This assignment is a case study on the importance of a cohesive organisational culture. The case study is based on a large manufacturing organisation known as BSG Ltd, which is faced with management challenges.
The challenges have led to the decline of profits, low levels of job satisfaction and organisational commitment by employees, low levels of trust between management and employees, poor team work and a belief by many employees that there is little opportunity for advancement. Staff turnover is an issue because it increased by 15% in year ending 2010.
This case study is based on the literature on organisational culture and management theories. The aim of the case study is to highlight the changes which need to be implemented by the management of the organisation and give some recommendations on how best to effect the changes with little or no resistance by the employees.
The case study starts with a definition and exploration of the topic of organisational culture and the importance of a cohesive organisational culture. Afterwards is a discussion of the changes which need to be effected by the organisation and the recommendations on how to implement the changes based on theories of change management. At the tail end is a conclusion which highlights the key points in the discussion followed by a list of references used in the discussion.
2. Executive summary
The purpose of this report is to explore the topic of cohesive organisational culture by looking at the benefits of the same to organisations. The report is based on a case study of BSG Ltd, which is a large manufacturing organisation.
The organisation is faced with management challenges, which have led to a decline in profits, low cohesion among employees and poor relationships between the employees and top management as well as problems of increased turnover and pilfering in both warehouse stocks, and stationery supplies.
The report identifies the possible changes which should be undertaken by the management of the organisation so as to deal with these problems.
Such changes include increasing employees’ remunerations and replacement of the rule based culture with a human relations approach to management which encourages employees’ creativity, team work, innovativeness and flexibility. It is also recommended that the management should consider providing employees with additional benefits like taking them for holidays and provision of various forms of insurance cover.
The recommendations for implementing these changes are based on Lewin’s model of organisational change management which constitutes of three stages namely unfreezing, changing and freezing. This model is a procedural approach to organisational change aimed at minimising resistance to organisational change by employees.
2.1. Body and Recommendations
2.1.1. Organisational Culture
An organisation is a group of people who work together with coordinated efforts to achieve certain objectives or goals. Organisational goals and objectives are of various categories and it is this variation of the goals and objectives which classify organisations into three main categories namely profit making, service based and social responsibility based organisations (Murray, Poole, and Jones, 2006. pp.45-69).
The study of organisations is made possible by the use of organisational theoretical models or approaches. These theoretical models are mainly used to explain organisations in terms of structure and culture. Organisational culture refers to shared beliefs, values, norms and practices which characterise an organisation.
Organisational structure refers to how the organisation is structured, how power and authority to make decisions are distributed along the structure of the organisation, and who should take what direction or instructions from whom and when (Robbins, 1996).
Organisational culture is a very important aspect in any organisation which aspires to realize its vision and mission. This is because organisational culture determines whether the organisation is able to work together towards the realization of the vision.
Organisational culture is closely related to organisational structure in that the manner in which decisions are made by the top management influences the relationship between the top management and the other employees, which consequently determines the culture of the organisation (Brown, 1998).
An organisational culture is learned implicitly through interaction within the organizational setting. The employees learn it through imitating others who they find in the organisation. This imitation happens unconsciously due to the human instinct to adopt behaviours which make him or her fit in the social environment which he or she finds himself or herself in. Through communication and interaction with each other, employees may coin some terms or codes which are unique to the organisation.
Employees also learn organisational culture through conditioning and reinforcement. For instance, if certain behaviour is rewarded by the management of an organisation, the employees will tend to perfect that behaviour which eventually becomes part of their culture. Likewise, if certain behaviour is negatively sanctioned by the management, then the employees will tend to avoid it, thus becoming one of the don’ts in the organisation.
A strong organisational culture is found in organisations in which the employees are committed to their work and discharge their duties with little or no supervision while a weak organisational culture is found in organisations in which the employees have little commitment to their duties and are closely supervised so as to discharge their duties effectively (Brown, 1998).
There are various models of organisational culture. One such model is the power culture which is characterized by centralization of power to some few people within the organisation. This person(s) is usually very influential in the organisation and therefore everybody else tends to foster a good relationship with the person(s).
In this culture, employees are motivated to the degrees into which they emulate that central person(s). In this type of culture, decisions are made easily because there are no many hierarchical positions in the structure of the organisation (Gordon, DiTornaso and Farris, 1991.pp.18-23).
There is also role culture, which is characterized by doing things as per ones position, meaning that an employee only cares for what is of concern to him or her or what lies under his or her docket. This culture is also characterized by rigidity in decision making because of the bureaucratic nature of the organisational structure which leads to inefficiency (Fey and Denison, 2003.pp.686-687).
