Culture and Corporate Strategy - Assignment Example

CULTURE – CORPORATE STRATEGY Student’s Name Subject Professor University/Institution Location Date Executive Summary Organizational culture has often been defined as a concept in organizational leadership that rationally shapes the conduct of employees in a meaningful way; hence many researches on the subject have tended to focus on it with organizational allegory being filled with codes, ideals and information limited to the view of organizational culture as a tool related only to effectiveness and performance. This factor of treating organizational culture with so much simplicity can be understood but two main issues emerge from this definition; the first is that there are various factors related to culture that this definition discounts such as “bureaucratic – “meritocratic” chain of command, unfair allocation of benefits and remuneration, a fusion of individuality and conventionality, male dominion, financial growth, consumerism, stressing on money, advanced technology, development of nature and equating economic criteria with logic among other factors. The basis for rationality is one of the factors that are often overlooked in organizations. All in all, research related to organizational culture has always looked at the information and ideals that are related to resources and processes used in attaining pre-distinctive and unquestioned goals. The second issue with this simplified definition is that narrowing the definition of organizational culture to such limited definite dynamic concerns also leads to a reduction of the prospects of culture aiding in the actions that the management of an organization takes. Organizational culture demands that certain concerns which sever the relationship between the postulations that exemplify technological judgment. 1.0. Culture – Corporate Strategy 1.2. Question: “Organizational culture is a sophisticated method to control employees.” 1.3. Introduction The idea of organizational culture has been in the academic circles as a subject for a long time and has also been widely discussed. Many researchers have examine d the subject from an ethnographic standpoint but this paper does so through a purposeful view point. We look at culture inside groups as well as organizations as a social control structure that whose main basis is rules and ideals. The paper shows how culture is capable of manipulating the focal point of thought of the members of an organization, give form to the way they interpret event and guide their behavior and attitudes. The paper will also look at social control as a perspective of culture and express how various perspective apply to the aspect of culture in all types of organizations 1.4. Discussion The issue of control in organizational culture has been the concern of many researches. According to Etzioni (1964), many writings have focused on ways of controlling joint goings-on via the use of prescribed instruments such as budget, compensation systems, and operational processes among other factors since early days. The concept of control has often been used imprecisely and therefore it is very critical that a clear perspective be obtained in order to get the difference between “prescribed and social” control. This paper will study the aspect of control in organizations and how people experience it. In the point of view of this paper, organizational control is an aspect that emanates from being aware that someone who really matters is watching us or paying close attention to what we do and is most likely capable of telling us when or wherever our behavior is suitable or unsuitable (Pech & Slade 2006). Many researchers have studied organizational culture from an ethnographic point of view. This paper looks at organizational culture from a functional perspective and will look at organizational culture as a factor of group functions within the organization which will in this case be viewed as social control structures whose basis is found in joint models and ideals. The paper will look at how joint modelling command and/or culture can manipulate how and where ad sometimes how members of an organization focus their attention, how they shape the interpretations of occurrences, and offer guidance to behaviours and attitudes. It is the point of view of this paper that efficient control systems regardless of their nature because they could be; “financial planning systems, performance appraisal programs or even budgets are only capable of being efficient when the people being monitored are aware of the fact that they are being monitored by the people who really matter in an organization be it a manager, a colleague, a departmental head, etc. This is to say that when a member or members of staff in an organization know that other people who matter in that organization are watching what they are doing, and when this knowledge warrants the delivery of withholding of appreciated authorization when it comes to conformity or nonconformity, then one can conclude that a control system exists in that organization. Prescribed managerial systems keep an eye on performance results as well as behaviour or both performance results and behaviour. Some of the suppositions that bring about formal control in organizations include: Standardizing basic external incentives such as reimbursement, and remuneration and Subordinates recognize managerial influence or top-down authority as rightful and praiseworthy of conformity. Organizational culture can therefore be said to be a concept developed by top organizational management to give form to the behaviour of the members of the organization as opposed to a natural solution to the problems that the organization faces. According to Thomas, leadership, one of the concepts of organizational culture is one area where organizational culture fails (Thomas 2004); this is because poor management of performance can lead to unfair treatment of employees whereby some employees are treated better than others when it comes to remuneration and in some cases, we may find employees who stay in an organization year in year out for a long period of time even though they lack the right competence skills because the managers help them hide their shortcomings using intimidation. This is according to the concept of Peter Principle (Peter & Hull 1969). One of the areas where organizational culture fails in terms of effectiveness is in the area of values, in terms of distinguishing between good and bad, trivializing culture and overemphasizing the role of management and the use of contributory opinion. 