The Organizational Culture Systems In Companies Business Essay

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Organization culture is a system of shared meaning and beliefs held by organizational members that determines, in large degree, how they act toward each other and outsiders. It represents a common perception held by an organization's members that influences how they behave. In every organization, there are values, symbols, rituals, myths and practices that have evolved over time. These shared values and experiences determine in large degree, what employees perceive and how they respond to their world. When confronted with problems or issues, the organizational culture influences what employees can do and how they conceptualize, define, analyze and resolve issues.

The definition of culture implies three things: First, culture is a perception i.e. individual perceive the organization culture on the basis of what they see, hear or experience within the organization. Second, even though individuals may have different back grounds or work at different organizational levels, they tend to describe the organization's culture in similar terms. That is the shared aspect of culture. Finally the organizational culture is a descriptive term i.e. it is concerned with how members perceive the organization, not with whether they like it. It describes rather than evaluates.


It is described as a social atmosphere or series of associated social behaviors that depends heavily upon coffee, particularly as a social lubricant. The term also refers to the diffusion and adoption of coffee as a widely consumed stimulant by a culture.


One of the most important studies which attempted to establish the impact of culture differences on management was conducted by Geert Hofstede, first in the late 1960s and continuing through the next three decades.

In his studies, Hofstede identified four 'value' dimensions on which countries differed which are power distance, uncertainty avoidance, individualism/collectivism and inasculinity/feminity.And they are explained below as follows:

1. Power distance

This indicates the extent at which a society accepts the unequal distribution of power in institutions and organizations. Here Hofstede indicated that, Argentineans have high power distance than Americans.

2. Uncertainty avoidance

This refers to a society's discomfort with uncertainty, preferring predictability and stability. Hosted theory tells us that Argentineans have high level of uncertainty avoidance than Americans.

3. Individualism/collectivism

This refers to the extent at which people prefer to take care of themselves and their immediate families, remaining emotionally independent from groups, organizations and other collectivities. The Hofstede theory tells us that Americans have lower individualism than Argentineans.

4. Masculinity/Feminist

Dimension reveals the bias towards either 'masculine' values of assertiveness, competitiveness, and materialism, or toward 'famine' values of nurturing, and the quality of life and relationships. The theory tells us that, Americans have higher masculinity than Argentineans.

The four explained value above are the Hofstede's theories which attempted to establish the impact of culture differences as explained above.


Refers to European Institute for Business Administration:

It is recognized widely among its peers in the top-tier of business schools as one of the most influential and innovative business school in the world. It's the only business school in the world that has a fully fledged campus in both Asia and Europe. The Asia campus is in Singapore and the European campus is in Fontainebleau which is just south of Paris, France.

INSEAD distinctive competence is considered to be its genuine multiculturalism among both students and faculty. This multiculturalism is enforced by a policy which limits the proportion of students of any one nationality to less than twenty five percent. This means that students confront cultural differences on a routine basis. Moreover much of the work involves group assignments which are designed to maximize diversity by putting together individuals of different nationality, work experience, age and gender. No doubt that the content of the course work may be secondary to the process of learning how to work across cultures.


Argentinean has high uncertainty avoidance; under this organizations will tend to have more formalization evident in a greater amount of written rules and procedures. Also there would be greater specialization evident in the importance attached to technical competence in the role of staff and in defining jobs and functions. Managers would avoid taking risks and would be motivated by stability and security. The role of leadership would be more on planning, organizing, coordinating and controlling.

American is in small power distance means that the extent to which less powerful people accept the social inequality is small, that is members of a society are treated as equal as possible in an unequal society.

In the other hand Argentinean are in large power distance. In countries with high power distance employees are too afraid to express their doubts and disagreements with their autocratic and paternalistic bosses.

America is under decentralized organization, here the top executive delegate much of their decision making authority to lower tiers of the organizationalstructure.As a correlation, the organization is likely to run on less rigid policies and wider spans of control also reduces the number of tires within the organization, giving its structure a flat appearance .

Argentinean is in a centralized organization, the decisions are made by top executives or on the basis of pre-set policies. These decisions or policies are then enforced through several tiers of the organization after gradually broadening the span of control until it reaches the bottom tie



Cultural assumptions regarding external adaptation are particularly relevant to strategy, as its very purpose is to align the organization with its environment. Assumptions regarding internal integration are relevant to questions such as who is involved and who takes the decision. For example, managers from different countries have different assumptions regarding uncertainty and control.

