Organisational culture and structure Essay

Culture, HRM and ethics.Understanding Organisational CultureInterest in organisational culture began in the early ’80s when management gurus such as Tom Peters began to focus on culture as a differentiator of successful organisations. In the past twenty-odd years interest in culture has increased as case studies have identified a strong link between organisational culture and its performance.

Managers in general and HR practitioners in particular, must appreciate the extents to which culture influences organisation. Understanding and managing the implications of the nature of human relationships in the organisational context is critical for HR managers so that they can constantly develop practices and policies that foster the culture that the organisation wishes to prevail (eg. Zappos and Tony Hsieh).What is organisational culture?Organisational culture is the personality of the organisation, ‘the way we do things around here’. Culture refers to the underlying values, beliefs, traditions and codes of practice that employees share.Management psychologist Schein describes culture as a phenomenon that surrounds us all. Culture according to Schein is ‘A pattern of shared basic assumptions that a group learns as it solves problems’.

It can be seen through:1. Behaviour: language, customs, traditions2. Groups norms: standards and values3. Espoused values: published, publicly announced values4. Formal Philosophy: mission5. Rules of the Game: rules to all in organisations6.

Climate: climate of group in interaction7. Embedded skills8. Habits of thinking, acting, paradigms: Shared knowledge for socialisation 9. Shared meanings of the group10.

Metaphors or symbolsIn general terms culture can be defined as the physical aspects of society eg. art, music. Culture also means the values the citizens of that society share.It’s important to remember that, if the management’s stated values and beliefs differ from what manager actually value and believe, this will be reflected in their behaviour. This could possibly lead to a concept of corporate hypocrisy.Why is culture important?Evidence shows that organisations who have strong cultures are capable of increasing revenue, profitability and shareholder value.

Likewise organisations with weak cultures find it difficult to change and adapt to market demands. Many ex-monopolies in the public sector for example struggled to respond to changing consumer patterns. In the early 1990s IBM recognised that it needed to fundamentally change its culture and self belief that it was invincible in the marketplace. Its then somewhat arrogant culture had prevented it from recognising the rise in demand for personal computers and it was in danger of failure as a company.With the growing increase in globalisation, organisations face far more competition than ever before.

Having a strong culture which supports and underpins an organisation’s brand proposition helps businesses create and maintain competitive advantage – witness organisations such as Sony, Disney and Orange.Increasingly business leaders are recognising that the concept of organisational culture is particularly important when it comes to managing organisation-wide change. If change is to be deep seated and long lasting within an organisation, it needs to happen at a cultural level. Thechallenge for many organisations is how to change existing cultures as culture is rooted deep in the unconscious but represented in behaviour and practice.Different types of cultureThe best way to begin a culture change process is to better understand the culture in which you are currently operating. If you don’t understand and manage culture, it will manage you.

There are a number of different types of culture, just like there are many different personalities. Here is a selection of theories of culture types:1. Charles Handy points out that there are three cultural types:Power cultures with a single power source. This may be an individual or a group who typically controls via a web of communications how people are rewarded.Task cultures based on flexible matrix structures preserve a strong sense of purpose and promote teamwork.Role cultures which predominate typically pyramid structures and where hierarchy and regulation abound.2.

Jeffrey Sonnenfeld identified the following four cultural types:• Academy culture typified by stable environments such as hospitals, universities, large corporations where employees are highly skilled and tend to stay with the organisation.• Club culture typified by military organisations where employees work their way up the organisation. There is a strong sense of fit with the group and organisations promote from within, valuing seniority• Fortress culture where specialised skills are promoted and where organisations respond to market needs by downsizing or reorganising for example in financial services and car manufacturers• Baseball team culture where employees are ‘stars’ with skills that allow them to readily transfer from one firm to another e.g. advertising agencies, investment banking.The Growth of the Culture FactorThe 1980s experienced a great interest in organisational culture as the key to organisational effectiveness. For organisations to be successful, they need to have strong organisational culture.

Most management gurus recognise that changing culture is a long-term project. It is a process that can be undertaken bottom up but ultimately very much depends on the leadership of the organisation. This group shapes and reinforces the way that the organisation functions.

