Organizational culture plays a very important role in any process of operating an enterprise, especially in strategic management. Since organizational culture is one of the most important intangible resources of an enterprise, it is quite necessary for the managers to know the importance of organizational culture to an understanding of strategic management. This assignment is written to talk about what is organizational culture, how do people know what is an enterprise's culture, and how does it impact on strategic management.
Culture means the quality in a person or society that arises from a concern for what is regarded as excellent in arts, letters, manners, scholarly pursuits, etc. It is a particular form or stage of civilization, and it also can be a development or improvement of the mind by education or training.
An organization is a social unit of people, systematically structured and managed to meet a need or pursue collective goals on a continuing basis. All organizations have a management structure that determines relationships among functions and positions, and subdivides and delegates roles, responsibilities, and authority to carry out defined tasks. 'In fact, the culture is the organization, because the organization is the sum of its members' views, attitudes and beliefs.' (Robbins, Millett & Cacioppe 2001)
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Organizational culture is the collective behavior of humans that are part of an organization. It is also formed by the organization values, visions, norms, working language, systems, and symbols. It includes beliefs and habits. Organization culture is the values and behaviors that contribute to the unique social and psychological environment of an organization. 'Organizational culture reflects the shared and learned values, beliefs, and attitudes of its members.' (Slocum & Hellriegel 2008) Organizational culture is manifest in behavioural norms, hidden assumptions, and human nature. (Kilmann 1985)
Organizational culture has five main functions: 1. Organizational environment, which includes organizational properties, organizational management direction, external environment, the social image, and outside contact. It usually decides the behavior of the organization; 2. Organizational values, which means whether the employees can get the same understanding for something or some behavior. Values are the core of organizational culture. Unified values make the employees have the same standard when judging their behaviors, and choosing their behaviors by this; 3. Hero, which means the core characters or the personification of organizational culture, is setting as a sample for the other employees in the organization to study. It is very important in formatting and strengthening the organizational culture; 4. Cultural ceremony, which includes the recognition and reward activities, parties and entertainment events, can be used to publicize and embody the organizational culture; 5. Cultural network, mean the informal channels of information transmission, usually for the dissemination of cultural information. The information it conveys often reflects the aspirations and the state of minds of employees. (Deal & Kennedy 2000)
The importance of organizational culture in an enterprise is quite obvious. Any enterprise must have a good organizational culture if they want a sustainable development. It is like the anima for an enterprise. Without the anima, the enterprise cannot be successful. An excellent organizational culture can make a good organizational environment, improve staffs' cultural quality and moral standards, and form an integral part of spiritual strength and ethics for enterprise development. The organizational culture reflects on the values or value system of an enterprise. If the staffs have the same values with the enterprise, they will have a strong sense of belonging, which can become the power of promoting the entrepreneurial behavior of organizing groups. What is more, staffs' enthusiasm can be maximum stimulated. This kind of enthusiasm is also the endless power for the development of the enterprise. The organizational culture decides the value orientation of the members in a large context, and ensures the same target for them. Some present ideas, values, behaviors, or thinking can be added into the organizational culture, if the managers want to increase the energy of the organization. The organizational culture is able to provide a set of conduction code to regularize all the members' behaviors, according to the need of the whole benefits of the organization. This is a reliable guarantee for the interests exist of organization community. It usually adjusts the relationship of staffs. An organizational cannot survive without this code of conduction. The organizational culture educates the staffs that the profit, image and future of the enterprise have a quite close connection with them. This can make a fair, friendly atmosphere in the organization, and push the staffs trust, understand, and support each other. The organizational culture is strongly stable once it took shape. This kind of stability is the way to control the organization. It usually can replace or strength the ability of controlling in economy or administration. These cause the positive impacts for the enterprise, and make the resource reasonable configuration, to improve competitive strength for the enterprise.
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Since the organizational culture is so important, it is necessary to publicize the organizational culture to both the staffs and customers.
To the staffs, the human resource department will educate the staffs before they work on their position, such as giving them the orientation class. The teachers need to check whether the staffs really have understood the organizational culture by some tests. Sometimes, the HR department also held some activities, and all the staffs which are off duty can join. For example, Sheraton Towers Hotel in Singapore always gives the new-coming staffs the orientation classes and Star-care classes to help them to understand the organizational culture and the basic etiquette. And this hotel also organizes some activities every a period of time, to let the staffs have a better understand in the activities. These all have contributed a lot in improving the hotel standard. In addition, some streamlined slogans will be put on the marked wall, to remind the staffs to remember their organizational culture at all the time when they are working in their positions. What is more, almost every organization will have its specific uniform for the staffs, which presents the organizational culture to both staffs and customers.
