Task: Organisational culture is an important driver of the success of a business. Discuss how organisational culture can formed (formal/informal), the organisational structures in which organisational cultures can form (groups,
divisions, teams, leaders), the notion of power in this context and the impact on employees’ work performance.
Organization Culture: Importance and Role
Organizational culture is among the chief domains related to management as well as organization. A vital task of managers incorporates the fact that they should make an effort to understand the subordinates working under them. In addition, managers can create, regenerate or revise the culture where all managerial activities take place. A fundamental definition of organizational culture states that it is the distinguishing standards, beliefs; ways as well as principles in which an individual behaves which in turn amalgamated the distinguished attributes of each organization (Bailyn, 1993).
An organization’s culture could be categorized into two divisions, which are, formal organizational culture and informal organizational culture. The work culture related to an organization is highly influenced by the formal elements which include roles, obligations, rules, regulations and accountability. Basically, they set certain anticipations which an enterprise has from each employee working in it. Formal organization culture alludes to the system where jobs are well defined, having a definite standard of authority, obligation as well as accountability (Bluedorn, 2000). It is built by the means of coordination and collaboration of several efforts done by several employees and managers in an enterprise. Each individual is obligated for the estimated performance related to a particular task on which he/she is working. Even for the purpose of communication, proper lines of authority are followed to maintain discipline in the whole organization. In addition, this type of culture is intentionally created in an enterprise (Weick, 1995).
Informal organizational culture, on the other hand, defines the relationship or bond between distinct employees working in an organization, depending upon emotions, dislikes, likes, individual attitude and behaviour. These bonds are not formed according to the protocols or regulations provided informal organizational culture. In simple words, informal culture comprises of intangible and tangible, nonspecific or specific examples related to shared assumptions, beliefs as well as values. A stated segment of organizational culture, incorporating symbols, rites, artefacts, tales or ceremonies, forms a prominent part of an organization on the whole. Thus, the management does not create it intentionally; however, it originated by itself (Dale, 2003).
The organizational culture of each company is unique in itself and numerous elements go into the creation of the same. The success key elements associated with organizational culture are:
Vision
An organizational culture behind with adequate statement of vision. This includes each decision made by workers. When the statements related to vision are clearly defined, they can help in the smooth functioning if the same (Frost, 2003).
Values
Any enterprise’s values are the main element of its particular culture. Whilst the target is stated in the vision, the values on the other hand, provides specific guidelines related to mindsets as well as behaviors that are required to accomplish vision. An organization that articulates the values in a clear manner and incorporate the vows related to the manner in which enterprise wants to serve its related consumers can help a lot in maintaining an adequate culture.
Practices
Values do not hold much significance unless they are combined with practices of an enterprise. The organization that regards individuals as their assets should also make an adequate investment in them too. The values that are stated or followed should be collaborated with appropriate practices in order to have a healthy working environment.
People
An enterprise cannot create a strong culture if the people or employees are not ready to accept or share core values. This is the reason that the huge organizations in the globe possess certain most rigid and strict policies related to the process of recruitment. Choosing a right candidate for a right job not only reduces turnover, but also provides a sense of contentment to the employees. This, in turn, helps them to embrace the culture of an organization with ease (Global Business Network, 2002).
Narrative
All organizations have their respective past and a unique story. The capability to know that history and create a narrative out of it in a formal or informal manner is a great way to explain about organizational culture to the employees. This way, workforce can easily relate to the organization. In addition, it could be noted that a company is sturdier in case it recognizes, configures and retells according to the present culture of an organization.
Place
A place can play a prominent role in configuring the culture of an organization. Open architecture is highly conducive when it comes to office attitude and behaviors such as collaboration and cooperation. Some countries or cities might bear local culture that is completely opposite of what an organization is attempting to create. Place in terms of architecture, geography and design together influences the behavior and values of individuals to a great extent in an organization (Hampden & Trompenaars, 2000).
Power alludes to the control related to authority as well as its impact on others. It is an implement, depending upon the manner it is leveraged, can produce negative or positive results for an organization. Bertram Raven and John French, who were American sociologists, published an article in the year 1959, titled as The Bases of Power which was concerned about classifying power in the firms. The power could be used through a direct authority or by intangible means. Basically, the chief source of power is the appropriate knowledge. An individual possessing knowledge is the one who can make use of the same in a direct or indirect manner to influence others. The authority related to knowledge is mainly independent of the positions or distinct levels. Power can strengthen authority; however, the authority is also among the chief sources related to power (Lewis, 2003).
Organization structure ascertains the attitudes, behaviours, ethics and dispositions which in turn build an organizational culture (Sterman, 2000). In case the structure of an organization is hierarchical, with the centralization of decision making power at the top management, the organization’s culture would possibly reflect a dearth of freedom as well as autonomy at the lower level in the box of hierarchy. Conversely, in case the structure of an organization is more of a decentralized where the authority and power are shared at all existing levels, the organization’s culture in this type would be independent, accountable as well as customized. It could be stated that the organizational culture evolved around the structure of an organization. In addition, there would be a variation in the culture if there is a variation in the culture. Organizational culture can also get modified in case the administration changes the manner in which employees are assigned their specific roles and responsibilities (Kleiner, 2003).
Geert Hofstede presented an organizational model, comprising if five autonomous variables (Hofstede, G. (2001). By now it is clear that organizational culture alludes to the manner in which employees of an enterprise associate with one another, their work as well as the external world in comparison to the remaining organizations existing in the market. The variables allow tangible alignment of behavior and attitude of employees with an organizational culture.
