Abstract
This paper examines the way organizational culture impacts on decision making by two authors, Sekaran (2004) and schein (2005) by taking us through the effects of strong and weak cultures on leadership and bringing to view the culture and sub-cultures that have to be factored by management in making the best decisions in line with organizational goals.
It examines what happens when organizations merge, employee education on the impending merger, the role of management in the merger process for achieving the best results, how a change in organizational strategy may impact on an organization’s objectives, goals and mission, the role of decision making in organizations in line with conflict resolutions and risk aversion, and the common bias to be avoided in decision making for effective and efficient utilization of resources in line with an organization’s objectives, mission, and goals.
Introduction
A key element that holds sway in decision making in an organization is its culture. An organization’s culture should be clearly understood by its leadership to help them make the best strategic decisions in line with its objectives, mission, and goals. Formal and informal culture should be incorporated in decision making by the leadership which should embrace a strong culture for the best and desirable results.
Decisions made should not conflict with an organization’s culture, whether formal or informal. This calls for employee education when an organization changes its strategies to ensure full employee cooperation at all levels of an organization’s existence, thus ensuring a smooth transition from one strategy to another.
When mergers occur, active employee participation, employee education, and leadership should ensure a seamless merger of different cultures into a single organizational culture. To avert risk and other undesirable happenings within an organization, leadership should embrace the best decision making strategies and put in place measures to help counter any bias in the process.
Impact of organizational Culture on Decision Making
Strategic leadership calls for the creation and maintenance of organizational characteristics that bring about collective effort. Thus organizational culture is vital in driving an organization into achieving its goals. Organizational culture has a far important influence on organizations, the way decisions are made, the outcome of those decisions and the effect of those decisions on the strategic position of those organizations.
These are the values and norms which influence interaction between employees, define organizational goals and help an organization operate efficiently in the pursuit of its goals in line with established standards of behavior. Thus a strong culture helps influence employees in collectively pursuing organizational goals.
An organization’s culture shapes the outcome of the complex and challenging decisions, the decision making process and the impact of those decisions in achieving the desired goals. These values and norms influence the way employees interact in an organization, their standards of behavior and an organization’s interaction with its environment (Sekaran 2004). This results in good internal integration and external adaptation.
Decision making in an organization is a complex and challenging issue which entails a strong organizational culture for its mission, vision, goals, and objectives. Organizational culture is a strong element in decision making and leadership in positions should critically analyze an organization’s culture to enable them make the best strategic decisions.
A weak organizational culture calls for extensive reliance on procedures, and organizational bureaucracy in implementing its objectives and reaching its goals, leading to reduced innovations, and reduced employee motivation.
Organizational culture and sub-cultures greatly influence the outcome of decisions made by the leadership. An organization’s culture envisages several other subcultures which also play a vital role in influencing the outcome of decisions and the way decisions are made.
Schein bring to view a detailed analysis on how subcultures are formed from different subgroups and specific subgroups. These subgroups have different identifiable characteristics in an organization, by classifying themselves on the basis of social primary workgroups, occupational skills, and age. This is typically evident in the Department of Defense which comprises
“distinct cultures of the different military services and the corps of civil servants assigned to each service agency. A closer examination of each service culture reveals still greater cultural differentiation among occupational specialties, specific units within the service, and between line and staff personnel. Yet all of these subcultures adhere to the core ideologies, values and norms of the DOD” (Sekaran 2004)
What happens when organizations change their strategies
Changing or merging different cultures to come up with one culture for an organization is a difficulty and complex task. This undertaking envisages setting objectives, introducing employees in an organization to the new culture resulting from a merger, integrating the culture and the new organization to the environment.
In addition, this calls for an evaluation of the result and a renewal of the integration methods in line with organizational goals. Active participation by employees forms a fundamental driving force for an organization in reaching its desired goals in view of the new strategies it adopts. Employee discontent or satisfaction determines the success of a new strategy.
An organization’s core competencies should be focused for it to stay afloat in a competitive market. It is of primary importance that organizations continually revise and change their strategies. The HRM, human resource managers, should ensure effective quality management initiatives based on a thorough knowledge of organizational behavior, cultural values and norms, and the diversity of the strategy, a core factor in change management initiatives.
