Defining Organisational Culture
Values and principles drive the operations of a business to a large extent; the management of any business organisation takes strategic decisions on the basis of these values. Organisation culture is the underlying principles that the management of a company follows; it not only governs the decisions and policy making of the management it also responsible for the kind of work environment that the organisation want to offer the employees. This is important as the employees are the backbone of an enterprise and working collectively to achieve the objectives of the company is one of the major aspects of organisation culture. The culture followed by a company has a significant impact on the employees and the relationship in between the employer and the employee. The concept of organisation culture has evolved with globalization as companies have to deal with a number of different cultures as well as keep up with the values and principles that drive the company (Hofstede-insights.com 2018).
An organisation is like an individual with traits and values and principles based on which the functions of the enterprise runs. According to Martins and Terblanche (2003), organisation culture can be defined as the deep rooted principles that are shared by the people associated with a particular organisation. It can be said to be the characteristics of the company. As it develops an idea of shared value the organisation culture help the people have similar outlook thereby achieving the objectives of the business. One of the examples of organsiation behavior in strategic management is that it helps in formulating the mission and vision statements of the company. These are regarded as the first step in strategic management. On the other hand, according to the Hofstede model the concept can be described as the process that helps the people associated with the company associate with each other, their work and the outside world in comparison to other organisations. Organisation culture may be a barrier in the business function or may facilitate in the process of operation (Hofstede-insights.com 2018). The management or leadership style followed by the organisation is directly resulted from the kind of culture that the organisations follow. Lok and Crawford (2004), state that, job satisfaction and the rate of employee retention is also impacted by the organisation culture as the work culture if not favorable for the employee can negatively impact on the rate of job satisfaction. On the other hand, Abdul Rashid, Sambasivan and Johari (2003), state that culture in the organisation also impact the performance as ideals and attitude guide the employees’ behavior in the organisation towards greater success and the impact is also long term.
Evolution of Organisational Culture
According to Charles handy the type of organisation culture can be divided in four categories as is shown in the following figure:
Figure: Charles Handy’s model of organisation culture
Source: Author’s Creation
This model focuses on the authority and the way decisions and policies are made in the company. It explains delegation of responsibility and explains the style of leadership that is followed in the organisation.
Another most widely used model of organisation culture is Edgar Schein Model of Organization Culture. The theory goes deep in to the way culture is created and perceived rather than what it does. Schein in his model explained three levels of culture:
Figure: Schein’s model of organisation culture
Source: (Appannah and Biggs 2015)
These are the factors of culture which are visible or are felt by all the stakeholders of the company for example the mission and vision statement, the type of dress code that the company follows, behavioral pattern of the employees as well as the higher management etc.
Individual philosophy and principle that make up the thought process and attitude of employees guide their work process impacts the Organsiational culture. The mindset and the perspective of the people associated with the organisation make up the second level of culture that is prevalent in the particular company.
Models of Organisation Culture
This is the aspect of culture that cannot be measured or quantified by any means but they do have significant impact on the process of business function. The assumed values are the underlying factors of the culture that help stakeholders of the company make perceptions regarding the organisation in the long run.
Apart from the philosophy and values that help the management of the company develop mission and vision statements organisation culture is also sets the purpose of the company along with rights and rituals. According to Ferraro and Briody (2013), the kind of leaders that the organisation makes in the long run adds to the value of the organisation culture as well. On the other hand, Ruiz-Palomino, Martínez-Cañas and Fontrodona (2013), state that the communication network also plays an important role in the culture as it helps the company establish relationship with the targeted stakeholder.
Globalization has enabled companies to set up their business operations in countries beyond the geographical boundaries of the home country. Some of the factors that play an important role in choosing the country of operations are the: political scenario, economical background and prospect, social acceptance and the standard of living, technological advancement in the country etc. Culture of the organisation is a factor in the social scenario, one of the major aspects of culture is language and similarly the company has to accept a number of aspects if the management has to continue operations in a foreign land. The company has to schedule the holidays according to the requirements of the people in the country who work for the company. Some of the aspects that are impacted by cross cultural difference in the international business are:
Communication: As strategic communication is an essential part of management, language plays an important role in the process. Though English is regarded as the business language internationally there are body languages and other aspects of communication are also important. In some cultures directness and brevity is expected from the professional on the other hand this approach can be deemed to be rude and not acceptable. Therefore it can be said that cross-cultural communication can be a challenge for the management of the company, approaching cultural differences with sensitivity, openness, and curiosity can help cross the barrier and put the company in a favorable position in internal arena.
Workplace etiquette: This is an extension of the concept that has been discussed above. Depending on the country of origin the Workplace etiquette of the people vary and etiquettes lead to attitude of an individual.
Impact of Cross-Cultural Differences on Organisational Culture
Organizational hierarchy: The approach towards the higher management can also differ from one country to another. This is a direct indication of the societal values or level of social equality. Therefore it can be easily observed that company may have to barriers in the process of operation owing to the various cross-cultural differences.
According to Lee et al. (2011) this difference can be adapted by the company to ensure versatility and making the process of business function more effective in the process. Before planning to explore the horizon of the business the management of an organisation must derive insights regarding the cultural difference so that the barriers in the process is eliminated instead the differences are used in the strategic management in order to achieve the objective of the business.
