Effects of the Organisational Culture on Organisational Stability - Assignment Example

Strategic Management Table of Contents Table of Contents 2 Question 3 1. Organisational culture: 3 2. Effects of the organisational culture onorganisational stability 4 1.3. Advantages and disadvantages of strong culture in any organisation 5 Question number 2 6 Question number 3 7 3.1. Organisation power 8 3.1.1. Power schools: 8 3.1.2. Sources of power in an organisation 8 3.1.3. Indicators of power 9 3.2. Organisational political system: 9 Question number 4 10 4.1. Strategic change concept: 10 4.2. Approaches Available to the Manager for Strategic Change: 11 4.2.1. Prescriptive approaches 12 4.2.2. Emergent approaches 13 Question number 5 14 Reference list 16 Question 1: The first question is going to explaining the factors of organisational culture. This question will outline the importance of organisational culture on the organisational stability. In addition, this segment will be outlining the potential advantage and disadvantages strong cultured organisations. 1.1. Organisational culture: According to Hardy (1996), globalised organisations are facing variety of traits among the employees. Organisational culture can be defined as a structure of shared hypothesis, values, and beliefs of the members of any firms. Mainly the cultural traits of the employees are affecting the performance or the production capabilities of the firms. Shared values are crucial for developing effective cultural traits among the employees. Managers have shared their values among the employees in terms of achieving organisational goals and objectives (Mintzberg, Ahlstrand and Lampel, 2009). Organisational culture emphasises on the uniform, working status, and execution of the roles and responsibilities of the employees. In the global business environment organisations are maintaining unique culture for their multidepartment operational structure. Multination firms are facing the diversity of culture among the employees from different social, cultural and family background. These factors are controlling the traits of the employees in the organisational environment. Lukes (2007) stated that organisations are developing guidelines and limits to control the behaviour of employees. Management will try to reduce the challenges of the cross cultural conflicts. In addition, Jennings and Wattam (1998) argued that organisational or corporate cultures are addressing different features. Organisational culture depicts the behavioural actions of the managers in terms of indulging their employees, consumers, and the external society. In the globalised firms are maintaining unique cultural set for achieving the organisational goals and objectives. Managers of the multidepartment are providing the high independence on the employees for innovative decision making. This trait will be gathering fresh facts, concepts and individual appearance. Moreover, organisational culture also disseminates effective distribution of power among the employees. Organisations are using the cultural traits to disseminate information among employees and achieve preset objectives (Johnson et al., 2014). 1.2. Effects of the organisational culture on organisational stability Organisational culture is playing crucial role in maintaining organisational stability. Employee driven cultures are increasing the efficiency of the workforce with effective ambience and guidance. According to Henry Mintzberg international organisations are developing new cultural set to increase efficiency of the employees and achieve growth and sustainability in the competitive market. It is observed that the organisations like the Nike, Adidas, Wal-Mart, Tesco, Microsoft and many other leading global organisations are using various frameworks for developing their culture. Abovementioned organisational cultures have the following features to increase the efficiency (Mintzberg, Ahlstrand and Lampel, 2009). Innovation and Risk Orientation aspect: it is observed that the leading organisations like Tesco and Nike are using staff orienting cultures. They are increasing the value of the employees by empowering their innovative skills. Managers of the firms are encouraging employees to be more risk oriented. Innovative culture will develop employee’s performance. Accuracy Orientation: leading retailers and fashion wear manufacturers are maintaining accuracy oriented organisational culture to increase the efficiency of the employees. Managers are conveying the employees with the quality benchmarks. Schwenk (1989) opined that managers are evaluating the operations as per the accuracy or operational benchmarks. Achievement Orientation: many organisational cultures are using target orientation among the employees. Managers of such cultures are focusing on results achieved by the employees. Organisations like Wal-Mart and Tesco are providing unique target for each stores. Employees’ performances are evaluated on the basis of the achievement of them in terms of the meeting target criteria. Fairness Orientation: leading companies are providing higher emphasis on the welfare of the employees. Organisations like Microsoft, Apple Inc and Ford are promoting culture with high value on the employees. Human resource managers are showing high respect and distinction to the loyal employees. Such culture is helping the firms to reduce the rate of employee turnover and they will be able to conserve the skill and experience of employees (McGregor, 1960). Collaboration direction: retail organisations like Tesco, ASDA, and Sainsbury are using such cultural frameworks. Organisations are looking for developing the positive connection among the colleagues and managers. Therefore, employee’s efficiency will be increased with effective guidance and communication. Competitive Orientation: according to Brooks (2005), many globalised organisations are empowering the competitive orientation factors among the employees. Appraisal and compensation factors are developed as per the compatibility of employees. Managers are evaluating the performance of the employees. 