It is generally accepted that to bring about culture change, all aspects of the organisation need to change.Peters and Waterman (1983) in their book “In Search of Excellence” identified a strong culture as one of the characteristics of the “excellent” organisations they studied. They used “culture” to explain the highly publicised success of Japanese organisations compared to those in the United States. The dominant culture of the typical Japanese enterprise was one which: valued the people within the organisation very highlyvalued action rather than formal systems or structureswas “customer driven”.They borrowed 7 ‘S’ framework of Pascale;Athos (1981) to help explain the differences between the Western and Japanese management style.1.

Structure – there are many permutations of structure that an organisation can adopt:• Centralised• Decentralised• Hierarchical• Flat• Team based• VirtualEach has its pros and cons. For example many layers of hierarchy can block a leader’s access to customers and vice versa. Middle managers may ‘filter’ reality and present leaders with the picture of customer satisfaction which they wish them to see. The result of this is not only leaders who lack customer focus, but also employees who are fearful of ‘stepping out of line’ or taking responsibility for the customer.2. Strategy – the organisational plan to overall course of action to allocate scarce resources.

strategy of an organisation shapes its structure.3. Systems – the systems, which organisations use to interact with their customers, need to be designed with the customer in mind.These 3 S’s are familiar to most people concerned with organisations in the West. Pascale and Athos (1981) characterised these as “hard” S’s: they regard people in the organisation as secondary to the structure. In their view, the remaining 4 S’s are also highly important.4.

Super-ordinate Goal or Shared values – the underlying philosophy and guiding concepts, which set the tone for the organisation. If you discover the passion of the CEO, you will discover the organisation’s real priorities. Is there fundamental passion towards – making money?- staff relationships?- customer orientation?These are important issues to get to the bottom of. What measures are used in reward systems? This often shows the reality of what is important to theorganisation.4. Style – the distinctive style or modus operandi of the management and workers. How leaders behave influences the behaviours of their staff.

The most effective leaders are those who are sensitive to people’s needs.4. Staff- the number, age and demographic profile of employees.

6. Skills – the particular knowledge and abilities of the individual worker. Many customer orientated organizations such as the department store Nordstrom in the US emphasize the attitude and interpersonal skills needed to interact effectively with customers. Role, skills and knowledge can be taught, whereas many of the less tangible, empathetic interpersonal skills involve being able to create vital rapport with customers.Peters and Waterman produced their own framework of how organisations can be successful, becoming excellent, while also ensuring ongoing innovation: A bias for action – doing something, not just ongoing analysis Customer focused – know what your customers want and meet their needs Autonomy and risk taking – encourage entrepreneurship and innovation within your workers Productivity through people- the people resource is the most important within an organisation Hands-on, value driven – Managements by observationStick to the knitting – Know your businessSimple form, lean staffSimultaneous loose-tight properties – being loose enough to allow autonomy to individual managers, but tight enough to ensure that its core values (eg. customer service) are maintained.Peters and Waterman’s book had the effect of encouraging top management to rediscover the importance of the people within their organisations and customers outsideDeveloping Organisational Culture1). Torrington et al (2005) – organisations have both structure and culture.

The structure is the framework that can be portrayed and altered at will The organisational culture is more difficult to quantify and thus more difficult to change Differences between Structure and Culture:Structure is firm; culture is softStructure is clear, culture is intangibleStructure is about systems to which people have to adapt; culture is about norms and values that people have in common Structure is about distribution of authority; culture is about how people work together.2). Schlein highlighted the importance of the leader:What leaders pay most attention to – staff should know leader’s priorities How leaders react to crises and critical incidents – the leader must back up views with action Role modelling, teaching and coaching by leadersCriteria for allocating rewards and determining status – how organisation decided on pay increases and other rewards Criteria for selection, promotion and termination – those who are not likely to fit the organisation’s culture, must not be hired in the first place.Culture and Organisational Effectiveness:The idea of a strong culture assists overall organisational effectiveness is supported by 3 main arguments. It is thought that strong culture: provides a frame of reference, which allows decision-making to be consistent in a decentralised organisation improves the motivation of workersimproves performance levels by engendering a sense of pride in the workers regarding org. goals.Another approach is by Meek (1988) who proposes that:Culture is something that organisation “is” not “has”Culture is not something to be created, changed or manipulated. It emerges form the collective interactions of individuals and groups within the organisation Meek’s points out dangers of strong cultures and concerned withthose who do not support the dominant culture Meek argues that the reality of organisational life is different social classes between managers and workers.

