Can a Culture be Lethal? Summary & Criticism By 17th Group: Virpi Hytönen, Mengyuan Yang, Xiaohui Zhu

Agenda Summary for the article Implication for management Criticism and more thinking over culture

The Space Shuttle Columbia In the February year 2003 the Shuttle was exploded apart Columbia Accident Investigation Board was set up The immediate cause to the disaster was a hole in the Thermal Protection System The indirect causes was found in the organizational culture

Organizational culture From engineering culture to the managerial culture From open communication to the communication barriers Efficiency over the risk “Faster, cheaper, better” “What can go wrong?”

Agenda Summary for the article Implication for management Criticism and more thinking over culture

Implication Culture is Culture is learned. a pattern of shared basic assumptions that a group learned as it solved problems of external adaptation and internal integration, to be taught to new members as the correct way to perceive, think and feel in relation to those problems. Culture is learned. An individual or a group acquires patterns of thought and behavior by processes of socialization and acculturation. Leaders play a major role in shaping organizational culture. When norms of safety, respect, honesty, fairness and the like are integral parts of a culture, its people make ethical decisions.

Agenda Summary for the article Implication for management Criticism and more thinking over culture

Criticism 1 Strategy wrong or culture wrong? Usually we only judge culture as “suitable” or “unsuitable” Long-term: Whether it’s suitable for Vision or Core Value Short-term: Whether it’s suitable for Strategy “Wrong culture” = “unsuitable Culture” NASA’s vision and mission remain unchanged; However, NASA’s culture change keeps close pace with strategy change (see next slide) If culture is suitable and right, what is wrong ???? STRATEGY !!!

Criticism 1 (cont’d) NASA Established 1958 1972 Nixon’s announcement 1986 Challenger disaster 2003 Columbia 2011 Space Shuttle Program end 1982 Reagan’s declaration Stop Mars project and Space Platform Shuttle was “fully operational” Core Value: Safety / People / Excellence / Integrity Strategy Change: All eggs in one basket: Shuttle Program Heavy schedule of Shuttle launch, e.g. target 714 flights 1978-1990 Strategy Change: Internalize the commercial and military goals More launch pressure Outside economic resources, e.g. contractor which designs O-ring for Challenger Strategy Change: “Manage risk and cost to ensure success” Make individual manager understand risk and cost estimation Culture focus on Excellence Culture focus on Production and Bureaucracy

Criticism 2 How to develop HRO (Highly Reliable Organization)? For NASA, we suggest to establish hypocrisy Image to government: promising economy engine in the future Image to public: world’s hero, safety first, meaningful work Image to internal: still care about technical problems and engineers’ opinions Maybe by PR management and cautious Scorecard design More and more isolated from US government

Criticism 3 Can culture really be changed individually? Culture is a comprehensive “side product” of other factors: History, Leader, Strategy, Performance Management, HR Management, Internal Control...... Changes must start from factors other than Culture For NASA, we suggest change from STRATEGY DESIGN !! Prioritize safety, at least measure technical risk and financial risk separately Cost control can be included, but cannot be aggressive Strongly advise to put all commercial projects in one business unit ......

Thanks for listening and sharing ! By 17th Group: Virpi Hytönen, Mengyuan Yang, Xiaohui Zhu

Discussion Have you ever experienced interesting or freaky working cultures? What is culture in your opinion? How to change culture? … … Any suggestion for such political economy as NASA?

A case about “lethal culture” Foxconn: largest employer in China ( 1 million+), manufacturer for BlackBerry, iPad, iPhone, Kindle, PlayStation 4, Xbox One, and Wii U During the whole year of 2010, 14 employees took suicide at plant site, aging from 18 to 24 Some clues for working culture: 12 hours’ working / day If unable to meet hourly quota, no rest Conversation in the workshop is forbidden Every movement is standardized for maximum efficiency So hard to make friends because work shift changes quite often Modern factory facility: swimming pool and cinemas