Corporate Culture and Organizational Change - Essay Example

Corporate Culture and Change SECTION A Organizational Culture and Change Organizational cultural climate change is inevitable considering that change in general cannot be avoided, and the continued globalization of the economy. Organizational cultural climate change is occasioned by both external and internal factors, and it is very important since business performance highly depend on it. Organizational culture is a group of norms of behaviors and shared values that make those norms work. It stipulates what employees, managers, and all other stakeholders should do, at what time, with whom, where, and how. Organizational culture originates from their founder, that’s the members of the organization, and each member is supposed to make the culture function as intended. Cultural change in an organization occurs when a person at the top decides that old ways are not functioning, proposes new ways of doing things, enacts a new vision, and makes others to act differently. If the new changes are communicated, celebrated, and leads to better ways of doing things, they will be adopted, and new shared values will start growing. To better understand how cultural climate and its changes relate to the performance of an organization, this essay focuses on Vodafone, as the case study organization, which has undergone several organization cultural changes. The essay analyses why organizational changes are necessary in relation to the chosen organization, as well as how they improve the overall performance of the organization. It covers several factors such as shared values, goals on an organization, the effects of those goals, as well as the effect of that change on work practices. Organizational climate explains how members of an organization experience the culture of their organization. It is subject to alteration by the upper management. Though culture can be changed, it is not that easy to change what members of an organization have been used to. On the contrary, it is easy for the management to initiate changes in the climate of the organization. Vodafone’s organizational culture represents the personality of the organization, while its climate represents the company’s mood, and is much easier to measure and experience than the culture. This further explains why it is easy to change it. There are several types of organizational climate that can be produced by the prevailing organizational culture. These can be grouped in varied ways. Some of the most common ways of grouping organizational climate is climates that are rule-oriented, innovation-oriented, people-oriented and goal-oriented (Colao, 2013). Vodafone’s organizational culture and structure are inseparable. They influence one another, and help determine the mood of the company. They play a critical role in shaping the performance of the organization. The company has over 80,000 staff worldwide, and has branches in several parts in the world. Vodafone’s long history of divisional organization structure has deprived the company several opportunities. However, over the past few years, the company has initiated several changes that have helped improve performance and employee relationships. A survey conducted by (Colao, 2013) found that the company had no formal recognition to its employees as part of its culture. A culture that does not recognize employees when they perform exemplary duties makes it hard for the employees to get motivated. Employees who are not motivated always record low performance, and this contributes to the failure of the organization. This was the situation at Vodafone before the management initiated organizational changes. As part of its organizational cultural change, Vodafone started to follow a people-oriented culture. The management took it seriously and introduced a couple of measures to increase employee recognition. A good example is the introduction of the Legends’ Scheme. Under this scheme, employees who show exemplary performance are rewarded accordingly, and promotion if need be. However, under this program, employees are encouraged to nominate colleagues who have shown outstanding performance throughout the year. The nomination exercise is a way of encouraging employees to participate in decision-making processes, which is a very important aspect of a good organizational culture. When nominations are completed, and winners selected, the company pays for their trip expenses, and sent them to luxurious vacations. Organizational cultural climate has been friendly at Vodafone since introduction of these measures. Employees often do their best knowing that if they emerge top performers, they will be paid off for their hard work. Organizational cultural climate greatly influence what is happening around a workplace. Factors such as perception, ability and skills, attitude and personality can greatly affect the performance of an organization. An organization that that builds positive perceptions, believes in employee’s abilities, and helps promote positive attitudes towards work performs better than one that does not do all these. Since an organization cannot function without employees, there is a need to check on these factors. However, not all employees are the same, and can fit in any group. This means that employees are diverse, and thus at some point, they may hold diverse views. Vodafone has seen the importance of embracing diversity in its operations. One of its shared values is embracing diversity for better performance, and this has been ensured in all branches, including braches that operate in countries with different races of people. The management of the organization is comprised of employees from different races, and cultures (Celina, 2014). Organizational cultures can be dived in four categories namely; collaborative, controlled, competitive and creative culture. Each of these types fit in a given organization, and what works in a certain