Organisational Culture & International Management: Paper Converters Limited - Essay Example

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Organisational Culture & International Management: Case Analysis Table of Content Executive Summary................................................................................4 1.0 Introduction …..................................................................................5 1.1 Aims of Study...................................................................................5 1.2 Objectives ….....................................................................................5 2.0 Organisational Culture.......................................................................6 2.1 Advantages and Disadvantages of Organisational Culture........................6 2.2 Dyson Paper's Organisational Structures & Cultural Trends......................7 2.3 Jones Sales Agency's Organisational Structures & Cultural Trends............8 3.1 Issues in the Merger Between the Two UK Departments..........................8 3.1.1 Structures & Cultural Clash..............................................................9 3.1.2 Management & Unity of Purpose.......................................................10 3.1.3 Ethical Differences..........................................................................11 3.1.3 Motivation.....................................................................................11 3.2 Towards Resolving the Issues With the Merger …..................................12 3.2.1 Team Building................................................................................12 3.2.2 Definition of A New Management Structure for Paper Converters...........13 3.2.3 Formulation of Common Systems and Structures................................13 3.2.4 Communication & Interpersonal Interaction........................................14 3.2.5 Supervision...................................................................................14 3.2.6 Training........................................................................................14 4.0 Zambian Joint Venture.......................................................................15 4.1 International Management Issues.......................................................15 4.1.1 Grey Areas in IJV Agreement..........................................................15 4.1.2 Ethical Rules Systems....................................................................16 4.1.3 Poor Information Flow Systems & Lack of Control..............................16 4.2 International Cultural Issues..............................................................16 4.2.1 Disregard for Cultural Dimensions....................................................17 4.2.2 Power Distance Issues....................................................................17 4.2.3 Uncertainty Avoidance Lapses..........................................................17 4.2.4 Role Playing Issues.........................................................................18 4.3 Towards Improving the Zambian Joint Venture......................................18 Conclusion.............................................................................................18 References.............................................................................................20 Executive Summary This paper provides an insight into the major organisational behaviour problems being faced by Paper Converters Limited. The company is the culmination of a merger between two companies with distinct specializations. However, a move to a joint premises and the establishment of an unsuccessful international branch has prompted an enquiry into the causes of issues in the company. The paper identifies that there are major organisational culture issues between the two entities and this spans from the clash of cultures of the two departments. Also, the failure of the management of Paper Converters to take decisive action has led to major problems. This has affected motivation and performance of the organisation. It would be appropriate to integrate some measures relating to team building like communication, definition of conflict resolution systems and the formulation of a unified cultural system. This could be complemented by flexible supervision systems and training. Also, it is apparent that there are some important control and structural issue with the international joint venture Paper Converters has in Zambia. They will need to redefine the terms of the venture and rectify grey areas in their contracts. The management of Paper Converters need to understand the Zambian culture, create a new ethical framework and information gathering system and also seek auditing partners with international exposure to supervise their Zambian joint venture. 1.0 Introduction Paper Converters Limited is a business that came about as a result of a merger between Dyson Paper Limited and Jones Sales Agents Limited. The two entities have leaders who hold two distinct philosophies about organisations and work efficiency. Due to this, they both upheld different organisational standards. After the merger, a few issues occurred in the organisation. The expansion of Paper Converters to a foreign country, Zambia also came up with distinct issues and matters relating to international management. This paper is based on a hypothetical case, where the writer is being hired as a student consultant to deal with the issues presented by the two managers who represent the merging entities. The paper will use theoretical concepts and ideas in the fields of organisational behaviour, international management and cross-cultural management to rationalise and critique the actions of the case study at hand. 1.1 Aims of Study The aim of the paper is to critically analyse and evaluate the case study in order to arrive at conclusions about the approaches used by the various parties in the case study at hand. 1.2 Objectives In attaining the end of the research, the following objectives will be examined: 1. A critical evaluation of the organisational culture and its trends in Dyson Paper, Jones Sales and Paper Converters. 2. An examination of the cultural alignment issues and matters in Paper Converters and a view of how they could be resolved. 3. An analysis of the international management issues relating to the Zambian expansion drive of Paper Converters. 