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Introduction
Organizational culture refers to the workplace environment created from the interaction of different employees within an organization. The definition of organizational culture includes the employee life experiences, education, strengths, upbringing, and weaknesses. Although defining the organization culture is the responsibility of the executive leaders within of the organization, other members including the employees also play a vital role in defining organizational culture (Inceoglu, 2002).
Other than factors such as the business strategy and structure, organizational culture is seen as the major component that enhances improved organization performance. In this regard, the management of an organization should find appropriate ways of introducing organizational culture to all the staff to familiarize themselves with the system of organization. More research has revealed that existence of a strong culture has the potential of stifling innovation and creativity within a dynamic environment. This is because people are willing to adhere closely to different routines that create behavioral inertia, uniformity, and an inward focus. Regardless of the views formulated by different researchers, the current debates and research have oversimplified the relevancy of organizational culture and have also failed to explain the influence of organizational culture in helping to increase the overall performance of a firm (Pfister, 2009). To gain a solid understanding of the value of organizational culture, this analysis discusses some of the reasons responsible for the increased interest and popularity of organizational culture amongst different organizations. The analysis includes the main objectives of creating organizational culture. Different theories to such as Schein’s theory of organizational culture are included in the analysis to show the importance of developing a strong culture in an organization.
Theories used and Discussion
Schein’s theory of organizational culture uses three levels namely Artefacts, Basic underlying assumptions, and Espoused values and beliefs to analyze the culture of an organization. Artefacts represent the culture of an organization at surface level, while Espoused values and beliefs represents the goals, strategies, shared assumptions, norms, and shared perceptions instilled by leaders and founders of an organization. The basic underlying assumptions represent the organizational culture at the base level (Smart & Paulsen, 2011). By observing these levels carefully, an organization finds it easier to determine whether employees are conducting themselves and engaging in various activities in accordance to the organization’s culture. Apart from relying on theories only when analyzing a firm’s organizational culture, it is also important to consider reasons for the increasing popularity of organization culture.
One of the major reasons that explain the current popularity of organizational culture is supported from believes that certain form of organizational culture increases a firm financial position. Organizational culture also enables companies to undertake activities in other areas in an effective and efficient manner, and eliminates unnecessary use of organization resources. Many practitioners and academics assert that the organization performance depends on the degree or level to which the cultural values are shared in an organization. The assertion that organizational culture has strong relationship with a firm’s performance is based on the perceived role that outlines the contribution of culture in helping a firm to gain competitive advantage (Antonsen, 2009).
The extent to which organizational culture increases the competitiveness of a firm depends on the ability of that particular culture to define the firm’s boundaries in a way that facilitates or enhances individual interaction or being in a position to limit the scope for processing information up to appropriate levels (Smith, 2011). Some theorists believe that sustainable competitive advantage comes as a result of the development of organizational competencies that are not only superior, but are also imperfectly imitable. In this regard, it is asserted that the uniqueness or the quality of a firm’s culture makes it a possible source of gaining competitive advantage over other close competitors. Indeed, a good number of people ascertain the need for different organizations to make maximum use of all the existing advantages or opportunities created through organizational culture, other than placing much emphasis on the tangible side of the firm (Hopkins, Hopkins & Mallette, 2005).
It is also important to comprehend that majority of the previous researchers who developed a positive relationship between organizational performance and culture is in one way or another are always equivocal of their claims. A good illustration of this view is given by Uddin, Luva & Hossain (2012) who argue that many successful organizations are usually distinguished from poor performing organizations because of their potential to promote and use cultural values that conform to the selected performance strategies developed by the organization. Although some of these views have received initial popularity, the main tenets underlying this argument have faced extensive criticism. Some few years ago, most of the researchers engaged in studies to establish the relationship between performance and organization culture concentrated on establishing the link between the characteristics of culture and the firm’s performance. In particular, these researchers have found that culture can have a positive link with improved organizational performance in instances where culture is able to accommodate varying environmental conditions. Apart from being strong, this culture must possess unique features that cannot be imitated easily.
More recently, the findings from research conducted by Ke & Wei (2008) show that the association or the link between a firm’s performance and culture is tenuous. The growing understanding of competitive advantage that is based on resources suggests that the level to which organizational culture is theorized to establish a sustainable advantage depends on the sustainability, rarity, and value of the culture in question. As explained by Wang, Su & Yang (2011), it is true to say that literature surrounding organizational culture as argued by recent researchers is diverse and satisfactory. Much of this diversity is based on the claims that organizational performance is linked to culture. Though some theorists doubt the universality of the link between culture and performance, there is sufficient evidence that suggests or proves the strong link that exist performance and organizational culture.
As part of the objectives of creating organizational culture, many organizations tout their corporate culture by ensuring that all employees are happy of whatever activities they are engaged in, and are provided with a better working environment. Although the specific objective of developing an organizational culture depends on the organization, it should be understood that most organizations place much emphasis on productivity, or promoting empathy and increased innovation amongst the firm’s employees. In any company, culture is amongst the consistent things witnessed even in times when the organization is carrying out major changes of key personnel (Howard-Grenville, 2007).
