Examine The Meaning Of Organizational Culture Marketing Essay
In this section of the whole report, we will critically examine the meaning of organizational culture as well as how necessary its importance is to an understanding of strategic management. As we all know, every organization have its own working culture and this common practise has been acknowledged since the 1980's. A lot of professionals have argued that encouraging the whole organization to practice unique cultures is the way successful leaders conceptually manage their staffs to achieve instinctive goals according to their purpose of living/ working. Hereinafter, we are firstly to discuss the definition of organizational culture in strategic management terms.
What is 'Organizational Culture'?
"Organizational theorists and corporate leader have produced voluminous material on organizational culture and its offspring-symbol, language, ideology, belief, ritual, and myth" (Pettigrew 1979). Organizational culture is not only a dynamic phenomenon that surrounds us all the times, it has also been being enacted and created through our interactions with each other, with clients, with stakeholders, ... It is a combination set of organization values, visions, norm, working language, systems, symbols, routines and beliefs. In some understandings, it is also the pattern of behaviours and assumptions that are influenced by the organization itself to invisibly attach its members to be committed in the same way of perceiving, thinking and feeling.
Understanding of 'Organizational Culture'
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After some deep analysis of worldwide strategic management researches, organizational culture has been identified as an abstraction, yet many powerful forces were created from it in communities and the society. It directs all of us to choose how we act or behave towards others. Hence our acts are determinants for the organization's performances, process and outcome. Certain scenarios have shown that when the cultures that have been practiced within communities through years conceive false or immoral perceptions, it will cause visible down-hills or unexpected crisis resulting afterwards. "The concept of organizational culture also makes available a base for determination the differentiation that may survive in-between the organizations that are doing business in the same national culture" (Schein 1990). Therefore, management teams, up-lines and supervisors are strongly recommended to conceive the rightfully perceptive cultures among the whole organizations has always been a huge challenge within many big companies. The key of success is in our hands if we can predict how our decision makings lead to negative or positive outcomes. "The complete knowledge and awareness of organizational culture should help to improve the ability to examine the behavior of organization which assists to manage and lead" (Brooks 2006).
Organizational Culture practiced in Mercedes-Benz Companies
Let us make an analysis about some companies that realistically practice organizational cultures. Focusing on automobiles industry which apparently sounds familiar to elitists, most commonly in richly developed society like western countries, one of the biggest automobile manufacturers is Mercedes-Benz. Speaking of this very famous manufacturer should never be a quick brief, because it is not only known as multinational division of German manufacturer Daimler AG, but its own brand has also been used for luxury vehicles such as cars, coaches, buses and vans. The headquarter company of Mercedes-Benz is at Stuttgart city of state Baden-Württemberg, Germany. Mercedes-Benz has made a huge reputation since it was patented in 1886. Nevertheless, till date, Mercedes-Benz never stops creating new organizational cultures to practice.
Mercedes-Benz's "The Best or Nothing" Slogan
On 11th June 2010, Mercedes-Benz officially launched new slogan "The Best or Nothing" which declares the core value "Perfection, Fascination and Responsibility". This new slogan also refers to the principle of the organization introduced by Gottlieb Daimler - the company's founding father.
We invented the automobile and originated technologies that are now taken for granted - from the safety cell to ABS, the airbag or ESPÂ®, and unique technological highlights such as 'PRE-SAFEÂ®'. Based on this tradition, our customers expect nothing less than technological leadership. For us, that means we want to deliver the very best in all areas - be that in research and development, production, sales, service and aftermarket business or in purchasing (Schmidt 2010).
In this speech, Dr. Joachim Schmidt - the Executive Vice President of Mercedes-Benz Cars Sales and Marketing confidently announced that delivering the best to their consumers in terms of product innovation, technology development and service excellence, is not only the mission and core values of Mercedes-Benz, but also is this organization's purpose of living and breathing. His perception was extremely relevant to Gottlieb Daimler's "The Best or Nothing" ideal. This implies that Gottlieb Daimler generated an organizational culture that has influentially characterized his whole Mercedes-Benz corporation. With no surprise, his organizational culture has been not only widely adopted by leaders and management teams but also enthusiastically practiced by all employees in this community.
