Rio Tinto - Organizational Culture and Critical Approaches - Case Study Example

Heading: organizational culture and critical approaches Your name: Course name: Professors’ name: Date Executive Summary Organizational culture is challenging to define; scholars and researchers agree that organizational culture exist in every organization and impacts on how the organization operates. Organizational culture also affects organization’s effectiveness. In this analysis, Rio Tinto Alcan is selected for organizational culture analysis because it has its operations in the Northern Territory in Australia and also has a global presence mainly in the U.S, the UK and some parts of developing worlds like Africa and Asia. Information on Rio Tinto reveals its culture and approaches it has since its establishment a century ago. This analysis has demonstrated that Rio Tinto has three main cultures, Collaborative, Controlled and Creative. Rio Tinto encourages teamwork and discourages discrimination in terms of social origin, ethnicity and sexual orientation. Controlled culture is demonstrated by the company’s sustainable practices in areas of operations. This includes upholding the existing culture and funding sustainable projects that have positive impact on the local community. Creativity is also demonstrated by the company’s goals of establishing less harmful ways of mining and new technologies. On the other hand, critical approaches to organizational operations reveals the how power as a result of organizational operations influences the community. Rio Tinto has faced challenges in the past as a result of its power influence, this is depicted in the case of Papua New Guinea when the company jointly agreed with the government to commence mining of copper in areas occupied by citizens, and this led to bloodshed resistance from the community. Introduction Organizational culture is an important apsect in every organization, the real definition of organizational culture is not universally agreed but its existance is undoubted. Organizational culture determines how a company perhaps performs in terms of profitability and social responsibility. An organizational culture is passed from an existing employee to a new employee from the induction to the final integration stage. Department or branches of the same company can have subcultures which may even contradict the overall organizational culture. Notably, there are many theories and models of organizational culture developed with an aim of fully explaining fundamental organizational functions. The organization chosen for analysis in this case is Rio Tinto Alcan an international company also having its operations in Northern Territory in Australia. An insight into its operations will play an important role in the analysis of its culture. A critical analysis reveals how the organizatiin operates in its market niche and how it relates with the community in which the company sets its operations. A critical understanding of both internal and external environment of the organization is thus essential in ensuring organizational sustainability as revealed by Rio Tinto Alcan. Cultural and critical approaches of Rio Tinto Alcan Rio Tinto is an international company operating in many regions in the world including the UK, the US, Australia (The Northern Territory) as Alcan Gove Pty and in Africa. The company is headquartered in the UK and is listed in the London Stock Exchange and Australian Securities Exchange. Rio deals in mining and processing of mineral resources. The major products include copper, aluminium, diamonds, gold, uranium, industrial minerals and iron. The activities of the company span around the world but are dominantly represeted in Australia and North America with significant businesses in Africa, Europe and Asia (Rio Tinto Alcan 2013). The group's objective is to optimize value and sustainable returns to the stakeholders by investing in large, cost competitive mines as well as businesses inspired by quality. The rationale for the choice made is based on the vast information available on the operations of the company in Australia and specifically the Northern Territory (Rio Tinto Alcan 2013). According to Chernatony (2006, p.64) it is always a challenge to exhaustively define the meaning of organization culture, scholars and researchers however agree that culture exist in every organization irrespective of the industry and operations. As noted by Ashkanasy, Wilderom & Peterson (2000, p.23) culture is observable patterns in organizations, as Aristotle once asserted, "we are what we repeatedly do". Accordingly to Barbier & Hawkins (2012, p.34) culture is the behavior of humans within an organizational as well as the values that people attach on their actions. Culture is thus the values, norms, systems and habits among others that an organization experiences on a daily basis as it conducts its operations. Over the years, Rio has developed an organizational culture that is open, transparent and development focused. More so, the company has pioneered community concern through various initiatives aimed at creative a positive relationship with the community and also creative sustainable initiatives that will benefit them in the long run. Analysis of organizational culture reveals a number of factors about the organization. Firstly, the organizational culture reveals how the company relates with is stakeholders, clients and employee-management. Organizational culture therefore promotes or derails an organization because the relationship between employees, stakeholders and customers is imperative for the organization sustainability and achievement of its objectives. According to Chernatony (2006, p.64) Kim Cameron and Robert Quinn identified four basic types of organizational culture, Collaborate, Control, Create and Compete. Each of these types carries varying behaviors, attitudes and work patterns which must be identified in order to enhance the performance of the organization. Notably, no one type is better than the other. It