What is organizational culture. Some people define the culture as the way people do everything in an organization. More precisely, it can be defined as the underlying values, beliefs, patterns of behavior that affect how the operations of the organization should be conducted.-- how we do things around here (Beamish, H. R. 2008). Culture is one of the main differentiators between company and its competition, as it is a key driver of staff members' attitudes and behaviors. It impacts, for example, how a company runs a meeting, the way a company launches a new product, its dress code, and the type of people a company attract and retain, etc (Burt, G. 2002).
Organizational culture is somehow similar to the organization climate but they are completely different. Organization climate refers to current situation in an organization and the linkage among work groups, employees, and work performance. Therefore, climate is usually more easily controlled by management to directly influence the behavior of its employees. On the other hand, the organizational culture stands for the historical context within which a situation occurs and the impact of this context on the behaviors of employees. Furthermore, it is considered much more difficult to change in short-run situations because it has been defined over the course of years of history and tradition (Griffin, R. 2007). For example,
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The elements of culture are routines, rituals, rules, symbols, stories and myths, systems and structures, values and beliefs, through which people can recognise a company. The routine is the taken-for-granted and assumed ways of operating in organization. The ritual is specifically infrequent routines that mark some special value of the organization. The conduct and style of Christmas parties, Spring Festival celebration and staff meetings are some examples of rituals that explain the values of the organization. All organizations have rules. For example, rules for the annul leave, sick leave, working hours and maximum discount, these mark the culture of organization (Beamish, H. R. 2008).
The symbols indicate indirectly aspect of the organization's culture. Symbol consists of uniform and logo. The V.I.P. lounge in a five star hotel, for example, is grand and beautiful. The staffs who work there are usually very beautiful, friendly and well-trained. These show that hotel build it to deal with important guests. Uniform, is another symbol. Staff from different companies wear the different uniforms which is able to show their values or culture. For example, the uniforms of club and bank are completely different. One shows sexy culture, another indicates conservative culture. Furthermore, logo is another way to symbolize the organization. China Air has a phoenix on its logo which can be clearly recognized as a Chinese airline (Beamish, H. R. 2008).
There are always some stories and myths about an organization which display some key values or culture of the organization. For example, Bill Gates is one of the founders in Microsoft. His foundation worldwide helping poor families and fighting against AIDS become one of well-known story about his company (Beamish, H. R. 2008).
The systems and structures in a company is also able to reflect the impact of the underlying culture. Such as what types of performance are measured by the systems, and whether structures are production focused or customer focused (Beamish, H. R. 2008). For example
The external perception of organizational culture is related to the corporate brand and its quality. For an example, SONY computer was usually regarded by consumers as beautiful design for its appearance in the last 5 years. Another example is about Cold Storage which offers the guaranteed quality of products at more expensive prices as compared with other big food suppliers. Its product quality, especially for food, is trusted for 100 years. Its strong sense of food safety incorporates the culture of Cold Storage and deeply rooted in customers' mind. Accordingly, Cold Storage symbolizes the high quality of products.
The organizational culture usually comes from ideas of the founders or some early leaders of a company. For example, the culture at Walt Disney corporation rested on the founder personal views. In the beginning, the company was concerned only with wholesome family entertainment which is based around the cartoon figures of Donald Duck, Mickey Mouse and others. Its films, books and TV shows made people happy. In late 1980s, next president, Michael Eisner, redefined family entertainment and expanded the Disney product and market range to fit into different national cultures and globalize its brand (Beamish, H. R. 2008).
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In french, Disney' culture of not serving alcohol caused surprises by customers in a culture where wine with lunch and dinner is very common. In order to fit into French lifestyle, Disney altered its culture/rules to serve alcohol. In this case, its previous culture conflicted with new market strategies. In order to enter in French market, the Disney has to change its culture to match its strategy.
Disney France also faced problems with its staff. Initially, It was trying to use the same teamwork model that they used in the U.S. and Japan. But French viewed it as a brainwashing approach. Nearly 1000 new staffs, 10 percent of the total workforce, left during the first nine weeks. One of unhappy employees said: he don't think that they(Disney) realize what Europeans are like.... that people ask questions and do not all think the same way (Burt, G. 2002). Afterwards, Disney had to change the previous way in which people work together. Basically, its way of working as team which is one of its culture could not coordinate its corporate strategy of French market.
One of Singapore Airline's strategy is to build a culture of service excellence. So the company spends tremendous times looking for right candidates. This ends up selecting only about 2 percent of applicants. Selecting people on the basis of values which fit the organization culture is a significant determinant of excellent job performance and subsequent turnover (Beamish, H.R. 2008). In order to build up or enhance its culture of providing outstanding service, Singapore Airline conducts an extensive and professional training for employees. It completely matches its culture. In addition, this culture makes employer find hard to hire the right people
In the last few years, companies such as Southwest Airlines had reinforced the importance of having a strong corporate culture to drive the right behaviors and actions. A unique culture of Southeast airline which is called goofiness/fun by some individuals keep the morale of its employees high. In order to build up this culture which emphasizes employee as the airlines first customers and passengers as second, the company is committed to provide its employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. In addition, employees are provided the same concern, respect, and caring attitude within the organization that they are willing to share externally with customers (Emerald. 2012). Another organization that has built a strong culture which matches its strategy is Zappos, founded in San Francisco in 1999. They are selling shoes and cloths online, and offering not only free shipping but also free 365-day return. Its staffs are encouraged to provide WOW service. Most of staffs work in the call center. They have no script to follow, as they are encouraged to be individualistic and respond to the customer on the phone. The CEO, Tony Hsieh, took an annual salary of 36,000 to create the core values of Zappos that drives the culture. The culture includes delivering WOW through service, creating fun and a little weirdness and being adventurous, creative and open-minded (Burt, G. 2002).
