Importance Of Organizational Culture To An Understanding Business Essay

2957 words (12 pages) Essay in Business

5/12/16 Business Reference this

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Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations (Schein 1985 and Becker 1982). Organizational culture provides employees with a clear understanding of the “the way things are done around here”. (Dessler 1976) provides three different approaches to define the culture- structural, subjective and synthetic. The structural approaches define culture as a set of enduring characteristics which describe and organization, differentiate it from other organization and affect the behavior of human resource in it. The subjective approaches analyses culture from the standpoint of the ‘feel’ that people have for the organization. The Synthetic approaches stress both structural and subjective elements. According to this view, organizational culture is the perceived, subjective influence of the formal system, the informal ‘style’ of managers and other significant environmental factors on the attitudes, beliefs; values and motivation of people in particular organization (Litwin and Stringer 1986).

Organizational culture, therefore, can be defined as a set of attributes which are perceived by the individuals and which are deemed to have an impact on the willingness of the individual to perform at his best. In fact, culture is what one reacts to both physical and psychological and which ultimately determines the quality of the organization. Recent research suggests that there are ten primary characteristics that, in aggregate, capture the essence of organization’s culture. (Dwivedi 1995).

Importance of organizational culture

Every organization has its unique style of working which often contributes to its culture. The beliefs, ideologies, principles and values of an organization form its culture. The culture of the workplace controls the way employees behave themselves as well as with people outside the organization.

The culture decide the way employee interact themselves at workplace, a healthy culture encourage employees to stay motivated and loyal towards the management. Employees try their level best to perform better than their fellow workers and earn recognition and appreciation of the superiors. It is the culture of the workplace which actually motivates the employees to perform. Every organization must have set guidelines for the employees to work accordingly. (Feldman 2002)

The culture of an organization represents certain predefined policies which guide the employees and give them a sense of direction at the workplace. Every individual is clear about his roles and responsibilities in the organization and know how to accomplish the tasks ahead of the deadlines. Certain organizations follow a culture where all the employees irrespective of their designations have to step into the office on time. Such a culture encourages the employees to be punctual which eventually benefits them in the long run. It is the culture of the organization which makes the individuals a successful professional. (Schein 2010)

Example: Haier

Such as domestic and foreign, there are many excellent enterprises, their organizational culture is doing very well, not only to become the consensus of their employees, but also become the other signs, such as respect for the spirit of innovation. Haier, the Chinese home appliance industry is rare to challenge the national and foreign investment enterprises, in the course of development in more than 20 years, Haier has to generate distinctive culture system: from concept to strategy, from talent to technology, to the service from the market, Haier innovation not only the achievements of the development of enterprises, and the staff has also been widely recognized. Enterprises have such a famous global brand is to be treated as such: “Culture, is an emotion. (Wang 2009)

Organizational culture is kind of material culture, when people mention about Coca-Cola, we know that “brand, is an emotion”; by South Korea’s Samsung Electronics, we all know that the brand meaning “pursuit of excellence”; Haier, we know brand as “advocating innovation”; Microsoft, we think that brand is the culture of “passion “.These are the material culture of a reflection of penetrating the space-time, a far-reaching impact.These three cultures, like the three circles, the corporate culture is the center of the circle, always rotate around the corporate culture. Enterprises to improve the overall quality of within growth cohesion, outer increase competitiveness, enterprise development strategies; the role of culture is very prominent. In a sense, the importance of corporate culture even is not limited to the enterprise itself, but also has a far-reaching impact on the community big. After a good corporate culture nurtured the talent, the importance of social self-evident.


Organizational culture influence on strategic management

1 .Organizational culture is the foundation of strategic management

The organizational culture is a spirit cultural, it get the whole enterprise together. As the corporate culture is tested by time, constantly sum up, recognized by the corporate members. It out on behalf of a business, can be said is another sign; inward is the manifestation of the cohesion of the enterprise, but also the belief of all members of the, and it can contribute to all members of the advance toward the same goal.

The corporate culture is the culture of an institution. It is precisely because of the constraints of the corporate culture, the enterprise can better together. Under the influence of corporate culture, the entire staff to have a high sense of responsibility and unity, in other words, is to have a strong executive power, and thus protect the high-speed, efficient operation, and achieve a multiplier effect. The same time, in such enterprises, employees and jointly create atmosphere, the launch of products and services with a high added value, and more likely to be accepted by consumers, by the trust.

