Intercontinental Hotel Group: Organizational Culture - Coursework Example

End-of-Term Reflection This paper is prepared and submitted by [Client’s Name] In partial fulfillment of the course syllabus [Subject] Submitted to [Professor’s Name] 1.0 Introduction The hotel and hospitality industry is among the largest industries that employ large number of people from various social and racial backgrounds. The industry has over 200 million in workforce worldwide (Ethical Corporation, 2006). The success of any company in the industry lies largely on how well the company manages its people as well as how it resolves and manages conflict. Organizations in the industry that have deeper understanding of its own organizational structure, organizational culture, power and politics, and conflict and negotiation have better chances of understanding the culturally diverse market where they operate. Intercontinental Hotel Group Intercontinental Hotel is a large syndicated hotel network that operates in a global scale. IHG operates more than 125 hotels in 2008 and is planning to expand on a much larger scale to pursue its aggressive dominance in the industry (“Cultural Revolution”, 2005). The number of hotels it owns and the geographically diverse locations of its hotels signify that IHG is constantly exposed to various conflicts or to power struggles (Clark, 2005). Since IHG operates on such a large scale, it is more exposed to people from different cultural backgrounds with little or no understanding of how other cultures operate. In order for IHG to be able to be effective and efficient in what it does, it needs to be able to understand the principles of organizational culture, organizational structure, power and politics, and conflict and negotiation. An organization that understands the implications of these issues on its internal affairs is more likely to manage efficiently the same issues externally. 2.0 Aim of the Study Because of the nature of business operations of IHG and because of the internal struggles that can easily arise from the cultural or behavioral differences within the organization, understanding the interplay of organizational culture, organizational structure, power and politics, and conflict and negotiation becomes interesting. The aim of this study is to explore how a multinational organization that caters clients from various racial background can minimize the negative impact of internal conflicts with the understanding of the concepts and principles of power and politics, organizational culture and structure, and conflict and negotiation. 3.0 Power and Politics IHG caters a market whose cultural spectrum is very wide. Internally, the organization has a very wide avenue for growth and development which translates to the growth and development for its employees as well. However, the organizational structure of IHG is very steep pyramid and people within the organization are competing against each other as they move along the hierarchy. Because the organization is very large and gradually narrows, power struggle within the organization through political maneuvering is a common thing to expect. The struggle for power and political influence within the organization can cause irreparable damage to the organization both in the short and the long run (Weidner & Purohit, 2009) and so IHG must be able to curb the negative effects of power struggle in order to maintain an overall favorable position. Power, regardless of the scope of the domain, is a good thing. With power, allows individuals greater and deeper control over the presiding elements in a situation that would enable them to mold the outcome of the issue towards their own preferences (Weidner & Purohit, 2009). It is for this reason that leaders in organization were given enough power to change the outcome of certain situations according to the will of the organization. However, the need for more (often excessive) power or influence within the organization, political maneuvering occurs. Power and politics, when used the wrong way, can undermine the strength of the organization. It is easy to identify that IHG uses power and politics in a regulated and responsible manner. Power is relegated to a few select individuals who are responsible for steering the organization towards its goals. With the power vested on a few people, the lower levels of the organizational hierarchy are expected to trust and follow decisions coming from those delegated with power. On the other hand, individuals with power are accountable to the stakeholders for the direction and outcome of their decisions. While IHG is able to somehow control the outcome of bigger scope of power and politics within its domain, it could not suppress the smaller scope of internal politics and power struggles. Intrapersonal glitches concerning power struggles may affect the culture of the organization as a whole. 4.0 Organizational Culture The ability of the organization to manage and minimize intrapersonal power struggle depends largely on the adapted culture of the organization. If the organization tolerates highly competitive culture, there is a big probability that individuals within the organization would struggle of power through crafty maneuvering of influences and resources. On the other hand, an organization that understands the need for competition in growth but does not tolerate negative impacts of these competitions from influencing the rest of the organization will more likely be able to efficiently handle power and politics. In this example, we saw how important organizational culture is in handling power and politics as well as in managing conflicts and negotiations. Positive interaction within the organization increases the probability of having objectives met because of the increased number of positive influences and motivations for the people involved. For example, when an organization needs to cut cost and reduce the number of operating hours, workers with hourly rates bear the brunt of the burden. Depending on the management style employed, individuals within the organization may sympathize with the company (and would nobly help the company endure the cost-cutting measures) or they may harbor resentment towards the company (and thus try to retaliate against the organization for the loss of their job). Organizational culture is the summative characteristics of individuals within the organization (Child, 1975). It determines how those individuals perceive the organization and to what extent they can contribute to the overall performance of the organization. An organization’s philosophy, professed mission, vision, objectives, culture, and idealisms help establish the tenets of organizational culture (Johns, 2006). Central to the sociological concern of organizational culture is the fact that culture is influenced by the behavior of individuals making