The aim of this paper is to analyze the organizational culture and its impact on the strategic management. In recent years, the importance of organizational culture is discussed and emphasized more and more frequently. People begin to focus on its impact of organizational culture on the corporation management from many perspectives, such as clients, vendors and employees. Firstly, before the analysis of the importance of organizational culture on strategic management, we should make sure what organizational culture is. Thus, the definition of organizational culture is found out. Secondly, we critically analyze its impact on strategic management from 4 aspects, which are customers, partners, employees and corporate social responsibility. To a certain extent, the strategic management is determined by the culture of organization. The strong organizational culture gives the company a clear and explicit philosophy about business. On the contrast, the weak organizational culture always links to no clear strategic management. In other words, employees do not know how to conduct business in the workplace, and the corporation does not have characters for clients. Using the wide range of the examples and literatures, the importance of organizational culture to an understanding of strategic management is analyzed critically. Last but not least, this paper makes the conclusion of the critical analysis and further gives some suggestion for the strategic management of corporations.
1 The concept of organizational culture
What is the organisational culture? In fact, the organizational culture is the basic beliefs of the company that are accepted by clients and shared by employees. There are a large number of the definitions of the organizational culture. The organizational culture is the common value of the company, which develops an understanding of both the company’s opportunities and constraints. States that managers consider the organisational culture as an effective control tool that can influence people’s thoughts, beliefs and value. In other words, organizational culture can be used to achieve internal control and take advantage of the opportunities by companies. The organizational culture is made up of the organization values, working beliefs and habits. It is kinds of ways of thinking and feeling that are approved by organizational members. In other words, although there are diverse cultures in the large organizations, the common characteristics of beliefs are existed in the management team (Gordon 2008, P. 20). The common beliefs shared by the members in the organisation are the essence of organization culture. It is a kind of thinking mode which is approved by each other about the organisation. In the organizational culture, people and groups interact with each other, including clients, partners and employees (Hill and Jones 2001, P. 56). The power of organizational culture cannot be ignored, because it inspires employees, attracts clients and promotes the cooperation with partners. For example, ” The Best Or Nothing” (Daimler 2010). This is Mercedes-Benz company’ s mission, and their organization culture are Perfection, Responsibility and Fascination. Perfection including comfort, quality and safety. Responsibility including customer care, sustainability and innovation. Fascination including motorsport, life style and design essence. Until this very day, this leadership expectation remains fundamental to the thoughts and actions of every single Mercedes employee.
2 The impact of organizational culture on strategic management
Organizational culture plays an important role in the strategic management of companies. In fact, organizational culture is a factor that determines the survival or failure of organizations. In other word, to a certain extent, the strategic management is determined by the culture of organization. We critically analyze its impact on strategic management from 4 aspects, which are customers, partners, employees and corporate social responsibility. We cannot deny that numerous outcomes are connected with organizational culture no matter directly or indirectly.
In the organizational culture, people and groups interact with each other, including clients, partners and employees. It means that good organizational culture can bring into following benefits, including perfect customer service, efficient cooperation with partners, consistent employee performance and strong social responsibility.
2.1 The impact of organizational culture on customers
Cultures can be considered as some agreement inside companies. Each employee brings a different set of personal experiences and a variety of backgrounds to the company. And the consistency of these individual differences enlarges the organizational customer service. We can deny that the organizational culture has positive impact on customers. A strong organizational culture will generally attract the customers and make loyalty to the organization. In fact, excellent customer service is provided by the employees in the common organizational culture. Customer service is not only the responsibility of the employee in the customer service department, it is the responsibility of every employee in the organization. In other words, the healthy and strong organizational culture focuses on providing excellent customer service. The reason is that organizations with strong culture tend to spend time teaching, training and reinforcing employees on how to provide excellent service for customers. The good organizational culture focuses on the development in long term. In order to achieve this goal, company generates motivation to provide high quality products or service for customers. With well-trained employees, organizations can offer talented and exceptional customer service.
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The organizational culture has a significant impact on customer service, further impact on long-term economic performance. The reasons are shown as follows. Excellent customer service requires the combination of team work and consistent company values. In the process of business, organization with strong culture would help each other and achieve integration. It leads to higher efficiency than operation by individuals. Conversely, unhealthy organizational culture do harm to the customer service because of the lack of cooperation. The unsuitable culture can significantly decrease the organizational effectiveness. To a certain extent, organizational culture can attract more customers and bring into organization success. For example, Famous Haier culture in Chinaï¼Œtheir Service concept are “The user is always right” and “User troubles drops to zero”(Zhang 2003, P. 36), It shows that a successful corporate culture of the company, their attitude towards the customers have a lot of influence. Because every company has their own culture, so can attract a variety of customers, This is also a method of strategic management.
