Overview
As the title suggests, this
post is focused on identifying how organizational culture is benefiting an
organization but at the same time how it becomes an obstacle in certain
circumstances. Although there can be many advantages and disadvantages of
organizational culture, this post consists of the key benefits and limitations
of organizational culture.
Benefits
- Creates a distinctive image of the organization that separates it from others
When two cultures of two companies are considered in the same industry, it is never the same even though they may have some common features (El-Sayed et al., 2021). From visible artifacts to invisible factors each company has its unique culture because it is formed with the ideologies of the founders, shaped by the leaders and maintained by the social interactions of employees with each other (Janićijević, 2011).
- Gives employees a sense of consistency and belonging
The organization culture makes the employees feel as if they are part of a family which encourages teamwork and commitment (Sun, 2008). It also gives them a sense of being in their own consistent comfort zone (Janićijević, 2011).
- Makes the employees committed to something more than self-interest
As individuals, people are more concerned about one’s own growth and success but the organizational culture unifies employees to think that working as a team for the organization is beneficial not just for themselves but for the organization as a whole (Robbins and Judge, 2013). Similarly, (Kushwaha and Rao, 2015) suggests that organizational culture aids in internal integration of the corporation to work as a group.
- Certain cultures create an innovative environment for employees
Zafar et al, (2016) asserts that some organizations like technological companies need to change regularly to the external environment, so a culture that promotes innovation is created. Zennouche and Zhang (2014), similarly suggests that innovation is not just about creating new products or technology but building a culture that encourages new ideas of employees in the decision making, problem solving ideas and new product development.
- Culture provides a framework inside which employees should work
The organizational culture guides the employees on how their behavior is rewarded or punished based on the adapted organizational culture of the organization and determines the boundaries of their behavior (Allameh, 2010).
Video 1 consists of how “Apple Inc.” has used the benefits of organizational culture to create a distinct innovative culture which attracts best skills and retains the employee satisfaction which makes them succeed in the competitive market.
Video 1: An insight in to the Organizational Culture of “Apple Inc.”
Source: (Learn and Transform, 2013)
Limitations
- Resistance to change
A strong culture doesn’t like to change as they are already satisfied with the results of the current culture and avoid taking risks due to the feeling of insecurity (Blanc and Ramona, 2016). However, if the current culture hinders the performance or the effectiveness of the organization it is vital for the organization to change its culture to yield better results and survive. Employees who are attached to the current culture may resist changes and hinder the transformation journey (Karapancheva, 2020).
- Barriers to diversity
With growing importance of diversity in the organizational context, most organizations are recruiting and selecting individuals with differences in race, gender, religion, nationality, disabilities, personalities, cognitive style and education (Patrick and Kumar, 2012).
Nevertheless, if the majority of the company and values differ from the new recruits, they try to adapt or ‘fit-in’ to the culture of the company usually not expressing their concerns or not participating in giving ideas from their own point of view as their opinions are suppressed (Chuang et al., 2004). The existing employees might also discriminate new recruits who are outside or new to the organization culture (Sezerel and Tonus, 2016).
- Resistance for mergers and acquisitions
Mergers and acquisitions are a widely followed form of integration as in the theoretical perspective, they provide a lot of advantages but a question arises in terms of organizational cultural integration (Aristos et al., 2018). It is a tedious task of bringing two very distinctive cultures together with the employees (Weber and Tarba, 2012).
If the organizational culture conflicts were not present, it may have been a successful merger but bringing forward a new organizational culture in alignment with a national culture is a very hard task and sometimes results in failure if proper strategies are not used (Remanda, 2016).
Even
though limitations exist in an organizational culture, it is possible to avoid
them if organizations analyze, plan their strategies ahead taking in to account
that all individuals are not the same and finally communicate it to the
employees in a transparent manner (Armstrong and Taylor, 2014).
Video 2 includes seven strategies crucial to overcome resistance to change in an organizational culture.
Video 2: Strategies to overcome resistance to change
References
Allameh, M., Zamani, M. and Davoodi, S. (2010). The Relationship between Organizational Culture and Knowledge Management. A Case Study: Isfahan University. Procedia Computer Science. 3(2011). pp. 1224-1236.
