The Modern Corporate Culture - Essay Example

? Is corporate culture a useful concept for today’s managers? BY YOU YOUR SCHOOL DATA HERE HERE Is corporate culture a useful concept for today’s managers? Introduction Setting up an appropriate culture within a business should be a priority for today’s leaders and managers. If the business operates in a multi-national environment that has a diverse type of personnel, it is especially important to understand what drives attitudes and cultural values in order to be successful. Businesses that operate where teams are necessary are even more in need of a unified culture where everyone in the organisation works together to achieve harmony and goal attainment. The goal of the essay is to identify what parts of culture are the most important and why it is useful for managers in order to build a worthwhile long-term corporate strategy and keep competitive edge. Here will be described power, diverse attitudes and beliefs, how to effectively manage people, risk and socialisation. The corporate culture There are several success factors for business if the organisation desires to achieve growth and build high human capital development. First, leadership needs to have a very strong vision of what they want to accomplish. “They know how to set the direction for the organisation and how to build commitment to follow that direction” (DeVries, 1996, p.491). It is necessary for managers to be transformational, using positive personality and charismatic traits, in order to get employees to model themselves after the leader. They need to push for personal growth and add more value to the human resources role to gain this commitment. However, this cannot be done without setting a cultural tone within the business that provides opportunities for employees to be empowered. If the manager considers culture important, they will develop proper training for this effort and always reinforce how important it is for employees to be focused on mission-related goals. People should be made to feel special and valued. It can only be accomplished by building a positive social network between managers and employees and inspiring them to achieve greatness and learning. This is the basis of a culture that is decentralised where authority is not always made at the top layers, but moves horizontally throughout the business environment where employees help in decision making. Managers should not always keep power at the top levels since this breaks down the effectiveness of attempting to build a positive, unified corporate culture. “If power lies in the strategic coordination of resources rather than mere possession of them, then a strategic conception of power offers the opportunity for subordinate groups to develop coalitions capable of challenging dominant groups” (Alvesson & Willmott, 2003, p.6). If this is true, then employees will work against senior-level power and control and try to combat it by developing their own factions as they try to gain control in certain key areas. If power only resides at the top layers of the business leadership, then it is not a true culture. It is, instead, a business that maintains very high controls and does not provide workers with much flexibility or give them perceptions of value. A business that operates in this condition would be referred to as a centralised organisation dedicated only to making sure employees perform as they are expected. Social and psychological factors are dismissed in this type of business and no culture exists at all, only one with a Theory X type of focus where employees are always regulated. This could lead to higher turnover rates or generally dissatisfied employee groups who have little to contribute to a cultural whole. In some business environments overseas, such as Saudi Arabia, managers score high on testing related to Hofstede’s power distance scale. This is due to Muslim beliefs that are traditionalist and are common in Islamic societies (Bjerke & Al-Meer, 1993). Power distance is the level of closeness between management and regular employees. When a business scores high in this dimension, there is a very large gap between social networking with employees and higher-level leadership that takes away from the value of creating a culture. Again, this is an organisation that cannot achieve its focus on building employee commitment to meeting long-term strategic goals. A proper inspirational manager or vision builder does not exist in a corporation where high power distance is present and therefore some competitive edge is lost and less human capital development occurs. Some corporations have a risk-focused culture where everyone in the business is always looking for opportunities to spot risk and remove it from the environment. Risk includes cost problems, customer dealings that might go wrong, or general ethical problems that might arise due to attitudes or angry employees. “People in uncertainty accepting cultures are more tolerant of conflicting opinions and try to have fewer rules” (Donnison, 2008, p.17). If a business is able to motivate workers to become involved in risk identification as part of their uncertainty accepting culture, then it provides the value and self-esteem that workers require to become their best. In this type of culture, there are less formal rules and many more contingencies built that come from not only managers, but lower-level employees as well. Since risk reduction is becoming so important to achieving competitive advantage and saving costs, it is necessary to build a culture that is unified in risk identification to outperform other competition without a unified risk focus culture. Finance is also impacted by culture. “Culture is considered to be one of the most powerful environmental factors affecting the accounting system of a country” (Tsui & Windsor, 2001, p.144). As more international regulations regarding creating a standardised accounting system become frequent, there must be an inter-connection at all levels of the business. However, if there is high power distance in the business, employees will not be able to understand their role in providing accurate accounting data. This could impact finances and budgets in the short- and in the long-term. Especially during times of recession, it is necessary for employees to remain focused on cost reduction and reporting on their expenses properly in an environment with free and open lines of communication between all ranks. To be focused properly on making a quality budget and avoiding high or redundant costs, there must be a culture developed where everyone understands the importance of costs to strategy. Without this culture, the business will likely experience high expenses and lose profitability that could lead to job losses or lost competitive advantage. Having a positive social environment is also important to build worthwhile relationships between managers and employees. This is true for employee-to-employee relationships as well. According to Chow (2009) individuals that have a large social network and friends who are influential succeed more than those without these dimensions of trust and mutual respect. High performance is important in the corporation, however it cannot be achieved until employees are satisfied and motivated to achieve mission or strategic goals. Again, this reinforces that it is important to develop a unified culture where social networking and mutual trust is developed. Without these dimensions, a business remains segregated and cannot achieve team-focused goals properly and might lead to dissatisfied employees. Local cultures that value individualism might argue that culture is not needed to achieve corporate results. These individuals value rewards and recognition based not on group involvement, but on their own accomplishments (Blodgett, Bakir & Rose, 2008). Culture usually represents unification of attitudes and values. Individualists likely would believe that culture is not necessary so long as they are rewarded when they achieve goals and would be motivated through individual bonuses or promotions that impact the business positively through their efforts. Conclusion Despite any argument against, building a corporate culture is still very useful for today’s managers. Diversity is a key concept in corporations especially when they operate in international environments and staff many people with widely different cultural beliefs. A business cannot properly exploit its resources or its people without having a team focus. It should be said that corporate culture is very much important and useful to get everyone on board and motivated to achieve greatness. A manager cannot be a quality leader without these principles of unity. References Alvesson, M. & Willmott, H. (2003), Studying Management Critically. London: Sage. Bjerke, B. & Al-Meer, A. (1993), Culture’s consequences: management in Saudi Arabia, Leadership & Organization Development Journal. 14(2), pp.30-36. Blodgett, J., Bakir, A. & Rose, G.M. (2008), A test of the validity of Hofstede’s cultural framework, The Journal of Consumer Marketing. 25(6), p.339. Chow, I. (2009), The relationship between social capital, organizational citizenship behavior, and performance outcomes: an empirical study from China, Advanced Management Journal. 74(3), pp.44-55. DeVries, M. (1996), Leaders who make a difference, European Management Journal. 14(5), pp.486-493. Donnison, P. (2008), Executive coaching across cultural boundaries: an interesting challenge facing coaches today, Development and Learning in Organizations. 22(4), p.17. Tsui, J. & Windsor, C. (2001), Some cross-cultural evidence on ethical reasoning, Journal of Business Ethics. 31(2), pp.143-151. Read More