Abstract
In the innovation field, the existing theories have suggested that organization culture affects the capacity of a corporation to innovate. In fact, most organizations have been unable to innovate because of the prevailing culture that inhibits the propensity of workforce to generate and effectively use new ideas.
This paper has highlighted organization cultural aspects that tend to create and enhance the level of innovation.
The paper further reviewed how the adopted organizational culture affects the innovative capacity of people in an organization as well as actions and strategies that can be implemented to ensure that appropriate culture is created.
Introduction
Organizational culture and cultural diversity is a context that dominates the area of leadership, employees’ development, and innovation in most organizations. The diversity in culture heightens the challenge faced by managers in keeping organizational staff motivated to innovate and change the existing corporate structures.
With most organizations operating in cultural diverse environments, it is essential to check the nature of organizational culture, its impacts on innovation and management development in cultural various contexts (Melitski, Gavin & Gavin, 2010).
This paper relates the wider field of management to the specific area of organizational culture. It argues that organization leaders will have difficulties in changing an existing organizational culture.
The paper explores how the prevailing organizational culture influences change and creative behaviors. It finally offers recommended actions and strategies to make sure that proper culture is created.
A critical literature review on the nature of organizational culture theories
Organizational cultural environment and its impact on change and innovation
Organizational culture and the general social and cultural environments can be considered to interlock in that people enter organizations from surrounding societies and bring their culture and social life with them.
Therefore, the changing social and cultural environment influences corporate culture and is a big challenge to managers endeavoring to change the corporate culture. Forces in this environment are those that effect changes in how people live and work.
Mohanty and Rath (2012) think that managers must be responsive to those changes that take place in the surrounding societies as they affect all aspects of corporate culture, yet most corporate managers will have little knowledge about those changes.
For instance, new organizational leaders are tasked with the development of corporate ethics and well-being to initiate change. Sims (2009) considers corporate ethics as one element of corporate culture that is hard to change, as ethics are defined differently by each organization.
No wonder huge ethical scandals such as Enron and Hewlett-Packard have plagued hundreds of United States firms. Unethical organizational culture behaviors damage firm’s reputation and cost the firm the goodwill of employees and customers.
Moreover, the losses could lead to financial and economic damage of the firm. Managers who wish to change such a culture are required to set up an ethical code that defines acceptable behaviors and develop a framework of rewards and punishments to make ethical codes.
However, to some firms, social or ethical responsibility means doing any action if it is legal. In such a culture, developing a code of ethics that helps the firm to protect their reputation and make sure the goodwill of employees and customers is hard for new managers.
As Sims (2009) notes, the challenge is to build an organizational culture where members oppose the temptation to act in ethical manners that promote interests at the cost of the firm or promote the interest of the firm at the cost of the society.
Indeed, many executives have been unable to take effective measures when confronted by an ethical cultural scandal. For example, Citigroup suffered dearly from a cultural scandal and the executives could only choose corporate silence to support the reputation of the company (Jeffrey, Liker & Hoseus, 2008).
Workforce diversity is also a big challenge to managers wishing to change an existing organizational culture. While an organization is legally and socially committed, it must include employees from different environments.
Some organizations are not sensitive to diversity issue while others have overemphasized on the issue. The demographic composition of workers has changed considerably meaning that managers must address this cause when fostering or changing organizational culture (Moran, Harris & Moran, 2010).
While this is an essential consideration to managers, some existing organizational cultures discourage such efforts to an extent of justifying that diversification lowers the quality of management.
The belief makes it difficult for managers to change the culture, as it requires the commitment of both the manager and employees.
Global cultural environment theory
The global business environment is changing drastically, thus requiring new and creative approaches to business (Melitski, Gavin & Gavin, 2010).
Apart from the changes in regulations, diversity and consumer behaviors, the global economic factors have experienced significant economic changes, thus influencing organization culture greatly.
For many organizations, the focus is to create a culture that might improve competitive advantages and eventually the profitability in a threatening economic environment.
Therefore, organizational cultures that are witnessed today have nothing to do with the traditional emphasis on aligning corporate cultures with national cultures. Firms, including small-to-medium enterprises (SME), have internationalized their operations in search of business opportunities (Scheffknecht, 2011).
Today’s managers are challenged by a myriad of factors stemming from the changing global environment. First, as noted earlier, cultural differences influence corporate culture in different countries.
Management functions directed towards maintaining and improving corporate culture become more complex as firm’s activities expand internationally. The coordination of organizational and decision-making issues also becomes much difficult (Moran, Harris & Moran, 2010).
