The Importance of Culture in an Organization

University Degree Business and Administrative studies

Culture in an organization is very important. It is a contributing factor that can lead to the success or failure of a business. For example, the operations at the General Motors’ plant in California were struggling and production was below expectation. The plant had many conflicts amongst its workers and a high absenteeism rate. As a result, the plant was shut down. After a joint venture with Toyota, the plant reopened and the majority of the former workers were rehired. This time the plant were producing cars about half the time it took their other facilities to produce the same numbers of cars. It is believed one of the reasons for this successful turnaround was the improvement of the culture in their organization. The workers were maintaining their machines and ensuring the quality of their work. As a result, workers were more productive and the plant was successful. (Staw, pgs. 307-308)

According to Wikipedia.org, “Culture generally refers to patterns of human activity and the symbolic structures that give such activity significance.” Culture is also referred to as, “a whole product of an individual, group or society of intelligent beings.” (Wikipedia.org) Organizations are developed from these symbolic structures and consist of human activities. Culture also acts as a form of control system for the company. A control system is a way of monitoring the worker’s performance. For example, when a supervisor pays close attention to his workers, he can influence and ensure that everything is going according to plan. Culture is a form of a social control system that can be formed into a certain way. Caring about those we work with is a form of control whenever we are in their presence. (Staw, pg. 309) With social control, we often feel as though we have great autonomy, even though we are being somewhat manipulated to act and perform the way others wants us to act. Howard Schwartz and Stan Davis refer to culture as the central norms that may characterize an organization. (Staw, pg. 309) This would include the attitudes and behaviors that are acceptable within the organization. For instance, in most organizations it may be impolite to confront someone in front of a group of people. In this case, it is best to wait until you can confront that person privately. But in other organizations, it is encouraged to confront that person immediately, even in front of others. Even though both companies have different styles or attitudes and beliefs, they each incorporate a culture that might be best suited for their company’s needs. (Staw, pgs. 308-310)

Culture is important to an organization, as it can increase or maintain the employee’s loyalty and dedication to a company. In addition, culture can also affect the strategy that is implemented within the company. For example, the three largest companies that distribute and manufacture technology are AMD, Intel, and National Semiconductor. Even though they all sell products in the same industry, they each have their own unique strategy and culture that influences the way they compete in the industry. AMD’s strategy is to offer good service and focus on the marketing and selling of a quality product. In addition, they respect their employees and value hard work, diversity, responsibility and embracing their success. (AMD) Intel focuses on being leaders in innovation and creativity. They were one of the first companies to offer a health plan that allows the employees to manage their own expenses which gives the employees more responsibility. Responsibility is one thing that Intel values strongly. Also, Intel encourages their employees to participate in programs that are good for their community. Intel has chosen to create products that bring value to the world and to the communities around them. Intel’s culture and strategy are two factors that contribute to their success in the technology industry. (Otellini) National Semiconductor focuses on selling cost leadership. They have a cost control that is stringent and culture that is more concerned about the numbers than anything else. Their strategy has a sense of brutality which is why they are called, “Animals of the valley.” It takes the people, structure and culture for a strategy to be successful. But sometimes strategies in an organization change and when they do, their culture must also change. If a company has a strong culture, they may gain a competitive advantage over their competitors. (Staw, pgs. 312-314)

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Google, in Mountain view, California, was rated the number one place to work for in 2007. Google’s culture is very exciting and rewarding. Even people, who don’t work at Google, want to see what it’s like to work there. Google has 11 gourmet cafeterias that have their employees craving to eat on a daily basis. Stacy Sullivan, the HR director enjoys the Irish oatmeal with fresh berries at their Plymouth Rock Cafe. Joshua Bloch, a Java expert loves to eat their roast quail at their Café Seven. Sergey Brin, co-founder of Google, tries to keep a healthy lifestyle at Google but with food sources no more than 150 feet away it is difficult. The food is so good, every time at a board meeting, Art Levinson, an executive at Genentech stays at Google until 10:00 p.m. to get a free meal. The food is just one of many perks of becoming an employee at Google. There is a place where you can drop off your laundry, get an oil change and get your car washed. In addition, there is a fitness center and a place to get your haircut. Google even has a pool table in their employee lounge. Furthermore, Google has five doctors on site that gives free checkups to their employees. If you are a new employee and want to meet some new people, there is a TGIF party every week where people can meet. Google’s employees seem to be the happy-go-lucky people on the outside, but type A on their inside. Of course, it is not all fun and games at Google. Google’s executives would like to hear any ideas that their employees may have and would like to discuss it. For instance, there is a pajama day at Google but not all employees are open to be involved in it. So a group of workers dressed up in tuxedos during that day to rebel against it. With an income over 10 billion dollars, it is not hard for Google to have such a lavish lifestyle at work. Because of this type of work environment, their employees are so committed; they sometimes don’t want to go home. For example, there is a team of ten people working on a secret project in a conference room where music is playing to make work more relaxing. This is usually done around 5:00-7:00 in the evening. “Google's mission is to organize the world's information and make it universally accessible and useful.”(Google) Not only Google and its employees do this very successfully but they enjoy doing it. ()

