Introduction to HRM
What is meant by the term ' organisational culture', and why do many of today's organisations seemingly place so much importance on the idea of managing culture?
26st November 2012
Lecturer: Dr. Frank Worthington
The late twentieth century saw an emergence in industry competition and in order to continually achieve success, organisational behavior had to evolve into something new. Organisational culture is one form of organisational behavior that is focused on the shared values and beliefs which members and employees of a specific organisation believe to be the right way to act in a particular situation (Vecchio, 2000). Just like other theories of organisational behavior, the purpose of culture theory is to gain knowledge of employee attitudes so that organisations can reduce cost and improve production (Stanford, 2010). The aim of this essay is to show the rise of culture belief in organisations, and why it can play an important role in organisational performance. First it will provide a history of the literature, then present different concepts that can be seen, such as 'has' and 'is' theory 'strong' and 'weak' cultures. Finally it will identify positive effects it can have on organisations and employees.
The rise of Humanistic theories
From the 1920s to the early 1970s Scientific Management was widely adopted by Western companies because it was an easy structure to implement by managers in an organisation to achieve success and control over employees (Burnes, 1996). However with the oil crises in 1973 interest in the Japanese model of production spread to the World (Brown and Williams, 2012). This happened because the Japanese were achieving what no other organisation had ever achieved; in addition they were contradicting every previous concept of production (Vecchio, 2000). When organisations around the World were practicing mass production, the Japanese were developing the just-in-time approach. This is when the raw material would only be ordered just-in-time to be produced, and production would only start just-in-time to be delivered to the costumer, avoiding waste and contributing towards a more effective cash flow; additionally they were practicing team work (Brown and Williams, 2012). Employees were involved in decision making and projects would be integrated at different levels from the marketing and finance department to the shop floor (Vecchio, 2000). This reduced alienation and empowered employees, the results were considerable and were seen as a miracle by Western organisations. Therefore, as a response to the Japanese's new challenging approach, western organisations began to explore different models of behavior (Burnes, 1996). That is when the theories that were more humanistic (Human Resource Management, Culture theory and Contingency approach) were rediscovered and adopted. In 1982 Peters and Waterman (1982) suggested that the key to the recovery of Western companies was the implementation of organisational culture. In their study they analysed several different organisations from the USA and identified a list of eight common beliefs that according to them were the reasons for their success (Mullins, 2011). Thus, if a company wishes to achieve ‘excellence’ they should embrace those beliefs. Customer orientation, respectful treatment beyond different level of employee's and a set of values through a clear organisation philosophy were a few of those common attributes (Burnes, 1996). They argue that when employees have organisational values integrated within their actions, there is no need for close supervision, reducing organisation cost and empowering employees (ibid). Therefore, managers should adopt a system where employees have more freedom, nevertheless managers would still have some...