2.0. Theoretical perspectives Below are some of the theories that define various aspects of organizational culture: 2.1. Unitarism This is an ideology that organizations are united bodies whereby all parties have an ordinary objective (O'Reilly 2001). This theory is based on the concept of management as the only source of authority in an organization. 2.2. Social control perspective In this perspective of culture, the underlying psychology is apparent. There is first and foremost the choice factor after which involvement is promoted through the use of augmentation of obligation processes to encourage attachment (Hofstede, 1991). Afterwards, there is the aspect of support of likeness to create affectionate accessory. 2.3. Radical This theory defines organizational relationships as based on class conflict regarding interests. Power in this type of organizational culture is left to the employer who in turn creates control mechanisms and passes them on to the members of the organization (Weiner, 1988). 2.4. Traditional theory This is a situation whereby employees do not have the power to take part in decision making and power is concerted in the hands of a few. In the traditional setting, activities in an organization are controlled thorough through use of such factor as systems, procedures, budgets, etc (Walton 1985) 2.5. Paternalistic This theory advocates employees as assets and the sole aim of a paternalistic based organization is to make maximum use of the identification of employees and nothing more. This perspective does not encourage joint efforts at all and it is usually a one sided affair (Tushman & O’Reilly 1996). 3.0. The Aspect of Culture as a Control Mechanism 3.1. Idea of good culture This is basically the habit of viewing all cultures as good without necessarily finding out whether it’s useful or not. However, that is not the case because what has come to be appreciated as good culture in today’s society in nothing more than influential prejudiced thinking, or a pattern of fundamental suppositions that have been established as suitable for groups dealing with issues of both “internal integration and external adaptation” (Thomas 2004). Case in Study 1: The National Australian Bank (NAB) during the period of losses related to catastrophic foreign exchange in 2004 led to a wrangle in which various members of the board of directors resigned due to a fall in the prices of the shares of the company. This type of situation leads to loss of morale in staff of an organization and in most cases customers lose confidence in the company and the company usually takes time to recuperate. The case of NAB can be attributed to defective procedures in the internal management of the organization (Pech & Slade 2006). Positive case of good culture in real life: Fortune carried an article in 1989 that described the ways through which one CEO at Black & Decker changed the complete image of the organization’s culture through the replacement of a manufacturing approach that had turned smug with a new way of doing things. The same things happened at food Lion, a food market chain worth $3 billion that is said to have changed and made a U-turn to start growing at a an yearly rate of 37% for over 20 years with about 24 % percent returns on equity. This was done by changing the culture of the organization into one that lay emphasis on straightforwardness, hard work, and prudence. Firm s such as 3M, Johnson & Johnson Kimberley Clark and Apple are some of the organizations that are said to have the most innovative cultures and many Japanese companies in the United States have been praised for their innovative cultures nurtured under the management of American managers (O'Reilly 2001). 3.2. Trivialization of culture This basically draws from the above perspective and trivialization is usually characterized by the propensity to give emphasis to outward features of the specific selected parts of the culture of an organization. Superficiality gives certain areas of an organization’s culture a description of being well-matched with technological thinking probably easily reachable by managerial involvement. Case in Study 2: Australian National football league matches are often characterized by an itemisation of statistics related to the game plastered in local newspaper in an effort to seek the truth about the reasons as to why one team won and/or why the performance of one team or player was impressive. However, these reports are also characterized by the inclination to apportion culpability which often brings public scorn upon both teams and players. Organization example: The new United Motors Manufacturing Incorporated (NUMMI) which was based in Carlifornia is said to have been one of General Motors’ worst assembly divisions with about 18% daily rate of employee absenteeism and a long history of conflicts related to labor relations. This culture continued for a while until GM decided to close the division down and re-opened it a a joint venture between GM and Toyota in the year 1983. The new joint venture introduced a brand new culture with new employees by over 85% creating new mechanisms of control and a new way of doing things (O'Reilly, 2001). A few years down the line, the company was able to double its productivity. 3.3. Managerialization of culture The adoption of culture has often led to the confusion between the culture of the organization and the management ideology of the company whereby culture is often seen as those ideals and visions that the management of the organization agrees upon. Case in Study 3: An article on the leadership crisis that existed in the US in 2004 carried in an Australian newspaper carried the story of alleged embarrassment and maltreatment of Iraqi prisoners when Rumsfeld was US Defence Secretary. This is one case where confusion between the culture of the organization and the management ideology could lead to organizational culture becoming a tool for leaders to push their own personal agendas. In this case, Rumsfeld ended up being blamed for the alleged abuse of the prisoners and for causing the lacklustre image that the US Army received. Rumsfeld was also blamed for making George W. Bush look ineffectual and imprudent. Real organization case in example: The CEO of Computer-land William Tauscher tried to restructure the organization through a culture of low cost which never succeeded. He CEO OF SmithKline Beckman, Henry Wendt in the 1980s also talked of the organization’s culture as being complacent which led to the troubles that the organization was facing at that time. This could mean that, a culture that is not based on control often leads to disaster. Companies such as Bank of America, Catterpilar have also faced various problems in the past that can be attributed to lack of a control culture (O'Reilly, 2001). From the above examples, we can say that culture control is very crucial for purposes of coordinating and directing activities in an organization. It is a fact that many organizations today appear to be effective due to control systems within which they operate. A control system as we have defined it before is “the knowledge that someone who knows and cares is paying close attention to what we are doing and can see where we go wrong such as a boss”. 