Organizational ethos and culture at ONGC: an empirical study.
Farooq, Ayesha ; Sethi, Seep
A number of organizational culture frameworks have come into
existence in recent years. Organizations can use these to do a diagnosis
of the existing culture and preparing action plans to change the culture
if required. One such cultural framework is provided by Udai Pareek,
which helps in assessing the organizational culture. It relies on ethos,
deriving out of core values, which forms culture. This paper intends to
find that how far OCTAPACE ethos is a part of the organizational
culture. The importance of this lies is the fact that culture reflecting
OCTAPACE can be viewed as an approach to supplement organizational
strategy and to develop the capabilities of the organizational members
for achieving success. To understand the dimensions of culture and
ethos, the study has been conducted at ONGC and data was collected from
different levels in the organization. Instrument developed by Udai
Pareek, has been used to collect data which, indicated that ethos in
ONGC is at an average level. It has emerged that some of the values are
distinguished enough to make the culture a performing culture. Results
have confirmed that culture is derived out of ethos, which ultimately
leads to performance.
Public sector enterprises play a significant role in the all-round
development of the country. They need to operate at the maximum level of
efficiency and productivity. Productivity improvement in their working
gives a fillip to national economy and prosperity for the entire nation.
In order to introduce the spirit of productivity and efficiency of the
workforce, there is a need to develop a new work ethic as well as
corporate culture. Culture of any company heavily relies on the ethos of
the organization; values which are practiced and shared by the
organizational members.
The Public Sector enterprises have twin objectives- commercial and
noncommercial. In a private enterprise, the process of goal setting is
comparatively simpler and is primarily influenced by economic
considerations. In a public enterprise, goal setting is a complex
socio-tech no-economic process, which is influenced by the perceptions
of different stakeholders, namely, employees, government, politicians
and society.
Organizational Culture
The organizational culture plays a very significant role in making
organizations get the best out of themselves. Culture provides the
energy needed to function well by ensuring as it were a proper
circulation of blood through all the organs.
The Corporate culture is one that results from the belief of the
top management initially and subsequently from the HRD systems and
practices.
Organizational culture shapes the values and beliefs of the
members. Organization culture is defined as shared managerial beliefs
and assumptions about employee nature and behavior (Ayean et al., 2002).
Geert Hofstede (1980) has clearly brought out a strong influence of
culture in organizational working. Linda Smircich (1985) brought out the
direct link between the concepts of culture and organizational behavior.
Pettigrew (1979) referred culture as a system publicly and collectively
accepted meanings operating for a given group. Louis (1983) also came up
with the idea of common understanding. Thus it is rational and logical
to say that culture with its different dimensions has a significant
influence on the organizations performance. Organizational culture is
concerned with how employees perceive the characteristics of an
organization's culture, not with whether or not they like them.
That is, it is a descriptive term. It also represents a common
perception held by the organization's member. Culture plays an
important role in shaping any organization. It evolves with the business
perspective, internally and externally.
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Schein (1985) proposed culture as a cumulative preference for some
states of life over others (values), the predispositions concerning
responses towards several significant issues and phenomenon (attitudes),
organized way of filling time in relation to certain affairs (rituals),
and ways of promoting desired behaviors and preventing undesirable ones
(sanctions).
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The conception of organizational culture advanced by Schein (1985)
also holds the notion of collective understandings culture has been
defined as 'the pattern of basic assumptions that a given group has
invented, discovered, or developed in learning to cope with its problems
of external adaptation and internal integration, and that have worked
well enough to be considered valid, and, therefore, to be taught to new
members as the correct way to perceive, think, and feel in relation to
these problems'.
Schein further argues that to understand the content and dynamics
of culture, one should know those aspects, which provide information
about how basic assumptions arise and why they persist. He categorizes
these aspects into two groups. These two aspects are:
1. External adaptation, and
2. Internal integration.
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Organizational culture is considered as an internal variable
meaning that it is something that organization has. This perspective of
culture has been taken by a number of researchers. It has been described
as a set of assumptions (Schein, 1985), rituals and ceremonies (Deal and
Kennedy, 1982), shared management practices (Hofstede, 1998) and shared
values (O Reilly, 1991). Peters and Waterman (1982) argued that a strong
culture distinguishes successful organizations from other organizations.
