Organizational Culture - Essay Example

?Organizational Culture Organizational Culture Introduction The primary objective of strategic leaders is to formulate and sustain the organizational characteristics which would endow and support collective effort. And the most essential element among those is organizational culture. Often the organizational culture is characterized as having three phases; behavior and artifacts, values, and assumptions and beliefs (‘Strategic Leadership and Decision Making’). Organizational culture has great influence on the streamlined decision making process. To illustrate, in a centralized organizational structure, the decision making power is vested in the hand of top level management. On the other hand, in decentralized organizational structures, the decision making power is distributed as down as possible to the first phase of chain of command. The organizational culture provides the members of a firm with meaning and regulations for behaving within the organization. In the same way, a firm’s history together with unwritten rules also constitutes a significant part of its culture. On the other hand, some organizational cultures are so strong that they dictate the character of the whole firm. The organizational culture has the power to influence the decision making as it articulates informally through direct and indirect statements what the management wishes. The culture, sometimes, consists of explicit statements of values, beliefs, and customs got from top-level managements. Strategic Transition Strategy can be defined as the overarching goals and objectives of a business. The strategy decisions of a company affect its line of business and its internal operations. It is much difficult to predict exactly what happens when the organization alters its strategy. However, organizations come across some positive and negative effects when undertaking a strategic change. Importance Organizational strategy controls all managerial decisions from the front line to the board room. Strategic policies play the important role of guidelines to the owners and top-level management in achieving their grand expectations in a more practical way. Changing the strategy of an organization can alter the manner and mode which the organization operates in, affecting everything from organizational structure to the daily practices of employees. Process The process of a corporate strategic transition by an organization can be divided into four distinct steps such as planning, implementing, monitoring, and review. At the planning process, the executives set a strategic vision with concrete and time-bound objectives and aims. Suitable research and testing must be carried out at this stage to make sure the viability of the change. At the implementations stage, the changes must be put into action in accordance with the plan. The monitoring stage includes a continual process of supervising and examining that the plans are working. Finally, the review phase analyzes the progress of the working of the plan and decides whether the changes must be sustained or changed yet again. Positive Effects Changing the strategy of an organization can result in several positive effects. New strategic guidelines help an organization to easily acclimatize to the changing environments of the marketplace. New business strategies assist a company to execute its business more effectively and cost efficiently. They help a company to invest into a new, more profitable trade or market segment. Besides, with the help of changes in the strategy, a stagnant company can retrieve its earlier growth rates. Negative Effects However, all the effects are not positive and there are negative effects too. Organizations face the major issue of resistance from the internal employees against implementing effective strategic changes. There are certain people who strongly oppose any kind of alterations to the status quo or to their daily practices. In the same way, there are also chances for an organization to end up in a poorer condition due to strategic changes. Considerations Adequate changes in the strategic plans of an organization are necessary for the successful operation of the organization. Market conditions, technology, and other factors like operational trends do not remain constant for a long time. They must be efficiently altered to ensure the effectiveness of the business operations. A specific example for the organizational strategic change is IBM. Its organizational change strategy practice is one of the global businesses with practitioners around the globe supported by the global delivery model (Organization change strategy: IBM). Strategic changes have enhanced the IBM’s consultants in creating value for clients and serving as trusted business advisors. There are chances for organizations from different cultures to merge together. While merging the organizations at first, both the organizations have to agree on the term of acculturation. As Locke (2000) states, acculturation consists of two elements: the intention of maintaining one’s own cultural identity and the intention of adapting an affiliation with the other culture; and these two factors constitute four different types of acculturations: (i) Integration, (ii) Separation, (iii) Assimilation, and (iv) Marginalization (p. 430). Both the organizations should agree on deciding which type of acculturation is to be put into action. The merger will be effective only when there is a cultural suitability. The procuring organization should permit the merging organization to sustain its sovereignty to constitute a successful merger. Cultures vary from one to the other because of each one’s confrontation to change. The strongest disagreement to alteration characterizes cultures of low individualism and high uncertainty evasion. Thus, directors should take the cultural characteristics of both the merging organization and the acquiring organization into consideration. For an instance, if an American organization acquires a Mexican organization, understanding the characteristics of any one of the organization is not the only the requirement in the acculturation process; but it also involves understanding the cultural gap between the two organizations. Besides, the system selected for acculturation also acts as an important factor in the effective accomplishment of merger. And so, action for any cultural changes should commence from the top-level management. And if the merging process is not carried efficiently as mentioned above, it will lead to cultural conflicts in mergers. Such situations will affect the success of the merger and will lead the organization into a worse condition. An example will help in illustrating facts about the cultural conflicts with regard to acquiring another organization. There had been high expectations about the Daimler-Chrysler merger. Both companies were operating pretty well and indeed Chrysler was on of the most profitable American automakers. Both firm had an anticipation for “merger of equals” in order to gain advantage from the influence and potentials of one other. However, the operation after the merger was entirely different from what was expected, specifically of the Chrysler. The stock prices started to fall shortly after the merger, and major layoffs started to take place. Conclusion In total, organizational culture is an important element in the operation of a firm. It consists of organizational values, conviction, and ideas about what type of objectives that members of a firm should pursue. It explains the suitable standards of behavior the organizational members should practice to accomplish the objectives. Thus it formulates and explains the importance of appropriate systems of shared meaning that enhances the members to work together towards the desired results. References ‘Strategic leadership and decision making’. National Defense University. Retrieved from http://www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/pt4ch16.html ‘Organization change strategy’. IBM. Retrieved from http://www-935.ibm.com/services/us/en/business-services/organization-change-strategy.html Locke, E. A. (2000). The Blackwell handbook of principles of organizational behavior. Wiley-Blackwell. Read More