Research Issues On Organisational Culture Commerce Essay

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This chapter discusses the relevant literature on the independent variable, organizational culture. This chapter begins, in section 3.1, with an introduction to organisational culture. Section 3.2 defines organisational culture. Section 3.3 presents different models for measuring organisational culture. Section 3.4 introduces the competing value framework. Section 3.5 explains the organisational culture assessment instrument used to measure organisational culture type in the current study. Section 3.6 discusses the organisational culture and its relation to Business-IT strategic alignment. The chapter is summarised in section 3.7.

3.1 INTRODUCTION

A significant amount of research has occurred on organisational culture since the 1980s, and first appeared as early as the 1960s as a synonym for organisational climate (Munro et al., 1997). In recent years, the literature on organisational culture in business organisations has been prolific (Alvesson, 2002; Cameron & Quinn, 1999; Cooper & Quinn, 1993; Fey & Denison, 2003; Goffee & Jones, 1998; Hofstede, 1994a; Kenneth, 1999; Martin, 2002; Schein, 1992; Trompenaars, 1994). While organisations have always had cultures, few managers have been able to understand how to manage them (Druckman, Singer, & Van Cott, 1997). Organisational culture is associated with an organisation's sense of uniqueness, its aim, goals, mission, values, and main ways of working and establishing shared beliefs (Cameron & Quinn, 1999). All organisations have a basis that is not negotiable, and unquestionable beliefs that justify their goals, products, and services. Cultural beliefs can both permit and control what organisations are able to do. Normally, these cultural beliefs are taken for granted and are rarely if ever openly stated or discussed (Schein, 1992).

One of the unique characteristics that differentiates successful firms from others, is their organisational culture (Coopers & Lybrand, 1996). Understanding organisational culture is important to organisational success in the business environment and a vital task for leaders within organisations because it has an influence on planned growth, productivity, adopting new systems, and future changes of the organisation.

The literature points to organisational culture as a moderating factor in adopting and implementing any successful changes in organisations (Van den Bosh, Volberda, & de Boer, 1999). With the rapid transformation of economies, the impact of globalisation, and increasing multinational business cooperation, organisational culture is more important today than ever before, as it has a crucial effect upon an organisation's performance and ability to adopt changes (Wilkins & Ouchi, 1983). These changes include: fast technological changes, change in industries and market, deregulation, the global economy, increased organisational complexity, and new business models (Hagberg Consulting Group, 2004).

Cameron and Quinn (1999) argue that organisational culture is important because plans for any changes adopted without including organisational culture normally would have unforeseen and usually negative consequences. Many studies report that one of the most common causes given for failure of most planned organisational changes, mergers and acquisitions, and adopting new technology systems is neglect of the impact of organisational culture (Abdul Rashid et al., 2004; Al-Mashari & Zairi, 2000; Davison, 1996; Davison, 2002; Fey & Denison, 2003; Frotaine & Richardson, 2003).

Coopers & Lybrand (1996) found that 83% of the mergers studied failed to make any recovery in shareholder value due to the differences in organisational culture and management technique and practices. As many as 75% of the reengineering, total quality management, strategic planning, adoption of technology, and downsizing efforts have failed or have created problems serious enough that the survival of the organisation is jeopardised. This was due mainly to the neglect of organisational culture (Cameron & Quinn, 1999). It is clear then that organisational culture impacts upon the success of organisational change and as such is an important factor influencing the organisational performance and structure in MIS adoption and implementation. Therefore, it is

important to understand and define the proper organisational culture type to map and study the organisation's B-ITa.

3.2 ORGANISATIONAL CULTURE DEFINED

In every organisation there are specific attitudes, symbols used, and beliefs that are

shared within that organisation that are taken for granted (Schein, 1990). Many academics and researchers who have studied culture have defined culture differently, and have developed different definitions according to their discipline and area of interest.

