The Importance of Organizational Culture

1 Organizational Culture Organizational culture is a topic that has elicited a lot of debate. The business world is fast changing and cultures change with it. Firms adopt cultures that enhance their profitability and are in line with their objectives. Good organizational culture help firms attract and retain not only the employees but also the customers. A good culture means employees are proud of the firm and are willing to invest both their expertise and skills fully to enhance the firm’s performance. Organizations are profit oriented. Therefore, adopted changes need to reflect the company vision and mission. The management of an organization is the people responsible for adopted culture (Craft & Leake 2002). These individuals operate under the mercy of the company stakeholders.

Buy this excellently written paper or order a fresh one from ace-myhomework.com

2

This implies that their performance dictates their stay in the company. Given a manager fails to deliver; the shareholders are obliged to call for his resignation or subsequent sacking.

New managerial changes means new adopted cultures. This essay seeks to discuss organizational culture and the reasons behind cultural change in organizations.

According to Alexander (2007), organization culture is a set of values that are shared by employees of a given firm. Culture is responsible for the practices undertaken by a firm on a daily basis. In addition, organization culture is what holds together and spurs a company to new growth heights. Different scholars have advanced different definitions on the same that are hard to conceptualize and capture. However, they are both in agreement that a culture is an imminent driver of organizational practices. A firm’s culture is enriched by a huge magnitude of shared characteristics, beliefs and symbols that guide the decisions that individuals make either when aware or when unconsciouss (Bose & Thomas, 2007). This binding force has otherwise been accredited for helping a firm survive while enhancing its growth and subsequent success in business. The role played by culture in an organization cannot be belittled. This important aspect of an organization helps bring company stakeholders together and steer them towards its objectives. From the aforementioned, it is imminent that organization culture is responsible in keeping a firm in a strong-footed direction. Given that culture normally deals with the unconscious level of individuals, it provides a sure way of gauging the operations of members.

Moreover, it enhances civility and enhances responsibility as members are well versed of what they are supposed to do at a particular point in time.

Culture plays an important role in the contemporary business world. Both small and large organizations have embraced good cultures to enable them align well with their goals and help

3 them stay ahead of competitors. Heineken is such a company that has been sensitive to culture.

Heineken good culture has helped it improve its brands by enhancing mergers and cooperation with other brewers in the brewing industry. The merging with Amstel has enable the firm enjoy the advantages of economies of scale. An organization is a legally established entity that seeks to satisfy the needs of stakeholders by aligning itself to company objectives and mission statements (Agostino & Arnaboldi, 2011). Organizations are divided into two large groups; profit oriented and none profit oriented. Profit driven organizations are those institutions that seek to harness revenues and enhance company growth within a given period. Profit driven firms are much sensitive to stakeholder voices and adopted moves reflect not only the interest of management but also those of its stakeholders i.e. employees, shareholders and suppliers. To address stakeholders’ fears adequately, firm management needs to have a sound culture that binds a company together. This will ensure that shareholders loyalty is maintained over a period through constant satisfaction. A performing company means a satisfied stakeholder. For example, a company’s ability to attract and retain employees is good for a company as it safeguards company secrets. Companies that lose employees to competitors often lose tangible information that can be used against them (Agostino & Arnaboldi 2011).

Employees are individuals who are willing to work in firms that satisfy their interest to some extent. For example, organizations that provide avenues for personal growth and development are better placed to attract and retain employees than other firms. A satisfied employee also means a satisfied customer (Pechm & Slade 2007). Google, a search engine giant, has embraced the aforementioned move to help retain a well-informed group of employees.

Google runs workshops to train and enlighten its staff worldwide. This has boosted its efficiency and brought down costs while ensuring employees are retained for a long time in the firm. The

4 move has bonded customer employee relationships. Having a good relationship means the employees will put their best foot forward to ensure client needs are meet. This will therefore lead to improved performance of a firm over a given period. From the aforementioned, it is apparent that adopted culture can either make or break a firm (Agostino & Arnaboldi 2011).

To outperform competitors, an organization needs to adopt sound cultures i.e. those that will boost both its public image while at the same time increasing its revenue. According to Alexander (2007), companies that have aligned their culture to their mission statements well often outsmart their competitors. Given the business world is a dynamic sphere that often changes, a flexible management is paramount to ensure modern ones replaces outdated cultures.

Rigidity to change greatly disadvantages a company. Sony is one company that has been lambasted for advancing retrogressive type of culture. Pech and Slade (2005) argue that the company is adamant to changing its top management and injects new blood into the system. The firm has repetitively applied same strategies over a period yielding similar results. Culture ought to be interrogated to ensure the effective ones are adopted to enhance the performance of the firm in both the short and the long run. Well-interrogated organization cultures have been credited for improving companies’ performances, with most of them reporting 200% improvement in their revenue levels. Therefore, it is up to the company managers to figure out sound cultures that are will bind together employees and drive them towards the achievement of set goals. A well embraced culture equals to good performance of a firm.

Constant monitoring and evaluation of a company culture ensures that a firm does not lag behind. Managers need to review their firm culture frequently to meet the industry requirement.

To asses a company culture, there are some sound methods a manager can adopt. First, employing a company expert is a sure way to ascertain how company environment is responding

5 to a culture. This is because a consultant is an expert who will not be biased in his report (Pechm & Slade 2007). An expert will give an opinion based on a well assessment of a system, as he has no interests guiding him in his dispensation. Secondly, a manager is able to assess a given culture by evaluating how firm employees act. In addition, being a good listener enables a manager know the reactions of stakeholder towards the undertakings carried out by the firm. From the discussed responses, it is apparent that to thrive in and industry, a company needs to pay attention to the slightest details and complains facing its brand (Pechm & Slade 2007). Apple is one such company that has been sensitive to market changes over time. Steve Jobs, the then company CEO and the founder employed consultants who advised the firm on a number of issue including trimming employee numbers and aligning firms culture to the industry needs. Upon the demise of Jobs, the company change of management slightly affected the performance of the firm. From the aforementioned, it is evident that a company brand is largely dependent on company management (Agostino & Arnaboldi 2011).