1.3. Advantages and disadvantages of strong culture in any organisation Recently many globalised organisations are using strong culture for controlling the traits of the employees. Brooks (2005) stated that strong culture is enforcing immense control on the employee’s actions. Strong culture is disseminating the goals and objectives among the employees and management. Both the stakeholders are able to understand operational roles and responsibility of them delegated by the management according to the core values of the firms. Organisations will be enjoying different benefit of imposing strong culture. Johnson et al., (2014) argued that managers will be communicating various operational policies and measures of evaluating the operations of the employees. Strong cultures are observed in the leading organisations like Ford, Toyota, Blackberry and many other organisations. In the organisations managers will be able to share their core values of the business. In addition, the firms are using the strong culture to increase their competitive advantage in the global market (McGregor, 1960). However, Brooks (2005) argued that strong corporate cultures are having certain limitations. Managers are more concentrating on the rules and regulations rather than the interest of the employees. Employees are strained to meet the goals set by the company. New recruits are facing stuffy condition in the existing competitive culture. These new employees will be failed to express their interest to the management. Thus, workplace culture becomes more complex for the new employees (Jennings and Wattam, 1998). Question number 2 In this part detailed explanation, discussion and evaluation on the importance of Ethics in a business context are done. This discussion is exploring the advantages of using CSR strategies by the global firms. It is observed the global businesses are using the responsible management strategy to attract the customers rapidly. According to Mintzberg, Ahlstrand and Lampel (2009), organisations are concerning for the sustainable business process in terms of meeting the challenge and competitions from many other organisations in the globalisations set. Ethics are one of the major factors of being sustainable enough. Multinational businesses are deriving substantiality and ethical consideration with the help of the corporate value provisions. Organisations like Nike, Coca-Cola, Pepsi, Adidas, Puma and many other manufacturing organisations are highly emphasising on the corporate values and objectives. Mainly the corporate values are developed on the basis of various factors economic values are one of those (Johnson et al., 2014). Lukes (2007), stated that corporate values are adopting the policies like accounting profitability, stock returns, customer value, market share and corporate growth. Mainly above mentioned organisations will be aiming to increase the profitability to provide proper dividend to the investors. Managers are aiming for increasing the market share by effective sales and profitability. According to the triple bottom line approach peoples, planet and profitability aspects are segmented to develop feasible strategies. This approach is increasing the popularity of the corporate governance policies and organisational value provisions. Corporate governance policies of the firms are depending on various factors. MNCs are generating value for the stakeholders with the help of efficient actions and operational policies. Managers are adopting sustainable policies by the mean of high-quality products offering. Firms are using quality checking activities and practices to produce best possible products and services. In addition, corporate social responsibilities are other policies are used by the international firms to ensure more value provisions. Multinational firms are adopting the corporate social responsibility to attract customers (Johnson et al., 2014). Accruing to Jennings and Wattam (1998), corporate social responsibility can be defined as the commitment of the international organisations for the stakeholders. International organisations are planning to perform ethically as per the economic, environmental and social norms. Mainly organisations like Nike or Pepsi contributes a lot towards the economic development prospects. Such apparel and beverage producers are increasing the quality of the lifestyle of employees. They are also developing welfare strategies for the families of the workers and society they are operating. Local community and society are developed with strategies like educational development, craft training, and structural change in the locality. Schwenk (1989) argued that in general terms international organisations are using corporate social responsibility policies in order to treat their key stakeholders in more accountable approach. Organisational ethical values are going beyond the concept of profitability. CSR policies are non-profit oriented and organisations are meeting challenges of finance, economy, environment and social issues in more ethical manner. Firms like Nike, Adidas and Wal-Mart are increasing the value orientation of the customers and other stakeholders. Corporate social responsibility strategies bring different advantages to the business houses specially the international businesses (Johnson et al., 2014). With the help of efficient CSR strategies firms are able to develop feasible brand value which will help them in developing trust among the customers for their new businesses. Customer loyalty and retention increases. The firms who have sound CSR strategies will be able to build up excellent association with their clients, traders and networks. Firms are able to