Organizational Culture as the Main Driver of the Company Performance - Case Study Example

Organisational Culture Name Course Name and Code Instructor’s name Date Introduction Organisational culture is defined as a system of shared assumptions, beliefs, and values that develops within an organization and guides its members to certain models of behaviour. It includes general habits, behaviours, rules, dominant ethics, and mood or climate conveyed within an organization (Kohli & Jaworski, 2009). It is the basis on which people react, reply, and manipulates how things can be accomplished within an organization. It covers and dictates the organizational behavioural norms, objects and central considerations. Within any firm, culture is expressed and articulated through organizational heroes, myths, legends, rites, rituals, stories, and jargons. Organizational culture is regarded as a critical factor for the organization’s accomplishment and achievement of organizational tasks and plans, and integrates the organization’s success and acts as the alliance of change. Corporate culture is a vital element for averting all obstructions that hinder firm’s operations. Advocates of corporate culture regard it as the collective programming of the mind that differentiates the members of one organization from another. In this regard, organization culture defines the future course of action of that particular organization, and is the hub of team construction providing a common purpose for the members of the organization. In simple terms, organization culture is the critical basis, which aids how work is done within the organization and how infrastructure could be, operated (Kohli & Jaworski, 2009). The above explanation clearly defines that organizational culture comprises of complex set of beliefs, ideologies, symbols and core values that must and should be shared throughout the organization thus influencing the way it conducts its daily business activities. Following this understanding, it is vitally essential to shape the organizational culture to the central task of effective and efficient strategic leadership (Cook & Yanow, 2007). Organizational culture is said to be a pattern of shared basic assumptions held by a group of people and hence these values are responsible for defining how they perceive things or think and feel. Cultural identity instils internal stability together with cohesion as well as distinguishing an organization from others. Organizational culture is described as the personality of an organization that dictates how things are done within an organization (Drucker, 2006). Corporate culture aids the way employees think, act and feel; it is a key aspect that determines the success or failure of any organization. This paper gives an inherent and comprehensive discussion as to how Hewlett Packard (HP) corporate culture has helped it to enhance its effectiveness in the marketplace and in maintaining its position as a market leader together with the challenges the company has faced with regard to its corporate culture. Hewlett Packard (HP) Overview HP is an American information technology corporation that is based in Palo Alto, California, USA. Within the Information technology industry across the world, HP is one of the world largest companies that has been in operation for almost a century. The company is specialized in the manufacturing and development of computing, data storage, and networking hardware, designing software programs and delivering services. HP’s major product line includes personal computing devices, enterprise servers, storage devices, together with printers coupled with other imaging products. The company was established in 1939 by Bill Hewlett and Dave Packard. It stated as a company producing a range of electronic products; the company’s first products were counters and voltmeters. Within no time the company founded the Silicon Valley. In the early 1960s the company started producing semiconductors and they entered the computer market with their HP2100 and the HP1000 (Hewlett Packard, 2010). The first ink laser printer produced by the company was created in 1984 thus raising the company’s popularity by selling their computers to average consumers and also by opening an online store that has been a vital tool in reaching to consumers (Hewlett Packard, 2010). This successful exploits of HP in industry is wholly anchored on the firm’s corporate culture that is flexible, encouraging teamwork, employee autonomy, and extensive sharing of information across the organization and at all levels (Hewlett Packard, 2010). In essence, the company’s culture has shaped the way people interact, act and strongly influence how things are done (Ellinger & Bostrom, 2001). It has been the key component in the achievements of the company’s mission, goals, objectives and strategies. Accordingly, it has helped in the innovation of new products and the continued improvement of the organization’s effectiveness and change management as a whole. HP has a discrete culture that makes employees to defend the organization and strongly work to make sure that the company delivers its goods and services in an efficient and effective manner (Ellinger & Bostrom, 2001). For HP, understanding and accepting their corporate culture is a primary and significant step that all employees must embrace. For instance, the organization’s culture encourages the development of entrepreneurial orientation among employees and has the ability to change the culture if it is deemed necessary. HP Mission and Vision Statements Organization’s mission and vision statement always gives the firm’s dimensions of culture. Successfully corporate organizations merge both their current undertakings that are usually found in the mission statement, together with their future pursuits or ambitions in one statement. The mission statement makes the organization’s formal philosophy (Kohli & Jaworski, 2009). Given this understanding, members of an organization must fit into the organization culture; the company’s mission and vision statements orient job applicants from the very start. The Mission statement usually portrays why the organization exists, evidently displays the kind of business that the organization is in; is normally broad to facilitate the expansion and development; and it is adequately short for every member of the organization to bear in mind and simply communicate (Cook & Yanow, 2007). HP Mission Statement is to provide products, services and solutions of highest quality and deliver more value to our customers that earns their respect and loyalty (Hewlett Packard, 2010). The organization’s vision statement defines the future direction and