Impact of Organizational Culture on Strategic Management

An organization is a common platform where individuals from different backgrounds come together and work as a collective unit to achieve certain targets and goals. It contains individuals with different specializations, educational qualifications and work experiences all working towards a common objective. Culture is something which one inherits from the ancestors and it helps to make a distinction between one individual and others. It is termed as culture with the attitude, identify and behavioral patterns by means of governing the way an individual interacts with others.

Impact of Organizational Culture on Strategic Management

Meanwhile, strategic management is the process in which a management team develops a mission and vision, objectives and goals, roles and responsibilities and values which ensure the success of the organization. Organizational culture significantly influences the performance of an organization. Furthermore, strategic management helps in making the organizational culture through developing the vision, mission and values. So the appropriate strategic management would improve the formation of a culture of integrity, competitive work ethic, embracing technology, value creation for customers and shareholders.

Organizational culture refers to the beliefs and principles of a particular organization. The organizations follow the culture which has a deep impact on the employees and their relationship amongst themselves. Organizational cultures are special and offer strategic strengths and it makes complete sense that organizations would think about culture in strategic management. A high-performing team of an organization need consider that has a corporate strategy of providing a fun and people-oriented environment friendly. This would not ally well with a sluggish culture or one with very traditional and employees. Whereas, it is necessary for the company to hire fun, friendly and customer-oriented workers and provide an environment that is fun and rewards great customer-friendly behavior through create unique organizational culture.

There are several factors which affect the organization culture, Firstly and the major factor affecting culture is the employees the organization. The employees are the main assets of an organization and contribute effectively in its successful functioning. It is essential for the employees to be loyal towards the organization and try the best hard in furthering its brand image. The employees in their own way contribute to the culture of the workplace which 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 cooperation and unity at the workplace in an organization.

On one hand, the attitudes, mentalities, interests, perception and even the thought process of the employees affect the organization culture. Organizations with majority of encourage healthy and benign competition at the workplace and employees are always on the toes to perform better than the fellow worker. Every employee understands clearly with his responsibilities, roles and strives hard to accomplish the duties within the desired time frame in accordance with the set guidelines. The new employees also make great efforts to understand the work culture and make the organization a better place to work. It is the culture of the organization which selects the best from each team member. The culture develops a habit in the individuals which makes them successful at the workplace. Starbucks is an example of organizational culture with a people-oriented. The company offers health care and tuition reimbursement benefits to its part-time as well as full-time employees, provides employees above minimum salary and has creative perquisite for instance weekly free coffee for all associates. As a result of these strategies, the company benefits from a turnover rate lower than the industry average with its own organizational culture. The culture promotes healthy relationship and environment amongst the employees.

Secondly, the leadership of organization is the other factor affecting the organizational culture. Organization Culture is the purport of the psychology and attitudes which are communicated by the leadership team to the employees and the ethics, beliefs and values which are incorporated for execution of work and achieved business objectives. Now that organization culture is connected with internal controls and control environment clearly. It is defined by the leadership of the organization. The chief executive officer is the torch-bearer of organization culture. The vision, mission and strategy communicated by the senior management are the link which holds the organization together and moves everybody in the same direction. Lack of clear direction, frequent and abrupt changes and arbitrary decisions in mission, vision and strategy contribute to the negativity in the organization culture, which also results in varieties of departments having different work cultures and working in a counter-productive manner. Additionally, business operations also would be impacted directly by effectiveness and efficiency. For example, Larry Page and Sergey Brin who are the leaders of Google Inc still play an active role in the day-to-day affairs. That being said, they have constructed a organizational culture that deeply believes in delegation. Each of employees are encouraged to speak their mind from the first day, and even decisions classically reserved for management that hiring are done through a collaborative process.

Thirdly, the team work also affects the culture of the organization. Team work is cooperative and emphasizes cooperation among employees. The organization culture brings all the employees on a common platform. The employees must be treated fairly and no one should feel ignored or left out at the workplace. It is essential for the employees to adjust well in the organization culture for them to deliver as best as they can. In team work organizations, members tend to have more positive relationships with their coworkers and particularly with their managers. For example, the growth in the number of passengers flies with Southwest Airlines from 1973 to 2007, southwest surpassed American Airlines as the most flown airline in the USA. Although the price has played a role in this, there is a key piece of their culture and competitive advantage due to emphasis on service. Southwest Airlines fosters a team work culture by cross-training its employees so that they are in a position to help one another when they needed. The company also emphasizes training intact work teams. In Southwest’s selection process, applicants who are not viewed as team players are not hired as employees.

The above mentioned three aspects clearly indicate that organization culture has a significant impact on strategic management. Every organization has its particular style of working which often contributes to its culture. The beliefs, principles, ideologies, and values of an organization structure its culture. The culture of the workplace controls the way employees conduct themselves as well as with people outside the organization. The way of employees interact with their workplace is decided the organizational culture. A healthy culture encourages the employees to stay highly motivated and loyal to the management. The culture of the workplace also goes a long way in facilitating healthy competition at the workplace that makes the individuals a successful professional.