up the organization; similarly, the behavior of individuals within the organization is influenced by the culture of the organization (Mowday & Sutton, 1993). In the context of a culturally diverse organization, the concept of organizational culture becomes too complicated. This is because “culture” is no longer focused on the internal processes of the organization but also takes into account the internal processes of the individuals comprising the organization. So if an organization has a culturally diverse workforce, homogeneity in the organization’s culture will be very hard to achieve. In other words, a culturally diverse workforce makes it hard for organizations to establish or stabilize their culture. There are a lot of things that could possibly occur when organizations fail to establish or stabilize their intrinsic culture. One of the many effects is the development of culturally-defined interpersonal conflict between and among individuals within it. 5.0 Conflict and Negotiation Social interactions in organizations play important roles in the achievement of organizational goals and objectives. How each member of the organization interacts with each other individually affects a larger context of interaction within the organization which in turn affects the performance of the organization as a whole. As organizations adopt structures that encourage communication between and among individuals; design strategies that allows one individual to work with other individuals; and implement systems that force individual members to cooperate and collaborate their skills and functions in order to achieve certain goals and perform certain tasks, social interactions are becoming difficult to control (Salas, Stagl & Burke, 2004). Assimilation of feelings, emotions, and personal perspectives take place and as individuals within organizations make frequent contacts with each other. In some situations, social networks prove to be disadvantageous as they bar organizations from achieving goals and objectives. The extent with which misdirection of social interaction within organizations tend to hinder the organization from achieving its objectives depends highly on the issues. When wrong emotions or perspective like racial prejudices and gender biases enter social networks within the organization, consequences of varying degree are to be expected and conflict is expected to occur. Cultural conflicts in the business environment can lead to serious problems if not resolved at an earlier stage. For example, Americans shake hands when a business deal is closed while Middle Eastern businessmen view shaking of hands as a sign of the beginning of serious business talks. On the other hand, if both parties can be able to understand and work around the cultural differences, cultural differences can only strengthen the relationship between parties. A good way to understand cultural differences and approach cultural management is to check the different cultures involved against Hofstede’s Dimensions of Cultural Differences. Hofstede suggests five cultural dimensions management leaders can use to understand various cultures. These five dimensions are power distance, individualism vs. collectivism, masculinity vs. femininity, long-term vs. short-term orientation, and uncertainty avoidance (Hofstede, 1997). Business deals and business management scenarios that involves people from various cultural background have reported difficulties in achieving coherent business details compared to doing business or working with people from one’s own culture. Theoretically speaking, all cultures can be checked vis-à-vis the Hofstede dimensions in order to allow common understanding. For example, Hofstede’s power distance refers to the degree by which one social subgroup defers to the other like how blue collar workers differ to corporate workers where such distinction does not matter in United States and does in India with their caste system. Masculinity vs. femininity refers to which the preference of a certain culture over social dominance against the communal feelings and quality of life. Opening an office in Japan would be successful if a male person is to be placed as the head. The male-female preference does not exist in Sweden. Individualism vs. collectivism is the term used to refer to how society relates to each other. A society with high individualism index means that individuals in the society are more attuned on their own whereas a society with high collectivism index means that people belonging to the society generally build stronger relationships with each other. Countries like Panama and Guatemala are known as cultures inclined to collectivism and so advertising must exploit on socio-cultural collectivism in order to gain positive response. Uncertainty avoidance index measures the tendency of the culture to stick to rules and seek order. Some cultures do not want to be confronted by risks and so they would evaluate every detail from every business proposals to examine and assess risks. Germans demand more options and alternatives from a business plan than do Thais as Thais are more fatalistic of their view in life and in business. 6.0 Organizational Structure The structure of the organization determines two things: first, it tells about the speed of communication that occurs within the organization and secondly, it tells us about how the organization manages and resolves conflicts. Organizational structure is akin to communication line. An organization whose structure looks like a pyramid (hierarchical structure) has an inefficient communication process as well as conflict resolution process (Yi & Kim, 1988). This is because any communication made on any level within the organizational tree would take more time to reach the intended destination. A flat organization on the other hand allows fast and efficient communication as well as conflict resolution. Whenever conflicts occur in a flat organization, all parties concerned can be easily notified (because of the significant cut in the communication layers) and thus conflicts can easily be resolved. Simply put, organizations need to flatten their structures in order for them to resolve internal conflicts. 7.0 Conclusion A big part of the success of IHG is its ability to manage power and politics within its system by adopting a positive organizational culture that understands how culture operates and by designing an organizational structure that could complement to its organizational needs. This understanding of culture allows IHG to manage and resolve conflicts between and among individuals within its organization. References Child, J. (1975). Managerial and organizational factors associated with company performance--part II: A contingency analysis. Journal of Management Studies, 12: 12-27. Duarte, F. (2010). 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