Aristos, D., Georgios, S., Chalikias, M. and Kyriakopoulos, G. (2018). The impact of mergers and acquisitions on corporate culture and employees: The case of Aegean & Olympic Air. Academy of Strategic Management Journal. 17(1). pp. 1-13.
Armstrong, M. and Taylor, S. (2014). Armstrong’s Handbook of Human Resource Management Practice. 13th edn. London: Kogan Page.
Blanc, G. and Ramona, T. (2016). Change, Resistance to Change and Organizational Cynicism. Studies in Business and Economics. 11(3). pp. 47-54. doi: 10.1515/sbe-2016-0034.
Chuang, Y., Church R. and Zikic, J. (2004). Organizational culture, group diversity and intra-group conflict. Team Performance Management. 10(1).pp.26-34. 10.1108/13527590410527568.
El-Sayed, M., Wahba, M., Ragheb, M. and Elgharabawy, A. (2021). The Impact of Job Commitment on the Relationship between Organizational Culture and Sustainable Development. Open Access Library Journal. 8. pp.1-28. doi: 10.4236/oalib.1106998.
Forward Focus. (2016). 7
Strategies for Overcoming Resistance to Change. [video] Available at: https://www.youtube.com/watch?v=o9ulQvQdBQY
(Accessed: 16th April 2021).
Janićijević, N. (2011). Methodological Approaches in the Research of Organizational Culture. Economic Annals. 56(189). pp. 69-99. doi:10.2298/EKA1189069J.
Karapancheva, M. (2020). The Future of Organizational Culture. Journal of Sustainable Development. 10(25). pp. 42-52.
Kushwaha, P. and Rao, M, (2015). Integrative role of KM infrastructure and KM strategy to enhance individual competence: Conceptualizing knowledge process enablement. Journal of Information and Knowledge Management Systems. 45(3). pp. 376-396. doi: 10.1108/VINE-02-2014-0014.
Learn and Transform. (2013). Corporate Culture Apple Example. [video] Available at: https://www.youtube.com/watch?v=EcHpgsTg458&t=97s (Accessed: 14th April 2021).
Patrick, H. and Kumar, V. (2012). Managing Workplace Diversity: Issues and Challenges. SAGE Open Journals. 2(2). pp. 1-15. doi: 10.1177/2158244012444615.
Remanda, L. (2016). A Review of Organizational Culture in Mergers and Acquisition process. Journal of Media Critics. 2(8). pp. 100-110. doi: 10.17349/jmc116206.
Robbins, S. and Judge, T. (2013). Organizational Behavior. 15th edn. United States: Pearson Education.
Sezerel, H. and Tonus, H. (2016). The effects of the organizational culture on diversity management perceptions in hotel industry. Journal of Human Resource Management. 19(2). pp. 1-17.
Sun, S. (2008). Organizational Culture and its themes. International Journal of Business and Management. 3(12). pp. 137-141. doi:10.5539/ijbm.v3n12p137.
Weber, Y. and Tarba, S. (2012). Mergers and acquisitions process: the use of corporate culture analysis. Cross Cultural Management Journal. 19(3). pp. 288-302. doi: 10.1108/13527601211247053.
Zafar, H., Hafeez, M. and Shariff, M. (2016). Relationship between Market Orientation, Organizational Learning, Organizational Culture and Organizational Performance: Mediating Impact of Innovation. South East Asia Journal of Contemporary Business, Economics and Law. 9(2). pp. 40-56.
Zennouche,
M. and Zhang, J. (2014). Evolution of Leadership and Organizational Culture
Research on Innovation Field: 12 Years of Analysis. Open Journal of Social Sciences. 2. pp.388-392. doi: 10.4236/jss.2014.24044.
12 Comments
Agreed, A great organizational culture is the main component to developing the traits necessary for organization success. Organizational culture is the collection of values, expectations, and practices that help the actions of all team members. Organizational culture affects all aspects of the company, from punctuality and tone to contract terms and employee benefits (Wong, 2020).
