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Nick Chandler, Budapest Business School, Hungary Balzs Heidrich, Budapest Business School, Hungary Richrd Kasa, Budapest Business School, Hungary Abstract With the withdrawal of state funding for students of business-related topics in 2012, Hungarian business schools are under increased pressure to become market-oriented as enrolment levels show a 50 decline in applications for business-related studies. The aim of our study is to explore the nature of organisational culture through the use of a quantitative tool with the employees of a business school in Hungary and consider how the organisational culture has changed over time. We have undertaken studies in 2011 and 2016 with the aim of identifying subcultures and their changing nature over time. Despite apparent internal and external drivers for change, subcultures remain largely unchanged. These subcultures continue to exhibit signs of both heterogeneity and homogeneity as subcultures are divided not only by differences in values themselves but by the expressed strength of values. The results indicate whilst values have changes in light of many drivers towards change, perceptions of the organisation have not. Keywords Organisational culture, subculture, longitudinal, higher education Introduction H ungarian higher education institutions have faced a number of tumultuous chages in the past decade. Not only has government funding for the higher education institutions (HEIs) decreased, but state funding for students has been withdrawn generally, changes in the pension system have led to masses of staff leaving from one year to the next and, more recently, the government has required all HEIs to have a chancellor to take on many of the non-academic roles of the rector, such as financial and administrative affairs. In many instances this has led to restructuring and a change of focus for institutions in Hungary. The focus of this study is on a Hungarian business school, which recently received university status. If we consider the organisation as primarily split between academic and non-academic staff, then the academic staff are now being pulled towards a greater focus on research and reputation, whereas the advent of a chancellor has led to a shake-up in the administrative arena. Changes to student funding has led to many institutions based in rural regions struggling to survive and, as with these institutions, there is a greater focus on enrolments and keeping ahead of the competition. These forces pushing and pulling staff in different directions has led to Musselin (2013) describing these organisations as simultaneously affected by bureaucratic and market forces. From a cultural perspective, these driving forces could also lead to a fragmentation of the culture. In higher education, there is a predilection for a fragmented culture as many researchers find the concept of a homogenous culture as strained in this context (Kuh and Whitt (1988 Clark 2017 Tierney 1988). Furthermore, the larger, more bureaucratic and more complex an organisation is, the more likely the organisational culture will be split into a range of subcultures (Trice and Beyer 1993). The complexity of the culture in HEIs was claimed by Becher (1987) as based upon the discipline for academic employees, with their own boundaries and conflict ensuing through competing interests. These academic boundaries can only be crossed by administrative staff and librarians (Bergquist 1992). Considering that the organisation at the heart of this study has undergone significant internal and external changes and existed as a large complex organisation (over 1000 employees) with many locations and a matrix structure, we have accepted the assumption that subcultures exist in this case. Our study examines the organisational culture of an organisation in 2011 and 2016. This is a repeated cross-section study as the participants are not likely to be the same as in the first sample due to a high level of staff turnover. Our research question centres upon how organisational culture has changed over the course of this period. We will first present the organisation and the changes that have occurred. Based upon our research questions, we then highlight the key findings of the literature, followed by the findings of our previous study in 2011 as a means of constructing hypotheses for the study. The organisation Our research focuses upon the Budapest Business School (BBS). This institution was established with a merger in 2000, through combining three separate colleges. These colleges remained in their existing locations after the merger, although the structure was changed from a hierarchical to a matrix one as a means of encouraging greater cooperation and contact across the three colleges. Figure one exhibits the key external and internal changes. Many have occurred after our first study in 2011 and this was the main impetus for undertaking a cross-sectional study over time. 2000Forced merger of 3 colleges to form the Budapest Business School. New institution becomes the 5th largest HEI in Hungary with around 22,000 students. Three colleges renamed as 3 faculties.2011Satellite institution of one of the faculties separates to become a 4th faculty2012Funding withdrawn for the majority of students, especially those studying business and economics. Many institutions suffer from nose-dives in enrolments in these areas. 