Controlling model:

The controlling model can be characterized as centralized and formalized.Topanagement may call in expert consultants to assist in devising strategies. Formal strategic planning units may be established to devise plans to be submitted to top management or the board for deliberation. Formal scanning units may also exist that are responsible for tracking environmentalevents.Scanning is focused and in-depth in order to obtain the necessary information.

Information is often obtained from industry reports, or consultants, and tends to be quantitative and objective.Ferecasting, econometric models, and structured scenarios are used to analyze the information. Based on this information and analysis, top management makes the decisions and then hands them down to be implemented.Implimantation entails thorough planning, setting clear and specific targets, explicitly communication of what is to be done and how, persistent follow through, and then linking performance goals and rewards.

There is no doubt at all that this controlling model is associated more with the Argentinean subsidiary because there is the assumption that the environment can be known. Specific information can be obtained and analyzed to reduce environmental uncertainty. Truth is obtained by facts and figures manipulated by mathematical models.Stratigic vision can be expressed as concrete targets, explicitly and tangible. Decisions are taken by those presumed to have the most power or knowledge, namely top management. As the top managers are considered to be rational economic agents, they are assumed to make the best decisions in line with individual interests.

Adapting model

This model is more centralized and informal. Responsibility for strategy is diffused throughout the organization. Scanning is broader based and less systematic.Informtion is gathered from personal sources, friends and colleagues, and through observation and thus tends to be more qualitative and subjective. Information is interpreted through intuitive models.Intence discussion is encouraged involving many people from all levels within the organization. Strategic decisions are expected to be reached through consensus.

This kind of model is associated more with American head office due to the fact that the underlying assumptions in this model are that the environment cannot be readily known or controlled. Therefore the organization must be flexible and prepared to react to unforeseeable environmental events.

Abroad scan-peripheral vision again is needed to detect subtle changes in the environment. Person relationships and interactions are considered to be developing shared understanding, thus information sources are more personal and subjective. Truth and reality, or knowledge, are more likely to be arrived at through an intuition. Strategic vision is often vague and philosophical. Strategy implementation is considered to hinge on the development of internal capabilities such as knowledge, competencies and learning in order to be able to continuously improve their changing situations.

The model I recommend and believe to be more relevant to Modcon is Adapting model. This model will help the modcon to manage to understand their cultural differences. The solution for the problem that Modcon has opted to appoint a local country manager and two department managers for the subsidiary rather than have an ex-pat manager oversees operations for a period of time is very right, since according to the model modcon is suppose to be flexible and prepared to react to unforeseeable environmental events. Also the few conflict situation which emerge over such things as how decisions are made, approaches to deligation,degree of specialization and flexibility as according to the case study will be sot ten out.


In trying to describe one, own culture, we often call up stereotypes that others have of us. In fact while we may find difficult to describe ourselves, characterizing someone else culture seems relatively easy. Stereotyping comes naturally However many of us have been brought up to think of stereotyping as bad, ignorant and immoral as evidence of prejudice and bigotry, and far from political correct. Stereotypes can indeed be wrong, based on misinformation, and hurtful, used to discredit the other. But they can also be use in a positive way.

Stereotypes can be defined as generalizations or assumptions that people make about the characteristics of all members of group, based on an image about what people in that group are like. For example, one study of stereotypes revealed that Americans are generally considered to be friendly, generous, and tolerant, but also arrogant, impatient, reserved. Clearly not all Americans are friendly and generous, and not all Asians are reserved. But according to this study, others commonly perceive them this way.


Stereotyping leads to prejudice .This is in turn leads to discrimination.

All stereotyping is really is a simplified and standardized conception about the characteristics or expected behaviors of an identifiable group. As a result we develop generalized perceptions about people based such things as the color of their skin, style of dress, sex and so on. As human beings, we face an infinite number of choices about what kind of person we want to be, and what to do .But this is the root of much type and horror. It is easier to kill and allows injustice when we think someone is fundamentally different from us. To be human is to recognize the humanity in others.

Stereotyping conjures up an image of stamping the same type on every blank face.

It may be more useful to think rather of prototypes, which allow for variation around a set of core charactaristics.Therefore on given cultural dimension there a hypothetical country mean a variation around that mean a normal curve. Thus when comparing these hypothetical means of countries, we expect to find significant differences and less variation within cultures than between them. In other words, members of the same culture are expected to have more in common than with members of the other. For example when comparing Swedes and Italians in terms of their levels of expressed emotionality, it may be possible to find some Italians who are more reserved and some Swedes who are quite expressive. But overall we can expect Swedish managers to be more reserved and more like other Swedes than their Italian counterparts.