the desired state foreseen for the company (usually up to more than fifteen years) (Kohli & Jaworski, 2009). The vision always stipulates the outcomes the company plan to achieve; the effect that the company will make; and clearly state the foundation values; motivate and bring together employees, board, volunteers and contributors in a common effort (Wilkins & Ouchi, 2007). The vision also provides both inspiration and measure for progress. To employees, the vision statement directs them as to how they are expected to behave while at the same time inspiring them to give their best. Significantly important, the vision statement always addresses what impacts that organization will make; the future of the customers the organization intends to have as a result carrying out and following its mission. HP’s vision is to view change in the marketplace as an opportunity to grow; to use our profits and our ability to develop and produce innovative products, services and solutions that satisfy emerging customer needs (Hewlett Packard, 2010). HP’s Culture Schein defines culture as a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, which has worked well enough to be considered valid and, therefore, to be tough to new members as the correct way you perceive, think, and feel in relation to those problems (Schein, 2002). Normal organizational settings, culture expands or develops because of personality and collective experiences over time; which are then passed over to other members of the group. Factors that anchor organization’s corporate culture are rituals and routines, stories, symbols, organizational structure and relationship of the power (Schein, 2002). HP is a learning organization where there is a certain type of collective activities aimed at achieving the organization’s vision. This organization has created an environment that encourages personal and organizational goals to developed and realized. Personal mastery is highly encouraged and embraced where employees work to achieve the company objectives, continuously improve their ability to perform; and they are always informed of the organizations updated knowledge for them to perform with regard to the learned knowledge (Cook & Yanow, 2007). Nevertheless, there is a continuous improvement of activities and skill development to make sure that customers are given superb services. The organization fully understands that knowing a person’s internal picture of their environment always shapes ones decision and behaviour (Ellinger & Bostrom, 2001). The mental models allow employees to have or come up with simple opinions about the problem, and most importantly, respecting and accepting others opinions, is equally upheld in order for apt decision making. Rationality in problem solving and believing in finding better alternatives is widely encouraged throughout the organization (Wilkins & Ouchi, 2007). In essence, the better option among the alternatives is always adopted. HP has developed a sense of group commitment by coming up with a shared vision of the organization’s future (Land 2003). In this regard, employees have been trained to be fully committed to the firm’s vision; for instance, they participate in defining the organization’s general and specific objectives. Through this, employees get committed to accomplishing and achieving both the general and specific objectives of the firm. Homogeneity of individual and organizational objectives is essential (Land 2003). The objectives of HP are clear and transparent thus making them easy to be understood by all employees. Employees within HP are trained to have the ability to see the big picture of the organization and thus it is easy for them to understand how change is a singular area that can have massive effect on the whole organization (Homburg & Pflesser, 2000). Following this, the organization encourages system thinking where employees are called upon to pay attention particularly to the effects of the decisions that the organization makes (Senge, 2010). Similarly, the employees are encouraged to brainstorm and try to find the potential causes of problem within the organization. In this perspective, considering and monitoring changes in the organization’s external environment is vital. In addition, employees are empowered to make comprehensive decisions (Homburg & Pflesser, 2000). The organization has transformed conversational and collective thinking skill thus empowering groups to have the capacity to reliably develop intelligence and ability, which is greater than the sum of its individual member’s talents (Morgan & Strong, 2005). Team learning is usually used: dialogue and discussions where exchange of information in making decision is embraced. Similarly, group evaluation and assessment is encouraged and group members are committed to group decision making. Team learning and training is highly valued. Using other’s experiences usually allows the company to spend less time in group decision making. HP’s prevailing corporate culture is market culture; the organization’s norms and values are designed to reflect the importance of achieving measurable and demanding goals that specifically are financially and market inclined (Appia-Adu, 2011). The company focus is to continuously increase sales, integrate profitability while at the same time expanding the company’s market share. HP’s relationship with its employees is always contractual as previously agreed upon (Popper & Lipshitz, 2010). Consequently, employees are responsible for their performance and on the other hand, the company promises specific rewards for different levels of performance. Equally important, HP’s Managers are not judged on their effectiveness as role models or mentors rather on their monthly, quarterly and annual performance, and goals are based on profit (Appia-Adu, 2011). Market oriented culture is one that focus on competing effectively in the marketplace, achievement and getting the job done (Lafferty & Hult, 2001). This culture is composed of customer orientation, competitor orientation and inter-department collaboration aimed at maintaining supreme firm performance through efficient and effective execution of actions needed for gaining customer value (Land 2003). This kind of corporate is regarded as pragmatic, action-oriented translation of market concept; it emphasizes the importance of the customer not only within the marketing context but also throughout the organization. HP highly values their customers; they execute the required actions within the most efficient and effective means available thus enhancing their performance. The company has strategies that always seek to provide added value to the customer while