Flexible Firm

The Design of Culture at Bang & Olufsen

Jakob Krause-Jensen

• Publisher: Berghahn Books
• Year: 2010
• ISBN:
  9781845458249
• Edition: 1
• Topic: Social Sciences
• Subtopic: Physical Anthropology
• Index: Social Sciences

Bang & Olufsen, the famous Danish producer of high-end home electronics, is well known as an early exponent of value-based management: the idea that there should be consistency in what the organisation does, a certain continuity between what the company develops and sells, and the beliefs and practices of the employees. This study investigates how company values are communicated and the collective identity is articulated through the use of such concepts as 'culture', 'fundamental values', and 'corporate religion', as well as how employees negotiate these ideas in their daily working lives. As this book reveals, the identification of values, meant to create cohesion and solidarity among employees, came to symbolise and engender a split between the staff and the other parts of the company. By examining the rise and fall of the value-based management approach, this volume offers the indispensible insight of anthropological enquiry to expose how social realities challenge conventional management strategies and therefore must be considered in the development of new management techniques.

CHAPTER 1

Starting Fieldwork on ‘The Farm’

For more than two decades this humorous drawing by Gary Larson has been a favourite on the fridge doors and pin-up boards of anthropologists. The cartoon shows a group of ‘primitives’ who are in a panic to remove their TV's, telephones, and VCR's before the anthropologists arrive. Apparently, the ‘primitives’ are intent on keeping the otherworldly scientists locked in their professional illusion of the existence of equally otherworldly ‘pure natives’ living in timeless pockets uncontaminated by MTV and Beverly Hills 9876543 (or whatever the number is). Unfortunately, Larson's comic seems to imply that there are no more blank spots on the map. The object of anthropological investigation is fast disappearing; the world has been ‘entzaubert’, disenchanted, or, as Clifford Geertz puts it, we may simply have to get used to the fact that ‘variety is rapidly softening into a paler, narrower spectrum.’ The days of the headhunters, the matrilinealists, and the widow burners may be counted, but ‘the French will never eat salted butter’ (Geertz 2000: 68).

The following pages might provide unexpected consolation for anthropologists worried about the prospects of disenchantment hinted at by Larson and Geertz: my fieldwork was carried out in Denmark at Bang & Olufsen, one of the crown jewels in the Danish manufacturing industry, a company who has earned its reputation from the production of exclusive, high quality, audiovisual home electronics with a distinct design. For when we turn our gaze on the producers of these machines of modernity and disenchantment, people whom we would perhaps expect to be ‘specialists without a spirit’ (Weber 1991 [1904]: 182), we find instead that this corporate environment offers a strange and surprising inversion of the ‘Tristes Tropes’-ironies implied in Gary Larson's drawing. The ‘natives’ (a couple of them were anthropologists themselves) did not remove their technological equipment when the fieldworker arrived; on the contrary, they proudly presented their televisions, telephones, CD players, and state-of-the-art loudspeakers to the visiting anthropologist. And what was even more engagingly exotic: leading spokespersons insisted that what they produced and sold were not stereos and televisions, but ‘values’ and ‘visions’ (both in the metaphysical sense). This apparent turn-around of a well-known history of rationalisation and this re-enchantment occurring within what is commonly understood to be the heartland of utilitarian rationality – the world of business organizations – was what triggered my curiosity.

Illustration 1.1

The administrative headquarters (the ‘glass cage’) seen from the lobby.

Bang & Olufsen Ltd, known as ‘B&O’ to most Danes, is located in Struer, a town of 20,000 inhabitants in the windswept northwestern periphery of Denmark. The company develops and manufactures audio-visual products,¹ which are world-famous for their distinctive design. Bang & Olufsen is by far the biggest industrial workplace in Struer. Since the mid 1990s, the aim of management has been to turn Bang & Olufsen into a ‘value-based’ corporation. The company assets no longer refer solely to the bottom-line, but rather describe some fundamental orientations and attitudes that are not connected to economics in any immediate way. Fundamental to the value-based corporation is the idea that there should be a consistency in what the organization does: continuity between what the company develops and sells and the beliefs and practices of the employees. But how is the elegant minimalism of B&O's televisions, telephones, and sound systems connected to ways of working together? How do the aesthetic attributes of the products translate into the ethical realm of the organization? How is corporate culture defined and how are company values communicated? How do employees negotiate these ideas in their daily working lives?

