Organizational Culture - Assignment Example

?Organizational Culture Organizational culture is a “set of shared beliefs and experiences that essentially defines the identity of an organization and ultimately guides its behavior” (Kaliprasad, 2006, p.27). Today, most organizations are reconsidering and reconstructing their organizational culture for it is perceived as one of the important determinants of success in terms of influencing individual behavior. Furthermore, the culture’s role in the organization is indispensable because it is a lifetime result of weaknesses, strengths, failures, and experiences of people. In fact, it is frequently cited in the different versions of cultural studies that if an organization is planning to implement a change process, it must first understand its organizational culture because failure to do so will make the process unsuccessful (Balogun & Johnson, 2004; Danisman, 2010). This idea was seconded by the study of Kotter and Heskett (1992) when they presented that organizational culture is one of the barriers in implementing a successful organizational change effort because culture or experiences are learnt over many years. In addition, a company’s invention or development of systems or procedures will too often fail because “cultures do not support the newly learned concepts, values, or assumptions” (Schein, 1996, p.30). “Generally, culture studies are conducted at different levels of analyses (for instance, organizational versus societal) using different methodological approaches (conceptual, quantitative, and qualitative) and a variety of associated constructs” (Sarros, et al., 2005, p.160). In the literature review, several academic researches of culture studies and scholars in different disciplines have cited that failure to materialize change in the organization’s process or system is attributed to the habitual dismissal of organizational culture in the process (Balogun & Johnson, 2004). However, organizational culture could be changed through effective leadership and collaboration among organizational members. Furthermore, cultures and good performances are strongly linked considering that today’s most successful companies (i.e. Wal-Mart, General Electric, Coca-Cola, McDonalds, Apple) have acknowledged that culture is one of their most powerful assets (Cameron & Quinn, 2006). Moreover, the positive relationship between culture and performance is supported by several research studies (Peters & Waterman, 1982; Denison, 1996; Marcoulides & Heck, 1993). Culture is also considered as a strong competitive advantage; thus, beliefs, values, attitudes, and behaviors of people in an organization are highly regarded (Alvesson & Sveningsson, 2008, p.3). For example, if business practices are not aligned with the corporate culture, profits will fall, wider range of facilities will not be fully utilized, and there will be no unity and cooperation in the organization. Theories and Conceptual Models in Defining the Style of Management Organizations are expected to be proactive with their actions or strategies and update them based on current market trends. However, changing an organizational culture is a complicated process because of the concept’s nature wherein “the stronger the culture, the more resistant it is to any form of change” (Kaliprasad, 2006, p.29; Thompson & Luthans, 1990). Therefore, the organization’s greatest challenge is to create a strong and powerful culture, which is at the same time susceptible to environmental disturbances (Schein, 1992). Thus, several culture theories and models are proposed to have a good or in-depth understanding of the increasing perception that organizational culture and success/effectiveness have a positive linkage. These associated models and cultures are also created to determine the different aspects of culture in different analyses, approaches, forms, and dimensions, particularly in organizational behaviors. Edgar Schein’s Model of Organizational Culture and Leadership (1980s). Having a powerful and flexible organizational culture is considered as an asset to every organization because culture and performance are positively linked; however, there are instances that a powerful culture is not advantageous to the organization because it prevented the management to command necessary behaviors in favor to organizational purposes. The involvement of leaders/managers and cultures is the real essence of Schein’s model of organizational culture and leadership (Sarros, et al., 2005, p.160). The model is associated with culture and business/corporate performance through leadership. The result of his survey explained the nature of cultural transformation model wherein to deliver organizational success managers or leaders should know the appropriate managerial style in every cultural level. In addition, this group of people should augment their sense of crises, particularly when it comes to managing culture because “If leaders do not become conscious of the cultures in which they are embedded, those cultures will manage them” (Nye, 2008, p.92). Hence, this objective will be fully attained if there is the joining of forces between the management and workers, so that the latter’s performance will be optimized based on management’s direction. Furthermore, Schein’s culture theory also emphasised the need for an organisation to adapt changes in the external and internal environment because culture is “shaped by the circumstances of the organisation and its environment” (Miller, 2009, p.89). Thus, Schein has introduced the three levels or layers of culture including artifacts, espoused values, and basic underlying assumptions, which have played an important role in defining an organizational culture (see figure 1). Artifacts. The first level of culture is artifacts or visible organizational structures, processes, and behaviors, which will determine how strong and weak is the culture of a particular organization through effective leadership. This is the topmost layer of the organizational culture, which is visible to the naked eye, and it can also be heard and perceived (e.g. level of technology, climate, organizational structure, etc.); thus, it can be easily identified, quantified, and observed by observers or insiders. However, the intended meaning of this layer is difficult to discern or interpret because it does not define its usage or its importance to the organizational process, but having an in-depth knowledge about the organization’s espoused values will simplify the scenario (Schein, 