Corporate Culture : The Key to Understanding Work Organisations
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by: Guest
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Organizational or corporate culture is widely held to refer to a system of shared meanings held by members that distinguishes the organization from other organizations that is a set of shared key characteristics or values. The culture that an organization has will play an important part in its success in its market sector. Likewise an organization’s continued success will depend to a large extent on the ability of the leadership of the organization to perpetuate that culture. A large, established organization in a mature market is likely to have objectives of moderate growth and the maintenance of its position within the market. McDonald's is an example of such an organization. You could walk in to a McDonald's restaurant in London, Tokyo or Moscow and expect to see staff dressed in the same uniform serving the same food from within restaurants that look remarkably similar. There are no risks to be taken here and rarely a snap decision to be made and certainly not by the staff. Contrast this with a small organization, thirsty for success in an emergent market such as Steve Job's Apple Computers in the early eighties. Here was a company led by a very strong character that was highly motivated, possessed a highly practical imagination and was fanatical about detail. He built up a multinational company on the strength of his ability to promote free thinking coupled with the attention to detail that is required to produce a world class computer within the organization that he ran. It is quite clear that if the cultures of these two organizations were transposed there would be internal chaos and the company's would lose their positions within their markets. A McDonald's restaurant that started to add flair to its menu would soon cut in to the company's tightly controlled profit margins whereas a company with tightly enforced rules and regulations could never lead the market in innovative technologies. It is not by chance that these two organizations have such different cultures. They are each the product of a clearly constructed and executed leadership policies reinforced by the organization’s founders and subsequently their top management. The processes of selection and socialization are key tools in the maintenance of an organization’s culture. The selection process is typically employed within organizations not only to select individuals who have the technical skills and knowledge to perform their roles within the organization but also to select people who will fit in with, and not undermine, the organization’s culture. The process of socialization has as its key objective the molding of the individual, who has already been selected partly for their apparent conformity with the organization’s core values, in to a true member of the organization where their values and norms are synchronized with those of their work group A work organization cannot be understood, however, by studying its culture in isolation to the areas of group dynamics, leadership, power and influence. It is indeed not possible to understand organizational culture without putting it within the context of organizational behavior as a whole. Leadership plays a key role in the establishment of organizational culture. As culture is principally the subjective perception of the organization’s and how it achieves those aims then leadership must play a central role in setting the values that underlie this perception. The founders of an organization hold the responsibility for the establishment of an organization’s culture. In an embryonic company this does not necessarily have to be done with much thought. In this environment the organization’s founders generally have a lot to do with the day to day running of the organization. The founders or their close associates will interview prospective employees and the successful candidates will be those who not only have the appropriate skills but those who also possess values and behaviors that are similar to those of the interviewer. As the organization develops and grows a number of sub-cultures will develop and it is now more important that the organization’s values are communicated in an effective way. Now the interviewers are further removed from the founders and direct exposure to their values and behaviors. Now it is important that the founders develop an effective way of communicating their values and behaviors so that they are seen as the basis of the dominant culture within the organization. Likewise the group dynamics within the organization will have a direct relationship to the organization’s culture. In fact the norms that are established within the various groups that make up an organization form a substantial part of the organization’s culture and it is in the establishment of these norms that leadership is so important for if dysfunctional norms are established within a group, for example a department of an organization, then the effect on the organization’s culture would be potentially very damaging. We would see the norms within the department come in to conflict with the organization’s culture and if decisive leadership were not taking in tackling the dysfunctional norms then the possibility of these norms spreading throughout the organization and overthrowing the organization’s existing culture is posed. An organization’s culture may be seen as the commonality between the various group norms within the organization. With effective leadership these norms can be centered around those of the organization’s official leadership through the effective communication and reinforcement of the leadership's values. It can , therefore, be seen that the statement 'organizational culture is the key to understanding work organizations' cannot be substantiated as an organization cannot be understood by simply looking at one aspect of its behavior in isolation to the broad body of study collectively known as 'organizational behavior'. Organizational Culture within London Underground London Underground was formed out of the railway lines that were built, owned and operated by a number of private railway companies that served the centre of London. These companies were formed around the turn of the century and were finally brought under the unifying umbrella of London Regional Transport in the 1940's. The private rail companies had developed the most modern technology to generate profits and had, on the whole, done this successfully London Underground was formed out of the need to have a coordinated transport plan for the growing capital city in order to move people around without choking the streets with traffic. It was only with the arrival of a new government in the late 70's that was intent on dismantling the nationalized industries that the leadership within London Underground was forced to rethink the direction it had been taking over the previous decades. London Underground had become a club. An organization where high value was placed on fitting in, on loyalty, and on commitment. This club culture placed along side the lack of direction that the organization was plagued with started to foster dysfunctional norms within groups that were furthest away from the leadership. As these individuals were promoted due to their seniority the organization started to take on these dysfunctional norms as its dominant culture. The government had been using its influence throughout the 80's to appoint a new leadership to London Underground and in the early 90's this leadership announced the 'company plan'. In order to obtain the finance from government that the organization required to replace or repair the now crumbling infrastructure the organization was to undergo a full review of its activities that would slash staffing levels by almost 25% through a complete review of the company's activities. The end result would be an "underground fit for the next century". The culture within London Underground had become very strong and a whole range of tactics were employed to overturn the old culture. The organization’s leadership was replaced not only on the board of directors but wherever necessary throughout the organization with 'outsiders' brought in from what has now become known as 'the real world'; where this was not possible or where there were suitable candidates within the company then employees who espoused the company's new values were promoted. The unwritten norms that had become the basis for the old culture were replaced, after months of long, heated discussions with the unions, with formal rules and regulations that were, and still are to a great extent, tightly enforced. The net result today is an organization that is at least pulling in the same direction as its leadership and where the values and behaviors have now been published and are being used to point the way forward. • Openness, Honesty, Trust, Respect • More for Less • Empowerment within a Framework • Continuous Improvement, Steady State, Innovation Management • Constructive Descent
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