Posted at 10.04.2018
This academic essay is regarding to the importance of organizational culture to a knowledge of strategic management. Organizational culture is one of quite elements of the tactical thinking and it can impact on company's employees, customers, suppliers and other different targets. The owner of the company can create their own strategy on the position of unique organizational culture with a competitive space. It also requires how organizational culture influences its tactical decision, options and activities. The purpose of this essay is to explore the partnership between organizational culture and business strategy, and use unique organizational culture to make powerful strategies and become its competitive advantages in current competitive environment, then make organizations and companies successful.
'Culture of an organization refers to the unique settings of norms, beliefs, ways of behaving etc that characterize the manner in which groups and individuals incorporate to get things done' (Eldridge and Crombie, 1974). It also can identify that the set of important assumptions that people of a business share in common. There is other classification of the organizational culture includes assumptions, adaptations, perceptions and learning. Good examples such as Walt Disney's or Nokia's, they have three layers. First covering includes artifacts and creations, such as annual report, a publication, wall structure dividers between staff and home furniture. Second level includes beliefs, or things that are important to the people. The third coating is the basic assumptions that tell individuals how to perceive, think about and feel about work, performance goals, human being interactions and the performance of colleagues. This becomes the three coating model of organizational culture.
In nowadays world-wide, every business has its culture. The organizational culture exactly like an individual's personality, can influence opinions, activities and proper choice within the firm (Pears and Robinson, 1997).
In recent years, the concept of strategic management has increased attention scholars and professionals. The taken-for-granted mother nature of culture is why is it centrally important in relation to strategy and the management of strategy. A couple of two significant reasons because of this. First is controlling culture. Because it is difficult to see, identify and control that which is overlooked, it is difficult to manage. And the second reason is the culture as a driver of strategy (Dark brown, 1998). The culture and strategy of the business is considered critical because in the world-wide, the huge range of competitive challenges that currently face organizations. Getting the unique and high quality organizational culture can lead the corporation making suitable strategies, then build their own competitive advantages and get success. You can find few points to prove that the organizational culture is important to the proper management.
Organizational culture is very impacting. It could impact the success or inability of a company. One strong organizational culture may become one of the most sustainable competitive advantages of a business or organization, and this is difficult to replicate. There is the diagram (1) demonstrates the culture's affect on strategy development. Firstly, there must have cultures in the organization, and this kind of culture can result in the introduction of strategy. Next, the thoughts or ideas can become implementations for the business. Finally, we can easily see the organization's performance or results from strategies (Johnson and Scholes, 2008). There is also one example can clarify why the organizational culture is important can influent strategies. The Southwest Airlines can be an organization where the links between strategy and its execution are related to its culture. The culture is strong, because there is consistency in what folks see, notice and feel about it, and employees are obvious how things are done and are prepared to help the airline achieve its goals. Therefore, the strong organizational culture of the Southwest Airlines lead to stretching out and addresses short-term and long-term goals for the business, and evidently articulated. In addition, the organizational culture of the Southwest Airlines is laid back. The company promotes informality and wishes employees to enjoy their careers. The Southwest Airlines believes that employees are incredibly valued, with CEO acknowledging births, marriage and death by notes and cards. Staffs should pitch in and help out, especially at check-in, providing Southwest turnaround times less than half the industry average (Southwest Airlines, 2012). Therefore, according to the organizational culture of the Southwest Airlines, it can seen easily that the positive organizational culture is currently a prerequisite for success rather than a competitive advantages, such as selecting top-quality employees and unique products and service give customers all are vital for the strategy management of the company or business.
The good organizational culture is one of the important tasks for strategies in organization or company, and it make a difference different focuses on of corporation. For instance, when there is one group has very good quality customer service and it is important in the culture, then individuals are willing to adopt this behavior. If, this culture in the group is sticking with the set of procedures in working with customers is the norm, therefore, this type of habit would be expected, recognized and rewarded (Gibson and Ivancevich, 2003).
Firstly, organizational culture make a difference employees and employees' performance of the company. Employees are one of the most important determinants and leading factors that determine the success of an organization in a competitive environment. This is also true for service organizations that count heavily on the good behavioral employees to provide friendly and courteous service to their customers in this competitive environment. For instance, Starbucks is more than simply coffee. They can be in the individuals business. The success of the Starbucks is depending on people they employed, preserve and develop. At Starbucks there's a little green booklet, called The Green Apron E book, which are the guiding principles for all the people who just work at the company. It really is a simple publication, but nobody ever before complaints about its simplicity. The ten guiding guidelines include: 'know who you are, know why you're here, think independently, build trust, pay attention for the reality, be accountable, do something, face concern, practice control and dare to dream'. It really is easily can know they are the origins of Starbucks organizational culture through these guiding concepts, and make every employees in the Starbucks can know obviously about company's mission and eyesight, then show their finest performance to customers. Therefore, the employees' turnover of Starbucks includes 20% management and 80% lower tier. That means the Starbucks has its turnover rate of 120% less than the average turnover and employees of Starbucks have 82% of satisfaction rate (Behar and Goldstein, 2007).
