Organizational Behavior in Globalized Context
1. What is the relationship between an institutional system and an organizational culture? The process when an “organization takes on a life of its own, apart from its founders or members, and acquires immortality” is called institutionalization by Robbins and Judge. That means that the organization in itself does not change even if the founder dies or important managers leave the company, it will remain basically the same in the future as it has been in the past. Furthermore, these institutions influence the behavior and make some actions more understood than they perhaps should be. For example a very authoritarian management behavior that obstructs innovations and harms the external view on the company, but is tolerated by the entrepreneur as he acts in the same way. Even though a company may have achieved its original goals, it will continue its business with new goals if it is institutionalized. Organizational culture can be defined as “a system of shared meaning held by members that distinguishes the organization from other organizations”. This shows that every organization is different because of its values that origin from the organization’s founders and from the employees who are specifically selected in consideration of these values. Robbins and Judge identify seven primary characteristics to describe a culture: innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness and stability. It is vital for a company to have a matching culture to the means of an organization: for instance should a high-technology firm not be afraid of risk-taking and ought to give high attention to detail and team orientation; a retailer in a very competitive market should rather be outcome oriented and does not necessarily have to be very innovative. All of these seven attitudes could also be used for human beings which points up that an organization with its own culture develops its own personality. Organizational culture can also be seen as a descriptive term how employees perceive a firm’s culture. Robbins and Judge call institutionalization the forerunner of organizational culture as it already exists for a significant longer time. In the past a firm was considered more as “rational -1-
means” that was strictly organized, controlled and influenced people. It was not supposed to have an own personality, values and culture. When the concept of institutionalization was introduced, it was the first time to acknowledge that corporations are more than just a rational system, that people are a very important part of every organization and that these employees shape an organization as well as they are influenced by it. In the concept of organizational culture, the focus on the members of each organization is even stronger as business would not work without the employees. Therefore an institutional system and an organization’s culture can be seen as related to each other, but they are still two very different ways to direct employees. Both concepts show the importance of people in an organization and consider an organization as a person in itself. An organization has its own values and acts according to them. They continue to “live” even if the members of the organization change continuously. However, institutionalization regards rules and structures as necessary and even as substitutes for managerial discretion. It is more about controlling people to act in the desired manner and influence their behavior with direct orders or regulations. Organizational culture can be considered as a broader view: it contains all aspects that concern an organization’s members. Their minds and values also influence the rules and regulations and thus the institutional system of these companies. Thus, a strong culture can be considered superior to an institutional system within a company as the culture influences the...
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