Impact on Mercedes-Benz's products
As analyzed, "The Best or Nothing" ideal is elaborated to fulfil consumers' expectation in every possible aspect. When automobiles has become the most popular physical features of the manufacturer, consumers would first pay their concerns on the product innovation to judge whether it deserves being rated "The Best" as announced. According to the Mercedes-Benz company sales' record in the beginning of year 2010, the total worldwide sales of Mercedes-Benz car products has increased 16 percent higher compared to the previous year in the same period of time. There were 16 new upgraded automobile models created and launched during years of 2010 and 2011. In autumn 2010, there was one set of benchmarked products released known as "the efficiency of modern internal combustion engines", which were V6 and V8 models. With their brand new engine system, they consume 24 percent less fuel than the earlier models. This function was considered cost-saving, met most of the needs of consumers and matched the rate for the most efficient car products in automobile industry.
Impact on Mercedes-Benz's customer service
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However, besides product quality, consumers also give judgments to the company based on customer service. "The Best or Nothing" culture of Mercedes-Benz organization also comprises delivering high-range of customer service quality because "Customer satisfaction is a key factor that helps determine which automotive companies will survive in the future" (Schmidt 2012). Regarding this manner, Dr. Joachim Schmidt thoughtfully expressed in speech his opinions towards the importance of customer service quality.
We try to thrill our customers not only with groundbreaking technologies and fascinating products and services but also with our outstanding customer care. Customer satisfaction is a key factor that helps determine which automotive companies will survive in the future. Customer satisfaction and loyalty decide whether customers choose to purchase another one of our vehicles, whether they decide to buy, finance, or lease our cars, and whether they come to us for maintenance and service. Most importantly, these factors also determine how many times customers will return to our company.
The important thing here is that we don't regard our goal of achieving outstanding customer care as a temporary project. Instead, we have firmly established the associated attitude as a shared state of mind at sales and service departments around the world. In the end, we also try to continually exceed our customers' expectations because only enthusiastic customers will become loyal customers who will choose a Mercedes-Benz the next time around as well. Evidence of our success here is provided by the high degree of loyalty - the highest in the premium segment, in fact - that is displayed by Mercedes-Benz customers. Nevertheless, we continue to work on developing new customized service products that will help bind our customers to us even after the sale (Schmidt 2012).
According to Dr. Joachim Schmidt responses, being able to fulfil customers' satisfaction is a sustainable key that leads the whole organization to achieve success. By setting up this organizational culture, Gottlieb Daimler has strictly aimed for the "perfection", meaning that the organization is not allowed to provide insufficient services to their customers. "A product means nothing without consumers, and a company plays no role without supportive customers", throughout this understanding, customers are the greatest impacts on profit and loss of a company sales because they "decide whether customers choose to purchase another one of our vehicles, whether they decide to buy, finance, or lease our cars, and whether they come to us for maintenance and service" (Schmidt 2012).
Impact on the staffs' performances in Mercedes-Benz companies
The great impact of Mercedes-Benz organizational culture does not only end at product and service quality, it also influences the working styles of employees within the company. As reviewed, there are plenty of testimonies revealed by different employees in Mercedes-Benz branches located in United States (MBUSA).
Being such an innovative company, we are always searching for new technologies and methods to provide a superior vehicle. As the Environmental Compliance Engineer, this means constantly being up-to-date and compliant with all governmental regulations, and there are many, many regulations (Roopnarine 2012).
Continuously being a process improvement leader, repeatedly making efficiency improvements in a very mature facility. Inspiring individuals through my leadership to always be the best at what they do and strive to achieve 'stretch goals' (Ciszon 2012).
These above experiences were honestly written by Shaun Roopnarine, current Environmental Compliance Engineer and Martin A. Ciszon, Manager of Carol Stream, IL Parts Distribution Centre respectively. Their testimonies implied how challenging working in Mercedes-Benz organization is, as it requires employees and management teams to contribute their maximum efforts in order to improve productivity. Every single member in Mercedes Benz organization is expected to be at his most qualified performance, thus become ambassadors of the company regardless of who they are, whether they are safety engineers, head designers or electronics specialists.
