Culture is one of the most complicated words in English language (Williams, 1983: p.87). According to Parker (2000, p.1) organizational culture involves the understandings of its members and features of sector, state and society in which the organization is a part of. As a citizen of the society employees tend to have a relationship with its organization, criticise them for being bureaucratic. But they are the providers of employment and welfare (Thompson and McHugh, 2002). Therefore the culture of every organization has become a focus of study for all these years.
The assignment relates the theory about organization culture to an organization. Using the example of organization ABC, this assignment shows how culture is determined considering many factors. This assignment explores how the different management and organizational theories impact the culture of the organization.
The example of the organization taken in the assignment ABC is one of the many manufacturing branches in India and is the head office for the India operations. My association with the organization has been spanned with a number of roles, initially as an apprentice, then a temporary employee and finally a permanent employee. This experience with the organization in various departments and different shifts of work will help me write this assignment about the organization culture. Hence I feel that I am in a better position to describe, criticise and write about the culture of the organization ABC.
2.0 HISTORY OF COMPANY ABC
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ABC is a subsidiary of a German Company Headquartered in Stuttgart, which holds up to 70 percent of the shares. The Bangalore plant was established in 1954. ABC started off by manufacturing spark plugs and fuel injection equipment under licence from its parent company. Later on it extended its production to Packaging Machines, Special Purpose Machines and Power Tools. Over the years it has grown to 14 manufacturing sites and 3 development centres at various parts of India. ABC employs about 18,000 associates in India alone. ABC now is India's largest auto component manufacturer and one of the largest in the world. It is also the second largest Indo-German Company in India.
3.0 WHAT IS ORGANIZATION CULTURE?
Peter when talking about Meek (1992, p.28) says that all the theories for the organization culture fall in two groups. One he says culture is within the organization and will be manipulated for the end results of the management. And the other is that the culture comes with the history and its structure relationship. According to Schein (1983, p.14) organizational culture is the pattern of basic assumption that a group has invented, discovered or developed to overcome the problems of external adaptations and internal integration.
Culture not just means how the organization works or the people with in an organization work. It means a lot more than the work culture, management culture or the production culture. When we ask a person about his organization he tells us about the work area, organisation history, and his identity with in that organization. All this is related to the culture of that organization. Organizational culture becomes a powerful influence on every individual with respect to his values and beliefs (Moorhead and Griffin, 1998). When we talk of organization culture we cannot miss out on Taylorism, Bureaucracy and its principles. In this assignment these principles will be compared to the organization and how it has been manipulated for the organization to work at its best.
According to Scott (2003, p.319) culture is a necessity in every organization. There are three directions from which the culture of the organization springs from (Schein, 1997). One is from the founder of that organization from his beliefs, values and assumption. Second from the members of that organization from the learning curve obtained while working. Third is from the new member or new leader with his new beliefs, values and assumptions. In all the end product of the organization culture is to achieve the goals set by the company and bring in profits. Indirectly it gives its employees the satisfaction of work and the identity that he requires to compete in the globalize world.
Frederick Taylor in his studies derived a principle where he related the time and motion of the worker and brought in the wage system on the bases of performance. Hackman and Lawler (1971, p.215) says on Taylorism that the overall assumption in the scientific management theory was to simplify the work from the complex task and to have more efficiency with less qualified people in order to achieve the profit goals of the company. He introduced the scientific method of management which replaced the old system of personal management.
Always on Time
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These principles of Taylor became the fundamentals of all the process planning within a workshop or a factory. The production house in ABC operated with scientific management principles of "one best way" (Cutajar, 2010) with the work split into small tasks which one employee doing each station or task. The work method was defined with respect to the scientific study of the task. There was a clear instruction for the employee regarding the task or operation he had to take and nothing different was expected from him. The selection of the employees is done through the formal interview and will be trained for the task he would be undertaking. In ABC the employee was to give X amount of output from that station, and if he had over produced in his shift he would be rewarded with incentives. All the important principles from Taylor were embraced with both hands in ABC.
3.2 BUREAUCRACY IN THE VIEWS OF MAX WEBER
Of the three pure types of organisations explained by Weber (1947) the third one which is the most popular one is the rational - legal one. Charismatic and traditional organizations are the other two. Pugh, et al. (1983) when explaining about Weber's theory points out about the organization being compared to a well designed machine and that there is contribution from every part of the machine to obtain maximum output with the system of rules and procedures supporting it.
Since the parent company of ABC is from Germany there is great influence of bureaucracy in the management culture. The bureaucracy principles of Weber have been modified to suit the local or regional culture of India. For example in an Indian culture the personal relationship or family will be considered first over the organization, the government intervention in its business structure is high. ABC had overcome these hindrance and to influence its own German principles of management hierarchy and orderliness of employees.