2012Changes to the pension system. Large numbers of staff leave the organisation during Summer of 2012 as high as 30 in some faculties.2014All Hungarian HEIs required to have a chancellor to manage all non-academic affairs (legal, financial, etc)2016Budapest Business School is given university status and given the name University of Applied Sciences Figure 1. Key Changes for the Budapest Business School Our initial study in 2011 took place before all these changes and we seek to discover how subcultures have changed in the face of these external and internal developments through comparison with our second study on 2016. We developed the following research questions What types of subcultures exist in the organisation How do subculture values and perceptions change over time We have conducted our literature review with the aim of finding answers to these research questions and forming some hypotheses for our study. Thus, our literature is divided into two sections subculture types in higher education and how subcultures (i.e. their inherent values and perceptions) change over time. Cultural fragmentation in higher education A wave of studies of HE staff and their values appeared in the 80s and 90s, such as. The central recurring theme of earlier studies was that all staff of an HE organisation should be studied when assessing the culture of an HEI. This does not mean that the desired values and direction of management are insignificant, but rather it is accepted that divergences of values exist in these large complex organisations. Gregory (1983) found that large, complex organisations resemble the society around them, with the same potential for subcultures to emerge and change over time. Hofstede (1998) also considered large organisations, such as that at the centre of this study, as having a high propensity for heterogeneous subcultures. With regard to academic staff in particular, fragmentation can also be seen in differentiating between Senior and Junior Faculty, with the former perceiging themselves as survivalists, with a predominantly external focus, whereas in contrast the latter feel overwhelmed and exploited in and by the organisation (Bila and Miller 1997). There is a further fragmentation between academic and non-academic staff (see earlier) in terms of autonomy, as academic staff are highly autonomous, and it is the professional life and external activities that have the potential to bind these autonomous employees together (Tierney (2008), which harks back to the works of Trice (1993) that distinct subcultures form in large complex organisations based upon profession. The potential for subcultural formation, also is seen in the potential for a splitting of values within the organisation. If we consider the specific case of values in Hungarian higher educational culture, then we need to consider the history particular to the country. In Hungary, a change of regime occurred in the late eighties / early nineties with the end of communism and adopting a Western-style democratic system. In higher education organisations, studies found that the vast majority of educators in Hungary favoured a Western focus (Kaufman, 1991). However, this preference was not universal in the country as studies found a split between rural and urban areas of Hungary as the majority of the population in rural Hungary favoured strong nationalism whereas in urban Hungary a European focus was preferred. Furthermore, later studies reasserted that the preference for Western values was not held by the majority of Hungarians (Halsz 2002). Bearing in mind the potential for fragmented grouping of values held by employees in higher education, we will now consider the literature in terms of the potential for these subcultural values and perceptions to change over time. Culture and subcultures over time The culture of society is prone to development and change. Steward (1955) writes about the evolution of culture from this anthropologist perspective by specifying three perspectives of cultural development. Firstly, there is unilinear evolution, where all societies go through similar developmental stages. In contrast to unilinear evolution, the focus shifts for the second group, called culture relativists. In this case, cultural development is seen as divergent and the focus is on how societal cultures distinguish themselves from one another. The third is referred to as multilinear evolution and sees societal cultures as developing in similar ways under similar conditions, but that few concrete aspects of culture will appear among all groups of mankind in a regular sequence (ibid., p. 4). Schein (1985) highlights the evolutionary nature of organisational culture in his definition of culture as a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration that has 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 (ibid., p.6). If we accept that organisation cultures and subcultures evolve, then the question arises as to the time needed for change. Nahavandi and Malekzadeh (1988) claim that for organisational cultures to complete the process of acculturation after a merger, it may take around 7 years. However, there is caveat here it would be false to assume that the acculturation process is complete for an organisation after 7 years, as the acculturation process depends on other factors such as the level of interaction and conflict and barriers to integration such as the organisation being based in a variety of locations. However, in our study we are not looking at a cultural change program and its completion, but rather to see what has changed and to what extent. Although empirical studies of the time needed for culture change are limited, practitioners have a range of views some say it takes as long as it takes to kick a habit, such as smoking, that it all depends on the organisation, or that some aspects of culture always remain (usually the aspects perceiving as bringing success are upheld). Thus, our study will take an explorative approach with the understanding that we are taking snapshots of a dynamic and ongoing process that will continue after the study. Longitudinal studies of subcultures in organisation culture are rather sparse. However, there are some studies of the changes of values and perceptions over time. Noble et al. (2002) looked at changes in market orientation over time and its affect upon performance. Dawes (2000) also looked at market orientation and its impact upon profitability. A longitudinal study was used in both cases to consider growth and performance over time in relation to behaviours, values and attitudes relating to a market orientation. Our study, however, is not considering the testing of specific values in relation to effectiveness. The changing nature of employee values can also be seen in studies of the creating of organisational culture, such as that of Wilkinson and Bruch (2014), who focussed on the building of a library subculture. Moreover, Hamm et al. (2008) looked at value congruence over time at a non-profit sports organisation and found, as did the practitioners mentioned earlier, that some values diverged over time from those espoused by management, whilst others did not. A similar view was held of subcultures by Turker and Atluntas (2015), who found that perceptions of organisational culture by students as newcomers to the organisation tended to converge over time with the perceptions held by their immediate manager. Likewise, Parker (2002) found that, as employees see the past differently, they are in turn likely to orient themselves to the future differently as well. This cross-pollination of values and perceptions over time and convergence or divergence of perceptions found in empirical studies emphasise the need for a long-term analysis of subcultures as a means towards understanding their dynamic nature. We found in the literature that some subcultural elements are likely to change, and others remain the same. As this is a longitudinal study, we should consider the previous findings in relation to the literature and develop hypotheses based on a combination of both. Findings from previous study We found 5 subcultures in 2011 (a dominant market type, two hierarchy and two clan subcultures) Table 1. Summary of findings from 2011 Dominant characteristicSubculture12345Size (number of persons)14084343044Dominant culture typeMarketClanHierarchyStrong HierarchyStrong ClanPerceived organisational dominant culture typeHierarchyHierarchyHierarchyHierarchyClanPosition LecturerLecturerOffice staffOffice staffLecturerFunction TeachingTeachingAdminAdminAdminAge (years)50-6250-6250-6250-6250-62Tenure (years)less than 5 and 10-20 10-2010-20Less than 55-10 Since 2011 there have been three events that may contribute of constructing hypotheses losses of the older staff, students have become fee paying and the introduction of a chancellor to hand non-academic affairs. Based upon qualitative findings from focus groups, it was found that the older academic staff were seen as somewhat nostalgic and associated with the clan culture type. The majority of this staff left after changes to the pension system in 2012. Furthermore, the literature showed that times of ambiguity and uncertainty, such as the changes experienced since 2011, push people together for solace and sense-making thereby increasing the potential for reverting to clan cultures. As their values are challenged by a new way of doing things, their subcultures will be correspondingly reinforced, as found in the literature. The increase in fee paying students and need for funds for survival may lead to a higher market orientation (student and competition being the main focus). The introduction of the chancellor might be seen as potentially increasing a hierarchy orientation. With this in mind, we put forward the following hypothesis Hypothesis one Membership will decrease in clan subcultures from 2011 to 2016, with a corresponding increase in the market and hierarchical subcultures for