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Organizational culture is the way the organization perform its business, treat its employees, customers and the community. Organizational culture allows freedom for employees in decision making processes, building up new ideas, and personal expressions or suggestions. Gap Inc. is one of the successful organizations that applied the organizational culture. This company focuses on customer satisfaction beforehand, creativity, corporate ethics and social responsibility, and delivers the best results. Customers' priority is Gap Inc.'s culture. They create goods and services based on customer needs and their expectations. The creativity has improved the company's business. Gap Inc. accepts challenges in its business and solves problems in an effective way. The challenges that they have faced help the company think of new ideas and ways of working. Gap Inc. also believes that integrity and business ethics are extremely vital. Doing the right thing without any frauds in business is always Gap Inc.'s mission to its employees. Last but not least, they deliver the best results in setting precedence, taking responsibilities and meeting their goals and objectives (Gap Inc. 2010).
Innovation is "a process of developing and implementing a new idea" (Van de Ven Angle 1989). The main intention and focus of innovation is to take a creative idea, managers have the ability to think strategically, and to bring the organization to fruition. An innovative organization sometimes has to adapt in different situations and tolerate in different business deals that thrive on both internal and external changes. Innovation is involved in many different domains, such as technical, organizational, for example, process improvements, or social, like quality circles and competitive advantages.
Five strategies in crafting an innovation organizational culture
The five main strategies in crafting an innovative organizational culture are inspire, organize, synergize, empower, and reward. Inspire is to provide vision and mission, create an inspiring cultures, encourage employees participation, appreciate their work efforts, and lead innovation. Managers give freedom to employees on decision making, and sharing ideas. Inspiring culture will reduce the conflicts between managers and employees. In addition, the company is able to keep up with a fast changing society. Organize is setting company's rules and policies, assigning tasks, grouping tasks into departments, entrusting authority, and allocating resources across the organisation (Daft, 2010). Managers have to ensure that every employee is assigned on their own task and make sure they are able to complete their tasks effectively. Without an organized workplace, innovation is unachievable. The main reason of synergy is diversification, authorize cross-functional team, and exchange ideas. Diversification from different background and culture enable a company to have different view of traditional businesses in order to achieve innovation. Cross-functional team is also known as collaboration. It is important because managers and employees are working together and to come out with different ideas and information. Organizational innovation encourages individuals to think independently and creatively in applying personal knowledge to organizational challenges. They exchange their ideas based on their experiences or learning from customers or competitors. Besides, empowerment is used to encourage risk-taking, give employees opportunities to experiment in both external and internal environments. Managers are given the opportunities to know more about their employees' behaviors, to innovate and to experiment outside of the company. Lastly, reward is an encouragement to both individual and collective contributions, and also to celebrate success. Reward will motivate employees to put more effort towards organizational objectives.
Throughout the progress and process of crafting an innovative organization culture, there are a number of challenges that an organization face. Challenges could be estranged into two main components which are the internal or external of an organization.
Lack of training and development
First and foremost, the internal challenges of an organization may face is training and development. According to Badenoch and Clark (2009), 71% of the employees do not access to regular training between the ages of twenty-five to thirty-four years old, and 52% only receiving training when they proactively request it. Lack of training and development, it will be less organized in workplace. Thus, employees will need more time to complete their task compared with those employees who are receiving training. An employer depends on the managers and employees' efforts in succeeding innovation. However, training opportunities have gradually reduced to an unacceptably low level which will endanger a company's exertion to develop in economic stabilizes. Some organizations are forced to shut down because they have no confidence in their management abilities and inadequate retention strategies. It is acknowledged that an effective training program make it much easier for an organization to implement the strategic goals. Unfortunately, most companies today are still misplaced to align training. Besides, organization should be trained more rapidly than the competition to remain competitive. However, some leaders consider that they can expand the business based on their abilities and knowledge in achieving the organization's goals. So, they do not need to learn more and do not offer training programs for their employees. Other than that, inadequate training and development might slow down the new recruits to adapt. This is because the changes of innovation and technology are developing and upgrading every day. If an employer is still not responsive of the situation, it might fall behind in the developed business world and managers are frustrated at the length of time it takes recruits to adapt to a new corporate culture. Therefore, the danger of ignoring training and development creates a big impact for an innovative organizational culture and the people will start to stagnate on their employment.
