The Concept of Organizational Culture - Literature review Example

Topic 2: Organizational Culture Name Institution Topic 2: Organizational Culture Organizational culture is critical because it acts as the glue that holds people in a certain organization together. Organizational culture refers to the behaviors and values that make up an organization’s unique psychological and social environment. The behaviors of people in a company and the meaning attached to specific behaviors are very important for the daily running of a company. According to Schein (2010, p. 34), the pattern of teaching collective assumptions and behaviors to new-organizational members helps instill the right organizational culture. Different organizations have unique cultures. Many employees spend more of their time in their workplaces, and therefore, their organizational culture affects their personal and work lives. Furthermore, it affects the ways people within an organization interact with their fellow employees, their seniors and juniors, stakeholders and clients (Schein, 2010, p. 35). Organizational culture plays a critical role as far as productivity and success of the company is concerned. This essay explains the concept of organizational culture, its importance for every organization, dimensions of culture, according to Hofstede theory and finally, ways in which organizational culture affects productivity and success of an organization. According to Homburg and Pflesser (2000, p. 456), organizational culture refers to the mental assumptions within an organization that guides how certain behaviors and actions are to be interpreted within the organization, depending on the situation. While some large organizations may have their unique cultures, different management teams within the same organization may have conflicting sub-cultures. These subcultures may be referred to as corporate culture (Homburg & Pflesser, 2000, p. 454). Corporate cultures are created by management for achieving their strategic goals within an organization. This may affect how different employees identify with the organization. Homburg and Pflesser (2000, p. 456) states that organizational culture is a product of different factors such as strategy, market, product, history and technology. Other factors that determine organizational cultures are management style, type of employees and national culture. Different organizations do their things differently, and therefore, culture is created by what people in an organization do repeatedly (Cameron, & Quinn, 2011, p. 78). Organizational culture is greatly shaped by incentives. Managers predict what their employees will do, and therefore, motivates then to perform their duties effectively and enthusiastically. Various types of incentives are used to motivate employees and can be grouped into monetary and non monetary incentives. Examples of non-monetary incentives include sanctions, advancement, status and recognition. According to Cameron and Quinn (2011, p. 213), there is a dilemma on whether incentives determine patterns of behavior or whether incentives are determined by the values and beliefs that define the culture within an organization (Martin, 2002, p. 56). Every organization aspires to be successful in terms of being effective and achieving better results. A careful business strategy, therefore, has to be put in place in order to achieve the set objectives. Successful execution of the business strategy will occur when changes in organizational culture, capability, roles, people management and leadership are all aligned to it (Martin, 2002, p. 56). Most businesses fail because they are unable to align their employees towards their business strategies. Successful businesses have leaders that drive their employees towards the right behaviors and shared goals (Martin, 2002, p. 56). It is therefore important for all organizations regardless of size and level, to create a culture that includes positive managerial practices such as listening to employees, coaching and guiding them. Finally, it is also important to involve employees in problem-solving decisions. This encourages them and makes them feel relevant to the company (Alvesson, 2012, p. 142). The role of human resource management is very critical in achieving an effective organizational culture. By enforcing policies, it reinforces the values and culture of the company (Alvesson, 2012, p. 213). According to Ogbonna and Harris (2000, p. 766), when an organizations culture is not effective, it is very important to change it. Focusing on a culture that instills to employees that they are the most-valuable resources of a company can increase efficiency and productivity (Ogbonna & Harris, 2000, p. 767). Successful companies have embraced an organizational culture that increases their employee interactions, relations and engagement, attracting new customers and retaining repeat customers and boosting their revenues. Effective culture change has the potential to increase employee satisfaction, reduce operational costs and increase employee retention (Ravasi & Schultz, 2006, p. 435). Shared organizational culture helps in creating a united workplace. People from different demographics are united and they work together, sharing the same values, beliefs and goals (Ravasi & Schultz, 2006, p. 435). Many organizations have employee from diverse backgrounds, religions, traditions and cultures. When they work in an organization that has a shared dream, they have a sense of unity, promote better communication and understanding with each other and reduce conflicts. Equality is achieved in an organizing where every employee is treated equally and no one is neglected (Ravasi & Schultz, 2006, p. 437). Organizational culture is very important in helping to keep the employees motivated and loyal. A culture that engages employees will make