This famous quote by Philip Rosenthal is symptomatic of the Western self-conception: change is progression, stagnation is regression. In terms of the economy, this would probably mean that only those companies that continue to develop can survive. If one consistently follows this logic, then the executive management of an organization must constantly change the system in order to secure its existence in the long term. But is this even possible? Can an organisation exist in a constant dynamic or does it not need moments of stability? Does a company not need a stabilising, common culture that holds the system together with all its dynamism? And what is dynamics anyway?
This essay will examine the question of whether and how a corporate culture can be built up and maintained in organizations undergoing constant change. To answer these questions, a theory by Lotman (2010, pp. 21-28,211-218) is intended as a guide.
Dynamic organisational culture
According to Lotman (2010, p. 21), culture can be understood as a „complex whole“ composed of „layers of different developmental speeds“. Lotman talks in particular about the interaction of a successive development with moments of explosion. The plate tectonics of the earth can be used to illustrate this statement. Thus, the various earth plates also shift successively, parallel and imperceptibly until an explosion occurs at certain points in the form of earthquakes or volcanic eruptions, which radically changes the state of the system. This co-existence of gradual development and explosion leads to a state characterized by different dynamics. In other words, following Lotman’s argumentation, culture is a constantly evolving system that stabilises itself through continuous successive development, while the moments of explosion change the equilibrium of the system. Due to this constant change, which the system experiences, it is on the one hand dynamic and on the other hand it remains stable, because it constantly adapts to the changing environment (cf. Rüegg-Stürm & Grand, 2014). If we apply this insight to the initial question, then it seems to be possible that a company is in a state of constant change and still possesses a stabilizing organizational culture. Considering Lotman’s theory, it even seems conclusive that corporate culture is characterised by the fact that, in its stable state, it is constantly evolving successively and then changes noticeably in moments of explosion, which means that it always adapts to the successive and radical changes in internal and external environments.
In this way, a practice can be imagined in which a common culture is lived in companies, which is characterised, among other things, by the time at which one is present in the workplace, how the common breaks are spent, how one speaks to one another, how one dresses oneself, how one understands one’s dealings with the environment, etc. And this common culture is changed imperceptibly by successive development. This can manifest itself in the fact that although smaller things change, they have no significant influence on the common culture. Thinking of trivial changes such as unifying greeting at the reception desk, changing coffee beans in the break room or changing the e-mail program. Such smaller changes do not lead to radical change, but stabilise the system by consciously reflecting on the shared basic values and comparing them with the new state of affairs in such successive changes. Due to the inferiority of these successive developments to the fundamental values, the collective culture is consolidated and even strengthened by the marginal dynamics. If we follow Lotman, however, this stable state of successive development is now repeatedly shaken by moments of explosion. This can also be reconciled with entrepreneurial practice. In this way, there will be moments in every company in which culture changes radically in various aspects, while other levels continue to develop successively. The characteristics of such explosive moments can be manifold. Based on the above examples, the introduction of email technology would be a good example of an explosion that would disrupt the equilibrium on one level, while other levels continue to develop successively. Thus, the emergence of this new technology could potentially radically change external and internal communication, while the product sold by the company is not or hardly affected by this change.
