Organizational Behaviour

1. Introduction

In 1905 Norsk Hydro ASA of Oslo began producing nitrogen fertiliser using a process which used Norway's abundant hydro-electric potential and a novel electric-arc process to fix the nitrogen from air. In the 1920s this process was usurped by the Haber-Bosch process but Norsk Hydro adapted and evolved over the century into a global multi-division company specialising in aluminium products, oil and gas, and alternative energies. The original agricultural division, Hydro Agri, became less of a focus and in 2004 it was demerged to form Yara International ASA.

Towards the end of the 1990s Hydro Agri implemented an improvement program including a major business process reengineering project enabled by an implementation of an SAP enterprise resource planning system. A global consultancy was used as the implementation partner and a new IT Support Centre was established to maintain and enhance the new system. The SAP project and IT Support were based in Brussels, Belgium.

Schein (2004) proposes that organisational culture and leadership must be analysed together; "When we examine culture and leadership closely, we see that they are two sides of the same coin; neither can really be understood by itself." (p. 10-11). This essay studies the organisational culture and leadership within Hydro Agri and specifically the IT Support Centre during the two years following the SAP implementation. It will propose that a weak leadership failed to overcome historic cultural divisions and foster a positive cultural environment. As a result both performance and the employee experience were adversely affected.

2. Analysing the Organisational Culture

2.i. The Historic Organisational Culture

Norsk Hydro historically had a very strong organisational culture based on the Norwegian nationality, history, language and geography. The company logo is a caricature of a Viking ship and the initial product required the country's hydro-electric power.

With the executives based in Oslo it no doubt still has this strong culture at head office but its spread over Europe, followed by globalisation, has meant that the vast majority of operations are now performed outside Norway by non-Norwegians. In regional offices the Norwegian cultural influence is much diluted.

The company seems to have a laid back, easy going approach to business. Three of Hofstede's dimensions might help to explain this. The low ‘power distance', low ‘masculinity' and relatively long-term orientation of the Norwegian culture could be argued to provide a relaxed working environment where tasks get completed eventually and there isn't too much excitement. This may also be attributed to the slow, old industry in which Hydro Agri operated and the fact that the Norwegian government owns a substantial stake in the company. There were definite similarities with the traditional culture of public sector organisations.

With the Norwegian influence very diluted in IT Support, however, other cultural influences were coming to the fore. The teams into which the support centre was divided consisted of Walloons, Flemish, English and a smattering of other nationalities from around the world. To outsiders it was a veritable model of diversity and globalisation, albeit European focussed.

2.ii. Characteristics