Organization Culture Development and Success of the Organization - Essay Example

? Module Topic Supervisor Organization culture can be described as a USP or “Unique Selling Point” of a firm that differentiates itself from itscounterparts. It can also be described as a competitive or strategic advantage that one firm holds against competition. Organizational culture means the way human resource in an organization acts and performs its duties. The culture in an organization is usually developed by top leadership which is translated to the production workers or managers at the lower level of the hierarchy. Any organization that fails to develop a unique culture fails to communicate its value to its customers and hence loses its vividness in the eyes of its customers. In the 21st, the concept is more important than ever before because of the intensive competition by firm. Not only the firms in the same country are fighting for a same job, but outsourcing has included the foreign firms also in the fight for a job that comes to the market. In the midst of so heavy competition, it has become increasingly important for firms to “Break through the clutter”. No firm can break through the clutter or become vivid unless it has something other than that the conventional competition is offering. Many firms, as a result, have increased their focus on organizational culture. Many are trying to develop a culture that will help them gain an edge over their competition. Organizational Culture, apart from helping an organization in all of these, also help helps an organization in developing the ideal characteristics of its workforce overtime without having to incur the heavy training expense that also entails loss of productivity and may lead to boredom and job turnover. It is also suggest by organizational behavior experts to develop a long term strategy based on an organizational culture in order to achieve firm’s targets and goals. The long term strategy can be supplemented by incorporating several training regimes that are used to make sure that the organizational culture has been properly engraved into the conscience of the workers and everyone in the organization is following the same culture that is yielding synergy and resulting in achievement in difficult tasks and goals which are not possible unless everyone in the organization is following the same culture. (Jin, Drozdenko, & Bassett, 2007) Organizational Culture leads to more efficiency in the organization. In fact, organizational culture improves the efficiency because it gives the sense of direction to employees and tells them how they are supposed to act in a variety of situation. This reduces their response time and helps them focus on the customer satisfaction more that leads to very satisfactory results. This increases organization wide efficiency of the human resource and all the staff in the organization allocates more time to core competencies. This also increases job satisfaction which leads to customer satisfaction and towards profitability of the organization. (Denison & Mishra, 1995) Organizational Culture also affects the knowledge management practices of an organization. Knowledge management is extremely important for an organization as concluded by Toyota Motor Company, UNIX, Microsoft and Mercedes-Benz. One cannot imagine an organization to achieve success if it does not pay any heed to the technology development and knowledge management flows within the organization. It is extremely difficult to assume the success of the organization without the technology factor playing its part. Hence, indirectly organizational culture plays an important role in the development of an organization and its technology management and knowledge management practices which are now considered vital for the success of the organization. So much so that even the large organizations are making their old staff who seemed incompatible to technology are training them to make them work on the technology of the new era. Of course all of this is not possible without organizational culture that encourages learning and development. The following model of knowledge management can be used in the context of organization culture management: Figure 1: Organizational Culture and Knowledge Management Reference: (Alavi, Kayworth, & Leidner, 2006) The paper correctly defines how an effective organizational culture develops a learning organization which is necessary for the success of any organization. In the model illustrate above, it can be seen that organizational values which promote learning leads to Knowledge Management Development Values and instill new values in the organization that makes it more open to learning. Later the community knowledge development approaches lead to an individual’s own development approaches that encourage learning and development in the field of technology. These individual knowledge management outcomes lead to Organizational Knowledge Management outcomes. Hence, one can say that a good organizational culture is necessary for the development of a success for the organizations. This learning process in the fields other than knowledge management works in the same way. In other words, an organization that has a good culture and willing to learn and change is more adaptive to the changes in the environment and can achieve success faster than organizations that are tend to be stagnant and are not willing to learn, innovate and develop. All of this is made possible by a good organizational culture and it can be concluded that it is the organizational culture that plays the most important role in the success of the organization than any other factor. (Alavi, Kayworth, & Leidner, 2006). There are many different types of organizational cultures that