Organizational culture tends to evolve overtime. With globalization taking center stage in the 21st century, firms have been kept on their toes. The 21st century employee, often called the generation Y employee lacks loyalty. This implies that they do not work in an organization for long periods. As these generation Y employees leave the company in search for greener pastures and new challenges, other employees replace them. New employees will relatively change company culture in either the short run or the long run or even both (Agostino & Arnaboldi 2011). However, the change of culture depends on its state at that particular point in time. A weak culture is easy to be changed even by slight changes adopted in a company. However, strong organization cultures are not easy to be changed. This therefore calls for the adjustment of the new employees to suit the postulated culture. New employees bring with them unique traits

6 and often undertake tasks differently. This implies that despite the dynamic natures of a company culture, a little detail have to change to accommodate the new practices incorporated into a system (Craft & Leake 2011).

Organizational culture is not adamant to changes. However, some managers are rigid to adjust to these changes. For example, Jeff Bezos who is at the helm of Amazon is often reluctant to adjust company culture despite the criticism faced. Amazon adopted a culture that has reduced its profitability i.e. by the increased levels of imitators (Pech & Slade 2005). To survive and stay ahead of competitors, a company needs to develop a unique culture and be open to criticism.

Many aspects dictate the position to be taken by a firm as far as adopting a sound culture is concerned. As a company is joining a business, it endeavors new market challenges on a daily basis. Given a company started from a startup, it has endured a lot and accommodated many changes to where it stands as a reputable company. Nurturing a firm from scratch means, a lot of cultural alignments and changes have to be realized. On the other hand, the environment of a firm dictates the cultures to be adopted. The locality of operation guides the decisions of the firm in regard to the sound cultures. This environment entails the legislation, industrial climate and government regulations. In such an environment, the firm’s freedom is curtailed, as its decisions have to be aligned with the requirements of either the state or some given statutes. The cultural changes adopted during such a state impacts the organization either in a positive or in a negative manner. This is because the requirements of these bodies may be minor or major. Given that a cultural change is a major but to the negative direction, a company will face the wrath of the market i.e. it is better placed to lose not only its profitability but also the market share. On the other hand, given the change is mild; an organization may stagnate or make very slight improvements. However, a major cultural change to the positive is an advantage to the firm, as it

7 will be better placed to outdo its competitors while increasing its market share (Bose & Thomas 2011).

Changing an organizational culture is a manager’s headache. This move means that values of individuals together with their practices have to be done away with. This is not an easy task considering the psychological nature of human beings. Humans are naturally reluctant to changes. Most employees may have been in a system for a good period i.e. since the inception of a company and eliminating changes means you are looking to do a cultural overhaul on the employee (Alexander 2007). In such a state, it is human for one to express resentment and dissatisfaction on a system. On the other hand, there are reasons why a firm has subscribed to a certain culture. This may be driven by the managerial style or the magnitude of comfort the superiors i.e. the founders are exposed to. Given that organizational culture often echoes current state of issues i.e. the management, a significant event is important for a change to be considered (Bose & Thomas 2007).

Firm managers are better placed to change organizational cultures as they have ability to influence the decisions undertaken by a company. Managers have the ability to recruit new personnel, dismiss, promote or even demote employees based on their level of performance and their contributions to the coffers of the company (Alexander 2007). As discussed earlier, the position of an employee at a particular time or the hiring of an employee has to impact on the company culture. Although a manager has the machinery and the ability to change the organizational culture of an organization, the issue is delicate and can negatively dent the company. To be successful, a manager needs to win the hearts of his colleagues and employees.

To woo them and avoid resistance, a firm manager needs to be persuasive and at the same time being cunning. By being cunning, a manager needs to start the culture transformation process

8 from the lower ladder. This implies that individuals with limited influence in the firm are the first people to be axed (Pech & Slade 2005). In addition, the management of a company needs to sensitize their employees on how an existing culture is derailing firm operations.

In conclusion, organizational change is imminent in the ever-changing business world.

Firms that seek to thrive well and stay ahead of their competitors need to adopt a sound culture.

This will ensure that it attracts and retains well-trained employees and help keep their customers for a long period. Creating awareness before changing a company culture is also important. This will minimize the resistance levels exposed to the firm by resistive employees. It will also ensure a good working relationship with employees. Finally, shareholders need to be kept up to date on the company intentions to change a culture.

9 List of References Agostino, D., & Arnaboldi, M., 2011. How the BSC implementation process shapes its outcome.

International Journal of Productivity and Performance Management, 60(2), 99-114.

Alexander, J., 2007. Performance dashboards and analysis for value creation. Hoboken, NJ: John Wiley & Sons, Inc. Bose, S., & Thomas, K., 2007. Applying the balanced scorecard for better performance of intellectual capital. Journal of Intellectual Capital, 8(4), 653-665.

Craft, R. C., & Leake, C., 2002. The Pareto principle in organization decision making.

Management Decision, 40(8), 729-733.

Pech, J. R., & Slade, W. B., 2005, ‘Business maneuver: exploiting speed and surprise as key elements’, Handbook of Business Strategy, Vol. 6, no. 1, pp.35 - 42 Pechm R. J., & Slade, B. W., 2007. Organizational sociopaths: rarely challenged, often promoted. Why? Society and Business Review, 2(3), 254-269.