Although there are many definitions of organisational culture, nearly all definitions

consist of a combination of values, beliefs, and important assumptions that organisational

members consider about proper, adequate, and acceptable behaviour (1991; Hofstede,

2001a). A generic definition also includes the notion that behaviour exists at various

levels of management, and demonstrates itself in a limited scope of characteristics of

organisational life (Hofstede, Neuijen, Ohayv, & Sanders, 1990). The term organisational

culture first appeared in the English language in the 1960s as a synonym of

'organisational climate' (Fey & Beamish, 2001). In recent years, the term organisational

culture has become more popular than the term organisational climate. Cameron and

Quinn (1999) claim that the term organisational culture became common after the

publication of Deal and Kennedy's (1982) book. As Denison (1996) argues, the dispute

about the differences and similarities between organisational culture and climate is in

various ways a typical case of differences about methodological issues. There are

different views among researchers about organisational culture, particularly between

those who believe culture as something an organisation has, and those who believe it as

something an organisation is (Smircich, 1983). Alvesson (2002) claims that

organisational culture is not something an organisation has, but organisational culture is

the organisation itself.

Schein (1992) indicates that basic beliefs form the main and most important feature of organisational culture and defines it as follows:

A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members of the organisation as the correct way to perceive, think, and feel in relation to those problems (Schein, 1992) (p. 12).

According to Schein, culture is the most difficult organisational attribute to change,

outlasting organisational products, services, founders and leadership and all other physical attributes of the organisation. His organisational model illuminates culture from the point of view of the observer, described by three cognitive levels of organisational culture. Schein (1992) divides organisational culture into three levels or layers:

Artifacts:

These "artifacts" are at the surface, those aspects (such as dress or badge) which can be easily distinguished, yet are hard to understand.

Espoused Values:

Beneath artifacts are espoused values" which are conscious strategies, goals, and philosophies.

Basic Assumptions and Values:

the core, or essence, of a culture is represented by the basic underlying assumptions and values, which are difficult to separate or discern because they exist at largely unconscious level. Yet they provide the key to understanding why things happen the way they do.

These basic assumptions form around deeper dimensions of human existence such as the nature of human, human relationships and activity, reality and truth. Schein also claims that a strong organisational culture has normally been seen as a conservative force. Strong culture means better performance (Mallak, Lyth, Olson, Ulshafer, & Sardone, 2003) but may influence the aptitude of organisations to adapt to change. The employees of organisations may meet the introduction of MIS in a strong organisational culture, like the Arabic culture, with some resistance. Therefore, it is important to know the culture type of the organisations in the Arab regions before starting the adoption process of MIS.

Cameron and Quinn (1999) argue that organisational culture is a complex, rational, broad, and unclear set of factors, and that it is impossible to include every applicable issue in analysing and measuring organisational culture. Cameron and Quinn (1999) define organisational culture as "the taken for granted values, underlying assumptions, expectations, collective memories, and definitions present in an organisation" (p.14). Within an organisation, "subunits such as functional departments, product groups, hierarchical levels, or even teams may reflect their own unique cultures" (p. 15).

The literature also indicates that organisations are either people-oriented or task-oriented. Organisations that are people-oriented may adopt a wide decision-making structure. This,

in turn, would direct it to adopt a flat organisational structure, which is characteristic of a low power distance. On the other hand, organisations that are task-oriented are likely to adopt a more centralised decision-making process, which is likely to lead to a more hierarchical organisational structure, or a high power distance structure. The type of organisation, if it is task oriented, would aid the adoption and implementation of new technology which if they helped to accomplish tasks faster and more efficiently would be accepted and implemented. On the other hand, if the organisation is people oriented then it would accept the technology more slowly or may even resist the change to the new technology because it could be seen as a threat to the people.

The other factor deals with the relation between organisational culture and technology: there is a difference between organisations characterised as a technology-oriented culture and others that are a more traditionalist culture. The technology-oriented culture organisations are more likely to adopt modern technologies such as MIS, than the traditionalist culture, which will be more conservative in adopting modern technology and MIS (Alvesson, 2002). The literature points to numerous researchers that have studied and measured organisational culture. Researchers measured culture differently according to their disciplines and backgrounds.