ABC followed the principles of hierarchy where the lower workers had to follow the higher manager's orders but they had the right to criticise or ask for reasons. The workers were appointed on technical qualification basis. The use of written documents was seen throughout the company in all the levels of production. Rules and policies were clearly outlined to its employees. Because the nature of product ABC had to produce was not changing day by day it was able to follow the bureaucratic principles of Weber. If the produce was constantly changing then batch or small production methods had to be used and the use Weber's principles would have been difficult.
3.3 DOUGLAS MCGREGOR'S XY THEORY
Douglas McGregor (1960), an American social psychologist gave us the famous X and Y theory in his book 'The Human Side of Enterprise'. These theories are still referred to when we talk about management and its culture. In his view the X theory is for the less skilled workers and the Y theory is for the mangers who manage these less skilled workers. The X theory states that due to the employees developing dislike over work and need to be controlled, threatened to make them work hard. The Y theory inspires the employees from the managers with self-control and self-direction in the pursuit of organisational objectives, without external control. These points were highlighted by Gruyter (1987) when explaining about the works of McGregor.
When I compare this theory towards ABC, I feel the organization has moved forward from the situation of strong bureaucracy to a very friendly situation where the less skilled workers shared the qualities mentioned in the Y theory. Few principles of X theory have been modified over the years. In the X theory one of the principles was that the workers had to be threatened and punished in order to get the work done. Now people are given bonus and incentives to make him more efficient. In the same way ABC also provides various facilities to keep the employees happy and feel that they are at home rather than thinking that they are at work. Even the manager's work has been made simple to follow up the less skilled employees in the workshop. ABC has given its employees various numbers of benefits in order to get the maximum out of them. All these have proved the Y Theory wrong in the case of organizational culture of ABC.
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A few benefits of ABC to take care of its employees -
Incentives and Bonuses - Incentives were given if an employee has produced more than 100% of his work. When we see the target of 100% set by the management for a shift, it can be easily achieved by any employee. It has been done so that the employees will be satisfied at the end of his shift achieving a target more than 100% and gets paid for the extra work he has done.
Shift incentives - People will not be willing to work in the 2nd shift and night shift. To promote these employees were given shift allowance or paid a sum of money for the days he / she worked in the night shift or 2nd shift.
Refreshments - Coffee / tea with snacks was provided in all the shifts
Food - Food was provided at a subsidised rate.
Transport - All employees were given transport facilities in all the shifts
Uniforms - the cloths for their uniforms, shoes was distributed once in a year. I was amazed when soap was provided every month for cleaning their uniforms. Stitching charges were given when they distributed the uniform.
Training - All employees had to under go through the training process to sharpen their skills and to use new facilities or equipments.
A medical facility - A small hospital had been set up with in the organization for the employees and was open for access at any time of their shifts.
Apart from this there were few more steps taken to encourage the employees that had caught my attention when I was working with them -
Slogans of encouragement - was posted all across every department.
Company Policy - was displayed throughout the factory
Suggestion box - was kept in the canteen
Sports clubs, Gym facilities were provided
Family day - once in a year the family members of the employees were let to come in to the work place to see the environment in which their husband, son or daughter is working.
Monthly magazine - showing the company growth and profits was distributed to the employees to make them feel that the organization is one among their family.
When working in the organization talked with a few people around the factory and all these facilities provided by the management had a major impact to the employee confidence and commitment towards the work. Most of the employees gave his maximum when at work. The management should be very pleased to provide all these facilities to its employees when they see the results at the end of each year. The employees of ABC had the support of the strong union on their side to support them to obtain all these facilities from the management. The union would put forward the demands in front of the management each year and there are negotiations which take place between them.
3.4 THEORY Z
William Ouchi (1981) developed the management approach of Theory Z. This theory talks about the American tradition of individualism and the Japanese collectivism type of organization. The theory takes the advantages of both the X and Y theory and gives a new approach for the organizations. Moorhead and Griffin (1998, pp.448-450) when explaining about the Theory Z approach lists that Ouchi had put forward seven points of cultural values for which he compares the three types of organization.
Culture of ABC when compared with the seven points of Theory Z
Commitment to Employees - ABC has the Life time employment type as followed by the Japanese culture. The permanent employees have the advantage of having the job for life and this eases the pressure with their social and family life. ABC has been not impressed with the way the Typical US companies have followed in dealing with their employees with the short term employment scheme.
Evaluation - it means evaluating the workers with respect to the qualitative and the quantitative measures. ABC has chosen the typical American company way of rapidly evaluating and putting in the modes of performance measures. One point to be noted with the ABC is that the promotions were given in reasonably shorter periods in the early stage of the employment but as and when he settles and makes himself available for life time employment the promotions were hard to come and the performance measures were made stricter.
Careers - when we see career as a point from in ABC they have gone by the Japanese company way of life time employment.
Control - is required for every organization for it to achieve the goals set for the year. When the Japanese companies goes the implicit and informal way, the American companies goes the explicit and formal way. ABC has been very cautious in selecting the type they are going to follow and have decided in going the mean way but with a little tilt towards the Japanese way. The communication was formal from the higher level management to the lower manages. The task was expected to be completed once the communication is completed.
