Managers Perceptions of Organizational Culture - Annotated Bibliography Example

Managers’ Perceptions of Organizational Culture Introduction The paper intends to present a thorough review of related literature on organizational culture and its correlates. In the first study, the effect of organizational culture was investigated. The study aimed to determine if the relationship between budgetary participation would rely on managers’ perceptions of innovation and attention to detail. The second study intends to find out if firm size and the degree of being hierarchical affect the utilization of strategic mechanisms. The third empirical study aimed to determine if culture type, i.e. power, role, task, and person culture had a significant effect on the formulation of strategy. The last two studies described the organizational culture issues of a China-based joint venture. Finally, the study undertaken by Thomas & Lindsay (2003) explored the match between the organizational culture that pervaded in Compass, South Africa and its strategic objectives. The following paragraphs present a detailed analysis of these topics. Review of Related Literature The review of related literature intends to provide a comprehensive and thorough background of organizational culture and its correlates, through a combination of quantitative and qualitative studies. The findings of empirical studies related to the topic are presented logically in the following paragraphs: The Effect of Organizational Culture on the Relationship between Budgetary Participation and Job-related Outcomes Subramaniam & Ashkanasy (2001) have undertaken a study entitled ‘The effect of organizational culture perceptions on the relationship between budgetary participation and job-related outcomes.” A random sample of 62 organizations were chosen for participation in the study out of the 623 food manufacturing organizations listed in the Kompass Australia directory, each with over a hundred employees. The findings of the present study purport that managers’ organizational culture (OC) perceptions influence the effect of budgetary participation (BP) on job-related outcomes of job-related tension and managerial performance. In particular, BP was demonstrated to have a relationship with agreeable job-related outcomes for managers who have given high innovation evaluations. The study presents that for these managers, BP accounts for lower job-related tension (JRT) and enhanced managerial performance – this, regardless of their perceptions of attention to detail. Managers with low OC perceptions are deemed low in both innovation and attention to detail, BP is critical in planning and coordination. Moreover, it is also considered crucial in managerial motivation, specifically for incumbents who may more likely be complacent and tend to utilize below standard decision making tools. This results in a reduction in JRT because of enhanced work clarity. In effect, managers feel increased confidence in drafting performance goals. On the other hand, for managers evaluating innovation as low with high attention to detail, the outcome of BP on JRT was assuaged. This outcome indicates that high BP is related to more or less high JRT for managers with high attention to detail. These managers distinguish their work as mainly driven by procedural or routine processes, with premium placed on accuracy and care. Budgetary objective setting may prove to be demanding in such a context, attributed to managers’ feeling that their participation is not that authentic. These findings support past literature by Waterhouse & Tiesen (1998 in Subramaniam & Ashkanasy, 2001), and Gul et al. (1995 in Subramaniam & Ashkanasy, 2001) suggesting that in contexts where there is a lack of procedures, rules, and decision making, BP may not be that useful. Despite this, the result does not apply to the positive association between BP and managerial performance. It supports the results of Murray’s (1990 Subramaniam & Ashkanasy, 2001) study, asserting that on the whole, BP results in enhanced performance results. In summary, this study purports that managers’ perceptions of OC have an important moderating effect on the relationship between BP and managers’ job related outcomes. In effect, those who help design organizational control systems necessarily have to consider the influence of OC on managerial perceptions. In fact, these results are consistent with general job design literature (Parker & Wall, 1996 in Subramaniam & Ashkanasy, 2001). For instance, Wall, Jackson, Mullarkey, and Parker (1996 in Subramaniam & Ashkanasy, 2001) assert that task uncertainty moderates the association between job control and performance. Apart from budgetary participation, another study points to the fact that organizational also exerts an equally powerful influence on technological innovation, discussed as follows: Organizational Culture and Technological Innovation Roberts, Watson, & Oliver (1989) have undertaken a study relating technological innovation and organizational culture. Using a 2x2 factorial design incorporating organization size (i.e. small and large) and culture (i.e. hierarchic and non-hierarchic), investigated the use of the strategic mechanisms of chain of command, SOPs, goal-setting, direct contact, interdepartmental liaison, temporary task team, permanent implementation team, integrating role, and integrating department. Data were collected from 35 American and Canadian manufacturing companies in the process of implementing a statistical process control program. The results indicate that large and small firms show significant differences only in three noted