Study and report about these companies history, structure, nature of business and culture profile features. Compare their organisational cultures using Trompenar framework with reference to history and structure of the companies. Explore the likely consequences for employees, management and the way in which they are controlled based on Trompenar framework and student point of view after analysing their organizational culture profiles. Suggest some areas for improvement. You should explore what is meant by ‘organisational culture’ and associated and contested concepts in your answer.
What is Organizational Culture and Why It is Important?
Organizational culture has become one of the defining elements of an institution that makes it different and unique from all the other contemporary organizations. Every organization shares its own personalized understanding of professional values, beliefs, ethics, and therefore, enjoys a particular environment, which upholds and reflects the same (Willar, Trigunarsyah and Coffey 2016). The way of interaction amongst the process levels of an organization be it employee-employee or employee-employer, depends heavily on the work culture of the organization. Organizational culture guides the actions and performance of a Company starting from regular production processes, decision-making, promotion and sale. Emphasizing on the organizational culture of a Company is of utmost importance in order to assure smooth flow of work, high efficiency of employees and reduced technical chaos.
Since, the employees of an organization constitute the most important and relevant resources for production, it is extremely important to establish an easy and transparent communication system with them. One of the crucial responsibilities of entrepreneurs is to successfully communicate the duties to their employees or what is expected of them. Not only that, in order to keep up the established communication, it is important to make the conversation a two-way process—that is, allow the employees to reflect their ideas and opinions (Ramdhani, Ramdhani and Ainissyifa 2017). A good rapport can be established with the employees only with sufficient knowledge about their cultures and beliefs.
According to (Bird and Mendenhall 2016), the structure of an organization reflects the essence of its culture by portraying the modes and methods of achieving objectives. Organizational structure particularly refers to the organization’s design, based on which it performs on a daily basis. The centralization or de-centralization of power in an organization defines their medium of fulfilling organizational aims and objectives (D’Innocenzo, Mathieu and Kukenberger 2016. The arrangement of the roles, positions and responsibilities in an organization direct towards their outlook of information flow. For example, in a centralized power structure, most vital decision-making responsibilities would be preserved for the central unit of the organization, which works as the most powerful unit.
According to (Kryscynski and Ulrich 2015), with rapid globalization, industrial boom and advent of free market, employees have gained high mobility all over the world. Individuals from various different cultures, backgrounds and ethnicities are moving great geographical distances and boundaries in search of pertinent jobs. Similarly, organizations now have the luxury to hire skilled and talented employees, appropriate for the required position, from all over the world. This induces a huge cultural shift, as major chunks of individuals are cross-connecting and networking across the geography of the world, along with their cultures, values and beliefs. Therefore, focusing on an organization’s culture is vital in the process of peaceful co-existence and optimum efficiency of the mixed cultural group of employees. Not only is this important on the part of the entrepreneurs, but also helps the employees to understand their work, their employers and their employer’s code of culture (Grayson and Hodges 2017). This builds a strong connection between the two parties and assures optimum effectiveness.
Communication and Employee Culture
The Trompenaars’ framework for organizational culture is based on the cross-cultural communication and differences amongst the various cultures that come together in an industrial or professional setup (Binder 2016). The framework was originally devised by Frons Trompenaars and Charles Hampden-Turner, with a motive of shedding sufficient light and understanding of the ways humans perform (culturally) in the given setup. This framework emphasizes on the seven dimensions of culture that govern the actions of human beings, in relevance with time and environment (Ling, Yen and Yen 2016). The seven cultural dimensions as suggested by the Trompenaars’ framework are as follows:
Universalism vs. Particularism: Universalism refers to the actions guided by positions and roles, where as Particularism refers to actions taken on basis of shared relations.
Individualism vs. Communitarianism: Individualism refers to the tendencies of working alone whereas Communitarianism refers to the culture of working in a group.
Neutral vs. Emotional: Neutral culture emphasizes on putting up a professional attitude by keeping emotions in control, whereas Emotional culture is freely accepting and acknowledging human emotions.
Specific vs. Diffuse: Specific culture provides a large public space as contrary to Diffuse culture that reduces public space to private space.
Achievement vs. Ascription: Achievement culture emphasizes on recognition of employees and duty distribution on the basis of personal achievements and qualities, whereas, Ascription culture takes in consideration features like age, class, gender etc.
Sequential vs. Synchronic: Sequential culture encourages the completion of tasks over a period of time in a systematic order. Synchronic culture encourages simultaneous completion of tasks with a help of various groups of workers.
Internal vs. External control: internal control refers to accepting the environmental changes as they come. External control makes an effort to change the environmental circumstances.
This particular research would take up two dominant Companies of Saudi Arabia, namely Saudi Telecom and Saudi Electricity Co, to understand and analyze the similarities and differences in their culture, using Trompenaars framework for cross-cultural management (Mach and Baruch 2015). The research would use both quantitative as well as qualitative data so as to conduct a detailed research and investigation procedure for the most accurate results (Palinkas et al. 2015).
