Table of Contents
- Table of Contents
Most contemporary organizations have well defined corporate cultures because it is their source of competitive advantage. Corporate culture affects the way an organization’s employee interacts among themselves and with the external publics. Corporate culture therefore affects the organizations alignment because the culture acts as a symbolic reminder to the employees, influences behaviors and attitude. Corporate culture is significantly linked to change management, organizational commitment, performance, power relations, task orientation and values (Pinho, Rodrigues, & Dibb, 2014, pp. 374-398).
2. Using corporate culture to drive organization performance
In their research on the role of corporate culture, market orientation and organizational commitment in organizational performance, Pinho et al, (2014), found that organization’s culture is significantly correlated with the success, sustainability as well as profitability. Corporate culture is correlated with the company’s success because it defines the interrelationships among the employees thereby preventing internal conflicts, and enables faster decision making. It also defines the relationship between the staff and the external parties such as suppliers, customers, and other stakeholders as it define the formal procedures, code of conduct, etiquette and value. By definition, organization culture refers to the shared processes, values, and established norms (Smith, 2011).
Corporate culture shapes the organization’s strategic direction considering the fact rapid, volatile and discontinuous changes in the business environment. To accelerate change, strategic imperatives and the operative imperatives, behavior change is important because change starts from the change in the mindset such that when the mindset is changes, beliefs, attitudes and myths follows (Shin, Kim, Choi & Lee, 2015). Therefore, when making major changes in the organization, the changes must be embedded in the fabric of the organism which is the organization’s culture (Tseng, 2006).
What impact has the application of this management concept had or will have on the organization’s performance?
Corporate culture influences the organizations performance because it defines how business is conducted and sets boundaries to conducts, and attitudes. According to Pinho et al, (2014), for an organization to maximize its ability to innovate, compete effectively and engage its employees as well as the customer, the corporate culture must be aligned with these goals. The values, vision, and mission must be aligned towards competitive advantage, and innovation. A good organization’s goals must completely pervade the way the employees work, and relate to each other and the extern parties. Furthermore, to create such a culture, the motivation must originate from the top management to the front-line workers (Katzenbach, Oelschlegel, & Thomas, 2016). The top managers must inspire the culture they want to see in the organization. The culture must be communicated and affirmed by the top management till it becomes central to the organization’s fabric. Each manager must strive to ensure that the culture is sustainable by championing for the same. Just like change, corporate culture must be established by the top management and passed to the other lower ranks (Pinho et al, 2014)
. How then does the management ensure that the new employees adopt the established culture? (Critical thinking). In most cases, the management makes it their initiative to nature the ire vision, mission and goals and ensures that the employees are motivated because without motivation, the established culture would be eroded (Onel, Zeid & Kamarthi, 2015). Bellow is examples of how major companies leverage corpora culture for sustainable competitive advantage:
At GE, the corporate culture was contextual as the company changed it narratives with the changes in the environment. For example, when jack Welch took over from Immelt, he changed the culture to allow the employees implement their innovative ideas freely. Innovation was the driver of the company’s success. However, after Jack Welch, he corporeal culture was changed to adapt to the changes in the environment and were spelt in 4Es which mean energy, energize, edge, and execution (Kim & Kim, 2013). These were the main expectation that the company had on m the departmental managers. Secondly, GE contextual culture changes significantly with its growth. For example, when the company products range grew and it’s expanded to over 175 countries globally, the company changed its corporate culture to reflect its vision in the global market. The constant framework reengineering of its practices, portfolio and operating framework mean that the company had to adopt a more standardized culture but a proactive stances at problem solutions (Onel, Zeid & Kamarthi, 2015).
Corporate culture must be aligned with the disrupters that give the corporation their edge. For example, companies such as Uber and Airbnb (Carney, 2014). These two companies have exhibited their total understanding of the millennial especially third understanding of the mobile nature of the millenials which makes up a larger percentage of the working groups. The shift in ownership has seen these companies have defined their corporate culture in line with the technology which is a major disruptor (Parastoo, Safari, &, Torkestani, 2013, pp.94-107). They have changed the transport and hotel sector using technology by contracting the actual car owners and drivers. Instead of owning their own cars, the two companies have developed community of users who double as the customers and staff. From the analysis of the two companies’ corporate culture is about ethics and trust because without trust and ethics, no user would have believed in the company’s early adoption of technology (Erdogan, Bauer & Taylor, 2015).
