Organizational Culture and Organizational Stability - Essay Example

Strategic management Contents Contents 2 Answer Organizational culture and organizational stability 4 Introduction 4 Main body 4 Conclusion 8 Answer 2: Ethics and Corporate Social Responsibility (CSR) 8 Introduction 8 Main body 9 Conclusion 11 Answer 3: Power and politics in an organization 12 Introduction 12 Main Body 12 Conclusion 15 Answer 4: Evaluation of strategic change 15 Introduction 15 Main Body 16 Conclusion 19 References 20 Answer 1: Organizational culture and organizational stability Introduction The culture of an organization defines the personality and philosophy of that organization. Organizational culture refers to the system of assumptions, beliefs and values which are shared within the organizational entities and which govern and direct the ways in which the people within the organization behave, work as well as conduct themselves. Organizational culture include shared values which are substantial influencers for the entities of the organization and direct and guide the, as to how they should act, behave and perform their respective job roles. All types of organizations aim at developing and maintaining specific types of cultures which are in line with the philosophies of the organization and which help in the process of achievement of goals and objectives of the same. Main body The culture of an organization is extremely significant for the achievement of stability of that organization, especially while functioning within a highly dynamic and competitive external corporate environment. Corporate culture or organizational culture is a system which is necessary for developing the standards and rules of functioning that can act as a guiding element for all types and levels of employees within the enterprise. Since, organizational culture is developed on the basis of inputs like assumptions, norms and values of people; therefore the role of this system is highly profound in the management of human resources which is considered to be the main stabilizing factor for an enterprise. This system decides the organizational behaviours, processes, future strategies, brand value creation, brand perception and many other diverse ranges of factors which are necessary to establish the organisation as a properly functioning unit. The concept of organizational culture is found to be extremely important in the situations in which the management of a company aims at managing major organization wide transformations. In times of a transition or change, organizational culture acts as the main factor that holds together all the entities of the organization and acts as a platform based on which the changes can be implemented in the most benefit reaping manner. A consistent yet flexible organizational and corporate culture is particularly helpful to encourage coherency and cooperation in times of change management and transition through the development of stability of roles, alignment of organizational and personal values and visions, clear communications and supportive behaviours. Organizational culture encompasses seven main characteristics which range in the priority level in a descending order. Every organization develops and determines a distinct value and priority level for each of the seven characteristics involved in organizational culture, which act in a combined manner to define the unique culture for a particular organization. These characteristics of organizational culture are Risk orientation or innovation Precision orientation or attention to details Achievement orientation or emphasizing on outcomes Fairness orientation or emphasizing on people Collaboration orientation or emphasizing on teamwork Competitive orientation or emphasising on aggressiveness Rule orientation or emphasizing on stability The culture of an organization important because it helps the organization to make judgments and take suitable decisions related to the value that the organizational activities and processes place on these main characteristic of organizational and corporate values and culture. The presence of a well defined organizational culture also helps the organizations to take appropriate steps to adjust the activities and behaviours in order to match the organizational philosophies and perceived values inherent to the organization. Figure 1: Dimensions of organizational culture (Source: Mintzberg, Ahlstrand and Lampel, 2009) Organizational stability refers to the status quo that is to be maintained by an organization in order to maintain a positive image and ensure that the organization can behave in a supportive and stable manner during any kind of transitional phases or business contingency management phases. . Organizational stability is as important as organizational change because both these factors find importance in different situations with distinct requirements. Organizational culture and organizational stability are closely related to each other because both are the antecedents of one another. Focusing on developing and maintaining a strong organizational culture often results in the creation of organizational stability in both the short term as well as the long term scenarios. Organizational stability is a pre requisite in the change management processes and should necessarily be present during the implementation of a change within the business organization. Developing a strong organizational culture is a main strategy of showing how the people resources of an organization are the most value reaping and valuable assets available within the enterprise. Developing and maintaining a strong corporate and organizational culture and environment