ORGANIZATIONAL CULTURE AND ENVIRONMENT

1. ORGANIZATIONAL CULTURE AND ENVIRONMENT

2. Meaning of culture • Culture is a set of values, beliefs, norms, attitudes and habits, which governs the behavior of a group of people.

3. Organizational culture • It can be described as the shared values, principles, traditions and ways of doing things that influence the way organizational members act. In most organizations, these shared values and practices have evolved over time and determine, to a large extent, how things are done in the organization.

4. Significance of corporate culture • The culture decides the way employees interact at their workplace. A healthy culture encourages the employees to stay motivated and loyal towards the management. • The culture of the workplace also goes a long way in promoting healthy competition at the workplace. Employees try their level best to perform better than their fellow workers and earn recognition and appreciation of the superiors. It is the culture of the workplace which actually motivates the employees to perform.

5. Every organization must have set guidelines for the employees to work accordingly. The culture of an organization represents certain predefined policies which guide the employees and give them a sense of direction at the workplace. Every individual is clear about his roles and responsibilities in the organization and know how to accomplish the tasks ahead of the deadlines. • No two organizations can have the same work culture. It is the culture of an organization which makes it distinct from others. The work culture goes a long way in creating the brand image of the organization. The work culture gives an identity to the organization. In other words, an organization is known by its culture.

6. The organization culture brings all the employees on a common platform. The employees must be treated equally and no one should feel neglected or left out at the workplace. It is essential for the employees to adjust well in the organization culture for them to deliver their level best. • The work culture unites the employees who are otherwise from different back grounds, families and have varied attitudes and mentalities. The culture gives the employees a sense of unity at the workplace. • Certain organizations follow a culture where all the employees irrespective of their designations have to step into the office on time. Such a culture encourages the employees to be punctual which eventually benefits them in the long run. It is the culture of the organization which makes the individuals a successful professional.

7. Every employee is clear with his roles and responsibilities and strives hard to accomplish the tasks within the desired time frame as per the set guidelines. Implementation of policies is never a problem in organizations where people follow a set culture. The new employees also try their level best to understand the work culture and make the organization a better place to work. • ·The work culture promotes healthy relationship amongst the employees. No one treats work as a burden and moulds himself according to the culture.

8. It is the culture of the organization which extracts the best out of each team member. In a culture where management is very particular about the reporting system, the employees however busy they are would send their reports by end of the day. No one has to force anyone to work. The culture develops a habit in the individuals which makes them successful at the workplace.

9. Characteristics of organizational culture • It is distinctive. • It is based on certain norms. • It promotes dominant and stable values. • It leads to common behavioral aspects. • It shapes philosophy and rules. • Its strength varies.

10. Seven dimensions of organizational culture • Attention to detail : degree to which employees are expected to exhibit precision, analysis and attention to detail. • Outcome orientation : degree to which managers focus on results or outcomes rather than on how these outcomes are achieved. • People orientation : degree to which management decisions take into account the effects the decisions have on people in the organization.

11. Team orientation : degree to which work is organized around teams rather than individuals. • Aggressiveness : degree to which employees are aggressive and competitive rather than co-operative. • Stability : degree to which organizational decisions and actions emphasize on maintaining the status quo. • Innovation and risk taking : degree to which employees are encouraged to be innovative and to take risks.

12. How employees learn culture • Stories • Rituals • Material symbols • Language

13. Stories • These stories mostly contain a narration of significant events or people, including such things as the organization’s founders, rule breaking and reactions to past mistakes. These company stories provide examples that people can learn from. • Organizational stories anchor the present in the past, provide explanations and legitimacy for current practices, exemplify what is important to the organization and provide compelling pictures of an organization’s goals.

14. Rituals • Rituals are also important as a tool to transmit culture. At Aditya Birla, there are three high profile awards that are given by the company to recognize individual contributors every year-awards for superior teamwork, awards for internationally benchmarked outstanding achievement and a monetary award for performance recognition in delivering excellence.

15. Material symbols • When someone walks into different businesses, he/ she gets a feel for what type of work environment it is – formal, casual, fun, serious and so forth. These reactions demonstrate the power of material symbols or artefacts in creating an organization’s personality. • It also convey to employees who is important and the kinds of behaviour that are expected and considered appropriate.

16. Language • Many organizations and units within organizations use language as a way to identify and unite members of a culture. By learning this language, members attest to their acceptance of the culture and their willingness to help preserve it. Over time, organizations often develop unique terms to describe equipment, key personnel, suppliers, customers, processes or products related to their business.

17. How does culture affect the managers? • Planning • the degree of riskiness in preparing the planned targets. • the development of planned proposals individually or by a team. • the degree of environmental scanning before developing the plans.

