Table of Contents
Chapter 1 Importance of Organizational Culture5
Chapter 1.1 The Components of Culture5
Chapter 1.2 Strong and Weak Organizational Cultures7
Chapter 2 Managing of Organizational Culture8
Chapter 2.1 Skills needed for Managing Organizational Culture and Culture Change9 Chapter 3 Organizational Culture Change10
Chapter 3.1 External Forces10
Chapter 3.2 Internal Forces10
Chapter 3.3 Resistant to Change11
Chapter 4 Consequences on Organizational Performance14
Chapter 4.1 Company with a strong culture15
Chapter 4.2 Company with a weak culture15
Conclusions and Recommendations17
Every company has their own culture about the way things are done in their organization. A culture gives shape to the company and will be for every company unique. In the report strong and weak cultures have been discussed. It can be concluded that companies with a strong culture are more profitable and perform better than companies with a weak culture. It has been looked further at how organizational culture can be managed. It can be noted that managing a culture is not an easy task and management will need to know how to deal with employees’ resistance. In order to stay competitive, companies will from time to time need to analyze their existing culture in order to find out if it is still appropriate in the current environment and make changes if necessary.
An organizational culture has been defined by Schein (1990 cited in Wilson, 2010) as “a pattern of basic assumptions, invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and integral integration, which has worked well enough to be considered valid, and therefore is to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.”
It has been proven that companies with strong cultures are successful and profitable. In today’s environment where globalization plays an important role, companies will need to be flexible in changing their organizational culture in order to stay competitive on the market.
This report will discuss how organizational culture can be managed and what significant consequences it can have on the organizational performance.
Chapter 1 Importance of Organizational Culture
As seen in the Introduction, organizational culture is the way companies run their business. The organization culture deals with:
• Behavior of the employees
• Norms and values within the organization
• Philosophy of the organization
• Rules in the organization
• Way of thinking and acting in the organization
Culture in the company can be seen as a guidance for the employees and will develop teamwork, due to the fact that members of the organization follow and share the same values, rules and goals, which will unite them. Teamwork in a company leads to better performance and increase of revenue. Teamwork also improves the relationships between the employees.
A company without a culture has no sense of direction, which will lead to unmotivated people. Further it can be noted that the importance of having a culture in an organization is to stand out from the crowd by creating an own image.
Chapter 1.1 The Components of Culture
The components of culture are values, norms, artefacts and leadership or management style.
As stated by Schiffman and Kanuk (1994 cited in Armstrong, 2006), “values help to determine what we think is right or wrong, what is important and what is desirable”. The values describe what needs to be done in the organization in order to reach the desired goals and to lead the organization to success. Management will need to follow the values set by an organization in order to influence their employees.