In order for a company to succeed, it needs to have a strong and firmly entrenched culture. In this assignment we look at the definition and types pf culture, how it is managed and developed to maintain high performance, within the organisation.

Person Culture

An organisation which is designed to serve and focus on the needs of their employees when deciding upon issues the consensus method is preferred eg. Roles are distributed in the form of personal preference. Authority does not exist in these types of organisations usually there is shared ownership on decisions. The organisation is dependant on the individual for existence. Examples of this type of organisational culture include groups of doctors, barristers and doctors joining together to form a shared practice.

Most organisations are a mix of a number of cultures those obtaining its own individual, unique culture. People often feel more satisfied at work if their attributes and personalities suit the culture in which they are employed.

Case Study

Johnson and Johnson is the world’s largest producer of health care products, such as disposable contact lenses to pain relievers. Each of nineteen group heads, who then report to one of there sector heads, who then reports to Ralph S. Larsen Chief Executive. This shows logic and rationality through its communication network while no information is transferred from one company to another, each working independently from the other illustrate a role orientated culture. The company also witnesses a person culture as companies are expected to operate independently, each decides which products to sell, whom to hire, etc. decisions about the company are made within the company. There is an essence of task culture as headquarters provide the capital and make the major decisions, each company must operate independently. This approach both fuels managerial creativity while providing adequate structure to pressure the various companies to produce.  

Four Generic types of culture were developed by Deal and Kennedy according to two determining factors in the workplace:

• The degree of risk associated with the organisations activities and
• The speed at which organisations and their employees receive feedback on the success of decisions or strategies.

The four generic types of culture are;

• Tough-guy macho Culture
• Work-hard/play-hard Culture
• Bet-your-company Culture
• Process Culture

Tough-guy macho Culture

These are organisations consistently take high risks and obtain feedback quickly on the right or wrong of their actions. These organisations operate on speed as high financial stakes are involved. The large workload often result on internet competition and early “burn out”, examples surgeons, police departments.

Work-hard/Play-hard culture

Employees take few risk but obtain quick feedback, it is characterised by fun and much activity eg. estate agents, computer companies. These organisations focus on the customer’s needs which in turn tend to be highly dynamic. Games, meetings, etc. are encouraged to help motivation and produce the volume of work needed.  

Bet-your-company Culture

These employees face large-stake decisions with high risks but slow feedback is evident, leaving employees wondering whether their decisions where successful for a period of time. Eg. Oil companies, military etc. These firms tend to focus on the future and the need to invest in it. Decisions are usually made by members in authority. These firms create high quality products but operate very slowly.

 

Process Culture

In this type of culture where employees find difficulty in measuring what they do, because they encounter low risks and obtain little or no feedback. Eg. Banks, insurance companies. Staff morale is sometimes low as individual performance is hard measured however process cultures can be effective when there is a need for order and predictability.

Case Study

Throughout Johnson and Johnson Company we witness are four generic types culture. The risk associated with new products such as contact lenses, constitute high risks and feedback is quickly delivered to tell you of the product has failed, therefore representing the tough-guy macho culture. Such products as baby powder have few risks involved however the company will obtain quick feedback if such a product does not meet ones needs (work hard/play hard culture)

Managing and development of organizational culture

Organizational culture differ among firms, these different cultures can affect a firms performance immensely. Based on these observations, managers have become increasingly concerned about how to best manage the cultures of their organisations. Strong organisation culture can help implement new business strategies and achieve high levels of excellence.

• Strong organisation culture which encourages employee participation, job security and open communication results in high levels of excellence and success of their organisation are discussed in the Ouchi Framework.

• Cultural strength denotes the agreement among members of an organisation about the importance of specific values. If widespread consensus exists about the importance of those values, the culture is said to be cohesive and strong. If little agreement exists, the culture is described as weak (Arogyaswany and Byles 1987)

• People within these successful organisations take their own initiative and take risks. Companies identify their customer wants and ensure they get it.

• Toyata has imported the management style and culture that have succeeded in Japan into its manufacturing facilities in North America. The reason for Toyata’s success often have been attributed to the ability of Japanese and Type z firms to systemically invest in their employees and in their operations over long periods of time and thus to obtain steady and marked improvements in long- term performance.

Peters and Waterman researched forty-three “high performing” American companies, in which they identified attributes which characterize the cultures of successful organisations;

Bias for Action

• These organisations do not have to stick to the rule book constantly and implement the “do it, try it, and fix it” approach. Firms with this attribute often set the pace for their competitors as they have made quick decisions showing business initiative.