Conclusions• Organisational culture is the glue that holds the organisation together.• Culture is important as a strong culture has proven to underpin high performance• There are many different types of culture which can exist even within the same organisationChanging organisational culture requires a long term approach. It involves reassessing and making changes to all aspects of the organisationManagers in general and HR practitioners in particular, must appreciate the extent to which org culture can be changed. Understanding and managing the implications of the nature of human relationships in the org context is critical for HR managers, so they can constantly develop practices and policies that foster the culture that the organisation wishes to prevail.Exam questions:Q. Outline the concept of organisational culture and describe how this can be effectively managed with particular emphasis on the role of the HR manager.

IntroductionInterest in organisational culture began in the early ’80s when management gurus such as Tom Peters began to focus on culture as a differentiator of successful organisations. In the past twenty-odd years interest in culture has increased as case studies have identified a strong link between organisational culture and its performance. Managers in general and HRpractitioners in particular, must appreciate the extents to which culture influences organisation.

Understanding and managing the implications of the nature of human relationships in the organisational context is critical for HR managers so that they can constantly develop practices and policies that foster the culture that the organisation wishes to prevail (eg. Zappos and Tony Hsieh).What is organisational culture?Organisational culture is the personality of the organisation, ‘the way we do things around here’.

Culture refers to the underlying values, beliefs, traditions and codes of practice that employees share. Also org. culture can be defined as the characteristics, traditions and values that employees share.

Values are basic beliefs about what you should do and what is or is not important. Factors such as organisational geographical location, nature of org business, the management and its styles of handling the employees, org clients and external parties, org goals and objectives, sex and ethnic grouping of employees, etc all have an impact on formation of organisational culture.The 1080s experienced a great interest in organisational culture as the key to organisational effectiveness. There were a number of theories focusing on development of strong organisational structure, such as: 7 S’s framework of Pascale and Athos (1981) used by Peters and Waterman to distinguish the difference why Japanese org-s were more successful than Western ones. Peters and Waterman framework of “excellent” organisationSchein’s theory of “Importance of the leader”Management of organisational cultureIn dealing with the management of organisational culture, managers and HR managers have to remember that, firstly, it is necessary to identify as fully as possible the attributes of the existing or new target culture — the myths, symbols, rituals, values and assumptions that underpin the culture.Subsequently, action can be instigated in any of several key points of leverage:recruitment, selection and replacement — culture management can be affected by ensuring that recruitment and selection process requires close scrutiny and those who are not likely to “fit” the organisation’s culture must not be recruited in the first place.

New appointments should strengthen the existing culture/s or support a culture shift. Removal and replacement should be used to dramatically change the culture; socialisation — induction and subsequent development and training can provide for acculturation to an existing or new culture and also for improved interpersonal communication and teamwork, which is especially critical in fragmented organisational cultures; performance management/reward systems — can be used to highlight and encourage desired behaviours which may (or may not) in turn lead to changed values; leadership and modelling — by executives, managers, HR managers, supervisors can reinforce or assist in the overturning of existing myths, symbols, behaviour and values, and demonstrates the universality and integrity of vision, mission or value statements; participation — of all organisation members in cultural reconstruction or maintenance activities and associated input, decision-making and development activities is essential if long-term change in values, and not just behaviours, is to be achieved; interpersonal communication — satisfying interpersonal relationships do much to support an existing organisational culture and integrate members into a culture; effective teamwork supports either change or development in and communication of culture; structures, policies, procedures and allocation of resources — need to be congruent with organisational strategy and culture and objectives.ConclusionManagers in general and HR practitioners in particular, must appreciate the extent to which org culture can be changed. Understanding and managing the implications of the nature of human relationships in the org context is critical for HR managers, so they can constantly develop practices andpolicies that foster the culture that the organisation wishes to prevail.

Managers and HR practitioners have to be mindful that changing organisational culture requires a long term approach. It involves reassessing and making changes to all aspects of the organisation.There are no definitive answers to questions about the most appropriate way to change or maintain an organisational culture in order to provide for success or, indeed, whether change or maintenance is required in a given context — to answer these question is the essential challenge facing the strategic leader.

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