ Plans and optimism for the future of the company ✔ Recruiting, developing, promoting, and retaining best talent

Towers Perrin I 2

A company’s most desirable cultural qualities depend on the particular business strategy the organisation is emphasising.

Using this knowledge as a framework for investigation, Towers Perrin implemented a two-step assessment to determine to what degree and with what consequences the drivers of quality exist at this consumer products manufacturing company and to identify areas of culture change that would have the most beneficial impact in supporting an organisational strategy based on quality. EXAMINING THE COMPANY’S CULTURE Employee opinions, taken from their most recent survey, were analysed on the cultural drivers of quality. The survey results were first compared with scores from Towers Perrin’s Global High Performance Norm. This Towers Perrin benchmark consists of companies demonstrating superior financial performance and excellent management practices. As seen in Figure 1, the company scored significantly below benchmark in five of the cultural drivers of quality. Employees at this company were favourable with regard to sharing information and working across teams, managing performance towards customer service goals and understanding what their customers expect in terms of quality. Employees were less favourable...
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