Cultural and Social Institutional Factors in Business Environment at Argentina Suites - Essay Example

What are some of the major problems facing Argentina Suites? Identify cultural and social al factors explaining these challenges and the current business environment at Argentina Suites. Family-run and staffed business enterprises are not uncommon and should job requirements correspond with individual qualifications, should not be problematic and may be successful. The problem with Argentina Suites, therefore, is not that it is staffed with family members but that the predominant criteria for hiring appears to be familial connections, irrespective of professional abilities and, added to that, there is neither a strong organizational cultural or an effective and efficient management in place. The implication here is that a thorough review of the case indicates that the primary cultural and social institutional challenges/problems confronting Argentina Suites is the absence of an organisational culture, as would promote both organisational commitment and ethical behaviors among employees, and a leadership vacuum. Arguing that Argentina Suites’ problem primarily stems from the absence, or nature of its organisational culture, necessitates the definition of the latter and an explanation of its importance. The concept of organizational culture is of singular importance within organizational framework, insofar as it embraces and articulates specific organization’s unique set of ethos. That ethos is the primary force shaping and directing the level of formality operative within an organization; the degree of loyalty employees exhibit towards it; and the ethical standards and behavioural norms that supposedly guide the actions of employees. Indeed, as MacMohan and Harvey (2007) contend, an organization’s culture simultaneously functions as the foundations upon which employees base their behavior and the environment within which organisational commitment and loyalty are born. As such, it is the framework within which an organisation’s social and institutional characteristics are defined and, accordingly, can function to either motivate organisational success or determine failure (MacMohan and Harvey, 2007). In direct reference to Argentina Suites, the absence of an organisational culture is evident in the behavior of employees. Irrespective of the fact that the majority cannot seem to articulate the requirements and responsibilities of their job, the fact is that they do not even adhere to those responsibilities which they know to be an integral part of their job description. Hence, the front of the hotel is often left unattended and employees regularly leave their posts. Added to that, employee behaviors and decisions have, on occasions, been incontrovertibly unethical and have, as such, functioned as an immediate threat o the hotel’s financial wellbeing. On the basis of the argument presented in the preceding, it is evident that the cultural and social institutional factors which have emerged as problematic for Argentina Suites, an which may be summarised as lack of commitment and unethical behaviors, are immediately traceable to the absence of a strong organizational culture on the one hand, and an effectively organisational leadership on the other. Consequently, it is imperative to define and propagate an organizational culture which would address these identified problems: commitment, employee efficiency and ethics. What recommendations should one provide to Max to address the most critical problems? How can one make sure that the changes recommended do not hurt the motivation of employees? It is recommended that Max address the problems he has uncovered in a systematic manner, through the utilization of organizational development intervention strategies. As explained by Appelbaum (1997) intervention may be defined as a set of planned actions which aims towards the resolution of specified problems identified as impeding organizational growth and efficiency and which, upon deployment, will maximize efficiency and overcome the targeted problems. Intervention strategies, hence, aim towards the redefinition of the status quo and the redesign of the work environment which are precisely what Max must do. It is imperative, however, that he select the intervention strategy, or set of strategies which best correspond to the problems identified. Considering that Max need resolve the identified problems without adversely impacting motivation, it is recommended that all of human processes intervention, human resource management intervention and strategic intervention be used. Human process interventions are based upon the premise that organizational effectiveness is contingent upon the satisfaction/fulfilment of employees, whereby their improved functioning will positively impact organization efficiency. This intervention type is simultaneously related to both interpersonal and intergroup relations and the organization in its totality. It outlines change programs which aim towards the maximization of fulfilment and efficiency through the improvement of inter and intra group relations, as well as interpersonal ones. The inclusion of human process interventions is necessary within the context of the case as it would effectively ensure, not only the maximisation of employee efficiency but that they remain motivated. In addition to the above, Max should also utilize human resource management intervention. The aforementioned is based on the theory that organizational effectiveness is contingent upon the efficient integration of employees into organizations. It accordingly focuses on performance management and offers employees the support and direction they need in order to perform their jobs well and per requirements. As the facts of the case indicate, Argentina Suite employees are in dire need of effective human resource management and, more importantly, the training and support which will allow each one of them to perform his/her job responsibilities efficiently, effectively and professionally. The final intervention strategy which Max should utilize is strategic intervention. This is best defined as a comprehensive intervention strategy which is designed to transform organizations and the management of organization and environment relationship. That is, it seeks to create a greater level of harmony between the internal workings of the organization and the external environment in which it functions via the creation of a fit between structure, strategy, culture and the environment. This necessitates the institutionalization of organization-wide changes which basically affect a transformation of the organization, leading to greater effectiveness. It is particularly useful within the context of the case study because of the competition factor. As noted in the case brief, a number of international chains have opened in Argentina and all pose as immediate and direct threats to Argentina Suites. In order to compete and survive these threats, management has to acquire an understanding of the external environment, its demands and requirements and restructure the hotel for better responsiveness to the environment in question. Only then can Argentina Suites survive its competition. As argued in the above response to the question, Max has to deploy three intervention strategies, designed to enhance organizational efficiency and restructure