Quantitative data refers to the numerical data collected from surveys, questionnaires, statistics and more. Whereas, qualitative data offers the qualitative aspects like, theories, personal interviews, reflections and more. Extensive surveys on the employees of these two organizations would help us get a look of their culture and how it is affecting the work atmosphere of the Company. The qualitative approach to research would emphasize on Trompenaars’ cultural framework to distinguish the particular elements in the current organizations and analyze them to have an enhanced understanding.
Organizational Structure and Its Influence on Culture
The case study includes a detailed comparison of the two chose Companies of Saudi Arabia, in order to analyze both with relevance to a cross-cultural approach to organizational management. Both the Companies have a wide range of employees, hired from various parts of the world and therefore hold a concoction of various cultures (Gharamah et al. 2018). Therefore, analyzing these Companies with a cross-cultural model of analysis would be appropriate in this case.
As the name suggests, Saudi Telecom is a telecommunications based company that offers a wide range of telecommunication services like, landline connections, mobile connections, internet and broadband, television connection and more. The company ran a monopoly over telecommunication services in Saudi Arabia, before the advent of Bahraini Batelco. Saudi Telecom’s expansion to the international market incorporates its business in Malaysia and Indonesia, where it earns an approximate $3.04 billion. The Company’s business network extends to various other countries like the Persian Gulf, Asia, Africa and Turkey.
Saudi Electricity Co is a public sector organization that holds a monopoly over the electricity generation, distribution and transmission over Saudi Arabia. The establishment of the Company dates back to 2000, when existing electricity utility companies merged together to form a single joint stock company, supported by the orders of the Council of Ministers. However, the Company is moving towards a generational break-up since 2009, supported by the ECRA, in order to increase competitiveness and efficiency of all the different subparts.
Saudi Telecom: The Saudi Telecom Company enjoys a functional organizational structure, where the jobs and responsibilities of the Company is divided amongst small individual working groups, specialized in particular areas. Under the CEO of the Company works 5 different teams, specialized in public relations, IT, legal assistance, technical affairs and security department. Each team is led by a managing director, who makes sure that the team is functioning effectively and handles all issues arising during the process. These managers are again answerable to their respective heads, thus following a hierarchical structure. The various teams work together in their respective fields to fulfill the objectives of the organization as a whole.
The advantage of this structure is that it allows the hiring, grouping and positioning of the employees according their respective skills and energies, thus providing enhanced dedication and expertise in the subject (Sharma 2014). One of the major challenges of this structure is that it may cause a communication gap between the employees of a particular team and the entrepreneurs of the Company as a whole.
Cross-Cultural Management and Trompenaars’ Framework
Saudi Electricity Co: Saudi Electricity Company is a public sector organization that holds a monopoly over the electric utilities in Saudi Arabia. Being a large-scale company it enjoys a Divisional Structure, which allows a greater autonomy amongst the different working teams. Most teams work independently, controlling their own funds and investments, but are still answerable to the organizational head.
One of the advantages of this structure is that it allows more flexibility to a large-scale organization, where various teams are working at once in their respective fields. Instead of dragging issues to the top-management every time, the divisions have the liberty to resolve their issues at a divisional level. The rising challenges of this structure are related to tax and legal affairs (Nachet and Aoun, 2015). Another major issue is lack of communication amongst the various organizational departments that work towards the same objectives.
As analyzed by the Trompenaars’ framework of cross-cultural management, the Saudi Telecom as well as the Saudi Electricity Company seems to be following a more Communitarian approach to organizational culture, as both the Company’s structures divide their work amongst divisional groups specialized in particular areas. The Saudi Telecom uses a more Achievement approach, where the employees are recognized and positioned according to their contributions and skills; on the other hand, Saudi Electricity Company uses a more Ascription approach as its divisional levels are mostly autonomous and being a public sector enterprise, follows hierarchies. The Saudi Electricity Company follows a sequential approach, where each organizational level takes up one objective at a time and works together to achieve it; on the contrary, Saudi Telecom follows a more Synchronic approach by allowing the different teams to take up various responsibilities at once and work towards their achievement together.
Saudi telecom has more internal control as opposed to Saudi Electricity Company, which has more power over the external environment. Saudi Electricity Company being a monopoly governmental enterprise enjoys massive powers to control the generation, transmission and distribution of electricity in the entire geographical territory of Saudi Arabia and beyond.
According to (van Hoorn 2017), as both the Companies are spread beyond their national territorial barriers and include huge sections of mixed-cultural workforce, it is important for the entrepreneurs to devise a strong and relevant organizational culture that would satisfy the diverse cultural needs and requirements of the organizations.
To conclude, organizational culture can be considered one of the most vital elements in the success of established institutions. Especially in case of large-scale organizations that have huge multi-cultural workforces, it is absolutely necessary to emphasize on the cultural unity of the organization, so that all the stakeholders are well-informed regarding their duties and responsibilities. The Trompenaars’ framework provides seven cultural dimensions, which have been used to critically analyze the organizational structures of two Companies: Saudi Telecom and Saudi Electricity Co. Specific similarities and differences have been pointed out on the basis of the framework, which allows further scope to think about the respective advantages, challenges and opportunities of the same.
Case Study: Saudi Telecom and Saudi Electricity Co
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