3.4. Premature practicality There is a need to allow culture to mature in an environment where they are not restricted or in a manner that is less connected to apprehensions about practicality. Premature practicality is basically the treatment of culture as a tool to control employees because in as much as culture is a control mechanism, its excesses must be controlled to ensure that it is not misused. There is also a need for leaders to get to understand the negation between sophisticated thinking and easily sensible and appropriate apprehensions. Case in Study 4: The case of the storming of Bastille demonstrates this point as it talks of King Louis XVI and his accomplices losing sight of their purposes and hence their leadership ending and the French revolution beginning. Real case in an organization: A company such as Pepsico promotes competition and castigates failure to compete. IBM is the norm at IBM and 3M encourages innovation. These are joint values that the members of the respective organizations share and this is how the organizations grow and uphold their cultures and this is how they have succeeded so far. This shows that managers should involve their employees in every aspect of decision making when it comes to culture (Feldman, 1984). 3.5. Role Leadership Leadership in organizations plays a key role in ensuring that the culture of an organization is right and that it does not lead t situations whereby control measures are not put in place leading to a situation whereby organizational culture is used as a tool to control the members of the organization as this cases more harm than good in an organization. Case in Study: An insurance company the second largest in the USA during the metropolitan days in the 1990s saw the leadership of the organization reward the wrong cultural behaviours in the organization. This led to a swindle running into millions of dollars, a behaviour which was awarded. The award of wrong behaviours often occurs in many organizations due to lack of or misuse of culture. This is often characterized by behaviour such as habitual lying, anti social behaviour, not taking responsibility for wrong behaviour among other factors. Real case in organization: A toy manufacturing company in the early 2000s installed management-by-objectives (MBO) at large expenses for purposes of appraising performance but after one year realized that the system was doing well in one part of the organization but not so well in another. After scrutiny, it was realized that the difference was that in the areas where it was working so well, the managers there were dedicated and passionate and that they rigorously applied the p and down chain of command. On the other hand, the part where the system was not doing well had managers who saw it as just another bureaucratic exercise (O'Reilly, 2001). 4.0. Conclusion The culture of an organization is very important as it helps us to understand the factors that give organizations what could be termed as their character including the financial aspects of the organizations as well as various other types of performances. This paper has discussed various aspect of culture including: the perceptions that various groups have about culture, the role of management in culture whereby activities related to an organization are seen as interdependent regardless of their characteristics as they all affects aspects of organizational culture such as beliefs and indulgence and thirdly culture as a ground for drawbacks and opportunities. Thought processes are very critical in the culture of an organization as the basis of culture. However, many people have always assumed that organizational culture is barely an instrumental factor in the growth of a company and can easily be identified as either good or bad and can easily be dealt with by the management of the organization but that is not the case. Another factor that this paper has discussed is the role of leadership and employees in an organization in the context of culture. It is not easy to establish whether organizational culture has a direct link with performance but this doesn’t mean that they have not relationship because at a certain level of the organization there is a direct link between the two. Aspects of culture are capable of giving very important association between policy and other factors such as the behaviour of employees. The suggestion of how culture can be linked to performance are however not clear as it is hard to separate culture from performance in an organization. 5.0. List of References Etzioni, A, 1964, Modern Organizations. Englewood Cliffs NJ: Prentice-Hall. Feldman, D, 1984, The Development and Enforcement of Group Norms, Academy of Management Review Vol. 9 , 47-53. Hofstede, G, 1991, Cultures and organizations. New York: McGraw-Hill. O'Reilly, C, 2001, Corporations, Culture and Commitment: Motivation and Social Control in Organizations, Managing Human Resources , 9-25. Pech, R, & Slade, B, 2006, Organisational sociopaths: rarely challenged, often promote, Why? Melbourne: La Trobe University. Peter, L, & Hull, R, 1969, The Peter Principle. New York: W. Morrow & Company. Thomas, K, 2004, Revisiting the dark side of leadership in the light of management theory: A leadership concept paper, Melbourne: La Trobe University. Tushman, M, & O’Reilly, C, 1996, Staving on top: Managing strategic innovation and change for long-term success, Boston: Harvard Business School Press. Walton, R, 1985, From control to commitment in the workplace, Harvard Business Review Vol. 64 , 77-84. Weiner, Y, 1988, Forms of value systems: A focus on organizational effectiveness and cultural change and maintenance, Academy of Management Review Vol 13 , 534-545. Read More