simultaneously lowering the cost of their products and services (Morgan & Strong, 2005). Customer service orientation is strongly practiced throughout the organization thus making sure that the commitment required by organizational arrangement is achieved. Similarly, the firm has an atmosphere that supports excellent customer services. This culture has continuously affected the firm’s performance in a positive manner. Impacts of HP’s Culture on its performance From the above discussion, HP is a learning organization thus, it is comprised of communities of committed individuals and not just a group of people who learn. This commitment brings about cooperation and engaging creativity rather than just creative human beings. Employee commitment brings about change and thus seeing and organization as a vehicle of bringing about the needed changes. Similarly, employees are committed to addressing areas of organizational dysfunction (Ismael & Nor’y, 2010). Employee’s relationship with the organization is extremely vital for its superb performance; learning organization provides this environment by creating a strong and working relationship between the organization and the people who comprise it (Ismael & Nor’y, 2010). HP has its employees focused on learning that gives rise to cognitive approach where employees’ beliefs and insights are viewed as vital influencers of organizational effectiveness. Similarly, system thinking as described in the five pillars of learning organization brings about interconnections and interdependencies that are vital for information sharing and thus increasing the effectiveness in organization performance (Ismael & Nor’y, 2010). The members of a learning organization have the ability detecting and correcting errors or problems. Following this explanation, HP has an effective way of fixing organizational problems thus helping the organization spend less solving organizational issues (Brown & Starkey, 2009). The HP organizational structure is not a hierarchical one; the company promotes a collaborative structure that allows self managed teams and cross-functional teams to help in promoting effective performance (Senge, 2010). Additionally, there is extensive sharing of information and retention; it has reward systems that are key in reinforcing long term effective performance and the development and sharing of new skills and knowledge (Brown & Starkey, 2009). The market culture that HP has successfully implemented has massively influenced its performance and helping it to continue being a leader in the marketplace (Popper & Lipshitz, 2010). As it is a norm, organizational culture always influences everything that a firm does. How any company operates fully defines it; organizational culture determines what the company focuses on, how it treats its customers, employees and shareholders (Narver & Slater, 2003). The market culture has helped the organization to continuous work to understand the market that it is operating in thus allowing the organization to meet the current customer needs. The culture also helps the organization to support the necessary skills for creating value for customers. More significantly, the company through its culture continuously promote the belief that the ultimate objective for the business if to create superior customer value and profitability (Caroll & Nafukho, 2006). The strong market culture of HP that is instilled in all employees by the senior has made it possible for the company has an upper hand over its competitors (Caroll & Nafukho, 2006). The market culture is key in customer-centric alignment and thus employees at all levels are involved in one strategic mission of customer satisfaction. In this regard, HP top management always emphasizes the needs and satisfaction of customers as top priority (Lafferty & Hult, 2001). On the other hand, employees are committed to providing service adjustments to make sure that they conform to customer specifications and desires. This has immensely helped the company is developing and delivering quality, and thus their products are well received by customers and eventually the company end up earning profits. Market culture has helped in maintaining the HP position in the marketplace (Appia-Adu, 2011). Adaptability to the market, HP has its ears open to the market and thus the company gets immediate feedback from customers (Narver & Slater, 2003). Due to this, the company is able to make adjustments and improve their products and services to conform to customer desired quality. Meeting customer needs has been and still is the focus of HP. Technological advancement that the company has made is due its market culture; marketing orientation and product orientation has been made possible by the company’s ability to efficiently upgrade their products (Narver & Slater, 2003). HP’s corporate culture although, has massive benefits it is has also exposed the company to the following challenges: talent management and Content and Product Data management. The company’s talent management program reflects the specific needs of the employees (Hewlett Packard, 2010). For this program to be effective, the program must be aligned to the company’s strategy and business objectives. Translating the company’s strategy and business goals to specific talent requirements is at times very difficult for the company. Content and Product Data Management is another huddle that the company faces due to its culture and for being a learning organization (Hewlett Packard, 2010). For instance, the company faces a challenge of how to make a bowl size that is able to hold the connection between HP’s business units and their customers especially when the customer size is extremely huge (Hewlett Packard, 2010). Conclusion Organizational culture is the main driver of the company performance; it is a system of shared assumptions, beliefs, and values that develops within an organization and guides its members to certain models of behaviour. A learning organization allows the company to continuously share information while at the same abolishing hierarchical structure and replacing it with a collaborative one that allows sharing of information. HP as described in the above discussion is a learning organization that embraces sharing of information thus empowering employees to be autonomous. 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Retrieved on 29/07/13, from; http://www.parskeyconsulting.com/presentations/Knowledge%20Management%20at%20HP_Linkage%20Press%282%29.pdf Wilkins, A., and Ouchi, WG. (2007). Efficient Cultures: Exploring the Relationship between Culture and Organisational Performance. Administrative Science Quarterly, 28, 468–481. Read More