They emphasized that any organization, in order to survive and achieve
successes, must have a sound set of beliefs. If an organization is to
meet the challenge of a challenging world, it must be prepared to change
everything about itself except those beliefs as it moves through
corporate life. They argued that the "Soft" is hard. Ouchi
(1980) viewed that strong culture facilitates coordination and
communication and these give strong-culture companies a competitive
advantage over their competitors.
Among these the theory propounded by Edgar Schein has been most
influential in understanding organizational culture. Culture exists at
three levels ranging from latent to manifest. At the latent level lies a
core of beliefs and assumption, in middle the values and at the manifest
levels are artifacts. Schein believes that the core of basic assumptions
and belief is the essence of culture. This core guides the values and
behavior norms, which the members recognize, respond to and maintain.
Pareek (1988) relied on the functionalist approach to study
culture. Culture related concepts can be seen as multi level concepts.
Values, beliefs attitudes and norms are inter-related. Pareek (1997)
discussed the concept of ethos, as the underlying spirit of character or
group and is made of its beliefs, customs or practices. At the base of
ethos are core values i.e., "People need to give and get something
from the occupation that goes beyond simply earning a salary".
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A healthy organizational culture rests on eight strong pillars of
"OCTAPACE" referring to Openness, Confrontation, Trust,
Authenticity, Proactive, Autonomy, Collaboration and Empowerment and
Experimentation. T. V. Rao introduced the concept of OCTAPAC culture as
a good progressive way of building organizations. Udai Pareek and T.V.
Rao pioneered the concept of HR Culture and propounded the OCTAPAC
culture. An E for Empowerment and Experimentation was later added and it
became OCTAPACE. In addition to being an acronym for these values,
OCTAPACE is a meaningful term, indicating eight (octa) steps (pace) to
create functional ETHOS. These values are discussed below.
Openness: The spontaneous expression of feelings and thoughts,
giving the receiving feedback are the outcomes of openness.
Confrontation: It is defined as facing rather than shying away from
problems. Deeper analysis of interpersonal problem is also
confrontation.
Trust: It is defined as maintaining the confidentiality of
information provided by others and not misusing it.
Authenticity: Congruence should be there in what one feels, says
and does.
Proaction: It means taking the initiative, preplanning and taking
preventive actions.
Autonomy: It means using and giving freedom to plan and act in
one's own sphere.
Collaboration: Collaboration is giving help to others and asking
for help, and working together.
Experimenting: This means using and encouraging innovative
approaches to solve problems, encouraging creativity, and taking a fresh
look at things.
Cultural Change-Ways and Means
Cultural change in an organization can be achieved through one or
more of the following ways:
1. Changing people: Recruiting people of different profiles.
2. Changing people's position: Right people on right jobs.
3. Changing beliefs and attitudes: Encouraging mutual trust and
co-operation.
4. Changing systems: Using information as a tool rather than power.
5. Changing structure: Empowering frontline managers to take
decisions.
6. Changing the corporate image: To get internal and external
positive attitude with focus on stake holder's interest.
Oil and Natural Gas Corporation Ltd.
ONGC is a blue chip and leading public sector Company in India and
is engaged in E&P (Exploration and Production) activities in India
and overseas. ONGC is the only fully-integrated petroleum company in
India, operating along the entire hydrocarbon value chain. It is not
only the largest E&P Company in India but also one of the most
valuable companies. Moody's has assigned ONGC Baal-highest ever
credit rating to any Indian corporate. It is highest ever profit company
in India since last many years, it produces value added products like
Naphtha from its own plants, which are available for export.
ONGC's success rate is at par with the global norm and is
elevating its operations to the best-in-class level, with the
modernization of its fleet of drilling rigs and related equipment. ONGC
has adopted Best-in-class business practices for modernization,
expansion and integration of all Info-com. Today, ONGC is the flagship
company of India; and making this possible is a dedicated team of nearly
40,000 professionals who toil round the clock. It has a unique
distinction of being a company with in-house service capabilities in all
the activity areas of exploration and production of oil and gas and
related oil field services. It is the only fully-integrated petroleum
company in India, operating along the entire hydrocarbon value chain:
* Holds largest share (57.2 per cent) of hydrocarbon acreages in
India.
* Contributes over eighty four percent of Indian's oil and gas
production.
* Every sixth LPG cylinder comes from ONGC.