different companies followed and achieved success. For example, Bill Gates used to shout at his workers to keep them on their feet. Steve Jobs used to make his workers work entire night so they can finish the project far earlier than their competition. Similarly, IBM created a culture of innovation where every employee was given the responsibility to do nothing, but to think about new innovative ideas for 15% of their daily work time. Hence, IBM became synonymous with Innovation in New Technology. All of these firms achieved with their organizational culture what their competitors could not achieve. Organization development is one of the fundamental outcomes of a good organizational culture Organizational culture is correlated to organizational learning. This again shows that no organization can learn achieve the object of adapting to the new developments in the industry without having a good a organizational culture. Having said that, the organizational culture stems from the top levels of the hierarchy and unless the top management shows the willingness to learn and develop, the lower-level management is not going to show any determination in learning about the new aspects of the organization. A good gesture shown by the top level management in showing the organization culture of learning is by improving and increasing the channels of distribution of information or making the information available to a wider range of audience or people at different level of hierarchy. This will force people at the different level of hierarchy to learn how to use the new information to their and organization’s advantage. This will not only promote an atmosphere to learn, but will also create a unique organizational culture that will allow even the lower level staff to deal with customers and teach them about certain processes that will improve their view of the organization and will bring the organization the achievement of its objective like increase in sales and profitability that is going to boost the organization’s financial health and morale and would lead to better performance appraisal of its workers. All of these forces will result in the creation of a better organizational culture which will help in the creation of a better organization. Organizational culture is not something for large organizations, but history shows that even small organizations have grown exponentially by putting the study of organizational culture into practice. As a result of this many researchers have tried to link it with the profitability and success of the organization and concluded that organizational culture is a force that creates a suitable path for organization to grow and develop. (Huber, 1991) Organization Culture theory is a recent development in the field of organizational study that has sparked widespread interest from experts in the field and practical organizations’ managers alike. Many organizations are now using this information to their advantage and are trying to build a culture that not only supports development, but also that is easy to follow. In simple words, there has been a great and quick rise in the organization culture theory and its application. Managers, these days, are using organizational culture in getting to know what is happening in the organization and using the information to control people working under them, their subordinates organizational culture theory is also studied with great interest by people from non-academia, such as managers, customers and suppliers. All of these are stakeholders of an organization and have a right to know what is happening in the organization. They can then use this information in making their decisions about the organizations. This helps them in making rational decision and choices which maximizes their utility. The market sometimes also looks for this information in order to speculate the fate of the organization. Many investors use the organizational culture to supplement the financial data that they have into making wise investment decision that is needed for wealth maximization or loss minimization. In the past, many investors lost money because were unaware of internal culture of the organization. For example, if an investor does not know how an organization operates, what kind of contingency planning they do and what backup plans they have, it is likely that the investor won’t be able speculate the organization’s response to a change in the market dynamics. This is where the chances of losing money rise and investors can lose some serious money without knowing what is actually happening in the organization. Hence, organizational culture development is necessary for decision making related to all spheres of a business, be it marketing, finance, operations or human resource. (Alvesson, 1991) Culture of one organization might not be replicated by an organization in a different country. The reason being difference in norms, value standards, way of life, culture and the way people respond to different things. For example, Russians value flexibility much more than the Americas. Similarly, there was also stability difference between the people of these two countries. The environment of American organizations is more stable than the Russian firms. Therefore it becomes very difficult to replicate the culture of one organization to another in a different country. Hence, there can only be one Microsoft, Apple, IBM and McDonalds. Even MNCs use different organization culture for their subsidiaries in different countries in order to gain strategic advantage. (Fey & Denison, 2003) As an organization becomes more centralized, its compliance with ethical standards tends to decrease. In an organization where there is a culture of power distance, the compliance with