strategy implementation mechanisms. These are on the use of interdepartmental liaisons, temporary task forces, and permanent implementation teams; these are utilized more frequently by larger organizations. The results demonstrate that large and small firms do not significantly differ in terms of use of chain of command, SOPs, goal setting, direct contact, integrating roles, and integrating departments. When organizational domain was analyzed, they garnered similar results, with hierarchic and non-hierarchic organizations exhibiting similar levels on the use of seven mechanisms; however, there were significant differences noted for two of these – goal setting and direct contact mechanisms were utilized more often by non-hierarchic organizations. These results are inconsistent with those asserted by Gilbraith and Nathanson (1978 in Roberts, Watson, & Oliver, 1989), who purported that larger firms ought to be more complex and mature than smaller firms in terms of these mechanisms. However, based on the results of the current study, both firm sizes seem to depend both on less complicated mechanisms such as chain of command and SOPs. Moreover, they are also similarly dependent on more complex mechanisms, particularly integrating roles and departments. These results suggest that both large and small organizations utilize a wide array of techniques to make rules on the implementation of technology. Thus, managers who wish to implement technology may consider less sophisticated implementation mechanisms to carry out the job. The corollary is also true; that is, smaller organizations must not close their doors to the use of more complicated mechanisms, if necessary, as implementation strategies. While the correlates of organizational culture discussed thus far are interesting, the following empirical account on the relationship between the types of organizational culture and strategy execution presents noteworthy findings. Organizational Culture and Strategic Execution There has been no documented research on the relationship between the types of organizational culture and the way in which these organizations execute strategy. This topic was investigated by Struwig & Smith (2002) with the following culture types: power, role, task, and person culture – these were used as the independent variables in the MANOVA, while strategy formulation was pegged as the dependent variable. Self-administered questionnaires were sent to a total of 3000 firms for data gathering. This was specifically carried out using South African firms as companies of interest. It demonstrated that firms with a power culture differ in the way they formulate strategies along all phases of the strategy formulation process: planning strategies, formulation of mission statements and policies, and defining the business of the organization. This trend was not seen with companies who exhibited a power culture, where differences were noted only for the planning phase of the strategic formulation process. The task culture was next analyzed, and yielded similar results as power culture firms – significant differences were noted for all strategic phases. Finally, person culture organizations did not garner any significant relationship with any of the phases. They provide an overriding guideline on ensuring that strategy formulation is supportive of the existing culture. Since there is a strong and significant relationship between power and task cultures and strategy implementation, strategy formulators ought to scrutinize all aspects of strategy before formulating it. Strategy formulators of organizations with a role culture ought to pay particular attention to planning strategies. Those with person cultures must consider that their culture does not influence strategic formulation in any of the phases. Overall, there should be high premium placed on the alignment of culture and strategic formulation. The succeeding exposition presents the effects of organizational culture across regions, namely China and South Africa. Organizational Culture Across Regions and Cultures Through the use of interviews, the case study of Jiang (2001) has investigated issues within a China-based joint venture. The findings clearly indicate that the British-Chinese enterprise still has a very strong Chinese state-owned organizational culture. For instance, the Maoist egalitarianism and ‘iron rice bowl’ mentality were still prevalent in employees’ values, beliefs, labor contracts, rewards systems and management implementation. The researcher has noted that these ran contrary to the liberalist ideologies of individual responsibility, market forces, and economic rationalism. Such a discrepancy has resulted in negative outcomes, in both efficiency and productivity. For instance, conflict between Chinese rank and file employees and Western expatriates were obvious in the areas of labor contracts and income distribution. It is imperative that the prevailing organizational culture be changed if the JV is to survive in the global economy. For such a cultural change to be possible, there is a recommendation of undertaking a revamp for management posts. New staff are likely to be more open to a market-oriented management style, which is primarily profit-based. The next study undertaken by Thomas & Lindsay (2003) explored the match between the organizational culture that pervaded in Compass, South Africa and its strategic objectives. Using Harrison and Stokes’ (1992 in Thomas & Lindsay, 2003) tool, it yielded data on 86 employees’ preferred organizational culture. The results suggest that the preferred organizational culture of employees is one distinguished