Culture Matters Most
In every organization, strategic changes involve many actions, which may require months and years to accomplish. Old businesses may have to be divested, new products may have to be developed, market tests may be required, manufacturing facilities may have to be built and so on. However, in a more subtle but at the same time more decisive way, strategic change requires a basic rethinking of the beliefs and assumptions by which the company defines and carries on its businesses. My organization is a vivid example of changes in culture and importance of one culture for the entire organization.
My company owns six subsidiary companies with their own separate culture and leadership styles. The leader of my organization instills a new culture on the organization. Also, he keeps the main elements of individual cultures of other subdivisions and respects their leadership styles. Following Thomas Kell and Gregory T. Carrott (2005) culture has a profound impact on all spheres of organizational performance and influences morale. Corporate cultures probably change more often than national and family cultures do, as the former are more open and more dependent on the environment.
The latter may even contain values not to change, but instead to support traditions. However,
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In my organization, culture is a strategy which helps to unit employees and increase morale and motivation. Strategy is commonly understood as general ideas about how to relate an organization to its environment, principles for various decisions taken, and rough outlines of how major objectives, resources and accomplishments of the organization are related to each other. So, the traditional view of strategy omits a major influence on strategy formulation which has to do with the strategy-makers themselves (Sorensen, 2002).
Culture gives employees a sense of how to behave, what they should do and where to place priorities in getting the job done. Culture is, as mentioned earlier, filling the gaps for employees between what is formally decreed and what actually takes place. As such, culture is of critical importance and a powerful driving force in, for instance, implementation of strategy. My company faces implementing a new strategy that requires several changes in structure, systems and procedures.
At the same time, most of the changes are potentially compatible with the existing organizational culture (Bass 1998). Companies in this situation are usually successful companies that want to grow further, for instance, by either seeking to take advantage of a major opportunity or attempting to redirect major product/ market operations consistent with core, proven capabilities. Such companies are in a very promising position: they can pursue a strategy requiring major changes leaning on the power of cultural reinforcement. Following Sorensen (2002):
“Performance variability is also an important outcome in its own right, because it plays a central role in a variety of theoretical approaches to organizations. Behavioral theories of the firm suggest that risk taking by managers depends on firm performance relative to aspiration levels (Cyert and March, 1963; Bromiley, 1991); highly variable performance may increase the frequency of risk-taking behavior” (70) According to Bass (1998), companies seeking to manage a strategy-culture relationship in this situation need to emphasize four basic considerations.
First, the mission provides a broad official expression of the organizational culture, therefore, top executives should use every forum available to stress the message that the changes are linked to the company mission. Second, existing personnel carry with them the shared norms, values and assumptions of the organization, therefore, such personnel should be used as much as possible to fill positions created in implementing the strategy. Third, care must be taken if adjustments are needed in the reward system. These should be consistent with currently rewarded behavior.
Fourth, key attention should be paid to changes that are least compatible with current culture so that current norms are not disrupted. There are, of course, other relations between culture and leadership. Managers in a firm (as well as other employees), be they leaders or not, have a culture which is more or less shared and common. This fact influences, often implicitly, how they manage themselves and other employees, and how they conduct their business, for example, decisions they make about the organization’s relationship with its environment and about its strategy (Bass 1998).
The choices managers make consequently reflect their view of reality -the beliefs and norms that have served them and their company well during their career. These choices will also reaffirm the corporation’s culture and reinforce the expected behavior across the organization. In their analysis, Thomas Kell and Gregory T. Carrott (2005) prove that economic stability and innovative technology cannot ensure good morale and commitments to work. Only a strong corporate culture motivates people and influences their leadership styles.
In general, classic studies on leadership as a set of personal attributes have yielded many interesting results but they also have limitations. Few leaders possess all the attributes, and many non-leaders may possess many or even most of them. Also, the attribute approach gives no guidance as to how much of each characteristic a person should have. It also seems as if almost every study has tried to confirm the hypothesis that the more people are allowed to participate, delegate, trust others and behave democratically, the more effective they are as leaders.
Other cultures may also define words like ‘participation’, ‘delegation’, ‘trust’ and ‘democracy’ differently. Managers have not often focused on building cultures, and when they have their approach has often been to reinforce the existing corporate culture. “But knowledge work managers need to build company cultures that are in accordance with what knowledge workers want, or the workers will leave” (Bass 1998, 63). The importance and impact of one culture on leadership styles of employees can be explained by the knowledge-worker culture which is also a communal one.
Managers must work jointly with workers to create a communal sense of purpose and vision. Knowledge employees do not want to work toward a goal because someone else has set it, but rather because they believe that it’s right. Specific knowledge-oriented behaviors must also be an integral part of the culture. It should be perfectly acceptable, for example, to sit at one’s desk and read a business-relevant book’s normally a knowledge behavior that’s restricted to personal time.
