An Examination of Organisational Culture - the Regent Hotel - Article Example

An Examination of Organisational Culture - the Regent Hotel A coherent culture is important for the effective functioning of an organization (Kemp & Dwyer, 2001). A distinctive culture ensures that all are working towards a common goal and provide the basis of competitive advantage. Organizational culture can also resist change and become impediments to growth. Edgar Schein adds that such organizational cultures operate unconsciously and define the organization’s view of itself and the environment. Exotic and Sympa nurtured two different organizational cultures and they also differed in their underlying assumptions, values and norms. Both aimed to provide high standards of service even though their approaches were diametrically opposite. To have a smooth merger, it is essential to understand and analyze the two diverse cultures including its relationship to the hotel’s performance. It would also explore the role of the founder in the development of the organization in each case. Exotic applied the traditional approach to strategic management where power and decision-making reside at the top-level of the organization. In such a case, Kemp & Dwyer contend, organization members are more doers than thinkers. While employees’ actions are controlled and predictable, and their roles are defined by their position in the organization, it stifles creativity and the avenues of growth are shut out. There is lack of motivation and commitment as employees are unable to make any contribution to the organization or participate in any way. Culture is a set of important understandings that members of a community share together but in the case of Exotic, everything was thrust upon. Kemp and Dwyer quote that an analysis and recognition of surface culture should be the first step in strategy formulation. Organizational paradigms or artefacts are the most visible and the most superficial manifestations of an organizational culture. Exotic considers every employee an important member of the family while Sympa considers them as the most important resource and each staff member is a profit centre. Both value and train the employees, both are committed towards their employees. Exotic followed rituals and routines, one of the six artefacts of the culture. They practice the ritual right from recruitment, training, further development, promotions and induction as managers. These formal processes according to Robbins et al., are rituals which include relatively formal organizational processes (cited by Kemp & Dwyer). Such rituals are routinised activities that maintain cultural beliefs and values. The Group’s slogan ‘Exotic Spice’ conveyed the shared attitude and values and symbolized the vision of quality. As a matter of routine, when the staff succeeded in meeting the criteria of excellence in service, they were rewarded. Kemp and Dwyer point out that such recognition not only serve to reinforce to others that organizational culture has to be respected, it also demonstrates commitment to the culture. Even the one-day orientation program for the new staff was a ritual with the implementation of the ‘Spice’ principles, information about the hotel and glimpse of its different areas and aspects. Hence, at Exotic, all the underlying assumption, values and norms were conveyed through rituals. Exotic also used stories to reflect their culture and influence other people’s understanding of situation and events (Kemp & Dwyer). The staff had put up a picture of the owner in the staff cafeteria and his messages were displayed all over. Even the dress code, etiquette and personal appearance were spelt out. Sympa on the other hand, identified the staff as the most important resource. They believed in innovation and guest service and satisfaction was priority. Research demonstrates that there is a link between the focus of power in organizations and the perceived ability of such individuals to reduce uncertainty. They attracted the best talent in the industry which conforms to the theory that only service-oriented people are employed who identify with the corporate objectives (Kemp & Dwyer). Power at Sympa resided in each and every person. They were empowered to use initiative and contribute to the decision making process. Such a cultural approach has the power to reduce staff turnover, reduce guest concerns and achieve distinctive service quality. While Exotic only provided further training to those who got through the first test, at Sympa, everyone enjoyed the benefits of continuous regular education. Formal strategy like that of Exotic displays a weak culture because a strong culture would require less management needs to invoke formal rules and intervention to guide employees’ behavior. As Sympa considers its human resources important, according to Kemp and Dwyer, they would be able to adapt and respond to internal and external changes. This is the reason that whenever the Sympa employees are transferred to another Sympa hotel they had to retake courses but it was not difficult for them to adapt to the local Sympa culture. Cultural approach extends the benefit of collective participation as in the case of Sympa. The top management just set the game plan and allowed the individuals to determine the details of implementation while at Exotic power and decision-making resided at the top of the management. Soft control is more subtle and a more powerful means of influencing behavior. Firms are usually created by entrepreneurs who are normally very strong-minded, and who already have underlying assumptions on how to run the organization (Schein, 1983). Both