1992). Espoused Values. The second level is espoused values or strategies, goals, rules, and philosophies of the organization, which are commonly recognized and actioned by those in managerial positions or executives. These values have a significant impact on the culture of an organization because these are directly coming from leading figures or leaders down to organizational members. Just like artifacts, espoused values are partly visible elements in the organization, and these are not implied, but stated (verbal or written) because these are the values that organizational leaders wanted for their people to become successful. Furthermore, imposed values or beliefs are not harmful to the organization as long as it is backed up, aligned, and consistent with the preferences of organizational members or artifacts, rather than directly manipulating them. In fact, there are instances that the management exuded a positive work life-balance in the organization; however, their actions do not represent operating values, which lead to a dysfunctional process. According to Schein (1992), “If espoused values by leaders are not in line with the general assumptions of the culture, this signal trouble.” Therefore, as much as possible observers or insiders should not presume that organizational culture can be understood based on what has been stated or written in the environment because inconsistencies or misunderstanding between the executor & receiver are always present (Marker, 2010). Basic Underlying Assumptions. The third level is basic underlying assumptions or assumed, and taken-for-granted values, which are unconsciously observed or followed in the organization. These beliefs, perceptions, thoughts, and feelings are not directly visible nor discuss in the organization, but these are reflected in actions generated by organizational members. Basic underlying assumptions are the influence of shared experiences or values of organizational members, and these are composed of espoused values that are acceptable to the work environment without proper definition or acknowledgement. However, these are unconsciously observed and drop out of perception because these are deeply rooted in the organizational process. In other words, these values are commonly shared and actively pursued in the organization because the acceptance level among members is high; thus, they become the basic underlying assumptions that will guide members’ actions and perceptions toward the organization. However, “underlying assumptions, although extremely difficult to assess, are critical in understanding operational effectiveness” (Keillor, 2011, p.135). Schein’s notion about organizational culture, as reflected in his different change models, is coherent with the idea presented in Peters and Waterman model. The two models have both emphasised the important role of understanding employees’ behaviors and values to enhance the performance of an organization. Also, they have stressed that consolidated behaviors, values, attitudes, beliefs, feelings, etc., of every organizational member is the responsible element in creating an excellent organization with a strong and appropriate corporate culture. On the other hand, Schein’s culture model had emphasised that organizations need to successfully adjust to its external environment and integrate internal synergies led by organizational leaders, and the correct pattern of behaviors, assumptions, perceptions, etc., should be shared to organizational members--for instance, the rising demand of high-end mobile phone (smartphone) in the market today. It was projected that the smartphone demand would stay longer in the tech market (Cisco, 2012; Cromar, 2010); thus, handset manufacturers were encouraged to produce their own smartphones to take a bigger piece of market share. Based on Schein’s model (1985), the culture of these manufacturers is influenced by the future increase of smartphone demand as the visible manifestations of culture while innovation and aggressiveness are the espoused values, and competitiveness is the basic underlying assumption. Thus, organizational cultures of these telecommunication players are positive, strong, innovative, aggressive, etc. toward their environment. Advantages. Schein’s culture model has suggested that high performing organizations are those that possessed highly powerful and flexible culture supported with a strong leadership. Also, this model served as a reminder for leaders and managers to “accord attention to softer issues of people, values, and employee/customer satisfaction” together with innovation (Jamali, 2005, p.107). Schein’s understanding on organizational culture is reflected in the three basic elements of culture, which he identified as artifacts, espoused values, and assumptions. The rising demand of smartphone is encouraging handset manufacturers to make their partly visible values be correlated with their real or actual operating values in the culture. Nokia is one of those handset manufacturers that have launched their own smartphone model using the Microsoft Windows operating system because the market is becoming very competitive in terms of service providers interaction (Microsoft, 2011). The company is aware of the rising demand of smartphone; thus, it has implemented some changes to the company’s operation to meet the demand. Traditionally, Nokia is using an “informal style of management, its emphasis on building a strong corporate culture and its focus on handsets (unlike its competitors who have diversified) will enable Nokia to march ahead of confidence” (Aswathappa, 2010, p.65). However, the market trend is rapidly changing, and the environment is highly competitive; thus, Nokia has created a more flexible culture and free innovation towards global ecosystem for sustainability (Wall, 2012). Hence, Schein’s culture model through Nokia’s leaders has opened the company to a change process where they could get away from the traditional way and cope up with the modern way. Nokia’s problems include the low level of smartphone sales, decreasing customer preferences, and declining market share; thus, they have partnered with Microsoft as their new operating system and aggressively advertised in the global market. Furthermore, the company’s leading figures have decided to convert the company’ behavior for it to have a set of assumptions and strategies that are correlated with the current business environment (Ziegler, 2011). In fact, Nokias new strategy is “supported by changes in Nokia’s leadership, operational