Appropriate organizational culture to the formulation of strategic management, implementation, control the correct guiding ideology and the spirit of enterprise in coordinated with corporate goals, corporate values, corporate ethics and corporate fashion, therefore, the success of the organizational culture for corporate strategy develop successful momentum, is the key to the smooth implementation of corporate strategy, is also an important condition for maintaining the corporate strategic advantage. Maintain the patency of the organizational culture and strategic management, corporate strategic management capacity to continue to improve, and ultimately improve the level of core competitiveness of enterprises. (Thompson and Martin 2005)

Example: Samsung

Samsung believes that to achieve the common interests of human, and to improve the work of the human quality of life for the Samsung bounden historical responsibility. As an enterprise, Samsung will create the best products and services, so that customers get the fullest satisfaction to improve the human quality of life, promote the common interests of human. (Lige 2012)

2.Organizational culture improves the success of power to strategic management.

One of the necessary conditions for the success of the implementation and development of corporate strategy is the construction of the organizational culture and innovation. To form enterprise jointly owned by all members of the values ​​and ethical standards must have excellent organizational culture, and this culture is able to highlight the characteristics of the enterprises. If a business has distinct cultural characteristics, then the particularity performance values ​​for all employees, which allows businesses to form distinctive, unique corporate strategy, as well as provided the original impetus for the strategic development, and its success laid the foundation. (Hill 2012)

Example: Samsung

In order to achieve the ideal “contribute to human society”, to achieve the goal of “creating the best products and services”, the Samsung must on the one hand, “not only have to look towards looking for more talented people in the world, but also open-minded focus on training around us creative talent “on the other hand,” to spare no effort to speed up the pace of investment in technology – Open “upgraded Samsung’s technical standards to an international level. (Lige 2012)

The significance of strategic management for enterprise.

Establish enterprise development strategies, the objective requirements of the socialist commodity economy, the objective requirements of the market mechanism, and the requirements of the survival and development of enterprises. That is to ensure the conditions of the enterprise a decisive role in an invincible position in the competition. (Morden 2007)

Planning for the future is the basic function of the enterprise development strategy, business managers must establish a strategic concept, good at predicting the future, thinking about future possible scenarios, and the impact on enterprise development, the development of enterprise program. (Morden 2007)


Times Group in the direction of development of the planning company in the 1990s, chose the strategy of technological innovation, more than a decade, the company is developing rapidly, and now has 22 subsidiaries across the country, and set up a number of branches in Europe and the United States, the president of the company is believed to be accurate the strategy is the most basic conditions for them to win (Lige 2012)

Development strategy in the implementation process, with the changes between the change of system elements, as well as elements of the development strategy must constantly modify and improved.

Once enterprise development strategy is determined, all work must be carried out in accordance with the development strategy, its services, all work must reflect the basic idea and the spirit of enterprise development strategies

In summary, enterprise development strategy should focus on the global and future; it is related to the survival of the enterprise, only closely linked to the strategic management of the main points from the premise to ensure the safety and scientific enterprises under the conditions of a market economy.

The relationship between organizational culture and strategic management

The organizational culture guide strategic choices

Shared values ​​and behavior on behalf of the members of corporate culture, corporate mission is one of the core concept of the corporate culture, corporate mission to provide the fundamental basis for the choice of corporate strategy.

Each organization should have a particularly different from the reasons for the existence of the other organizations, clear corporate mission, essential for corporate strategic management process for enterprise resource allocation can provide the basis and criteria for which mitigation and coordinating role of the enterprise within the organization has played a variety of conflicting goals for enterprise employees understand organizational goals and direction to provide opportunities to help establish unity and energetic spirit within the organization, the organization’s business objectives into specific operational goals and strategic tasks to each employee. (Sheldon and Windham 2002)

On the other hand, each industry has its culture, and culture tend to have a more significant difference between the industries, such as the characteristics of the IT industry is more emphasis on a relaxed environment, focusing on the innovation of the employees, focusing on each other’s exchanges. Every industry has its cultural identity, the basic characteristics of the industry is not going to change until there is no more revolutionary changes in this industry, it is necessary, therefore, the cultural characteristics largely determine the overall business strategy industry choose.

The organizational culture is an important means of implementation of the corporate strategy

Companies develop strategies need all members of the active and effective implementation. Organizational culture is to inspire people to enthusiasm, an important means to agree with the group members.

Organizational culture has the motivate function.

