Management Consulting/Organizational Culture
What do you understand by an organizational culture? Is there a relationship between service and culture of an organization? Justify with the help of a case of an organization.
WHAT IS ORGANIZATION CULTURE ??
HOW AN ORGANIZATION's CULTURE CAN BE KNOWN ?
Organization culture can be a set of key values , assumptions,
understandings and norms that is shared by members of an
Organization values are fundamental beliefs that an organization
considers to be important , that are relatively stable over time,
and they have an impact on employees behaviors and attitudes.
Organization Norms are shared standards that define what
behaviors are acceptable and desirable within organization.
Shared assumptions are about how things are done
in an organization.
Understandings are coping with internal / external problems
LEVELS OF ORGANIZATION CULTURE
LEVEL 1---VISIBLE, that can be seen at the surface level
-office layout [ open office]
-ceremonies[ monthly / annual awards/long service/birthdays etc.
LEVEL 2- INVISIBLE , that can be cannot be seen but only felt.
-stories about people performance
-symbols [ flag, trademark, logos, etc]
-corporate mission statements
-recruitment/selection [ methods used]
-fairness in treatment
-risk taking in business deals
-formality in approach
-autonomy for departments
-responsiveness to communication
-empowerment of staff.
Importance of Organizational Culture
Organizational culture is even more important today than it was in the
past. Increased competition, globalization, mergers, acquisitions, alliances, and various
workforce developments have created a greater need for:
-Coordination and integration across organizational units in order to improve efficiency,
quality, and speed of designing, manufacturing, and delivering products and services
-Process innovation and the ability to successfully introduce new technologies, such as
-Effective management of dispersed work units and increasing workforce diversity
-Cross-cultural management of global enterprises and/or multi-national partnerships
-Construction of meta- or hybrid- cultures that merge aspects of cultures from what were
distinct organizations prior to an acquisition or merger
-Management of workforce diversity
-Facilitation and support of teamwork.
In addition to a greater need to adapt to these external and internal changes, organizational culture
has become more important because, for an increasing number of corporations, intellectual as
opposed to material assets now constitute the main source of value.
Maximizing the value of
employees as intellectual assets requires a culture that promotes their intellectual participation
and facilitates both individual and organizational learning, new knowledge creation and
application, and the willingness to share knowledge with others. Culture today must play a key
role in promoting
Effects of Organizational Culture
There has been a great deal of anecdotal evidence and some empirical evidence regarding the
performance effects of organizational culture.
-Southwest Airlines (21,775% return on investment ,
-Wal-Mart (19,807% ROI),
-Tyson Foods (18,118% ROI),
Circuit City (16,410% ROI),
and Plenum Publishing (15,689% ROI) .
These winners have strong leadership that promotes unique strategies and a strong culture to help them
realize these strategies.
Growing evidence that excellent companies do not remain excellent for
long also suggests that the traditional notion of a strong culture may need to be replaced with a
more discerning understanding of the types and role of culture and the need to change culture
over the life cycle of the organization.
For example, perhaps a strong consistent culture is useful
in the beginning start-up phase of an organization but a mature organization may need to become
more differentiated as well as more oriented to change and learning.
What is important for long- term organizational success may not be a particular type of organizational culture per se but the
ability to effectively manage and change the culture over time to adjust to changes in the situation
and needs of the organization. This understanding has pointed to the need for a more dynamic
understanding of culture and the role of organizational leaders in ensuring that the culture
contributes both to the organization’s current and future success.
Leadership today is essentially the creation, the management, and at
times the destruction and reconstruction of culture. In fact,“the only thing of importance
that leaders do is create and manage culture” and “the unique talent of leaders is their ability to
understand and work within culture” . Leaders must be able to assess how well the
culture is performing and when and how it needs to be changed. Assessing and improving
organizational culture as well as determining when major cultural transformations are necessary
is critical to long-term organizational success. Managing differentiated cultures and creating
synergies across these cultures is also a critical leadership challenge. Effective culture
management is also necessary to ensure that major strategic and organizational changes will
succeed. Basically, culture management is a key leadership and management competency.
However, effective cultural management does not depend on great individual leaders and charisma.
Charisma may be an advantage in times of crisis and change, but solid instrumental leadership can be as, or
more, effective in more normal circumstances .
Critical instrumental mechanisms for changing and managing culture include
-Strategic planning and the identification of necessarily cultural requisites
-Ensuring consistency of culture with mission, goals, strategies, structures and processes
-Creating formal statements of organizational philosophy and values
-Establishing consistent incentives, recognition systems, and performance measurement
-Maintaining appropriate error-detection and accountability systems
-Coaching, mentoring, informal and formal training, and identifying role models
-Embracing appropriate rites, rituals, symbols, and narratives
-Taking advantage of the growth of subcultures
-Managing and promoting strong communities of practice .