Managers fight in vain to create a corporate culture that balances between the needs of the foreign markets and cultural disparities on important organization issues such as evaluation, innovation, compensation packages, and promotion policies.
Second, understanding global cultural difference is a challenge to most managers who appreciate the changing global environment. There are issues related to understanding corporate behavior in diverse global settings.
Organizational corporate culture becomes especially complicated at global level since desires, attitudes and values of employees differ across countries (Moran, Harris & Moran, 2010).
Again, the issues of coordinating activities to match organizational environment become more complicated as firms expand internationally. Also, many organizations are locating in a specific region because this permits them to increase efficiency, but in this way, also affects organizational corporate culture.
Third, global learning that has helped organizations abroad to become strongly positioned in the global market is a challenge to most managers.
For this challenge, managers are required to create an organizational corporate culture that might allow the firm to rotate employees to other foreign operations to learn the opportunities and problems that lie overseas. Apparently, this is difficult for the managers and costly to the firm.
No wonder many kinds of research on expatriation have pointed the key challenge to successful expatriation as the capacity of the organization to create a culture that arms the employees with the necessary skills and knowledge to fit in foreign cultures (Jeffrey, Liker & Hoseus, 2008).
How the nature of organizational culture impacts on the innovative environment
One element of organizational culture that firms have focused on is innovation. Almost every organization creates a culture that might make the employees more creative. The most significant driver to innovation is information technology (IT) and its integration in business operations.
In as much as IT is essential to organizational activities, it poses a major challenge to today’s managers (Melitski, Gavin & Gavin, 2010). They have no other alternative but to involve IT when changing the organizational culture.
However, to promote organizational innovation, learning, and creation of knowledge, corporations must use IT to define, acquire, arrange, organize, input, manipulate, transmit, and store information.
Organizational learning can only occur if the employees are able to manage knowledge and information to obtain a better understanding of the need to change.
Regarding technological innovation, Melitski, Gavin, and Joanne (2010) shed light on organizational culture and its adoption. According to them, organizations are increasingly operating in uncertain, decentralized, and networked environments, where adoption of creative ideas has become essential to organizational change.
Indeed, organizational cultures institutionally shape the way firms choose to use technology and add the innovatively new ideas. The researchers also showed that there are environmental factors that influence employees’ willingness to innovate and adapt new technology.
When the organizational culture is supportive, the probability of innovating and adopting creatively new ideas is substantially higher.
For employees who work in firms where work is well organized, their opinions are considered valuable and they are well-informed on how relevant issues in the firm will be adopted to enhance the level of technology (Melitski, Gavin & Joanne, 2010).
Unfortunately, most organizations do not have a supportive culture that can enhance the willingness of employees to innovate and adapt new technologies. Recently, changes in organization creative culture have taken many directions about technology, work, and employment relationships.
Technological innovation and adoption have been associated with downsizing, growth of temporary workers or contingents, outsourcing and employees no longer spend their full careers with one firm (Scheffknecht, 2011).
As a result, organizational managers have to work with employees whose confidence with the firm is fainted by cultural changes taking place within, and hence are likely to resist innovative ideas and culture change.
How organizational culture influences change and innovative behaviors
In most organizational contexts, it is believed that culture affects innovation-related behaviors in many ways. The effect of organization culture either may directly or indirectly affect improvement in relation to external rivalry, dimension of the firm, technical variables, and managerial assets.
First, an organization with well-built cultural ethics such as the Toyota Company may be stalled and other aspects may help the production performance (Jeffrey, Liker & Hoseus, 2008).
In cases where employees make morals and norms that emphasize on openness to newly crafted ideas and innovation, the next activities and practices will augment the productive capacity of an individual innovativeness.
In this company, the efficiency of modernization might be affected by optimistic group value plans that direct and inspire people towards innovation. To facilitate the progress of cultural adoption among organizational employees, Toyota has established communal principles that foster innovation.
The degree of innovation depends on different variables such as power allotment, participating judgment, people and vocation progress as well as support and joint venture. In some organizational groups, culture may entail willing to control and guard the schedule of individuals’ in an organization.
Therefore, the available assets and information are mutually influenced across different areas and levels of the organization (Scheffknecht, 2011).
Participation and sincerity in decision-making process have been highlighted as an area that might enhance organization innovation. However, there is the need to have open group cultures that engross employees from various corporation levels as depicted in the case of Toyota.
Organizational culture normally enables employees to help and support one another in developing thoughts and getting things done.