Secondly, the organizational culture can effect on customers or companies clients. Because of this point, organizational culture can affects customers or clients' attitude, behaviours and even options. Any companies' culture is connected very close with customers and clients of the business. From this point, the service culture is important area of the whole organization. For instance, if you decide to stay at the Four Months Hotel, you will feel what an unbelievable experience is. Once you walk onto the hotel, you can't help but notice that each and every person working there --- leading deck staffs, the receptionists, the concierge, the restaurant staff, everyone works in the Four Months, seems to master service. It becomes a more amazing experience for guests. The reason why the Four Conditions received such excellent effect on friends and clients is the Four Conditions learn the Golden Rule from the Sharp company's organizational culture and of its future. This rule interacts every worker in the Four Seasons provides brilliance service experience for customers and build customer devotion. Therefore, the Four Season was the first company to place shampoo in bathrooms, to offer 24 hours room service, also to create flooring where smoking was not allowed (Parker, 2012). For this kind of commitment and commitment to the Four Conditions brand, and its world -renowned service culture, help the Four Months established the very strong customer devotion and get customers who come from across the world to feel and experience the service culture in the Four Conditions worldwide. The diagram (2) implies that the total profits that the Four Months Hotel in Thailand achieved from 2009 to 2011. The statistic presents that the full total revenues increased each year. This show that customers willing to choose luxury hotels and resorts to remain, they more focus on how worth once they pay the amount of money.
Thirdly, suppliers and associates are important assignments that organizational culture can effect on. Dell Computer is the good example to describe this point. Michael Dell was the creator who founded Dell Computer with a simple eyesight and business theory. Dell's "being successful" culture is emphasized cost efficiency and competitiveness and lead the Dell acquired success (Thompson and Strickland, 2005). Dell management assumed it experienced the industry's most effective business model. The business's strategy was built around lots of core elements: build-to-order processing, partnerships with suppliers. Because Michael Dell presumed that it made far better sense for Dell Computer to spouse with reputable suppliers of PC parts and components than to incorporate backward and get into parts and components making on its own. The wining culture make Dell always picked the best a couple of as suppliers and then jammed with them as long as they preserved their control in technology, performance, quality and cost. Management also feels that long-term partnership can benefit Dell company, and can reputable and advantage suppliers as well. For example, Dell's long run determination to its suppliers managed to get feasible for suppliers to find their crops or distribution centers within few miles of Dell. It can short distance and the delivery time between Dell company and suppliers, then can save transportation costs and other fees. It really is a win-win situation. Therefore, suppliers of Dell Company aren't too much, but it creates Dell successful.
Another important role is the organization social obligations that organizational culture can impact on. Corporate social responsibility is part of organizational culture and a value in the organizational culture. Different organizational cultures have framed different explanations about the corporate social responsibilities. For instance, Singapore airlines occurred over seven years and examined the business's strategy and competitiveness, in particular its organizational culture that support the delivery of excellent service, achieve ecological competitive advantages. The strong corporate culture of Singapore Airlines can also strongly have an effect on their corporate communal obligations. Singapore Airlines thinks that supporting the corporate social responsibility can benefit the areas that Singapore Airlines help throughout the world. It is an essential part to be a good commercial citizen. Such as Singapore Airlines contributes to numerous educational programs and occurrences; focusing on national occurrences, arts and heritage activities; in addition, reduce carbon footprint from airplanes is quite area of the responsibility that Singapore Airlines is able to take. That's why the Singapore Airlines can get advanced awards every year (Singapore Airlines, 2012).
According to these four samples above, it can clearly demonstrates there are types of effects on organizational culture. The effects of organizational culture depend on whether the company has a solid culture or a vulnerable culture. One the one palm, one strong organizational culture can focus on the environment it generates for employees. Because this can encourage and develop a very productive and strategic competitive advantages for a firm. A solid organizational culture can focus on establishing and sustaining the management of company, and make employees think that they are simply one the crucial elements of the company. For example, Japanese companies such as Toyota is one of the organizations has quite strong and influential cultures. One the other palm, a company's culture can be vulnerable. In poor culture companies, there is little cohesion and glue across firm units and group members routinely have no deeply noticed sense of corporate and business identity. Although they could have bonds of recognition and commitment toward their section, their fellow workers, their union, or their employer. The principles can also be unclearly, it can cause the bad results on employees of the business, and everything staffs of the company can not go along with the same course.