Several requisites for organizational success that organizational culture must
now take into account:
-The organization must be proactive, not just reactive.
-The organization must influence and manage the environment, not just adapt.
-The organization must be pragmatic, not idealistic.
-The organization must be future-oriented, not predominantly present/past oriented.
-The organization must embrace diversity, not uniformity.
-The organization must be relationship-oriented, not just task-oriented.
-The organization must embrace external connectivity, as well as promote internal
These fundamental assumptions are key to eliminating obstacles that will inhibit the kinds of
internal and external organizational adaptations necessary for future success. They are not,
however, sufficient. They must be reinforced by values, behavioral norms and patterns, artifacts
and symbols, as well as accompanied by a particular mission, set of goals, and strategies.
Others emphasize more specific cultural mandates, such as that the modern organizational culture
-Knowledge and learning oriented .
-Alliance and partnership oriented .
-Another emerging mandate is to
-Know when to emphasize and how to balance cultural maintenance and cultural
-Managers must actively work to keep the existing organization culture relevant to the present and
future while maintaining some sense of continuity with the past.
Companies with long-term success had a limited but strong set of timeless core values that did
not prevent organizational change over time. These companies were able to preserve the core
while stimulating progress.
Cultural change typically refers to radical versus limited change. It is not easy to achieve; it is a
difficult, complicated, demanding effort that can take several years to accomplish. There are
three basic types of cultural change
-Revolutionary and comprehensive efforts to change the culture of the entire organization
-Efforts that are gradual and incremental but nevertheless are designed to cumulate so as
to produce a comprehensive reshaping of the entire organizational culture
-Efforts confined to radically change specific subcultures or cultural components of the
overall differentiated culture.
Strategies for effecting cultural change include
-Unfreezing the old culture and creating motivation to change
-Capitalizing on propitious moments—problems, opportunities, changed circumstances,
and/or accumulated excesses or deficiencies of the past
-Making the change target concrete and clear
-Maintaining some continuity with the past
-Creating psychological safety through a compelling positive vision, formal training,
informal training of relevant groups and teams, providing coaches and positive role
models, employee involvement and opportunities for input and feedback, support groups,
and addressing fears and losses head on
-Selecting, modifying, and creating appropriate cultural forms, behaviors, artifacts, and
-Cultivating charismatic leaders
-Having a realistic and solid transition plan
-Exercising risk management by understanding and addressing the risks and the benefits
as well as the potential inequitable distribution of these risks and benefits.
Four essential strengths of the organizational culture approach:
• It focuses attention on the human side of organizational life, and finds significance and learning in even its most mundane aspects (for example, the setup in an empty meeting room).
• It makes clear the importance of creating appropriate systems of shared meaning to help people work together toward desired outcomes.
• It requires members—especially leaders—to acknowledge the impact of their behavior on the organization’s culture. Morgan proposes that people should ask themselves: "What impact am I having on the social construction of reality in my organization?" "What can I do to have a different and more positive impact?"
• It encourages the view that the perceived relationship between an organization and its environment is also affected by the organization’s basic assumptions. Morgan says:
We choose and operate in environmental domains according to how we construct conceptions of who we are and what we are trying to do. . . . And we act in relation to those domains through the definitions we impose on them. . . . The beliefs and ideas that organizations hold about who they are, what they are trying to do, and what their environment is like have a much greater tendency to realize themselves than is usually believed.
Today, people live in an environment that is increasingly moving towards services-based economy. The concepts of
service quality and satisfaction in marketing activities during the past decades have been the focus of attention.
There is the advantages of satisfaction and consider them as indicators of the competitive advantage of organizations, although the exact nature of customer judgments and the relationship between these two is still hung in the balance . Willingness to provide quality services in today's world plays an important role in the
service industries. Because service quality is considered crucial for organization's survival and profit making.
Service quality plays a significant role in customer's satisfaction, maintenance, and stability. In addition, the chain of services - profit - income is associated with the stated factors .
strategic benefits of quality, market share and return on investment in partnership development and in reducing production costs and in enhancing productivity . But before discussing service quality, it is essential to understand the concept of quality. Quality is the customer's satisfaction and enjoyment or simply fulfilling or
surpassing customer's expectations . Internal service quality leads to the satisfaction of staffs [maintenance of staffs] which in turn leads to external service quality and customer satisfaction
whose final product is profitability, growth, and development. Internal service quality is the most essential element to achieve high quality of external services and it is imperative that be reviewed in most sport environments. Several
factors contribute to the Internal service quality in An organization. Among these factors, organizational learning culture, job satisfaction, organizational commitment, learning motivation, organizational atmosphere and
organizational justice. Organizational learning leads to competitive advantage for the
staff who have a clear vision of the importance of quality service. Organizational learning can be defined as a dynamic process of creating, acquiring and gathering knowledge and resources to develop the capacity and resources, which leads to better performance of the organization . Certainly the culture of organizational learning
will play a significant role in the internal service quality .There is a significant relationship between organizational learning culture and internal service quality in the staff of the
ORGANIZATION departments There is a significant positive relationship between
organizational learning culture and internal service quality in ORGANIZATION. There is a significant relationship between organizational learning culture and internal service quality;
and organizational learning culture would account for 5% of the variance of internal service quality. Hays and Hill
That for having a superior external service quality, organizations need staffs [internal customers]
committed to the goals and prospects of the company and require customer oriented behavior and the internal
service quality [satisfaction of organizational units from each other], shows that there should be a
close interaction between internal service quality and external quality.