The Frame of the Argument

The primary aim of this book is to investigate how the company articulates its collective identity through the use of concepts such as ‘culture’, ‘fundamental values’, and ‘corporate religion’. I want to see how these words are used in corporate discourse² and to trace the connection between these ideas and the social environment of the organization. The general thrust of my argument is that there is a connection between the fragmentation and dispersal at the social level, and the company's efforts to address and mobilise Bang & Olufsen stakeholders through cultural rhetoric on the ideological level.

The business environment in the Western world can be characterised by constant flux and increasing unpredictability (Harvey 1990; Kanter 1989; Harrison 1994; Sennett 1998; Castells 2000). To survive under these conditions of speed-up and instability, business organizations must be able to accommodate to rapidly changing markets, adjust to high degrees of uncertainty, and celebrate neverending technological revolutions. People change jobs at increasing rates, the computer and the internet have made it possible to work from home, outsourcing has become an imperative corporate strategy, the ‘consultant’ is a common employment category, and organizational flexibility is regarded as a universal yet imprecise condition of survival in turbulent markets. Bang & Olufsen's attempts to determine its cultural values, articulate the corporate vision, and thus objectify the company's culture were all an indication that – among an increasing number of employees – establishing a productive business milieu and a sense of common purpose and belonging was becoming increasingly difficult.

The social theorist Robert Cooper (1992) argues that when organizations become increasingly de-localised, when they are looked upon and experienced as mediating networks, orbits of continuous communication, exchange, and motion, then the need to distinguish between those who belong to the organization and those who do not becomes acute. When the boundary between inside and outside the organization is fluid and unstable, then the organization achieves continuity, delimitation, and reality through ongoing symbolic efforts to constitute itself. In this sense, ‘culture’ typically becomes an issue when identity is challenged (Dugay 1996: 57–58). Attempts at establishing corporate identity are thus linked to the fact that the connection between organization and employee, once assumed to be fixed, coherent, and constant, becomes a more fragile and transitory relationship that must be continuously nurtured and won.

The model of the relationship between the business and its environment framing my argument might be visualised as a gravitational field. At the social and economic level, a number of centrifugal forces are in play: flexibility, de-localisation, employee mobility, incessant technological renewal, and the increasing pace of change in the market. At the cultural level, a complementary, centripetal movement can be identified, whereby the company tries to attract employees, investors, and customers through reflexive clarifications of corporate collective identity through an articulation of the fundamental corporate values and a religious rhetoric. Consequently, managerial cultural discourse at Bang & Olufsen must mediate a series of dualities: flexibility and loyalty; individualism and commitment; empowerment and cultural centralisation; non-conformist ‘crazy’ thinking and hard deadlines; and, values of continual change and ‘high fidelity’.

Nevertheless, the aim of my inquiry was not to identify a crucial cultural rock bottom that sustained the Bang & Olufsen corporate community. Rather, I was looking for concepts to grasp both the stability, but also the complexity and change that seemed to be such prevalent facts of life at Bang & Olufsen. Borrowing a distinction from urban anthropology, my ambition was to do an ethnography ‘in’ rather than an ethnography ‘of’ Bang and Olufsen (Rogers and Vertovec 1995: 3): the emphasis of my research question was on how people worked with, experienced, and acted on managerial ideas of culture rather than on describing these ideas as a coherent system (Holy and Stuchlick 1983: 2). I wanted to investigate what sense the employees had of their own situation when helped by these management notions. How do people cope with these ideas in the course of their everyday working lives? I wanted to see how different culture-related concepts were used strategically by the company in an attempt to create commitment and community that went far beyond company boundaries (which are difficult to draw anyway) to include retailers, investors, and customers, and how employees used and negotiated these concepts.

