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Culture as the term which is frequently used in the discussions of workplace or an organization, it means behavioral patterns, traits and attitude that influence the way when individuals interact with others (Defillipi and Arthur, 1996). It can be viewed as something that is inherited from predecessors to enable one to distinguish itself from others. While the organization culture is born under the context of wider culture context, for example, nation or the ethic grouping that is embedded with the features of the specific organization. As organizational culture is not formed in one day, it is cumulated through long term interaction among the staff along with their behavioral pattern formed in the workplace. Once the organizational culture is formed, individuals would follow the regulated values and stick to the guidelines in quite a long timeframe (Kouzes and Posner, 1999). Organizational culture can enhance the cohesion and motivation of work team. It can also promote the image of a company by setting up a positive marketing image. On the other hand, organizational cultural once formed would become liabilities to the company due to incompatible with the fasting changing business world that render the original culture to lay obstacles to the innovation, adjust or quick response to the market (Pielstick, 1998). Considering its increasing importance to the growth of an organization, especially its impacts on the strategic management that would regularly comprise a wide range of enterprise activities, the essay launches an investigation on to critically evaluate the impacts of organizational culture on the strategic management within the organization. It is to start with the introduction of organizational culture, which ushers a threshed to the understanding of the importance of organizational culture. On the basis of that, the impacts of organizational culture on the strategic management are to be examined carefully by borrowing the model and examples. Following that, it would shed the light on the ways to understand the organizational culture, which lays the foundation on the handling organizational culture. Assisted by the suggestions from experts, the essay would take a critical review on how organizational culture affects strategic management. In the end, a conclusion is to be drafted.
Organizational culture is referred to the collective behaviors of individuals within the certain context as part of the organization (Ryan et al., 2000). Organizational culture is shaped through the long term interactions within the organization and affected by the visions, values, norms, systems, working language, symbols and any other elements that may exert the influence on the behavior of the employees (Shenkar, 2001). Organizational culture not only consists of behavior patterns but also embraces habits and belief, which is able to influence the way of individuals or groups to interact with others through teaching its members the pattern to perceive, think and feel. It needs to mention that, although in the common case, an organization may possess its own unique organizational culture, while in a larger organization, there could appear diversified and even conflicting cultures. These cultures take place owing to the different features affiliated to the management team and often co-exist with each other. Beyond that, organizational culture is the double edged sword, possessing both positive and negative aspects.
Each organization possesses its own style of working environment which contributes to its organizational culture to large extent, which lays the foundation for its ideologies, beliefs, values and principles that influence the behavior of staff indirectly (DeFillipi, 2002). Furthermore, the organizational culture as well contributes to the individuals of outside the company, such as suppliers, customers and public relationship.
First of all, organizational culture plays an important and direct role in the formulation of the behavior of the employees in the workplace. Generally a positive organizational culture could maintain its employees to be spurred and loyal towards the organization or managerial level (Aaker, 2000). Besides, organizational culture can also encourage a healthy competition among employees so that each employee would likely try its best to do the job in order to win the appreciation and recognition from both their superiors and peers. In addition to exert a motivation impacts, organizational culture can help an organization to set up some predefined guidelines to embed employees a sense of responsibility as well as the direction to work. Under such context, each employee is well aware of his or her role and responsibilities within the organization in the workplace. Assisted by the motivation offered by organization as well, staff could accordingly accomplish the assignments ahead of time in result of high efficiency (Deutsch, 2011).
Every organizational culture has its own peculiars due to the long term formulation in different workplace. In this way, organizational culture not only exerts internal influence on the staff alone, but also can reflect the image of certain brand (Alimo. & Alban, 2001). As a matter of fact, organizational culture possesses wide influence on the external world, giving the identity to a company, which means a company could be known for its distinctive identity.
As organization culture could have all the employees work in the same platform, it requires all the employees should be treated equally with no negative feeling of being left out or neglected in the workplace (Angouri and Glynos, 2009). Otherwise, organization culture could generate some negatives results. In this way, it is of vital importance for all the employees in the organization to adjust well under the organization culture in order to deliver their best level.
In the third place, organization culture can insert common objectives to the employees from different back grounds by readjusting their mentalities and attitudes to suit the needs of the development of an organization. In other words, organization culture could offer the staff the sense of unity in the workplace. For example, in Mitsubishi, the company follows an organization culture that every employee should be in office ahead of 10 minutes (Belbin, 2010). Such kind of organization culture attempts to encourage all the personnel in the company to be punctual. It is this culture that spurs the appearance of multiply professionals due to its emphasis on the efficiency, which plays a positive role on the organization in the long run, because every individual strives hard in order to finish the task in the regulated timeframe.
