Organizational Culture Assignment: Cultural Change Management Plan for Aetna Inc.
The Aetna, Inc., Project
In this organizational culture assignment you are a senior executive working for a large Australian health insurance company that has been experiencing serious financial deterioration and staff turnover over a period of around 4 years. Using the Aetna, Inc., health insurance company in the US as an exemplar, you have been directed to write a strategic benchmarking report for your Executive Board that investigates and evaluates the different aspects of organisational change that were undertaken to turnaround the fortunes of the Aetna, Inc., organisation in the Case Study. Your report needs to provide a detailed explanation of why you believe that the cultural change aspects of the Aetna, Inc., have been so successful and you must draw sound conclusions and make recommendations to your own organisation that demonstrates, using some of the various tools and techniques you have learned about in the unit lectures and tutorials, on how a process of organisational culture change can be set up, indicating how this can be implemented strategically for the overall benefit of your company.
You will work individually drawing upon information from the video, readings, textbooks and your wider experiences either in the workplace, or from your own social organisations, to develop an evaluative report (3,500 words ±10%) on the organisational culture aspects of the Aetna, Inc., case. Your report will include proposals and recommendations for a formal cultural change management plan to be forwarded to your Chief Executive Officer and Director of Human Resources.
Your benchmarking and cultural change report, amongst other things, should consider and respond to the following seven challenges:
1. Levels Of Organisational Culture:
Discuss what is meant by organisational culture. In your discussion, you should identify the common aspects of the many definitions of organisational culture and comment upon levels of culture. Consider the film you have just watched, which level of culture is mentioned most frequently? What level(s) of culture would you like to see happening in your improved organisation?
Distinguish between values, espoused values, enacted values and assumptions; list the Aetna, Inc core (espoused values) and discuss how they were created. How would you apply these when managing your company’s organisational change implementation?
3. Survival In Competitive And Turbulent Environments: Functions Of Organizational Culture.
Peters and Waterman (1982) p75 argued 'the stronger the culture and the more it was directed toward the marketplace, the less need was there for policy manuals, organization charts, or detailed procedures and rules. ‘What is meant by a ‘strong culture’ and how might such a culture impact upon organisational performance (you should consider both positive and negative consequences) of your company aspiring to change?
4. Organisational Performance:
Consider the role of culture in relation to organisational performance and explain what is meant by the “fit” and the “adaptation” perspectives and evaluate these concepts in relation to Aetna, Inc. and for your own organisation.
5. The Role Of The Leader In Shaping And Reinforcing Culture
Evaluate the leader’s role (for example that of Ron Williams) in shaping and reinforcing culture; what does that mean for the leadership in your company in future?
6. Managing Culture:
Discuss whether culture can be managed and suggested approaches used to manage culture if you believe that it can be managed. Evaluate why Aetna, Inc., soared to develop a culture of empowerment and quality amongst other things and suggest how that can be implemented in your aspiring company.
7. Changing The Culture:
Determine what your company’s cultural change plan will look like and describe how you will use evidence that you have obtained from using some of the various evaluation tools to inform your plan. What kind of culture do you think your Australian organisation needs to espouse in order to change its fortunes, and how will that need to be managed in future for success?
The report is written for an American health insurance company that has been facing a number of issues since past few years. These issues are associated with financial deterioration in the organization. Also, the employee turnover rate is increasing continuously over the past few years.
Aetna Inc. is also a health insurance company based in America and it has successfully made changes in its organizational culture to experience successful outcomes. The cultural changes in Aetna were led by Ron Williams. The lessons and outcomes from Aetna are used and applied in this case to make sure that the effective results can be witnessed.
Levels of Organizational Culture
There are different explanations and definitions of organizational culture. It can be defined as the philosophy and values applicable in an organization that are at the core of directing the behaviour of the members in an organization.
Some of the definitions also include the vision and mission of an organization as part of its culture as these have an impact on the overall strategy that is followed (Frantz & Jain, 2017).
Based on these definitions, organization culture can be broadly classified in three levels. The first is the behaviour and environment. It is something that is easily reflected and can be observed, such as the dress code, flexibility offered, layout of work spaces, etc. The next is values which can be observed through certain norms and characteristics. The values direct the behaviour. The last is the assumptions. It can vary from an employee to the other employee. For example, the acceptance of the diversity in a workplace or employees’ reaction towards a change.
In the film that was recently watch, values were the level of culture that was expressed and reflected. The film was a sports drama and it was based on the values as collaboration, cohesion, sportsmanship, and optimistic attitude.