is highly beneficial for an organization when considered from a number of distinct and diverse viewpoints. Firstly, a strong organizational culture should be developed so that the organization can attract talent and create a positive image on the minds of the potential employees as a preferred employer. Also, a strong organizational culture helps to enhance the desire of an employee to remain within the company for a long time and as such decrease the employee turnover and attrition rates in the company. This would mean that the huge expenses of the company related to managing employee attrition, absenteeism and turnover can be managed and controlled in a better manner. Organizational culture is a key determinant of the motivation, involvement and commitment of the employees which are the primary factors required for enhancing the performances of the company both at the individual level and at the organizational level. A positive and supportive organizational culture helps to develop engaged and involved workforces which lead to higher productivity and profitability for the organisation. Building up a customized, visionary and energetic culture also allows for the scopes of the people to recognize their values and become more proactive in the process which drives momentum within the company. It also helps to create a positive view regarding the work responsibilities and fosters synergy and collaboration within different levels and units of the company. Conclusion Thus, it can be observed that organizational culture is a key aspect of any organization and acts as a platform on which the philosophies, visions and strategies of an organization are built on. However, the culture of an organization should be developed and formulated by adequately considering the specific requirements of the internal and external environments’ of the company. The bosom line, however mains that organizational culture calls for a number of investments like that of focus, time and talent which should be made in a way such that they can add to the development of stronger organizational capabilities and support systems. Answer 2: Ethics and Corporate Social Responsibility (CSR) Introduction Ethics refer to the values and principles that are used by an individual or an enterprise to govern the activities and decisions. Organizational ethics or business ethics denote a set of principles or rulers that guide and direct an organization in deciding the policies, strategic and management directions and programs of a company. In the recent day scenario, business ethics act as a main component of the strategic management functions of an organization. The ethical philosophy used in an organization helps it to conduct its business activities in a way that they lead to higher levels of compliance and enhance the reputation, bottom line, productivity as well as sustainability in the highly dynamic and challenging global business environment. Main body A healthy and positive work culture is developed on the basis of the formulation and maintenance of ethical standards and practices within the organization. This not only helps in developing higher levels of legal, environmental and social compliance but also supports the company in improving the moral of the employee groups of the organization which in the long term leads to several financial and non financial benefits like higher employee retention levels and increased productivity and efficiency. Business ethics and Corporate Social Responsibility (CSR) are two distinct terms which are closely interrelated. Both these components are essential for a business to function sustainably and responsibly in a scenario in which the responsible and proactive behaviours and the contributions of the business entities to the societies and communities are highly accounted for. Ethics involves the adherence to the morale and legal principles even if it means giving up on short routes to high economic benefits for the business. CSR, on the other hand, involves the activities that are done by the corporate entities with the aim of giving back to the societies, communities and environment in which they operate. Both ethics and CSR involves displaying a morally conscious and responsible behaviour that adds to the corporate brand image and value of any organization. Every business should take up CSR activities to the permissible degree so as to ensure higher sustainability as well as to create competitive advantage. Both Corporate Social Responsibility (CSR) and ethical behaviours can bring about significant advantages for an organization. These may include attaching customers who are conscious and well informed , thereby boosting the revenue generation and profits of the company, establishing a strong and reliable brand image which will lead to higher brand value and goodwill creation, develop a preferred employer position for the company which would reduce the employee turnover rates and increase productivity , reduce the training and recruitment expenses of the company and also enable the organization to create a talent pool by retaining the skilled and talented employees within the organization. In addition to these benefits, several other benefits may also be achieved through the employment of ethical conducts and Corporate Social Responsibility (CSR) initiatives like creating a better investment position for the company, attracting investors, maintaining high stock prices in the capital markets, protecting the reputation of the company and thereby making the company more appealing for the existing and potential investor groups. On the other hand, if a firm is capable of taking up Corporate Social