Organization Development of a Company - Essay Example

? Organizational Culture [Pick the Table of Contents Executive Summary 3 2 Importance of the study 3 3 Introduction 3 4 Choosinga company; Why bank? 4 1.5 General perception and definition of organizational culture 4 1.6 Organizational Culture 5 1.7 Table 1 6 1.8 Organizational scenario in NAB 7 1.9 Conclusion 8 2.0 Hofstede’s Frame Work 9 1. Executive Summary The motive of this report is to analyze organizational culture of any organization. I have chosen a bank. The National Bank of Australia is my subject because the organization made several mistakes, specifically, in management. This report also evaluates organizational culture in general. It has been also notified that NAB had a very prosperous past and flourishing from 1980 to 1990. After that, the bank started to lose its credibility due to organizational decisions such as the plan of expansion. 1.2 Importance of the study Numerous factors influence the business effectiveness. Therefore, we will analyze the effectiveness of organization in the context of organizational culture. Many authors have analyzed organizational culture and organizational culture is gaining significant magnitude regarding business enhancement. In the current study, we will discuss several dimensions of organizational culture per se: organizational development, effectiveness and management. Clearly, organizational culture is not a limited subject; it has various branches and affects the whole organization. Moreover, the study will guide organizations for taking right steps in the correct directions. 1.3 Introduction In the current study the weaknesses and a few incidents will be discussed, which have been the core cause of the downfall of the services’ standards of the NAB. Some reasons will be highlighted. This aspect of the study will help to develop a correct future prospect of any bank. Furthermore, the literature review will help to ascertain the true reasons for such happenings. Prior to analyze the current topic, a general view of organizational culture will be put forth for deeper understandings. The context of the current topic will be supported through previously done research. The focal point of the current paper is organizational culture. The organizational culture has been designed with the help of past examples; those examples have been found important, successful, and relevant for the development of organizational culture. Experienced people have obtained the help from organizational practices, and values to develop a hypothesis for organizational culture’s implementations (Schein, 1990). 1.4 Choosing a company; Why bank? I will focus on the National Bank of Australia as every company has a dissimilar history. The bank has gone through very difficult times. Moreover, the social atmosphere influences significantly the banking industry; therefore, in my view to study a culture of a bank is helpful to ascertain the solutions of present cultural issues. I am well aware of the culture of NAB. The National Bank of Australia two decade ago was the largest bank of Australia. It had a reputation. Its shares were selling like a hot cake. The bank had planned to expand its boundaries from Australia to North America and Britain. 1.5 General perception and definition of organizational culture By understanding the behavior, thoughts, point of views and feelings of a group of people within the organization, or in the world, a set of rules and regulations development is called culture (Schein, 1996). To ascertain the attitude of an individual within the organization three-core aspects can be studied within the parameters of cultures, these are organizational culture, occupational culture, and national culture (Hofstede, 1991). 1.6 Organizational Culture If there were dissimilarities between shared experiences and standards, it would generate organizational culture; moreover, it is developed and enhanced within the organization and not go beyond the limits of organization. The culture that grows between schooling and university period until the professional development, shared experiences and traditions are part of it; these are recognized as occupational culture. An individual in initial childhood learns national culture from his/her family; fundamentally, it is structured on variations in traditions. Furthermore, these traditions and values are clung to an individual’s mind and he/she can never be able to ignore these strong beliefs (Mintzberg, 1978; Schein, 1996; Trice & Beyer, 1993). The behavior of the people is relatively influenced by organizational and occupational culture and affects importantly their professions (Mintzberg, 1978; Schein, 1996; Trice & Beyer, 1993). The culture of organization where the group of individuals works is not the precise measure to check the behavior of these professionals; in contrast, the behavior is measured correctly through occupational culture. However, different less regulated professionals’ behavior will remain normally unaffected form the impact of the organizational culture. An organization develops itself through standard cultural norms and with the passage of time, this culture becomes the set organizational culture. However, not all regions of an organization are, uniformly, influenced by the organizational culture. Nevertheless, some of its standards infuse the whole organization. Moreover, dissimilar groups are able to develop their own part organizational culture within the organization. The culture of an organization is not assessable easily because of development of sub-cultures and different evaluations of dissimilar groups by acquiring their own standards from organizational culture (Argyris & Sch. on, 1978). Nevertheless, countless attempts have been made to formulate a method to evaluate organizational culture. Amongst all of the attempts the framework, which was developed by Hofstede, has been found very effective to identify weaknesses of an organization. The framework of Hofstede provides instruments to help the managers to utilize this effective yet inexpensive framework to assess problems and implement vital changes in organizational culture. The data is obtained from the following sources, the method of the study is qualitative, and secondary sources are implemented. 