internal service quality had a significant positive effect on staff retention due to the
role of job satisfaction. Job satisfaction increases when internal service quality increases. Satisfaction of internal
customers is a strongly associated with internal service quality which in turn has strong relationships with customers
who receive external service. Management should meet the needs and expectations of internal customers so that the
staff have high levels of satisfaction and give high quality external service to external customers
HERE IS AN EXAMPLE OF ''implementing value based culture''.
the organisation I am referring to
The organization, I am familiar with is a
-a large manufacturer/ marketer of safety products
-the products are used as [personal protection safety] [ industrial safety]
-the products are distributed through the distributors as well as sold directly
-the products are sold to various industries like mining/fireservices/defence/
as well as to various manufacturing companies.
-the company employs about 235 people.
-the company has the following functional departments
IN THIS COMPANY, WITH WHICH I AM ASSOCIATED,
Value based culture is the management approach that ensures corporations
are run consistently on value, such as
-maximising shareholders value
-adding values to the customers' service.
-creating value in all actions/strategy
-managing for values
-measuring value with the help of metrics
THE EMPLOYEES WHO LIVE BY THE VALUES OF THE ORGANIZATIONS
SHOW IT BY THEIR EFFORTS / PURPOSE/DIRECTION/SUPPORT.
-by aligning all their actions/programs with the organization vision.
-by aligning all their actions/programs with the organization mission.
-by aligning all their actions/programs with the organization objectives.
-by aligning all their actions/programs with the organization strategies.
-in maximization of value creation for customers
-in increasing value for company products for the market
-in aligning company activties with the interest of shareholders
-in maintaining quality communication internally/ externally
-in allocation of resources [ finance]
-in allocation of resources [ human resources ]
-in handling complexity in operation
-in handling uncertainty in operation
-in managing risks in operation.
-in planning / budgeting
-WATCH THE Work practices
1 Direction - management's style and attitude as it affects employees
2 Commitment - attitudes towards work and the organisation
3 Recognition - motivation and recognition of employees
4 Collaboration - cooperation and teamwork within groups and departments
-WATCH THE Cultural Values
1 Risk - attitudes toward risk taking, structure and ambiguity
2 Individuality - attitudes toward contribution and self reliance
3 Compliance - attitudes toward rules and exceptions
4 Dominance - attitudes towards hierarchy, power and equality
WHAT ROLE IS PLAYED BY TOP MANAGEMENT IN THIS ORGANIZATION,
IN CREATING VALUE BASED CULTURE SYSTEM?
THE TOP MANAGEMENT IN CREATING VALUE BASED
CULTURE SYSTEM PROVIDE
-value based corporate vision
-develop a value based mission statement
-provide a value based corporate OBJECTIVES
-provide a value based corporate STRATEGIES
-provide a value based corporate COMMUNICATION SYSTEM.
-provide a value based corporate GOVERNANCE
-provide a value based corporate CULTURE
-provide a value based corporate ORGANIZATION STRUCTURE
-provide a value based corporate MANAGEMENT STYLE
-provide a value based corporate DECISION MAKING PROCESS.
-provide a value based corporate PERFORMANCE MANAGEMENT SYSTEM
-provide a value based corporate REWARD PROCESS
-provide a value based corporate CLEAR MANAGEMENT PRIORITIES.
-provide a value based corporate BALANCE BETWEEN SHORT TERM/LONG TERM TRENDS.
-provide a value based corporate SHARED VALUES
-provide the required skills to the employees
IN IMPLEMENTING CULTURAL CHANGE, WHAT WE DO
-DEFINE THE CULTURE VERY CLEARLY.
-''CHANGE MANAGEMENT'' IS MORE IMPORTANT THAN CULTURE ITSELF.
-What I have suggested is a blend of guidelines/ideas/concepts on the
process of managing the change of culture in an organization.
I must also emphasise that the culture change is always done with a purpose.
YOU MUST STATE THIS VERY CLEARLY UPFRONT.
PEOPLE ANCHOR THE PURPOSE FIRST, THEN CHANGE
ALL THESE STEPS WILL HELP YOU TO MANAGE YOUR
ORGANIZATION MORE EFFECTIVELY.