Responsibilities (CSR) and yet does not invest in such initiatives, then the company starts losing its reputation in the minds of the global stakeholder groups which may lead to high economic losses for the business. Both business ethics and CSR are integral parts of a strong corporate governance process without which it would be very difficult to create corporate value for a business. Also, the non compliance to the ethical and legal requirements and the lack of desirable levels of corporate social responsibility actions can damage the goodwill and reputation of a company which may be very difficult to recover (Shaw, 2007). A loss of reputational and goodwill can also negatively affects the appeal of the business as an investment option for the shareholder groups. A business should take up a responsible management stance for the purpose of stimulating long term growth, mitigating expense and risks , developing anti capitalist and credible sentiments and values and also for using the limited resources available to the company and in the external environment in the most optimal and value generating manner. An organization should essentially involve in taking up corporate social responsibility activities and also ensure that ethical compliance is maintained in every step and function of the business so as to drive the long term growth of the company and create sustainable competitive advantage which would ensure long term success of the business in the continuously shifting and challenging external business situations and contingencies. Figure 2: Business ethics (Source: Hardy, 1996) Conclusion In a corporate world which is disillusioned with new interdictions and concepts like globalization, the significance of business ethics and Corporate Social Responsibility (CSR) is becoming more profound and recognised. It has been identified over the last few years, that the companies which act beyond purely economic and financial profit based motives achieve higher level of success, sustainability and competitive advantage as compared to those companies which are less active in terms of taking up a corporate socially responsible and ethical stance in the management of the business. Focusing on the triple bottom line – people, process and planet and integrating ethical practices surely act as crucial business and corporate strategies which have multiple benefits including financial and reputational benefits for a company. Answer 3: Power and politics in an organization Introduction Energy and effort is incorporated within strategic management mechanism but there are strategies which are not executed appropriately. There are estimates predicting only certain percentage of strategic plans to be actually implemented by firms. This kind of high failure rate is because of some reasons external or internal to an organization. Amongst these reasons, one aspect can be negative impact of power and politics. Strategic goals cannot be accomplished alone but there needs to be proper direction given to execution of organizational strategies. Power is an essential aspect needed for setting forth strategic direction. Organizational politics also plays a key role in context of strategic development. Main Body Politics and power have a critical role towards organizational strategic development. Politics and power is usually associated with legislation and government but it is also observed within organizational system. Rational planning model clearly states that strategic plan is to be delivered by itself. Strategic process is a well planned procedure and power is considered to be one the most important ingredient in this process. Power is highly responsible for appropriate strategic execution or can adversely affect the entire strategic process. There is distinction between politics and power. Power can be stated as a force that affects overall outcome. On the other hand, politics is closely knitted with the concept of power in action. Power school is a framework which helps to determine the impact of power and politics on organizational strategic development. These two aspects greatly influence the process of strategy formulation. It can be stated that usage of politics and power help in negotiating strategies in order to be aligned with particular interests. The effect of power on strategic development can be well outlined with the support of four premises of power school. First premises indicate that strategic formulation is affected by politics and power, whether internal to an organization or being a part of external environment. The next premises of power school indicate such strategies to be of emergent nature. Micro power being the third premise considers strategy to be interplay. It is also stated at times as direct confrontation, mainly in context of political games. On the other hand, the last premise, macro power, views organization to be engaged into their welfare promotion. This is achieved through co-operating and controlling effectively with other firms (Lukes, 2007). As per this premise, organization tends to utilize collective strategies in the form of wide array of alliances and networks. Organizations are also denoted as political systems. Strategy implementation or structuring does not take place within a particular environment but it evolves out of day-to-day activities within an organization. Political environment is a major area of concern for all business organizations since firms are viewed as political systems. This political environment influences an organization in relation to execution of strategy. Strategic change always occurs in a systematic procedure and in this framework power already is a major