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Nature of Business: ONGC is engaged into the following businesses:
* E & P (Exploration and Production):--in India, Vietnam,
Sudan, Sakhalin and Syria.
* LNG:-(Re-gasification).
* Refining.
* Retail Marketing.
Need of the Study
To comprehend the scenario of change, it is to be realized in the
first place that the environmental contexts in which organizations exist
are never static. Today, liberalization of the economy and the opening
up of the Petroleum Sector has induced an unprecedented scale of
dynamism in the economic environment of the country. In this fast
changing environment, organizations as well as individuals are
pro-actively to join in the game and then strive to extend their own
spheres of influence for survival and sustained growth. This issue is of
great significance for India's Oil Sector, which has to provide oil
security, and thereby economic strength and resilience, to the country.
On the other hand, in the new environment, this sector has to be
globally competitive for achieving its rightful place amidst the global
oil industry.
To meet the challenges of the environment and extend the sphere of
influence, for an organization it is not merely a question of its
commercial orientation, though it is important. From a monopolistic
position under a protected business regime, transition to a competitive
market environment calls for a radical change in the management culture
and processes and the whole architecture of the organization
encompassing delegation of powers, planning and decision making
processes, executive accountability, and business paradigm. For an
enterprise it has to be a quantum leap in transformation from what it is
today to a more responsive and innovative organization of tomorrow. And
that ensures the extension of its sphere of influence with a competitive
strength in the market place.
To be specific, when the Navaratna declaration had taken place,
ONGC got the global recognition. Under the Navaratna guideline,
organizational structural cum cultural change was required. To undertake
such a change many steps have been undertaken which includes the coming
up of OTP (Organizational Transformation Program) followed by the CRC (Corporate Rejuvenation Campaign). Therefore, to check how much cultural
change has occurred so far in the company and how far it has to go
OCTAPACE cultural study has been conducted.
Objectives of the Study
The study is carried out 1. To assess the organizational ethos/
culture of ONGC on eight dimensions namely, OCTAPACE, and
2. To find out the reasons behind the deterioration of culture (if
any). Research Methodology
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Research Methodology
Research design used was Descriptive in nature. The OCTAPACE
profile, a 40-item instrument giving the profile of organization's
ethos on eight values was used for the study. Population of interest was
the employees of ONGC (Delhi), which include both management and working
staff. A total of four hundred employees was the population. Out of
which a sample of one hundred employees was taken using Systematic
sampling method. Every fourth element in the list was selected, which
formed the part of sample. Sampling frame was the employee list provided
by the company. Data has been collected from the employees and
management using a standard questionnaire. The staff was divided into
the three broad groups, i.e,
EI-E3 - Jr. Management.
E4-E5 - Middle management.
E6 & Above - Sr. Management.
Where EI, E2, E3 ... are the various executive levels. All the
employees and management staff was included in these levels. Finally
selection of respondents was done using Systematic Sampling method from
these three different executives group.
The important statistical measures that we used to summarize the
survey/ research data are: measures of central tendency or statistical
average and measure of dispersion. In "OCTAPACE profile data"
the mean value of scores of each variable out of eight variables has
been calculated. Similarly the mean value of total scores of all eight
variables, have been calculated. This provides overall OCTAPACE profile
score of the organization.
Analysis and Interpretation
In case of OCTAPACE profile data, the answer sheet is suitably
designed to tabulate the scores of eight OCTAPACE variables. The
classification of scores in each OCTAPACE variable has been made with
the available pattern of score. Lowest and highest score for each of the
eight dimensions have been obtained from the responses. The
classification of each variable is shown in table I below.
The mean value of score obtained from one hundred respondents on
eight dimensions using the instrument have been compiled and presented
in table II and chart I below.
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Pareek while conducting the cultural survey (1997) came up with the
tentative norms, based on the values of mean and standard deviation
obtained from their survey. The table III summarizes those norms. These
norms indicate the lowest and highest mean value each dimension can
take, i.e., range of each dimension.
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On comparing table II, which shows the mean value of eight
dimensions obtained from the research, with the tentative norms given in
table III above, we find that---
The scores of Confrontation, Trust, and Experimentation are much
satisfactory as compare to the scores of other dimensions, as they lie
in the medium to high range. The major problem areas that emerge out in
this study are Openness and Collaboration, scores of these 2 dimensions
are tending towards the lowest side. While the scores of rest of the
dimensions namely Authenticity, Proaction and Autonomy was satisfactory/
average.
