Human Resource Management - Organizational Culture & Organizational Leadership Effectiveness

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Pranjana X Vol 16, No 2, Jul-Dec, 2013

Introduction Leadership is critical in codifying and maintaining an organization’s purpose, values, and vision. Leaders must set the example by living the elements of culture: values, behaviors, measures, and actions. Values are meaningless without the other element, such that organizations with clearly codified and enforced cultures enjoy great employee and customer loyalty. Like anything worthwhile, corporate culture is something in which you invest. An organization's norms and values aren't formed through speeches but through actions and team learning. Leadership is a process by which a person influences others (followers) to accomplish an objective and directs the organization in a way that makes it more cohesive and coherent. Leaders carry out this process by applying their leadership attributes, such as beliefs, values, ethics, c h a r a c t e r , knowledge, and skills. Underlying this ability are fundamental executive processes, or meta- components” (Sternberg, 1985): recognizing the existence of a problem, defining and redefining the problem, allocating resources to the solution of the problem, representing the problem mentally, formulating a strategy for solving the problem, monitoring the solution of the problem while problem solving is ongoing, and evaluating the solution to the problem after it has been solved. Creative intelligence is involved when one applies the processes to relatively novel tasks and situations Organizational cultures are much more than slogans and empty promises. Some

Amit Kumar Jain 1

Shrankhla Jain 2

UNDERSTANDING ORGANIZATIONAL

CULTURE AND LEADERSHIP - ENHANCE

EFFICIENCY AND PRODUCTIVITY

Abstract

This paper reviews the existing literature on relationships between innovativeness

and organization structure and culture, technical process approach, and

encourages employees to find the meaning and purpose in their work, and to link

their individual efforts to those of the entire company. This paper further

argues that certain organizational cultural attributes contribute to the shaping of future

courses of action, the core of team building, achieving change, and

understanding the goals and strategies of the business. Next, this paper points out

how knowledge management and organization culture can direct day-to-

day behavior, support structural and process changes, and create the climate

required for successful implementation of innovation strategy. Basically,

organizational culture is the personality of the organization, and will drive the

employee’s productivity and company performance levels. Culture is comprised

of the assumptions, values, norms and tangible signs (artifacts) of organization

members and their behaviors, and leadership. This article provides a process

for mapping and describing organizational culture.

Keywords: Organizational, Culture,

Performance, Purpose, and Leadership.

1. Head - Department Of Mgmt, Ideal Institute

of Technology, Ghaziabad.

2. Asst. Professor - Department Of Mgmt, Ideal

Institute of Technology, Ghaziabad.

Amit Kumar Jain and Shrankhla Jain

organizations choose to part ways with those who do not manage according to the values and behaviors that other employees embrace. Others accomplish the same objective more positively. Employees at all levels in an organization notice and validate the elements of culture. As owners, they judge every management decision to hire, reward, promote, and fire colleagues (Fathi El Nadi, 2008). The most important idea of all major companies like GM, IBM, and Sears is that those pushing for organizational improvement whether they are external members of the board, major investors, or top executives must deal with cultural and behavioral obstacles to change. Specifically, attempts at organizational change must consider three key features of organizational life: the firm's culture, the leadership of the change effort, and the existing network of power.

An organization’s culture has a substantial impact on its ability to execute its strategy and to achieve business goals and objectives. If a culture and work environment are cultivated intentionally, it improves dramatically an organization’s ability to execute, and they often become better places to work. They become well known among prospective employees. The level of ownership referral rates and ideas for improving the business of existing employees is often high. The screening process is simplified, because employees tend to refer acquaintances who behave like them. The pool of prospective employees grows. The cost of selecting among many applicants is offset by cost savings as prospective employees sort themselves into and out of consideration for jobs. This self-selection process reduces the number of mismatches among new hires. Members of an organization soon come to sense the particular culture of an organization. Organizational culture facilitates the acceptable solutions for knowing the problems, which members learn, feel and set the principles, expectations, behavior, patterns, and norms that promote a high level of achievement (Marcoulides & Heck, 1993; Schein, 1992).

Taking this a step further, if each recognition is specifically tied to a company value demonstrated or strategic objective achieved (or contributed to), company leaders can begin to track which values and objectives are less understood by every employee and how those values and objectives apply to his or her specific job. Executives can use the recognition program as lagging indicators, to target these areas of low recognition for additional training or reinforcement. It is more important now than ever to establish a company culture that will drive the employee productivity and company performance levels to carry the organization through recession and prepare for when the economy turns. A culture of appreciation in which employees are recognized for their efforts helps employees understand why those efforts are critical to the company for achieving its strategic objectives.