The level of culture that will be expected to be observed in the organization will be the step by step improvement across all the levels. Beginning with the environment and behaviour, the values will be defined and imbibed so that the employee characteristics can be determined accordingly. The integrated effort and combination of all three will ensure that marked improvements are made in the organizational culture (Alvesson, 2016).
Values can be defined as the specific norms and characteristics that form the underlying beliefs in an organization. These values can be further classified in two types as espoused values and enacted values. Espoused values are the ones that are defined and included in the policies. These are the ethical aspects and characteristics that an organization claims to follow. However, enacted values are the values that are actually followed and reflected by the team members in an organization.
Assumptions can be defined as the deeply held beliefs that may vary from one individual to another. These may be formed by the cultural backgrounds or personal and professional experiences of the individuals (Arif et al., 2017).
The core values that are identified for Aetna include integrity, quality and value, excellence and accountability, and employee engagement. These values were developed by Aetna in a set of three phases. As described by Ron, the strategic journey of leadership and organizational change for the organization can be broadly classified in three stages. The first stage is from 2001 to 2004 and it was the phase in which the organization was going through numerous losses and decided to go back to the basics. The existing and required values were analysed in this phase. The next phase was from 2004 to 2006 wherein the organization started to experience good returns based on the new set of values and the changes that it had made. The next phase was from 2006 to 2008 wherein the organization was performing well and incorporated innovative elements to have enhanced operational capabilities. The phased approach enabled Aetna to define the four set of values. A good span of time was involved wherein these values could be transformed from espoused to enacted values. These enabled the organization to achieve the expected goals and objectives (Driskill& Angela Laird Brenton, 2019).
It will be important to manage these aspects while dealing with the change in the organization. There will be a step by step plan developed like Aetna to make sure that the values are created and incorporated to witness the effective outcomes. The first step that will be followed will include the determination of the existing gaps and issues in the organization. Based on these issues, specific strategies and action plans will be developed along with the goals and objectives. The organization values will be defined so that these goals are achieved and these will be defined mapped with the organization requirements.
Survival in Competitive and Turbulent Environments: Functions of Organizational
Organizational culture can be sub-divided in two broad categories as strong culture and weak culture. Strong culture is the one in which the specific values and norms are known to all the employees and these are embedded in the employee behaviour and actions. In such cultures, it is not essential for the organization to have detailed policy documents in place so as to make sure that the desired cultural values are adopted.
There are certain elements and characteristics associated with a strong culture. The first and the foremost is the core values that are defined and are known to all the employees in the organization. Communication is a key element behind the organization culture. In order to make sure that all the employees are aware of the core values and norms, it is essential that information sharing is in place. It improves recognition and connection and also ensures that a sense of community is developed.
There are positive and negative impacts associated with the strong culture in the organization (Biliavsk?, 2017). Strong culture can positively impact the organization by lowering down its employee turnover rate. It is one of the primary issues with the organization in the present times. For employees to remain motivated and engaged with the organization, it is not only the work duties and responsibilities that need to be managed well. The employees shall be provided with a healthy work environment with required support and assistance along with the transparency on the specific norms and aspects followed. With strong culture implemented and developed in the organization, it will be easier for the company to retain its employees. The employees will be able to report their concerns to the managers and leaders so that these can be resolved. With improved job satisfaction and motivation, it will be possible for the organization to experience higher levels of employee productivity.
The positive attitude and improved involvement of the employees will also ascertain enhanced levels of employee advocacy and client relationships. With strong culture, employees will be able to represent the organization in an effective manner and it will improve the organization reputation in the market. For example, the employees will be able to understand the insurance requirements of their customers in an effective way to come up with the most suitable health insurance policies for them ensuring maximum coverage. With such aspects in place, the organization will be able to achieve high customer experience and satisfaction levels.
There can be negative implications of the strong culture if the new employees are not provided with required training and coaching sessions (Bongso et al., 2019). The new employees joining the firm will not be aware of the cultural norms and values prevailing in the organization. The absence of detailed documents will lead to the inability to resolve such gaps unless proper training sessions are organized for the new employees. Also, it is often witnessed that the organization becomes too dependent on the employee decisions and choices in a strong culture. Poor decision-making of the employees can lead to further financial risks and other organizational concerns that may not be easy to handle.
Organizational culture can have significant impacts on the organization performance. Organization fit and organization adaptation are the two terms that need to be understood to explore the relationship between culture and performance. Organization fit refers to the alignment between the organization values with employee work style and beliefs. For example, an organization may have the values as honesty and integrity defined and implemented; however, a dishonest employee working for the organization will not follow these values. The organization fit in such cases will not be up to the mark. Organization adaptation refers to the willingness and appetite of the company to incorporate the change(s).