maintain and generate motivated workforce. This policy also provides competitive advantage to the firms and they will be able to get more growth and sustainability. Corporate social responsibility also empowers innovation, environmental sustainability and learning for the firms and their stakeholders (Johnson et al., 2014). Question number 3 Answer of this question is going to explain and evaluate the role of the power and politics factors on the organisations strategic development. Organisations like British Gas, British Airways, Maclaren, Nike and many other multidepartment firms are observing power and political impacts in employee’s behaviours. These two factors are having high influence in strategic management process. Power factors are providing the employees with the capacity of imposing strategic change. Effective power dissemination will increase the rate of control on the employees and managers can be able to influence the employees to meet organisational goals and objectives. In addition, strategic management procedure will evaluate different sources of power among the organisational members. On the other hand, McGregor (1960) critically stated that political skills are also plying crucial roles in the strategic management process. Political approaches of organisational stakeholders are controlling the arguments and negotiation process of organisations. Mainly such traits are controlling the grouping policy, building teams, supporting others, and developing arrangement in the multidepartment organisations (Johnson et al., 2014). 3.1. Organisation power Strategic management and power of the stakeholders are closely interconnected. Degree of power will determine the ability to obtain the outcome and objectives. Organisational power concepts of the multidepartment organisations are outlining the behaviours of employees like convince, encourage or pressurize others to execute strategic changes and objectives. In absence of effective power among the employees and other stakeholders execution of the strategic change is quite tough. According to the Mintzberg, Ahlstrand and Lampel (2009), power schools will help organisational stakeholders in developing efficient powers. 3.1.1. Power schools: Power School can be defined as the space where various HR uses the brainstorming policies to generate certain idea on the power ad politics features. Power and politics are influencing the behaviour of the employees or stakeholders as per the external environment. Power schools are using two different power segments like micro and macro. Hardy (1996) stated that Micro power refers to relationship development by influencing others, negotiating welfare, and argument with other peoples. Artificial situations are created to introduce the employees with various power and control circumstances. Macro power factors refer to the situation when organisations are concentrated on the self welfare policies. Multinational organisations are inducing strategic direction and their managers are seeking for combined strategies to maintain favourable outcome from strategic alliances (Johnson et al., 2014). 3.1.2. Sources of power in an organisation Mainly power sources can be derived from the internal and external sources. Internal power structure Internal stakeholder groups are the major source of power for the organisations. Internal power is depending on employee’s individual power bases which will be playing crucial role in the strategic alliances and merger process. Power is an influential factor that negotiates role and ability of individual and teams of any organisations. In the multinational aspect trade unions are also generating certain organisational powers. External power construction: External power of the organisation is based on the proprietors, acquaintances, community, and local or international governments. 3.1.3. Indicators of power Powers are indicated internally and externally among the stakeholders. Main internal indicators of the power are status, resources, representations and symbols. External stakeholders are depending on status, negotiations powers and images (Lukes, 2007). 3.2. Organisational political system: Strategic development also depends on the political system promoted in the organisations. Organisations control and hierarchy depends on the political systems referred to the allocation of the various factors. In the globalised organisational structure politics are impacting the organisations rapidly (Jennings and Wattam, 1998). Political aspects are creating conflicts between various persons or the stakeholders of the organisations. Major political power is generated by the interest groups of the international firms. These types of conflicts continue among the multinational firm members. Their conflict arises due to the diversified values, attitude, interests, and insight on the contemporary market condition and economic aspects. Organisations like Tesco, ASDA, and Wal-Mart are observing such traits of the political system. The managers of the firms are adopting significant decisions on the basis of the limited resources allocation (Johnson et al., 2014). It is observed that allocation of limited resources is most potential conflict causing policy in the organisations. In the multinational firms like Nike, Ford, Microsoft, Wal-Mart and many other firms are able to providing one central role to develop the managerial dynamics. This process disseminates power and politics in most appropriate manners. Efficient political structure will help firms to share their important resource effectively. In addition, political system also helps in achieving goals set by the management teams. In addition, decision making process is materialized from the process like collective bargaining, and negotiation of welfare process of the different stakeholders (Johnson et al., 2014). Question number 4 Strategic change is one of the key issues faced by the globalised organisations. 