2.0 Organisational Culture Organisational culture refers to the norms, values and standards upheld by a given organisation and it marks the pervasive attitudes and tendencies of the members of the organisation (Deal and Kennedy, 2000). Organisational culture is also defined as “that which grows or emerges within the organisation and which emphasises the creativity of organisational members as culture retainers, perhaps resisting the dominant culture” (Brown, 1998). Professor Edgar Schein, seen as the father of organisational culture defined organisational culture as the pattern of behaviour in an organisation inspired by the values and norms that is based on the collective beliefs and assumptions of the people in the organisation (1985). To Schein, organisational culture is manifest through the pattern of behaviour and symbols of the organisation. 2.1 Advantages and Disadvantages of Organisational Culture There are several advantages of organisational culture. This relates to how it affects the collective actions and synergistic effects on the people in the organisation. The advantages of organisational culture include: 1. Motivation: Organisational culture helps in building a high degree of collectivism amongst employees of an organisation and this helps the member to attain optimum results (Lamb, 2011). 2. Loyalty: Organisational culture leads to a high degree of cohesion and builds loyalty (Schein, 2010). 3. Productivity: Organisational culture helps to increase productivity because the members find the best ways of doing things quickly and conveniently under the corporate culture that is placed upon them. Aside the advantages of organisational culture, there are some disadvantages of organisational culture that can make it a negative thing to the organisation. They include: 1. Groupthink: Groupthink refers to a situation where all members of a group approve of something without giving it a critical thought and analysing it appropriately (Martins, 2009). 2. Anti-Innovation: Organisational culture can create a platform where members of the team can stand up against innovation in an organisation. 3. Resistance: Organisational culture can be an avenue through which members of an organisation can resist certain facets of the top level management. This leads to a clash between the corporate culture and the organisational culture and the result could be destructive for the organisation (Brown, 1998). 2.2 Dyson Paper's Organisational Structures & Cultural Trends Alan Dyson comes from a production and technocratic background. Due to that, he seems to believe in specialization, division of labour and operational efficiency. In his organisational setting, there is the need for structure where there is clearly defined roles and control. The organisational culture of such an entity is likely to be centralized. A centralized entity is one where the power is concentrated in the top level management and they maintain a strong and firm control over the rest of the organisation (Wood, 2009). In such an entity, the organisational culture is based on attaining results and things are very factual in nature. There is no room for informality and things are put the way they must be. Results are put ahead of other things which are seen as unimportant. Things are fixed and mechanistic in nature. There are rigid structures. And the organisational culture is steeped in attaining results, meeting strict requirements and doing things to specification. The focus is on loyalty and productivity. Things like innovation, participation in decision making and questioning of authority are discouraged in such centralised organisational cultures. 2.3 Jones Sales Agency's Organisational Structures & Cultural Trends Jones on the other hand seem to work in a field where innovation and dynamism is important and central. The focus of an entity like his is to build a culture around an emergent strategy. An emergent strategy is one that is flexible and integrates things that comes up in the external environment (Scott, 2011). The organisational culture is meant to be one that focuses on democratic questioning of ideas, innovation and contribution by members of the group. Resistance is permitted and ideas are integrated in such flexible organisational cultures. 3.1 Issues in the Merger Between the Two UK Departments of Paper Converters As identified in 2.2 and 2.3 above, the two UK departments of Paper Converters Limited are remnants of two very distinct organisations that had cultures built on two very different philosophical view points. They operated within two separate cultural contexts until the merger. After the merger, the two of the departments existed separately on two distinct premises in the UK. This means that they were mainly different and structurally distinct. There are major problems that were inherent in the way the two entities operated. The current conflict between the two departments of the UK departments of Paper converters seem to be the root of some important and significant differences that exists within the structures, fabric and culture of the organisation. The fact that the two departments are having conflicts is just a tip of the iceberg. It provides the impetus for further investigations and diagnosis to identify the real challenge on the ground in order to attain results. 3.1.1 Structures & Cultural Clash Organisational structure refers to the way power and authority is distributed within an organisation (Paddington, 2012). In the case of structure, it appears that there are two inherent issues that are causing the conflict. First of all, there is the issue of the two organisations running totally different structures. The Production and presumably the Administrative unit seem to be centralised in nature and maintains rigid structures. This is in direct contrast with the very flexible and orientation innovated system maintained by the Sales department. This can lead to so many practical problems and issues that will almost certainly fuel a conflict between the two constituent parts of Paper Converters. Secondly, it appears that there is no unified plan for the organisation to follow in order to unite the two different cultural components. This leads to an inevitable quest for power and control with each group hoping that the other group would abandon its own culture and take up their own group's culture. 