The compatibility of Lotman’s theory with management practice is also illustrated by the fact that, for example, the well-known St. Gallen management model in its third generation also speaks of this duality in development (Dubs, Euler, Rüegg-Stürm & Wyss, 2009, pp. 122ff). The successive development can stand for incremental change presented in the St. Gallen management model, which represents a continuous optimization. According to Dubs et al. (2009), this improvement of the current state means an increase in stability. On the other hand, there is radical change. This is characteristic for the renewal or change of the current state and can thus be attributed to Lotman’s concept of explosion. Seitz & Capaul (2004, p. 47) illustrate the analogy between the two models. On the one hand, by describing incremental change insofar as the „frameworks of structure, culture and routines“ remain in place (p. 47). On the other hand, by introducing radical change (p. 47):“Norms and values that worked in the old system are questioned by change.“
So, if management theory now also speaks of this co-existence of successive development and moments of explosion, then it seems obvious to assume that there are models in business administration that can explain how to deal with these processes of change. One of the best-known models is the following three-phase model by Lewin (1943,1948,1963): 1st Unfreeze: Creation of a willingness to change within the company; 2nd Move: Change of corporate culture; 3rd Freeze: Freezing or „freeze“. Stabilize the new condition. Although this model is very intuitively understandable, it does not seem to be able to provide a comprehensive answer to the question posed. While this model seems to answer the question of how the process works mechanically from one state to another, other important questions are not covered. Thus, the model leaves open how moments of the explosion occur or how an organization can recognize such moments. Moreover, the phase model seems to be more a description of the process than an explanation of how to deal with it. In this context, it is also necessary to express the criticism that this model has a deterministic understanding of change. This neglects the fact that there are many environmental impacts on the organization that are not expected and therefore cannot be fully managed. Rüegg-Stürm & Grand (2014) in their fourth generation St. Gallen management model speak of a co-evolution of environment and organization in a similar context, thus implicitly pointing out that explosive moments are also carried into the organization by the environment. Because of all these criticisms, it is not wrong to describe the Unfreeze Move Freeze model as an ex-post rationalization of executive management, as Lotman (p. 27) also accuses historians of doing in the context of historiography. Explosive moments are retrospectively perceived as linear and subsequently described as if the actual contingent future had been determined.
Corporate Universities as dealing with dynamic stability
Nevertheless, from the point of view of business management it is legitimate to look for forms of processing in order to be able to influence the dynamic stability of the corporate culture. If one were to indulge in fatalism in management theory, executive management would be exaggeratedly worded as unemployed. However, if the Unfreeze-Move-Freeze-Model mentioned above does not go far enough and cannot get rid of the accusation of an ex-post rationalization, how is dynamic stability and especially explosive moments to be dealt with? Lotman (2010) gives us a solution to this problem by comparing ternary with binary systems. He describes binary systems as absolute because old and new values cannot be brought to justice there. Rather, binary systems are characterised by the fact that in explosive moments the old values are completely destroyed and only the new is correct, true and good. In contrast, Lotman places the ternary system he prefers. A middleground allows a coexistence of old and new values. The old values are not completely destroyed, but rather carried by the centre of the value system on its periphery. This middleground allows explosive moments within the organization to be used constructively. In addition, ternary systems appear to be more likely to regain the state of dynamic stability because the system is not completely destroyed and does not need to be fundamentally rebuilt.
If we now apply this insight again to entrepreneurial practice, then a so-called „middleground“ would have to be created within a company as well. One possibility to institutionalize this middleground is the establishment of a corporate university (CU). Such institutions are already used by many (large) companies to train employees, develop strategies or explore innovations (Rademakers, 2014). It therefore does not seem absurd to use a CU to ensure a dynamic stability of the corporate culture. A CU can deal with successive developments as well as moments of explosion.
In connection with the gradual development, the CU can be used, among other things, to carry out an introductory training course when recruiting new employees, in which great importance is attached to the prevailing corporate culture. Periodic training courses and workshops can also be used to verbalize the existing culture or the collective basic values, to compare them with the successive changes and thus consolidate them. In addition, the CU can also take exploratory action to observe the prevailing culture in the organization and thus make it easier to understand, especially for executive management. In other words, a CU can support the development and maintenance of dynamic stability through exploration and education (or communication in general). This enables the organization in general and the executive management in particular to understand the corporate culture as much as possible and thus to exercise the greatest possible influence. However, it should not be forgotten that a corporate culture cannot be determined and enforced by just a few people. A culture is not made, but lived and so it will never be completely possible for executive management to define a specific culture in detail. Nonetheless, as shown above, a CU can serve to understand the culture in an organization and to develop and maintain it successively together with the employees.
