Site hosted by Angelfire.com: Build your free website today!

RELEVANCE OF ORGANISATIONAL CULTURE

TO

SAFETY (AND PRODUCTIVITY)

 

 

The following is offered in the hope that it will provide some guidance on workplace change involving introduction of risk management to organisations and modification of their culture.

Risk in the workplace of an organisation, generally arises from exposure to a hazard. The magnitude of the risk is associated with the likelihood of an incident occurring (causing loss or injury), and the potential consequences (including adverse public perceptions or ‘outrage’), of the incident.

These ‘operational risks’ are probably best controlled through application of a ‘hierarchy of controls’. In the case of ‘safety risk’, the following hierarchy is in general use:

When the first three levels of the hierarchy of controls are applied there is ‘residual risk’. (The Victorian Dangerous Goods Act 1985 specifies requirements to prevent disasters, by indicating storage and transport incompatibilities. It does not provide requirements for management of Hazardous Substances involved in processes in the workplace.) The application of administrative control copes with this deficiency.

An example of an administrative control, is the common ‘recipe’ used by most cooks, to assure the quality of their product. Similar controls are internal ‘codes of practice’ such as process specifications, work instructions, operating procedures, laboratory methods, and ‘use lists’. The use of an administrative control is a proactive attempt, to minimise risks associated with ‘method of use’ to a level, tolerable to stakeholders (see Note 1).

Unfortunately administrative controls have a flaw which may be fatal – they depend on workers ‘doing the right thing’, and following the procedure. It is suggested that the main reason that workers do not ‘do the right thing’, is primarily due to organisational culture.

Organisational culture may be derived from several factors. It is considered that the main factors are leadership values which may be based on morals, ethics and beliefs, as well as attitudes of middle managers and workers, and the organisation’s paradigm (see Note 2).

a) Values – values are usually based on an individuals training and experience, and may be affected by his/her formal education, age, gender and ethnic background.

To understand the importance of values, we need to know what the term ‘value judgement’ means.

An example of a ‘value judgement’ is as follows:

Kidney dialysis is an extremely expensive medical procedure, access to kidney machines is very limited and doctors must decide which patients get potentially life-saving treatment.

Consider three patients -–a doctor of 57, who is conducting research into wonder drugs, a student of 19 studying nuclear energy, and a middle aged ethnic mother of three children. If there is only one kidney machine, who gets it?

Later information is that the doctor is addicted to heroin, the student is a communist, and the ethnic mother has been out gambling and drinking and neglecting her children. Who gets the kidney machine now?

(The decision made by doctors, is usually based on who will derive maximum benefit from the procedure, not on value judgements).

In industry decisions are often made, based on values. Decisions can lead to disaster, when they are not directed at providing a net positive benefit to all stakeholders.

In particular, decisions related to safety should not be based on value judgements. The ‘them and us’ aspect of organisational culture is thus highly undesirable.

  1. Attitudes – The attitudes of workers are often formed in response to the attitudes of their leaders (the Chief Executive Officer, in particular). Middle managers who are hypocrites, and are manipulative (exercise normative control (see Note 3)) and/or overtly directive, can exacerbate a bad attitude among workers, with corresponding poor performance in areas of operational risk, such as quality, safety, environment and security, and productivity generally.
  2. The attitudes of workers ‘at the coal face’, are often a barometer of culture. An organisation in which the forklift driver will try to run you down, the cleaner leaves the work site in a mess, or the receptionist is obviously having difficulty trying to be civil, probably has a bad organisational culture. This reflects directly on the Chief Executive Officer’s values and attitudes.
  3. Paradigm (see Note 2) – The paradigm which exists in most organisations at this time, is a reflection of the external industrial environment. To the worker our management systems (and whole frame of reference), in most organisations are essentially directive. Participation in decision making by workers, has in the past, been mainly through representative democracy (unions).

For administrative risk control to be effective, a change to the organisational paradigm is essential. It is suggested that the new paradigm should be risk conscious, proactive in implementing risk controls, empowering to workers, placing the customer first and seeking maximum benefit for all stakeholders. (In this paradigm management has a supportive, rather than directive role).

This can be achieved formally by implementing a documented management system (preferably based on Australian Standard AS 4581 – Management System Integration) consisting of stated policies for the critical risk areas, and a procedure manual based on the normal project path within the organisation. This measure reduces the dependence on directive management practices, and provides the basis for self-management for workers.

Additionally, as part of the management system, provision should be made for formal communication and handling of workers concerns, and other opportunities for improvement raised by workers. Use of the ‘Nonconformance (Opportunity for Improvement ) Report’ is recommended.

Increased participation of workers, in decisions affecting safety, is essential for increasing productivity. Any improvement to operating procedures also affects the product or service quality, and environmental effects of the manufacturing operation or product. (There is usually only one correct way of ‘doing a job’, this is usually in the hands of the worker at the ‘coal face’).

Implementation of programmes such as Employee Share Ownership (ESOP) and ‘Open Book Management’ are strongly recommended, as these provide motivation to improve work practices, when the effects of such improvements are shown as benefits to the bottom line for workers and other stakeholders.

Under the current regime there is little incentive for workers to improve practices and systems, to make an organisation more competitive. Improvements are often taken up in cutting costs by downsizing, rather than expanding output by producing a quality (safe) product, thus capturing a larger share of the global market.

In conclusion, it is suggested that confrontationist policies of governments towards unions, do not help industrial safety, nor does micromanaging (see Note 4). These policies can adversely affect organisational culture and render administrative risk controls ineffective.

Implementation of more participative management systems depends primarily on the Chief Executive Officer, without his commitment this initiative will fail, and the organisation will revert to a more dangerous state. This has a direct effect on both workers and the general public, as has been seen in recent disasters close to home.

It can easily be argued that when incidents occur, the Chief Executive Officer is directly responsible and accountable. Legally an employer has the right to ‘direct employees in the manner of performing work’, however he/she also has a ‘duty of care’. Existence of a documented management system may be considered to be prima facie evidence that the requirements of ‘duty of care’ have been fulfilled.

Leadership of most organisations could be usefully improved by use of a ‘stable relationship’ for the executive team. (A theoretical ‘stable relationship’ consists of three people. From this group the organisation should not normally get a dictator or a division of loyalties. The organisation should always get a decision when it counts, as two persons in the team can always override the third person.).

An arrangement which, may be appropriate, could include the Chief Executive Officer, a Legal Representative, and an Employee Representative.

 

NOTES

Note 1. The term ‘stakeholders’ refers to interested parties such as customers, workers, managers, owners of organisations (shareholders), and in many cases the general public (community), and government.

Note 2. The term ‘paradigm’, when applied to an organisation, refers to the organisation’s accepted practices, the implied assumptions, rules, folklore, traditional behaviour, values, models, legislative constraints, (in fact the employees whole frame of reference).

Note 3. The term ‘normative control’ refers to the setting of standards (sometimes empirical, or having no basis in accepted policy) for the purpose of achieving an objective. Normative control sometimes equates to manipulation. (See paper titled ‘Leadership and the Problem of Bogus Empowerment’ by J. Ciulla, on the internet).

Note 4. The term ‘micromanaging’ refers to the practice by managers of directing every detail of an operation, usually verbally or sometimes by notes written on scraps of paper.

Alan Cotterell

Acotrel Risk Management Pty Ltd

27th August 1999