It is very important for organizations to make performance measurement system to evaluate the performance of the employees, which is very helpful to evaluate the achievement of organizational goals and in developing strategic plans for the organizations (Ittner and Larcker 1998).
Anyway, by supporting all employees with best motivation and opportunity, as a result Mercedes-Benz manages to effectuate its success through many years. "When organization members realize that they will be rewarded for performing or acting according to the espoused core values of the organization, their desire to do so increases" (Luthans 1989). Motivation is a key of improving staff performances.
Impact on social responsibility acted by Mercedes-Benz companies
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Hereafter, last but not least, "The Best or Nothing" has also made an impact on corporate social responsibility. At Los Angeles city of United States in 2009, the Mercedes-Benz Driving Academy has launched with more than 4,500 students enrolled. Earlier, this Academy already had its branch at United Kingdom, German and Netherlands. The reason for Mercedes-Benz Driving Academy to be introduced was to improve the social safety. The most common cause of death occurred to teenagers who are their most targeted audiences in the United States is vehicle's crashes accident. Therefore, this Academy provides them effective training programs to educate them to drive safe and avoid accidents from happening. The program prepares three stages in total, which are Provisional Learner's Permit, Provisional License and Adult License. Drivers who are under 18 must compulsorily complete them with high passing grades to be legally issued drivers license. With such safety programs promoted, it proves that Mercedes-Benz professionally practised moral and social responsibility to deliver "The Best" to consumers even after their products have been purchased away with costly price.
Multi Level Marketing Companies
Indifferently, let us make another analysis on an organization called Infinite Lifestyle Private Limited, located at 36 Kaki Bukit Place road, LFI Business Centre building in Singapore. Infinite Lifestyle Private Limited is known of short term "LFI Group" or "In Life". Since LFI Group was incorporated in 2006, it became one of the fastest growing network companies in Singapore and supported by numerous affiliates and offices all over the world, such as in Vietnam, Indonesia, Malaysia. In 2011, LFI Group was given award and certificate for achieving top 500 of all the Small and Medium Enterprise (SME) organizations in Singapore. As researched, there are 160,000 SME companies in Singapore, therefore being in top 500 is considered as the greatest achieve for LFI Group. However, LFI Group does not seem widely familiar with a lot of people, because it follows Multi Level Marketing strategy.
Criticisms for Multi Level Marketing
Multi Level Marketing (MLM) is a strategy in which the sales force is compensated not only on sales the salesmen originally generate, but also on a few percentages of the sales made by the other salespeople that they recruited. This recruited sales force is referred to as the participant's down-line, and can provide multiple levels of compensation. MLM can be known with the term "pyramid selling", "network marketing" and "referral marketing". Being specified from commonly traditional marketing, MLM is a direct selling from one to another via word of mouth strategy. Apparently, as reviewed, MLM companies have frequently been a subject for criticisms as well as the target of lawsuits, because it is highly suspected as an illegal marketing scheme, price-fixing products, high initial start-up costs, emphasis on recruitment of lower-tiered salespeople over actual sales, encouraging or requiring salespeople to purchase and use the company's products as testimonies, potential exploitation of personal relationships which are used as new sales and recruiting targets, complex and sometimes exaggerated compensation schemes, and cult-like techniques which some groups use to enhance their members' enthusiasm and devotion.
Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It's best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products (FTC 2009).
As FTC has stated the warning, in 2004 Walter J. Carl had also given his optional criticism in Western Journal of Communication article that "MLM organizations have been described by some as cults (Butterfield, 1985), pyramid schemes (Fitzpatrick & Reynolds, 1997), or organizations rife with misleading, deceptive, and unethical behaviour (Carter, 1999), such as the questionable use of evangelical discourse to promote the business (Hopfl & Maddrell, 1996), and the exploitation of personal relationships for financial gain (Fitzpatrick & Reynolds, 1997)". This has shown how much MLM strategy is not recommended to follow in order to maintain the instinctive characteristics of traditional marketing.
