The role of organizational culture

Abstract

          The paper surveys the different aspects of organizational culture - The role of organizational culture introduction. Culture has been identified to promote success or failure of the organization. A case study of the culture of Apple Inc has been done to indicate how culture has played a positive role. The case study involving the merger between Daimler AG and Chrysler LLC shows the negative impacts of organizational culture.

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Introduction

Culture refers to the values, attitudes, and believes of a group of people living in a community, society or an organization. Culture is developed throughout the history of people. As people interact, they exchange ideas which become incorporated in their cultural systems. The behaviour pattern of people is determined by the culture of the place they work, live and interact. Culture gives people a sense of belonging since human beings like identifying themselves with certain social groups. Culture is dynamic and changes as time goes by (Willcoxson & Millett, 2000).

          According to Willcoxson and Millett (2000, pp. 93) “organizational culture may be generally described as a set of norms, beliefs, principles and ways of behaving that together give each organization a distinctive character.” Organizational culture is similar to the national cultures in that they develop over time. An organization develops the culture of the industry the moment it is established. For example, the nature of competition, customer needs and the values of the wider community shape the culture of an organization. The founders of any organization establish the norms to be observed by all stakeholders and these norms become a culture to be followed by all people (Willcoxson & Millett, 2000).

          The managers construct meaning about the processes of the organization by using cultural aspects existing within the institution. People are guided by the culture of the organization when performing duties. Organizational culture affects the achievement of goals. A good culture promotes the organization and motivates the workers. The culture of an organization can promote success or failure of the strategies adopted. Culture determines the ethics to be followed by the people in the organization. Organizational ethics are developed by the various professionals who provide the rules and regulations to be followed. Culture brings change in the perception of the stakeholders upon the activities of the organization. Organizational culture is categorized as weak or strong. In an organization, the employees have different personalities, attitudes, responsibilities and views (Willcoxson & Millett, 2000).

To change the culture of the organization involves changing the values, norms, beliefs and other aspects of culture. A change in culture of the organization determines the ability of the internal systems to achieve the desired goals of an organization. Culture is an important aspect that determines the success of many strategies established within the organizations (McNamara, 2010).

Case study of Apple Inc

Apple Inc was established in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. Ronald Wayne later sold his shares to the other two partners and ceased to be a partner. During the foundation of the company, Mark Markkula provided with funds and expertise. The headquarters of the company are based in Cupertino, California. The company manufactures computer software, electronics and commercial servers. The software manufactured by the company includes Mac OS X operating system, iTunes, iLife, iWork, Aperture, Final Cut Studio, and Logic Studio. The computer hardware manufactured by the company includes iPod, iPhone, iPad and the Macintosh computers (Linzmayer, 2009). Steve Jobs is the current CEO of the company and has been in that position since 1997. Due to the health problems that Steve Jobs has encountered of late, Tim Cook has been the acting president of the company as Jobs recovers from illness. The company is managed by a board of directors who are the supreme decision makers. There are committees elected to conduct projects by the company (Linzmayer, 2009).

The cultural aspects of Apple Inc

The management of Apple Inc has been very successful in the establishment of strategies to develop a culture that encourages innovation. Apple has adopted a culture of leadership among its management. Steve Jobs established a culture where the executive managers as well as departmental managers should apply leadership strategies in the management of the subordinates under their areas of operation. This has encouraged the employees to perform their duties according to the standards which have been established for the achievement of the organizational goals. The employees are organized into teams which are the basic units of operation. All the teams are controlled by team leaders. The team members have a common vision and they interact to share ideas about the activities of the organization. The top management gives the teams adequate resources to conduct their activities optimally. Training is done to the teams to provide the most recent information in the market (Amberg, 2000).

          Under the leadership of Steve Jobs, the organization has been able to achieve excellent progress in the human resources management. Steve Jobs has created more opportunities for the organization after his return into the management of the company. He has excellent skills in management and this aspect has created strength to the company. Steve Jobs was one of the co-founders of the company and has a lot of experience about the management of Apple. The employees of the company are comfortable with the management of Steve and the good relationship between the top management and the other employees has enhanced the company to grow and expand (Ballard, 2002).

          Apple Inc has established a research and development department to find out the products and market trends. The R&D department researches on the technologies which will enable the workers produce competitive products. The company does market research to establish the needs of the customers so that the production department can design products which match the market demand. This strategy has created a competitive advantage to the company and more market share has been obtained. For example, the iMovie products have been successful in the market due to the high demand by the music industry. Apple has made more sales of the products and the customers are satisfied by the products (Tyre, 1999).

