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In my personal preference, I love to explore psychological issues that have effect on the materially and tactically events, for this reason, values and beliefs among different communities which leads to the concept of organizational culture when referred in business light me up.
The case study is concerned with a warehouse in London's Dockland with predominantly local staff with its main function of storing and distributing food and drinks for contractors. In 1975, a multi-national shipping company takeover the warehouse, but then the warehouse suffered rising cost, mounting losses, non-renewal of contract and increasing stock shrinkage. The holding company's executives attributed their problem to 'the under utilization of resources', 'work apathy', 'poor team work' and 'low morale of the workforce, besides, the union was 'difficult and recalcitrant', three major symbol is that there are far too many warehousemen and most are too old for the job which arise the pension cost; another one is the high level of pilferage, that with damage, had amounted to over half the company's losses; the third was referred at having to regularly hire out-of-house trucks to cover short-falls in the availability of their own. The holding company wanted the warehouse to become efficient and cost effective, but failed. So the company hired a group of consultant to solve the problem.
After a series of researches, major problems were founded in terms of cultural conflict between the warehouse and top management. As for the warehouse, kinship and neighborly obligations were strong and they celebrated group enterprise, collective support and autonomy. Whilst for the holding company, the top management had minimal contact with warehouse staff. In even the most militaristic and hierarchic of organizations, however, there is invariably and element of knowledge transmission upwards, usually effected through an intermediate level of non-commissioned officers. The social, residential and cultural distances between the two parties are large. The intensity of this 'managerial insulation' explains why the manager of the warehouse lacked the information to appreciate the complexities of its culture. In addition, a similar cultural block precluded understanding between the managers and the consultant. The culture that seemed least affected by centricity and which appeared most amenable to mutual understanding was that of the East-End labor force. Besides, professional culture has also been mentioned in the article
In the article, the author plays as a consultant who are failed to help cope with two distinctive organizational cultures for the sake that they both are strong and seems to be unchangeable. However, acknowledged that organizational culture has common properties don't mean each organization own shares one culture. Nevertheless, most large organizations have a dominant culture and numerous sets of subcultures. A dominant culture conveys the core values which are shared by a large number of the organization's members, while subcultures likely to develop in a large organization to reflect common problems, situations, or experiences that the members encountered, which is more likely to be defined by department for designations and geographical separation (Robbins, Judge & Campbell, 2010).
In this case, on one hand, the shipping company can hold the dominant culture, formalized, enlightened and innovative, and built flat organizational structure which facilitates the communication of the top manager of the holding company and the warehouse. Furthermore, empowerment and authority autonomy are essential for large organizations- the shipping company- to deliver rights of decision-making to subordinate- East-End Warehouse; on the other hand, the warehouse can have its subculture, or mini-culture, to support its original workforce but it must vary to promote the efficiency and effectiveness of the operation, exorcising obsolete investment, regulations, custom gradually. Evidently, this culture must be in the base of dominant one. There must be some methodology to integrate these two cultures (dominant culture and subculture) to make them exist harmoniously and combined them to exert synergy effect. (Robbins, S. P., Judge, T. A. & Campbell, T.T., 2010)
Organizational culture refers to the shared values, principles, traditions and ways of doing things that influence the way organizational members act, and most organizations regard culture as a tool to govern how their members should behave. It is a system evolves a set of key features that the organization values, in aggregate, seven primary characteristics get the nature of an organizational culture, including innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness and stability (Brown, 1995). By rating the degrees from low to high, appraisal can be achieved to draw a basic picture about the feeling and shared understanding of the members to perceive the organization.
Culture performs many functions in an organization. Firstly, it defines the boundary between one organization and others; secondly, it conveys a sense of identity for organization members; thirdly, culture facilitates the generation of commitment to something larger than one's individual self-interest; (Brown, 1995) fourthly, it enhances the stability of the social system, culture is the social glue which helps get the organization together via offering suitable standards for what members should see and do; fifthly, culture serves as a sense-making and control mechanism for fitting employees in the organization. (Lemon, K. N., White, T.B. & Winer R.S. January, 2002)
In an organization, cultural elements like values, beliefs and rules have a significant impact on the business strategy and plan during which process the decision making comes along. This is manifested in or through most functional areas in business including marketing, finance, human resource and the whole corporate governance.
Specifically, first of all, Organization's values and beliefs will shape a company marketing. When an organization's brand is famous, the values and beliefs will limit its product category and quality. What's more, the price of a new product is affected by the organization's values and beliefs.
Secondly, Organization's values and beliefs can cause an effect on the condition of finance standard. Some companies may attach the importance of stability; as a result their financial statement is controlled under safe level. (Daft, H. & Daft, R. L., 2008) However, some companies may emphasize the innovation and carry out investment for developing. The financial statement is determined by the degree of risk an organization can afford for investment which is shaped by the organization's values towards future development and the profit it makes.
Thirdly, organization's values and beliefs will determine the enrolling of new employees and cause influence on employee performance. In another word, human resource is under the control of organizational culture. Usually, employee misfits have considerably higher turnover rates than individuals who perceive a good fit and an employee's performance depends to a considerable degree on knowing what he should or should not do. In some way, the values and beliefs of an organization just give some clue for their understanding (Robbins, Judge, & Campbell, 2010).
At last, organization's values and beliefs help the corporate governance to be effective. They develop a core set of assumptions understandings and implicit rules that govern day-to-day behavior in the workplace. (Mullins, 2007) A rewarding and punishing system is established under the organization's values and beliefs. On one hand, most of companies are focused on extrinsic rewards like pay and promotions while little may value the power of smaller rewards like praise. On the other hand, the measure of amerce, demotion and smaller punishing like criticize is adopted when employee makes a mistake.
The stronger the organizational culture, the more influences it exerts on decision making and operation of the organization. In order to make better decisions, the managers have to cultivate positive organizational cultures while move out the strong negative values and beliefs. Some positive organizational cultures that enhance decision making can be a high tolerance for risks and the maintenance of being modest in aggressiveness, rewards for personal strengths and individual growth, and focus on means as well as outcomes, etc. On the other hand, some strong cultures are difficult for managers to change, so the managers should recruit new employees who can fit well and enhance a desirable organizational culture, the managers should also act as role models to help to create the cultural values of ethics, spirituality, and a positive culture.
In conclusion, from studying the case study of the cultural conflict between the East-End Warehouse and its holding company, organizational culture has been put forward which by definition is elusive, intangible, implicit, and taken for granted, but every organization develops a core set of assumptions, understandings, and implicit rules that govern day-to-day behavior in the work place (Mullins, 2007). Companies, especially for those large enterprises which have merger acquisition or takeover affairs, should spare no effort to deal with cultural conflict and make them exert positive energy and influences.