by a high achievement / support orientation, with reduced power / role influences. This finding is supported by majority of societies cited in Western literature that expressed a similar preference for this profile (Hofstede, 1997 in Thomas & Lindsay, 2003). It was also noted that the existing cultural approach may exert an influence on the views of the Board and of operations and administrative groups in terms of their belief that change is possible. This is placed in stark contrast with the more positive perspective of the Chief Executive Officer that modifying the existing culture is perfectly plausible. There has been a noted discrepancy between the views of the CEO and those of the two employee groups; the perceptions of the latter seem more consistent and aligned with regards to the actual (existing) and preferred (ideal) organizational culture. Despite this, all groups concur that there is a gap between actual and ideal cultures; thus entailing action. The study concludes that there is an overall dissatisfaction with the current culture. This may be precisely why there is resistance to change as opined by the CEO. Second, the view of the CEO of the actual or existing culture is not agreed or concurred to by the two employee groups. Moreover, it has been found that the predominant existing culture is power / role based. In effect, this is not considered supportive of a learning organization whose main thrust is to feature sophisticated food service concepts, with the eventual objective of guaranteeing market leadership. Therefore, the existing culture and planned strategies of the company seem to be misaligned. The ideal organizational culture for the respondents is characterized by high achievement / support, which is evaluated as supportive of a learning organization and its strategic goals (Senge, 1990 in Thomas & Lindsay, 2003). In this regard, Garvin (1990 in Thomas & Lindsay, 2003) recommends the following points in the creation of a learning organization, as follows: “1) the fostering of an environment conducive to learning by creating time and space within the operation for management and employees to reflect on and analyze company strategies and the current working environment; 2) the removal of boundaries within the organization that would otherwise insulate groups of people, reinforce preconceptions and limit the sharing of ideas; and 3) the facilitation of learning forums in which the processes, policies, procedures, and expected outcomes could be examined by employees through the application of new knowledge gained from both external and internal sources.” In the South African region, it has been observed that middle management employees, regardless of race, seem resistant with a high power orientation work atmosphere. In a similar vein, the desired approach in the service industry in the West purports that optimal productivity is an offshoot of a motivated and empowered workforce (Hofstede, 1997 in Thomas & Lindsay, 2003; Kotter & Heskett, 1992 in Thomas & Lindsay, 2003). It is thus recommended that Compass adopts a high achievement / high support orientation. These studies point to the fact that organizational culture is a complex construct that is influenced by a wide array of factors. While these studies all present methodological limitations, they must be undertaken, and these issues addressed, if the impact and influence of organizational culture is to maximized for the benefit of both the corporation and its employees. Conclusion Based on the empirical studies presented, managers’ perceptions of organizational culture have a crucial moderating effect on the relationship between budget participation and managers’ job related outcomes. In addition, it has been found that both large and small firms depend on less complicated mechanisms such as chain of command and SOPs; they are also similarly dependent on more complex mechanisms, particularly integrating roles and departments. These results indicate that organizations, regardless of size, use a wide range of means for technological implementation. The review also indicates that strategy formulation is supportive of the existing culture. Overall, there should be high, strategic premium attached to the alignment of culture and strategic formulation. For both studies that focused on cultural effects of organizational culture in a South African and Chinese firm, the preferred organizational culture of employees is one distinguished by a high achievement / support orientation, with reduced power / role influences. In conclusion, organizational culture has a whole host of correlates that need to be considered to be able to build or sustain the type of culture that is supportive of the enterprise’s business and people goals. References Jiang, X. (2001). A case study of organizational culture and ideological issues in a joint venture in China. Journal of Enterprising Culture, 9(3), 313-330. Roberts, G., Watson, K., & Oliver, J.(1989). Technological innovation and organizational culture. Journal of Organizational Change Management, 2, 3, 65-74. Struwig, F. & Smith, E. (2002). The relationship between organizational culture and strategy formulation in South African firms. South African Journal of Business Management, 33(1), 21-29. Subramaniam, N. & Ashkanasy, N. (2001). The effect of organizational culture perceptions on the relationship between budgetary participation and job-related outcomes. Australian Journal of Management, 26(1), 35-54. Thomas, A. & Lindsay, D. (2003). Organizational culture at a South African food serve company. South African Journal of Business Management, 34(4), 45-52. Read More