Every organization has a particular culture making it different from the other and giving it a sense of direction and it comprises of an omnipresent set of assumptions which is often difficult to fathom and which directs activities with the organization. It is be indispensable for the employees to absorb the culture of their workplace to adjust well. Organizational culture is so impacting it can result in the success or failure of an organization, so a strong organizational culture is one of the most sustainable competitive advantages for a company. It is shared by organizational members, that is, a culture in which most employees in the organization show accordance with reference to the values of the company and the more likely it is to affect the way employees think and behave. For example, cultural values with emphasizing customer service will lead to higher-quality customer service if there is generalized agreement among employees on the importance of customer-service-related values. It is important to realize that a strong culture also serve on an asset or a liability for the organization that is depending on the types of values that are shared

Therefore, excellent organizational culture can make the relationship between employees and consumers, meanwhile, it also can help employees feel their role of importance and sense of personal responsibility throughout the image of organization, so that employees feel own organization how to communicate with customers, let customers know their kind of feelings, in order to make customer to deepen the organizational good impression and more trust depends on the organization. So any tiny requirements of consumers will feed back to organization as soon as possible, organization according to the original information feedback to improve their products and services, in order to satisfy the needs of customers successfully. This will have a positive cycle development pattern for the organization.

In recent society, the advents of the knowledge-based economy era make talents become the key of organizational development. Organizations obtain a large number of outstanding talents, and retain qualified personnel, it is very important to the organizational management, because these are able to promote organization to realize the appreciation of human capital. If only purely monetary reward as a standard, it will only cause employees do not have sense of belonging and frequent job-hopping. The organization can not invest in training of employees, but it will cause negative effect on talented person growth and organizational development. The attraction of talent to the people-oriented corporate culture will be able to be imagined which allows the employees to have a strong sense of belonging and a feeling of self-realization. Google is the best company to work for in the world which maintains a democratic and casual environment with resulting in its distinction. The company does not boast a large middle management, and upper management is so hands on, its hard to qualify them in a separate classification. Team-work model is made up of members with equal jurisdiction and a certain level of autonomy is maintained. In addition, people-oriented management also takes a good deal of effort to maintain. In order to put into effect it, Google create some unique cultural aspects, including all sorts of sports equipment’s and leisure facilities and the diversity of food and drinks for all employees.

However, positive organization culture is now a prior condition for success rather than a competitive advantage. In the meantime, it allows the hiring and retention of top-quality staff. If the organizational culture in a company is lowering morale, a top-down approach is needed, setting out the vision from the top and demonstrating acceptable behavior. Improving workplace culture makes experience of employees happier and this in turn leads to improved profitability, so in the HP (Hewlett Packard) example has a good reflection, HP is encouraged to change its culture because of problems several years ago, the employees were required to formulate three professional and three personal goals each year, and are encouraged to cheer those that achieve them. According to the two years into the program, HP reports no loss in productivity despite staff working shorter hours but there is an increased in staff retention rate. The program has been noted by the extent to which managers put into effect, and modeled it in their personal lives.

Furthermore, there are times when a strong culture may not exactly be the culture that is needed when it comes to facing the competitive environment. This is because the organization may have to come up with many innovative ideas in order to face the competition rather than sticking on to the old ways of doing things. To say, if the people in the organization are completely following the values and beliefs of the existing culture when it comes to achieving the goals, then they obviously lack the opportunities to think in a much creative or innovative way in order to come up with unique solutions or ideas to face the ever changing competitive environment. Haier Group is an example thats the core of organization culture is innovation. It is gradually formed and generated the unique cultural system in the course of development of Haier Group. Haier culture takes the concept innovation as the pilot, the strategic innovation as the direction, and organization innovation as the guarantee, the technical innovation as the means and the market innovation as the goal. With Haier Group from small to large, from weak to strong, from only China market to all over the world, Haier culture it is in constant innovation and development. The new product technology development abandon the past enclosed, linear low efficiency development mode, creatively implement integrated global technology, intellectual resources of the parallel type development, to the rapidly meet the demand of market.

In conclusion, it is the culture of an organization which makes it distinct from others. No two organizations can have the same organizational culture. The organizational culture goes a long way in creating the brand image of the organization. The culture gives an identity to the organization. In other words, an organization is known by its culture. The management and its style of managing the employees also affect the culture of the organization. There are certain organizations where the management allows the employees to take their own decisions and let them partake in making strategy. According to the organizational culture, employees get attached to their management and look forward to long term incorporation with the organization. The management must regard the employees to avoid a culture where the employees just work for money and nothing else. They treat the organization as a mere source of earning money and look for a change in a short span of time. Clearly, in many excellent organizations all over world, the organization will help employees to develop their own career planning, design for their own future and it means the positive organizational culture is important for strategic management.

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