them feel that they are part of the organization and that they are valued (Zahra, Hayton & Salvato, 2004, p. 365). They will, therefore, be more eager to contribute to success of the organization as a whole. When success is achieved in such as away, the employees feel they have accomplished part of their dreams and for an organization for which they care (Zahra, Hayton & Salvato, 2004, p. 365). Furthermore, when employees share an effective culture, they become more competitive in a healthy manner. They will work hard to achieve the best or be best performers to gain appreciation and recognition from the employers. This increases the productivity of an organization and the quality of its services. Guidelines are part of an effective organizational culture (Zahra, Hayton & Salvato, 2004, p. 369). They offer employees a sense of direction and expectations. This motivates the employees to complete their tasks as guided. Guidelines helps each employee to understand what is expected of them, and therefore, they are able to meet established deadlines, accomplish individual tasks and are able to know when to indulge in shared tasks and responsibilities (Adler & Gundersen, 2007, p. 546). Janz and Prasarnphanich, (2003, p. 365), states that an organization identity is defined by its culture. The perceptions of the customers, stakeholders, employees and managers define an organizations way of doing business. The values and beliefs that are portrayed help in reinforcing the brand image of an organization (Adler & Gundersen, 2007, p. 547). Detert, Schroeder and Mauriel, (2000, p. 860) states that culture is used in an organization’s sense making processes. They further define sense making to be a process, which is collaborative, and which is aimed at making the varied interest and different individual perspectives into a shared understanding and awareness. Through this definition, the meaning of organizational culture is beyond the interpretations and beliefs that are held jointly about what is right or wrong in an organization. Detert, Schroeder and Mauriel, (2000, p. 860) focuses on the fact that organizational culture plays the role of orienting members of certain organizations to allow them to see the reality in a way of shared purpose and action. Culture does not only provide a shared perspective of “what is” but also focuses on “why is” (Adler & Gundersen, 2007, p. 547). This view of organizational culture focuses on the story behind every organization and the values and beliefs practiced in the same organization, to reinforce the story. For every organization, there are symbols and specific language used. To fit in the work environment of such an organization, every new member has to learn and understand the symbols and languages used. Adler and Gundersen (2007, p. 547), states that culture acts as the control system that guides, reinforces and promotes people to think and behave rightly. Organizational culture can, therefore, be referred as civilization in a workplace that helps in sanctioning wrong behaviors and thinking, while at the same time, promoting and upholding the good morals. Gelfand, Erez and Aycan (2007, p. 487), focuses on this view by stating that organizational culture acts as an organizations immune system, which prevents wrong people and thoughts from entering the organization. Organizational cultures differ widely depending on the type of organization (Gelfand, Erez, & Aycan, 2007, p. 487). According to Hofstede cultural dimension theory, different nations and regions have different cultures making it important for organizations to have multiculturalism and international awareness of their own culture (Gelfand, Erez, & Aycan, 2007, p. 489). Hofstede relates culture differences to differences in thinking and behaviors based on different regional and ethnic groups. Differences in organizations, families, professions, national political systems, subculture groups and legislation all determines how people will behave and think (Gelfand, Erez, & Aycan, 2007, p. 487). According to Hofstede, changing predictable behavior leads to value change although some groups have maintained their cultural identities throughout centuries (Adler & Gundersen, 2007, p. 546). Some of the national and regional cultural group’s values and beliefs affect the way an organization will behave. Hofstede cultural dimension theory demonstrates five dimensions of culture namely, power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity and long versus short orientation (Zahra, Hayton & Salvato, 2004, p. 369). Power distance of culture states that different societies depend on social inequality to find solutions. In some organizations, the relationship between managers and employees is that of boss to subordinates relationship (Zahra, Hayton & Salvato, 2004, p. 369). These organizations depend on inequality in the workplace. While subordinates will try all ways to reduce the distance of power between them and their bosses, the bosses will be working hard to increase the distance or at least maintain it. Different organizations have different levels of power, and while some believe that some individuals should have large powers, others believe that people should have equal rights (Zahra, Hayton & Salvato, 2004, p. 369). Uncertainty avoidance dimension of culture refers to the way a society or organizations deal with future uncertainties (Alvesson, 2012, p. 213). Some of the uncertainties include the law, technology and religion. Hofstede defined two ways that organizations can deal with rituals, law and technology (Martin, 2002, p. 56). The non-rational way is used to deal with rituals such as repots, memos, nomination of experts, parts of accounting systems and planning and control systems parts. Organizations should deal with law and technology uncertainties in rational ways. Individualism