Task culture is characterized by the formation of groups which are composed of people with some expertise or knowledge to perform some specific tasks. In this type of culture therefore, group work is very important and authority as well as supervision play little or no role because the teams are trusted by the management with their tasks (Murray, et al, 2006. pp.45-69).
Lastly, there is person’s culture which is characterized by a feeling of superiority among the employees, who think that they are very valuable to the organisation. In such a culture, unity and cooperation among the employees may be rare because each employee thinks that he or she is the best and therefore not ready to share what he or she knows with others without extra remuneration by the organisation for the same (Murray, et al, 2006. pp.45-69).
Organisations vary greatly in terms of their mission, vision, objectives, resource base philosophy and coverage. Due to this, each and every organisation must cultivate a culture which is unique to itself so as to achieve its mission and objectives.
This means that what may be considered as values or norms in one organisation may not be considered as such in another organisation. However, despite these variations and differences, there is the importance of having a cohesive organisational culture regardless of the organisational structure, mission and objectives (Bakar, 2001.pp. 64-69).
One reason is because organisations are run by people for the benefit of people. All employees in all organisations are social beings complete with needs, feelings and emotions. In many countries for instance, it is almost impossible to separate personal life and work among employees, which calls for an integration of employees lives with their work environment so as to make work both satisfying and enjoyable as well as a means of realizing happiness and fulfilment in one’s life (Bakar, 2001.pp. 64-69).
This argument is based on the human relations model of organisational theory pioneered by Ludwig von Bertalanffy in 1928, which brought a radical shift from the classical management theories pioneered by Taylor, which emphasised on scientific management of employees as if they were machines to be operated by their managers (Cooke and Lafferty, 1987).
But what is a cohesive organisational culture? Many organisational researchers agree that a cohesive organisational culture is the one in which all members of an organisation hold to similar beliefs and values which glue the organisation together. These beliefs and values may be implicit or explicit to the organisation, meaning that they may be or not be publicly declared in the organisational core values.
In this kind of a culture, it does not matter the organisational structure but what matters most is the commitment of each and every member of the organisation to these believes and values. For example, an organisation may value hard work, honesty and team work and believe in transparency, utmost good faith, ethics and morality. A cohesive organisational culture has got many benefits (Keshavarzi, 2007).
One benefit is that it leads to high motivation among the employees because they share common believes and values. When employees are highly motivated, there is minimal use of resources in their supervision which in turn increases their productivity because to them, what matters most is the good of the organisation as a whole but not personal good.
Another benefit of cohesive organisational culture is that it facilitates the alignment of organisations for the achievement of their objectives, mission and vision without much difficulty. This is because the employees are not only fully aware of the mission, vision and objectives, but have also internalised them thus making them to work hard to achieve them. This makes them more motivated to accomplish the set organisational gaols, targets or objectives (Martins and Terblanche, 2003.pp.64-65).
Strong organisational culture also boosts organisational efficiency because of the internalisation of what is required of each and every employee when and where.
The sharing of values and beliefs creates a good working environment free from any kind of confusion, ambiguity or lack of understanding among the employees, which apart from increasing efficiency also saves on time wasted when things seem not to move in the right direction because the employees are able and free to consult each other without the fear of victimisation or intimidation especially by the senior managers.
Employees also portray good behaviour at work because they know what is right to be done and what is not right (Martins and Terblanche, 2003.pp.64-65).
Furthermore, strong organisational culture leads to cohesion among various departments of an organisation which leads to harmonisation of all organisational procedures, policies and practices in each and every department.
This cohesion leads to proper utilisation of organisational resources without sabotage as well as sound, logical and relevant polices on how to coordinate organisational activities in a manner that would maximise the organisations’ chances of realizing their mission and vision.
Cohesion among various organisational departments also leads to the sharing of information by various departments which increases the employees’ levels of understanding of how various departments work.
This is very important because it enables employees to multitask especially in times when staffs in some departments are not available. For example, the understanding of administrative issues in the organisation by the head of accounting departmental may make him or her work on behalf of the head of the administration department when he or she is not present ( Mathew, 2007.pp.677-678).
Strong organisational culture enhances control, good coordination and consistency within an organisation. This is because the employees and the management are in good terms and thus are able to agree informally on various procedures and practices without compromising the quality of the organisational practices and objectives.
This saves on time because employees implement the changes which they find necessary without having to wait for bureaucratic board meetings and discussion to approve even the slightest change in procedures or practices ( Mathew, 2007.pp.677-678).
Lastly not the least, cohesive organisational culture enhances team work, group leadership and collaboration of the employees in various tasks. This is of crucial importance to organisations because it opens the room for employees’ creativity, innovativeness and openness to positive criticism which makes work not only enjoyable, but also enriched with a multiplicity of ideas.