4.3 MEASURES OF ORGANISATIONAL CULTURE

In an attempt to summarise and better understand the concept of organisational culture, various studies have been examined in order to measure and map organisational culture. Many researchers (Cameron & Quinn, 1999; Cooke & Szumal, 2000; Hampden-Turner & Trompenaars, 1994; Hofstede, 1980; Schein, 1990; Trompenaars & Hampden-Turner, 1998) have studied organisational culture according to their interest and discipline, and hence, all have developed differing measures and dimensions of organisational culture. For example, Hofstede (1991) argues that the difference between societal and organisational culture is brought about by the different roles played in each by the manifestations of culture. He developed six dimensions that emerged from his research, and they assist in understanding different kinds of organisational cultures. The dimensions are: process versus results, employee versus job oriented, parochial versus

professional, open versus closed system, loose versus tight control, and normative versus pragmatic.

Hofstede's organisational culture dimensions were influenced by his conceptualisation of societal culture. He also claims that, whereas societal culture resides more in values and less in practice, organisational culture lies more in practice and less in values. Therefore, while measuring values using those dimensions may be adequate for societal culture, using them to measure organisational culture that resides more in practice may be problematic. From this we can conclude that using Hofstede's organisational culture dimensions may not provide significant indication of the differences between societal and organisational values and beliefs held by employees of the organisation. It is therefore suggested here that Hofstede's work is more suitable for measuring societal culture than organisational culture.

Trompenaars and Hampden-Turner (1994) argue that organisational culture can be measured on seven dimensions similar to Hofstede's conclusions. However, Trompenaars and Hampden-Turners' dimensions are similar to those of Hofstede, as they are a combination of measuring societal and organisational cultures. Even though they claimed that they were measuring organisational culture by surveying senior management executives, in reality they were measuring a combination of societal and organisational culture. The survey instrument they developed did not clearly delineate between the two forms of culture. This may be a key reason as to why their research resulted in seven dimensions of culture.

Thus, as there are many approaches to the study and measurement of organisational culture, for the purposes of the current study, the researcher sought a valid and reliable instrument that can be adapted to measure the influence of organisational culture on the adoption of MIS. The Organisational Culture Assessment Instrument (OCAI), developed by Cameron and Quinn (1999), was considered to be the most suitable for the purpose of this research. The OCAI is based on a theoretical model, the "Competing Values Framework" by Quinn and Rohrbaugh (1981; 1983). This framework refers to whether an organisation has an internal or external focus and whether it favours flexibility and individuality or stability and control. The framework is also based on six organisational

culture dimensions that form four types of dominant organisational culture types: hierarchy, clan, adhocracy, and market. Those four culture types are used to identify the organisational culture profile based on the core values, assumptions, interpretations, and approaches that characterise organisations (Cameron & Quinn, 1999). The OCAI will be discussed more fully in section 3.5. The following is a discussion of the Competing Values Framework (CVF).

3.4 OVERVIEW OF THE COMPETING VALUES FRAMEWORK

The Competing Values Framework (CVF) of Quinn and Rohrbaugh (Quinn & Rohrbaugh, 1981; Rohrbaugh, 1983) is very useful in supporting, organising, and recognising a wide variety of organisational phenomena. Cameron and Quinn (1999) claim that in using the appropriate framework, it should be based on empirical evidence, should summarise precisely the reality being depicted (i.e. it should be valid), and should be able to put together and classify the majority of the dimensions being considered. It should also match with a known and well-recognised classification system that organises the way people think, their values and beliefs about what makes a good organisation, and the ways they deal with information. In their research, Cameron and Quinn (1999) have concluded that the CVF meets all of these requirements.

The CVF theory suggests three value dimensions that inspire conceptualisations of organisational effectiveness, and therefore it can be used to organise the traditional and often contradictory models of effectiveness. Figure 4.1 demonstrates the three value dimensions identified by Quinn and Rohrbaugh (1981). These dimensions are organisational structure, organisational focus, and the means-ends range. The dimension of organisational structure distinguishes between those values and activities that emphasise an organisation's flexibility and adaptability and those that emphasise control and stability. The dimension of organisational focus compares an emphasis on internal and integrating issues such as comfort, security and employee development, with external and differentiating issues, such as the development and growth of the organisation itself or its relations with entities outside itself.