The culture also supports decision making and action based on knowledge and facts, not gut feel and intuition alone. Managers must set examples with their own decisions (Bass 1998). The example of my company shows that a formal leader in hierarchy has a tremendous impact on behavior of all employees. Leadership is partly a function of skilful deployment of personal qualities but probably more of the interactive processes between leaders and their followers and the more general processes through which purpose and commitment are generated and sustained within an organization.
The actual content of the culture and the degree to which it relates to the environment (present or future) seem like the critical variables here, not strength, pervasiveness or direction. An informal leader in hierarchy can be somebody acting as the real brain behind a weak boss. An informal leader in networks can be anybody listened to, no matter his or her formal position (Erickson 2000). Effective organizational leadership involves hierarchical and social network leaderships working in complementary tension patterns over time.
Transformational leadership is the best type which helps to ‘unit’ all subdivision and creates a unique culture for the entire organization. Transformational leaders achieve superior results by raising followers’ consciousness about goals and values, and motivating followers to go beyond their own individual interests for the good of the group, organization, or society. They employ one or more of the four elements of transformational leadership. Transformational leaders stimulate their followers into being innovative and creative. The leader questions assumptions and reframes problems (Bass 1998).
Followers are galvanized into trying new approaches. Their ideas are not criticized because they differ from those of the leader or others. Both cognitive and social intelligence would appear to be particularly important to being intellectually stimulating. Transformational leaders motivate employees by providing meaning to their work. The leader shares with followers a vision of an attractive future and articulates expectations on how to attain it. The contrast is instructive for understanding the relationship between corporate culture and business values.
The specific culture found in any given company may vary greatly from that of another firm. Companies display contrasting styles of management and give over varying proportions of corporate life to productive economizing and to expansionist power seeking. Such differences may arise from a lingering value tradition originally imposed on the firm by its founders, or from accepted practices and competitive conditions typical of the firm’s industry compared with another, or from the technological matrix employed, or from the demographic and ethnic mixture of the company’s personnel.
All corporate employees are caught up within the tolls of this rank-order system. It has particular meaning for managers, especially those who covet favorable positions within the hierarchy. Their work life becomes one long round of securing the good thoughts and support of their superiors, colleagues, and subordinates, so that they may be known as loyal team players, ready to offer fealty to the boss and to receive it from lower ranks.
Corporate actions are structured actions, occurring according to whatever logic and pattern that may be embedded in a company’s culture (Sorensen 2002). “Culture matters most” because the economizing core of the modern business corporation’s culture relies on personnel who assume a pragmatic posture toward problem solving, exhibit a practical turn of mind, take a logical-rational analytic approach, and measure results by a utilitarian cost-benefit calculus. When applied with vigor and determination, these core elements lead to growth and greater productivity.
The economizing activities and outcomes are more likely to be achieved when the values of systemic integrity are given full sway. That means a focus on cooperation, teamwork, free information flows, open decision making, and other similarly functional means of binding workers together into a common economizing effort. Like all life units, business firms need to display large measures of systemic integrity if they are to draw energy from the environment and focus it effectively to promote their economizing purposes and goals.
“For all of these reasons, corporate culture strength has implications for organizational outcomes that go beyond their effects on mean performance levels” (Sorensen 2002, 70). In sum, organization should have one corporate culture for all divisions and sub-units which ensures unified actions towards a common goal. One corporate culture ensures employees belonging to organization and increases their commitment to work. Its effect is to direct the actions of corporate functionaries in ways thought to be congenial to the corporation’s goals and purposes.
In addition, corporate culture is more important than other aspects of jobs stipulating “policy rules” which generally lay down general guidelines and rationales that define the directions and goals to be sought by corporate managers as they go about their daily work. These two types of rules provide the logic of corporate decision making. They stand apart from the actual persons who work within this structure. References 1. AVOLIO, B. J. , & BASS, B. M. 1997. The full range of leadership development: Manual, Redwood City, CA: Mind Garden.
2. BASS, B. M. 1998. Transformational leadership: Industrial, military, and educational impact. Mahwah, NJ: Lawrence Erlbaum Associates. 3. ERICKSON, J. A. April 2000. Corporate Culture: The Key to Safety Performance. Occupational Hazards, 62 (4), 45. 4. KELL, TH. , CARROTT, G. T. Culture Matters Most. Harvard Review. 83 (5), 22-24. 5. SORENSEN, J. B. 2002. The Strength of Corporate Culture and the Reliability of Firm Performance. Administrative Science Quarterly, 47 (1), 70.