versus collectivism is another dimension of culture whereby there are disharmonies between collective goals and personal interests (Martin, 2002, p.128). The employees within an organization will reflect on whether an organization is an individualistic or a collective organization. In a collectivist organization, an organization will depend heavily on the emotional well being of their employees. Such organizations are, therefore, expected to be responsible for their members (Cameron, & Quinn, 2011, p. 278). The masculinity versus femininity dimension of culture relates to whether an organization is predominantly male or female, in relation to its power relations, gender roles and cultural values (Cameron, & Quinn, 2011, p. 278). The long versus short-term orientation relates to the effort an organization makes to look for virtue. Organizations that opt for short time orientation are strongly concerned for establishing the truth. They respect tradition, are normative thinkers and rather than focusing greatly on saving for the future, they focus on achieving fast results (Cameron, & Quinn, 2011, p. 283). Organizations that are long term oriented, believe that context, time and satiation determines the establishment of the truth. Thus, they are able to adapt to traditions and change of conditions, show great perseverance in achieving results and focus on saving and investing (Cameron, & Quinn, 2011, p. 298). Organizational culture matters a lot because it is an organization’s biggest liability as well as greatest asset. Organizations that have unique cultures have the greatest competitive advantage because they are hard to imitate. According to Homburg and Pflesser (2000, p. 456), organizational and corporate culture is as important as an organizations corporate strategy. Leaders of very successful organizations attribute their success to their organizational culture. Homburg and Pflesser (2000, p. 456) states that, when employees have a culture or shared beliefs and values, there is an increased probability of increased performance. While there is a relationship between a company’s performances with respect to its revenues, market share, sales volume and stock process and its organizational culture, it is important for every organization to have a culture that befits the goals of the company (Cameron, & Quinn, 2011, p. 178). For example, a company in the technology industry has to have a culture that encourages creativity, innovativeness and adaptability to support its performance. On the contrary, there can be a company in the same industry that is characterized by a culture of maintaining rules and procedures, stability, high traditional respect and strong company preferences, which may lead to its downfall (Schein, 2010, p. 135). When a company has the right organizational culture, it has a competitive advantage over a company that has the wrong organizational culture. Wrong cultures may lead to decreased predictability, performance difficulties and organizational failures (Schein, 2010, p. 135). According to Alvesson (2012, p. 142), in addition to affecting the performance of an organization, organizational culture dictates the way employees behave. Having an effective organizational culture is a powerful way of managing and controlling behaviors of employees and rules and regulations of the organization. For example, when a company has issues with its customer service, upholding rules may not have an impact. To achieve better results, the company would be required to create a culture of good customer services by encouraging the employees to maintain professionalism during their daily activities. When managers are carrying out their organizational functions, it is important for them to influence and understand organizational culture (Alvesson, 2012, p. 142). Organizational culture can be classified into three levels, which are interrelated. To understand organizational culture, the first step is to understand its artifacts, which are made up of employee integrations, reward systems, company policies and physical environment (Alvesson, 2012, p. 148). For example, when one is going for an interview, it would be very important for them to observe the way people dress and relax the physical environment and employee interactions as a good way of understanding the organizations culture. There are, however, other intangible aspects to look out for because the important part of the components of culture lies below ones awareness. Every organization has values and assumptions that shape its culture and these can only be uncovered by taking a deep look at how employees interact with each other and make choices. It is, therefore, important for people to make enquiries about the perceptions and beliefs of the employees, that is, what they think is right and wrong (Ogbonna & Harris, 2000, p. 767). In conclusion, every organization has a unique culture that defines its values and beliefs. Organizational culture plays a very important role of shaping behaviors that are acceptable in an organization. Organizational culture of an organization defines an organization because it portrays how an organization does its things. Ways of incentives used by managers to motivate employees also shape the culture of an organization. The managers are able to predict how their employees will behave after giving them incentives. Finally, while organizational culture shapes the behaviors to be expected in an organization, it also acts as an immune system that shields bad behaviors and attitudes from entering the workplace. References Adler, N. J., & Gundersen, A. (2007). International dimensions of organizational behavior. Cengage Learning. Alvesson, M. (2012). Understanding organizational culture. Sage. Cameron, K. S., & Quinn, R. E. (2011). 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