membership. It was also found in our 2011 study that 4 out of five subcultures perceived the organisation as a hierarchy culture. As the literature found that HEIs are perceived as unresponsive to the changes around them. We put forward the following hypothesis bearing in mind the changes over the period Hypothesis two Subcultural perceptions of the organisation have remained with seeing the organisation as a hierarchy culture. The following section will consider a suitable method for studying the fragmented culture of an organisation and testing these hypotheses, with an instrument that has been used previously in a higher educational context. Method It was found in our literature review that the values of employees in a higher education are pulsed in a number of direction. For example, there is a certain degree of autonomy for some staff but not others, some have an internal focus, whilst others are required to focus externally due to the nature of the profession. We also found that the organisation has and is being pulled in a number of direction with the government exerting tighter control, whilst at the same time reducing funding from government and students, which have led to a greater need to an increased focus on the market, and aspects such as university rankings, accreditation and enrolments. With these aspects in mind, we have selected an instrument that covered these conflicting elements. The Organisational Culture Assessment Instrument (OCAI) was first tested in an educational context and has since been used in empirical studies in both secondary and tertiary education (e.g. Kleijnen et al. 2009 Ferreira and Hill 2008). The model adopts the perspective that the organisation culture cannot be split into a single type, but that there are contrasting values at play which should be allowed for, hence the name Competing Values Framework (Cameron and Quinn 1999). It also covers the aspects that arose in our literature review as the model is based upon four dimensions internal vs external focus and stability and control vs flexibility and discretion. These dimensions form two axes from which four culture types can be distinguished clan adhocracy market and hierarchy, as displayed in the following figure (Cameron and Quinn 1999) Internal focus and integrationFlexibility / DiscretionExternal focus and differentiationClanAdhocracyHierarchyMarketStability / ControlFigure 2. The common dimensions of the four cultural types Moreover, this instrument has been used in Hungary although not for employees of a higher education institution (Gal et al. 2010), although the original version of the instrument was used rather than an existing instrument in the target language. It was translated, back translated and pilot tested to ensure both linguistic and cultural validation. The instrument provided a total of twenty-four values relating to given statements. Using these values, we adopted a method used by Hofstede (1998) to detect subcultures in a large complex organisation using a quantitative tool. We undertook a hierarchical cluster analysis was conducted using Wards method, which resulted in a tree diagram and a scree analysis was undertaken. The instrument remained unchanged for both studies and the same method of distribution and timing was used to minimise the possibility of corrupt data as much as possible. Findings From a total possible 959 employees from all levels of the organisation, 369 completed questionnaires were received (38.5), from which 3.5 were either incomplete or invalid due to miscalculations in the OCAI, giving a final sample of 35 (334 employees) for our 2011 study. Our study in 2016 resulted in a final sample of 348 employees. The reliability was tested for both samples in 2011 and 2016 Table 2. OCAI Reliability Statistics using Cronbachs alpha Culture type2011 Perception As can be seen in the table, the scores for Cronbachs alpha range from 0.65 (questionable) to 0.825 (acceptable). The relatively low alpha of 0.608 suggests that market and hierarchy have a little lower intercorrelation with other variables in preferredvalues due to higher variances, and these lower correlations reduce alphas. According toHair et al. (2017)Cronbachs alphatends to be underestimated in some models based on averaging (like OCAI), asthis is also reflected in Cameron and Quinns work.Accordingto Nunally (1978)a satisfactory level of reliability depends on how a measure is being used. Inthisearly stage of research,time and energy can be savedby working with instruments that have only modest reliability, so in such cases (Loewenthal 2004)the alpha coefficient of 0.6 could be acceptable. Although these coefficients seem somewhat lower when compared with those found by Cameron and Quinn (1999), they still exceed the 0.6 threshold in all cases. This evidence of reliability indicates that the 6 dimensions are related to a common construct, namely, the four culture types. For our study in 2011, five subcultures were found, whereas we found 6 subcultures for our 2016 study. To distinguish between these subcultures, we have used the demographic data, values and perceptions of the