business need not necessarily work on another. In other words, each organization must have its unique cultural climate with different ways of doing things (Celina, 2014). Collaborative culture encourages employees to cooperate on projects, inside and outside their departments. Teamwork is very important with this culture, and employees must be willing to cooperate throughout their working hours. Collaborative cultures work in several types of business especially for businesses that require a combination of skills. Controlled culture strictly controls and monitors what employees are doing. Being punctual and dependable is highly appreciated, and there is no room for error with this type of culture. The environments put high emphasis on certain things like cost-effectiveness and high efficiency. Competitive culture is opposite to cooperative culture. It sets up workers against each other and asks them to compete based on goals. Achievement of stipulated goals is the major concern with this culture, and sometimes, it may require the use of commissions and incentives to motivate employees to do more within their working environment. This brings a competitive environment in the organization, which can possibly raise the overall performance. Creative culture is adopted mostly by technology companies like Vodafone. Creative culture places emphasis on cooperation among workers, and in many times allows employees to carry out independent projects. It also emphasize on the significance of taking risks and being novel. Vodafone scheme of rewarding top performers is built on this culture since it helps encourages employees to be innovative, and become independent. However, it also creates a competitive environment within the organization that has helped improve performance of workers (Vodafone Group, 2013). Organizational cultural climate determines what leadership and structure should be adopted. On August 2013, Vodafone announced several cultural changes that changed its organizational structure, and the working environment in the company. The company announced that changes in its organization that were designed to ensure a more effective and efficient delivery of services by the start of 2015. The new structure allows the company to implement its enterprise and consumer plans more consistently and quickly. The company had a divisional organizational structure before implementation of a unified structure, which now allows unified communications. From 2013, the company merged Central and Northern Europe regions into a single region. Emerging markets of Asia, Africa and the Middle East were grouped in one region. However, the cultural climate in the organization has undergone several changes. Vodafone also creates an expanded Group Commercial function, comprised of unified communications, partner markets, terminals, as well as customer operations. These changes enable the executives to create a culture that is focused on people. According to the Company’s CEO, Vittorio Colao, these changes are anticipated to improve the customer experience as well as develop a commercial strategy more easily and consistently (Vodafone Plc, 2013). From the above observation, it can be noted that organizational cultural climate influences the overall performance. Vodafone is now switching to a more centralized organization structure, which creates people-focused environment. Moreover, the company is also engaged practices that help improve employee performance by recognizing them, and involving employees in decision-making processes. Vodafone is said to have improved its performance after the introduction of a centralized structure, and adoption of a better employee motivation strategies. References Celina, K. (2014). A Perceptive in organizational culture . Alberta: Booz & Company. Colao, V. (2013). Interim managemnet statement . Newsbury: The Connection . VodafoneGroup. (2013, June 12). Using technology to improve economies. The Times 100, p. 4. VodafonePlc. (2013). Sustainability report 2013/1014. London: Vodafone Group. SECTION B Political Situation at Vodafone There is no organization on earth that does not encounter politics. The degree to workplace politics varies from one organization to the other, but the truth is that all organizations have internal struggle that can affect their performance. Dealing with this struggle involves a careful examination of the internal political landscape, the rules of the game political game being played, and the players of the game. An organization’s political landscape starts from the top management and whoever leads the organization will not only form the political landscape, but also influence the formulation of rules and regulations that govern employees. A political landscape can be defined as the formal, informal or alternative hierarchies that connect political players together. In most organizations, there is an organizational chart that outlines how reporting should be done and who should report to whom. The paper analyses a political situation at Vodafone workplaces with in relation to games of Henry Minztberg and Allen et al political behaviors. Different researchers have come with different interpretations of the causes of organizational politics. According to (Cacciatolo, 2014) certain organizational conditions make employees engage in workplace politics. Since people are different, and have diversified points of views towards organizational matters, how they respond to organizational conditions is different, and this makes politics inevitable in the organization. Another view holds that workplace politics originate from eternal competitive demands that are experienced when an organization pursue a global strategy. Globalization leads to changes in the organizational structure and involves a lot of technological transformations. However, workplace politics may be as a result of structural relationships within an organization. A group of employees may have particular