is important to comprehend organization or team’s culture and how the culture plays a role in supporting business goals. Since organization culture varies, it is hard for similar workplace to support the same effectively. Collaborative organization emphasizes on teamwork and enhances space for interaction. A controlled culture thrives on stability and structure and encourages continuity from time to time. A culture that is based on competition on the other hand demands openness and quick adaptability especially to change. Creative culture fosters risk taking, innovation as well as individual initiative. As also noted by Becker (2007, p.3) culture within an organization is not uniform, varying subcultures tend to exist in departments or teams, some may contradict the organization culture. Rio Tinto exhibits three cultures identified in this case, Collaborative, Controlled and Creative. Rio Tinto encourages teamwork within a team and it also encourages sound interaction through its initiatives of being non-discriminate in terms of race, ethnicity, social origin, sexual orientation, religion or politics. In its selection process, this culture is evident. Employees are expected to comprehend the need for interaction with people from difference cultures, ethnic and sexual orientation. Collaboration and team work is expected from all the employees of the company in different regions where its operations are present. Rio Tinto Alcan has maintained this positive culture towards the employees and the community as well. This has had a positive impact on how the company operates in these regions. In fact whenever there are local rules that dictate the priority of employment in favor of the local people, Rio Tinto has always ensured fairness in its selection and appraisal process and hence fostering a sound culture for attaining organizational goals (Becker 2007, p.3). More so, Rio Tinto recognizes the critical role that gender plays in social dynamics of the local communities in areas that it operates. It acknowledges the fact that these social dynamics influence the quality and effectiveness of community. The attention given to gender aspects of the operations also plays an important role in increasing their capacity to gain and maintain social license to operate. Rio Tinto also works to increase employment opportunities and uphold human rights in order to minimize the negative impact of their operations. Rio Tinto also upholds human rights concerns and encourages sustainable development objectives. Rio Tinto demonstrates a controlled culture through its numerous sustainable practices, these ranges from its large global expansion and wide product portfolio which ensures sustainability of the company’s profitability as well as the community which benefits from the company. A culture of creativity is evident in Rio Tinto’s operations, as one of the global leaders in the aluminum business; the company also produces bauxite and alumina. The company has extensive project pipeline, benchmark smelting technology and enviable hydropower position. The company has continuously searchers for better mining technologies that reduce damage to the environment. Rio is also guided by development principles that dictate the company’s actions in terms of the health and the safety of the environment. Creativity culture is an important aspect in a mining company given the environmental concerns of the mining process that has affected most companies operating in the mining industry. More so, concerns of the global warming cannot be overemphasized, companies in the energy and mining sector are directly linked to increased greenhouse gases in the environment (Rio Tinto 2009). This is a major concern for the company and hence the need for creative and sustainable mining technologies that will see the reduction in carbon footprint. This is the inspiration behind the active programs developed by Rio Tinto over the past century of its existence in the mining industry. As evidenced by Rio Tinto (2010, p.17) Rio Tinto values the community in areas of its operations. In a report, Rio Tinto demonstrated that cultural heritage is important to the company because it is fundamental in identifying their host communities and is also an integral feature of every landscape one seeks to explore and develop of operate (Rio Tinto 2010). In fact, Rio Tinto believes that they way they engage the heritage of the local community immensely affects the quality of their relationships. This enhances the company’s effectiveness through its broader community engagement which leads to a sustainability of its operations and the company’s legacy (Rio Tinto 2009). In essence, Rio Tinto has developed a sound culture both internally and externally, the organization’s employees have been trained effectively on how to handle conflicts, work together and encouraged to speak up in order to identify issues affecting them. Rio Tinto addresses problems head on and rewards employee’s performance. In essence, the company demonstrates high value not only to its employees but also the community. Rio has created an environment that adapts quickly to new ideas and encourages its employees to be innovative. According to Hellriegel & Slocum (2007, p.124) organizational critical approaches are influenced by Karl Marx, a German intellectual and other theorist. The fundamental of critical approach is that critique reveals the fundamental truth about an organization and the existing social condition in place. These theorists see theory as a force that can emancipate individuals from dominating the organization. Critical approaches essentially enhance organizational transformation. As noted by Hellriegel & Slocum (2007, p.124) theorists agree that, some societal structures and processes lead to imbalances of power, imbalance of power lead to alienation and oppression of certain groups of people. The role of critical theorists is to explore and uncover these imbalances and consequent bring them to the attention of the oppressed. In critical