component. Political mechanisms are used to manage organizational change efficiently. This is exhibited through association or support from elites, control of resources and alliance building. Political measures within a corporate environment are critical because they help in important corporate activities like negotiations and persuasions, politicking and alliance building etc. which are obligatory corporate functions for the organizations operating in the contemporary business world. Power is an essential component in the strategic management process of an organization. It is a useful driver of strategic changes within an organization and thus, also acts as a primary component of strategic management in the contemporary business organizations. Because the formulation and successive implementation of strategies are generally shaped by the use of corporate politics and power, therefore, the development of power schools within companies are identified to have major impacts on the effectiveness of the strategic management initiatives of the same. Both micro power and macro power are necessary for the development of "power schools" within organizations and thus, for driving the success of strategic management and changes. The establishment of suitable levels of power within a firm calls for a wide range of corporate political skills and strategies. Power is necessary for conflict management and for giving a desirable direction to the organization and deciding on the organizational activities accordingly (Schwenk, 1989). However, there may be a number of hindrances and challenges associated with the use of power and corporate politics within a company. An uncontrolled level of power may lead to higher levels of biased and unjustified behaviours and autonomous attitudes displayed by the more powerful entities within the organization and as such, can lead to the exploitation of the less powerful entities belonging to the company. Also, distinct power biases can lead to imbalances within the organizational structure thereby decreasing the overall effectiveness and efficiency of the organization in achieving its principal objectives. The "second face of power", as it is commonly known refers to the dark side of power as an organizational component. While a balanced and controlled level of politics and power can help the organization to achieve empowerment and success, an extreme level of uncontrolled power may lead to the contributions towards the mobilization of unjust and biased behaviours in many ways and aspects of an organization (Jennings and Wattam, 1998). Conclusion Thus, it can be inferred from the above discussion, that both power and political skills are necessary for conducting corporate functions in a benefit reaping way. While power provides for the energy that can help in strategic management, political skills act as the mandatory components that help the management of the organization to implement the strategic management initiatives in the practical scenarios of the organization. However, both power and corporate politics should be employed in a controlled and monitored manner so that the negative effects of these factors like biased behaviours, exploitations and high levels of autonomous and dictating behaviours can be avoided. Answer 4: Evaluation of strategic change Introduction Organizational change can be stated as an alteration in organizational environment, technology, human capital and culture. This form of change is essential for organization in order to stay competitive in the market place. Organizational change can be regarded as a constant force, a threat or opportunity, and reality. Change cannot take place on its own but it requires support of a change agent. Change agent undertakes overall responsibility for change or is the one to structure change initiative. This change agent is also held responsible for efficiently managing organizational change. There are various dimensions of strategic change and leadership plays a significant role in change process. Main Body Change is an aspect which cannot be ignored in organizational or social context. There are different factors causing strategic change. These factors are environmental conditions, technological change, business relationship, changes in political power and people. Environment mainly relates to external and internal business environment of an organization. Stakeholders influences organizational functionality to a great extent. They are the ones at times initiating strategic change within organizational system. Strategic change can also be defined as pro-active change management concept. This change is undertaken in order to accomplish set strategic objectives. The essence of this kind of change can be categorized into three dimensions such as re-structuring, re-positioning and re-vitalising. Strategic change’s essence denotes basic organizational components like organization’s map, culture and business. Change often brings forth revolution within an organizational framework. It is essential for managers to handle such revolutionary change. Change management can be exhibited through collaborating symbolic and rational levers, setting forth a proper strategic direction, monitoring change continuously, dealing with wide array of change management styles and incorporating productive aspects of existing culture. Transformational change is considered to be an integral element of change management. This in turn facilitates organizational empowerment, obtaining commitment from top management, being inclined towards strategic vision, identifying targets and establishing change objectives within mindset of team members. Strategic change