What is the significance of highlighting these “obvious” complexities and potential conflicts within a corporate culture? Put quite simply organizational designs are culturally-bound paradigms for solutions; they are operations of cultural frames of reference that determine how problems are solved and relationships defined (Trompenaars, 1993); they guide strategy for organizational development. Essentially, principles associated with a specific design become norms that influence employee actions and represent defining features of that organization’s culture. So, identifying a predisposition

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for solving problems, i.e., an organizational design, contributes to an increased appreciation and understanding of organizational culture.

Corporate culture can be looked at as a system based on the company’s value and norms, and organizational behaviors such as its technologies, strategies, products, services and appearance. The concept of a corporate culture is particularly important when attempting to manage organization wide change. Despite the best-laid plans, organizational change must include not only changing structures and processes, but also changing the corporate culture as well. There's been a great deal of literature generated over the past decade about the concept of organizational culture particularly in regard to learning how to change organizational culture. Organizational change efforts are rumored to fail the vast majority of the time. Usually, this failure is credited to lack of understanding about the strong role of culture in organizations. That's one of the reasons that many strategic planners now place as much emphasis on identifying strategic values as they do on mission and vision. High-performing organizations periodically revisit and re- affirm their core values and associated behaviors. Further, they often subscribe to some kind of initiative that requires constant benchmarking and searching for best practices both inside and outside the organization. Organizations with strong and adaptive cultures foster effective succession in the leadership ranks. In large part, the culture both prepares successors and eases the transition (Fathi El Nadi, 2008).

It has been established that satisfying the specific job requirements on a day-to-day basis through on-the-job task performance is not the only important component of employee effectiveness (Borman & Motowidlo, 1993; Organ, 1988; Van Scotter & Motowidlo, 1996). Many people feel like they have little stake in the place they work, because they don't understand the goals and strategies of the business, and when they do to seek out this information they get the run around. We don't know if most management teams are intentionally indirect about how their strategies and goals function, but it can be embarrassing for some of them to map-out what teams are asked to do back to corporate goals and strategies. True, many senior managers are very vague in their communications. Perhaps they don't want to be held accountable, or perhaps they just don't have a strategy, and are uncertain about how the busines is run. Quite often, people claim ignorance or don't want to acknowledge a corporate strategy. This important assumption, that culture drives employee behaviors, however, has received only limited direct empirical attention (Tesluk, Hofmann, & Quigley, 2002).

Organizational culture is basically a system of shared beliefs that members of the organization have, which determines how members in an organization act when confronted with decision-making responsibilities. In every organization, you will notice that there are systems or patterns of values that are constantly evolving. These shared values will also affect how the employees will deal with issues and concerns inside and outside the organization. Every single person comes from different backgrounds and lifestyles but in an organizational culture, each one of them perceives the organizational culture in the same way, thus, this perception is one of the shared aspects of an organizational culture. There are seven dimensions of an organizational culture,

Amit Kumar Jain and Shrankhla Jain

namely, attention to detail, innovation and risk taking, outcome orientation, stability, people orientation, aggressiveness, and team orientation.

Because of unreasonably high performance expectations, competitive behavior taken to an unethical level became the norm for many Enron managers and employees. The Enron leadership sustained this aggressive culture by enriching themselves, possibly unethically. By comparison, companies prominent for their innovation competencies like 3M and Apple effectively reinforce innovative employee behavior by sustaining a culture of creativity and innovation (Tesluk, Farr & Klein, 1997). Each of these aspects has its own role in defining what the organizational culture will be. Organizational culture is basically a system of shared beliefs that members of the organization have. This determines how members in an organization act when confronted with decision-making responsibilities. In every organization, you will notice that there are systems or patterns of values that are constantly evolving..

Recent events in the business world nevertheless suggest that understanding organizational culture and its impact on human behavior in organizations may be of critical importance. Enron, for instance, is an exemple of how having the wrong organizational culture precipitates business failure. Enron’s high achievement oriented, entrepreneurial employees reinforced the competitive “survival-of-the-fittest” culture of the company (Byrne, 2002).

Defining the Organizational Culture Each of these aspects has its own role in defining what the organizational culture will be. Oftentimes, two cultures clash because people from different organizations perceive things differently. They can blame their counterpart if failure occurs because they regard the other as incompetent. The best thing managers and CEOs can do to avoid this scenario is to introduce a different culture for the company or at least make their employees aware of what they should expect. This will minimize the adverse effects of mergers on the morale of the employees and ensure a smoother flow of operations.

Corporate culture shapes the way people act and interact and strongly influences how things get done. It encompasses the organization's goals, behavioral norms, and dominant ideologies. Companies pursuing internal stability such as large government bureaucracies are likely to seek to instill respect for order and rule following as appropriate behaviors in their employees in order to facilitate functioning on complex tasks (Leavitt, 2003; Thompson & Wildavsky, 1986). Ouchi (1981) juxtaposed the traditional American and Japanese organizational culture styles and suggested that management through commitment and cohesiveness seems to be the success formula in Japan. In the USA, on the other hand, tragic events such as September 11th have demonstrated that the courage, cooperation and cohesiveness of the rescuer teams of fire fighters and police officers was key for the successful management of this emergency situation. These examples reinforce the idea that fostering a specific culture is likely to be crucial for eliciting a variety of employee behaviors ranging from high

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individual achievement to cooperation and help, and from strict rule observance to innovation.

Culture can also be expressed through the organization's myths, heroes, legends, stories, jargon, rites and rituals. Corporate culture is a key component in the achievement of an organization's mission and strategies the improvement of organizational effectiveness, and the management of change (Samuel Olu Adeyoyin, 2006). A corporate culture can work for an organization to improve performance or against it by creating barriers that prevent the attainment of goals. However, it can be corrected by providing guidance on what is expected by conveying a sense of identity and purpose of unity to members, facilitating the generation of commitment and shaping behavior.

Organizational culture shaping a future course of action One of the primary responsibilities of strategic leaders is to create and maintain the organizational characteristics that reward and encourage collective effort. Perhaps the most fundamental of these is organizational culture. "The grand total of all the objects, ideas, knowledge, ways of doing things, habits, values, and attitudes which each generation in a society passes on to the next is what the anthropologist refers to as the culture of a group" (Nord, 1972). The famous Dutch behavioral scientist, Geert Hofstede defined culture “as the collective mental programming of a people in an environment". His later definition was "that culture is the collective programming of the mind which distinguishes the members of one group from another". Kotter and Heskett (1992) of the Harvard Business School define organizational culture, "as an interdependent set of values and ways of behaving that are common to a community and tend to perpetuate thems, sometimes over a long period of time". Robbins (1989) defines organizational culture as "a system of shared meaning held by members that distinguishes the organization from other organizations. This is a set of characteristics that the organization values." If a business is established to make the best use of its resources, and then builds walls and political machinations that make it less efficient, those failures have to be obvious to the people in control. So office politics and a lack of teamwork are not just accepted but often implicitly condoned by a management team that can't create clear incentives to work together. This seems more intent on creating competitive teams that excel by eliminating team work. Culture is usually long-term, strategic, and difficult to change. It is rooted in beliefs and values. An organizational culture also represents the shared sense of the way we do things around here, a critical factor in guiding day-to-day behavior and shaping a future course of action”. (2) Handy (1986) believes that it is these last two forms of culture, role and task, which are most frequently found in organizations. Handy's categorization of types of culture is useful for giving a picture of different organizational cultures. It serves to highlight both the difficulty of clearly defining cultures and the profound implications of the cultural approach to organizations.

Organizational Values can help employees find meaning and purpose in their work and link their individual efforts to those of the entire company. Our culture is the theatre in which we play out our lives. It is imbedded in the synaptic connections in our brains. It is

Amit Kumar Jain and Shrankhla Jain

a major part of who we are. Robbins (1989) describes the culture of an organization as performing a number of functions within the organization as follows: 1."It provides a boundary-defining role separating one organization from another. 2. It conveys a sense of identity. 3. It facilitates the generation of commitment to something larger than one’s own self-interest. 4. It enhances social system stability. Culture is the social glue that helps hold the organization together. 5. It serves as a sense making and control mechanism that guides and shapes the attitudes and behavior of employees. Organizational culture defines the rules of the game. These frustrations point to the fact that many managers simply don't know how to lead and manage people, and are afraid of providing specific, direct goals that are measurable and holding people accountable to those goals. Rather, they create very indirect and unspecific goals, don't communicate them well, and tolerate office politics and silos, then wonder why everyone is frustrated and work is never done as it should be.

Organizational culture as a core of team building Several suggestions may be offered to managers. First, understand the direct service work of your organization. "Management by walking around" is a useful way to stay in touch with direct service workers and their needs. Practice what you preach: use TQM (total quality management) on your own processes. Meet frequently with middle managers regarding their personal efforts to use TQM. Focus on the nature of the work and try to establish in employees' minds some excitement about a new way of working. TQM training will be needed for all involved work groups. Also, horizontal and vertical communication training may be useful to get groups communicating with each other. Team building is a core element of the process, to ensure employee involvement and effective problem solving. Build analysis into the culture: "stop and think about how we work," according to Cohen and Brand. Insist on objective measures of results. Look for visible improvement, but not optimization; and try to generate some quick results in terms of time or money saved. Constantly check with employees to assess their comfort with the process. If peoples are feel threatened, slow down (Fathi El Nadi, 2008).

Research on national culture supports the importance of roles by demonstrating that culture influences the cognitive processes of individuals by intensifying the retrieval of perceptions consistent with the overall cultural values (Trafimow, Triandis, & Goto, 1991; Triandis, 1989). Organizational culture consists of ambient stimuli that are likely to prime role cognitions coherent with their content and direction (Katz & Kahn, 1978).

In the business world, cultures such as that of Dell might initiate employees’ developing achievement role perceptions, which in turn drive high individual achievement behavior, while at 3M or Apple employees might espouse an innovative role orientation consistent with the organizational culture of innovation. Thus I propose that different organizational cultures create different patterns of role perceptions and subsequent behavioral responses. Human resources aspects such as team functioning and analysis must be kept in balance. Prevent or watch for schisms between TQM and human resources functions or other parts of the organization (Fathi El Nadi, 2008). Basically, a management team serves to

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provide leadership and direction to the people within a company. If the management team takes on a positive outlook, leading others to greater growth, exciting opportunities and new adventures, the team will adopt that philosophy and work hard to achieve it. This is not to say that being overly optimistic will create a firm that will follow you through fire, but the power of positive thinking by the management team is catching. The term culture, as defined by the school of cognitive anthropology, consists of psychological structures which guide individuals’ and groups’ behavior. For instance, Goodenough, who is representative of that school of thought, pointed out that the culture of society: ”consists of whatever it is one is to know or believe in order to operate in a manner acceptable to its members” (In Geertz, 1973, p.11). The term organizational culture has a similar meaning, only, it is applied to the concept of organization instead of society

Generally the value of the organization is only recognized at the top level; failure to share the statements value to the members cannot be described as a value-driven organization. The importance of learning from failure and promoting a culture that permits dissent and failures, and how the market interacts with creativity and the impact of this interaction on creativity in organizations, should be considered. Culture, thus, consists of the set of assumptions, values, norms, symbols and artifacts within the organization, which convey meaning to employees regarding what is expected and which shape individual and group behavior (Enz, 1988; Hatch, 1993; O’Reilly et al, 1991; Rousseau, 1990).

Organizational culture provides a common purposes Today, the concept and management of innovation are becoming popular topics for management courses and bestselling books. Many successful business firms such as 3M, Hewlett-Packard and GE have already formalized innovation as a major strategic thrust (Van de Ven, 1986). Van de Ven (1986) noted, “Of all issues that surfaced in his meeting with over 30 CEOs of large public and private firms, management of innovation was the most central concern in managing their enterprises.” Innovation management is complex and is of greater significance, because it involves a whole range of organizational design and development activities that are associated with the process of change and innovation. The difference between innovation and change is only whether the idea is new to the industry or new to the organization. However, within organizations, the processes of innovation and change are nearly identical (Daft, 1986). To achieve innovative capabilities, a firm must first orient its strategies toward innovation and develop the required degree of integration by adequately preparing its internal environment. In other words, the internal environment and the operational goals should be consistent with the innovation strategies. Orienting the whole organization towards innovation is a complex process, and it requires top management’s continuous commitment, and special resources beyond those identified in operating budgets (Kanter, 1983). The innovation strategies should also be responsive to external task environments and stakeholders such as suppliers, customers, regulating agencies, and competitors.

Silverman (1970) contended that organizations are societies in miniature and can therefore be expected to show evidence of their own cultural characteristics. However,

Amit Kumar Jain and Shrankhla Jain

culture does not spring fully formed from the desires of management. Allaire and Firsirotu (1984) argue that it is the product of a number of different influences: the ambient society's values and characteristics, the organization's history and past leadership, and factors such as industry and technology. Organizational Culture is a framework that is held in the minds of the organizational members (Mission Statement). This framework contains basic assumptions and values, which are taught to new members as the way to: perceive, feel, think, behave, and expect others to behave. Culture arises over time as people in the organization learn to deal successfully with external adaptation and internal integration. In essence, culture arises out of what has been “successful.”