However, the CU cannot only function as an institution in order to understand the successive development and to channel it as much as possible. It can also serve as a „middleground“ to hold the organization together in explosive moments, possibly even to steer or at least to influence it. For example, when a new company is acquired, the compatibility of the different corporate cultures can be promoted by using the CU to explore the old values of both organizations and to develop a new value system together with the employees of the merged company. The CU acts as a middleground because it does not deny and destroy the states prior to the fusion, but rather builds a bridge from the state before the explosion to the state after the explosion. A second example illustrates even more clearly the comprehensive application of a CU for dealing with explosive moments. Almost every company in its lifecycle is confronted with new disruptive technologies that pose a massive threat to the survival of the organization. Such moments of the explosion cannot always be predicted and are also consciously sought in a few cases. Here, the CU can represent a robust machining form. In this way, it can be used exploratively to detect explosive moments at an early stage. Although this can rarely completely prevent such explosions from always having moments of surprise, it can reduce uncertainty and insecurity as much as possible through the targeted examination of the environment. If an (explored) moment of explosion occurs, the CU can then be used to reconcile the organization’s value system with the new state. Thus, it functions as a „middleground“, enabling the members of the organisation to build and cross the bridge from the old to the new state in a cooperative manner. This can be achieved, for example, by organizing training courses, workshops or conferences at the CU in order to jointly analyse the new situation and then try to realign the collective basic values together.
This shows that stable corporate cultures can be built up and maintained against the background of constant change. This is done by using the cultural concept of co-existence of successive developments and moments of the explosion of Lotman (2010) as a solution approach, whose understanding is strongly reminiscent of the development modes of the St. Gallen Management Model III (Dubs, Euler, Rüegg-Stürm & Wyss, 2009). Gradual development can be understood as a stabilising element of culture, in that smaller, imperceptible changes strengthen and stabilise the existing, collective fundamental values, while the moments of explosion represent a radical change in the system and thus shake up existing values and norms. Taking into account Lotman’s preferred ternary system, the institution of the Corporate University (CU) can be seen as a solution to ensure dynamic stability. In this way, the CU can serve on the one hand to explore the successive development and thus make it recognisable, and on the other hand to communicate and guide it. In addition, the CU can also mitigate the surprise effect of the explosive moments through exploration, while at the same time acting as an institution in order to present a „middleground“ in the ternary corporate system in moments of explosion and thus reconcile the old with the new state of affairs.
Despite these advantages of a CU in dealing with the dynamic environment, it seems to be hardly established for this purpose. This can open up the possibility for companies to develop a competitive advantage by establishing such an institution. On the one hand, fully in line with the St. Gallen Management Model IV by ensuring stabilising development dynamics (Rüegg-Stürm & Grand, 2014). On the other hand, by saving resources when working on change processes, which in turn are then available for growth-enhancing investments.
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Sources and further reading
Brown, T. (2009). Change by Design. New York: HarperCollins.
Dubs, R., Euler, D., Rüegg-Stürm, J., & Wyss, C. E. (2009). Introduction to management theory (2nd ed., Vol. I). Bern: Main.
Lewin, & K. (1963). Field theory in social science. Bern/Stuttgart.
Lewin, K. (1943). Forces behind food habits and methods of change. 35-65.
Lewin, K. (1948). Resolving social conflicts. Selected papers on group dynamics. New York: Harper & Brothers Publishers.
Lotman, J. M. (2010). Culture and explosion. Berlin: Suhrkamp.
Rademakers, M. F. (2014). Corporate Universities – Drivers of the learning organization. New York: Routledge.
Rüegg forward, J., & Grand, S. (2014). The St. Gallen Management Model 4th Generation – Introduction. Bern: Main.
Seitz, H., & Capaul, R. (2004). Leadership Situation – Shaping Innovation Processes (Vol. VI). (E. Dieter, & C. Metzger, Eds.) St. Gallen: Institute for Business Education.
Seufert, S. (2013). Education management. Stuttgart: Schäffer-Poeschel.
Seufert, S., Hasanbegovic, J., & Euler, D. (2007). Added value for education management through sustainable learning cultures. (D. Euler, & S. Seufert, Eds.) St. Gallen: Gebert Rüf Foundation.
Taylor, S., & Philips, T. (2002). The Corporate University Challenge: Corporate Competitiveness, Learning and Knowledge. Brussels: foreign.