Agilent Assignment Rug

Organizational Theory and Design

Assignment lecture 6

[pic 1]

Group 32

Luuk Hazeleger (s2217317)

Reind Hoekman (s3273849)
Wouter Jans (s3244733)[pic 2]

Mirza Selimovic (s3273636

Nienke Veltman (s3270459)

28-10-2016

Word count: 500

Jones (2013) thinks of shared norms and values as foundations of organizational culture. These foundations, controlling behaviour of organization’s members, are somewhat channelled. When interests of various stakeholders conflict, prevailing power correlations determine largely which claims are honoured. In Agilent’s case, especially top-management was the most dominant force in shaping the firm’s ‘esprit de corps’. CEO Barnholt strived for integration of the HP legacy (integrity, trust, respect and teamwork) with the terminal values of speed, focus and accountability. To achieve these, structural and cultural transformation was deemed necessary. Especially the latter turned out highly complex to reform.

Several instruments were used to steer cultural change. Firstly, by institutionalized socialization tactics: in rather standardized, non-individual and formal manner, Agilent’s employees were collectively informed and sequentially guided into the new organizational design and corresponding values that were considered crucial. In multiple forums, for example, Barnholt wanted to proactively change the business leaders’ mindset. This was paired with different property rights: meritocracy around performance became prevalent. This contrasted with HP’s egalitarian mentality. Reward functioned as a tool to encourage acceptance of Agilent’s new values. Also stories (synthesizing the rationale and potential for the spin-off) and artefacts such as the company name (‘Agilent’, stressing speed) embodied these values. In operational sense, organizational rites included the abovementioned rites of passage (training), rites of enhancement (reward), integration (synergistic business model) and degradation (elimination of country managers).

Important to stress, however, is that Agilent was creating a new company with people from the same background: HP. Not only top-management acknowledged the importance of legacy values (“Clone-and-Go”)^[1], also employees did not want to relinquish their association with HP. This made Barnholt preserve more parts of the ‘HP Way’ than originally planned. Interdependencies with HP further restrained the autonomy of Agilent.

The significant span of top-down control and centralized authority of Agilent’s upper management inhibited organizational change. The tall, rigid (mechanistic) business structure, with hierarchy as central integrating mechanism, functioned as an instrument to encapsulate the organizational design, including culture. Lack of transformative capacity from bottom-up limited Agilent’s tendency to change.