the owners contributed in their own ways and both met with success. The owner of Sympa created mini-entrepreneurs with his innovative approach. He stimulated innovation. He adopted the Management by Objectives approach which enabled managers to identify exactly what was expected of them. He gave a free hand to the local managers because he visualized the importance of integrating local culture. This inculcated a sense of confidence and accountability in the local managers. He encouraged recruitment of young people who demonstrated entrepreneurship qualities. Even though the owner of Exotic called every member a part of the family, authority was centralized. He adhered to the principles with which he started the hotel. He was interested in developing good managers but without sharing ownership. He wanted open communications but did not encourage innovation. The owner of Exotic deliberately chose to build an organization that reflected his own biases while the owner of Sympa created the basic organization and then left it to the subordinates to functions it in the way they deemed fit. In both cases, according to Schein, the process of culture formation is complicated as there is conflict with their own personality. In the case of Exotic, because the owner is in authority, the subordinates will tolerate his behavior even though the organization culture will develop complex assumptions. Both founders had a common vision – customer satisfaction. Being an own directly accountable for the organization, he had the potential to absorb and contain the anxieties and risks, which the owner of Sympa did not have to as he relinquished authority with the local managers. Being the ultimate stakeholder, the owner of Exotic exercised his right to do things as he wanted. This reflected his own values and biases on how to build an effective organization. He was concerned about the staff but expected them to follow his instructions and visions to the minutest detail. Exotic developed a traditional approach to strategic management while Sympa had a cultural approach. An analysis of the strengths and weakness of the two diverse organizational cultures would facilitate fusion of the two hotels. Ownership should not remain with a single person but the powers should be with a board of members. This is because in the event of shocks and risks, the onus falls on the owner as in the case of Exotic (Schein) while in the case of Sympa, this has to be borne by the local managers in charge who are entrepreneurs in themselves. Rituals help to maintain cultural beliefs and values. Regular rewards and recognition were granted. Stories are good to remind each other and others of the success and events of the organization, which Exotic relied upon. It legitimizes type of behavior and reinforces the ideal of a satisfied guest. These also work as effective control mechanism, according to Kemp and Dwyer but reward system can be a barrier to success of new strategies. At Sympa everyone worked together as a team to meet guest needs. Exotic uses overt control while Sympa’s underlying assumption is that tight control discourages daring and initiative. Behavioral control can be exerted through training but Exotic extended further training only when they passed the first test while at Sympa everyone enjoyed the benefits of continuous regular education. Staff at Sympa is considered profit centers without whom the service quality cannot be achieved. Culture permeates every aspect of operations at Sympa, which conveys a sense of identity to the members and holds the organization together. Sympa recruited young people and empowered them to take decisions. It inculcated confidence and satisfaction that they could contribute to the organization. The cultural approach breaks down the barriers between thinkers and doers. Decentralized power structures and shared goals are the salient features at Sympa but it works well only with enthusiastic and informed people. It takes a long time to implement. It fosters a very strong sense of organizational identity which can hamper growth. It becomes difficult to recruit new people at the top level hence there should be a strategic use of culture. Motivation and empowerment was the greatest strength of the cultural approach adopted by Sympa. This conforms to the principle that strong cultures help business performance because they create an unusual level of motivation in employees (Flamholtz, 2001). Research also demonstrates that culture explains organizational effectiveness and in turn financial performance when four key areas are efficiently managed. These four areas include treatment of customers, treatment of human capital, standards of organizational performance, and notions of accountability. Hence, to ensure optimal performance and with a long-term vision in mind, the strategic use of culture should be done. While a board of governors should have the overall control, managers should also be given independent charge. Inter-hotel transfers should be smooth which can be implemented through training. Culture should be uniform across all hotels but motivations and encouragement is essential. The strengths from both the approaches should be adopted for the right fusion of cultures. References: Flamholtz, E (2001), Corporate Culture and the Bottom Line, European Management Journal Vol. 19, No. 3, pp. 268–275, 2001 Kemp, S & Dwyer, L (2001), An examination of organisational culture - the Regent Hotel, Sydney, Hospitality Management 20 (2001) 77-93 Schein, E H (1983), The Role of the Founder in creating the Organizational Culture, Organizational Dynamics, American Management Associations Read More