Identify 5 merits and demerits of organisational culture and their effects on strategy implementation (Argumentative essay)
a) Types of organisational culture should be explained (market, clan, adhocracy and hierarchical, formal and informal and their varying relationships)
b) Also, the relationship of organisational culture to other factors that could enhance strategy making process
c) Journal reference should be limited to: Journal of Marketing, Journal of marketing research, Journal of retailing, Journal of Academic of Marketing Science, Harvard Business Review, Strategic Management journal, Academy of Management Journal and Management Science.
d) Use organisational learning theory to explain clearly stating the assumptions of this theory with how it applies in an organisational strategy implementation context.
Types of Organisational Culture
Organisational culture as believed by Nielsen and Nielsen (2013), is a collection of values, beliefs and principles of working that affect the organisational operation and also the decision making process. In the opinion of Bauer and Matzler (2014), it does affect the strategy implementation process. A very small change or an implementation of a new strategy is possible only if it has the supportive resources and employees are positive to change. Employees associated with a union body are more threatening in this regard. Potential stoppage can be posed to a change and thereby, delaying the project. This paper is purposefully aimed at understanding the impact of cultures on the strategy implementation. It also identifies the five merits and demerits of organisational culture. In addition, this also covers the few important types of organisational culture. It also highlights the application of organisational learning theory in context to the organisational strategy implementation.
The Clan Culture: The culture gives values to collaborative works. It means that the organisation is like a family where there is no conflict between the bosses and the employees. It also means teamwork, effective communication and agreement. Leadership in such organisations are in the form of mentorship where things are just resolved with effective training (Helfat and Peteraf 2015).
The market culture: The kind of organisation tends to exist in a competitive environment. The leadership style in such organisation is demanding. In course of the action, employees and other members like the middle and the low-level managers are put under severe pressure. The kind of culture is not supportive all the time and also tends to pressurise for works at times (Neffke and Henning 2013).
The adhocracy culture: The culture is driven by innovation and entrepreneurship. Employees are encouraged for taking risks to make innovative experiments. Leaders do also experiment and promote entrepreneurial ventures. The core values of the culture are based on change and agility (Jansen, Simsek and Cao 2012).
The hierarchy culture: The culture is founded based on control and structure. The work environment is formal in nature. Strict institutional procedures are given the importance. Leadership style is more organised in regards to monitoring and coordinating. The core values are confined to uniformity and consistency (Mollick 2012).
The formal culture: This is alike in meaning as that of the hierarchy culture. Similarities exist in the structure that the culture follows. The culture follows a hierarchical structure where leaders and the other members are connected to each other but in a very formal way. The exchange of communication happens on a very formal note. This is purposefully designed and implemented (Sears and Hoetker 2014).
The informal culture: An informal culture is just opposite to the formal culture in concept and execution. Leadership is informal as it involves every member in the decision making process. Hierarchy does not exist and managers discuss with the lower-level managers & the employees regarding the strategy implementation and also to take the feedback from employees (Barney 2012).
Merits: When culture is friendly, it pulls aspirants to the recruitment process. Applicants look for such cultures apart from their basic expectations from the brand. Employees are filled with high morale in supportive cultures. They seem like motivated which are very necessary for their potential output. Supply chain operation also gets better as effective organisational culture helps in an effective relationship between business and suppliers. ‘Financial benefits’ is another advantage which is really possible through effective organisational culture. Employees do not work to their potential and hence, production suffers. They can only decide whether they work to their potentials. Nevertheless, a friendly organisational culture is indeed beneficial in this regard. Customer service definitely gets better as improved organisational cultures produce several merits like those few as highlighted in the section. Improvements continue till the leaders maintain a sustained work on culture.