To the customers or potential customers, the managers always get someone to do some commercial videos about the organizational culture, and put them in the website such as Youtube, Tudou, Youku, and etc. People from all over the world can watch the video. What is more, the leaders will spend the money to do some advertisements in the several most famous magazines or newspapers. It is also a good opportunity for publicizing the organizational culture when the enterprises are doing the public relationship with partners or the marketing with the customers. All of the above will make the organizational culture spread widely during the customers.
Organizational culture has a very wide impact in strategic management. An outstanding organizational culture is the key point to the success of an enterprise's strategy. It may highlight the characteristics of an enterprise, and unified the values of the staffs. The characteristics are good for enterprise to draft a useful and excellent strategy. The strategy only makes sense when getting the support from the organizational culture which has developed for many years. So, when managers are doing the strategic management, they should pay enough attention on organizational culture. The enterprise will get a further development only when organizational culture and strategy get together. (Yang 2011). The importance of organizational culture will reflect in branding, service, sales, customers, staffs and etc, which will be talked in details as followed:
A branding image has a close relationship with the organizational values. Position is a very important step in brand establishment. Exact position can transform the product to brand. The key point to the success of a brand is to get the recognition and goodwill from the customers. For example, Coca-cola Company did very well in this aspect. The idea of Coca-cola is to cultivate and protect their brand. 'Brand is an emotional.' In the process of brand communication during the recent years, Coca-cola Company always focus on this basic routine, and put forward some pop, normal but deep-rooted slogan, in order to show customers the passion for life, the happiness, the family emotion, and so on. These all let customers feel affinity of Coca-cola Company, which brings it a fantastic sales revenue.
The progress of the time manufactures the most intelligent and most harsh customers. Inexpensive goods and service with high quality are always welcomed by the customers. Even the food stalls are also required the service by the customers. The service of the quality is always the most important competitive means for an enterprise. Organizational culture will show in the relationship between staffs and customers, it is the corporate atmosphere by integrating the function like construction, renovation, products, brand and etc. The most important part is the service quality provided by the staffs, because the facilities can only attract new customers, but the service can keep the regular customers. For example, Hilton Hotels always emphasize the civilized rituals education of staffs. Even in the most difficult period in 1930, the boss - Mr. Hilton also ask the staffs to remember the etiquette. He always liked to ask his staff one question: "Did you smile to the guests, today?" And actually, after a lot of hotel collapsing, the smiles of the staffs in Hilton Hotels were the best in the remaining 20 percent hotel. It made Hilton Hotels System quickly entered into a new prosperity period, and stepped in a golden age, after the economic recession.
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Organizational culture is also the base of developing sales management mode, which can influence and lead enterprise's sales activities. The good organizational culture will make the managers, executives and staffs clarify their directions and targets. Good organizational culture also combines managers', staffs' profits, customers' profits as well as social profits, in order to boost the improvement and innovation of the enterprise's business philosophy. So, the enterprise can adjust to the development of the market economy. For example, IKEA always believe "Mean is better than wastage." Their long-time strategy is: Stick to low price. This is the reason why it can keep some many regular customers. The target of IKEA in China is to provide cheap home solutions for Chinese. In today's IKEA shop, the yellow marks which mean price reduction are growing. The designers usually determine the cost before they start to design the products. They also would like to use the material economically, which not only cut the cost, but also get the distinguished creative.
The voice of customers has risen to an unprecedented height. Most of the enterprises have put something about the customer satisfaction into their organizational culture, and begun to pay more attention to the opinions, experience, hobbies and complaints. They will analysis the information, and improve their measure by taking the information as the basis. People have already realized that the customer satisfaction is the power for the company to success. For example, Citibank is one of the biggest banks in the world. It established a customer feedback system and the feedback counters in every sub branch in 2006. At the beginning, the managers doubted that whether this programme could make sense. Very quickly, they got the feedback from the customers and experienced the significant results. This plan helped the Citibank customer satisfaction performance to rise to the second place from the original fourth place within one year. Although Citibank was influenced in subprime crisis, their customer satisfaction helped them exert themselves and get a further development.