Close to the customer

• Once firms focus on the customer needs and wants, they will find out information on their current product, receive ideas on new products, and obtain financial information etc. once a company focuses on the customer it leads to superior performance eg. Scandinavian Airlines systems focused its culture on customer service and finally started making money in 1989 when many other Airlines were experiencing financial difficulties.

Autonomy and entrepreneurship

• Risk taking and innovation are encouraged; employees are given the freedom to be creative eg. A junior manager implements a new marketing plan to improve sales.

Productivity through people

• These companies accept that their employees are business and treat them as their key resource.

Hands on management

• Managers should not manage an organisation behind closed doors but by wandering around and taking pat in the day to day operations of the business. Philosophy and values are often tied into a business success.

Stick to the knitting

• Is the management practice in which management chooses not to diversify into unrelated businesses where they do not have the same competency.

Both these schools of thought found favour with managers in order to transform their business into a cultural success however succeeding to excellence does not always ensure success even in the medium term, change is essential. Such change includes using empowerment, total quality management, team based management etc. however it must be managed correctly in order to achieve success. There are three elements of managing organization culture- taking advantage of existing culture, teaching organizations culture and changing organization culture.

1. Taking advantage of existing Culture

Many organizations have existing cultures in which they operate, so therefore it may be easier and faster to alter employee behaviour within the organization than to change its cultural fundamentals such as history, traditions and values. Managers must be aware of what culture includes and what behaviours or actions those values involve observing and analyzing how the company operates eg. A value as “sticking to the knitting” can not be altered to accommodate a new business strategy which is economically weak due to the nature of the organization, needs to be pointed out by top management. As values are installed in employees less direct supervision is required will guide their decision making.

2. Teaching the organization Culture: socialization

Organizational socialization is the process through which employees learn about the firm’s culture and pass their knowledge and understanding on to the others. Employees become more aware of personal and organizational values through socialization programs, which also help them develop ways to cope with the differences. Through experiences people develop a method to deal with situations by observing experienced employees actions. Often organizations as expressed through the actions of its employees eg. A firm may say that employees are its most important asset but may treat employees badly. Employees accept the actual culture experienced everyday rather than the culture formally expressed.

Culture is a powerful influence on behaviour as it installs the basic values of the firm. Culture simply resists change, therefore when managers attempt to change culture; they are attempting to change people’s basic assumptions about what is and what is not appropriate behaviour in the organization. However, companies have changed their cultures form performance reducing to performance enhancing. Several elements are used to change culture.

Managing symbols

Culture is communication through stories and media. Managers interested in changing cultures should change “stories” to help implement and support new cultural values for those which support the old culture.

Case Study

SAS is an airline corporation of three nations; Denmark, Norway and Sweden. Jan Carlzon was appointed managing director of SAS in 1981 and was in charge of the task of heading the financial turnaround of the corporation. A key element of Carlzon’s approach was to centre attention on the frontline personnel who should be seen as to be the keys to success or failure for the corporation. In order to implement such a strategy, these frontline employees must be given authority to make decisions in these moments of truth without recourse to senior mangers. Carlzon, therefore delegated decision making power to the frontline personnel and made sure that employees were kept aware of how important they were for the success of the company. The message was reinforced through both internal SAS magazines and the mass media.

3. The difficulty to change

Changing a firm’s culture is a ling and tedious process. A primary problem is that upper-level managers, not matter how dedicated they are to implementing some new cultural value, often unconsciously revert to previous patterns of behaviour. Often a culture is generated which supports old values, example, managers may ask for input of ideas by its employees, but managers fail to act on these ideas. Credibility has been lost and cultural change has been made more difficult.

Case study

This happens with airline SAS as none of carlzon’s strategies have succeeded since 1984, due to lake of change.

4. The stability of change

The process of changing a firm’s culture starts with a need for change and more through a transition period where effects are made to adopt new values and beliefs. In the long run, a firm that successfully changes its culture will find that the new values and beliefs are just as stable and influential as the old ones. If a firm can change it’s culture from performance reducing to performance–enhancing, the new values are likely to remain in place for a long-time.

Conclusion

   Culture is a universal element which affects numerous areas of the organization, from ideas to supply the product to the consumer. The culture of an organization cannot be position into a specific category, but is linked to larger cultural processes within the organization’s environment. Firms need to change their culture in order to be product and suits the needs of the stakeholders of their particular business.

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