Stereotypes eliminate the challenges of understanding people:

Stereotypes eliminate the challenges of understanding people, who are different from our selves, they supposedly give us a general overview of whole groups of people so we know what to expect and how to act. Unfortunately, so many stereotypes are inaccurate and are used as a method of scapegoating, or to separate their behavior from any other behavior.

Stereotypes prevent us from identifying the feelings that really goes on inside of us. With stereotypes, the belief will remain that someone did something to us, rather than the problem, fear, or rigidity thinking being within ourselves .When we are stereotyping we get caught up in the issues of that what they do, that's how these people are, instead of being in touch with our actual feelings of hurt, confusion, being slighted, left-out, anger and others.


Although stereotypes generally have negative implications, they aren't necessarily negative. Stereotypes are basically generalizations that are made about groups. Such generalization is necessary, inorder to be able to interact effectively we must have some idea of what people are likely to be like ,which behaviors will be considered acceptable, and which not.

Such generalizations are in essence stereotypes. They allow us to put people into a category, according to the group they belong to, and make inferences about how they will behave based on that grouping. There will still be differences between individuals from one culture and with the same individual in different situations. But the stereotypes are reasonably accurate, so it is useful. Stereotypes are only problem when they are in accurate, especially when those inaccurate are negative and hostile.


Now days more and more companies are turning towards teams as a way of managing increasingly complex and dynamic environments, teams are now seen as solutions to problem of external adaptation, responding to complexity by bringing together variety of perspective while responding to complexity by bringing together a variety of perspective while responding to dynamic changes by encouraging teams to make decisions at the front line, where the action is.

Team can be defined as group of participants from several departments who meet regularly to solve ongoing problems of common interest.


Teams can work on a variety of things such as designing products, provide services, negociate deals, coordinate project, offer advice and make decisions.

Teams works according to four groups or types which are:

1. Problem solving teams.

This is a team of five to twelve employees from the same department or functional area who are involved in efforts to improve work activities or to solve specific problems.

2. Self managed work teams.

A formal group of employees who operate without a manager and are responsible for a complete work process or segment, this team is responsible for getting the work done and for managing themselves. This usually includes planning and scheduling of work, assigning tasks to member's collective control over the place of work, making operating decision and taking actions on problems.

3. Cross functional team.

Is a hybrid grouping of individuals who are experts in various specialties and who work together on various tasks. Many organizations use this.

4. Virtual team.

This are teams that use computer technology to link physically dispersed member in order to achieve a common goal. Under this team, members collaborate on line with took such as a wide area network, video conferencing, fax, email, or even web sites where the team can hold online conferences. This team can do all the things that other teams can like sharing information, making decisions and completing tasks, however they miss the normal give tend task of face to face discussions.


The three key process strategies that this team of managers needs to focus on are:

1. Building team.

When it comes to building teams, North American managers tend to have a more task-oriented, mechanistic view. As they see it, teams can be put together by assembling a group of individuals, setting the objectives, oiling the wheels and then expecting them to function effectively, or fixing them if they fail to do so. Team building efforts such as outward bound, are designed to demonstrate the need to cooperate in order to survive.

2. Resolving Conflict.

For teams to function effectively they need to establish mechanisms or ways of resolving conflict. This prevents a problem for multicultural teams, given different norms for managing conflict. Modes of conflict resolution have been classified according to degrees of assertiveness and cooperativeness.Competing, collaborating, compromising, accommodating and avoiding. While this model acknowledges differences in personal styles, cultural patterns tend to be ignored.

3. Evaluating Performance.

To ensure effectiveness, teams have to evaluate their progress continuously, both in terms of task and process.Furthermoe, it is necessary to provide opportunities to reflect and learn as a team. This requires setting aside time to evaluate how the team and its members are doing, to discuss the dynamics and resolve the differences. While not easy to do in any culture, some cultures are more prepared to give and receive feedback than others. This makes the process of evaluating performance a potential cultural minefield.


Team is being formed when certain tasks is suppose to be managed. These team members are to work intensely on a specific, common goal using their positive synergy, individual and mutual accountability, a complementary skills.



This is a process of locating, identifying, and attracting capable applicants. Recruitment is also an area in which there are important social and legal implications, but perhaps most important is the significant part played in the lives of individual men and women by their personal experience of recruitment and the failure to be recruited.


This is an exercise in prediction. It seeks to predict which applicants will be successful if hired. Successful in this case means performing well on the criteria the organization uses to evaluate employees. In filling a sales position, for example, the selection process should be able to predict which applicants will generate a high volume of sales for a position of a network administrator,, it should predict which applicants will be able to effectively oversees and manage the organization's computer network.


1. Architecture and design.

Entering an organization the most obvious artifact is the architecture and design of the building. Like Japanese companies one often finds large, open, crowded offices where everyone, including the boss, sits together.