The intrinsic quality of organizational culture that exists in an enterprise is going to ensure the context to which the expected results from the staffs are got. The same opinions of the individual staffs about the organization decide the types of the organizational culture, individuals with realm of universal truths and are broad enough to accept any kinds of circumstance. The organizational culture always includes the primary value of the organization and the existing management style and systems. These two aspects make sure that the staffs can get the desired result. The value system which is directly or indirectly supported by the staffs indicates the direction for the organization in the future. For example, the organizational culture of McDonald is like the happy family culture. The staffs can call their colleagues' names directly regardless of their level. Everybody feel very relax when they are working together, just like a family. It does not matter if a staff makes some mistakes in the work. McDonald will not fire him or her unless the staff is seriously violating the relevant policies and regulations of the company. This environment gets the support from the staffs, and they become more loyal to the enterprise, and would like to contribute more to it, which also makes McDonald be one of the most famous brands in the world.
'Strategic decision is the decision about the overall and future situation of a corporation, which is also affected by environment of culture especially corporate culture.' (Ma 2001) Everybody knows that decision making is the most central activity of management. The nature of a manager's decision is quite varied. The quality of these decisions can influence a lot on unit performance and ultimately on the performance of entire organization. (Newstrom & Davis 1989)
Decision making is the necessary work in operating the enterprise. The processes of decision making includes understanding the time, clarifying the targets, collecting thee information, developing viable solutions, choosing best solution and execution. (Lazy et al. 1993) Organizational culture has effect on every process, such as the understanding of environment and issues. An issue which is insignificant in a culture can be very serious in another culture. The understanding of the issue will decide the way and process of decision making. Another important aspect is the target. If most of the members think people cannot change the environment, the decision making mode may be like Garbage Can Mode. Chance determines the result. Otherwise, managers will choose the rational solutions to solve the issues. Information collection is also impacted by the organizational culture. Some organizations collect and analysis the information in a scientific method, and some listen to the professional consultants. Information collecting method comes from the logic. This logic is from the common cognitive structure. That is why organizational culture can affect the methods of information collecting. Besides the collecting methods, it also includes the explanation which will influence its judgment. Thus, organizational culture is important on the judgment. (Tan 1990)
Developing viable solutions, choosing best solution and execution are the most important three key processes in decision making. Developing viable solutions means putting forward the hypothetical method for the issue. Organizational culture influences the thinking way of the members even the design for the solutions. In addition, organizational culture also has an effect on the priorities and characteristics, because the design comes from the understanding of the issues and the explanation of the information. After developing viable solutions, the managers should choose the best solution from the viable options. The best option always has different meaning in different organizational culture. Sometimes, the organizational culture may be quite conservative, and has low tolerance for risk and reform. Under this culture, the best solution should have small change and small possible risk. However, in an open and creative organizational culture, managers may choose the solution which pursues the maximum reform and has the biggest risk. Therefore, the organizational culture impacts the subjective understanding of the managers, and impact the understanding of best solutions due to the different organizational culture. The last process is execution including authorization, communication, coordination and etc. The organizational culture impact the way that members communicate. Some organizational cultures are particular about the level. Leapfrog communication is not accepted. So, it is quite difficult to communicate under the organizational culture, but there are some rules which can be found. Besides this, organizational culture has the impact on communication way. Some culture encourages solving the conflicts, but some avoid these. The opinions are much more pluralistic. However, members should express their opinions in a roundabout way to avoid conflicts, which makes communication more difficult. What is more, organizational culture will influence authorization. Some culture requires managers take care of every single thing personally, and some encourage staffs participate. All of these which are mentioned above have the impact on decision making and execution. (Wu 1993)
In conclusion, an excellent organizational culture is a significant part in the establishment, survival and development of an enterprise and it is also perfected in the process of establishing and developing the enterprise. An excellent organizational culture is also the core work for condensing the talents and getting the enterprise competitiveness. In order to improve the standard of the enterprise, an enterprise should focus on making a positive organizational culture. The positive organizational culture needs the leadership from a creative entrepreneur and an energetic management team. And it also needs to pay attention to increasing the responsibility of the staffs, founding a value which encourages adventure and tolerates failure, emphasizing people oriented, and developing a studying culture. In this way, an enterprise can create its own organizational culture while they are clenching the production and business operation. The enterprise will get a further success under the pushing of this specific organizational culture.