2.2 The impact of organizational culture on partners
During cooperation, organizational culture is one of the biggest problems to partners. When the culture is difficult to integrate, the collaboration cannot be achieved successfully. If the partners fail to identify with the organizational culture, there would be communication problems and inter-group conflicts.
One way to promote the cooperation is by cultural leadership. Organizational culture should be changed properly according to the real situation. On the other hand, in strong organizational culture, partners have to do their best to interact the culture. The reason is that, in processes of conflict resolution and communication, interaction of culture has important effect. Especially, for international joint venture, organizational culture differences are obvious. For partners, they have to take integration acculturation strategy.
2.3 The impact of organizational culture on employees
Employees are affected by organizational culture how to treat tasks and make objectives. It means that organizational culture influences their ways that make decisions, feelings. When they face difficulties and opportunities, they would act differently in different organizational culture. Only when employees acclimatize the organizational culture, they satisfy the job. The reason is that staff are identify with the culture and values. It is also a strategic management of the company for their employees.
In a way, organizational culture impacts the degree of employee’s creative ability, task motivation, and work enthusiasm. Individuals always are attracted to engage in organizations with good and strong organizational culture. In the strong organizational culture, employees are positive to respond to their jobs. In this situation, organizational culture contributes to the well operation of the organization. The organization with strong cultures owns its obvious beliefs and values. Thus employees can accept the culture and embrace the culture. Especially for the organizations in the service field, the strong culture inspires employees to deliver high quality service and be responsible for the organization. In other words, developing strong and productive cultures make the organization in accord with its vision and goals. The motivation and loyalty of employees are stirred up. It is easy for organizations to promote consistency and encourage coordination. In this situation, the strong organizational culture enables the organization to be more efficient. In addition, the team spirit in different departments can be increased in the strong organizational culture. To the contrary, weak culture cannot lead to alignment between organization and employees.If they are not fit into the organizational culture, employees feel no relation to the company and lower job satisfaction.
However, there are some arguments that strong organizational culture would bring into the risk of groupthink described by Irving Janis. When organizational culture is strong, members tend to believe their thinking without destination. The way of thinking is fixed. Once they engage into the things, the mode of thinking is formed quickly and easily. People in the strong organizational culture strive for unanimity instead of looking for alternatives of action. It means that individuals tend to follow the traditional culture, and do not want to challenge organizational thinking. The ability of creation and innovation are reduced in strong organizational culture.
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In my opinion, we cannot deny the influence of the strong organizational culture on employees. Employees can increase productivity and efficiency in the process of work. For organization, in order to reduce counterproductive behavior and to increase the turnover of employees, organizational culture should be strengthened. In fact, the diversity of ideas and strong organizational culture are not contradicted. In the healthy and strong organizational culture, employees would be pride and enthusiastic to work for the organization and be positive to perform their ability. The common and consistent organizational culture enhances the communication among employees. The interaction and communication with co-workers about approaches help employees meet the needs of their work. It means that the works are finished by teams, rather than only by individuals. Besides, when people meet a complex job, a team with various thoughts would finish it. It is the most efficient way. When each employee has a strong sense of direction and purpose, the efficiency of organization is higher than that in weak organizational culture. In addition, in order to increase the organizational culture, the organization must provide the opportunities for employees to learn and be trained. In this condition, there are strong internal communications and high level of acceptance of organizational culture. Resulting from their full potential, employees have high levels of motivation, sense of satisfaction and high service quality. When individuals can cooperate tacitly, the innovation can be achieved finally. These oriented cultures always lead to financial benefits for companies. On the contrast, in weak and unhealthy organizational culture, companies have to control their workers in forceful approach. Employees are pressured to accept the work. Without the active consciousness, they would be lack of creative ability. Even their beliefs are inconsistent with the organizational culture, there are interpersonal conflicts and inefficiency. The different value in the organization should damage the motivation and satisfaction of employees.
Organizations with strong cultures have much better performance than organizations with weak cultures. Thus, we found out that organizational culture is the explicit factor of the strategic management, especially for employees. The organizational culture can be used to achieve internal control and take advantage of the opportunities by companies. The common cognitive culture is formed in corporations. In this organisational culture, employees can get identity achievement, which is in favour of high efficiency. For example, in Google, employees are allowed to dress causal, play games, and bring their pets into the company. Google make a kind of happy culture for workers (Kotter 1992, P. 198). In fact, the funny organisational culture helps each employees enlarge their incredible ability of creation and efficiency. According to the survey about Google, employees accept the identity of organizational culture and enjoy the cognitive culture. Besides, they have the sense of success as a member of Google. In the process of the survey, they are proud to say they love Google.