Sathe (1983) argues that culture guides the actions of an organization's members without the need for detailed instructions or long meetings to discuss how to approach particular issues or problems, and reduces the level of ambiguity and misunderstanding between functions and departments. In effect, it provides a common context and a common purpose for those in the organization. This is only true when an organization possesses a strong culture and when the members of the organization have internalized it to the extent that they no longer question the legitimacy or appropriateness of the organization's values and beliefs. One of the most important implications is that as Barratt (1990) observed, "values, beliefs and attitudes are learnt, can be managed and changed, and are potentially manipulable by management." O'Reilly (1989) is one of those who clearly believes this is the case. He argues that it is possible to change or manage a culture by choosing the attitudes and behaviors that are required, identifying the norms or expectations that promote or impede them, and then taking action to create the desired effect.

Approaches to corporate culture and achieving change If you have ever been part of a team and you were mismanaged, you probably didn't feel like giving all. This is why so many teams are "average" or "mediocre." The missing link is almost always the manager not valuing the differences of the people on the team, and failing to bring out the best in them. Yet it's difficult for managers to motivate their teams to top levels of performance if they've not been taught how. Total Quality Management (TQM) is at first glance seen primarily as a change in an organization's technology its way of doing work. In the human services, this means the way clients are processed the service delivery methods applied to them and ancillary organizational processes such as paperwork, procurement processes and other procedures. But TQM is also a change in an organization's culture - its norms, values, and belief systems about how organizations function. And finally, it is a change in an organization's political system: decision making processes and power bases. For substantive change to occur, changes in these three dimensions must be aligned TQM as a technological change will not be successful unless cultural and political dimensions are attended to as well (Tichey, 1983).

Many (e.g., Hyde, 1992; Chaudron, 1992) have noted that TQM results in a radical change in the culture and the way of work in an organization. A fundamental factor is leadership, including philosophy, style, and behavior. Any manager serious about embarking on a culture change such as TQM should reflect seriously on how she or he

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feels and behaves regarding these factors. Perhaps the easiest way to become an expert about the people you manage is to learn the different ways they think, the different ways they prefer to act, and their different motivations. A simple way to remember this is "Head, Hands, and Heart" ((Fathi El Nadi, 2008). Study the different ways people perceive and process information, along with how they make decisions. People often prefer one method over another, and just because you, the manager, like a particular method, it doesn't mean it's the best method for everyone. Expecting everyone to think like you creates a team of clones. It's incumbent upon managers to learn and value the different ways people think.

For many managers, a personal program of leadership development (e.g., Bennis, 1989) may be a prerequisite to effective functioning as an internal change agent advocating TQM. Other key considerations have to do with alignment among various organizational systems (Chaudron, 1992; Hyde, 1992). Building a culture of productivity and innovation requires some vision at the top a leader to understand the market dynamics and to drive people in his or her organization to change. Once the vision is set, managers have to be on board to get the organization where it needs to be, and to constantly reinforce that culture and vision throughout the organization. We can drive productivity to infinity by cutting costs and people and maintaining the same output. However, this short term focus will derail the ability to deliver for customers eventually and drive away the biggest resource an organization has its employees and their corporate knowledge. It's time to balance the desires of the investors and their short term objectives with the requirement that firms invest in their people, their ideas and the fruits they'll bear in the future.

Concluding thought We see organizational culture as the critical foundation which shapes the way that the work of the organization gets done (established through goals, plans, measures, rewards) and the infrastructure (systems, process and structures) gets utilized. Aligning organizational culture with strategy is a powerful means for gaining competitive advantage and industry or sector leadership. We use the concept of “culture” to describe how members of groups understand their world and their place in it. A highly productive business invariably has a high performing organizational culture that aligns well both internally and externally to support the overall objectives of the business. This organizational culture shapes employee experience, which in turn impacts customer experience, business partner relationships and, ultimately, shareholder value. During a merger, two or more distinct organizational cultures must be integrated and fused. An understanding of organizational culture, and how to transform it, is a crucial skill for leaders trying to achieve strategic outcomes. Strategic leaders have the best perspective, because of their position in the organization, to see the dynamics of the culture, what should remain, and what needs transformation. This is the essence of strategic success. Effective organizations empower and engage their people, build their organization around teams, and develop human capability at all levels.

Amit Kumar Jain and Shrankhla Jain

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