Level Wise OCT APACE-Score: Besides tabulating the overall OCTAPACE
culture score for the company, a level-wise analysis has also been done
to find out whether the picture/ pattern that exists at overall
organization level is same as that exists at individual levels. For this
all the employees and management staff was grouped in three broad
levels:
EI-E3 - Jr. Management. From this cadre a sample of 42 respondents
was selected out of 168, using the same technique, i.e., Systematic
Sampling.
E4-E5 - Middle Management. From this cadre also forty two
respondents were selected out of one hundred sixty eight, using
systematic sampling.
E6 & above - Sr. Management. Here a sample of sixteen
respondents was taken out of sixty four.
The mean value of OCTAPACE profile in these three executive levels
is summarized in the table IV. Although the analysis of overall OCTAPACE
profile scores in three executive levels do not show much significant
difference in the organizational ethos, as the total cultural scores at
all the three levels is almost the same. However there are slight
variations in the scores when analyzed at individual levels, which is
summarized in chart II. As for example, variations are observed in the
scores of Openness, Authenticity and experimentation. Openness is high
in E6 and above level, Authenticity is low in the first two levels
(EI-E3 & E4-E5) and Experimentation has come up to be highest in the
first level (E1-E3).
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Overall Culture Score (A Comparative View): As per the tentative
norms given by Pareek (1997), the overall culture score of an
organization can range from a minimum of ninety to a maximum of one
hundred thirty. In the present study, the overall OCTAPACE culture score
for ONGC has come up to be 105.35. If we compare this score with the
overall culture score that we have found for three different levels, not
much difference is observed (table V & chart III).
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Findings
The present study provides the information on the prevailing
organization culture. The comparison of results of this study with the
standards given by Pareek provided useful insights. The study has
provided useful inputs which management can use to restructure its
corporate functions and build a strong culture. Following are the
findings of the study---
1. The study of OCTAPACE culture, that constitutes the core values
of organizational ethos have been found to be at the average level. As
per the tentative standards given by Pareek, the overall
organization's culture score can range from 90-130. In the present
study, the overall culture score for ONGC has come out to be 105.35.
2. OCTAPACE study has revealed that, the scores of Confrontation,
Trust and Experimentation are fairly good whereas there is lack of
Openness and Collaboration among employees. Scores of other dimensions
namely, Authenticity, Proaction & Autonomy have come up to be at
satisfactory/ average level.
3. On analyzing the overall OCTAPACE culture score in the three
executive level, not much difference have been observed, but slight
variations have been observed while analyzing scores of individual
dimensions--- * Openness is higher in E6 and above level as compared to
the other levels.
* Authenticity is low at the first two levels, i.e., E1-E3 &
E4-E5.
* Experimentation has come up to be highest in E1-E3 level.
4. Overall culture score has come up to be highest at E6 and above
level, i.e., 106.7.
Implications of Findings
The high scores on the three dimensions, namely, Confrontation,
Trust and Experimentation indicate that:
* Employees are facing the problems and challenges they confront in
the work situation and not run away from it. They go deeper into the
problems, analyze them and try to find the solution. They believe in
finding a solution out and not just identifying the problem areas.
* Employees believe in helping and supporting each other. They like
to help and provide moral support. They trust their seniors,
subordinates and peers and rely on each other without any fear in time
of crisis.
* Organization is taking active steps in encouraging their
employees to take a fresh look at how things are done. They encourage
employees to find out new and better means to do work. Employees believe
in experimenting with their work and not just follow tried and tested
ways. Organization is also taking initiative to change behavior of their
employees by providing them constructive feedback, so that they can
better gel with their work and organization.
The major problem areas that emerge out in this study are Openness
and Collaboration, scores of these 2 dimensions are tending towards the
lowest side. It indicates that:
* Although from the above results we inferred that employees trust
each other and do provide help when needed. But at the same time there
is lack of openness among them. They do not freely discuss and
communicate their problems and ask for help. During meetings or
discussions, they do not come up with genuine information, feeling and
thoughts, due which there exist a gap between actual feelings and
perceived feeling/ behavior. Thus a culture of seeking help and support
when the need arises may be developed.