As aforementioned, it can be seen, organizational culture can offer a clear sense of responsibilities by identifying the roles of individuals as implementation is often on the track of predefined culture in the organization (Brown and Eisenhardt, 1997). Also the newcomers would feel more comfortable to step into the new environment through exposure to the accepted culture. With the relationship between employers and employees as well as amongst the employees greatly improving, employees would work with more motivation as they are trying to module themselves to the organizational culture instead of deeming the job as the burden. Not only does the organizational culture contribute to the internal operation of an organization but it could as well promote the external image, supplier channels, relationship with customers and the like.
Organizational culture in different types can exert different impacts on the strategy management, employees, customers, suppliers, corporate social responsibility and the like, which covers every aspects of an enterprise. To make it specifically, it employs Hofstede's cultural dimension theories to make an analysis of the existing substantial differences.
Hofstede investigated 116 thousand staffs across the dozens of countries and found out the main differences between western countries and other countries result from culture and social environment (Hofstede, 2003). Based on the opinions of value he balanced culture characteristics of every country in four aspects: power distance (PDI), individualism (IDV), uncertainty avoidance (UAI), masculinity (MAS) and Long term orientation (LTO) (Buchan et al., 2002).
Power distance (PDI) is referred to that there is a strong legal faith that could separate administrators and employees. Such kind of custom is often observed in Southeast Asian countries. Comparatively speaking, employees in western countries prefer to lower power distance, and often are unwilling to believe that administrators' decisions are correct. Accordingly those employees in western countries do not adhere to the administrators' orders in comparison with employees in Asian countries.
For instance¼ŒIBM, as a reputable multinational, when its administrators from several different regions are asked that whether they think it is of importance to give the exact answers proposed by their subordinates. For administrators in Asian countries think the answer is positive (demonstrating high power distance). On the contrary, only a few of USA administrators agreed with this answer. The latter HR personnel do not accept expert's roles. Rather, they view experts as a kind of resource, the talents who solve problems and offer individual support (showing low power distance).
Individualism and collectivism means relationship between individual and group. Individualism refers to incompact social structure whilst collectivism is meant to be compact social structure (Elspeth et al., 2012).
For example, in European countries, its managerial level pays more attention to individualism and intends to emphasize freedom and right, which form social relationship in relax and value self-respect. Samsung, a Korean multinational, however, pays more attention to group and harmony among members. Individual emotion has to comply with whole benefit of team, which forces it to revise its HRM when stepping into the European countries (Adair et al., 2001). In European countries with individualism, employees' loyalty for the company is relatively low (Chatman and Flynn, 2001).
Uncertainty avoidance indicator (UAI)
Uncertainty avoidance is meant to the extent of obscure situation and uncertainty that society feels. In general, in Asian countries employees are pleasant to accept specific instructions from managerial level due to high degree uncertainty avoidance. Lenovo is an ideal example. In China, it implements a way to offer specific guidelines and generate high efficiency whilst its employees in the USA respond in the opposite way, partly because ambiguity seldom threatens and low need to stability and safety, where employees feel easy to face uncertainties in the job (Durham & Charman, 2012). Therefore the performance of Lenovo has to employ a larger number of local individuals to deal with the organizational cultural conflicts after facing to setbacks in the overseas market.
Masculinity refers to there exist clear social gender differences between male and female in the social environment. For a man, he should be strong, confident and cherish substance achievements whilst women tend to be modest, submissive and respectful. Generally speaking, Asian countries tend to be more conservative and traditional, extending gender roles position and accordingly tend to be more like a masculinity society while western countries exists mild masculinity culture. Sony as a notable multinational with its root in Japan its organizational culture differs with each region due to the large expansion across the world. In Japan, it executives a masculinity management due to the influences exerted by larger society whilst in its oversea market, especially in western courtiers, it usually approaches mild masculinity culture to motivate its staff (Deutsch, 2011).
Long term orientation (LTO)
Long-term orientation pays attention to future and attaches importance to thrifty and perseverance. It thinks savings can result in rich. Stubborn persistence can achieve the target and thrifty is of importance. For many Japanese enterprises such as Panasonic, Toyota and Canon, people would like to invest for future at the cost of slow result, resulting large expansion in the 1980s largely owing to its accumulation in the 1970s (Castells, 2009). In western, companies pay more focus on seasonal and annual profits, which ties closely with the relationship and balance between the shareholders and managers. For example, Blackstone, a financial corporate, its managers estimate profits via the evaluation of employees seasonally or yearly.
However, at present, most of multinationals take long term vision to equip with an ambitious goal in promoting long term development in order to reach a lasting growth instead of focusing efforts in the current business issues, some of which may well gain its growth at the cost of future benefits. For example, Apple, it has fostered a long term vision on how to deliver its products step by step and keep the lasting advantages to opposite its main rivalries (Duuhig and Bradsher, 2012).