It is the role of the Human Resource to ensure that the people who are working in the organisation get an adequate and healthy work culture as it directly impacts the job satisfaction level and in turn impacts the efficiency and the production level among the people. According to Aguilera and Dencker (2004), the role of human resource is evident and significant in the process of management cross boarder management. Some of the functions of HRM in this case are learning about the cultural differences and ensuing that this difference does not pose a barrier in the process of business. Another important function of the HRM is providing training to the employees to develop an understand and be at par with the culture that prevails in the organisation so that when the person joins the business he or she is aware of the culture and is prepared to adapt to it. The Human resource has to understand the culture difference and remove the area of conflict that may arise due to difference in culture. They are responsible for making the list of holidays which is based on the festivals and the holidays of the country of operation. As cross cultural communication is important in the process of business operation the HRM in a multi-cultural environment, works towards achieving the organisational effectiveness by building teams, encoring managerial communication and fostering international collaboration among the employees and the organisation.
According to Vance and Paik (2014), the Human resource management of the company explains and upholds the origination culture by ensuring that the people who are recruited will accept the kind of culture that is prevalent in the company. This reduces conflict of interest among the people working for the company and in the long run setting up a work culture that is suitable and is efficient for all the employees, the work culture that is prevalent in the company depends on the culture that the organisation follow. For example: an organisation follows an aggressive approach in the business function and the person who has been employed is not aggressive in nature then this individual may face issues in the work environment.
Role of Human Resource Management in Building and Upholding Organisational Culture
The Human resource department helps the higher management of the company make policies and decisions regarding the work force, here it is the role of the HRM to keep up with the values and principles of the company while devising plans for the people associated with the organisation. Martins and Terblanche (2003), state that if the company values innovation and creativity in the organisation then it is the duty of the HRM to provide the employees of the organisation with resources that encourage the same. On the other hand Ogbonna and Harris (2002), mentions that the role of HRM is significant in the case of cross-cultural adaptability as this department help the management to understand a culture in the nation of operation and align it with the interest of organisation.
Schuler and Rogovsky (1998), state that the culture in an organisation determines the way employees interact at their workplace. A healthy work culture helps the employees to be remaining inspired and committed to the company and its objectives. Personal or individual culture also plays an important role on the function of the business; intrinsic motivation of an individual drives him or her to efficiently perform in an organisation. The culture in an individual is directly responsible for the national culture of the country. Companies must respect the cultural demands of the employees allowing holidays and time off work depending on the needs and requirement which may arise due to the certain cultural aspect of the individual.
The gap in the literature that has been observed while conducting the literature review is the way in which personal culture and individual traits are impacted in a multinational organisation’s culture. The literature also does not state the way personal culture is influence by national culture and the process by which HRM can foster these individual traits.
4. Conclusion
It can be concluded form the above discussion that leadership is a reflection of the organisation culture that is prevalent. The style of leadership impacts the operations of the business as well as upholds the culture of the company as well. The role of human resource in management is significant in understanding and reducing the barriers that are caused by cross-cultural communication in multinational companies.
5. Reference list
Abdul Rashid, Z., Sambasivan, M. and Johari, J., 2003. The influence of corporate culture and organisational commitment on performance. Journal of management development, 22(8), pp.708-728.
Aguilera, R.V. and Dencker, J.C., 2004. The role of human resource management in cross-border mergers and acquisitions. The International Journal of Human Resource Management, 15(8), pp.1355-1370.
Appannah, A. and Biggs, S., 2015. Age-friendly organisations: The role of organisational culture and the participation of older workers. Journal of Social Work Practice, 29(1), pp.37-51.
Ferraro, G.P. and Briody, E.K., 2013. The cultural dimension of global business. Upper Saddle River: Pearson.
Hofstede-insights.com (2018). ORGANISATIONAL CULTURE. [online] hofstede-insights.com. Available at: https://www.hofstede-insights.com/models/organisational-culture/ [Accessed 3 May 2018].
Lok, P. and Crawford, J., 2004. The effect of organisational culture and leadership style on job satisfaction and organisational commitment: A cross-national comparison. Journal of management development, 23(4), pp.321-338.
Martins, E.C. and Terblanche, F., 2003. Building organisational culture that stimulates creativity and innovation. European journal of innovation management, 6(1), pp.64-74.
Ogbonna, E. and Harris, L.C., 2002. Managing organisational culture: Insights from the hospitality industry. Human Resource Management Journal, 12(1), pp.33-53.
Ruiz-Palomino, P., Martínez-Cañas, R. and Fontrodona, J., 2013. Ethical culture and employee outcomes: The mediating role of person-organization fit. Journal of Business Ethics, 116(1), pp.173-188.
Schuler, R.S. and Rogovsky, N., 1998. Understanding compensation practice variations across firms: The impact of national culture. Journal of International Business Studies, 29(1), pp.159-177.
Vance, C.M. and Paik, Y., 2014. Managing a global workforce: challenges and opportunities in international human resource management. Routledge.
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