Opportunities And Challenges For Organisations Today Commerce Essay

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With the industrial revolution growing at a rapid pace, the word 'organisation' has become very common, as organisations are ubiquitous. Organisations are brought into existence by humans with a purpose to achieve a goal. Usually an organisation consists of a group of people and their activities are structured deliberately. However it is not necessary that everyone working in an organisation have the same goal. People with different skill sets are hired in an organisation to perform required tasks which will help an organisation to achieve its primary goal. So how does an organisation function when the goal of an organisation is different from the goal of the people working in an organisation? It is in this context that the study of Organisational Behaviour becomes crucial. With the advent of the 21st century, managing work force diversity has become imperative to organisations. Diverse work force also means a group of people from different backgrounds and cultures. In my assignment I will deal with the consequences of having a diverse workforce and the impact of culture and leadership to organisations today. My outlook to the literature is also influenced, to some extent, based on my experience with a multinational company for half a decade (Accenture Service Pvt. Ltd).

The study of organisational behaviour is a tool for an organisation who aims to improve their workplace by understanding and dealing with their employee behaviour in a way that it helps to achieve the overall organisational goal along with employee work satisfaction. Organisational Behaviour can be defined as,

"A term applied to the systematic study of the behaviour of individuals within work groups, including an analysis of the nature of groups, the development of structures between and within groups, and the process of implementing change. The rationale of Organisation behaviour is to predict and/ or control individual and group behaviour in the pursuit of management goals, which may or may not be shared throughout the organisation" (Cole, 1998, p.3).

The aspect of Leadership is one of the most influential elements in 'Organisational Behaviour'. Leadership is not a part of the job but a quality that can enhance a particular job (Mukherjee, 2009). Employees tend to communicate easily with those whom they identify closely. Based on the vast research on leadership theories and styles, leaders tend to be those people in the organisation who are effective in mentoring employees and motivating them to perform in a way that achieves organisational effectiveness (Robbins, 2009).

Employees have a right to be given equal opportunities; therefore promoting diversity in workforce also contributes to the socially better image of an organisation. Work force diversity leads to an organisation having an upper hand in the market place. Being a part of the globalization era, work force diversity has become increasingly common (Poutsma et al., 2010). Diversity management will definitely help organisations to achieve their strategic goals and will also establish a better corporate image by attracting and retaining human capital. However, it is important to understand how an organisation will deal with the behaviours of a diverse workforce especially where people have different genders, background, cultural values, age. As Poutsma et al. (2010) mentions that, if an organisation fails to manage diversity, it will prove to be a rather risky choice to have a diverse workforce.

Implementation of diversity is often supported by the ambiguous word - equality. The concept of equality is essentially contested. Bacchi (1990) claims that equality can either be considered as giving a similar and a standardized treatment to all employees or different treatment to reach equal outcomes in a team representation. However, Pascale (2010) argues that employees hold different positions in an organisation with different merits and having a standardized approach to all employees will result in to additional issues like jealousy or unfairness within the workforce. Rollingson et al., (1998) suggests that equal treatment to under-represented groups can be achieved by including minority groups in the workforce to promote the positive image of work force diversity. Mullins (2008) agrees while he says that,

"The only way these voices can be expressed and heard is to treat people fairly, which means to treat people differently. If member diversity is to be acknowledged and differences of opinions encouraged, the collective must develop a culture of trust in which members will want to support one another" (Mulins, 2008, p. 72)

Diverse Workforce encourages better team outcomes on creative and problem solving tasks (Metcalf & Anderson, 2004). It is always helpful for organisations to have access to a different perspectives and views to get high quality solutions. An organisation promoting diversity obtains the advantage of having a larger pool of Resources available in the market (Mullins, 2008). Increased diversity also provides a better customer service to a diverse customer base (Gilbert et al., 1999). Accenture Service Private Ltd. is a classic example of work force diversity; this organisation is globally known as an equal opportunities employer.

Managing a diverse workforce however, requires a lot of time and effort. Special attention has to be given as people have different cultural backgrounds. Communication style is another important aspect which needs to be considered when handling with diversity management (Hellreigel & Slocum, 2009).

"Effectively fostering cultural diversity promises to continue to be a significant challenge for organisations for a long time. Programmes such as day care and elder care, flexible work schedules, paternal leaves, and management of contingent workers are major issues facing organisation" (Hellreigel & Slocum, 2009, p.477).

While Gilbert et al. (1999) argue that, "to manage diversity effectively, a corporation must value diversity; it must have diversity and it must change the organisation to accommodate diversity and make it an integral part of the organisation" (Gilbert et al., 1999). Effectively managing diversity can create a competitive advantage in marketing, resource acquisition and organisational flexibility. Commentators agree that a insight of enhanced competence should mitigate employment discrimination against minority individuals.