          The culture of innovation has provided employees with strategies to manufacture competitive products. The employees of the company have been very innovative and they have established many differentiated products. The innovations of the company have placed the company at an advantage over other competitors in the market. The company has established innovative products in the market and customers appreciate these products. The innovative products have been differentiated to provide a competitive edge to the company in the global markets. Through differentiation, Apple has managed to succeed in the market by competing with larger companies like Microsoft, IBM among others. Some of the differentiated products are the iTunes, iPhone, and others (Hubbard, 1992).

          Apple has managed to capture customer loyalty in the market. Most of the customers of the company like the products due to their unique features as well as the innovativeness of the company. The brands of the company are easily identifiable in the market and many people are willing to re-buy from the company. Apple has the highest level of customer loyalty in the industry compared to any other company according to Fortunes magazine. This aspect has increased the sales volume of the company since more customers are purchasing from the company (Fisher, 1998).

          The culture of entrepreneurship has been successfully practiced within the company. Steve Jobs is an entrepreneur who has created great success to the company. Most of the activities are based on risk taking. The establishment of the various products is based on risk taking by the organization and this has made the company more successful compared to other competitors in the market. Entrepreneurship can be traced back when the company was being established. Steve Jobs, Steve Wozniak and Ronald Wayne took the greatest risk to establish the company. They had inadequate funds and they underwent challenging moments to generate enough capital to establish the business. Entrepreneurial aspects are also evident in the current activities of the organization (Ballard, 2002).

          Good customer relationship has attracted a large customer base to the company. The management of the company encourages the employees to create a good relationship with the customers. The company has been able to achieve customer loyalty through good relationship the employees have with the customers (Ballard, 2002).

          E-business activities within Apple include the use of online management of the activities as well as online retailing. The online management system is used by the managers to control all the activities of the organization. The managers monitor the customers, employees, and all the activities of the company. The trends in the market are monitored through the use of the online system. The sales made in the market can be determined by the system and this is used as a basis for deciding the best products to manufacture. Most of the management decisions are made using the online management system. The e-business is enhanced through internet, intranets and extranets. All the departments are connected to the network connection where the management can access all the individuals within the organization (Graves, 2006).

          The strategy of using e-business has promoted the policies of the company by encouraging the employees to be innovative. Innovation is one of the policies of the company and through e-retailing, more products have been sold. The company has achieved success in the market since most of the competitors have not been able to introduce this system into their marketing strategies (Kaplan, 1997).

          The decision making process of the organization has been simplified. All the stakeholders can contribute to the decisions made by the top management through online management system. The system has enabled the organization to involve all its stakeholders in the decisions affecting the company. This has created more attachment to the company and a feeling of ownership of the decisions of the company by all the people affected by the activities of the company has been established (Graves, 2006).

Case study of DaimlerChrysler merger

The merger between Daimler and Chrysler was affected by cultural differences between the employees of the two companies. The two companies had good ideas before they merged and success was speculated about the merger. The management of the organizations laid down the strategies about the operations of the merger. A good impression was made about how the two organizations would promote each other in acquiring competitive advantage in the market. After the merger, the cultural differences brought about many politics among the employees from the two companies. The employees from Chrysler (US) were not ready to accept the ideas of those from Daimler AG (Germany). The politics within the merger brought about the breakdown of the merger later. The companies had done self-promotion about their compatibility of the employees. The management had not accessed the compatibility of the cultural differences of the people working in the two companies (Fairholm, 1993).

The merger between Daimler AG and Chrysler Group was forecasted to be very successful. The two companies had a good history of performance in the market and the merger would increase the competitiveness of the companies. Daimler AG is an automobile company based in Germany. It is well known for its Mercedes products which have achieved a good brand image in the market. Chrysler is based in the US and has dominated the US market for a long period of time. The merger between the two was done to increase the market as well as expand the production capacity of the two companies (Yost, 2003).

The merger never lasted for long before it failed due to lack of proper analysis of the cultures of the two companies. Cultural differences between the employees of the two companies caused the failure of the merger. The German have the culture of informal operation of activities while the Americans are too formal. This created a conflict between the management of the two companies, for example, the Americans emphasized on the use of official attire within the premises of the company. The Germans were flexible since they accepted transfers to the US based company. The Americans were resistant and never accepted the transfer out of the US to Germany. This created a lot of conflicts between the management of the two companies (Schmidt, 2009).