ReplyDeleteThank you for your Feedback Nivethini. Yes, the organizational culture affects the behavior of the Organization, influence the decisions and behavior of employees which in turn affects the performance of the Organization so it has a relationship with all functions of the organization (Wu et al., 2011).
DeleteI do agree that organizational culture plays a vital role to make organizations to stand apart from other competitors. Kaplan & Norton (2001) have argued that many organizations nowadays focus on managing intangible assets such as customer relationships, innovative products and services, high-quality and responsive operating processes, which are non-financial in nature, rather than managing tangible assets such as, fixed assets and inventory.
ReplyDeleteAccording to 2007, cited by Hambrick, 2010 (Abu Jarad et al., 2010) in today’s economy, firms are challenged to continuously offer a portfolio of innovative products and services. Despite the key role of portfolio innovativeness for corporate performance, firms differ in their focus on building innovation capabilities and generating innovation outcomes. Moreover, I believe that organizational culture reflects on organizational performance in positive manner.
References
Abu Jarad, , Yusof, N.A. & Nikbin, , 2010. A Review Paper on Organizational Culture and Organizational Performance. International Journal of Business and Social Science, 1(3), pp.26-46.
Kaplan , & Norton, D., 2001. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment Hardcover. 1st ed. Boston: Harvard Business School Press.
Thank you for the value addition Gagana. Yes, more organizations are focusing on intangible assets because many researchers has proven that investing in intangible assets has a long term effect on profitability (Dvořáková, 2007).
DeleteHowever, Vodák (2011) suggests that companies that transform intangible assets to tangible results can have a competitive advantage.
Agreed with your point Arjun. Further Kenny(2012) explains that organizational culture is an important element of organizational performance and also a valuable source for sustainability of organization. Successful culture within the organization can lead to effective communication and improvement of overall performance (Idris at al 2015). Lee & Gaur (2013) also has pointed out that it is necessary to establish an effective organizational culture in order to improve performance as well as productivity.
ReplyDeleteThank you for your valuable feedback Pernalla, Yes, Organizational culture is a crucial factor in determining the overall performance of the company and has an impact on the strategy, structures and procedures of an organization (Belassi et al., 2007). However, Leaders need to address the multiple levels of organizational culture in order to create a sustainable culture (Schein, 2010).
DeleteNevertheless, Galpin et al., (2015) suggests that the leaders should make the employees aware that sustainability is not just about the impact of the organization to the environment but the long term growth and success of the organization.
Agreed with you Arjun, further more The culture of an organization refers to the unique configuration of norms, values,beliefs and ways of behaving that characterize the manner in which groups and individuals combine to get things done (Eldridge and Crombie,1974).
ReplyDeleteYes Duminda, 'Culture is a model of norms, values, beliefs and attitudes which affects organizational behaviour' (Aktaş et al., 2011, p.1561).
DeleteI have explained further about organizational culture definitions and dimensions in my first blog post 'Overview of Organizational Culture'.
Agreeing with you. Resistance to change is essential factor to be considered in any change process, since a proper management of resistance is the key for change success or failure. By resistance to change we understand any phenomenon that hinders the process at its beginning or its development, aiming to keep the current situation (Pardo de Val and Fuentes, 2003)
ReplyDeleteYes Chamara, as resistance to change normally occurs when a change is introduced, it is important for change agents to build strong relationships with employees and use different methods to engage them successfully in the change process (Ford et al., 2008).
DeleteAgree with you Arjun, Ashworth (2015),explains that your organizational culture “defines for you and for all others, how your organization does business, how your organization interacts with one another and how the team interacts with the outside world, specifically your customers, employees, partners, suppliers, media and all other stakeholders.”
ReplyDeleteIn other words, your organizational culture will reverberate across all aspects of your business because it represents the way you do business. It’s simultaneously your identity and your image, which means it determines how your people and customers perceive you.
Yes Indeevari, culture provides the organization a direction, a unique identity and needs to be nurtured and grown like any other relationship (Morcos, 2018).
Delete