approach, organizational concepts are power, power relationship, emancipation and resistance. The rationale for this is because the concept of power is usually related to control and domination and hence individuals are always keen on who has the power and hence control over them. In Rio Tinto, the past history has revealed some aspects of oppression especially in remote areas such as Papua New Guinea. According to Gullo (2007) reports in the recent past reveal significant oppression and racial and discrimination in areas that Rio Tinto has had its operations in the past. More so, environmental impacts that the mining industry has is very significant, despite the efforts made by the company to ensure environmental safety and safe mining. It is still evident that mining actually depletes the land and makes it harder to use for constructive purposes later because of the damage done in the mining process. This is a form of oppression to the local people irrespective of the fact that they also gain from the employment opportunities that come with the cost of their land. In New Guinea unlike in Australia, oppression, racism and discrimination were evident (Gullo, 2007). According to Gullo (2007) the London based company and the government of the New Guinea formed a joint operation to mine in areas rich of copper amid protests from citizens against the mining. The consequences of the resistance led to deaths of thousands of civilian population as they resisted invasion on their land. Organizations just like organism live by producing products that can be sold for a profit. Organizations are like machines as they process the products with use of human capital. In this case, there has to be a clear source of power which controls the production process. The sources of power in organizations are the shareholders or owners (Keyton 2010). The owners are responsible for how the process will be conducted; as a result, they control the people responsible for the process. This is the point of conflict as the employees of the company tend to feel oppressed and receive less for their labor. This is similar to the events witnessed in Rio Tinto in its operations. The operations of the company involve people and the affected community in general. This has led to conflicts in the past including civil actions against the company for its actions. The community, the government and employees always resist companies operations at some point, the community feels oppressed by extensive pollution in their habitats, the government feels the need to reduce carbon footprint and reduce destructive mining operations while the employees feel the need for increased safety precautions and wage increase (Schein 2009). All these are forms of resistance as a result of the companies’ activities especially in the mining industry. Conclusion As evident in this analysis, like other organizations, Rio Tinto has a culture and critical approaches that have been employed since the establishment of the company about a century ago. Notably, the company values the essence of culture internally and also externally. Internally, the company adopts collaborative, creative and controlled forms of culture. Collaborative enhances teamwork within the working force, creative enhances better ways of conducting operations such as adaptation of new technologies while controlled focuses on creating sustainable practices both internally and externally. Rio Tinto also exhibits a positive culture towards the community in which the company has its operations. In essence, the company sees cultural heritage of the existing community as a way to get into their hearts and minds and hence reducing the possibility of conflicts with the community. Rio promotes cultural heritage of the community besides other Corporate Social Responsibility activities such as provision of energy, increasing sources of food to the community and enhancing their educational capacities. The operations of Rio Tinto in handling the existing internal culture and managing the community has inspired its achievements and thus the reason why the company is the third largest company in mining and a global leader in the aluminum industry. The company can however achieve more if it focuses on green energy as a better way of producing sustainable energy and increasing its sensitivity towards environmental concerns by reverse-engineering the mining process in order for the lands exploited to be habitable again by the local community. References Ashkanasy, NM, Wilderom, CP & Peterson, MF 2000, Handbook of Organizational Culture and Climate, SAGE, London. P.23 Barbier, JC & Hawkins, P 2012, Evaluation CulturesSense-making in Complex Times, Transaction Publishers, London. Pp.34-45. Becker, GF 2007, The Alignment Between Leadership, Organizational Culture, and Functional Maturity: An Ethnographic Case Study for Small Business Transformational Change, ProQuest, Melbourne. pp.2-5. Chernatony, LD 2006, From Brand Vision to Brand Evaluation: The Strategic Process of Growing and Strengthening Brands, Elsevier, London. Pp.56-67. Gullo, K 2007, Rio Tinto Wins Review of Ruling on Papua New Guinea Claims, BloombergNews. Accessed from http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTWJjrIk0gFk Hellriegel, D & Slocum, JW 2007, Organizational behavior, Cengage Learning, Canberra. Pp.123-127 Keyton, J 2010, Communication and Organizational Culture: A Key to Understanding Work Experiences, SAGE, Melbourne. Rio Tinto Alcan 2013, The Global Leader in Aluminum Industry, Accessed from http://www.riotintoalcan.com/ Rio Tinto, 2009, The way we work, Our Global Code of Business Conduct. Accessed from http://www.riotinto.com/documents/The_way_we_work.pdf Rio Tinto, 2010, Why Heritage Matters. Pp.10-29 Accessed from http://www.riotinto.com/documents/ReportsPublications/Rio_Tinto_Cultural_Heritage_Guide.pdf Robbins, SP & Judge, T 2008, Organizational Behavior, Pearson Prentice Hall, Canberra,. Schein, EH 2009, The Corporate Culture Survival Guide, John Wiley & Sons, New York. Read More