performance indicators and goals to achieve that are different from those of the other group. According to ( Omisor & Nweke, 2014) such conflicts arise from diversity, and can be beneficial to the entire organization because they improve decision-making processes and improve output through constructive criticism. Henry Mintzberg holds that political behavior is a collection of games, and some of the games such as rivalry games between organizational and support workers, may bring a persistent pattern of organizational behavior. Thus, it is very important to first identify the political situation in an organization, and the game it seems to play (Newton & Sauter, 2010). Vodafone’s current situation of centralizing control and communication, and unification of Northern and Central Europe raises several political concerns. The company’s actions to change its divisional structure to centralized structure affect several things such as decision making, control, employees as well as customer experience. There is no doubt that some parties will benefit more than the others. Though the top management aims at hastening decision-making processes, it should be understood that this move changes the organizational climate. Employees will take time before they adapt to this new climate, and during this period, as they get used to the new changes, performance may slightly go down. However, as part of its reforms, Vodafone directors sold the firm’s stake to a Verizon Wireless; a U.S based wireless company, which saw its profits rise by a considerable amount. This further ads to the company’s organizational politics since it faced a lot of criticisms from the government for not paying capital gains tax on the deal. Since the top executives did not pay tax, this raises political questions within the organizations, and employees may demand more salaries since they already know that the company is doing well. Mintzberg describes organizational politics as a Darwinian effect system that is exploited by people who are politically skilled to fasten their progression into leadership positions. Mintzberg also states that political behavior is a mixture of games that fall into four categories namely; power base games, rivalry games, authority games, and change games (Vigoda‐Gadot & Talmud, 2010). He identified two types of authority games; games that resist authority, and managers who try to increase their control over their subordinates. This is what Vodafone has done. After realizing that divisional organizational structure resulted to slower decision making and communication, the top managers decided to centralize operations, which allow major decisions to be made by the top management, with minimal subordinate participation. Since employees were would possibly not accept this move, Vodafone managers came up with a way of countering opposition by introducing incentives that favor employees. To motivate employees, and possibly make them accept the new changes without rebellion, Vodafone initiated a scheme where employees are allowed to make decision regarding rewarding good performers. According to (Dörrenbächer & Geppert,2011) power base games are aimed at increasing one’s organizational power, and so it can be argued that managers at Vodafone headquarters aimed at increasing their power, though in a subtle way. In case of power, (Dörrenbächer & Geppert, 2011) provide an explanation of two types of organizational power; systematic power and episodic power. These forms of power guide organizational politics, and affect how information flows between groups, individuals and organizations. Episodic power is a distinct and premeditated political conduct that is pioneered by self-interested people who are very able to influence decision-making processes. However, systematic power is directed to the social systems of an organization, and incorporates accreditation and socialization processes. Vodafone’s case uses systematic power, since the CEO who occasioned these changes had no self-interests in the organization. The changes were accepted by all the levels of management, and thus the CEO exercises systematic power. Another type of political game that’s evident in Vodafone’s case is change games. According to Mintzberg, change games are intended to induce organizational changes. They include; Whistle blowing, strategic candidates and Young Turks games. Whistle blowing games involve lower status employees to trying to effect an organizational change, where one repots the actions of the other with the hope of bringing change. This is what Vodafone is doing with its new rewarding system. The scheme allows employees to watch over one another, and monitor who is doing better than the other. Following the above investigation, it can be noted that organizational politics are inevitable, and takes different forms depending on the structure and cultural climate of the organization. Vodafone change from divisional to unified organizational structure where communication and decision making are centralized presents various political activities in the organization. Change games are evidently seen taking place within the organization, and this helps improve performance in the organization. References Cacciatolo, K. (2014). Defining organizational politics. European Scientific Journal, 14. Dörrenbächer, C., & Geppert, M. (Eds.). (2011). Politics and power in the multinational corporation: The role of institutions, interests and identities. Cambridge University Press. Newton, R. A., & Sauter, V. (2010). SYSTEMS DEVELOPMENT AND ORGANIZATIONAL POLITICS. Omisore, B. O., & Nweke, A. N. (2014). The Influence of Power and Politics in Organizations (Part 1). International Journal of Academic Research in Business and Social Sciences, 4(7), 164-183. Vigoda‐Gadot, E., & Talmud, I. (2010). Organizational politics and job outcomes: The moderating effect of trust and social support. Journal of Applied Social Psychology, 40(11), 2829-2861. Read More