This makes the company stay afloat in a competitive market, leads to risk aversion, and maintains the market base inline with its mission and goals. Thus a company maintains its strategy and improves its position in the market.
What happens when two organizations merge?
The merger process between organizations with different cultural values and norms presents a greater challenge to the employees and the concerned management. Mergers are particularly made for the purpose of synergy. This process depends entirely on the organization’s behavior, culture, creativity, and the innovative genius of the people.
A seamless and smooth transition to a merger relies on the ability of the HRM, human resource managers, in making initiatives for the recruitment, structure and of the company’s workforce while ensuring a seamless cultural change. Capable leadership is required for a successful merger in restructuring an industry. The leadership role envisages planning and managing the merger in order to arrive at the intended culture.
To help merge a diversity of cultures in the merger process, employees of the companies need to be educated on the impeding merger, reasons for the merger, and be convinced about the value of their work for the company and their role in the merger process. This inspires motivation and confidence in the organization. Employees are likely to feel valued, motivated and secure.
In a merger, various subgroups exist which require interpersonal interaction (Schein 2005). This kind of interaction comes with value added benefits for the newly formed merger. Subgroups benefits include interaction with peers thus assimilating new employees to the new merger, interaction with supervisor which creates culture in the new employees, and interaction with senior co-workers.
“When planning culture change, it can be helpful to utilize those aspects of existing organizational support systems that foster desired behavior”( Schein 2005). A sense of community makes people feel trusted and dependent on one another. People perform different roles and functions. People with similar cultural values should know each other’s aspirations and interests.
Times of need require that members come together to aid their peers in creating a sense of belonging to one another while feeling welcome to the new merger. There should be a shared vision, mission and goals. A shared vision should be integrated with members holding the same value systems.
Members of an organization should be made to feel the oneness of purpose and a sense of belonging to that organization. In implementing organizational behavior and culture, executives should play the role of coaches and profit consultants instead of the role of boss.
The Role of Decision Making in an Organization
Decision making in an organization is vital in determining the outcome of decision and their implications on the running of an organization.
It is vital to integrate an organization to its environment through the decision making process. This calls for leadership to adopt the best course of action in carrying out an organization’s tasks. This results in the best course of action and in an optimum use of scarce resources.
Workplace problems can be solved through the decision making process such as negative employee attitudes, crisis aversion, and conflict resolution. Decision making helps identify the best course of action, and promotes efficient and effective use of scarce resources. This leads to employee satisfaction, motivation and increased productivity
Common Bias in Decision Making
Decision making is a challenging and complex undertaking that plays on an individual’s psychology. Biases are bound to exist ranging from cognitive to personal biases. Various factors play a significant role in the type of decisions made by the leadership of an organization. In the decision making process, selective search evidence is bias where we go out in the search of evidence to support a specific conclusion.
Further, we may be unwilling to change the way we think in the face of new circumstances, usually referred to as, inertia. By doing away with information that we feel is unimportant, we fall into selective perceptions bias. Recency, biasness in decision making entails placing emphasis in recent information with little regard to preceding information on an issue.
Groupthink bias is based on peer pressure while uncertainty bias is where we underestimate the future. Choice-supportive bias results when we interfere with our memories on the attractive option of choice, and repletion bias, where we belief that all information is in our domain (Schein 2005).
Bias in decision making has either positive or negative implications on the outcome of a decision. However, when making decisions, for the best results, an organization should put in place measures to counter self bias. This will generate confidence on the management from organizational employees and the organization’s environment.
This also generates a strong organizational culture and calls for a concerted effort in the part of administrators in ensuring formal decisions based on formal and informal structures within an organization.
Conclusion
Leadership should be well versed with an organization’s culture, be it when a change in strategy occurs, or a merger takes place, understand the cultures and subcultures to make the best strategic decisions for the good of an organization.
The best decision making should be embraced by leadership to avert any crisis, motivate employees, and resolve conflicts amicably while putting in place measures to help curb any personal bias which may arise in the decision making process in an organization. This could put an organization in a better position and enable it to effectively and efficiently utilize its scarce resources.
References
Schein, E.H. (2005) Organizational Culture and Leadership, (3rd ed.), Jossey-Bass.
Sekaran, U. (2004). Research methods for business: A skill building approach (4th ed.). New York: John Wiley & Sons, Inc.