2.4 The impact of organizational culture on corporate social responsibility
Some people doubt the influence of organizational culture to the social responsibility. They state that organizations do not have a single culture to affect corporate social responsibility. Because the interest and ideology cannot be reflected in the organizational culture, meanwhile it cannot be affect in reverse.
Although there is little empirical research to illustrate the impact of organizational culture on corporate social responsibility, little doubt about this impact exists. Researches of organizational culture from many aspects, including leadership, gender of employees and their intersection. He found that organizational culture can drives organizations rather than vice versa. It is proved that corporate social responsibility is one of products of organizational culture. The corporate social responsibility is formed unawares with the strength of organizational culture. Employees share the common belief and values that always be beneficial for society. In the process of make strategic decisions, the organization with healthy organizational culture embedding sustainability focus on the clear framework systematically and benefits in long term. The strategic options would create sustainable wealth and has social responsible insights (Smircich 1983, P. 339). For example, Huawei company to the social responsibility to the industry to serve the country through science and education as its mission to the development of company, the communities in which to contribute to the prosperity of the great motherland, for the revitalization of the Chinese nation, and make unremitting efforts for the well-being of themselves and their families (Zheng and Zhang 2005, P. 13).
3 The way of understanding company culture
Company culture can be reflected in the way of thinking of employees in the company. It is a kind of thinking mode which is approved by each other about the organisation (Cameron and Quinn 1999ï¼ŒP. 110). The common beliefs shared by the members in the organisation are the essence of organization culture. In public, organizational culture are broadcasted by news, advertisements. The common characteristics of company culture are the symbol of the company. Besides, the organizations tend to cooperate with non-governmental organizations to create organizational value, meanwhile broadcast their culture.
4 How has the organizational culture affected the strategic management
Organizational culture plays a key role in the survival or failure of organizations. In other word, to a certain extent, the strategic management is determined by the culture of organization. We critically analyze its ways of influence on strategic management from 4 points, which are strategic decisions, strategic choices, options and action (Black 2003, P. 27).
When the organization makes decision, choices and options, it has to consider its organizational culture. It means that the factor of culture should be embedded into the decision. Organizational culture impacts the degree of employee’s creative ability, task motivation, and work enthusiasm. Individuals always are attracted to engage in organizations with good and strong organizational culture. In the strong organizational culture, employees are positive to respond to their jobs. In this situation, organizational culture contributes to the well operation of the organization. Thus, in the process of make strategic decisions, the organization with healthy organizational culture embedding sustainability focus on the clear framework systematically and benefits in long term. Organizational culture has a significant impact on customer service, further impact on long-term economic performance. The strategic options would create sustainable wealth and has social responsible insights. With a high level of decision-making, healthy and oriented companies are easier to success and attract the same types of customers. The problem for some organizations is not to consider the culture factor in the process of making options and decisions (Curhan 2001, P. 126).
At the aspect of strategic action, each employee brings a different set of personal experiences and a variety of backgrounds to the company. And the consistency of these individual differences enlarges the organizational customer service. When organizations do service for customers, their strategic action would be comprehensive. It is impossible to provide consistent, companywide customer service without strong organizational culture. That’s why organizations with strong culture tend to spend time teaching, training and reinforcing employees on how to provide excellent service for customers (Kozami 2002, P. 95).
This paper analyzes the organizational culture and its impact on the strategic management from four perspectives, which are clients, vendors and employees and corporate social responsibility (Partridge 2009,P. 238). In fact, the organizational culture is the basic beliefs of the company that are accepted by clients and shared by employees. We found out that the organizational culture has positive impact on customers. A strong organizational culture will generally attract the customers and make loyalty to the organization. For partners, in strong organizational culture, they have to do their best to integrate the organizational culture. In addition, as employees of the organization, they are affected by organizational culture how to treat tasks and make objectives. It means that organizational culture influences their ways that make decisions, feelings. After the analysis of the impact of organizational culture, we state the company culture can be reflected in the way of thinking of employees in the company. Meanwhile, the organization with healthy organizational culture focuses on the clear framework systematically and benefits in long term. And the consistency of these individual differences enlarges the organizational customer service. Additionally, unhealthy organizational culture do harm to the corporation management. For the organization, the culture should be assessed and changed in order to improve its operation.
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