program has its importance in various contexts as highlighted in figure 1. Figure 3: Importance of strategic change As per figure 1, focus of a firm is on different aspects such as efficiently utilizing time, preservation, capability enhancement, diversity management, power, scope, maximum utilization of capacity and readiness. Strategic change is of multiple types and it is dependent on two aspects – extent of change and nature of change (Brooks, 2005). Nature of change can be either big bang and incremental. Extent of change comprises of two elements transformation and realignment. The strategic change types have been well represented in figure 2. Figure 4: Types of strategic change According to figure 2, adaptation is the first type of strategic change. Adaptation is a form of change that occurs incrementally and can be aligned effectively with existing culture. Evolution can be defined as a strategic change which encompasses cultural change to be achieved over specific period of time. Reconstruction is stated as rapid change within organizational environment without bringing forth any such cultural change. Revolution basically denotes fundamental changes in context of organizational strategy and culture. These different strategic changes possess different set of conditions that are evaluated by firms. Strategic change is mainly undertaken to acquire desirable profit margins or to incorporate factors that ensure long-term growth. In every scenario of organizational change, there are two types of forces prevalent – forces in favour of strategic change and forces against this type of change. Forces for change can be described as closeness towards clients, flexibility in organizational structure and approach, considering change to be a normal process, networking and informality, working hard towards accomplishing goals and transforming organization into a fun workplace. On the contrary there are other forces which act against strategic change. These forces are negative organizational culture, change complacency, individualism approach, inappropriate process of induction, absence of coordinated information, and complexity in organizational structure, more of rewards and incentives, and large number of meetings to be organized for strategic change. Leadership roles are of high importance during strategic change process. It can be stated that leaders are the key people who can set forth change in the system. Strategic leadership roles are mainly of four distinct types such as advisers, sense making, local change leadership and adjustment or reinterpretation. Middle managers adopt the role of advisers when there is change requirement and there exist restrictions toward such change. Sense-making role of middle managers indicate interpreting well intended strategy that is required for specific organizational part. Local change leadership is all about aligning organizational change at specific local level. Reinterpretation role is adopted by leaders so as to enable strategic relationships and responses. Leaders need to possess specific styles so as to manage strategic change. The styles of change management can be divided into four main categories such as collaboration, direction, participation and persuasion. Managers can adopt any one of these approaches in order to implement and manage organizational change efficiently. Persuasion change style states that support is gained for strategic change, either by commitment or understanding. Collaboration is another style of leading change and it is inclined towards employee involvement in context of initiating and executing strategic change (Johnson, Whittington, Angwin, Scholes and Regnér, 2014). On the basis of participation style, change leaders sustain coordination amongst team members but even focus on delegation of change process’ aspects. In direction style, a specific approach is followed by the leaders to implement strategic change. Prescriptive approaches are at times utilized by managers and it consists of three essential steps. They are unfreezing current behavioural attitudes of team members, moving to the next strategic level and refreezing organizational attitudes at this specific level. Prescriptive approach is a planned change but there is another approach which occurs continuously in organizational system. It is stated as emergent approach and is an evolutionary change process. Conclusion Strategic change as per the discussion is a standardized phenomenon which would occur within organizational system. Change can be regarded as a vital element of overall business strategic management. There are various types of strategic change which are applicable in specific business scenarios. References Brooks, I., 2005. Organisational behaviour: individuals, groups and organization. Harlow: Financial Times Prentice Hall. Hardy, C., 1996. Understanding power: Bringing about strategic change. British Journal of Management, 7, 1, pp. 3-16. Jennings, D. & Wattam, S., 1998. Decision making: an integrated approach. (2nd edition). London: Financial Times Pitman Publishing. Johnson, G., Whittington, R., Angwin, D., Scholes, K. and Regnér, P., 2014. Exploring strategy: text & cases. Harlow: Pearson Education Limited. Lukes, S., 2007. Keywords: power. Contexts, 6(3), pp. 59-61. Mintzberg, H., Ahlstrand, B. W., & Lampel, J., 2009. Strategy safari: the complete guide through the wilds of strategic management. Harlow Financial Times Prentice Hall. Schwenk, C. R., 1989. Linking cognitive, organizational and political factors in explaining strategic change. Journal of Management Studies, 26 (2), pp. 177-187. Shaw, W. 2007. Business Ethics. London: Cengage Learning. Read More