Other groups, however, tend to encourage seclusion through demoralizing teamwork and support hence reducing the capacity to innovate. In some groups, culture may stipulate individuals’ involvement in informal education or training programs that would enhance capacity expansion.
There are other culturally formed groups in organizations that tend discourage learning and the ability to generate new ideas (Jeffrey, Liker & Hoseus, 2008).
Thus, to increase the level of individuals’ dedication and involvement to innovate, act freely, and come up with fresh ideas, an organizational culture must compel its workforce to participate in the decision-making process.
Some organizational cultures tend to discourage the generation of fresh ideas and fail to motivate employees to take risks. To overcome this, the prevailing culture in organization must increase sincerity and reduce panic through enhancing group effort and support.
This can be fostered by facilitating teamwork and communication to nurture and give confidence to innovative dreams. Such a culture will enable workforce to care about innovation for organizational good. Support and cooperation as a culture tends to increase traverse-fertilization of ideas, thus influence individual productivity.
Thus, Toyota encourages a participating culture that increases communication and information sharing to enhance innovation (Jeffrey, Liker & Hoseus, 2008).
Recommended actions and strategies to ensure appropriate culture is created
Culture in any organization plays a decisive role on how businesses have opted to carry out their activities. As a management model, corporate culture is among the different mechanisms that could be utilized by corporation management in growing, vibrant groups.
The management of an organization, however, instigates with the creation of cultural practices that demand for the enforcement of the devotees’ prospects and suppositions.
Suitable culture that enhances innovation and change can just be instituted through constancy in distributing comprehensible signs on organization viewpoints, ethics, and precedence.
According to Ulijn and Weggeman (2001), there are recommended actions and strategies that are primarily embedded on mechanisms that could be used by organizational leaders to create a suitable culture. The activities and plans are as discussed below:
The management practices and appraisals that should be considered regularly
Proper organizational culture can be created when corporate organizers and management accurately communicate precedence, viewpoint, and ideals that should be given awareness.
In fact, anything that corporate management appraises in the end and underlines might have considerable upshot on corporate culture. This is the most powerful tool that can be used to communicate messages when managers are steady in their personal behaviors.
The intensity of management constancy propels corporate ideas, morals, and priorities to every sector and the corporation will just display such standards.
Both unconstructive and constructive indicators should be exploited to draw the employees’ awareness towards what the corporation and its management feel is essential.
Company management should constantly inspire and sanction employees as well as attend to the principled and decent actions. Having organization’s code of conduct is hardly enough.
Leaders must monitor operating procedures and policies besides giving very strong signals that would enhance the creation of appropriate culture (Ulijn & Weggeman, 2001). The management of a company can also build a suitable culture by offering incentives for devotion and penalty for any non-cooperation.
For principled actions, the management strategies must reproduce the behavioral models, ideals, attitudes, and positions of a corporation working culture. In the course of imitating what the corporate management views, a suitable culture built on good and principled conducts might be implemented in a corporation.
The executive response to predicament and significant occurrences
When calamities occur within the organization, everybody knows about it. Most important is the organization management reactions. The way organizations react to calamities presents general organization culture.
Deeper cultural values of people are exposed during crises and such exposures increase the prospective of either changing or reinforcing the existing culture.
When a calamity occurs, the organization executive should influence those cultures that enhance moral behavior and appropriate values. Hence, crises within the organization should be taken as an example of compliance to moral values of the organization.
Assigning status, recompense and resources
The organizations normally assign resources depending on the values and postulation of the company top leadership.
Organizations find it essential to allocate their resources in a fair way as this result in improve efficiencies, create satisfaction on clients and employees, and most importantly, improve the organization’s value.
To create appropriate organizational culture; therefore, the beliefs of the management must be strongly financially supported.
Areas in the organization with an indication of improvement and provide the company with increased profits should be prioritized when resources are being allocated. Equitable resource allocation steers the performance of an organization to higher potential areas.
Organizational culture is equally affected by ethical and moral behaviors. The organization executive should evidently point out actions that are penalized and those worthwhile. To enhance appropriate organizational culture, leaders need to evaluate the employees’ effectiveness by using performance appraisal systems.
Employees resourceful applying existing skills or generate new technological know-how should be motivated through increased wages, endorsement for higher ranks or commendation.
When an organization negatively reacts to the innovatively new ideas through ridiculing the involved parties, others will have strong feelings that new ideas are undesirable.
Finally, firms are capable of generating appropriate values through proper orientation and training as well as through purposeful role modeling. This can be realized through excommunicating, promoting, and recruiting qualified personnel.