4.1. Strategic change concept: Strategic change can be defined as the change or adjustment of organisational environment, configuration, culture, technology used, and the modification of the employees. Strategic change is essential to meet the constant external forces. Managers are facing huge complexity in meeting the external threats with the no innovative segments. Strategic change can aid the organisation to achieve the opportunities and mitigating the potential threats (Brooks, 2005). Globalised firms like Nike, Adidas, Tesco, Wal-Mart and many other firms are using the strategic change option for meeting different threats. In the globalised market firms will be facing the challenges as follows; Figure 1: Reasons of strategic change in the international organisations (Source: Johnson et al., 2014, p. 145) External Environment plays crucial role in growth and sustainability of the organisations. Strategic change will be aiming to meet the challenges like economic crisis, Internal and external competition, etc. Apart from these large-scale organisations like Honda, Ford, and Microsoft are using alliances, and acquisitions strategies for developing their compatibility and market share grow. Technological modification also increases the potential strategic change. Human resources also face strategic change as because of the new leadership style, and new recruitment policies (McGregor, 1960). 4.2. Approaches Available to the Manager for Strategic Change: Human resource managers of the global firms are able to adopt different type of approaches to employ change in the organisational aspect. In the contemporary era firms are using prescriptive or emergent approaches for strategic change plicies. Nature of change in the approches is different. Maneger’s selection will be based on the different types of strategic aspects (Johnson et al., 2014). Firstly managers are adopting prescriptive approaches while instant action is required to meet various external challenges. Moreover, this approach is concentrating on the change of the entire organisational culture. This approach is taking more aggressive terms to meet the external threats like financial crisis, globalised competition and technological up gradation. On the other hand, managers are adopting emergent strategic change approaches to change the organisational culture. It is observe that cultures of firms like the Tesco, ASDA and Wal-Mart are open oriented. This policy is offering suitable time to execute the change in the organisational framework (Lukes, 2007). 4.2.1. Prescriptive approaches Prescriptive approaches are developed by the famous theorist Kurt Lewin during the year 1951. Mainly this theory developed on the basis three different attribute. Unfreezing current situations: Insufficient behaviour of the employees is forcing strategic change by the management. Fragmenting groups, teams and employees are the initial strategy of the change management approaches. Organisations are facing the challenge of resisting change (Johnson et al., 2014). Moving to a new level: After unfreezing organisational situations managers are providing new resolution for the external conditions. In the process new values and ethics are introduced to the existing employees. Organisational culture and structure are redeveloped as per complexity faced by the organisations. Refreezing According to Lewin, final stage of the strategic change is managing the changes among the various employees. In this segment managers will be enforcing new set of attitudes as per the requirement. On the other hand Kanter approach is adopted by the managers to execute strategic change. This approach is based on two different functions (Mintzberg, Ahlstrand and Lampel, 2009). Managing operational process: In the major retail firms like Aldi, LIDL and Marks and Spencer are modifying the characteristics operations. Change leaders will try to increase the level of co-ordination and transition among the employees according to the changing strategic traits (Johnson et al., 2014). Managing the employees: Strategic change strategists are communicated among the employees. Change leaders are delegating direct responsibility among the existing employees to execute strategic change. Employees sometime restrict change for their degrees of anxiety for the uncertain situations. Thus, strategic change must familiarize the employees to execute effective strategic change. 4.2.2. Emergent approaches Emergent approaches are empowering continuous change management tools. Change leaders are using the emergent approaches to increase linking, consulting with the employees. This strategy will help managers to share the proposition of innovative strategies. Thus, it will outline the potential risks of executing strategic change (Mintzberg, Ahlstrand and Lampel, 2009). Emergent change process is stated as more effective as the prescriptive strategic change. This approach is unable to meet influential and instant changes. Bristol, Morgan, Caterham and McLaren are the major car manufacturers of the UK market. Managers of the firms are adopting strategic change management techniques in order to meet the global challenges continuously. If the prescriptive and emergent approach is contrasted then much dissimilarity can be obtained. Emergent approaches are considering feasible development of strategies to execute strategic change. In this approach learning process of changing traits are continuous in nature. This approach is empowering innovative nature of the employees with the help of two way communications between change agents and the employees and other stakeholders (Johnson et al., 2014). Detailed change projects are planned to increase continuous learning process in order to develop feasible concept of changing conditions. Emergent approach is adopted by the ArcelorMittal Company to execute