18. Organizing • the degree of delegation of authority affects the managerial performance. The delegation reflects the trust and confidence of managers as perceived by the top management. • the process of task performance by individuals or teams also affect the managerial performance. In the team performance the motivation is strong and the morale is high. • the preparedness of managers to interact with other managers on common and interdependent issues. The strong culture reflects such preparedness of co-operation and co-ordination and indicates the culture of team spirit.

19. Leading • the managers’ concern towards increasing job satisfaction of employees during their job performance. • the selection of appropriate leadership styles. In a strong culture management give more freedom in job performance. Such approach fosters initiative and innovation. • whether all disagreements-even constructive ones- should be eliminated.

20. Controlling • it is a culture under which the employees work under close supervision or as little supervision as possible. • what criteria should be emphasized in employee performance evaluations • what repercussions will occur from exceeding one’s budget.

21. How does environment affect the managerial performance • Internal environment – refers to the factors which are within the organization and are controllable by managerial decisions and actions. • Technology know-how • Manufacturing know-how • Marketing know-how • Distribution know-how • Logistics know-how

22. External environment – refers to factors and forces outside the organization that affect the organization’s performance. The external environment are further classified into two categories- specific and general.

23. Specific environment: • Economic : the availability of inputs, input costs, affordability of consumers at a given price • Social : the radical change in tastes and preferences of people • Political : the regulatory or promotional policy of government

24. 4. Legal : safety of property, legal claim, price control etc. 5. Technological : the pace of technological advancement and chances of obsolation losses 6. Global : economic co-operation, tax rates, international agreements etc. 7. Demographic : the division of population strata and its impact on demand characteristics e.g. proportion of young population over aged population

25. General environment: • Customers : their attitude, loyalty and preferences • Suppliers : the size of procurement and preference given by suppliers • Competitors : their pricing strategy, expansion programmes, manipulative tactics etc. • Public pressure groups : impact of social activities on company products location and social sanction

26. Why change is crucial • Need for the change • crisis of leadership • crisis of autonomy • crisis of control • crisis of red tape • crisis of self-discipline • Changing external environment • Changing internal environment

28. Changing external environment

29. Changing internal environment

30. Styles of leadership • Autocratic/ authoritarian leadership style • Participative/ democratic leadership style • Laissez faire/ delegative/ free reign leadership style

31. Autocratic leadership style • This style is used when leaders tell their employees what they want done and how they want it accomplished, without getting the advice of their followers. • It can be used when you have all the information to solve the problem, you are short on time and your employees are well motivated.

32. Participative leadership style • This style involves the leader including one or more employees in the decision making process. • However, the leader maintains the final decision making authority. • This is normally used when you have part of the information and your employees have other parts.

33. Delegative leadership style • In this style, the leader allows the employees to make the decisions. However, the leader is still responsible for the decisions that are made. This is used when employees are able to analyse the situation and determine what needs to be done and how to do it. • This is a style to be used when you fully trust and confidence in the people below you.

34. Change process • Unfreezing • Changing behaviour • Refreezing

35. Unfreezing • As individuals we all develop habits. A habit is a patterned way of doing something that has been successful and therefore reinforced to the point that we exhibit the behaviour without really thinking about it. • Similarly, just as we can develop behavioural habits, we can develop cognitive habits or ways of seeing and interpreting events around us. We have static trend to see each things.

36. Unless we undo or unfreeze these old patterns, it is difficult to change to something new. E.g. ice sculpture of bird converted into fish • In other words, changing to something new requires undoing or unfreezing something old.

37. Changing behaviour • Once old tricks are unfrozen, then you are in a position to actually move, to make the needed change. As a manager, movement may involve changing your perceptions, decision making approach, comminication style and so on. • Research has demonstrated that one of the biggest determinants of movement is the level of certainty or uncertainty associated with the change.

38. The greater the uncertainty of what will happen, generally the greater the resistance to the change and the less likely that there will be any movement in the desired direction of the change. • Changing behaviour is attained through any one of the following two processes: • Identification process: Under this process various ‘role models’ are presented before a person. In the presentation of these various role models, the person strives select an ideal role model in relation to the existing conditions. Efforts are made to mould behaviour of a person like that of an ideal role model.

39. 2. Internalization process: Under this process a person is put in a totally new environment involving the expected behaviour pattern. The person is studying such newenvironment and strives to develop the attitude that is expected in a new environment. As the person develops familiarity and oneness with the new environment, it is known as internalization process.

40. Refreezing • Refreezing involves monitoring the change to see if it is producing the anticipated and desired results. To the extent the change is succeding, the refreezing phase should involve reinforcing the change so that it becomes more established.