HP Companys Outstanding Organizational Culture Business Essay
Disclaimer: This work has been submitted by a student. This is not an example of the work written by our professional academic writers. You can view samples of our professional work here.
Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.
Published: Mon, 5 Dec 2016
Organizational Culture this term first appeared on an academic literature of United States in 1979 by Pettigrew published in Administrative Science Quarterly On Studying Organizational Culture. After that, a batch of based on the organizational culture perspective to explore the source of enterprise competitive advantage popular management literature become popular books management scholars in Europe and America. The very famous Japanese American scholars William G. Ouchi (born 1943) the “(Theory Z, 1981), Deal and Kennedy’s”(Corporate Culture, 1982), as well as Peters and Waterman,” the (In Search of Excellence, 1983), etc. In this literature review based on the theory the strategy management of resource school (RBV) to discuss organization culture and the relationship between sustainable competitive advantage, and organizational culture how to further affect organizational performance. And from the Angle of organizational culture the seek business diversification condition organization synergistic effect, and the formation of core competence.
A) Composition enterprise competitive advantage source conditions
Resources can be generally divided into three categories: tangible assets, intangible assets and organization skills. Tangible assets assessment of the most easily, it can be reflected on the balance sheet the only resource. A tangible asset generally includes real estate, production facilities, raw materials and other. Although tangible assets and enterprise strategy must, but because they itself is standardization attribute, make it very easy to imitate, so seldom become the sources of competitive advantage. Intangible assets include enterprise reputation, brand, technology knowledge, patent, trademark and culture, and long-term accumulated knowledge and experience. The intangible assets are usually in the competitive advantage (or disadvantage) and company value plays an important role. At the same time, the intangible assets will not in use was loss, on the contrary, will continue to get accumulation and growth. Based on this reason, the intangible assets can be for enterprise’s multiplication expansion to provide a foundation of core competence value.
According to the view of Barney’s (1991), to become the enterprise sustainable competitive advantage of the resources of an organization has the following several aspects: (1) the value of resources . That is to say, resources can help enterprise to create value and lower cost than their competitors do well. A kind of valuable resources must be able to customers are willing to pay the price to meet the demand of customers. (2) the resource scarcity. If the supply of resources is very full, so each organization will have to use this kind of resources of the same ability, they also could not be organization the sources of competitive advantage. In some value sex resources for a large number of organization of market conditions, may have a certain organization thus obtain competitive advantage. (3) resources hard to imitativeness. Imitate the disorder has two kinds, one is physical obstacles, including legal or policy limitation, get into the elements of the superior way, close to the customer’s superior way, market capacity and scale economy, etc.; Secondly, intangible obstacles, including causal fuzzy, path dependence and social complexity. The resources of an organization hard to imitativeness from above one or more imitation barriers. (4) the irreplaceable resources. Although the resources of an organization is difficult to imitate, due to its special natural attribute, often by the threat of alternatives. If competitors to find the scarcity and difficult to imitate resources substitute, then the organization’s sustainable competitive advantage or not be maintained, although have, also be short-term phenomenon.
B) The organization culture and sustainable competitive advantage
Excellent enterprise culture can form the enterprise sustainable competitive advantage. Peters and Waterman,” the (In Search of Excellence(1982), they demonstrated the excellent enterprise organizational culture characteristics, and established a controversial “outstanding theory”. Kanter, 1983) in an organizational change research, discusses enterprise in the human resource management practice of advanced practice on organizational performance of positive influence. Denison(1984) to the organization culture based on the way of investigation measure that perceived organization member participation and input to the current organization and future financial performance. In addition, Gordon (1985) demonstrates the banking and public undertakings in the different performance enterprise’s different cultural characteristics.
Kravetz(1988) to Kanter previous research further amplification, demonstrates the management practice is able to nurture the members of the participation, autonomy and creativity, and those characteristics is with the objective of organization performance indicators closely related. Hansen and Wernerfelt (1989) is an organization effect and market position of the influence of the performance. Their study found that the organization of internal factors than market position more influential, and almost no correlation between the two. After that, Kotter and Heskett(1992) of strong culture and adaptive culture and the relationship between the organizational performance is analysed. Gordon and DiTomaso( 1992) in the insurance industry, further provide the cultural power and values approval and organizational performance relation of empirical research.
In addition, the theory also making progress. Barney(1986), from the perspective of economics of organizational culture are discussed, and define the organizational culture affect organizational performance condition. In the article “Organizational Culture: Can It Be a Source of Sustained Competitive Advantage”(1986), Barney puts forward Culture becomes the Source of sustainable Competitive Advantage must satisfy three conditions, namely has value, scarcity and inimitable. Organization first must be able to increase sales, reduce cost and expand the profit, and other ways to improve organization value. The requirements of scarcity of culture reflects the needs of competition, if each organization with a similar culture, in a similar manner to participate in competition, so there won’t be organization can obtain competitive advantage. On this basis, Barney put the organizational culture of not imitativeness as sustainable competitive advantage of the most effective and the strongest barriers. He quoted three reasons. First, the individual is difficult to observe and describe organizational culture worth. Secondly, is difficult to carries on the strict description and detection between this highly subjective structure characteristics and organization competitive advantage, value and scarcity of organizational culture is often difficult to oral expression, difficult to perception of organizational consensus, this comes from organization unique history and heritage. Finally, even if the organization culture can be described, it is still difficult to success imitation, it originated in organizational culture refused to change inert. Therefore, look from another Angle, organization powerless to understanding and copy their own culture, perhaps is the competitive advantage of the best protection, it better than any other system security . Of course, imitation of organization culture also make the organization become fragile, organization leader lack of foresight vigorous action is very easy to make the organization damaged.
