3. What is Organizational Culture?
• Culture is the set of values, norms, guiding beliefs
and understandings that are shared by members of
an organization and taught to new members as the
correct way to think, feel and behave
• It generally goes unnoticed
• Two critical functions in organizations:-
▫ To integrate members so that they know how to relate
to one another and
▫ To help the organization adapt to external
environment
4. Theories applicable to
Cultural Change (1/2)
• Materialistic variable approach
▫ It involves conceiving culture as an object, a thing
or a part of a bigger thing
▫ McKinsey‟s 7-S framework places culture (as
shared values) alongside structure, strategy, skills,
staff, style and system
5. Theories applicable to
Cultural Change (2/2)
• Anthropological or
Holistic view
▫ The view is that culture
is not something the
organization has but
something the
organization is
▫ According to Schein‟s
Framework, there is no
discrimination between
a culture and an
organization
6. Why Change Culture
• Interpreting Schein‟s Framework, there is no
discrimination between a culture and an
organization
• Culture and Strategy are substitutable for one
another. They are two sides of the same coin
• So, change in culture is required to:-
▫ Change strategy
▫ Change structure
▫ Bring change in organization
7.
8. Existing Culture at Schlumberger
• Scientific research was given precedence over
financial ones
• Senior level managers were involved in recruitment.
Training was very rigorous
• There was empowerment and decentralization in the
company
• A history of long tenure CEOs in the firm, led to
emphasis on long term planning and on consistent
corporate values
• Acquired companies could retain their own cultures
despite being a part of Schlumberger
9. Need for Change (1/2)
• By 1996, the company had a complete portfolio
of technology in oilfield services to offer.
However, the real revenue growth had stagnated
• Deep divisions in businesses precluded the firm
from broadly leveraging success in one product
area into a competitive advantage in another
• No horizontal integration. Company‟s various
businesses used to communicate via customers
10. Need for Change (2/2)
• Potential synergy existed to provide end-to-end
solutions to global customers. However, the
activities remained independent
▫ There were 6 businesses in oilfield services
▫ Their operations were supposed to be integrated
and provide solutions to customer problems
▫ There was lack of awareness and information on
the customer‟s side
11. The Process of Change
Forum Action The Workplace
2005 2000 Rollout 21
12. Forum 2005
• In 1996, Baird made a task force named “Forum
2005” of around 36 engineers and managers who
had high potential and were diverse
• They were to find out how industry will turn out in
next 10 years and then where they see Schlumberger
in that industry
• The team was to focus on the „vision‟ for the future
and not to spend time on implementation
• The change team‟s findings were:
▫ To leverage its IT technology and provide a platform
“One Schlumberger” to provide solutions to customers
▫ To create a more employee-friendly workplace and
more flexibility in new assignments
13. Action 2000 (1/2)
• In November, 1997, a team of 150 top managers of the
company was brought together to execute the change
• Action 2000 came up with a structure of the
organization
▫ The whole world was split into 29 Geographical Markets
known as GeoMarkets headed by General Managers
▫ They were provided complete independence of decision
making in terms of business planning in their areas
▫ Product Lines were renamed segments
▫ The local managers were to act according to the local
customer needs and changing circumstances
▫ Technical experts assigned to different segments were now
more visible to one another throughout the domain
14. Action 2000 (2/2)
• Segment superiors‟ were to work on solutions to
customer problems
• The GeoMarket managers were now responsible for
all products in their area
• Marketing and Sales, previously organised by
individual product lines were merged
• Technology centres were required to work more
closely with one another. They were also supposed
to come up with „solutions‟ to customers instead of
„products‟ for individual segments
15. The GeoMarket Structure
NSA
President
Vice
Presidents
IPM/Exp Global Industry
Legal Controller Marketing Personnel QHSE Sales Affairs
loitation
GeoMarket
Managers
(USL)
Business
Managers
Anadrill WireLine
Drilling
Dowell GeoQuest WCP
Bits
16. The Rollout
Level managers met with GeoMarket managers to explain them how
organization will work
The rest of the management and staff were told their new roles and
things expected of them
The management and support levels were changed first without any
disturbance in operations
Later on, operation organization was changed
GeoMarket managers contacted customers and explained them the new
structure, how it will lead to better service quality and client satisfaction
They were also told to contact only one person to know any information
or get services
17. Workplace 21
• Developed by Forum 2005
• Designed to better use the resources of IT &
Internet and was aimed at reinforcing the
“people oriented culture” at Schlumberger
• A team of 45 members was formed to investigate
business trends and best HR practices in the
industry
• The team investigated for six months and gave
eight recommendations
18. Recommendations by Workplace 21
Create the infrastructure for employees to do their work
Allow employees to choose their own workplace and style
Manage employees by results, not by methods
Adopt technologies that allow employees to collaborate with information and with
people in a way that is simpler, faster and more exciting
Adopt technologies that allow the Personnel Department to become a community of
career facilitators, rather than being the first people to have to say no
Pay closer attention to the quality of employees‟ lives
Consider the needs of employee families in the decision making process
Inspire creativity by incubating new ideas and innovation
19. Conclusions from the Case
• The case of Schlumberger is an interesting example
of change in organization during a healthy period
• The case tells how much “both-and” approach to
change has value where the organization and its
culture are intimately entwined
• They addressed the change from strategy, political
and cultural perspectives simultaneously
• The naming convention of different teams reflect
that the managers understood the different time
horizons needed for them
• The most important lesson that this case teaches is
that the leaders of a company understand clearly
that organisational change is equivalent to cultural
change and recognising this, managers have the
discipline to act accordingly
20. Some Generalizations about Change
• Sustained change requires mutual agreement
between change recipients and change
implementers
• The best change implementers will be power holders
in old organization
• Failure to keep focus on near term operations can
thwart change initiative
• Leaders in new organization must be change agents
• Clear communication and management visibility are
critical
• It is as important to embrace the elements of
organization‟s existing culture that are conducive to
change as it is to deal with those that inhibit the
change