Such as enterprise implementation of employee stock ownership plan, the senior management of the stock option system, so to meet the needs of the people of wealth maximization. On the other hand, focus on creating an atmosphere of spiritual and cultural management, team building, and emotional management to meet the people identified by a common mission. (Adler N.J.2008)

Organizational culture and corporate strategy must adapt to each other and coordinated

An enterprise’s corporate culture is relatively stable, and therefore, the formulation and implementation of the corporate strategy must be adapted to the existing corporate culture, corporate culture cannot be out of the status quo. From the point of implementation of the strategy, the corporate culture is necessary to the implementation of the corporate strategy, will restrict the implementation of the corporate strategy. When the new business strategy requires a corporate culture associated with it, the the original cultural change speed is very slow, it is difficult to immediately react to the new strategy, when the original enterprise culture may be resistance to the implementation of the new corporate strategy in the strategic management process, internal turnover of old and new cultures and coordination is an important guarantee for the implementation of the strategy to be successful. (Schabracq M.2007)


The relationship between organizational culture and strategic management -Walmart

Walmart focus on people- oriented corporate culture.

After decades of development, Wal-Mart has created the extremely valuable enterprise culture, which became the key to its ability to attract and retain qualified personnel. Sam Walton had a paragraph saying: “employees to be treated like the flowers and trees in the garden, need spiritual encouragement, promotions and favorable treatment to water them timely transplantation in order to ensure the best mix, if necessary also carefully remove the weeds in the park in order to facilitate their growth.”This passage can be described as points to the essence of the Wal-Mart’s corporate culture

Wal-Mart employees as a business partner to be treated on the relationship between managers and employees is also true sense of partnership. Almost all of the Wal-Mart managers have to spend engraved with “We care about our employees” package buttons, they paid great attention to listen to the views of staff. Truly treat employees as a partner in 1971, Wal-Mart has implemented a policy of “profit sharing”. Sam Walton believes that if the companies share profits with employees, whether by way of salary, bonus or bonuses, stock discount, then flow into the company’s profits, there would be a steady stream. Because staff will use what attitude they treat to management to treat their customers. If the staff treat customer nicely, the customer will satisfied, this is the true source of chain store industry make profit. Now, Wal-Mart has more than 80% of the staff or with the aid of a profit-sharing plan, or direct ownership of the company’s stock through an employee share option scheme, which the company and the employees to form a community of interests, so that the employees are treat the company as their own business, thus, they are work harder and harder. (Ma 2010)

Rise in the corporate culture as a strategic

The highest state of the industry culture “Integration of Form,” shaped “to include all the external things, including enterprise system, process, strategy, organizational structure, responsibilities and rights system, leadership style, products, etc.Shaped God substandard “corporate culture was” schizophrenic “because the employees do not know exactly what should follow. The highest stage of the corporate culture is to through “make up your mind”; companies need to pursue the idea of make the culture and strategy together, enterprises should consider how to adapt to each other, including the laws of economics, ethics, human concept, put people through demand for enterprise development and social progress combine to enhance the sense of mission and responsibility. From building a corporate culture to meet the demand point of view of the people, truly reflect the “people-oriented”.

Wal-Mart is the success of the enterprise culture rose to a typical case of the strategy for the development of its chain stores are always output from a large number of corporate culture, each employee must pre understand all the basic principles of the Wal-Mart, the kind of the standardization something rare in the world. (Ma 2010)


Strategic management and organizational culture are inseparable. They influence each other, the strategy innovation as well as organizational culture synchronization innovation. Organizational culture that is very important, but many companies are just a mere formality, and many companies are fundamentally doing not have culture.

At the same time, the enterprise must understand and grasp the complementary relationship between strategic management and organizational culture can help enhance the overall quality and competitiveness, promote access to quality, sustained and healthy development.

Enterprises to long-term development, we must have a development strategy, corporate culture and corporate strategy are closely linked. On the one hand a large extent can be said that culture determines the strategy, which can be divided into two levels to recognize¼Œ one of the level to the corporate mission to provide the basis for the formulation of corporate strategy. The implementation of the corporate strategy of each stage in order to achieve the strategic objectives of each stage of the enterprise, and the enterprise by the realization of the strategic objectives of each stage, the ultimate all in pursuit of the mission of the enterprise. So the corporate culture in the corporate mission to provide the fundamental basis for the formulation of corporate strategy. Strategic Enterprise Management framework, the mission to guide the strategic objectives and strategic goals to guide the entire strategic program is finalized. From another level, each industry there are industry culture, and tend to have a more significant difference in culture between the industry, such as the culture of the manufacturing sector, there it is the industry itself, in terms of administration, it may be more stringent focus on quality management, production efficiency, discipline, and some emerging industries, such as the characteristics of the IT industry to focus more relaxed environment, focus on employees’ innovative, focusing on mutual exchanges. Enterprises in developing strategies, especially considering the industry choose, it must be based on the enterprise culture.

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