Demerits: A dysfunctional culture put a strong barrier to knowledge-management. This is indeed necessary that knowledge sharing is functional and effectively implemented, so that, there is no communication gap. Hence, productivity gets maximise. Commitment gets also hampered especially in the hierarchical organisational culture. Corporate supremacy is another issue that may attract organisations for unethical practices forcing to win the competition at any cost. Subcultures can be formed due to differences of thoughts in employees. This may encourage internal conflicts. Hence, productivity may be hampered. Unseen culture can be regarded as those that are hidden. This includes but is not limited to attitudes, beliefs and underlying values.
Flexibility: Organisations with flexible cultures are more certain to changes and production. However, this is seriously challenged from the different generations that exist at the workplace. According to the Alegre, Sengupta and Lapiedra (2013), different generations exist at the workplace comprising of Millennials, Boomers and Baby Boomers. The generational differences do also influence the behavioural approach towards any change. Millennials are not constant with their job and keep on switching over to different jobs until they get their desired option. This is one of the reasons which in the opinion of Vaiman, Scullion and Collings (2012) do hamper the change process. It is a difficult situation for an organisation because a wholehearted cooperation may be missing for them. The other generations in specific the Boomers may also have resistive nature to change. The fact can be understood from what Anderson, Poto?nik and Zhou (2014) say regarding the Boomers. They say that Boomers are close to their retirements and hence, have a very minimal or probably no desire for any change. To them, their existing job is just a solution to financial needs that they desperately need to spend their rest lives.
Stability: A stable culture is one that supports strategy implementation. Stability can be attained through a culture of partnership, teamwork, unity and cooperation among employees. However, this is indeed challenging as already stated in the aforesaid point. This can be understood from the facts presented by Alfes et al. (2013). Alfes et al. (2013) say that for stability, it is important to have effective communication between the different members to avoid any communication gap. Communication gap according to Rosenbusch, Rauch and Bausch (2013) is one of the reasons that hamper the teamwork.
Goal fusion: It means all members need to unify their goals and make those aligned with one specific goal which is to support the strategy implementation. However, the fact is hardly visible at the organizational level. Few senior members may orient their alignment with the organizational goal. However, others may not necessarily be following the same line. As according to Spreitzer and Porath (2012), the architectural distribution of organizational members and thereby forming a formal culture gives rise to distinguished goals. Employees have certain goals and that may be limited to their career. However, the higher managers and specifically the directors may be focused on business.
Organisational learning in context to organisational strategy implementation: It means the ever-evolving capability to develop by learning from the variety of resources like academic resources, the organisational leadership and the organisational culture (Kolb and Kolb 2012). The theoretical background of organisational learning states a wide variety of learning forms which are applicable to organisational practices as follows:
Hereditary learning: It states a science of learning created only by founders of organisations. This could be applied to the organisational practices through effectively crafting the vision statement. Leaders need to create a cooperative environment where employees can feel the importance of learning values and deliver their potential capability. In course of the action, knowledge-sharing is of important value. Through knowledge sharing, hereditary learning could be effectively managed (Assaf et al. 2012).
Adaptive learning: For employees, it is about learning from their seniors, the managers and their past experiences. An organisation may learn it from other competitors and also from their past experiences. They can do it through effectively aligning their practices with their aim (Drucker 2017).
Practical learning: It means working on identified issues. It is the responsibility of the management that they are able to identify the root causes and then find the relevant solution to repair the same (Buckingham and Goodall 2015).
Forward-looking tendency: This means organisations avoiding the issues or the setbacks and keeping their eyes on the future possibilities. This can be applied to organisational setting by identifying the root causes and taking the relevant actions. This may also include a change process which needs an adequate support from the different members. Adaptability to the new system is also a key in such circumstances (Kozlenkova et al. 2015).
Therefore, organisational culture may be advantageous and also disadvantageous to operational output. It depends on the workforce how they interact with each other and gives importance to organisational learning. It also depends on the leaders how they are capable of inspiring their followers and also abiding by the scientific facts in mitigating the root causes of failures. Moreover, it is a combining effort of both leaders and employees which could bring a difference to the organisational culture and hence, the productivity.
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