For example, in the case of Aetna Inc., Rob Williams carried out the measures to achieve organizational fit and adaptation so that effective employee engagement levels were achieved. The employee surveys were conducted and the strategies were formed based on the responses received (Gabriel, 2015). Such strategic decision-making activities ensured that the employees were engaged and remained involved in the organizational changes. With effective communication and inclusion of the employee ideas, it also became possible to achieve the employees’ acceptance towards the changes. Such measures assisted Rob and Aetna Inc. to make organizational changes. The shift in the organization culture added to the ability of the organization to achieve improved performance and outcomes. Such aspects will be crucial for the organization as well. It will be necessary that the organization fit and adaptation is achieved so as to make the essential changes in the organization. The current employee turnover rate is high and it is primarily due to the issues with the existing culture in the organization. The employees shall be engaged in the organizational decision-making activities. The financial plans, adjustments, and control strategies, for instance, shall now be developed with collaboration from the employees rather than the decisions made by a few resources at the top. With higher engagement and collaboration, the employees will have a better understanding of the overall strategies and organizational norms. The goals of the employees will gradually align with the organizational goals and objectives. It will lead to the reduction in the employee turnover rate.
It is essential for the organization to make a few small-scale to large-scale changes so that it can handle the current financial situation. It is also necessary for the organization to manage the existing employees so that their engagement and motivation levels are enhanced. With changes in the existing culture, organization fit and adaptation will improve. Higher levels of transparency will enable the employees to understand the reasons behind the changes. The employees will be able to accept these changes once they are aware of the urgency of the change implementation. They will contribute with better ideas and alternatives that will make sure that the overall organization performance is enabled (Wahda et al., 2020).
It shows that all of these elements are inter-linked. With improvements and changes in one area, it is possible to make changes in the other areas. The step by step changes and alterations make sure that the overall organization performance is enhanced.
Role of Leader in Shaping and Reinforcing Culture
The role of the leader in shaping and reinforcing the culture is extremely significant. For example, in case of Aetna, Rob Williams adopted the adequate style of leadership to ensure that the changes were properly designed and implemented. Rob identified that there were major communication gaps present in the organization. The employees of Aetna were not aware that the organization was losing money. As a result, the employees did not participate or show interest in the measures taken at the organizational level to resolve such concerns. Williams made sure that the employees were informed about the concerns of the organization and the reasons behind the changes that were being made. Williams conducted meetings and sessions with the employees to inform them about the latest status, strategies being adopted, and also asked for the suggestions from the employees. Williams also developed the phased approach and strategy to make sure that the organizational culture and the associated changes were shaped appropriately and reinforced so that the effective outcomes were obtained (Hightower & Waters, 2018). Rob came up with an approach that included employee engagement and communication at the high priority. Rob was aware of the impacts of these aspects on the organizational changes and culture. The employee surveys were conducted to have an understanding on the perspective and viewpoints of the employees. These surveys made sure that the employee engagement levels were enhanced and the employee were also aware of the organizational norms. These were the aspects that made Aetna successful in sharing and reinforcing the culture.
The role of the leader will likewise be extremely significant in the case being explored. In this case, there are several issues present in the organization. The issues around financial concerns or the employee-related issues will not be resolved unless the leader is vigilant and skilled. It will be essential for the leader to adopt the correct styles of leadership so that required changes can be effectively implemented. For instance, the perspective of the employees will be essential to explore and understand so as to improve the employee motivation and engagement levels. Similarly, the root cause of the financial issues will be informed by the employees. Transformational and strategic leadership styles will be important for the leader to adopt so that the required changes are made. Also, the leader will be required to have effective communication and collaboration skills, analytical capabilities, and problem-solving skills. Without such skills, the leader will not be able to make good use of the information provided by the employees. The combination of all of these aspects will be crucial in ensuring that the issues currently associated with the organization are resolved (Nikpour, 2017).
There are a number of control and monitoring aspects present during the implementation of the changes in the organization. The role of the leader will also be important in this area and it will make sure that the effective control and monitoring procedures are implemented.
It is possible to manage the culture with correct vision and strategies in place. Organization culture comprises of a large number of elements that are combined. The combination of all of these elements provide the ability to achieve target goals and objectives. For example, strong culture in an organization can be managed with the aid of leadership styles, such as adaptive and transformational leadership. With such styles, the leader continuously communicates and collaborates with the employees so that the understanding and adoption of the core values is rightfully experienced. Some of the other ways to manage the culture include collaborative decision-making, use of automated tools for audits and reviews, and likewise.