The means-ends range reflects emphasis on the objectives of the organisation, such as productivity or human resource development, and the means by which it accomplishes these objectives, such as goal setting or enhancing confidence. As illustrated in Figure 4.1, Rohrbaugh and Quinn used these value dimensions as axes with which to organise four of the most common theoretical models of organisational effectiveness: the internal process model, the human relations model, the open systems model, and the rational goal model (Cameron & Quinn, 1999).

Adapted from (Rohrbaugh, 1983) (p.267)

Figure 3.1 Competing Values Framework

The four main clusters explain the main values on which decisions about organisations are made. For some, motivation and what it takes to encourage inspiration are the most valuable. For others, productivity, efficiency or self-esteem and the ways to accomplish these ends may be the most important. As Cameron and Quinn (1999) clarify, what is notable about these four values is that they represent opposite or rival hypotheses. Each

range points out the main value that is opposite from the value on the other end of the range, that is, people (internal focus on members and technologies) versus organisation (external focus on the organisation within an environment), and control versus flexibility. The significance of this framework to organisations and management is summarised here by Quinn and McGrath (1982):

This framework suggests a view of organisations that is more complex than most of the more popular diagnostic tools in organisation development. It not only encapsulates more criteria than other schemas, but the criteria are embedded in contradictory or competing values … Each of the quadrants or models is important and to ignore criteria in any one of the models is to have an incomplete view. This suggests that an operating manager must consider all of these criteria in making choices and from time to time make explicit or implicit tradeoffs among them. (p.469)

The dimensions, therefore, create quadrants that are also conflicting or opposing on the diagonal. The upper left quadrant identifies the Human Relation Model, which identifies values that emphasise people, whereas the lower right quadrant, the Rational Goal Model, identifies values that emphasise a control focus. Likewise, the upper right quadrant, the Open Systems Model, indicates values that emphasise flexibility focus, whereas the lower left quadrant, the Internal Process Model, reflects control values.

This framework is useful in organising and understanding the four organisational culture types. These four culture types serve as the base for the Organisational Culture Assessment Instrument (OCAI) that has been widely cited in the literature and has been used more repeatedly in measuring an organisation's culture. The reliability of this model of culture was used to develop a standardised diagnostic tool, the OCAI (Cameron & Quinn, 1999), used in the current study to analyse the organisational culture in the Arab regions in order to explore any variations in the adoption and implementation of MIS. The OCAI is also used to discover any similarities in organisational culture between the different industry sectors and regions that have adopted or have not yet adopted MIS

4.5 THE ORGANISATIONAL CULTURE ASSESSMENT INSTRUMENT

Since culture is a significant factor in the long-term success of organisations and moderates organisational changes, it is very important to map and to be able measure and

identify the key dominant organisational culture type. The Organisational Culture

Assessment Instrument (OCAI) developed by Cameron and Quinn (1999), which is

based on the above theoretical model (the CVF), is used to describe and categorise types

of cultures in organisations. Cameron and Quinn (1999) identified two main dimensions,

thus dividing the dimensions into four main quadrants (types of cultures). As can be seen

from Figure 3.2, these four quadrants make up the characteristics of competing values.

These dimensions relate to flexibility and discretion versus stability and control, and

internal focus and integration versus external focus and differentiation. The resulting

CVF is set out in Figure 3.2, each quadrant representing a different type of organisational

culture.

The hierarchy culture is based on a bureaucratic and official process and values tradition, emphasising stability, teamwork, and agreement. It focuses more on internal than external issues and values steadiness and control over flexibility. The hierarchy culture is characterised by a formalised and structured place of work. Procedures control what employees do and successful leaders are good coordinators and organisers (Cameron & Quinn, 1999). Large organisations and government agencies are generally dominated by this type of organisational culture (Cameron & Quinn, 1999). The objectives and aims of this type of organisational culture focus on efficiency, and the organisational environment is stable and simple; if changes are to be made they should be kept to a bare minimum. The hierarchy culture's key values focus on keeping an efficient, consistent, speedy, steady flow of products or services (Cameron & Quinn, 1999).

The Clan Culture is like an extended family, with shared values, beliefs, goals, unity, and participation (Cameron & Quinn, 1999). Instead of the rules and procedures of hierarchies or the competitive profit centres of market culture, typical characteristics of clan culture are cooperation, coordination, teamwork, employee involvement, rewards, fewer management levels, and harmony. It focuses on internal issues and values flexibility and carefulness rather than looking for stability and control. The clan culture is also characterised by a friendly place to work where people share a lot of themselves.

