Abstract
Research has indicated that there is a strong link between organizational culture and organizational productivity. It is therefore in the best interest of the organization to cultivate a strong favourable culture. This report set out to analyse the cultural issues facing BSG Ltd following a realization that internal factors were impacting on the company’s profits and market share.
The report begins by defining organizational culture and underscoring the importance of a cohesive organizational culture. The merits of a strong, cohesive organisational culture have been stated and contrasted against the disadvantages of a weak culture. The cultural issues at BSG Ltd are outlined and the reasons why this issues need to be addressed given. The report discusses the link between organizational culture and leadership, motivation and ethics.
This reinforces the notion that the problems facing BSG are a result of culture. With this understanding, a list of recommendations which if implemented can assist BSG Pty Ltd to change its adverse culture so as to improve organizational performance are given. The report recommends the development of a strong organizational culture by the company. The report concludes by reasserting the importance of a strong organizational culture for the organization’s performance.
Introduction
Organizations are constantly striving to increase their productivity so as to counter external factors that impact on their profits and market share. To achieve this, the organization relies on its workers who are the primary machinery that carry out the tasks necessary for the company.
Purpose of report
The aim of this report will be to analyse the organizational culture at BSG Pty Ltd so as to underscore the cultural issues that BSG currently faces. The focus will be on the implications of weak organizational culture on the productivity of the company. The report will offer solutions to the issues that BSG faces and give recommendations on how the solutions can be implemented.
Scope of report
This report will set out to present a logical view of the cultural issues affecting BSG. The paper will delve into what organizational culture entails and proceed to outline the benefits of a strong cohesive organizational culture. The various issues that BSG faces will be revealed and solutions to the issues suggested.
Culture
Culture plays a crucial role in our lives and it is the basis on which civilizations are built. Hofstede (1980, p.21) defines culture as “the collective programming of the human mind that distinguishes the members of one human group from those of another”. Willcoxson and Millet (2000) propose that culture serves to delineate different groupings of people based on shared values.
What is organisational culture
While the importance of organizational culture is acknowledged by all, there is a lack of a universal definition of organizational culture. Schein (2010, p.18) views culture as “a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration”.
According to him, organizational culture develops as groups of people struggle to make sense of the organizational environment and come up with a more consistent and predictable view of how things should be (Schein 2010). Mohan (1993) concurs that the search for an organization’s culture must include a discovery of the fundamental shared assumptions that lie within the organizational context. This is in essence the organization’s self image as well as its view of the external environment which surrounds it.
Champoux (2010) proposes that organizational culture rests in commonly held fabric of meanings. This may be embodied in shared norms, story telling and rituals which the members of the organization take part in. This view is shared by Schein (2010, p.17) who says that culture assist the organizations members to “know important (shared values), how things work (beliefs), and how to behave (norms).
Therefore, organizational culture holds the organization together by giving the employees a sense of belonging and commitment hence leading to increased productivity (Wilderom et al. 2004). Bate (1994) emphasizes that organizational culture is an inherent part of the organization and it is not readily changed.
Organizational culture strives towards patterning and integration of people so that they create a stable and consistent environment. Schein (2010) states that the formation of a culture is not easy since in many cases, the actual history of experiences of people prevents them from achieving a clear cut paradigm. A common attribute from all definitions of organizational culture is that “values, norms, and practices” are emphasized on.
What is a cohesive culture
A cohesive culture exists when there is a high level of agreement among organizational members about what is valued. Cohesive organizations are characterized by a common culture being found all through the organization.
This is in contrast to non-cohesive organizations which have fragmented cultures where many little cultural groups exist. Mohan (1993) takes care to note that even in the most cohesive culture, “culture” is imperfectly shared and there will always exist perceptual differences.
The benefits of a strong, cohesive organisational culture
A strong cohesive culture has many inherent benefits. To begin with, it helps to focus the organization’s workforce on the goals and objectives that are important.
This undivided attention results in higher performance in areas of interest for the company. In addition to this, it is easier for the employees to draw consensus and focus on important organizational goals since a cohesive culture results in high intensity of common beliefs (Mathew 2007). The number of conflicts in the organizations is also significantly reduced since all employees have similar objectives.
A strong organizational culture can result in enhanced commitment to the organization as well as increased motivation by the workforce (Chory-Assad & Hubbell 2005). Cohesive cultures also exhibit involvement which is the degree of employee participation in organizational decisions.
Participatory decision making practices result in higher financial performances by the company. This is because if employees have a sense of ownership in the stakes of the company, they will perform better and will require even less formal supervision. A strong culture ensures that employees no longer need to be forced to work hard since they identify themselves with the organization and want it to succeed (Mathew 2007).