Aetna Inc. made sure that the organizational culture had empowerment and quality as some of the significant elements apart from the other aspects. It was essential because Rob Williams was aware that empowered and engaged employees can only make a difference for the organization in a positive area (Schein, 2016). Without the maintenance of these aspects, the organizational changes could not be implemented properly. Rob, therefore, decided to focus on these aspects with the aid of mechanisms, such as employee surveys and meetings with the employees to inform them about the reasons for the changes. Quality was considered as an important element as it is something that is significant for the employees along with all the other internal and external stakeholders of the organization. Aetna Inc. deals with critical health data and services for the customers. The organization could not afford to have poor quality in these aspects and the same was essential to be maintained in its culture.
The case organization shall also focus on these aspects and must make sure that these are included in the decisions that are made at the organizational and at the employee levels. For example, there are major financial issues that the organization is currently experiencing. It is essential for the organization to get rid of these issues. Employee engagement will be a crucial element to achieve the same. The inclusion and maintenance of empowerment will ensure that the employee have the authority and the ability to provide suggestions and make the essential changes. The employees will be motivated to provide the useful recommendations to the organization. With the inclusion of these recommendations, the organization will witness massive changes in its existing culture and the functions performed by the employees. Similarly, the inclusion of quality as an aspect will make sure that the organization employees are provided with the employee-friendly approaches and policies. It will make sure that the employees have the trust and motivation in the organization to collectively work towards the resolution of the existing problems and challenges (Sharma, 2020). Therefore, the use of the strategies to manage the culture along with the inclusion of the elements as empowerment and quality will provide the ability to make essential changes.
Changing the Culture
The cultural change plan of the organization will be inspired from the one adopted by Aetna Inc. It will focus on the phased approach to make changes in the culture by identifying the existing issues and gaps in the first set of activities. The action plans and the change plans will be developed thereafter so that the organizational changes in the culture are in place.
The cultural change plan for the Australian health insurance company will be composed of four main phases. The first phase will include the identification and initiation phase wherein the changes will be identified along with the listing of the core values to be included.
The next will be the change planning which will include the development of the specific plans and sub-plans in the areas as schedule, budget, risks, quality, etc. Once these plans will be in place, the impact analysis for the cultural changes will also be performed. The change execution and implementation will begin next (Sharma, 2020). It will focus on some of the values as employee engagement, professional development, integrity, honesty, and enhancement of quality of life. The ethical practices will be referred from the ACS Code of Ethics and the norms as quality and empowerment will be assigned high priorities. The combination of these aspects will make sure that the cultural changes are made with the fulfilment of the intended goals and objectives.
The evaluation tools will be useful during these change procedures. The evaluation tools as goal trackers will be used to determine the goals percentage fulfilled and the gaps present. Similarly, variance analysis will be used to determine the schedule and cost variance in the process. Compliance checks will be made using the audit and compliance verification tools to determine the gaps, if any. The type of culture that the organization will implement will be collaborative and adaptive culture and it will be gradually transformed into strong culture. These aspects will be crucial as the existing issues of high employee turnover will be resolved with the usage of such cultural values. The employees will be able to collaborate with one another and will be willing to welcome the essential changes.
The transparency levels between the employees and the management will also improve with the adoption of such an organization culture. Strong culture will make sure that the values and practices are not just included in the policy documents and artefacts. Rather, the employees will be able to make actual changes in their work practices and decisions to reflect the new set of values. The Australian organizations are also known to have high diversity among their employees and stakeholders. The same will be applicable to the health insurance company (Alghamdi, 2018). With lack of adaptability and collaboration, the organization will not be able to manage the diversity in an effective manner. The incorporation of the strong culture based on adaptability and collaboration will provide the ability to the organization to make the desired changes. The scalability and flexibility levels will also improve with the incorporation of such cultural values and norms.
There are several aspects and components present in an organization that contribute towards the success of the organization. One of these aspects is the organization culture. It is essential that the organization culture is developed in such a manner that the necessary values are reflected in the actions and activities of all the employees. Aetna Inc. made sure that it could implement the essential changes in its organizational cultural through strategic steps and effective leadership. The case organization is also facing from a number of financial and resource-related risks. The organization will be successful in resolving the existing challenges through the adoption of adequate leadership styles and making changes in its existing culture. With cultural changes, there will be marked improvements in the overall organizational performance. The rest of the changes will also be readily accepted by the employees and the stakeholders so that the organization goals and objectives are attained.
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