the strategic change as they favours open-learning and employee empowerment styles (Mintzberg, Ahlstrand and Lampel, 2009). Question number 5 Michael Porter has developed the generic strategies in terms of developing operational process of different organisations. In this answer meaning of the comment “Stuck in the middle” is explained. Mainly the value chain system of the leading businesses is using the generic strategies outlined by the Michel Porter. In terms of meeting the competition the firms like Nike, Adidas, Tesco, Sainsbury, Maclaren and many other leading level firms have adopted all three strategies of the matrix. They are using the strategies like cost leadership, differentiation and niche marketing strategies. Firms who are using all the three strategies are recognised as the "stuck in the middle" organisations. Mainly all the three attributes will make the business strategy more complex. Role delegation among the staffs is quite complex. Therefore, this type of firms will be facing the complexity regarding role playing of the individual employees (Mintzberg, Ahlstrand and Lampel, 2009). According to Jennings and Wattam (1998), globalised firms will be facing the challenge of increasing operational costs and confusion due to multiple numbers strategic fits. In addition, multidepartment firms are facing certain complexity of the achieving market share with unique strategies, so they are developing different strategic fits for different sectors of market. “Stuck in the Middle” businesses face huge competitions as they are not having any particular business strength (Johnson et al., 2014). Mainly firms will be facing the complexity in developing the multi strategies. However, Porter disagreed with that fact as he thinks that firms can get the potential success by developing multiple strategies. According to him it is possible if the managers are creating different business component for every strategies they have developed. These separation techniques will help the business to increase the possibility in achieving success with help of the strategies. Schwenk (1989) opined that managers will be more efficient to execute each strategy in small business units. Strategic policies can be emerged with the cultures efficiently organisations can avoid the potential "stuck in the middle" condition. According to Lukes (2007), international marketers’ viewpoint using or generating single generic strategy can produce less compatibility. Global market is full of intense competition and alternating products are harming the choice of the customers. In the retail market, customers are enjoying huge optional base of the products. They are seeking for excellent satisfactions by using the products. Mainly it is observed the international retailers are required to match up the expectation of the customers regarding the quality, fashion, expediency, and worth of products. High street retailers are adopting multiple strategies for their high quality products and loyal customers. Single strategies are getting obsolete for the firms, and single strategies will not sufficient in terms of meeting the penetration, low priced suppliers and many other producers (Johnson et al., 2014). Hardy (1996) stated that successful aggressive approaches are developed on the basis of multiple numbers of strategies. Fashion retail is one of most attractive industry in the UK region. Any participants of this industry face five competitive forces identified by Porter. Mainly firms like Tesco, Sainsbury, Marks & Spencer and many other fashion retailers are facing threat of new entrants, threat of substitutes, buyer power of bargaining, supplier power of bargaining and rate of competition. Thus, developing strategies for the firms will be aimed to meet the competitive advantage in the market (Mintzberg, Ahlstrand and Lampel, 2009). Michael Porter has developed the Generic Strategies for increasing the efficiency of value chain. According to the generic theory competitive advantage is the key aim of the organisational strategic development. Porter stated that low priced retail operators and supplier are using the generic models to provide satisfactory products and services to the customers. In addition, such retailers are offering competitive price to attract the global customers. Thus, effective multi strategies will attract the purchaser fondness. Pricing and product differentiation is mandatory to survive in the market. Effective pricing with cost advantages needs to be niche market oriented (Mintzberg, Ahlstrand and Lampel, 2009). “Stuck in the Middle” is a negative situation for the business as there will be complexity in executing the strategies. However, such threats can be avoided with the help of the segmented and small block concept. Organisations must be careful to implement their strategies to avoid “Stuck in the Middle” condition (Johnson et al., 2014). Reference list Brooks, I., 2005. Organisational behaviour : individuals, groups and organisation. Harlow Financial Times Prentice Hall 2005. Hardy, C., 1996. Understanding power: Bringing about strategic change. British Journal Of Management, 7, S3-S16. Jennings, D. and Wattam, S., 1998. Decision making: an integrated approach.(2nd edition). London: Financial Times Pitman Publishing. Johnson, G., Whittington, R., Angwin, D., Scholes, K., and Regnér, P., 2014. Exploring strategy: text & cases. Harlow: Pearson Education Limited Lukes, S., 2007. Keywords: Power. Contexts, Vol. 6(3), 59-61 McGregor, D., 1960. The human side of enterprise. New York London McGraw Hill Mintzberg, H., Ahlstrand, B. W., and Lampel, J., 2009. Strategy safari : the complete guide through the wilds of strategic management. Harlow Financial Times Prentice Hall Schwenk, C. R., 1989. Linking cognitive, organizational and political factors in explaining strategic change. Journal of Management Studies, 26(2), 177-187 Read More