Genentech is another company that has an academic like atmosphere and ranks the second best place to work for. They also hire bright, intelligent and energetic people in the market and encourage their employees to speak freely. Of course, their contribution to their organization is rewarded by stock options, paid sabbatical programs, supreme health coverage and an onsite day care center for your children. Genentech uses minimum guidelines and rules which allows their employees to express themselves freely. Genentech is a team working environment that shares great rewards and dedication in getting things done. Another key component of Genentech’s culture is diversity. Their work environment is where a diversified range of skills, knowledge and individual performance is valued and integrated into their strategy. As a result, they are quite successful and employees are loyal and committed. (Boyer)

The Walt Disney Company is another company that is successful with an interesting culture and a winning strategy. Disneyland is known as “The happiest place on earth.” The Disney Company is a business of feelings that is filled with joy and laughter. Any presence of insincerity, rudeness, boredom or any type of unhappy feeling can damage a sale. Disney’s employees are well-screened and carefully picked. Disneyland ride operators are young white males and females with straight teeth and good health. Men must be groomed with no facial hair and well dressed with their shoes polished and the women are only allowed to wear a small amount of makeup. The ride operators are under specific guidelines and procedures that must be followed with little interaction with their guests. If a guest has a problem at one of their theme parks, they are told to call city hall. Their duties consist of performing live narrations, customer control and to operate the transportation vehicles in a proper manner. A part of Disney’s image is the look and feel of the employees and the Disneyland culture itself. If you ever been to Disney, you may have noticed how happy and cheerful the workers are. One of the goals of Disney’s employees is to lift up their guests’ spirits. During the employees’ off time, there are many activities for the employees to participate in, such as a softball game, volleyball game, canoe racing, and company picnic. Most of the young, college students that work at Disney live in low budget apartments that reside around the park. So when the sun goes down, some employees may get together and throw a party. Therefore, it is not unusual to see one employee marrying another employee. The dating scene is quite common on Disney’s grounds. Disney’s employees follow three standard rules: (Staw, pgs. 294-305)

First, we practice the friendly smile.
Second, we use only friendly and courteous phrases.
Third, we are not stuffy-the only Misters in Disneyland are Mr. Toad and Mr. Smee.

The Disneyland culture is reinforced by the employee’s actions and behavior. Of course, the culture is not the only factor that contributed to Disney’s success. With the creativity and dedication from their marketing, engineers, and Walt’s vision & dream; they became the primary choice for family entertainment. Furthermore, they ranked #1 in being the best place to launch a career, according to Business Week of 2006.

Because The Walt Disney Company has a winning strategy and pleasant culture, the Disney Institute was created to show other businesses how to apply the same tools and strategies that are being used at Disney’s resorts today. The Disney Institute has helped hundreds of organizations in improving their existing business processes and has helped them get much better returns on their investment by incorporating the same winning businesses strategies as Walt Disney. Their program trains businesses in the following areas: loyalty, people management, quality service, organizational creativity, team experiences and other custom strategies. (Disney Institute)

Orion South, Inc., my current employer, may not have a culture that is lavish or exciting as many other companies but they are also a stable and successful business. Orion South, Inc. is the administrative branch that operates its two subsidiaries, namely Reagan Equipment Co. and American Warrior. American Warrior sells gas compression packaging and leasing and Reagan Equipment Co. distributes all other types of power packages. The people that work here are friendly, courtesy and have different levels of expertise. The managers, supervisors, and co-workers are not demanding. There is minimal supervision which allows the employees to express themselves freely. The supervisors are very helpful. If there is something you don’t understand, just ask them what you don’t understand. In addition, if you need additional training on something, they will provide it for you. Like many other companies, they encourage two-way communication. They want to make sure you understand about what’s happening around you. Also, if you know a better way of getting the job done, they would like to hear it. Your idea may improve their service to customers. There is a variety of personalities at Orion South that has the ability to get the job done. They have a balance number of type A and B people. Therefore, Orion South, Inc. tends to have a laidback type of environment. Even though this is a laidback place, I think they lack in employee motivation and commitment. For example, as I mentioned earlier in my reply to another classmates’ paper, I was getting bored at my job and was not being motivated. My supervisor was procrastinating in giving me specific directions. He knew where he wanted to go with the project but he wasn’t ready to begin it because he didn’t have all the information together. So the directions he gave me were to look at other websites and get some ideas on how to redesign their current website. My supervisor had brainstormed some ideas but the instructions were not specific enough to follow. In addition, managers, co-workers and the other service companies are not that responsive. For instance, I have been waiting for five days now for some feedback from a company that hosts our website regarding maintenance issues. I tend to wait a day or two for a response about most situations that might have occurred which may hold up my work in progress. The work environment here is unexciting and boring. Not to mention there aren’t much rewards given in this organization. As a result, I am making plans to work elsewhere when I finish the graduate program or sooner.

As you can see, culture in an organization is crucial to its success. If an organization has a strong culture than it is likely their employees will have a high level of commitment and loyalty. Also, they will have a low employee turnover and absenteeism rate. Culture inspires, brings employees together and educates them. Furthermore, it is a form of social control that influences the way people act and behave in an organization.

References:

, Adam, Google is No. 1: Search and enjoy, Jan. 29, 2007

Google

AMD

Otellini, Paul S, Social Programs and performance, 2004

Boyer, Herbert, Ph.D., Genentech Co-Founder

The Walt Disney Co.