Power Distance
The organization where power is allocated in a balance manner among all designations, here every person irrespective of the level at which he is carrying out his duties, would get an advantage to enjoy equivalent rights and benefits. Conversely, the organization where the top management in the hierarchy gets special treatment from the administration as well as group leaders have more responsibilities than the employees working at lower levels. Basically, power distance dimension alludes to the distinction in the work culture, according to the way power is delegated among workers. There are certain enterprises that believe in employing team leaders who handles the responsibilities related to the team working under them and make an effort to extract the best out of these employees. In addition, the team members too, show adequate respect to their managers and carry out tasks according to their advice or orders. On the other hand, in certain firms, each worker is considered accountable for the individual performance. Here, no manager is appointed and these individuals are treated equally in the organization (Martin, 2002).
Masculinity vs. Feminity
This alludes to the impact of distinctions in values related to male and female on the organizational culture. Enterprises where male workers are more dominant to their female colleagues would follow distinguished policies in comparison to the organizations where females have a prominent role in the procedure of decision making process. Male workers would be mainly of an aggressive nature, whereas females would be more softhearted as well as caring. The obligations are also different on the basis of gender. The tasks which command repeated or numerous traveling or late settings are never given to the female employees.
Individualism
There are certain forms that have major dependency on the teamwork. The employees with similar interest come together and work as a team in this type of organization. In addition, these firms have a faith in the fact that the yield is higher when all employees exchange their concepts and have discussions regarding a task to create innovative ideas. There is a healthy bond between all employees and are ready to help each other in all circumstances. However, in some enterprises, employees prefer to work on an individual basis rather than working in a team (Paslack, 2004).
Uncertainty Avoidance Index
It alludes to the culture wherein workers understand the manner in which they have to react to unforeseen situations. It is associated with the forbearance level of workers in both uncomfortable and comfortable circumstances. Enterprises make hard efforts to avoid these kinds of situations from occurring and train their workers to deal with all the situations.
Long Term Orientation
There are certain enterprises that emphasized in long term relationship with the workers. The employees, in these kinds of organizations, work hard to fulfill the expectations and targets of the administration. Here, the workers develop an emotional bond with the company and does not focus on accomplishing short term goals. Conversely, there are certain firms that comprise of workers giving more significance to position as well as images. They adapt an organizational culture where wherein individuals move on in a shorter duration and the company does not have control over turnover ratio. In this case, workers are highly ambitious and interested in making profits. They shift to another company as soon as they receive a better opportunity for themselves (Salk, 1997).
Organization structure is completely concerned with power. The manner in which an organization distributes the power, as well as authority, ascertains the way in which employees act or behave. In other words, the organization structure is the mode for an enterprise to arrange its administration as well as the line of authority. In certain firms, organizations follow a structure where power is centralized in a few hands (Sorensen, 2002). Centralization is a structural component that delineated the allocation of power in the organization. Here, the founders of an enterprise might be the persons who ascertain the decisions that need to be taken for the company. Enterprises, where all vital decisions are taken by headquarters are known as centralized firms. As per some researches, the dearth of centralization can have negative outcomes. In addition, the decisions taken by top management or the person who have power are implemented by the levels working under them. For instance, a company owned by Mr Thompson, where all important decisions are taken by him would be a centralized firm. In this case, the decisions related to the product, finance, location and other vital domains would be taken by Mr. Thompson. In addition, the levels of hierarchy under him like real leaders or members would be the ones who would implement his decisions and supervised the employees working under them to accomplish the set goals (Schneider, 1990).
Organizational culture tells us a lot regarding the way activities are being carried out in an organization. It also indicates the strength of bonds that exist between superiors and subordinates in a particular company. Fundamentally, it is a personality of an enterprise that delineates the behaviour, attitudes, beliefs, psychology, values and experiences of an enterprise. It leaves a great impact on the manner in which employees working in an organization deal and communicate with customers, stakeholders and with one another (Zalami, 2005).
References
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Bluedorn, A. C. (2000). Time and Organizational Culture. In N. M. Ashkanazy, C.P.M. Wilderom, & M. F. Peterson (Eds.), Handbook of Organizational Culture and Climate. Thousand Oaks, Ca: Sage.
Dale, B.G. (2003). Managing Quality. 4th Ed. Oxford: Blackwell Publishers.
Frost, P. J. (2003). Toxic Emotions at Work. Boston: Harvard Business School Press.
Global Business Network (2002). What’s Next? Exploring the New Terrain for Business. Cambridge, Ma: Perseus Books.
Hampden, C. M., & Trompenaars, F. (2000). Building Cross-Cultural Competence. New York: Wiley.
Hofstede, G. (2001). Culture’s Consequences. 2nd Ed. Thousand Oaks, Ca: Sage.
Lewis, D. (2003). “Theorizing The Organization And Management Of Non-Governmental Development Organizations Towards A Composite Approach”. Public Management Review. 5(3). 325–344.
Kleiner, A. (2003). Who Really Matters. New York: Doubleday Currency.
Martin, J. (2002). Organizational Culture: Mapping the Terrain. Thousand Oaks, Ca: Sage.
Paslack, N. (2004). Operations Management. 4th Ed. Edinburgh: Pearson Education Limited.
Salk, J. (1997). Partners and Other Strangers. International Studies of Management and Organization. 26(4). 48–72.
Schneider, B. (Ed.) (1990). Organizational Climate and Culture. San Francisco, Ca: Jossey-Bass.
Sorensen, J. B. (2002). The Strength of Corporate Culture and the Reliability of F Irm Performance. Administrative Science Quarterly. 47. 70–91.
Sterman, J. D. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World. New York: Mcgraw-Hill/Irwin.
Weick, K. (1995). Sensemaking in Organizations. Thousand Oaks, Ca: Sage.
Zalami, A. (2005) Alignment of Organizational Cultures in the Public and Private Sectors. Presentation Given At Excellence in Public Service. Amman, Jordan.