Accessing the Farm and Beginning Fieldwork

It is a convention – almost a cliché – for anthropological studies to start with arrival stories. Strictly speaking, this convention serves to establish the trustworthiness of the participant–observer by testifying to the fact that he or she ‘was there’ as well as being, of course, a stylistic or literary trick to get the reader there as well (Clifford 1983: 118). Typically, the arrival story tells the reader about the difficulties encountered in the field; the first meeting; the negotiation of entry; the talk with the gatekeeper; and the conditions of being present. But, as Barbra Czarniawska-Jorges has remarked (1998: 33), the happy moment when you have gained access and can just get on with your gathering of data does not occur in the ethnography of organizations.³ According to her, this has to do with the fact that the anthropologist, who studies organizations, is likely to be studying ‘up’; i.e., studying people who earn more, have a higher social standing, and are probably more self-conscious than the participant-observer. Furthermore, one might add, organizations are in some sense more clearly bounded than most other locations. It is necessary to get permission from high-standing employees to get access to the locality and to do research.

Nine months before I started the fieldwork, I had an appointment with the personnel manager at B&O. I had written a letter explaining my interest in the use of concepts of culture in company discourse, and he had invited me for a meeting to discuss my project. I was happy that I had opted for the shirt-and-blazer solution, but decided not to wear a tie, as this choice seemed to fit the relatively informal dress code.

The meeting took place in the old headquarters, a three-story red brick building from the 1970s, but I was told that the administration would soon move to new headquarters. When I entered his office, he asked me to sit down and offered coffee. He then folded his hands and looked at me with a smile and a twinkle in his eye: ‘well, what do you want to sell us?’ he said in a mock rural accent.⁴ I had anticipated a question like that, because naturally I was going to have to explain why the gatekeeper should open the door and let me in. So I had two answers ready: I told him that, just like other anthropologists doing fieldwork, I intended to do ‘participant observation’, i.e., to take part in the life of the people I studied. Seen from this perspective, I could be regarded as six months of free labour because the university would be paying my salary. Second, I emphasised that I was not a consultant, but that I would eventually produce an outsider's account of social and cultural processes in the company. He seemed satisfied by the answer and wanted to hear more about my research interests. I was interested in the way that the company was able to play on different notions of culture – the broad anthropological notion and the elite, exclusive notion of culture as ‘distinction’. I told him that I was interested in following the process of working with vision and values. We finally agreed that the best place for me to start my fieldwork was the personnel or Human Resources Department. I was told to be aware that things were pretty chaotic at the moment, and we arranged for me to start fieldwork in April, the spring season, which was the least busy period of the year.

‘The Farm’: Context of Work and Corporate Symbol

On the first day of my fieldwork, the train arrived fifteen minutes late. Realising that the norm of punctuality is likely to be much stronger in a private corporation than in a university department, I hurled myself into a taxi and asked the driver to take me to Bang & Olufsen's new headquarters. Noticing the suppressed panic in my voice, the driver told me that ‘the farm’ (gården) was only three minutes away. ‘The farm’, it appeared, was the nickname given to the recently built company administration. Even though country fields surround the building, the unsophisticated, low-tech connotations of the name do not immediately fit the glass and basalt elegance of the headquarters or the tasteful technology and refined design produced by Bang & Olufsen. In this way, the name points to the incongruity of placing this company of urbane technology in Struer in North Western Jutland – a remote, rural, windswept periphery of Denmark. On the other hand, the name refers to the fact that the company was founded by two engineers, Peter Bang and Svend Olufsen, on Svend Olufsen's family estate seventy-four years ago.

Illustration 1.2

An alternate view of the glass cage seen from the lobby, and the glass corridor connecting the two.

‘The farm’ was built in 1998. It is symbolic of the recently defined corporate values, which are the subject of this book, and the building is also perhaps the most visible manifestation of new corporate affluence. In the beginning of the 1990s, the company came close to bankruptcy, and the then Corporate Executive Officer Anders Knutsen, together with a group of senior executives, launched a plan they called ‘Breakpoint 93’, a reform program that is today widely recognised to have saved Bang & Olufsen from collapse. The plan involved a radical restructuring and downsizing of the company, and one-third or 700 of the company's employees were laid off. From a strategic or corporate perspective, the reorganization was successful: Bang & Olufsen's share prices skyrocketed.⁵ Anders Knutsen subsequently earned star-executive status and was, at the time of fieldwork, often portrayed in the Danish media.