1.7 Table 1 Data Method/Source Culture of Bank Public sources: Published books and articles History of Bank The company’s official history book Regulations Public sources: Published books and articles Bank’s current strategic and organizational information Data announced by the bank 1.8 Organizational scenario in NAB The NAB planned to expand its capacity to overseas. In 1980s the bank opened its several branches in USA; however, the expansion brought several loses with it. In the first decade of 1990s the band had to close its network due to continuous loses. The move of expansion was not bad. The process of acquisition procedure was soundly structured; moreover, the other countries have the similar institutions in their territory (Mackenzie, 2001). Similarly, the process of acquisition in 1995 Michigan National and Bank of New Zealand in 1992 was a good acquisition. However, some experts argue that Michigan National was handled inadequately; therefore, the NAB had to face variable atmosphere, and in just ten years period it became mass of problems. The expansion to overseas and bad outcome is just one aspect of the poor organizational culture of NAB. The bank had completely missed its previous stable status of 1990s. In 2004, at a conference regarding superannuation investors, John Sevior, head of equities at Perpetual Trustees asserted that the haughtiness in organizational culture was the only reason for unsuccessfulness (Gluyas, 2004). New CEO, John Stewart, in November during yearly general meeting accepted all the criticism. He further stated that the reason for setbacks was the understanding and behavior of the employees. They were assuming that bank was the best bank of the world; moreover, they have the belief that they have the people who could solve such small issues easily (Murray, 2004). Several problems were surrounding the NAB such as administrative issues, suppliers and client’s disputes (Cornell, 2004a). Andrew Cornell recognized the true reasons of NAB’s downfall. He also noted that not all the big blunders were in the same capacity, every blunder had different dimension; therefore, the problem was big. He further noted that all the issues were not specific they were cultural problems of the bank. Clearly, all the problems were the outcome of organizational mismanagement (Cornell, 2004b). There were less training programs for the target-driven program, although all the networks of the bank was surrounding targets regarding deposits and free income. Moreover, all of these targets were putting pressure on managers. They were accountable to meet the set targets though they had no participation in the planning of the targets. Therefore, the managers were frightened of embarrassment in front of other managers. However, in reality the culture of the bank was responsible (Boyd, 2004b). Several of the control failure that caused financial options slaughters was due to the culture of the NAB. However, it was hard to evaluate the depth of the impact; nonetheless, cultural problems have been catalyst hurdles for the inner and outer growth of the bank. The organizational culture represents the atmosphere and behavior of people, specifically, those who were solely responsible for every deed of the bank such as risk management, policy makers, and high profile people of the bank. 1.9 Conclusion Conclusively, it can be judged that NAB suffered due to mismanagement, weak organizational culture. However, if Hofstede’s Frame Work has been implemented in the bank would not sustain financial and goodwill loses. 2.0 Hofstede’s Frame Work Hofstede, Neuijen, Ohayv, and Sanders (1990) chosen employees from 10 dissimilar organizations, five in the Netherland and five in Denmark, during their research to evaluate the point of views and values of employees regular practices. The outcome of their findings were supporting the previous research of Hofstede (1980) that dissimilarities of national culture in organizations have been found dissimilar as the perception of these experiences are observed through their own employees. Moreover, six core aspects of cross-organizational unpredictability is disclosed in a detailed statistical examination. The core aspects are: (1) normative vs. practical attitude, (2) open in comparison with close communication methods, (3) worker vs. profession orientation, (4) loose against tight control, (5) narrow against professional recognition, and (6) procedure vs. outcome-orientation. The procedure against outcome approach depicts the organizational nature regarding process and resources that are mandatory to follow to achieve the organizational targets through work. Moreover, the outcome orientation approach exhibits the schemas related to risk taking organic behavior and where new ideas are given importance while mistakes are endured; whereas, procedural is inclined to bureaucratic and mechanistic organizational tendency where regulations course and practices are worshiped. The worker vs. profession course shows the true culture of an organization as here the organization has preferences between the work and the welfare of the worker. Likewise, in employee familiarization culture committees or groups regularly make significant judgments; while attempts are devised to underpin new members’ adjustment. In comparison, professional directional culture is formulated to count on top to down assessment regarding individuals of the organization. The occupational culture of the members of any organization is evaluated through the narrow against professional methodology. In professional atmospheres, employees obtain their recognition by their profession. In contrast, employees recognize in robust manners with their organization in narrow or closed organizations. Social and family context is significant, in narrow organizations at the time of new employees’ hiring; in contrast, job competence is the only criteria in professional culture. Regarding the pressure of institution different organizations, differ in their scale of traditionalism. Normative cultures normally follow the institutional regulations; whereas, practical attitude are open to unplanned solutions and rather market-driven (Hofstede, 1980) Strict cost saving and time management, and fixed time of meetings are the part of tight-control culture. Organizations are very conscious in tight-control culture. In contrast, in lose-control culture organizations, organizations are very lenient regarding working capacities and abilities of employees. References Argyris, C., & Sch. on, D. A. (1978).Organizational learning: A theory of action perspective. Reading, MA: AddisonWesley.16. Boyd, Anthony (2004), ‘NAB’s Irish bank criticized by inspectors’, Australian Financial Review, 2 August. Cornell, A. (2004a), ‘Litany of sins leads straight to purgatory’, Australian Financial Review, 15 January. Cornell, A. (2004b), ‘Don’t blame rogues, it was in the culture’, Australian Financial Review, 13-14 March. GINEVICIUS, R. and VAITKUNAITE, V. 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(2004), ‘NAB slumps 20% and still falling’, Sydney Morning Herald, November 11. Schein, E. H. (1996). Three culturesof management: The key to organizational learning.Sloan Management Review,38(1), 9 20. Schein, E. H. (1990). Organizational culture.American Psychologist, 45, 109 119. Trice, H. M., & Beyer, J. M. (1993).The cultures of work organizations. Englewood Cliffs, NJ: Prentice Hall. Read More