Diversity management also depends a lot on the organisation culture & Leadership. Building on a culture which values differences requires major systematic efforts. Gilbert (1999) states that Leaders need to appreciate the differences and view them as a total cultural change rather than just an organisation policy which is designed to satisfy government and social mandates. Employees need to feel that they are an integral part of the organisation in order to perform their tasks to the best of their potential. Organisations need to create a culture where employees feel that they are nurtured, in spite of the diversity. I would like to refer to the words of Nord (1972) who comments that, "the grand total of all the objects, ideas, knowledge, ways of doing things, habits, values and attitudes which each generation in a society passes on to the next is what the anthropologist refers to as the culture of a group", (Nord, 1972).

While an organisation culture can be defined as, "the ideologies, beliefs and deep-set values which occur in all firms and are prescriptions for the way in which people should work in these organisations", (Harrison, 1972; Rollinson, 1998, p.532)

An organisations culture represents the personality of the organisation and this is an important impetus to employees' productivity and an organisations performance (Kefela, 2010). Leadership is important in sustaining an organisations purpose, values and vision. Literature on Total Quality Management includes leadership and culture as the two most important factors which are critical to the success of TQM's initiatives (Darling, 1992). Many influential thinkers have studied the link between leadership - culture relationship. Ogbonna and Harris (2000) in their research concluded that, the impact of leadership to an organisations performance is mediated by the culture of an organisation (Pors, 2008). While Pillai and Mendil (1998) mentioned that Organisational culture has a huge impact on the emergence of specific leadership styles. The research shows a consistent link in the leadership - culture relationship regardless the types of organisations studied and diverse organisational culture.

"Leadership and culture are so central to understanding organisations and making them effective that we cannot afford to be complacent about either one", (Schein, 1985, p.327).

Involvement (for e.g. team orientation), consistency (for e.g. coordination and integration), adaptability (for e.g. creating change while focussing on customers) and mission (for e.g. goals and objectives, vision) are the four cultural traits demonstrated by effective organisations. These traits help in balancing the tension between the need for stability and the need for flexibility (Dension, 2000b).

Organisational culture can influence how people perform tasks and administer resources to achieve them. Organisational cultures affects the way in which people consciously and subconsciously think, make decisions and ultimately the way in which they perceive, feel and act (Hansen and Wernerfelt, 1989; Schein, 1990). Wallach (1983) suggested that there are three main types of cultures in an organisation - innovative, bureaucratic and supportive. Employees have different ways of perceiving things as they have different values and beliefs. This is evident especially when an organisation has a diverse workforce. There are significant differences between the eastern and western cultures (Chen, 2001). Flatter organisational structures typically follow the transformational leadership attributes such as empowerment and clear vision especially in the western region (Whitley, 1997). Comparatively, organisations in Asia tend to be more on the bureaucratic and hierarchical side as they are policy driven and are based on central decision making.

Employees who rate their supervisors high on transformational leadership are more likely to view their culture in positive terms. Leaders who adapt transformational style of leadership establish a sense of trust with followers through the application of contingent rewards and thereby encouraging higher levels of commitment and performance (Bass & Avolio, 1999). However, the passive form of this behaviour is likely to have a negative impact on the organisation. For e.g. in Military settings, environmental risk is high and the ability to identify and correct mistakes is crucial for survival.

Different cultures have varied views about leadership behaviour. House and Javidan (2004) have identified six global leadership behaviours:

Value based Leadership: Reflects the ability to inspire, motivate and high performance from others based on core values. Trustworthy, decisive, performances oriented are some of the attributes of this style of leadership.

Team-oriented Leadership: This style of leadership emphasizes on team building and being collaborative, integrative and diplomatic.

Participative leadership: This style of leadership reflects the extent to which leaders involve others in the decision making process.

Humane-oriented Leadership: This style reflects on being sensitive, supportive and considerate towards employees.

Autonomous Leadership: This type of leadership reflects on being individualistic and independent.

Self protective Leadership: This style refers to leaders, who are self-centered, status conscious and procedural.

The above mentioned have some positive leadership traits as well as some negative leadership traits. House et al. (2004) argue that this research doesn't provide a clear set of assumptions which can form into a single theory of how different cultures relates to leadership. He further mentioned that the terms like 'self protective leadership' are vague and it is difficult to relate the same with leadership and culture. Lord & Maher (1991) claims that this theory is based on the beliefs of what individuals perceive leaders to be. This theory ignores a large amount of research that is conducted on what leaders do for e.g. path goal theory, LMX theory. It is important to study how leadership functions in different cultures.