* Employees do not like to work often in teams, as they feel
working in a team dilutes individual accountability. They like to help,
but do not accept and appreciate the help provided by others. Employees
are more concerned with finishing the immediate task rather than
focusing on large organizational goals. They also do not actively
participate in formation of long run goals and missions; just restrict
themselves to finish the work assigned to them. Thus more emphasis may
be given on building teams in the organization and the top management
may appreciate collaborative efforts.
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While comparing level wise score for each dimension, variations
have been observed in the scores of Openness, Authenticity and
Experimentation.
* Openness has come up to be higher in E6 and above level as
compared to other levels. This implies that employees at senior post are
communicating and interacting freely while employees at lower level are
unable to share their problems with each other.
* Authenticity is low in the first two levels, i.e., E1-E3 and
E4-E5; this implies that employees at these levels do manipulations to
get things done. They are not what they appear to be. They think that
instead of telling truth it is good to tell a polite lie.
* Experimentation has come up to be highest in E1-E3 level, which
means that employees are trying new and innovative means to solve
problems. They believe in taking fresh look at how things are done but
these new ideas and ways are not valued much at superior level. This is
due to the fact that promotions at junior level are time bound, while at
upper level it is merit based. So employees at these levels hesitate to
try out new ways, due to the risk attached.
Conclusion
Organization where the focus is on trust, collaboration and
authenticity - the positive attributes-perform better and become more
productive. Fighting and adjusting to the negative attributes require
patience and a lot of energy is wasted to cope with negativity shown by
employees. Culture, which is based on negativity breeds, negative energy
and degenerates the organizational process. In the course of time it is
reflected in the poor performance of the organizational members and
ultimately of the organizations. Ethos that fosters honesty and trust,
replenish member's energy, build collective strength and develop
emotionally intelligent culture. Thus a positive workplace atmosphere
deriving out of the unique culture is worth developing, as it becomes
the foundation of true organizational success.
The unique high performing culture of any organization helps it to
gain competitive advantage. Organizational Culture and strong ethos help
a company achieving competitive advantage because the manner in which it
contributes value to the organization's products or services is
rare, hard to substitute for and difficult to imitate. A competitor
cannot reverse the culture of the company at the same time it cannot
imitate it. Organizational culture leads to organization capabilities.
In a dynamic and changing environment culture's flexibility,
adaptive ness and responsiveness create organizational capabilities.
Organizational culture can play a vital role in the successful
formulation of strategy.
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Ayesha Farooq
Lecturer, Department of Business
Administration, Aligarh Muslim
University.
Seep Sethi
Student, MBA (F), Department of
Business Administration, Aligarh,
Muslim University.
Table I: Classification of Octapace-Profile
OCTAPACE Dimension Lowest Score Highest Score
Openness 6 19
Confrontation 5 19
Trust 7 20
Authenticity 6 17
Proaction 5 20
Autonomy 7 16
Collaboration 5 18
experimentation 6 18
Table II: OCTAPACE Profile Score
OCTAPACE-Dimensions Mean (N=100) SD
Openness 13.91 2.74
Confrontation 13.72 2.68
Trust 14.16 2.45
Authenticity 11.92 2.37
Proaction 14.10 2.81
Autonomy 12.43 2.08
Collaboration 13.71 2.44
Experimentation 13.15 2.27
Total =107.1
Table III: Tentative Norms for the OCTAPACE-Profile
Low High
1. Openness 13 17
2. Confrontation 10 16
3. Trust 10 16
4. Authenticity 10 14
5. Proaction 12 18
6. Autonomy 11 16
7. Collaboration 13 17
8. Experimentation 11 16
Total = 90 =130
Table IV: Comparative OCTAPACE Profile
of three Executive levels
OCTAPCE - Overall E1-E3 E4-E5 E6 & above
Dimension Mean Executive Executive Executive
level level level
Openness 13.91 13.86 13.38 14.13
Confrontation 13.72 13.21 13.14 13.31
Trust 14.16 13.83 13.88 13.75
Authenticity 11.92 11.88 11.83 12.38
Proaction 14.10 13.81 13.93 13.50
Autonomy 12.43 12.38 12.21 12.56
Collaboration 13.71 13.48 13.50 13.56
Experimentation 13.15 13.17 12.93 12.88
TOTAL =107.1 =105.62 =104.80 =106.07
Table V: Total OCTAPACE-Score
Levels Total Octapac
Score
E1-E2 105.62
E4-E5 104.81
E6 & Above 106.06
All Levels 105.35