2. Greeting rituals.

The importance of these rituals should not be overlooked. Some countries such as United States tend to pay less attention to protocol, but for others it is taken quite seriously. For example, failure to show respect by carefully exchanging and inspecting business cards in Japan can get business negotiations off to a very bad start.

3. Forms of address.

The degree of formality in addressing relations sends important signals that may not be intended, anything from respect, to friendliness. Formality is expressed in the use of last names, the formal version of 'you' and titles.

4. Contracts.

This is the agreement between the organization and employee. Whether business agreements are sealed by being put in writing, giving one's word is also highly important.


1. Safe, healthy and happy workplace.

Creating a safe, healthy and happy workplace will ensure that your employees feel homely and stay with your organization for a very long time.

2. Open book management style.

Sharing information about contracts, sales, new clients, management objectives, company policies, employee personal data these ensure that the employees are as enthusiastic about the business as the management. Through this open book process you can gradually create a culture participative management and ignite the creative endeavor of your work force .It involves making people an objectives. Be as open as you can. It helps in building trust and motivates employees Employee self service portal, manager on line, are the tools available today for the management to practice this style.

3. Performance linked bonuses.

Paying out bonuses or having any kind of variable compensation plan can be both an incentive and disillusionment, based on how it is administered and communicated.

4. Fair evaluation system for employees.

Develop an evaluation system that clearly link individual performance to corporate business goals and priorities.

5. Knowledge sharing.

Adopt a systematic approach to ensure that knowledge management support strategy. Store knowledge in data bases to provide greater access to information posted either by a company or the employees on the knowledge portals of the company.

6. Highlight performers.

Creating profiles of top performers and make these visible through company intraned, display boards and others. It will encourage others to put in their best, where by creating a competitive environment within the company. If the system approach is followed to shortlist high performers, you can surely avoid disgruntlements.

7. Open house discussion and feedback mechanism.

Employee management meets, suggestion boxes and ideas capture tools such as critical incidents diaries are the building blocks that can help the managers to identify and develop talent.


Although e-recruiting allows organization to identify applicants cheaply and quickly, the quality of those applicants may not be as good as other sources. The majority of studies have found that employee referrals generally produce the best candidates. The explanation is intuitively logical. First applicants referred by current employees are pre screened by these employees. Because the recommenders know both the job and the person being recommended, they tend to refer applicants who are well qualified. Also because current employees often feel that their reputation is at stake with the referral, they tend to refer others only when they are reasonably confident that the referral will not make them look bad.


A problem occurs when errors are made in rejecting candidates who would have performed successfully on the job or accepting those who ultimately perform poorly. These problems can be significant. Given today's human resource laws and regulation, reject errors can cost more than the additional screening needed to find acceptable candidates. They can expose organization to charges of discrimination, especially if applicants from protected groups are disproportionately rejected.

The costs of accept errors include the cost of training the employee, the profits lost because of employee's incompetence, the cost of severance ,and the subsequent costs of further recruiting and screening. The major thrust of any selection activity should be to reduce the probability of making reject errors or accept errors while increasing the probability of making correct decisions. Managers do this by using selection procedures that are both valid and reliable.


The concept of cultural diversity has a very wide scope and is being practiced by people and organizations all over the world. Broadly this idea includes hiring people of diverse races, different religions and promoting the entry of working staff from different countries. Although the practice of this concept has gained momentum in the past few years, but its existence is quite old and cultural diversity continues to live all around us. It exists in different communities and households, from small suburbs to big cities and that too all through the world. Diversity is an element of the society and has now become an important part of businesses as well.


1. Creativity argument:

When any organization invests in diversity, it results in the creation of a bigger pool of talent. This is a win-win situation for both the employees and the organization. The employee's exchanges learn each other's positives and competencies. Such a pool of talent provides the organization with a competitive edge, which help it to progress in a huge and competitive environment.

2. Marketing argument;

It increases the ability to respond to cultural preferences of local markets.

3. Cost argument;

It reduces cost incurred by turnover of non- home country managers.

4. Resource acquisition;

It increases ability to recruit employees of different national backgrounds, and host country elites.

5. Problem- solving argument.

It improves decision- making through wider range of perspectives and more thorough critical analysis.

6. System flexibility argument;

It enhances organizational flexibility and responsiveness to multiple demands and changing environments.

Susan C. Schneider and Jean-Louis Barsoux, Managing across Cultures, 2003, Prentice Hall, London

Derek Torrington, Laura Hall, and Stephen Taylor, Human Resources Management, 2008, Prentice Hall, London.