Interaction in Organization Culture and Organizational Effectiveness
Students today we shall learn about the Organization Culture and Organizational Effectiveness.
Does a certain pattern of culture lead to more effective performance? This question has interested a number of researchers and they have tried to identify the cultural components that lead to high productivity and satisfaction. Srivastava (2001) collected data on 150 executives from 6 private sector organizations through structured interviews. Using average as a cut-off point, 4 and 2 organizations were classified as having strong and weak cultures respectively. Organisations with a strong culture as compared to those with a weak culture showed better sales, reserves, and profit after tax for the last three years.
In another study of Organizational Effectiveness , Tripathietal (2000) collected data on 200 middle – level executives from to public and private sector organizations. They filled up questionnaires for measuring organizational culture and organizational commitment. Their results show that a participative organizational culture correlated significantly involvement, while a manipulative organizational culture and Organizational Effectiveness resulted in more in loyalty with individuals.
Sectoral differences in the cultures of public and private organizations also make a difference. They differed in terms of collaboration, creativity, adaptability, code of conduct, customer care, cultural nurturing, role clarity, and unity in diversity. Private sector managers scored significantly higher on these dimensions as compared to their counterparts in the public sector (Koteswara Rao and Srinivasan, 2001).
Organisation culture and national culture
Organisation culture is receiving considerable attention from researchers and managers alike who consider it to be a socializing and creator of organizational climate. They assume that organizational culture can override national culture and in a multinational organization, people belonging to different cultures can assimilate. The findings of Hofstede (1980) of a multinational organisation operating in forty countries proves that only 50 percent of the difference in employees‘ attitudes and behavior can be explained by the national culture of the employees, but its contribution in explaining their behavior is much more than their organisational role, race, gender or age. Laurent (1983) conducted research on organizational culture in a multinational corporation which had subsidiaries in 10 countries. He repeated his study to find out if employees working for the same multinational corporation would have greater similarities than their colleagues employed domestically (nationally). He found that employees belonging to one culture not only maintained their cultural differences but also enhanced them. Interestingly, differences among managers often different countries working in the same multinational corporation were higher than those of managers belonging to ten different countries and working in their native countries.
In order to validate his results, Laurent replicated his research in two more multinational corporations operating in the same nine Western European countries and the United States. The results obtained were the same as in the earlier study. His results show that organizational culture does not diminish the influence of national culture, rather it accentuates the differences in national culture when people belonging to different nationalities work in one organization. Hofstedeetal (1990) in their study of 20 different organizations in Denmark and Netherlands found that organizational culture explains the considerable variance in the values held by the employees. [ Organization Culture and Organizational Effectiveness ]
Emerging Trends in Organisational Culture
Cultural diversity is a part of organizational life. In the present business environment, it cannot be ignored. The question arises how to manage it?‘ When a manager focuses attention on cultural differences, it causes problems as it is often confused with evaluation of a culture. Judging organizational members, clients, and others based on cultural differences can result in offensive, inappropriate, ethnocentric, sexist, or racist attitude and behavior. But if the culture differences are recognized with a view to managing them, it would minimize the problems and maximize the advantages of cultural diversity. Culture diversity can be managed effectively by developing synergy among members to function as teams. This can be done by forming groups with members of diverse cultures and providing them with the structured learning experience and adequate training. Some of the emerging trends in recent times are discussed below. [ Organization Culture and Organizational Effectiveness ]
Business Process Re-engineering and Organisational Culture
A number of companies during the 1990s have gone through a process called ‗business process reengineering‘ (BPR), to dramatically improve their efficiency, performance, and customers satisfaction. According to Hammer and Champy (1993) who have popularized this concept, reengineering is the fundamental rethinking and radical redesign of business process to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed.‖ Thus BPR involves changing policies, control systems, and technologies, business practices along with a creative destruction of old ways of thinking and operating. Many organizations use Mckinsey‘s organizational model where BPR impacts six out of the seven dimensions for organizational.