C) in the business diversification for based on the organizational culture of the coordination effect
According to the view of Barney, value, scarcity and inimitable established organization culture as organization for an important source of competitive advantage. And in business diversification of organization, culture of inherent characteristics and can bring synergy effect, thus eventually become diversified management organization of the possibility of sustained competitive advantage source. Hiroyuki Itami In the “Mobilizing Invisible Assets”(1987) Hiroyuki Itami make organise resources subdivide into complementary effect and synergy effect in strategy implementation of the whole combination effect , he mentioned “complementary effect almost always based on the full use of resources to achieve… we can often through the Shared the same physical Assets or financial Assets, make two not relevant strategic elements exist at the same time. And this is the fundamentality of complementary effect.” In contrast, Hiroyuki Itami thinks multiple effect of synergistic effect “popular, synergy is hitch-hike. When a part from the company accumulated resources can be at the same time and nothing local applied in other parts of the company, synergistic effect happens.” Hiroyuki Itami and further emphasizes the obtain complementary effect resources mainly include physical assets and financial asset tangible assets, and exert synergy effect resources mainly is the intangible assets. He realized that most of the tangible assets cannot provide hitch-hike or provide opportunities to be used at the same time. “With a plant’s two different local production respectively two different products, there is no cooperative. Financial assets also is such, cannot be in two different parts used at the same time. If a product input increased, so can be used for other products will reduce the investment.” Different with tangible assets, including technology, goodwill, information, knowledge and culture of the intangible assets can be also used in two or more areas, and its value of existence a bit will not be affected.
Intangible assets which is including the organizational culture , this can be in the same organization business diversification, and no cost are being used, the intangible assets play a synergistic effect also reflects the value of organizational resources, can often provide competitive advantage for organization. “One can use product reputation, sales channels and invisible assets to create synergy effect company, is always better than no this kind of asset companies more advantage. Hiroyuki Itami further analysis “make use of synergistic effect achieve competitive advantage has both substantive, also has the persistent… invisible assets can not buy, it only by the company through the long-term effort created. This makes the company more than new to enter the market competition has the obvious advantage, because the latter must go through a long time to have a similar assets. If the synergistic effect be apt to is added use, strategists will be able to use this time competitive advantage to do more things. Intangible assets this cannot buy scarcity and needs long time exploring hard to imitativeness become diversified management through the synergistic effect to realize the source of sustainable competitive advantage. In contrast, tangible assets although may bring complementary effect, but as a result of complementary effect easy to easily all competitors to realize, so this kind of competition advantage nature also won’t be lasting.
A number of studies show that HP company’s outstanding organizational culture in its business diversification in bring the synergistic effect of competitive advantage (Barney, 1986; Kotter and Heskett’s( 1992); Collins and Boras, 1994). Hewlett-Packard company valuable, rare and difficult to imitate the organization culture build its core competence strategy. In a study of Hewlett-Packard company of empirical research of “HP way: application prudent and emergency enterprise culture analysis strategic competition advantage”, Kowalczyk and Giusti using questionnaire and statistics analysis method to Hewlett-Packard company subordinates different geographical location, different product line, different industry needs four branches were studied. Statistical results show that in each branch exist in the same single prudent organizational culture, namely middle management staff commitment to the dissemination of culture, and by comparison, found that the prudent culture and company executives advocated planning enterprise culture are basically the same. On the other hand, the company allows each branch development different emergency organization culture, it is each branch in different industry environment and industry coordinated result, accord with Kotter and Heskett’s in the “enterprise culture and business performance”, in which, he put forward enterprise culture adaptive principle. The study again, at least in part, is based on the organizational culture in every branch of synergistic effect, and cooperation with all branches in the development of the industry adaptive culture, Hewlett-Packard company to maintain long-term outstanding economic performance.
In the business diversification conditions, as intangible assets organization culture as a result of “can be at the same time and nothing local applied in other parts of the company”, thus can realize synergistic effect for the organization, and to realize the strategic income; At the same time, organization culture may be some value sex, scarcity and difficult to imitativeness characteristics, also make the organization in business diversification conditions possible to obtain sustainable competitive advantage. Therefore, the organizational culture to cultivate should become diversified enterprise strategic basis points, and extend to all aspects of the enterprise and business areas, in order to get strategic synergy effect, constructing the core competitive force of the enterprise.
1¼ŽBarney¼ŒJ¼ŽB¼Ž¼ˆ1986¼‰¼ŽOrganizational culture¼šcan it be a source of sustained competitive advantage?¼ŽAcademy of Management Review¼Œ11¼Œ3¼Œ656-665¼Ž
ã€€ã€€2¼ŽPettigrew¼ŒA¼ŽM¼Ž¼ˆ1979¼‰¼ŽOn Studying Organizational Culture¼ŽAdministrative Science Quarterly¼Œ24¼Œ570-581¼Ž
Cite This Work
To export a reference to this article please select a referencing stye below: