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Every workplace talks about organizational culture and how successful an organization will be also depends on how well the organization culture is being practiced.
Every organization has its own culture. A culture will decide the way employees communicate and interact within the organization. Organizational culture will also unite the employees and bring them to a common platform.
A positive organizational culture will improve organization process, employees' productivity and its performance. A dysfunctional culture will destroy value, waste of resources and generally create resentment.
This report will presents an introduction of organization culture in Host Private Limited, understanding the current existing organizational culture. Analysis of the strength and weakness of its current culture will also be discussed. Following up, studies will be made to determine how culture reflects the strategy and structure of Host Private Limited.
Final part of the report will includes the identification and evaluation of the cultural changes which might be needed in order to make Host Private Limited a more successful organization.
2.0 Outline your understanding of Organizational Culture
There is no single definition for organizational culture. Organizational culture can be defined as 'the collective programming of the mind that distinguishes the members of one organization from others.' It is formed by organization values, visions, norms, working language, working systems and as well as beliefs. Research have shown that if employees are committed and having the same norms and value as per organizations have, it can increase the performance towards achieving the overall organization goals'.
According to Tichy (1982), 'Organizational culture is known as "normative glue" means to hold the overall organization together'. Organizational cultures are important as it acts like an adhesive that glues everyone in the organization together. As a result, good or bad culture behavior will pose dramatic effect to the organization's well-being and success. There could be several sets of culture which can be found in an organization. According to Schein (1995), subculture is the segments of culture which show different norms, values, beliefs and behavior of people due to the difference in geographical areas or departmental goals and job requirements within the organization.
It is vital that organization has a strong organization culture. In a strong organization culture, most employees would have the same perceptions about the organization norms and values. Management will have lesser concern on developing formal rules and regulation to guide employees' behavior. If employer and employees have the mutual trust with one another, employees will feel a sense of belonging to the organization and thus it will enhance their work performance and as a result, achieving organization goals.
According to Deal and Kenndy (1982), a weak culture in organization could be one of that is loosely joined. Rules are imposed strictly on the employees that may create diversity between the person's personal objectives and organizational goals.
Organizational culture refers to a system of shared meaning held by members that distinguishes and differentiate this particular organization from the others. There are seven primary characteristics that capture the essence of the organization culture such as innovation and risk taking, Attention to details, Outcome orientation, People orientation, Team orientation, Aggressiveness and Stability which will be discussed in the later part of the report. All seven primary characteristics mentioned affects the organization's productivity and performance and could be guidelines for their customer care services, products, safety, employees' attendance and even punctuality.
3.0 Indicate your views on the creation and development of culture
How organization culture developed is based on the management who introduce the employees' or new hires about the norms, values and objectives of the organization.
The creation and development of culture is created by the founders and key leaders of an organization. The founder first chooses to appoint someone that has the same background so they will be able to work hand in hand to achieve the organization goals. It is essential that the founder set down policies on organization values, belief and work for others to follow. If it is not laid out properly, it will have an adverse impact on the rest of the employees in the organization. Organizational Culture should be developed in a way to improve employees' performance and continuing to develop the quality awareness. The management should act as a benchmark for the employees to follow.
An organizational culture is created by the employees who work in the organizations. It is the matter of how employees portray their behavior in the working environment.
Human resource departments that preselect the people to be hired play an important role in maintaining an organization's values. Employees are the main asset to an organization hence the hiring criteria that derive from the founder's philosophy are important to hire a person who best fits the job. Organizational cultures are acquired when new employees enter into a work organization, with their values put in place and taking time to adapt to the organization culture. They could bring his set of culture into the organization and influence his co-worker and vice-versa. Their subsequent socialization in the organization is a matter of learning and accepting the practices. Successful socialization will have a positive impact on employees' productivity and employees will feel more committed to the organization. If organizations are able to bring in new employees who have positive work attitude and culture, they might be able to bring in new knowledge / skills and share with their co-workers.
The development of culture has changed from time to time. An example to illustrate will be in Singapore, we are now having a diversified workforce due to a high influx of expatriates. They have influenced us in a way or another in our working mindset.
Companies are also seeing the importance of shaping positive culture in an organization. Management can shape a positive organization culture by capitalising employee strength instead of identify and correcting employee weakness. Company can also reward employees in various ways such as giving them incentives such as bonus, promotion or praise and encouragement during the staff meeting to let them feel that their work are being recognized. In return, employees are more willing to put in extra effort at work and feel committed to their job.
4.0 Comment on the Link between organizational culture and change
Every organizational culture is unique and it is one of the hardest things to change. Culture is a liability when the shared values are not aligned among employees that might hinders the organization's effectiveness. This happens usually when the organization is undergoing rapid changes such as merging and its strong culture may no longer be relevant. The consistency of behavior, an asset in a stable environment, may then burden the organization and make it difficult to respond to the changes. Strong cultures may help and worked well for the past but it may become a barrier to change when doing routine task is no longer as effective.
According to Burke W. & Litwin G. (1992), Organizational change can be a chaos with the number of changes happening at the same time, which includes environmental change and resistance of human system that will create processes that are unpredictable and uncontrollable. Nevertheless there are still patterns and linkages that can be seen. Organizational performance can be improved with effective changes, firstly understand how the organization function knowing the linkages of what will leads to what. Follow by listing out the processes and the possible effects it might produced.
Acoording to Stephen P.Robbins and Timothy A.Judge, (2012), Today no company stays in a particularly stable environment. Even those with dominant market share must change, sometimes radically. Our egos are fragile and we often see change as threatening. Strong organizational culture may also be a resistance against changes. Resistance to change is positive if it can leads to an open discussion. Having resistance does not necessarily surface in standardized ways, it can be overt, implicit, and immediate or deferred. The easiest for the management to deal with are overt and immediate resistance which are, strike threat or work slowdown. The tougher ones come under implicit or deferred as it involves loss of loyalty or motivation and absenteeism.
Deferred actions also cloud the link between the change and the reaction to it and may surface months or even years later. Making a single change might have impact and break everything due to the resistance to earlier changes that have been accumulated.
An organizational culture can influence everything and everyone in the organization. Having a well-developed organization culture creates positive changes across the board. It provides dramatic increase in employees' productivity. In an organizational change process, the top management has a higher impact. Cultural change must first begin at the top, with the leadership team setting the stage for everything to happen. People below the hierarchy will then follow suit when they notice that the top management has changed the culture.
The management can conduct a monthly meeting that focus on discussing relationship between departments, communications and work experiences. Next, managers can then collate and identify the desired culture values from all the employees and list the opportunities to strengthen the selected values. More planning without action will not advance the cultural change process. Therefore, conducting a discussion of actions need to be taken.
It is important to manage the culture in an organization well as it is a real pleasure working in an organization where people enjoy working with one another. Satisfaction and happiness go hand in hand with improved performance, turnover rate etc. A strong organizational culture creates a great place to work in.
5.0 Introduction of Rockwell Automation
Rockwell Automation is an organization that manufactures electronic components such as Programmable Logic Controller and as well as industrial component that are vastly utilized in the industrial space. Programmable logic controllers are commonly used in manufacturing plants and as well as machines as the main control hence market demands are huge. To ensure adequate market coverage, Rockwell Automation embraces on distributor as an extended arm for market coverage.
Respectively to Rockwell Automation distribution model, Host Private Limited is appointed as the sole distributor for Singapore. In this report, analysis will be made to identify the organization culture in Host Private Limited and thus identifying the strength and weakness of its culture.
6.0 Introduction of Host Private Limited
Host Private Limited duties being a sole distributor for Rockwell Singapore list from handling of all sales enquiries, rendering technical support to customers, ensuring timely delivery and providing product stocking for high availability of the products.
Host Private Limited is a local company that is being managed by a local entrepreneur. As business grows, it slowly evolves into a family business as more family members start to join the company. Figure 1 shows the organizational chart in Host Private Limited and from the organizational chart; we can determined that the hierarchy model is weak as every employee is reporting to the sales manager and the sales manager only reports to the managing director.
Host Pte Ltd Sales & Marketing Team
7.0 Company culture / strengths and weaknesses
7.1 Innovation and Risk Taking
In Host Private Limited company culture, management practices micromanagement which means every details needs to be reported to the management. Approval will also be from the management thus reducing the level of creativity or innovation as the level of empowerment is low due to micromanagement model that Host uptake in their culture. This also discourage risk taking from employees as empowerment level is low, more information will be needed than necessary to get management approval.
Level of risk taking is low and hence, it does not encourage aggressive growth within the organization. Despite slow growth, reducing level of risk taking will promote to a higher level of stability in the company which might not be a bad idea to consider if company is looking towards stability more than growth.
7.2 Attention to details
Host Private Limited is a distributor for an electronic component which involves high level of technical knowledge therefore management places plenty of emphasis on the level of attention to details. Information is critical as it will affect the technical feasibility of the proposed solution. Customer's details will also help the sales department to understand the customer's requirement and thus, making the right recommendation to the customers.
Customer's information is always critical to any organization but failure to cultivate good culture might result in new employees spending too much time in getting the details rather than achieving the objective that is vital for the organization.
7.3 Outcome orientation and people orientation
As Host Private Limited collaborates with Rockwell Automation which is an American company, close collaborating integrates the culture and they face similarity in terms of the outcome orientation. Management pays high emphasis in the end results which can be classified as result oriented. No matter how well the process has been done, it is still the end result that counts.
High level of outcome orientation might drive productivity which is the ideal scenario for Host management as ultimately it is the profit that will ensure sustainability of the company. Outcome orientation might produce result but people orientation might be compensated in this case. If there are no results produced, whatever effort placed will not be recognized by the management as winning factor is about result, not the process. Managing outcome and people orientation is critical for any organization as the failure to manage these two factors might result the company to suffer poor results or high employees turnover rate.
7.4 Team Orientation
From the organization chart in Figure 1, Host Sales is divided into different teams such as the Oil and Gas team, OEM team, Life Science team and the semiconductor team. Despite the separation of the sales team into different teams, results of each team are being consolidated and rewards will be given as a team and not as an individual. This promotes high level of team work as each and every individual salesperson has their focus industries but it also depends on each other to achieve the overall rewards.
Multiple efforts are always better than a single effort but there are also weaknesses in team strategy. There must be mutual trust within the team and it is never easy to trust everyone in the team if there is an absence of constant communication in the team. Who can guarantee that no one is riding in the success of other team members, spending less effort when other team members generates good result but putting additional effort? Internal conflicts will be generated if management does not address these kinds of issues which will harm the organization productivity.
7.5 Aggressiveness and Stability
Host Private limited is set up by the current managing director. Starting out with an employee who is the managing director himself and it took him 20 years to slowly expend to company size of 30 personnel with 30 million business transaction annually. Effort and hard work placed during these years was significant. Just like a typical Chinese entrepreneur, studies have indicated Singapore have a low score in uncertainty avoidance which means that how a society reacts to the fact that future is unknown and the risk implication. High risk adverse means that there are limitations in organization aggressiveness as aggressiveness is often tagged along with risk.
As we know, aggressiveness is correlated to stability as the lower risk taken would mean the higher stability in the organization. It is up to individual to figure out whether high level of growth is better or stability is the key factor to organizational profitability.
8.0 Consider how culture reflects the strategy and structure of the organization
The organization of our focus targets itself to be the leading preferred supplier of PLC equipment to the industry as the strategy. In order to make it possible, the management emphasizes in competitive pricing, response time and quality of their after-sales services. The company sales department is structured according to a Mechanistic Model. Burke and Litwin (1992) suggest that organizational effectiveness depends on the organization's internal structure be it mechanistic or organic. Countries like Singapore with high power distance, employees are more receptive of this mechanistic structure.
8.1 High Attention to Details
The organization wants its employees to pay high attention to detail and this culture enables the sales team to portray professionalism and pay attention to the needs of the customer. This will in returns retain existing customers and bring in new customers and hence, gain more market share and be a market leader. Therefore referring to the organizational structure, the sales team is designed like a Mechanistic Model. Having such a model, high level of specialization of the different sales engineer's area will enable them to be a specialist in their own individual field of customers. They will be more customer-orientated according to the organizational structure to be a single point of contact for the customer and thus improving communication and thus customer satisfaction will follow. This will in turn bring out the departmentalization of the Mechanistic Model to work more effectively for the structure and company.
Response time to handle customer queries will definitely be more efficient and shorter as the sales engineer is all responsible in their own area of industry. Having a Business Development Manager in the sales department will help the sales engineer to operate more efficiently as when marketing or extra manpower are needed for sizeable projects, he is able to assist and help reporting while the specific sales engineer can still manage in their own area of work which are being assigned. He can work closely with the sales engineer when needed as their status in the organizational chart is the same level.
8.3 Technical team included in the sales/marketing team (Team Orientation)
Having a technical team under the sales and marketing hierarchy makes it more functional and attentive to what customer needs in this global competitive world. Having a technical team working together with the sales will score a high degree of attention to the correct specific needs of the customers. It will definitely compliment the standard of the sales engineer. It is very common nowadays that sales department is not technically savvy to be able to identify the problems of customer's order or backup services needed.
8.4 Clear Chain of command
Being structured in a Mechanistic Model, there is a clear chain of command and everyone will report efficiently upwards to the upper level of hierarchy. So when there are any problems or unclear directions in their work, the lower echelon can actually consult the next in line to clarify their doubts.
8.5 Narrow span of control to keep costs low
Mechanistic model has its advantage in maintaining a narrow span of control thus it is redundant to have too many managers to function efficiently. As the sales/marketing department is not so big, hence having a Sales Manager to take charge of the sales team and also the technical team will help to efficiently maintain a healthy wage payout from the company to make the organization more efficient.
9.0 Identify and evaluate the cultural changes which might be needed in order to make the organization more successful
In order for the Host Private Limited to be more successful, we would suggest that a few changes would be required.
Due to the reason that the organization is started out by a local entrepreneur and the organization is still growing, alike to most local companies, management positions are frequently taken over by family members or close relatives. This culture must change in order for the organization to grow, sustain and be stable. If no changes were made, employees of the organization will feel that there is a limitation to their career path as the chance of stepping into the management is very low. This will cause the organization employees' turnover rate to increase.
We would suggest more job opportunities to be created as this would lessen the workload of the sales manager, work process efficiency could also be increased, and sales engineers can focus more and increase penetration into new markets.
The management culture works on a very conservative mode, although the management is reluctant to take risks but innovation should be highly encouraged. Most organizations grow through innovation, as innovation encourages improvement and sense of belonging for the employees on board. Host Private Limited should always keep their opportunity doors open, when employees suggest an idea, it is up to the management to assess if it is beneficial for the organization, but without ideas, the growth of the organization will be slower.
Judging from the existing hierarchy and how the organization culture works, the sales engineers have to handle all the administrative process before they can submit the final proposal to the sales manager.
I believed that sales engineers should always be searching for new leads and increasing sales volume from current accounts. Therefore, there should be sales coordinators allocated for the sales engineers to provide assistance whenever required. Sales coordinators will also have more time to ensure that customer's information is accurate, incorrect customer information can be disastrous for a sale. Errors / lapses would be hugely minimized.
Currently, the sales figures of different teams are consolidated as a whole and rewards are given to all if the results are good. Internal conflicts will definitely surface as some employees will perform better than the others. This could be due to the different industries that they are managing which will turns out with different results. Friendly competition within the organization is not encouraged as there isn't any exact quota set for each team to achieve.
We would suggest that the sales manager to set a sales quota to be achieved by each team per month based on industries. The team that achieves 100 percent of their monthly quota should then be rewarded. When every team understands what their goal is, the teams would be more productive and lesser conflicts occur as they are focused on their team quota. Friendly competition can also be encouraged; the team with the highest extra percentage in ratio to their team quota should be given an extra incentive.
Host Private Ltd has its own set of culture in the organization. Being establish for more than 20 years in the industry, we can see their success however, organization changes could still can be done or improved on. It is up to the Managing Director decision whether he wants to initiates the change in line with the norms and values of the organization. Positive culture change will improve in the employee productivity and enhance the organizational performance. Organizational change will also lead to adverse effects if the upper management did not manage it properly such as high turnover rates and unhappy employees.