The term market in the market culture is not the same as the marketing function, but rather refers to an organisation that functions as a market itself (Cameron & Quinn, 1999). It also values steadiness and control, but in addition focuses more on external environments rather than internal issues. This culture is likely to view the external environment as threatening, and searches to recognise threats and opportunities as it looks for competitive advantage and profits. It is characterised by its external orientation and competitive stance. The market culture's main principles are competitiveness and productivity (Cameron & Quinn, 1999).

The adhocracy culture focuses on external issues and values flexibility and carefulness rather than looking for stability and control. It is characterised by originality, creativity, risk taking, and entrepreneurial focus. Organisational charts and formal structure are not emphasised or non-existent. Job roles and established physical space are also considered to be flexible. The adhocracy culture is also characterised by a self-motivated, entrepreneurial and creative workplace (Cameron & Quinn, 1999). Software development and aerospace organisations are examples of organisations dominated by this type of culture, where the key challenges they face are manufacturing innovative and original products and/or services and adapting speedily to new opportunities.

These four types of culture serve as the base for the OCAI. This instrument has been used in more than a thousand organisations and been found to accurately predict organisational performance. It includes six questions, each with four optional answers corresponding to the four cultures explained above. The OCAI helps the organisation determine its dominant orientation based on the four main culture types. Figure 3.2 shows the characteristics of each type of culture as defined by Cameron and Quinn. Organisations on the left side of Figure 3.2 see their culture as dominated by a hierarchical structure and policies, as well as a direction toward establishing and achieving market aims. This type of organisation would rather be more active and flexible and more concerned about developing human resources. This may be in response to a dynamic and changing external environment that requires more cross-functional teaming, a diverse talent mix, and assurance to employees that they will be appreciated in the new environment. For organisations on the right hand side of Figure 4.2, the dominant culture profile of a high technology manufacturing organisation is weighted in the direction of flexibility and external focus, where effectiveness is viewed as creativity, originality, progressive output, and external growth and support. The four quadrants of

Figure 3.2 are averages based on Cameron and Quinn's (1999) experience with more than 1000 organisations.

The OCAI has been chosen to measure type of organisational culture in KSA because it is an instrument that is sensitive to creative and innovative aspects of organisational power. The OCAI can also generate a mutual language and attitude among all employees at every level of an organisation, including features that are associated with organisational performance. It also examines the relationship between organisational culture and desirable outcomes such as organisational effectiveness, organisational strategies, processes, and decision-making style.

A major objective of this thesis is to explore the dominant culture type of organisations in KSA. This is to determine if the dominant organisational culture type has any direct or indirect influential relationship on B-ITa. Using the OCAI, an organisational culture profile can be verified by determining the organisation's dominant culture type characteristics.

It is also possible to link the organisational culture type with B-ITa in this study's sample. Using OCAI's model of organisational culture in this research would enable identification of the type of organisational culture characteristics that influence the organisations in KSA. Using the OCAI would also assist in explaining the type of organisational culture and distinguish if there are any variations of organisational culture type in KSA. Organisations in KSA would be assessed according to the OCAI and analysed using the same techniques developed by Cameron and Quinn (1999).

Adapted from (Cameron & Quinn, 1999) (p 96)

Figure 3.2 The Organisational Culture Profile

3.6 ORGANISATIONAL CULTURE AND B-ITa

Add here 2-3 paragraphs

3.7 SUMMARY

This chapter reviewed a selection of related literature on independent variable in this research, the organisational culture. Organisational culture has been defined as the values and beliefs that are shared by the majority of employees of an organisation. Different studies and concepts that assessed and measured organisational culture were discussed. The competing values framework, the basis on which the organisational culture assessment instrument (OCAI) was based on was discussed. The adopted instrument relevant to this study the OCAI was introduced assessed, and the rationales for its considerations in as the most appropriate instrument for measuring organisational culture in the context of the current study were also given. The next chapter presents a conceptual model that guides this research and discusses the development of hypotheses to be tested.

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