An important aspect to be considered is that leadership in an organisation need to evaluate if a culture change is required in an organisation. As mentioned earlier, if an organisation reflects a completely bureaucratic culture and if that organisation is not achieving its primary goal, it could be the case to study the culture of that organisation and inculcate a change where required. Leaders need to analyse the trend of diverse work force and change the organisational culture which suits the cross cultural values. It is relatively easy to change surface-level behavioural issues in an organisational culture change compared to changing the deepest level of cultural attributes like assumptions, beliefs and human nature (Muijen & Witte (1999). Kilmann et al. (1985) suggests that, "executives may try to dictate a new culture by making dramatic changes in their own behaviour and symbolic gestures and fiery speeches, but only when work group members encourage one another to be receptive to overtures by other groups, will culture change take place", (Kilmann et al., 1985, p.365).

A strong culture needs to be implemented in an organisation which recognises an employee's efforts which will help the employees to know and understand that why those efforts are critical for the organisation in meeting its strategic objectives (Kefela, 2010). "Organisational designs are culturally bound paradigm for solutions", (Kefela, 2010). Hence identifying an organisational design adds to a better understanding of organisational culture. An organisation which inculcates a strong and an adaptive culture promotes effective succession in the leadership ranks.

A cultural change for an organisation also depends on how big the organisation is for e.g. Multinational companies who have a global presence and a diverse work force. An organisations culture is as important as its mission statement and its vision. A multinational companies' website have a small tab about the 'culture' of an organisation. The CEO of SAS, the number one company to work for featuring in the Fortune list, 2010, claims that, "SAS culture is to treat employees as if they make a difference, and they do". While the CEO of Google says that, "Google has grown a lot since 1998; we still maintain a small company feel. At lunch time almost everyone eats in the office cafe, sitting at whatever table has an opening and enjoying conversations with Googlers from different teams". People are fascinated to join an organisation which reflects a culture like that of Google. An organisation can have a very strong influence in the market segment based on the culture that an organisation values.

This study reflects the proposed theoretical linkages of work force diversity and the impact of culture and leadership on it. The implementation of diversity management in an organisation doesn't mean to employ women or elderly in the workforce per se, but that the success of diverse workforce will fit in the socio cultural context; and to implement this it is imperative to align these activities with the human resource systems. There is a need for the integration of any diversity management program in the human resources system of the organisation (Pascale, 2010). Coleman and Rippin (2000) argue that managers support implementation of diverse workforce based on social-justice arguments and business case arguments, while managers firstly need to be convinced that diversity in the workforce can bring in a lot of benefits to the organisation and based on that need to implement the change. It is only then that the effects of having a diverse team can be identified on a long term basis. Pascale (2010) suggests that the management of a diverse workforce depends a lot on the attitude and the behaviours of managers. Managers need to practice a group oriented style of leading which will be more supportive for the effectiveness of team diversity. Leaders or managers who are unsure of which leadership style would be effective for a diverse work force need to undergo training and development which will help them to motivate a team with different cultural backgrounds (Gilbert, 1999).

To summarize, Organisational Behaviour requires a clear sense of where it currently is and which direction is it going in with a 'injection of urgency & vitality' (Hosie & Smith, 2008). Aligning the organisations culture to the strategy of the organisation would prove to be a powerful means for gaining a competitive advantage (Kefela, 2010). An organisations culture influences employee's experience and this in turn impacts the employee commitment along with added benefits like better customer experience and shareholder value. Leaders trying to achieve strategic outcomes need to possess skills to first understand the organisations culture and how to transform it which is crucial for an organisational change. Leaders' further need to analyse based on the dynamics of the culture, what needs to be transformed and what needs to remain. It is also likely that historical context that the organisation operates in will have a significant role in the nature of the leadership - culture link that is at work within an organisation (Burke and Litwin, 1992). To become a specialist in managing teams, one needs to understand the different ways they think, the various ways they prefer to act and their different motivations. Further as rightly said by Hesselbein (1999) that, "Culture does not change because we desire to change it. Culture changes when the organisation is transformed; the culture reflects the realities of people working together everyday", (Hesselbein, 1999). Clearly, creating a culture starts from the top management through a thought leadership strategy before it is cascaded to respective teams in an organisation (Gibbons, 2011; Connel et al., 2000).

There are inherent limitations associated with this study which relies upon empirical measures. There are different leadership styles and models that are available for organisations to refer however, there is not a particular model developed to deal with issues like work force diversity or organisational culture where managers can refer to and implement. Managers need to imbibe some set of leadership styles to effectively deal with people issues. The challenge for managers lies in interpreting those possibilities in their own leadership styles. While this study is not voluminous, my study outlines to deal with some of the issues in organisational behaviour and the opportunities and challenges work force diversity and the impact of culture and leadership that brings in to an organisation by collating the views on various literature.