Why culture shift, why do companies declare culture shift? It is quite possible that corporate culture must be aligned with the company’s strategic shift. Culture gives a sense of direction to the employees. It amounts to the sum of all unwritten rules of conduct. If the strategy is to drive cost of operation down, to defend market share, to differentiate its products and or services or to leverage the first mover advantage, the culture must clearly spell and be embedded in the company’s goals, and objectives. No strategy shift can occur without culture shift as each company must (Chun, Shin, Choi & Kim, 2011).
Organization performance is dependent on the stability of the internal environment. The stability of the internal environment can only be realized through proper job description, little or no conflicts, amicable conflict resolution, and human resource management as well proper focus on all the managerial functions. For this study, the culture resonated throughout the organization at it focused on the employee’s creativity which is enshrined in the corporate culture. Competitive strategy needs an innovative culture just the same way organization performances is dependent on employee motivation. The corporate culture should be focused on creating and maintaining a conducive working environment. In conclusion, just as been argued by Pinho, Rodrigues, & Dibb, (2014, pp. 374-398), organization performance, competitive advantage, and organization commitment are significantly interrelated. Therefore for the company to maximize organization commitment, and performance, there must be a suitable corporate culture that allows and support the achievement of the envisaged future.
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Chun, J., Shin, Y., Choi, J., & Kim, M. (2011). How Does Corporate Ethics Contribute to Firm Financial Performance?: The Mediating Role of Collective Organizational Commitment and Organizational Citizenship Behavior. Journal Of Management, 39(4), 853-877. http://dx.doi.org/10.1177/0149206311419662
Erdogan, B., Bauer, T., & Taylor, S. (2015). Management commitment to the ecological environment and employees: Implications for employee attitudes and citizenship behaviors. Human Relations. http://dx.doi.org/10.1177/0018726714565723
Kim, H., & Kim, J. (2013). A cross-level study of transformational leadership and organizational affective commitment in the Korean Local Governments: Mediating role of procedural justice and moderating role of culture types based on competing values framework. Leadership, 11(2), 158-185. http://dx.doi.org/10.1177/1742715013514880
Katzenbach, J., Oelschlegel,, C., & Thomas, J. (2016). 10 Principles of Organizational Culture.strategy+business. Retrieved 15 March 2016, from http://www.strategy- business.com/article/10-Principles-of-Organizational-Culture?gko=71d2f
Onel, S., Zeid, A., & Kamarthi, S. (2015). Resiliency characteristics of a competitive and collaborative complex adaptive supply network. International Journal Of Collaborative Enterprise, 5(1/2), 1. http://dx.doi.org/10.1504/ijcent.2015.073166
Parastoo M, Safari A., &, Torkestani s, (2013). Investigating the Impact of Organizational Culture on the Performance of Insurance Companies in Iran. American Journal of Scientific Research. ISSN 2301-2005 Issue 89 July, 2013, pp.94-107
Pinho, J., Rodrigues, A., & Dibb, S. (2014). The role of corporate culture, market orientation and organisational commitment in organisational performance. Journal Of Mgmt Development, 33(4), 374-398. http://dx.doi.org/10.1108/jmd-03-2013-0036
Smith, B., (2011). Organizational Configurations and Strategies Related to Financial Performance in Medical Group Practices: a Test of Porter’s Generic Strategies. Birmingham, Alabama.
Shin, Y., Kim, M., Choi, J., & Lee, S. (2015). Does Team Culture Matter? Roles of Team Culture and Collective Regulatory Focus in Team Task and Creative Performance. Group & Organization Management, 41(2), 232-265. http://dx.doi.org/10.1177/1059601115584998
Tseng, H. (2006). Research on Organizational Culture, Organizational Restructuring, and Organizational Performance – Taking Example of South District, Chunghua Telecom. master’s dissertation at on-the-job Class of Graduate School of Engineering Management of National Cheng Kung University.,