The scale and complexity of change in software process improvement (SPI) are considerable and managerial attention to organizational culture during SPI can therefore potentially contribute to successful outcomes. However, we know little about the impact of variations in organizational subculture on SPI initiatives. On this backdrop, we report from a large scale SPI project in a Danish high-tech company, Terma. Two of its business units - Integrated Systems (ISY) and Airborne Systems (ASY) - followed similar approaches over a two year period, but with quite different outcomes. While ISY reached CMMI level 2 as planned, ASY struggled to implement even modest improvements. To explain these differences, we analyzed the underlying organizational culture within ISY and ASY using two different methods for subculture assessment. The study demonstrates how variations in culture across software organizations can have important implications for SPI outcomes. Furthermore, it provides insights into how software managers can practically assess subcultures to inform decisions about and help prepare plans for SPI initiatives.
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