Diagrammatic presentations
The ICE Model (Innovation culture enhancing model)
The diagram below shows the culture enhancing innovation model that is based on a comprehensive organizational development model literature survey. The model stems from literature on creativity, culture, and change management.
The ICE Model was first developed founded on wide-ranging literature reviews. It was after that tested in one of the Jordan pharmaceutical corporations for two years.
Given that organization cultures have values that underlie behavioral actions and have hidden assumptions, Schein felt that iceberg could be used as basis to design the ICE Model that describes organizational culture and innovation.
There are three main components in the ICE Model. The first component is called the foundation.
It is made of management commitment, PMS (Performance Management Systems) and Strategies, organizational structures, and national culture.
The second component is known as the change interventions component. This component comprises of the dimension for shared work values, motivational dimension, and leadership dimension. Such dimensions for innovative cultures tend to work well in climates that support creativity.
The supportive environment must include freedom, sufficient resources, challenging work, supervisory encouragement, organizational encouragement, and workgroup support.
The third component is the anticipated ICE Model outcomes that comprise of better performance and enhanced creativity. The organizational culture is always determined by nationals’ culture. Studies should thus concentrate on assessing national culture to incorporate its effects on organizational development processes.
From the above diagram, the following table for assessment instrument can be used by organizations to establish the keys to innovation or creativity.
For an organization to be innovative, competing value framework should be used to develop an OCAI (organizational culture assessment instrument). This instrument can be used to identify the preferred future and current organizational culture that supports innovations and creativity.
This framework tends to classify an organization into different continuums that underline core values. The values are directly opposite to each other in the continuum.
That is, there are external versus internal and stability versus flexibility. The following OCAI figure has four quadrants with distinguished features, namely hierarchy, market, adhocracy and clan.
The clan culture necessitates that any corporation needs to focus on maintaining internal flexibility, clients’ sensitivity, and concern for individuals in order to attain collaboration orientation. Conversely, organizations should concentrate on external positioning when they are in the adhocracy culture.
In fact, the organizations must have high degrees of orientation towards individuality and flexibility to be innovative.
Organizations with hierarchy cultures must focus on maintaining its internal structures to control itself and to be stable. Finally, organizations with market culture concentrate on positioning themselves externally to control and be stable in market competitions.
However, for organization to support workforce innovation and creativities, there is the need for them to concentrate on the adhocracy and clan quadrants.
This implies that any change in an organization must be geared towards moving the corporation from the hierarchy and market quadrants to the adhocracy and clan quadrants. This will facilitate the level of organizational innovation and creativity.
Conclusion
Organizational culture plays an important in spearheading or hindering the level of innovation. The culture of an organization includes corporate philosophy, the values, and images that tell action. This new approach to understanding corporate life must be passed into the process of management.
Organizational culture that rewards effective knowledge utilization and creation of innovatively new ideas is considered an appropriate culture. However, culture that hinders the creation of new ideas and fails to punish unethical behaviors is deemed inappropriate culture.
Therefore, it is normally challenging to implement cultural changes in an organization because the existing culture might be facing challenges and threats posed by changes relating to, social and cultural, technological and global environments.
When an organization implements the above named recommended actions and strategies, there are chances of creating or enhancing innovative and appropriate organizational culture.
References
Jeffrey, B., Liker, K. & Hoseus, M. 2008, “Toyota culture: the heart and soul of the Toyota way”, The DNA of Toyota Lies in Its Culture, pp. 3-33.
Melitski, J., Gavin, D. & Gavin, J. 2010, “Technology adoption and organizational culture in public organizations”, International Journal of Organization Theory & Behavior, vol.13 no.4, pp.546-568.
Mohanty, J. & Rath, B. 2012, “Influence of organizational culture on organizational citizenship behavior”, Global Journal of Business Research, vol.6 no.1, pp.65-76.
Moran, R., Harris, P. & Moran, S. 2010, Managing Cultural Differences: Global Leadership Strategies for Cross-Cultural Business Success, Routledge, New York.
Scheffknecht, S. 2011, “Multinational enterprise-organizational culture vs. national culture”, International Journal of Management Cases, vol.13 no. 4, pp.73-78.
Sims, R. 2009, “Toward a better understanding of organizational efforts to rebuild reputation following and ethical scandal”, Journal of Business Ethics, vol.90 no.4, pp.453-472.
Ulijn, J. & Weggeman, M. 2001, “Towards an innovation culture: What are its national, corporate, marketing and engineering aspects, some experimental evidence”, in Cooper et al, The International Handbook of Organizational Culture and Climate, Wiley, Chichester.