3.1.2 Management & Unity of Purpose In scientific management, the core concern is to promote unity of purpose and maintain a unified chain of command (Armstrong, 2011). “The role of management is to facilitate the fullest achievement of purpose through the coordination of effort and the promulgation of the corporate idea” (Sheldrake, 2004). This means that management plays an central role of unifying all the different components and units of the organisation. Coordination is a a core function of management. Murugan states that “coordination is the management of interdependence” (2009). There are different kinds of interdependence. Pooled interdependence is the outcome of units performing in different areas altogether but working under one management (Murugan, 2009). The merger of the two companies, Dyson Paper and Jones Sales created a unique and distinct entity. Thus, Paper Converters is an entity that is different from any of the two entities. As such, the managers of the two companies will need to come together and ensure that the two entities do not exist as independent units but as a a single cohesive unit with the same vision and the same purpose. The managers, Mr Dyson and Mr Jones would have to ensure that the merger does not exist only on paper. Rather, the merer must reflect in the informal as well as the cultural components of the organisation. Without this, there is bound to be conflicts and tensions and this would lead to destructive competitions that could hamper results. Thus, there is the need for the management of Paper Converters to come to a resolution on setting the right structures in place to promote coordination both in the formal and informal sense. 3.1.3 Ethical Differences From the way the two different components of Paper Converters Limited are operating, they seem to have major ethical and value differences. These ethical and value differences are stemmed in the flexibility levels that they both think must exist. This has led to a spate in arguments and conflicts. 3.1.3 Motivation Motivation is what arouses and sustains interest in a given action (Stevenson, 2009). Herzberg defines two types of motivation: motivators and disatisfiers (Akridge et al, 2012). The motivators are the things that keeps a person inspired and interested in doing what s/he does. The dissatisfiers or hygienic factors are those factors which when absent, makes it difficult to work hard and perform according to the rightful expectation. In this case at hand, organisational culture seems to be the kind of atmosphere that both departments have been used to since they got employed in the organisation. The organisational culture defines the kind of atmosphere that both parties are used to, which enables them to perform and attain the best results. In other words, they have each adapted to the way they do things and the atmosphere is such that it allows them to get interest and drive to attain the organisational targets that they have been given. Whilst they both existed individually, they built the appropriate structures and it helped them to add on to their motivation levels and adjusted to each other. However, after relocating and working on the same premises, the organisational cultures, which helped the workers to attain optimum results are being threatened. In the context of motivation, this new trend has caused them to lose the atmosphere in which they work best. As such, the organisational environment in the new unified premises is no more a system for effective and efficient work. On the contrary, the new organisational environment in this new premises has become a dissatisfier. It has taken away what used to lead to motivation and has replaced it with a trend of conflicts and disagreements. This is clearly a clash of cultures and needs to be addressed appropriately in order to restore Paper Converters to its former position as a successful organisation with a strong and effective culture. 3.2 Towards Resolving the Issues With the Merger From the issues that have arisen in the merger, there are some structural changes that needs to be accomplished in order to eliminate the conflicts and also improve the situation on the ground. This would enable the organisation to meet its ends and attain the best results. 3.2.1 Team Building Tuckman identifies that in order for teams to flourish, they often go through forming, storming, norming and performing (Schwalbe, 2009). With this theory in mind, the management of Paper Converters should understand that the relocation marks the forming stage of team and group dynamics. Now, the two departments are in the storming stage. So it is up to them to come up with a strategy to get them to vent out and discuss things. This can be done through constructive activities like communication, supervision, definition of roles and joint interpersonal activities. 3.2.2 Definition of A New Management Structure for Paper Converters There is the need for the management of Paper Converters to define a single unified organisational culture for the two entities. This will involve the definition of a new organisational structure which will define the reporting structures and the command structures. After that, there is the need for the definition of the clear obligations and goals of the organisation. This will show how the different units and components will interact with each other and from there, there would be the definition of the way things could be carried out. 3.2.3 Formulation of Common Systems and Structures When the organisational chart is defined and we know how each of the units would relate to each other, there is the need to define a set of values that would be the yardstick for behaviour for both departments. This will help provide a transparent system through which all the members will interact with each other and work to attain the best results. The process of drafting a common organisational value system should be democratic and this should include the inputs of all the different units of the organisation. This will help resolve all the different conflicts and also assist in the creation of a framework for interpersonal relations. 3.2.4 Communication & Interpersonal Interaction There is the need for the creation of specific communication systems where grievances will be reported to relevant authoritative figures for redress. This could be the human resource management unit and other units. This will enable the aggrieved team members to present their case relating to tensions within the organisation and also lead to the addressing of such issues. Also, there is the need for interpersonal interactions like team rotations and the like to help the people from the different units to adjust and get to know each other. Team rotation involves getting people from the different units to work together on projects and other activities to attain results. 