the hotel itself without adversely impacting motivation levels. Should Max adopt any particular leadership style as he implements such changes? What problems should he expect? “Leadership is an integral part of our everyday existence, especially in the workplace. Because of its ubiquitous presence in all of our lives, understanding who may be a good leader is an important issue that deserves attention” (Kobe, Reiter-Palmon and Rickers, 2003). The above quote emphasises the extent to which the leadership model which max adopts will influence his capacity to implement the required changes and, indeed, to encourage employee support for these changes. From a personal perspective, and given the problems that Max is likely to confront when attempting to implement changes, primarily in the form of employee resistance to change, it is recommended that he adhere to an emotional intelligence leadership model. Leadership scholars agree that effective leadership is an emotionally intelligent leadership in the sense that it combines between both emotional and social skills (Kobe, Reiter-Palmon and Rickers, 2003). The implication here is that the core characteristics of effective leadership are emotional and social intelligence, referring to the ability to step outside the self and comprehend the emotions experienced by others and to manipulate those emotions through a unique insight into, and ability to, understand behavioural motivations (Judge, Colbert and Ilies, 2004). In other words, it entails Max not looking at the changes he plans to implement from his point of view alone but of looking at them from his employees’ points of view, understand why they may feel threatened or disturbed by the proposed changes and, more importantly, try to see why they may resist these changes. To give a very simple example, Argentina Suite employees leave their work stations, dress informally and eat and drink in public, that is in the presence of hotel guests. They are accustomed to doing so and, as a matter of fact, hardly treat their workplace or their job functions with any real degree of formality or professionalism. This has to change and employees have to adopt a much more formal and professional attitude towards their work. Not only will this necessitate a complete redefinition of employee behaviours and work ethics, in itself a cause for resistance but, the changes will be imposed by one who is significantly younger than many of the key employees and, to complicate matters, is dealing with employees who are part of his immediate and extended families. Accordingly, resistance to changes, and possibly to Max’s authority may be significant. Given the context within which the changes are to take place and considering the above stated, emotionally intelligent leadership appears as the optimal leadership model in this case. Its adoption will not just encourage Max to step out of himself and see the situation from the perspective of his employees but it will allow him an insight into the motivations for resistance to change and importantly, the behaviors and emotions which are inciting resistance. Understanding, implying both affinity and empathy will allow Max to guide, even manipulate the behavior of his employees and offset, or manage, their resistance to change. It is, thus, that this particular leadership model is recommended here. What changes should Max implement to encourage an atmosphere of honesty, trust and ethical behavior? In order to encourage ethical behavior among employees, there is one particular change which Max must introduce into the organization. Specifically, and as Weaver (2001) advocates in relation to organizations which have suffered from unethical employee conduct or wish to avoid the possibility of such conduct, the answer lies in the design and implementation of an ethics compliance program. In constructing an ethics compliance program, Max needs to first articulate a code of conduct that both explicates the requisite behavioural and ethical conduct, and warns against the most likely, or easily committed, unethical actions. Secondly, the program itself must be supervised by a well-placed person within the organization such as, Max himself or Argentina Suites’ human resource manager. The person Max selects must be renown for strict personal adherence to the concept of ethics per se, and to the organization’s code of ethical conduct. Thirdly, the leadership/management positions must only be occupied by personnel who boats a clean track record and, are above suspicion regarding any charges of misconduct. Fourthly, Max needs to establish a communications system which would provide ethical training for its employees and explicate to all personnel all information pertaining to the Argentina Suite’s espoused ethical standards and procedures. Fifthly, and as a means of counteracting incidents of misconduct, Max should establish internal reporting systems which would allow employees to inform the relevant managers of any unethical conducts they may observe, without suffering any negative consequences as a result of having done so. Sixthly, Max must develop a deterrence and sanctions system that would guide responses towards unethical conduct, complete with suitable punishments. Finally, following from specific incidents of proven misconduct, Max must formulate policies and make such adjustments to its ethics program as would address that type of misconduct, guard against its future repetition, and effectively hinder the actions that motivate it. Even though the above advise, as derived from Weaver (2001) and applied to Argentina Suites does not overtly speak of teaching employees ethical behaviour but, rather describes the components of an ethical compliance program, it does function as such. That is to say, even as it provides a blueprint for the formulation of the stated program, it acts to guide understanding as to how Argentina Suites’ management may teach their employees ethical standards. They can do so through each of the seven components mention, be it through articulation of the organization’s ethical standards, the dissemination of information pertaining to accepted conduct versus misconduct, ethical training programs, or the reward and sanctions systems which outlines the modes of tackling unethical conduct. In other words, employees are taught ethics through both dissemination of information and training. As such, it is important for Max to do so via the application of the above mentioned change – the design and implementation of an ethics compliance program. Bibliography Appelbaum, S. H. (1997) `Socio-technical systems theory: An intervention strategy for organizational development.’ Management Decision, 35(5/6), 452-463. Judge, T A., Colbert, A.E. and Ilies, R. (2004). “Intelligence and leadership: A Quantitative review and test of theoretical propositions.” Journal of Applied Psychology. 89(3), 542-552. Kobe, Lisa M., Roni Reiter-Palmon and Jon D. Rickers (2001). “Self-reported leadership experiences in relation to inventoried social and emotional intelligence.” Current Psychology. 20(2), 154-163. McMahon, J., and Harvey, R. (2007) `The Effect of Moral Intensity on Ethical Judgment.’ Journal of Business Ethics,72(4), 335-357, Weaver, G. R. (2001) `The role of human resources in ethics/compliance management: A fairness perspective.’ Human Resource Management Review, 11(1/2) , 113-134. Read More