Cohesiveness helps the organization to deal with external factors and hence remain productive. Champoux (2010) notes that cohesiveness assists the organization to deal with external forces through adaptability. Adaptability in this context is the ability of the organization to positively respond to external changes with internal changes.
While cohesiveness alone may not result in strong organizational performance, it has many advantages which can be exploited to bring about higher organizational productivity. Organizational culture serves as a sense-making devise during the socialization process for new members.
Mohan (1993) notes that individuals over time acquire images of approved organizational expectations and these images are used as the standard for behaviour and organizational norms. A cohesive culture will ensure that new members are appropriately integrated into the organization and fit in with organizational expectations and norms.
Strong versus weak cultures
Weak Cultures are characterized by the lack of a common culture throughout the organization. Mathew (2007) reveals that such a culture results in reduced levels of commitment among employees. This is in contrast to a cohesive culture which fosters high levels of commitment among employees since organization’s culture functions to facilitate commitment among the fully socialized employees.
An organization which faces high complexity and high ambiguity in its operations requires a cohesive culture for it to perform effectively (Champoux 2010). On the other hand, an organization which faces low complexity and low uncertainty will suffer from a cohesive culture. There is a risk which comes about from cohesive cultures which result in ideological hegemony. According to Mohan (1993), such cultures serve to legitimize elite corporate structures which may have a negative effect on the company.
A Lack of cohesiveness results in the prevalence of work group cultures. These cultures consist of people who share similar tasks or interest and who adopt their own rituals and beliefs. This may not be supportive of organizational values or priorities and may cause the organization to fragment. Schein (2010) notes that sub cultures also facilitate or erect barriers to change.
Cultural Issues at BSG Pty Ltd
There are a considerable number of issues which have been identified at BSG ltd following a recent employee attitude survey and an analysis of company data. Most of these issues have a cultural implication.
Identified Issues
There is a lack of cohesion amongst employees which had led to increased number of conflicts within the organization. The company also has high turnover rates High rates of turnover are detrimental to the efforts of developing a strong organizational culture. Schein (2010) reveals that the strength of the culture depends on the length of time and the stability of membership of the group. This is because people who have lived or worked together for increased lengths of time have a shared historical experience.
There is evidently a break down in values in the company. This is evident from the analysis of company data for the year ending 2010 which reveals a 30% increase in pilfering, in both warehouse stocks, and stationery supplies. Another problem experienced by BSG ltd is that employees believe that there is little opportunity for advancement within the organization. This condition can be blamed on the lack of a cohesive organizational culture.
Another problem which is evident in BSG Ltd is poor team work. This is detrimental since the potential of groups and teams is monumental and as such indispensible to the organization. Teams are the units that are charged with carrying out various tasks together so as to achieve predetermined goals and objectives. Without good team work, the organization’s productivity is greatly reduced.
What needs to Change and Why
From this discussion, it is clear that culture influences the behavior of people in social systems. In the case of BSG ltd, culture is negatively impacting on the productivity of the company. Changes therefore have to occur for BSG Ltd to return to profitability. There needs to be a change in the level of job satisfaction by the employees. This lack of satisfaction has been blamed for the poor performance as well as high turnover rate currently exhibited by the company.
A decrease in turnover is desirable since it results in increased organizational performance and a reduction in the costs that arise when a firm losses skilled works and has to hire and retrain their replacements (Egan, Yang & Bartlett 2004). Cascio (2000, p.54) illustrates that reduction in turnover also “shrinks indirect costs such as lower new employee productivity and decreased productivity by old employees who are forced to serve as mentors to the new employees”.
The relationship between management and employees is also at an all time low. This poor relationship is characterized by low levels of trust which negatively impacts on the organization’s performance. Higher levels of trust need to be cultivated so as to increase productivity.
Addressing cultural issues at BSG
Considering the fact that organizational culture plays a crucial role in the performance and efficiency of the organization and a lack of it results in decreased productivity, it is of uttermost importance to address the cultural issues at BSG.
Culture and leadership
Leadership is the process through which a person makes use of the help and support of others to achieve desirable organizational goals or tasks (Mohan 1993). Strong leadership is desirable in all organizations since it is helps facilitate the achievements of goals. There exists a well established relationship between culture and leadership. Leaders ensure that the organization has a sense of purpose and is working towards the achievement of some organizational goals.
They therefore set out to generate and sustain trust between administration, employees and clients so as to promote confidence amongst the work force (Willcoxson & Millet 2000). Leaders are tasked with decision making and culture influences the decision making process and the manner in which events are interpreted by employees in the organization. Organizational leaders have to implement unification throughout the ranks so as to bring about a cohesive culture.