organisation. In the following figures, we present the results of the 2016 study for comparison with the summary for 2011 (see table 1) and present only those characteristics considered statistically significant Table 3. Subculture characteristics for 2016 Dominant characteristicSubculture123456Size (number of persons)1426261243621Dominant culture typeClanClanHierarchyStrong ClanAdhocracyHierarchyPerceived culture of the organisation as a wholeHierarchyHierarchyHierarchyClanHierarchyHierarchyFunction (Teaching/admin/ unskilled/management)teaching, admin, manage-mentteaching, manage-mentAdminAdminTeachingAdminGendermalefemaleTenure (years)31, 1011-5, 105 Table 4. A comparison of strength of dominant culture type by subculture type for 2011 and 2016 2011 dataSubculture12345Dominant culture typeMarketClanHierarchyStrong HierarchyStrong ClanScores (average)27.2534.6437.3535.5055.34No. of members140843430442016 dataSubculture123456Dominant culture typeClanClanHierarchyStrong ClanHierarchyAdhocracyScores (average)26.538.431.849.732.333.7No. of members1426261242136 Table 5. A comparison of perceptions of the organisation by subculture Dominant type (should be)Perception of organisation (as is seen)nClanAdhocracyMarketHierarchy2011Market21.8320.6326.0431.5140Clan24.8623.9624.3226.8784Hierarchy2615.5722.9135.5134Hierarchy 24.8910.7821.6642.6730Clan 37.9417.7618.6225.69442016Hierarchy 21.4618.0924.3836.0761Clan 38.8814.351828.7824Clan 21.1219.5225.6433.12142Clan 26.8319.723.5629.9162Hierarchy17.4215.1630.9536.4721Adhocracy23.5520.722.8832.8736 Discussion of findings In relation to a Hungarian Business School it seemed that the largest subculture being the market subculture for both studies. combined with an apparent drop in numbers and strength of values for the clan culture types may be an indication of a change of direction from the clan culture type often associated with higher education culture in the region. Furthermore. if the clan cultures may be interpreted as employees who hanker for the good old days. then perhaps a forward looking rather than backward looking orientation has emerged although a qualitative study may be needed to confirm this and examine this issue further. In consideration of our first hypothesis (Membership will decrease in clan subcultures from 2011 to 2016. and a corresponding increase in the market and hierarchical subcultures for membership). the following table summarizes the findings we need for testing this hypothesis Table 7. A summary of subculture size and type for 2011 and 2016 2011 dataSubculture12345Size (number of persons)14084343044Dominant culture typeMarketClanHierarchyStrong HierarchyStrong Clan2016 dataSubculture123456Size (number of persons)1426261242136Dominant culture typeClanClanHierarchyStrong ClanHierarchyAdhocracy The membership in the clan cultures has increased with 228 in 2016 compared to 128 in 2011. The hierarchy subcultures have increased by around 25 from 64 in 2011 to 82 in 2016. The market subculture has decreased from 140 members in 2011 to no dominant market culture in 2016. Thus, our first hypothesis is rejected. The huge increase in members of clan cultures is an unexpected finding. This type was associated with nostalgic staff yearning for the good old days as the literature made this association and these staff has, on the whole, left he organisation. However, there could be a number of reasons for this finding. Firstly, in times of crisis there is a tendency to revert back to the familiar. Over the last five years staff have been faced with an abnormally large amount of internal and external changes, and in the face of uncertainty, they may opt for the clan values that were found in the literature to related to the former centrally planned model. Another aspect is that the leadership has changed and the focus has moved towards collaboration, which may act as a driver towards clan-related values. Our second hypothesis involved how perceptions are likely to have stayed the same for both samples. As per table 5, perceptions remain of seeing the organisation as a hierarchical culture, with four out of five subcultures in 2011 and five out of six in 2016 seeing the organisation as predominantly hierarchy. In this case, our second hypothesis is accepted. It is interesting to note that the strong clan culture seems fixed in perceiving the organisation as the same as itself, despite the majority of subcultures seeing things differently. Further research would be required to confirm if the apparent blinkered perception of this culture type exists in other organisations and if a strong culture is one of the causes of this blinkered perception. As the staff changed significantly for the period, we cannot say for sure that members changed values. What we can say is that regardless of this, subcultures have changed substantially over the period. A new type of subcultures has emerged that didnt exist in our 2011 study an adhocracy. The most noteworthy change is that of the largest subculture (highlighted in bold type). It has changed from a market subculture to a clan subculture. In figure three it can be seen that these oppose one