In the last part of the 1990s, after years of tight budgeting following the Breakpoint plan, the time had come to open up the budget for strategic spending, such as building the new company headquarters. One of the areas to be developed was ‘communication’, the marketing of Bang & Olufsen values. Thus, Anders Knutsen (1998) wrote:

A customer who just wants a TV does not buy Bang & Olufsen…Bang & Olufsen has a valuable brand, because customers all over the world know our values (through our products and our own or other people's communication), because they share the values and consequently buy the product…the values must be a part of our everyday lives.

As Anders Knutsen suggests here, what we normally think of as a means of communication, transmitters of sounds and images, are themselves symbols and powerful messages: ‘Bang & Olufsen don't make products. They make tools for creating emotions’, the French composer and musician Jean-Michel Jarre said to the Danish news on 14 June 2000, which was the 75^th anniversary of Bang & Olufsen.

This focus on communication, values, and emotions indicates that, officially, the company prefers to perceive itself as a meaning broker rather than as a product producer. This again is a corporate self-understanding that points to Bang & Olufsen's attempt to become a brand. Thus, in the most material of domains, in an ambience that is normally regarded as the stronghold of utilitarian thinking and practical reason – the world of business and organization – concerns and strategies are often defined in cultural terms: companies use metaphor; develop symbols and philosophies; discover foundational myths; have visions, missions, ethics, and rituals.

Fieldwork on the Farm

The ‘farm’ is officially promoted as an important statement of corporate culture, an ideal portrait presented to the world. Quite logically, an organization that produces machines for seeing and listening should have headquarters that match the aesthetic quality of the products. Despite the humble, rural nickname and its recent origin in 1998, the new headquarters have already earned themselves a reputation in the history of Danish industrial architecture. The building is seen as an expression of company values: a link has been forged between that which is developed and produced and the building that houses the company's administrative functions. The administrative building has been praised in the Danish media as a paradigmatic example of corporate architecture. It has been suggested that the building itself resembles a Bang & Olufsen product (Keiding 1999).

From the outside, ‘the farm’ is far from monumental. The glass, steel, and basalt building is a low structure placed in the open fields on the outskirts of Struer. From the parking lot, a cobblestone path takes you down a slope to the main door. The entrance is a glass door tucked away in a corner and suggests a back door rather than a main entrance in its conspicuous lack of monumentality.

When I entered the new corporate headquarters, I looked for company insignia, posters, names, and other loud announcements of corporate identity – but I saw no slogans, no super-sized logos, and no products on display. Instead, I stepped into a spacious, luminous lobby with parquet floors of pale wood and jade-coloured glass and walls of concrete and dark grey stone slates (see illustration 1.2).

The only furniture in the foyer was a table with a few daily newspapers and a couple of chairs designed by the Danish modernist architect Poul Kjærholm. The chairs pointed to the link with the modern Danish design tradition that has been characterised by minimalism – an economy of means – an aesthetic that has been an important characteristic of Bang & Olufsen's products for decades.

I was looking for directly visible symbolic expressions of corporate culture in part because other ethnographic accounts had all described a massive symbolic exposure of company culture: streamers in the back window of employees’ cars, t-shirts and mugs with company logos, videos in the lobby transmitting the CEO's latest speech, posters declaring the corporate commandments, and so on (see Garsten 1994; Kunda 1992; Casey 1999). In contrast, the impression here was not one of importunate corporate slogans. The subtle and indirect quality of the b...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures and Illustrations
• Foreword
• Acknowledgements
• Chapter 1 - Starting Fieldwork on ‘The Farm’
• Chapter 2 - ‘Reflexibility’ – The Methodology of Fieldwork among Lay Ethnographers
• Chapter 3 - The Power of Culture
• Chapter 4 - Farm, Factory, Firm – the Culture of Design and the Design of Culture
• Chapter 5 - Breakpoint: Metaphors of Change
• Chapter 6 - From ‘Corporate Identity Components’ to ‘Fundamental Values’
• Chapter 7 - ‘Brand Religion’ – and Voices of Heresy
• Chapter 8 - Working with Human Resources
• Chapter 9 - How to Do Things with Words
• Chapter 10 - The Social Significance of Flexibility
• Conclusion
• Postscript
• Appendix
• References
• Index