The way to know organizational culture could be illustrated through Hofstede's 5 dimensions cultural model.
The most outside layer comprises news or any other information that could tell the behavior of an organization, which reflect the organizational culture in direct way (Casper, 2000).
The exterior layer refers to the symbol that could reflect the organizational culture, such as building, the collective behavior and the spoken language of employees and so on, which could be obtained through the contacts with the employees or observation into the company. The third layer is the ideal example of an organization, which is to examine the model established in the organization so that wider range of information such as how to arrange the activities in the organization or what kind of behaviors are accepted, could be gained.
The deeper layers of organizational culture need to be gained via the deeper contacts with its staff, including greeting leaders, meeting, negotiation or other activities.
Furthermore, the internal layer of organizational culture is demonstrated through it marketing strategies, though it is hard to touch for the outsiders (Damanpour et al., 2002).
Through the structure of analysis, the real value of t organizational culture could be outlined to have a basic understanding the development of strategic management by the examination how culture exerts its influence on every aspect of the organizational activity.
Organizational culture could smooth or lay obstacles to operation of an organization. The inner nucleus is its marketing strategy, which could reflect the role of organizational culture whether values or devalues the performance of an organization. Organizational culture accordingly has two aspects that plays different role in the strategic management. Its out layers culture illustrate the long term vision for the organizational activities which in fact is not the direct motivations but serve as the espoused values to have all the staff bear the common objects and thus regulate the action of all employees with the clear future perspectives and picture (Burns, 1978). Its inner layers plays more direct role such as dealing with real problems like the gender policies in the company or launching the new developed products into the market, which executives direct motivation to the employee and affects the relationship with both customers and supplier.
Organizational culture offers the employees common objectives of the organization, direction, sense of responsibility to control their behavior (Erez-Rein et al., 2004). Through having all the employees accept the unity and place them on a common platform, culture could affect the strategic management from the following aspects.
First and foremost, organizational culture comprising factor that could directly affect the individual in the workplace and the employees themselves contribute to the formulation of organizational culture in their own way. Their mentalities, attitudes, interests, thought and perception could iron or shape the organizational culture (Higgs and Perrin, 2002).
In the second place, the organizational culture has to be affected by the nature of the business. Different industries such like financial services, stock broking industries and banking industry, depend more on the external factors. Therefore a positive organizational culture would give more confidence and cohesion when in face of multiply uncertainties in result of more capability in coping with risks. Also organizational culture could offer employees more confidence in the future to reduce their helplessness in face of economic risks and enhance the stability of the organization (Anderson, 2010). In this way, the negative influences imposed by market or unforeseeable non systematic risks could be reduced to the minimum. Employees would be more willing to contribute themselves to the organization and thus leading to the increase in both the efficiency and effectiveness.
The organizational culture can also do benefits to the realization of the goals and objectives of an organization. In most cases, strategies as well as procedures that are designed to obtain the targets are often affected by the organizational culture, which render them to be more aggressive or conservative, either smoothing or hindering the process (Ben, 2012).
Moreover, the organizational culture has its impacts on the clients and other external parties including its suppliers, logistics and public relationship to some extent (Verschoor, 2006). For example some catering companies claim to open 24 hours, winning themselves more clients.
Apart from that, the organizational culture plays a role in the management style on how to handle the employees in the workplace. Under different organizational cultures, some organizations take the management that allows the employees to make their own decisions or even encourage them to participate in the process of strategy making. Implementation of such strategies which is deeply affected by the unique of organizational culture, employees tend to attach more importance to the management and thus look forward to more involvement and a lasting association affiliated with the organization. Accordingly the organizational culture could promote the motivation of employees in order to avoid that employees work just for money through giving them enough respect (Sharp, 2009). In this way, more achievement could be obtained as employees not just playing a crucial role in enhancing the work efficiency of the organization but also represent the organization to contact suppliers, customers and media.
Organizational culture is a complicated amalgamation including but not limited to history, influence of external events and executive personalities, which could affect almost everything, ranging from the treatment towards employees to the competition in the marketplace. Also the organizational culture is inevitably affected by the external environment though it could represent the practices, ideologies, beliefs and strategies of an organization. In this way, when implementing strategic management, it should following several principles. The organizational culture can exert influence on the business and selling of its products. It is obliged to follow a favored organizational culture to regulate the routine business of a company. Organizational culture is not an event but much like the personality which shaped and formed through the long timeframe so it is hard to change and affect the way of the organization to deal with clients, suppliers and matters, with coverage of both internal and external interaction with multi parties that involves business with the company.