Organizational Culture practiced in LFI Group
However, there are always strong beliefs and visual missions that have always been practised in LFI Group by Sales Directors and Sales Managers as well as their down-line members, which will never be influenced by the social criticism. The members of LFI Group have declared that "MLM or Network Marketing is the fastest way to reach success."
I like to define networking as cultivating mutually beneficial, give-and-take, win-win relationshipsâ€¦ The end result may be to develop a large and diverse group of people who will gladly and continually refer a lot of business to us, while we do the same for them (Burg 2012).
The truth is, the top of the network marketing system is open to everyone-unlike traditional corporate systems, which allow only one person to reach the top of the company (Kiyosaki 2000).
By having faith in Robert Kiyosaki - the author of the famous novel called "Rich Dad Poor Dad" and some other professional experts, LFI Group has been confidently putting adequate efforts to extend its relationships to others in order to obtain their reward given by Singapore govern today. The policy of LFI Group as well as other MLM companies declares obviously that there is no such thing called employees because every single member dominates his own business and his goal is to generate his network using his marketing strategy, therefore, the organizational culture of LFI Group is "MLM is the most sufficient way that leads to success and wealth."
Impact on the perceptions of LFI Group's member
The reason for LFI to repeatedly practise this organizational culture is because they strongly believe that MLM does not have requirement in recruiting people such as according to demography, educational background and unique potentials, but as long as recruited salespeople are humble, willing to learn and have dreams. In additional, MLM also nurtures people the opportunities to earn standard one-year income monthly if they work hard. It seems to be the most actionable way that enables people to achieve their dreams that many others have spent whole life to get, such as costly cars, expensive houses and early retirement. In this company, top directors do not have to spend years nor depend on relationships to achieve their positions. Their hard work and widely diverse network of down-lines are advantageous tools that bring them to successful future.
Impact on LFI Group's partnership
As observed, this MLM influential belief has made a great impact on products, partners, customers, members and social responsibility just like Mercedes-Benz. In this company, partnership is the most important key because its products are totally made by other companies. As in examples, LFI Group has been having partnership to release some products such as diamonds and jewelleries in Just Diamonds store by DeFRED, Long Far B&H Capsules and F-Essence medicines provided by Guardian Health and Beauty, S-factors as dietary products as a support to consumers with LFI Wellness Sanctuary altogether, etc... All products are sold with the same quality as in its retail outlets but with offered discounted prices of 15 percent less compared to original price which have attracted many customers to purchase from LFI company's networks. By winning the sales just through word of mouth, the strategy of LFI Group has been much simplified compared to Direct Selling Marketing Strategy.
Impact on staffs' performance in LFI Group
In another hand, this MLM organizational culture has affected the mindset of all the members in LFI Company since there is a required testimony of products by salesmen before selling them. Logically, "nobody knows how good their products are unless they experience the effectiveness" - therefore, salesmen are advised to purchase and use company's products beforehand in order to market them to other consumers with honest reviews and trustworthy use of word of mouth. This issue gives a worth-to-learn lesson on social responsibility, as salesmen have to be responsible in their own business strategies. Salesmen cannot give false statement/ opinion about company's products because everything is based on their own experiences - "cheating and exaggerating are not the rightful techniques to win sales" according to up-line managers' advices.
As proven, LFI Group as well as other MLM organizations has practised its shared beliefs through networks by networks regardless of how strong the social criticism speaks against MLM. This steadfastness should be well symbolized for strategy beginners to follow up with.
Optionally, I strongly believe that for any organizations in the whole universe, organizational culture is the most important concept, because its structure has led the groups and individuals to become the determinants of success. An organization is not a place whereby unsystematic group of people take part in mutually. It is where individuals are selected by proper criteria in order to help the organization achieve targeted goals. Organizational may have negative and positive effect on different workplaces and staffs, but moreover it is very important to understand organization structure as it will help individual to understand the strategies of the organization's management teams and which ways are to commit with excellent result.
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