Emphasis Of Quality
Most people like building a quality product. It‘s natural to want one‘s labors to produce something of quality and beauty. That might be one reason why workers tend to support quality efforts if they see them as being sincere.
Chrysler‘s steps to improve quality started with calling in customers, suppliers, mechanics, and assembly line workers early in the design process. They continued by surveying all customers and basing dealer incentives on quality and support. The dealership rating process was improved at various points. Complaints were followed through, and negative surveys were returned to dealers for resolution (however, many dealers do not follow through on this valuable feedback). In the end, the Five Star process was implemented because other dealer quality efforts had failed; cultural change is very challenging when you‘re dealing with a large number of geographically diverse, independently owned companies.
The strategy did not call for quality to be the number one objective from day one; first, the company had to overcome its reputation, newly gained, for lack of product innovation. The Viper, Intrepid, Ram, and Neon did this quite well. The first vehicle to have quality as its primary design goal was the 1996 Grand Cherokee. This theme has carried forward to the present; the clearest example is the 2000 Neon, where nearly every change was aimed at increasing reliability and perceived quality.
It is still worth noting that even the original 1995 Neon was a far higher quality car than its predecessors if you take away three poor decisions: using lower-cost exhaust couplings, lower-cost head gaskets, and in-house-designed frame-less windows. The first two decisions were reportedly made directly by Bob Eaton, overruling quality-minded engineers. Without the head gasket and window problems, the Neon would probably have a far greater reputation for quality – and far greater sales. Even with them, and the warranty work they caused, they still were profitable.
The best examples of the quality emphasis are probably the Chrysler PT Cruiser and Jeep Liberty; both have consistently appeared at or near the top of the quality charts, beating many Japanese competitors.
Applying Cultural Changes to your Organization in Organizational Effectiveness
Cultural changes take time, and the process may be bumpy. Some people get used to it quickly, and other people take more time. Cultural changes may take a long time in a larger business. At Chrysler, they started with engineering, moved on to customer service, down to the dealers, and so on. This made for some strange experiences for those who dealt with the company during the transitional times. Certainly, many in the press wondered why Chrysler, in the midst of heavy losses, was spending billions on new buildings and research. Their answer did not come until years later when Chrysler regained its billions and a few extra as well.
Rensis Likert suggested that major changes could take two or three years before the results showed. The lag time may be shorter if your commitment to the program is deep and shows clearly; if your vision of what your business should look like is clear; and if all of your actions are consistent with this vision. For example, at advertising giant Ogilvy & Mather, posters and cards are issued to each employee with clear, colloquial statements on ―how we do business‖ (signed by David Ogilvy). At Chrysler, the pace of change was slowed by structural problems and by the jaded viewpoints of many industry insiders. Another problem has been the onset of complacency, as winning products, record profits, and high sales erased the emergency‖ atmosphere that contributed to the speed of change.
While simple cost-cutting may show faster results, the profits don‘t stay for long. The cost-cutting programs of Roger Smith and Richard Stempel resulted in the biggest losses in GM‘s history, while the cultural change programs of Chrysler stopped the company‘s losses and increased its market share for the first time in years. Chrysler‘s own cost-cutting after the takeover resulted in problems getting new products developed and produced, and do not appear to have helped profits since sales also fell. You can‘t make a tree grow larger by cutting the roots.
Cultural changes must often be spearheaded by one or two people with strong ideas. This may be the head of the business, a consultant, or a designated executive or team. The best results seem to be achieved when there is a firm commitment from the top, which is communicated directly to each and every person in the business.
The accessibility of top people is a powerful incentive for workers to feel that they are part of the company. Often, if workers know they can walk into the president‘s or owner‘s office and be greeted with their attention and respect, they will work much harder to make that vision a reality. This one step may help to save a great deal of money, as workers may feel more free to bring in suggestions, and the executive may be more likely to try it out…sometimes with quite surprising results. [ Organization Culture and Organizational Effectivenes ]