Culture and motivation
Motivation involves engaging a person such that they show desirable behavior or perform certain required action. Motivation acts on the knowledge of “what causes people to behave as they do”. Increasing the motivation of workers is critical for there to be job satisfaction since highly motivated workers exhibit greater work satisfaction and as such, their work performance is higher.
This is Job satisfaction is defined by cranny, Smith and Stone (1992, p.34) as an employee’s “affective reactions to a job based on comparing desired outcomes with actual outcomes”. Research indicates that organizational culture is a strong determinant of the level of satisfaction exhibited by the employee. Egan, Yang and Bartlett (2004) theorize that employee attitudes interact with environmental factors and this in turn influences job satisfaction and hence turnover.
Culture and Ethics
Ethics are an important part in the existence of all organizations and ethical behavior is necessary for the productivity of the business. Unethical practices have been responsible for many cases of business failures throughout the world. Unethical behavior translates to decreased levels of commitment of the employees which also leads to higher turnover. Bansal and Kandola (2004) reveal that unethical practice also affect employees who do not directly engage in the unethical acts.
This is because they face guilt and anxiety and these feelings affect relationships between employees in the workplace thereby reducing performance. In an organization with a well established culture, employees have the liberty over their actions and they take responsibility for their actions and decisions.
The organizations stand on various ethical issues is well understood by the employees and employees realize the value of ethics and responsibility to the entire organization. Khan et al (2010) states that the rules of an organization influence the practices adopted since they govern organizational procedures and standards.
Recommendations
From the discussions presented in this paper, it is evident that it in the best interest of BSG Pty Ltd to change its adverse culture so as to improve organizational performance. As it currently stands, there are some values that are held by all the members of the organization. A systemic audit of dominant values and norms could be undertaken to help uncover the distinctive shared values among the organization’s members.
From this, a new organizational culture which has its basis on some old values could be implemented. Creating a new organizational culture or reintroducing an old one takes a deliberate effort. To begin with, an ideology that is understandable, convincing and widely discussed needs to be come up with. Champoux (2010) reveals that such an ideology is the key for getting organizational members’ commitment to the vision.
The next step would involve managers selecting employees who already share key parts of the advanced ideology. This group can easily develop commitment to the ideology. Key to ensuring that the employees at BSG Ltd adopt organizational culture is through socialization which is also regarded as organizational learning.
Egan, Yang and Bartlett (2004) theorize that employee attitudes interact with environmental factors and this in turn influences job satisfaction and hence turnover. Reducing anxiety within the organizational contexts serves to motivate the employees to learn relevant cultural knowledge.
Bate (1994) notes that the use of rewards or sanctions may prompt employees to change their behavior to come in line with new stated values. With this realization, managers can make use of various reward schemes to motivate employees to adopt certain values.
Employees who demonstrate a mastery of cultural norms and practices should be given positive reinforcement. Over time, these values will become deeply entrenched in all organizational members and the two will be inextricably linked and interdependent. At such a time, it will no longer be necessary to use rewards or other sanctions to prompt changes in employee behavior.
Building trust between managers and employees is crucial for the organizations performance. Kim (2002) asserts that a management method that consists of effective supervisory communication and provides an avenue for employees to air their views is the best. Such a method increases trust levels between managers and employees which leads to increased job satisfaction hence lowering turnover rates in the organization.
The problem concerning pilfering by employees should also be addressed. Chory-Assad and Hubbell (2005) suggest that failure to give recognition to employees’ results in reduced commitment on ethical behavior in the workplace. With this understanding, BSG Pty Ltd should adopt a culture of recognition. This recognition will result in boosting of ego of individual employees and this will encourage ethical behavior in the organization.
Employees need to perceive the organization as growing and see opportunity for their own advancement. This can be achieved by having strong leaders who will come up with visions for the organization. In addition to this, the organization should come up with properly articulated procedures for advancement.
Champoux (2010) states that organizations with cultures that have well-organized and well known advancement procedures outperform those without these cultural characteristics. BSG Ltd should therefore develop procedures for the advancement of employees. This procedures and steps should be communicated to the employees therefore dismissing the perception that there is no opportunity for advancement in the company.
Conclusion
Organizational culture plays a crucial role in the well being of an organization. From the discussions presented here in, it has been discovered that BSG suffers from a weak culture which has been responsible for the many problems that the organization face.
A strong organizational culture strengthens the entire organization and brings about outcomes which include: increased productivity, higher motivation, reduced conflicts and greater job satisfaction for the employees. By implementing the recommendations suggested herein, BSG Ltd can establish a strong organizational culture and therefore begin to enjoy the benefits of a cohesive culture and exhibit growth.
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