Harvard Case - Culture Change at California Resources Corporation
"Culture Change at California Resources Corporation" Harvard business case study is written by Alan Nelson. It deals with the challenges in the field of Organizational Behavior. The case study is 10 page(s) long and it was first published on : Jul 15, 2018
At Fern Fort University, we recommend a multifaceted approach to culture change at California Resources Corporation (CRC) that prioritizes employee engagement, leadership development, and strategic communication. This approach will foster a more inclusive and performance-driven culture, ultimately leading to improved employee morale, operational efficiency, and company reputation.
2. Background
This case study focuses on CRC, a major oil and gas company struggling to adapt to a rapidly changing industry landscape. The company faces several challenges, including:
- Declining oil prices: The company's profitability is directly tied to oil prices, which have been volatile in recent years.
- Environmental concerns: The oil and gas industry is facing increasing scrutiny over its environmental impact, leading to public pressure and regulatory changes.
- Employee morale: CRC has experienced a decline in employee morale due to layoffs, restructuring, and a perceived lack of transparency from leadership.
- Culture of fear: The company's previous leadership style fostered a culture of fear and silence, hindering open communication and innovation.
The main protagonists are Greg Garland, the new CEO, and the employees of CRC, who are experiencing the impact of the company's struggles.
3. Analysis of the Case Study
To analyze the case, we will use the Organizational Change Model, which emphasizes the importance of unfreezing, changing, and refreezing organizational culture.
Unfreezing:
- Identify the need for change: CRC needs to acknowledge the urgency of adapting to the changing industry landscape and address the decline in employee morale.
- Create a sense of urgency: Garland needs to clearly communicate the challenges facing the company and the need for change. This can be done through open communication, town hall meetings, and transparent data sharing.
- Reduce resistance: The company needs to actively address employee concerns and fears by providing clear explanations for changes, offering support, and fostering a sense of shared ownership.
Changing:
- Develop a new vision and values: CRC needs to define a clear vision for the future that aligns with the changing industry landscape and incorporates values like sustainability, innovation, and employee well-being.
- Implement new processes and structures: The company needs to implement new processes and structures that support the new vision and values. This may involve restructuring teams, adopting new technologies, and implementing performance management systems.
- Empower employees: CRC needs to empower employees to contribute to the change process by providing them with the tools, resources, and opportunities to participate in decision-making.
Refreezing:
- Reinforce the new culture: CRC needs to reinforce the new culture through consistent communication, leadership behavior, and recognition of positive changes.
- Celebrate successes: The company needs to celebrate successes and acknowledge the contributions of employees who are driving the change.
- Monitor progress: CRC needs to continuously monitor the progress of the change process and make adjustments as needed.
4. Recommendations
1. Leadership Development:
- Develop a new leadership model: CRC should implement a leadership development program that emphasizes transformational leadership and emotional intelligence. This program should focus on developing skills like communication, delegation, empathy, and creating a positive work environment.
- Empower middle management: CRC should empower middle managers to lead change by providing them with the necessary training, resources, and autonomy.
- Promote diversity and inclusion: CRC should prioritize diversity and inclusion in leadership roles, fostering a more representative and inclusive culture.
2. Employee Engagement:
- Implement a comprehensive communication strategy: CRC should establish a clear and consistent communication strategy that keeps employees informed about the company's vision, progress, and future plans. This should include regular town hall meetings, employee surveys, and internal communication channels.
- Foster open dialogue and feedback: CRC should create a culture of open dialogue and feedback, encouraging employees to share their ideas, concerns, and suggestions. This can be achieved through employee suggestion boxes, feedback sessions, and anonymous surveys.
- Recognize and reward employee contributions: CRC should implement a robust employee recognition program that acknowledges and rewards employee contributions, both individual and team-based. This can include bonuses, promotions, and public recognition.
3. Strategic Communication:
- Develop a clear and consistent brand message: CRC should communicate a clear and consistent brand message that emphasizes its commitment to sustainability, innovation, and employee well-being. This message should be communicated through all channels, including public relations, advertising, and social media.
- Engage with stakeholders: CRC should actively engage with stakeholders, including investors, customers, and the community, to address concerns and build trust. This can be done through community outreach programs, public forums, and transparent reporting on sustainability initiatives.
- Highlight success stories: CRC should highlight success stories that demonstrate the positive impact of its efforts to change its culture and improve its operations. This can be done through internal communication, press releases, and social media.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with CRC's mission to be a responsible and sustainable energy company.
- External customers and internal clients: The recommendations address the needs of both external customers (investors, consumers) and internal clients (employees).
- Competitors: The recommendations help CRC to stay competitive by fostering a culture of innovation and efficiency.
- Attractiveness ' quantitative measures: The recommendations are expected to improve employee morale, reduce turnover, and increase productivity, which will ultimately lead to improved financial performance.
6. Conclusion
By implementing these recommendations, CRC can transform its culture into one that is more inclusive, performance-driven, and aligned with the changing industry landscape. This will lead to improved employee morale, operational efficiency, and company reputation, ultimately positioning CRC for long-term success.
7. Discussion
Alternatives:
- Continuing the status quo: This would likely lead to further decline in employee morale, increased turnover, and a loss of competitive advantage.
- Focusing solely on leadership development: This would be insufficient to address the systemic issues within CRC's culture.
- Implementing a quick-fix solution: This would likely be ineffective and could create resistance from employees.
Risks and key assumptions:
- Resistance to change: Employees may resist change, especially if they are not adequately informed or supported.
- Lack of commitment from leadership: The success of the change process depends on the commitment and support of leadership.
- Time and resources: Implementing these recommendations will require time, resources, and commitment from all stakeholders.
8. Next Steps
Timeline:
- Month 1: Develop a detailed plan for implementing the recommendations, including specific goals, timelines, and resources.
- Month 2: Launch a leadership development program and implement a comprehensive communication strategy.
- Month 3: Begin implementing new processes and structures to support the new culture.
- Month 6: Evaluate the progress of the change process and make adjustments as needed.
- Year 1: Continue to reinforce the new culture and celebrate successes.
Key milestones:
- Increased employee engagement: Measure employee engagement through surveys, feedback sessions, and performance metrics.
- Improved leadership effectiveness: Evaluate leadership effectiveness through employee feedback, performance reviews, and objective measures of team performance.
- Enhanced company reputation: Monitor company reputation through media coverage, customer feedback, and industry rankings.
By taking these steps, CRC can successfully navigate the challenges of the changing industry landscape and emerge as a more competitive and sustainable energy company.
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Case Description
California Resources Corporation (CRC), a leading oil and natural gas producer in California, spun-off from Occidental Petroleum (Oxy), just as the bottom fell out of the oil market. Three years after surviving the launch, there's a growing sense that CRC needs to establish its unique culture, yet 90% of employees have Oxy roots. This case looks at the challenges of identifying culture, perceptions of its impact, and strategizing how to change it.
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