Lack of human skills
Human skill is essential for a manager to work effectively as a team. It indicates the relationship between the managers and employees in workplace, including the ability to innovate, lead, control, communicate, tolerate, and reduce conflicts. The relationship between the managers and employees is important because it will affect the organization performance to attain goals in an effective and efficient way (Daft, 2010). Nevertheless, some employees are dissatisfied with their work because they are discriminated by their managers. Some managers would not appreciate their employees' efforts and abuse their employees by distributing more work to them. The concept of human skill in an organization is to work together as a team. Organizations recurrently lose good people because managers do not show respect to their employees. This influences the innovative and productive work environment due to the behaviors of the managers and it will prolong the time to achieve company's goals. Managers should show appreciation for subordinates' efforts, encourage participation, and give them the chance to express their feeling without fear (Daft 2010). This may improve employees' demands at a level of freedom in decision making, idea implementation, risk undertaking, and exertion. For instance, the managers of Gap Inc. have a good communication and close relationship with their employees. The managers mentioned that, "Our employees are the source of most of the company's best ideas" (Gap Inc. 2010). The subordinates are passionate about their career and helping the company in achieving the goals.
Failure in risk-taking
Risk-taking is one of the challenges in crafting an innovative organizational culture as risk changes every now and then, without any standard or particular pattern. If a company does not properly handle and evaluate the risk of management, it may cause a big influence to an organization. Risk-taking brings benefits to a company to grow in innovation, but if it is overtaking risk without knowing the impact, the company may make huge losses or face negative issues. Risk-taking holds a very crucial part as it directly effects an organization's success or failure. However, there are some organisations which avoid taking risk. A survey conducted showed that 59% of the people hesitate when it comes to taking up work-related risk because they fear failure in accomplishing the tasks (McCormick, 2006). Organization has to determine the limit of risk-taking and provoke the challenges that are coming up in the near future. According to McCormick (2006), managers should encourage risk-taking by having a reward programme for successful risks and well-considered risks as well as having an understandable communication about the risk profile. An example can be seen from IBM in which its high innovation and risk-taking helped to make more than $1 billion in licensing royalties (Abeyta, 2006). Mistakes are considered as a learning experience in IBM and workers are required to admit it early, learn from it and not repeat it.
Inadequate understanding of customer needs
The external challenges that an organization face could not be more direct than consumers. The main condition of succeeding an organization is to increase their market share among consumers, to attract more buyers and customers demand on their products and service. However, some companies today are failing to innovate culture and organization because they have inadequate understanding of customers' needs. Some companies have failed on their new products because they missed out the customer value. They neglected the understanding of customer wants and needs, market size and customer's preferences and tastes are not well researched. Some companies want to produce unique products that could compete with other companies, but they did not realize that the product has exceeded customer expectations. On the other hand, some have failed in marketing and selling. They failed to advertise and promote their new product to the customers. For instance, Clairol's Touch of Yogurt Shampoo failed to attract consumers because the consumers did not like the idea of washing their hair with yogurt. There were some cases that some people misunderstood the yogurt shampoo as yogurt and eating it, and getting very ill as a result (WalletPop 2010). This situation may lose a large number of consumers to purchase the company's products because the products are disappointing to the consumers. A company should produce products to meet customer needs and their satisfaction. Companies should also be aware that consumers will be concern not only about the price, but also the quality of the product.
Overcoming the challenges
There are several obstacles that hinder some companies to success, but there are effective solutions to resolve the complex problems that are faced by an organization in succeeding an innovative organizational culture.
Training and development
Companies should encourage both managers and subordinates to attend training programs or additional educational programs to keep them follow the changes of the innovation and technology. It is important for an employer to seek for training and development opportunities for their people because money does not grow on tree and managers also do not grow on trees (Management-Issues Ltd., 2010). Companies will give the training opportunities for the managers first, and then employees come right after. This is because the idea and manpower of a manager will manipulate people throughout the organization and culture change. It is a prior in obtaining a group of crew that are willing to contribute their time and effort, working together with the organization to strive for success. Some companies are keen to spend more on training because they know that once their people have enough learning skills, they are able to contribute their knowledge and skills for the company. They may obtain more ideas and talents on how to innovate organization culture.
Understanding customer needs
An innovative organization should have adequate understanding of customers. Companies may put customers as their priority because customers are the one who can help the company to increase revenue. Without customers to support or purchase the products of the company, the company may not survive in the market in the long-run. If a company wants to develop a new product or service, market research or customer research is an essential process in order to enhance the company's goals. Understanding of customer wants and needs will help the company to drive innovation, define a new market opportunities and increase revenue of the company. Besides providing the demanded product or services of the market, organization should focus on minimizing its production cost, distribution and promotion expenses. These are the factors that keep prices of goods and services lower or at least at average to suit the stingy market demand and to survive among the over numbered competitors. However, company should also be conscious about customer preferences and tastes because these are also issues that affect consumers' demand. In order to maximize an organization's market share, products and services provided must be attractive, interesting, desirable, and of course according to the demand trend of consumers, yet compatible among competitors. This is because customer's predictability is dead. Customers have their unlimited wants to maximize their satisfaction. Sometimes what a customer wants today may not be what he or she wants tomorrow. Therefore, understanding of customer wants and needs is significant for a company to drive innovation.