3.2.5 Supervision A supervisor is the first line of management and they form a direct link between management and the working core (Mendel, 2010). Supervisors need to be given principles and ideas that would help to link the different groups. They should be encouraged to listen and try to understand cross-functional cultures. This will add up to the development of an appropriate organisational culture. 3.2.6 Training This could be done to get the two opposing units to understand each other's views and ideas. This can help to accelerate adjustments in both teams and help them to move from the storming phase to the norming phase where they would all work for the attainment of optimum results. 4.0 Zambian Joint Venture From the Zambian operations, it is conclusive that there are some issues with international management and cross cultural management. 4.1 International Management Issues International Management relates to the use of management techniques to monitor and control a business unit in a foreign country (Mead and Andrews, 2009). In order to come up with an international management strategy, a business must decide between using localisation or globalisation approaches to manage (Mendall, 2008). In this case, it is apparent that the management of Paper Converters are judging the people of their Zambian subsidiary according to UK standards. The fundamental issue relates to the fact that they have instituted a reporting structure and a reporting system that was developed in the UK in a country that has structures and systems which are overwhelmingly different from that of the UK. This is globalisation as opposed to an attempt to localise and base management on local Zambian standards. Due to this, there are major issues. Some of them are discussed below and evaluated accordingly 4.1.1 Grey Areas in IJV Agreement The international joint ventures do not seem to set out clear management structures. So the company has a structural issue and there are many grey areas. Through this, it seems the Zambian representatives of Paper Converters have taken advantage and Paper Converters also lacks the power to compel them to meet their requiremetns 4.1.2 Ethical Rules Systems It appears that there are major problems in the observance of British accounting and business conventions in Zambia. Due to this, the demands and requirements of Paper Converters are not being observed appropriately. The Zambian partners seem to be running the organisation according to principles that are different from the normal UK GAAPs of Accounting and Corporate Governance. 4.1.3 Poor Information Flow Systems & Lack of Control It seems that there is a general poor information and control mechanisms in the Zambian company. Paper Converters will be better off if they get real time information about transactions and give their views as soon as they get it. Secondly, they need to have independent audits and internal audits to ascertain the trends and actions that are carried out. In that sense, a global auditing entity with a branch in Zambia that observes international standards might be desirable to help in supervision and control 4.2 International Cultural Issues. The management of Paper Converters seem to be judging their Zambian partners according to the cultural dimensions of the UK. Although Zambia is a British Commonwealth nation, the citizens behave significantly differently from the people of the UK. Various reasons could be attributed to this variance. And the use of cultural dimensions can provide clues on how they can vary their management systems and structures. 4.2.1 Disregard for Cultural Dimensions Hofstede identified that there are five key things that define the different cultures for people around the world. They include: 1. Individualism V Collectivism 2. Power-Distance Index 3. Masculinism V Feminism 4. Uncertainty Avoidance 5. Long Term Orientation 4.2.2 Power Distance Issues Zambia has a high power distance (Mwila, 2009). Power distance on Hofstede's scale refers to how subordinates expect to be distanced from their superiors. This implies that in Zambia, subordinates are very much distanced from their superiors. This is evident in the IJV due to the the absence of levels of authority in expenditure, resistance to segregation of duties and lack of authority in procurement indicates that there might be one single dominant personality in the Zambian Joint Venture who overrides authority. This shows that such an individual expects all followers to be distant. If any change can occur, this must be done to prevent it. 4.2.3 Uncertainty Avoidance Lapses Mwila (2009) identifies that Zambia has a low uncertainty avoidance system and most of the country's actions are not really time bound. These problems are showing themselves in the area of poor management reporting as well as the issues with appointment of senior managers. 4.2.4 Role Playing Issues Roles in the Zambian society are defined strictly and this means it is more of a masculine entity (Mwila, 2009). Since these things are disregarded, it is apparent that the Paper Converters have disregarded some significant cultural issues. 4.3 Towards Improving the Zambian Joint Venture There are some recommendations that could be invoked to help improve the operations and performance of the Zambian IJV of Paper Converters. They include: 1. Redefining the terms of the international joint venture and rectifying the grey areas. This will show clearly what Paper Converter's scope of authority is and they can exert their power. 2. The management of Paper Converters need to understand the cultural systems and structures of the Zambian society. From there, they can formulate rules and supervisory frameworks to run the Zambian company. 3. Definition of a clear-cut ethical framework and the attainment of more control and real time information. 4. Attainment of Zambian partners, particularly an auditing firm in the Big Four to audit and supervise aspects of the Zambian operation. Conclusion There are fundamental issues in the clash of cultures between the two departments. There is the need for adjustments through team building, communication and conflict resolution to address the issue. Also, there are major control and structural issues with the international joint venture in Zambia. There is the need for the management to redefine the contract, understand the Zambian culture and create a new ethical framework that they can control. Paper Converters need to seek auditing partners in Zambia to oversee their interests. References Akridge, J. T., Barnard, F and Dooley, F. 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