The causes of the failure of the strategy were poor communication between the management and the employees. The strategy to merge the two companies was not well established and the cultural differences were not resolved amicably. All the stakeholders were not consulted when establishing the strategy and this resulted into conflicts between the affected parties. Most of the changes were established by the management without forecasting the effects of the merger on the culture of the employees and other stakeholders. Daimler AG has completely separated itself from the activities of Chrysler. The merger existed from 1998 to 2007. Most of the goals of the merger were not achieved and Chrysler continues to experience more problems with the management (Schmidt, 2009).

Conclusion

Culture plays a great role in the development of an organization. Organizational culture reflects believes and attitudes that people have towards the systems of the organization. The stakeholders of an organization design and shape the culture to be followed by all people affected by the activities of an organization. Culture may contribute positively or negatively to the success of an organization. Apple Inc has been affected positively by the culture developed by its management. Apple Inc has been very successful in the use of technology to produce products which are competitive in the market. Product differentiation has been a strategy the company has used to achieve a competitive advantage in the market. The management of the company has used leadership to encourage the employees come up with innovative products. Apple has improved the status of its employees to improve their productivity. The merger between Daimler and Chrysler failed due to poor cultural analysis of the management of both companies. The cultural differences of the two organizations caused poor cultural integration and led to the failure of the merger. The use of technology has been very important in the establishment of competitive advantage. Organizations should develop structures which define the roles and duties of each and every person. These structures enable the organization to specialize and divide labor according to the career requirements of each member. Innovation is a strategy which organizations are using to gain a competitive advantage in the market. The establishment of innovative ideas can be done through programmes which create a proper interaction system between the employees and the management. Leadership is the process of influencing others to contribute willingly towards the goals which have been predetermined by the organization.

Recommendations

Managers have an obligation to inculcate a culture which will lead to the achievement of the goals of the organization.

Managers should develop the skills which determine the positive and negative cultures

The management should interact with the junior employees to learn the things affecting them.

Managers need to be good leaders so that they can integrate all the needs of the employees as well as understanding the particular characteristics of the employees.

The management should involve the employees in staff meetings which inform them about the strategies the organization is about the make.

Managers ought to acquire and exercise leadership in their operations.

References

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Ballard, M. (November 2002). Apple Emac. MultiMedia Schools, Vol. 9.

Fairholm, G. W. (1993). Organizational Power Politics: Tactics in Organizational Leadership. Westport, CT: Praeger.

Finneran, M. (March 2002). Apple Computer-A Rebel without a Clue. Business Communications Review, Vol. 32.

Fisher, E. (June 8, 1998). Apple Slashes List of Authorized Resellers. The Washington Times,

Graves, S. E. (2006). The Free Flow of (Digital) Information: the Apple Computer Case. Justice System Journal, Vol. 27.

Hubbard, D. (1992). Forecasting Process at Apple Computer. The Journal of Business Forecasting Methods & Systems, Vol. 11.

Kaplan, P. (January 8, 1997). Apple Plans to Sell New Operating System by Mid-1998. The Washington Times.

Linzmayer, R. W. (2009). Apple Confidential: The Real Story of Apple Computer, Inc. No Starch Press. Retrieved 19th March 2010 from: <http://extras.denverpost.com/books/chap0411h.htm.>

McNamara, C. (2010). Organizational Performance Management. Retrieved 4 Apr 2010 from; <http://managementhelp.org/org_perf/org_perf.htm>

Schmidt, S. A.  (2009). Legacy: Walter Chrysler Jr. and the Untold Story of Norfolk’s Chrysler Museum of Art. Journal of Southern History, Vol. 75.

Tyre, T. (1999). New CD-ROM Drive Offered for Apple IIs and Macintosh. The Journal (Technological Horizons in Education), Vol. 15.

Willcoxson & Millett, B. (2000). The Management of Organisational Culture. Australian Journal of Management & Organizational Behaviour, Volume 3, No. 2, 91-99. Retrieved 1st May 2010 from;

<http://www.usq.edu.au/extrafiles/business/journals/HRMJournal/AJMOBarticles/Org%20culture%20paper%20LB1.pdf.>

Yost, J. R. (2003). Charles K. Hyde. Riding the Roller Coaster: A History of the Chrysler Corporation. Michigan Historical Review, Vol. 29.

 

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