Decision Making - ABC this time chose the American way of making the decisions. The individuals and their managers had the advantage of participating in making the decisions with in their department. When it comes in taking part in the decision making for the other departments it was not entertained.
Responsibility - this always coincides with the decision making policy. ABC has taken the Japanese way where the group was held responsible for the decisions they make.
Concern for the People - ABC has gone the Japanese way of taking care of its employees. It is evident when we spoke about the XY theory where the organization had completely made it a point to take care of its employees to the maximum.
4.0 ORGANIZATION CULTURE OF ABC
A mixture of Hierarchy structure or vertical structure and departmentalization or horizontal structure can be seen in ABC organization. When it comes to the level of the departmental heads and their higher management it can be compared to a vertical structure. The higher manager is respected and is believed to have power and authority. They have the willingness to display expert knowledge (Schneider and Barsoux, 1997). As Kast and Rosenzweig (pp.208-209) mentions the vertical structure has specific definition for each role of the various positions, and there are significant status differences between the levels. When it comes to the departmentalization or the horizontal structure it is mainly based on function, product, time, market and location. For the organization to move forward the departments have to work at their best. Extra care is given for it to work efficiently and effectively. Below is an example of the structure of higher management in ABC.
The activities between the departments in ABC are needed to be well coordinated. The loss of communication and clashes between the departments are to be minimised. The departments in ABC are organised on the bases of
Function - Tool room, Metrology
Product - special purpose machine building, design
Time - shifts with in departments
Location - maintenance electrical and mechanical
Market - production house
Role Culture -
This type of culture can be fond in every kind of organization and is the most popular type. ABC too has this type of culture in the higher management levels. According to Pheysey (1993, pp.15-17) this type is also called culture of pyramid and very similar to Weber's rule bound culture of bureaucracy. It was possible for ABC to have role culture within its management level because of the long product life cycle in its business.
The structure above is a typical Pyramid structure that can be seen in ABC. Here you can see the orders are passed on from the higher managers to the lower workers. The tasks are expected to be completed in more effective and efficient way. This example is followed in the production departments of ABC organization. Here the task of the employee is simplified and each step will have instruction manual. The type of work will be usually same everyday for these employees.
Power Culture -
Also known as the spider web culture where the centre influences everybody in the business. Pheysey (1993, p.17) compares this type to the traditional Indian family owned business. ABC in certain departments has been able to develop this type of culture. The maintenance departments, the Metrology departments and the Quality departments in ABC work with this type of culture. The individuals within these departments are expected to have all the knowledge of the business. When there is a problem on a machine in the production line the maintenance department are the once first called. The machines need to be regularly serviced and checked for its efficiency. The quality of the product depends on the machine functionality. ABC has been successful in developing such kind of departments by keeping it small and maintaining control.
Task Culture -
This is basically task oriented or project based. Wilson and Rosenfeld (1990) have compared this to the matrix or cross functional type of culture. ABC has managed to build in a Task culture within a few of its department i.e. Tool room and special purpose machine building. Here the team effort is more as they concentrate on completing the projects. The projects are usually small and require a lot of flexibility within the department. The job will be different everyday and the employees need to adjust to the tasks of that day. The example of tool room where employees will be working on developing the jigs and fixtures required for the production department. Once they have finalised the design for the jigs and fixture, it needs to be manufactured and tested prior to setting it to the production line. In such kind of departments task culture is essential.
As to conclude the assignment about the organizational culture it is difficult to say that a particular organization is following a particular culture. According to Beaumont (1996, p.43) both academics and practitioners are coming to a limited degree of agreement between them on organizational culture that it cannot be easily measured or defined. We know there is no particular organizational culture that is best suited to all organisations in all circumstances. Also the culture of an organisation may be viewed differently by different people. Therefore it is really difficult to define the culture of an organization.
We can write that there has been a lot of effort and studies put together in developing the organization ABC. The success of ABC has been progressing with a steady profit margin year by year and the way ABC has handled the situation in the recent downtime of recession also proves that they have done their homework. Taken all the theories of organizational culture into consideration they have put forward a management strategy that will yield them the good results as to the goals set by its parent company. As for the organizational culture ABC displays a different culture in different departments within the same organisation and a different cultural approach within its different branches of operation in India. When we compare ABC with its branches in different countries, there is again a different culture which is being followed. The statement given by Wilson and Rosenfeld (1990, p.230) supports this. It says that within an organization they are more likely to have different cultural exhibition and cannot have just one culture among the different departmental divisions of the multinational corporation. ABC was able to influence a few of its German culture with in this organization. A few of the examples are the influence of learning through vocational training, involvement of all its staffs in the technical development of its product and process and high wage system. This helped in developing the technical skills of both the workers and management hierarchy in ABC. Overall we can say ABC is a very well seasoned organization.