another the market subculture of 2011 had an external focus and stability and control whereas now the large clan subculture has an internal focus and a preference for flexibility and discretion over stability and control. This is a marked change in the organisation. One may wonder how it is that the same type of subcultures exist after a cluster analysis has been undertaken. However, it is an additional finding that subcultures are differentiated by the strength of their values, to such an extent that clusters emerge. This phenomenon was found in both the 2011 and 2016 studies. We also found that perceptions didnt change towards the organisation, in spite of staff changes and apparent value shifts. We cannot say if this is the fixed perception of subcultures or if the organisation is maintained an image of keeping the status quo in the face of apparent changes, but we should point out that there have been changes in the leadership since 2014. A chancellor has brought greater hierarchical culture qualities, whilst the rector is modernising and improving the academic aspects to build the reputation of the Budapest Business School in both research and quality courses with strong practice orientation for students. In line with the current strategy the academic orientation of the school has strengthened, due to Hungarian regulations (i.e. lecturers teaching in HE have to get a Ph.D. in a limited time to be able to stay employed and faculties of Business Schools have to demonstrate a minimum of 30 of their teaching staff holding a Ph.D.). At BBS, the rate of teaching staff with a Ph.D. increased significantly in the last few years. BBS easily fulfilled the requirements with the rate of 40-43 by 2013. At one Faculty, the rate grew from 16 to 40 in about five years. All these improvements have strongly influenced the culture and the perception of organisational culture by the subcultures. If we bear in mind that our study of 2011 found a link between hierarchy and student orientation (as a part of market orientation), it could be that a strong student orientation is also pushing towards hierarchical culture type, although further research would be needed to examine this aspect further. Conclusions Our literature indicated a strong likelihood for the emergence of subcultures in a higher education institution and these were based on a variety of reasons for formation. Our hypotheses concerning the likely membership of subcultures five years on, was not correct. However, with the number of drivers pushing and pulling the subcultures in a range of possible directions and the turnover of staff, distinct change in values was inevitable. The outcome that perceptions have remained the same, seems a reflection on views of top management and may hark back to persisting views of the higher echelons as being in their ivory tower. Whether this inert perception is a true one or not remains a question for further study. Our study asserts that these clusters are in fact subcultures in the organisation. To ensure that our assertion was correct, we included a question in the instrument about the level of interaction with others in the same and other faculties. With a daily level of interaction, a matrix organisational structure, shared values and additional qualitative findings from our 2011 study of the same organisation, we feel justified in our assertion that these clusters are in fact subcultures. Although the response rate for this study was seen as reasonable with just under 40 for both the 2011 and 2016 studies, the question arises as to whether this subcultural view can be considered as a truly representative cross-section of the organisational culture of the organisation. For example, there could be entire subcultures that didnt participate in the study or the smaller subcultures could in fact be much, much larger. The ideal would of course be a large a sample as possible to give a full picture of the organisations culture. However, the sample size is sufficient for representativeness and provides insight into the dynamic and complex nature of organisational culture in large complex organisations. 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ABOUT THE AUTHORS Nick Chandler Associate Professor, Department of Entrepreneurship and Human Resources, Budapest Business School, Budapest, Hungary Balzs Heidrich Professor of the Department of Entrepreneurship and Human Resources and Rector of Budapest Business School, Budapest, Hungary Richrd Kasa Senior Research Fellow of the Department of Entrepreneurship and Human Resources of Budapest Business School, Budapest, Hungary Corresponding Author Nick Chandler, Department of Management, Budapest Business School (University of Applied Sciences), Budapest 1149, Buzogny utca 10-12, Hungary. email [email protected] https// Organizational Cultures An International Journal CHANDLER Caught in time A repeated cross-section study of organisational subcultures in a Hungarian business school Journal Title Volume , Issue , 20, http// Common Ground Research Networks, Author(s) Name(s), All Rights Reserved. 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