ethics is low because decisions are made by people who are not closer to the action and are mostly concerned with the financial impact of the decision making rather than on the ethical aspects of the decision. This is an important finding as it can be applied to Multinational Corporations and large bureaucratic firms. These firms should try to create a culture of decentralization and should promote ethical behavior from their own actions for their subsidiaries to follow a approach that reflects the compliance with moral standards. It is also worth noting that an organization where all the achievements are concentrated at the top levels or all the achievement claims are taken by the top management also tends to be unethical because people working in the organization knows irrespective of the outcome, top management is going to come and take the credit or blame of the action, so there is no need to make tough decisions which might risk the employment of lower-level management and staff. Hence, an organizational culture which focuses on low power-distance tends to build the goodwill of an organization over a span of time and helps the firm to be more profitable in the future. (Jin, Drozdenko, & Bassett, 2007) The reason why organizational culture is considered to be a successful tool by a manager is because it is cost effective way of training workers. It involves making people more compatible with the organizational goals and focusing them on their core competencies without diverting their focus on useless long training hours that can be tedious, boring and wastage of productivity. Hence, many organizations these days are using the approach of organizational culture to develop and train its employees. The effects of organizational culture are long-term unlike training and guidance. It inculcates the spirit in the organization’s human resource that remains with them till they work for the organization (Harris, 1994). Many organizations often use organizational cultures that remove the monotony of work from the organization. For example, UniLever has developed an autocratic culture where the employees are told what they need to do and what is the deadline, the rest is up to them whether they finish the work in few hours or finish it till deadline. This autocratic culture has helped UniLever develop leaders which also leads to career development of employees and leads to further motivation and job satisfaction. In the end, it can be safely concluded that an organizational culture is a cost-effective substitute to training and can lead an organization achieve its long term and short term goals by setting up a value system in the human resource of the organization that is a guide for them to act in a certain way. It can also help in promoting organization wide efficiency which has a positive correlation with profitability. All in all, developing a good organizational culture can be a differentiating factor between the successful and unsuccessful organization. In 21st century, many writers have talked about the need for developing a competitive and strategic point that leverages a firm against its competition. A good and transparent organizational culture definitely helps the organization to differentiate itself strategically from the competitors. However, the duty of creating and maintaining a winning culture lies with the top management which can promote it through its own practices. Research has concluded that an organizational culture is only effective if the top level of the organization also follows it and there are no hierarchy level differences in following the same organizational culture. In other words, an organization should work as a mechanism where there are no power differences or hierarchical differences among people having different span of control and everybody is involved in the same process of following the organizational culture through their action and the way they deal with the stakeholders of the organization such as suppliers, customers and members of the community who have interest in the how the organization is carrying out its operations. Hence, it can be said that an organizational culture is an important determinant in the success of the organization in this era. Even the critics of organizational behavior who believe that an organization’s success if a function of good marketing and finance efforts are succumbing to the fact that organizational culture is definitely a force that inculcates in an organization the spirit to grow and achieve success. Hence, one can say that whether anybody likes it or not, organizational culture has definitely become a widely used concept for students, organizations, managers and other stakeholders alike. Works Cited Alavi, M., Kayworth, T., & Leidner, D. (2006). An Empirical Examination of the Influence of Organizational Culture on Knowledge. Journal of Management Information Systems, , 22 (3), 200-224. Alvesson, M. (1991). On the Popularity of Organizational Culture. Acta Sociologica , 33 (1), 31-50. Denison, D., & Mishra, A. (1995). Toward a Theory of Organizational Culture and Effectiveness. Organization Science, , 6 (2), 204-223. Fey, C., & Denison, D. (2003). Organizational Culture and Effectiveness: Can American Theory Be Applied in Russia? Organization Science , 14 (6), 690-700. Harris, S. (1994). Organizational Culture and Individual Sensemaking: A Schema-Based Perspective. Organization Science , 5 (3), 309-321. Huber, G. (1991). Organizational Learning: The Contributing Processes and the Literatures. Organization Science , 2 (1), 100-115. Jin, G., Drozdenko, R., & Bassett, R. (2007). Information Technology Professionals' Perceived Organizational Values and Managerial Ethics:. Journal of Business Ethics , 71 (2), 150-159. Read More