This in turn leads to increased achievement levels by the organisation as opposed to situations in which employees’ creativity and innovativeness are not entertained by the management of the organisations.
2.1.2. Changes That Need To Be Implemented By Management to Address the Issues Outlined
As outlined in the introduction, the organisation is faced with real challenges which if not addressed may lead to deterioration of the situation. This calls for nothing else except implementing some changes so as to arrest the situation and return the organisation back to its glory of high productivity, increased employee motivation and low turnover rates which it enjoyed before. One of the changes which the management must implement is the introduction of team work in the organisation.
The management should give the employees the leeway to divide their work into small achievable tasks, which should be undertaken by a group of employees. The idea is to replace the Person’s culture which is characterized by a feeling of superiority among the employees, who think that they are very valuable to the organisation with Task culture which is characterized by the formation of groups of people with some expertise or knowledge to perform some specific tasks (Lundy and Cowling, 1996).
The other change which the management should make is the introduction of a system of working in which the employees are less supervised, but encouraged to be responsible, flexible creative and innovative in their duties. The organisation should also do away with any rules and regulations which emphasise more on procedures and regulations and replace them with rules which emphasise more on the end product of work irrespective of the means and procedures used to arrive at a particular end result.
The management should also consider revising the remunerations of the employees upwards so as to increase their motivation. Studies show that the productivity of employees is based on both intrinsic and extrinsic motivation. One of the extrinsic motivations is the rewards which the employees get from the work, including good payment.
This would reduce employee turnover which is very costly especially in terms of recruitment. More so, turnover means that the organisation is losing on what it invests in training and coaching the employees who end up leaving the organisations with the knowledge and training (Shim, 2010. pp.847- 849).
Also to be considered by the management is the work environment, which should be improved in terms of ensuring that it is more conducive and attractive for the employees.
For instance, the organisation should introduce some social benefits schemes like payment of various forms of insurance like medical cover, provision of loaning system for advancement of employees’ education, career and training as well as other benefits like provision of leave allowances or taking the employees for paid holidays.
These would increase the employees’ loyalty and commitment to the organisation and consequently reduce the turnover rates (Furnham and Gunter, 1993. pp.233-234).
2.1.3. Recommendations for successfully implementing the changes
There are various theoretical models of change management which the management may rely on to successfully implement the above changes. I would recommend the management to use the Kurt Lewin’s approach to change management which falls under the category of teleological model of change. Lewin came up with what he called three stage theory which involves three stages or steps namely unfreezing, changing and freezing (Cummings and Worley, 2008).
In the first step of unfreezing, the organisation is supposed to be motivated and prepared for the change. The management must engage the employees and create a state of discontentment with the prevailing conditions in the organisation. While doing this, it should also ensure that it sets out deadlines for the new dispensation (Cummings and Worley, 2008).
Basically, this stage is about doing a cost benefit analysis about the proposed change and weighing whether the pros of the change outweighs the cons, then creating the necessary motivation for the change. This stage is therefore the preparatory stage and is very crucial because it determines the success of the change if effected. When people are highly motivated to change, the resistance to change is minimised and vice versa (Cummings and Worley, 2008).
The next stage is the change stage, which is also known as the transition stage and involves implementing the change. This is the hardest stage in change implementation because people are always reluctant to move out of their comfort zones despite any motivation. During this stage therefore, employees need to be guided and encouraged to undertake the change.
In order to realize a smooth sailing through this stage, employees need to be given the necessary training for them to acquire the knowledge and skills which would enable them navigate successfully during the transition stage (Cummings and Worley, 2008).For example, employees may be trained on group dynamics so as to adequately work in groups.
The final stage is the freezing stage, which is also known as refreezing stage. During this stage, the organisation has successfully sailed through the change process and is now leaving in a new dispensation. There is therefore the need of creating a new culture in the organisation which is in line with the new organisational dispensation (Cummings and Worley, 2008).
This report has discussed the topic of cohesive organisational culture and its importance in organisations. The report is on BSG Ltd, which is a large manufacturing company faced with management challenges.
In the discussion, various benefits of cohesive organisational culture have been discussed as well as the changes which the organisation should make so as to adequately deal with the problems it’s faced with. Also discussed are the recommendations on how to implement the changes successfully, where it has emerged that the organisation should use the Lewin’s model of organisational change management to sail through this change process successfully.
My opinion about the topic is that the organisation should consider replacing the rule based culture with a human relations approach to organisational culture which encourages employees’ creativity, flexibility and innovativeness as they discharge their duties. The organisation should also consider revising the remunerations and improve the working environment so as to deal with the problem of high turnover rates.
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