Organizational culture is the normal rules, the normal beliefs and showing the same aspiration that fostered by the organization employees. It has huge exciting pressure, spirit charisma and energy allure, and it lead all employees go with the same direction in the company. The organizational culture is the motive vitality of the organizational sustainable strategic development. Equate to the cultural corporation, the monetary type company only run after the monetary goals, but ethnic organization can form for the life of the business and obtain the ecological competitive advantages (Davis, 1984) Therefore, the strong organizational culture can firmly affect company's strategic decision-making, tactical options and the action of strategies. And exactly how organizational culture can promote better strategies execution with those decision-making, options and activities of the business?
Decision making is one of quite elements of the organizational management. Through the management functions, must make different decision-making regularly. In addition, the grade of decision-making is carefully connected with management performance and results, especially the tactical decision-making. Organizational culture can affect every decision-making process. For instance, to different internal and exterior environment views make a difference organizational employees' acknowledge to the trouble. Precisely the same problem can be ignored in one of the organizational cultures, but the serious of problem can be focused on in the other type of organizational culture. So, when is convinced of the serious issues that do not at exactly the same time, it will impact the form of decision making and process, also impact the approaches of decision-making. If most members' attitudes are negative, then your mode of decision-making is able to become the bad decision-making setting (Breen, 1973).
The good organizational culture not only can help the company make appropriate and great decision, but also can form a good management to lead the development of the company. Inside the global business community, organizations face an evergrowing need to comprehend the authority as it is exercised in several cultures (Jeremy, 2012). Nowadays, the business enterprise is global, and each business group has a culture created by the business enterprise organization. And exactly how cultures can come into play and affect the authority of the organization, there is certainly one case easily can imagine. You can find one British administrator who was simply trained at an American business school which is asked to perform the Argentine manufacturing facility of any Japanese firm. Just what exactly command should this British isles manager works to build up. American? British? Japanese? Or Agentine? From this case, this administrator should understand the culture within which he/she works and how his/her employees understand leadership. Which manager must also develop bespoke leadership attributes, personalized to the initial culture within which she or he works.
Therefore, different organizational ethnic groups may vary in their conceptions of the main characteristics of charismatic or transformational leaderships. In a few cultures, one might need to take strong and decisive activities in order to be seen as a leader. The fact that leadership behaviours and traits that are reported to work or inadequate across cultures, especially where these are related to charismatic or transformational authority. For instance, there are lots of specialties related to charisma as adding to outstanding leadership. There may be concern in a few cultures that folks have a tendency to lose their balance and perspective because of this of an increased focus on accomplishment created by charismatic leaders.
In summary, organizational culture is very important to the strategic management. As well as for the organization, having one suited and strong organizational culture is very important. It is the guidelines and competitive advantages of the proper management. In addition, creating a solid fit between strategy and culture is essential. It's the strategy maker's responsibility to select a strategy appropriate for the "sacred" or unchangeable parts of prevailing organizational culture. It is also the strategy implementer's task, once strategy is chosen, to change whatever areas of the organizational culture hinder effective execution. Therefore, it is very important to boost company's organizational culture (Thompson and Strickland, 2001).
Firstly, the company should change an issue culture because of their strategic management. The important step is to diagnose which areas of today's culture are strategy-supportive and which are not. Then, professionals have to talk openly and forthrightly to all concerned about those areas of the culture which may have to be changed. Make certain everyone will understand are designed to set up a new culture more in melody with the strategy. For instance, when the old hotel need refurbish to one completely new and luxury hotel, all physical tools and management structures, vision and quest will be transformed. Because of this period, managers should use accurate attitudes and communication skills to help employees through the change of the hotel. Second of all, the business should symbolic culture-changing activities. The best companies and the best executives expertly use symbols, role models, ceremonial situations and group gatherings to tighten the strategy-culture fit. For instance, low-cost market leaders like Wal-Mart and Nucor are renowned for his or her spartan facilities, executive frugality, intolerance of waste products and control of costs. Finally, the business should build ethic and soul of powerful into the organizational culture. Just because a strong organizational culture founded on moral business key points and moral principles can become a vital driving a vehicle force behind sustained strategic success. And build a spirit of powerful into the culture can make culture become results-oriented, and it uses people-management procedures that inspire workers to do their best.
Trough the evaluation, it is easily can see that the organizational culture is the image of the business company, and it takes on a role of drivers to lead the company become unique and form competitive advantages in this such competitive business environment as well. In order to develop, improve even protect this competitive good thing about the business, each role in the business should try better to play, whoever managers, executives, captains and staffs. Developing and bettering one strong organizational culture to be able to assist strategic management and make corporation successful.
Culture's effect on strategy development
Source: (Managerial Recipes for Strategic Success, 1979)
Source: (Four Months Thailand Annual Article, 2011)