structure and approach...placing heavy focus on results, speed and accountability” (Nokia, n.d.). Disadvantages. Being an innovative and aggressive company signified a good organizational culture, but Nokia did not sense the crisis of having insufficient artifacts such as resources and technologies to compete with other manufacturers (Ziegler, 2011). Moreover, they have lesser awareness of their physical environment considering that they need to cut the price level of their smartphone to regain their market share. The disadvantage is the failure of the company to adjust and accommodate change applications because they have created a strong and powerful culture towards environmental contingencies (Blandford, 2011). Thus, they have failed to offer unique and distinct set of smartphone features by adapting new technologies, and refining strategies or structures to make them capable of surviving in a highly competitive market. Even though they have changed their operating system, still it is not an assurance that they would reach the top of the smartphone market. Based on Schein’s model (1985), Nokia must not only look at the visible contingencies found in the organization and its environment, but also those underlying assumptions and values that have been engrained into their operations. Thus, the correct problem in Nokia’s environment is to successfully deal with the culture-based resistance to change, which is the primary responsibility of their leaders (Kendall, 2011). Also, the poor management of handling competitors is one of those basic assumptions that they have taken-for-granted. Thus, the model required the participation of employees or teamwork, so that a flexible culture will be created and give them a competitive advantage in the smartphone market. Culture and Management Style Most of the proposed model and theories for organizational culture have emphasised the significance of the role of strategic leadership or management style in the organization. “Leadership and culture are two sides of the same coin. Leaders create and change cultures, while managers live within them” (Kaliprasad, 2006, p.27). Leaders who care for their people and give importance on trust and integrity have frequently encouraged their employees to develop and uphold an organizational culture. In fact, it has been said that change initiatives often failed in part because leaders did not effectively handled the process by aligning practices and culture (Manion, et al., 1996). Culture is learnt over many years; thus, the style of management should be in line with the company’s organizational culture or shared assumptions and values (Osborne & Brown, 2005, p.82). Managers and leaders can make their employees more committed and motivated, but they can also create a culture of fear, distrust, discouragement, and de-motivation if the managerial style is not appropriate with the cultural context. For instance, if the organizational culture has lowered the productivity and motivation of employees, then managers should use the supportive or participative management style such as employee empowerment, decentralization, and promotion. However, an organization culture that involved competition and rivalry (no teamwork & cooperation) among employees will decline organizational performance and efficiency; thus, managers should use an instrumental management style to provide them with specific guidance. In addition, the management style should not be enforceable because there should be an in-depth knowledge of the organization’s artifacts, espoused values, and basic underlying assumptions. For instance, the main reason of Nokia's declining performance is because of inconsistencies in the company's basic assumptions, artifacts, and operating values, which lead to a dysfunctional organizational process. Also, an effective manager is flexible enough to use different management styles and techniques as to what is appropriate in a given culture (Krames, 2004, p.66). Through Schein's model, "leaders can try to change the basic assumptions of a given culture, and hence maybe improve the effectiveness of the company...where basic assumptions are sought changed to fit the wanted espoused values and artifacts of the company” (Business Mate, 2011). Therefore, Schein’s model of organizational culture and leadership is significant in defining the style of management. Conclusion Overall, organizational culture is a composition of intangible assumptions, values, norms, and practices on how things in the organization are being implemented or integrated in a certain process. Using the appropriate management style will strengthen or create a strong and positive culture; hence, employees will be motivated to perform their jobs, improved performance, productivity, and job satisfaction. Based on Schein’s model, organizational culture and leadership is positively related, and their actions are being guided by understanding the 3 elements of culture including artifacts, espoused values, and assumptions. Through this model, leaders and managers will be guided on how to correlate stated and operating values or strategies for sustainability. However, this group must first hold a good understanding of the three cultural layers within their organization to create a positive organizational culture. References Alvesson, M. & Sveningsson, S., 2008. Changing organizational culture: culture change work in progress. Abingdon, Oxon: Routledge. Aswathappa, K., 2010. International business. 4th ed. New Delhi, India: Tata McGraw Hill. Balogun, J. & Johnson, G., 2004. Organizational restructuring and middle manager sensemaking. Academy of Management Journal, 47 (4), pp.523-549. Blandford, R., 2011. Understanding Nokia’s smartphone strategy decision. 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Organizational culture: a behavioral perspective. In: B. Schneider, ed. 1990. Organizational climate and culture. San Francisco, CA: Jossey Bass, pp.314-334. Wall, K., 2012. What’s you point of view on challenge driven innovation? [Online] Available at: http://www.innovationmanagement.se/2012/01/26/whats-your-point-of-view-on-challenge-driven-innovation-2/ [Accessed 2 March 2012]. Ziegler, C., 2011. Nokia CEO Stephen Elop rallies stop in brutality honest ‘burning platform’ memo? [Online] Available at: http://www.engadget.com/2011/02/08/nokia-ceo-stephen-elop-rallies-troops-in-brutally-honest-burnin/ [Accessed 2 March 2012]. Appendix Figure 1: Edgar Schein’s Model of Culture Source: Krause-Jensen (2010, p.57) Read More