Objectives of organizational culture
The main objectives of creating organizational culture includes helping an organization to create legacy, understand stakeholder interests, foster an innovative atmosphere, and realize vested interest in terms of company growth. In regard to legacy creation, it is worthy to note that the existence of an entrenched company cultures helps an organization to continue operating even after the key staff within the organization have left. This is supported by the fact that a firm culture reflects the core values of the whole company. Through understanding stakeholder interests, the culture allows employees to keep aside their assigned roles and responsibilities as a way of respecting or adhering to the suggestions given by the company stakeholders. In companies where the top management is able to explain to the subordinates and other company staff on the specific customer requirements stands a good chance of increasing its overall performance and other goals or targets set by the company.
The objective of fostering an innovative atmosphere makes it easier for companies to develop techniques that contribute towards the innovativeness of its employees, and this enables employees to design or produce high quality products and develop a culture that enhances creativity. Organizations can achieve this culture objective by creating flexible scheduling and home-based employee programs. If possible, firms should encourage their employees to work very close with one another by using multi-disciplinary teams and open concept office designs. Lastly, having a culture of success in an organization makes it easier for employees to acquire vested interests and eventually contribute towards the growth of the company. The major building blocks responsible for culture success include increasing the professionalism level amongst company staff and improving various accountability methods such as providing company managers with accurate and consistent reports (Pohlman & Gardiner, 2000). Since the main objective of many organizations is to realize high level performance, providing accurate and consistent reports helps the management to determine how differences processes are being conducted. By monitoring these processes, managers are able to identify any deviations and make the necessary changes.
Strengthening organizational culture
According to Ghuman & Aswathappa (2010), a firm’s culture can also be strengthened by maintaining a stable workforce because the culture of most organizations is often embedded within the employees’ minds. This is an indication that different organizations reliable on their respective workforce reinforce and make communication that relates to the dominant values and beliefs. As Flamholtz & Randle (2011) explains, the culture of an organization can disintegrate in times when the company is recording high turnover rates, or during precipitous downsizing. The corporate culture of a company can also weaken in times when an organization is experiencing rapid mergers or expansion. This is based on the fact that new company employees require a substantial amount of time to learn and accept some of the corporate assumptions and values. It is because of this reason that some companies find it worthwhile to maintain their culture intact by ensuring that employment growth is moderated while correcting turnover problems. It should be understood that engaging this process effectively is not only helpful to the new employees, but also provides benefits to older employees and contributes to improved company performance.
Looking at how selection and socialization of employees contributes to strong company culture, it should be noted that this process helps company managers or the human resource personnel to establish whether the values of potential employees are compatible or conforms to the existing company values. Ventura, a clothing company located in California has successfully relied on this method to strengthen the company’s corporate culture by ensuring that all the new people hired into the company as employees have values, assumptions, and beliefs that correspond to the company culture. Having a good fit of both organizational and personal values enables company employees to incorporate the existing corporate culture in all their operations. In addition, an effective organization fits does not only improve the overall job satisfaction amongst individuals, but also facilitates organizational loyalty. This is explained by the fact that new employees whose values conform to the current corporate culture of the company are more likely to adapt to how the organization operates (Nelson & Quick, 2012). According to Baldegger (2012), having such employees in an organization increases the rate at which a company achieves it set targets and goals, and this eventually improves the overall performance of the organization.
According to Banerjee (2008), organizations should not only focus on hiring people with values similar to that of the company. There is a dire need for organizations to establish and maintain a very strong culture by providing the new employees with an opportunity to interact with other existing employees. Through organization socialization, people find it easier to gain a solid understanding of the expected behaviors, social knowledge, and the values that employees should have to enable them assume their various roles and responsibilities in the company. Communicating the dominant values of the company also helps new hires and job candidates to internalize or understand these values deeply and quickly.
Conclusion
Conclusively, it is apparent that the findings of various studies on organizational culture and organizational performance have established strong links or association between organizational culture and performance. Most importantly, these researchers have found that organizational culture can have a positive link with improved organizational performance especially in instances where company culture is able to accommodate varying environmental conditions. Companies can also improve the overall business performance by formulating clear objectives that show the significance of creating organizational culture.
Implications, Limitations and Suggestions
The implications of developing an effective organizational culture include the ability a company to create legacy, understand stakeholder interests, foster an innovative atmosphere, and realize vested interest in terms of company growth. On the other hand, a weak organizational culture makes it difficult for employees to subscribe to the organization’s shared values, norms, and beliefs. In addition, the employees are not able to identify the goals or the core values set by the organization.
Poor relationships between employees and the management is a major limitation that hinders the development of an effective organizational culture. A weaker culture can also result from the inability of the organization to develop clear objectives and goals that provide guidance on how to undertake different operations to realize the desired company performance.
References
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