The Wal-Mart Saturday meetings at 7 am every Saturday morning in Bentoville, Arkansas already became a culture of the company. Wal Mart CEO, Lee Scott began the regular Saturday morning meeting by leading the Wal-Mart cheer. The meeting is designed to beat competitors' Monday morning meetings. In the meeting, hundreds of executives from all over the country attended. The two-hour meeting considers the sales for the week and the year to date, and CEO randomly calls on a few executives to explain how their department performed for the week. The meeting is about sharing best practice, reminding people of the discipline needed every day, about developing a culture of performance and of being accountable. And it keeps people feeling part of the family (Bettis, R. 2005). This culture or habit or discipline considerably impacts the formation of numerous good strategies and always help Wal-Mart lead the supermarket worldwide.
Organizational culture has strong effects on employee retention and job satisfaction. In fact, it is the strategy which directly influence turnover rate and employee satisfaction. The culture and strategy have to work together to establish a better environment for employee. If a company has a very good concept of organizational culture, nevertheless, no strategies are being used to build up or maintain its culture, then organizational culture will not have effects on anything in a company. For example, some companies advocate a learning culture. In fact, they never provide any learning opportunities for employees, such as arranging them managerial classes, sponsoring them to further study and conducing few training, etc. This would result in low job satisfaction and high turnover rate. This is a case of strategy and organizational culture are not well matched. If the company offer employees many leaning opportunities, this culture can produce loyal and motivated employees and lead to outstanding performance (Griffin, R. 2007).
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3M is a global innovation company that serves customers through six business segments, including consumer and office, display and graphics, electro and communication, health care, industrial and transportation, and safety, security and protection service business. Its main culture is advocating innovation which is named 15 percent Rule. It allows research development personnel to spend 15 percent of their time perusing whatever Ideas appeal to them, as long as they have some commercial potentials. So this rule or strategy 3M created is to enhance its culture.
Organizational culture sometimes can be used as a strategy to differ each company. Most of successful organizations in the world succeeds through differing their products and service. People however easily omit organizational culture which plays a vital role to distinguish each company. Technologically, differentiation requires to position not only products but also the whole corporate. The values and emotions symbolized by the organization become key elements of differentiation strategies. For example, the corporate branding uses the vision and culture of company explicitly as a part of its unique selling proposition. For example, apple computer is known for its informality. People usually only focus on the product differentiation in a corporate strategy, actually, culture is used as a strategy to differentiate each other (Bettis, R. 2005).
The former CEO of IBM, Lou Gerstner, said: The management does not change culture. Management invites the workforce itself to change the culture. If I could have chosen not to tackle the IBM culture head-on, I probably would not have. My bias coming in was toward strategy, analysis, and measurement. In comparison, changing the attitude and behaviors of hundreds of thousands of people is very very hard. I came to see in my time at IBM that culture is not just one aspect of the game- it is the game.
Sometimes, even though the organizational culture and strategy are completely matched, it may not guarantee a company succeed. There are many external and internal factors affect its operation. The external factors include different policies and different cultures. For example, Google company is famous for free-access to any resources. Because of this, the company could not enter into China market where the government restricts sensitive information on line which is adverse to government. Since Google did not corporate with Chinese government, they now still ever enter Chinese market BBC 2010).
Organizational culture is not always permanent, instead it may change to support strategy implementation. The responsibility for doing so lies with senior management- it is a top - down job. Therefore, the management should start by asking: what behaviors do we want staff to adopt? what aspects of the culture must change to support the strategy execution? ( typical meeting agendas, customer focus, changes in leadership style) what supporting mechanisms will encourage these behaviors? (computer is fast and responsive to provide fast and responsive service to customers)
A strong culture will help to align the elements required for effective implementation. There is no so- called right culture and wrong culture.
Business firms are increasingly moving from the branding of products towards the branding of firm (Bettis, R. 2005).
As company grows and becomes successful, it usually develops a culture that distinguishes it from other companies. That is one the reasons that they are so successful.
A company succeeds as a result of what the company does, its strategy, and how it does it, its culture. The culture is linked to the strategic values whether one is running a new company or changing the culture of an existing company
The process of creating organizational culture has five steps, which is formulate strategic values, develop cultural values, create vision, initiate implementation strategies, reinforce cultural behaviors (John, M. 1999).
In different companies, some people care deeply about money, some care about technology innovation and employee well being.
There are serval elements of the implementation pattern of strategy, including leadership, people and culture. Firstly, strategy is done by company leaders, then it affects culture. Next, the culture changes the way corporate operates, like hiring the right people, emphasizing teamwork, selecting credible leadership, using team and individual performance-based salary, advocating equal communication and work-life balance, treating people as individuals, recognizing people and having strong corporate social responsibility (Beamish, H. R. 2008