The Importance of Culture as a Key Organizational Context for Strategic Change
1. Suggest culture change strategies that should be followed by the CEO to improve the fortunes of Yahoo.
2. Discuss the importance of culture as a key organizational context for strategic change and the long-term success of companies.
Culture plays an important role in the success of the business organizations. The various studies and researches that have taken place in the modern business environment have stated that the role of organizational culture has been changing a lot and the importance of this factor has increased to the highest levels as well. The organizations which face the challenges related to change in culture try to transform themselves so that they are able to adapt to the changes. The cultural situations are quite complex in nature and lend themselves so that the changes are implemented in the various parts of the organization. Organizational culture can act as a resistance or enabler of the changes that are to be implemented within the organizations (Luthans, Luthans and Luthans 2015).
The alignment and misalignment of culture is based on the ways by which the employees can align their personal objectives with that of the organization and the goals that are set by them. The major job of the management is to manage the people who are affected by the changes that occur in the cultural attributes of the company. The culture of the organizations affects the ways by which they are able to make a difference in competitive world. Culture of organizations are the most significant variables that the executive leaders are required to manage in an effective manner (nyzmes.com 2018). The cultural changes can offer unique blend of practice and theory in a thought-provoking and engaging manner which can enable smarter actions and decisions in relation to the cultural change related activities (Hogg and van Knippenberg 2017). The level of degree of change that is implemented in the organizations is based on the involvement of the cultural transformation. The understanding of cultural change is important within the organizations and the employees. The culture of the organizations is considered to be the most critical element of the entire managerial experience (Lazaroiu 2015). When the strategy of change is incompatible for the culture that is followed in the organizations, the change management policy is quite likely to fail.
The case study is mainly based on the analysis of the change related strategies that have been implemented in Yahoo after the appointment of Marissa Ann Meyer was appointed as the CEO of Yahoo. The change program that was implemented by Marissa was named as Process, Bureaucracy and Jams or (P B & J). The main aim of Marissa was to change the bureaucratic culture that was prevalent in Yahoo. The bureaucratic culture that is followed in Yahoo is a major misalignment to the innovative nature of the employees. The change is culture made by Meyer can be helpful in increasing the innovative capabilities of the organization (emarketer.com. 2018). The initiative was related to the encouragement that was provided to employees so that they are able to provide their ideas to the management and the culture of the organization can be changed in the process. The culture of the organization is a unique identifier of the success of the organization (Icmrindia.org. 2018). The values or the norms of an organization cannot be replicated and they are unique in nature. The positive culture in an organization helps in differentiating the business organization from its competitors in the market. Organizational culture can thereby be defined as the shared values and beliefs that are present among the members of the organization.
The Role of Organizational Culture in Success of Business Organizations
Competitive advantage that has been gained by an organization can help in maintaining the topmost position in the market. The advantage can help the organization in operating in the market in a sustainable manner. A strong organizational culture consists of the members who care about the values of the organization and are able to improve the performance of the business in the long run. In case of Yahoo, the new CEO had also tried to bring about changes in the organizational processes so that the employees are able to provide inputs in the processes of the organization. The high levels of bureaucracy in Yahoo has further led to the change of CEOs in the company within short periods of time. The organization was going through cultural changes in the year 2012. However, the company was still a major portal on the internet with more than 700 million viewers (Hui, Lee and Wang 2015). Yahoo was unable to increase its revenues in the market due to the various issues that was being faced by the company. Marissa was appointed as the CEO of Yahoo during the crisis period which was being faced by the company. The new CEO had brought new perspectives and changes that were to be made to the culture of the company. The CEO implemented the PB&J program which could be able to help Yahoo to increase its competitiveness in the industry. The bureaucratic culture that was followed by Yahoo was the major hindrance that had occurred in the innovation levels of the organization. The company was thereby not able to provide any innovative products in the industry. The operations of Yahoo were to be restructured so that the company can be able to increase the innovative culture (De Wit et al. 2017). The new CEO of the organization thereby focussed on the people of Yahoo to bring changes in the culture and the revenues of the company. The program was formulated by Marissa to change the ways by which the employees in the organization and took initiatives to provide incentives to the employees. The cultural changes in the organization has thereby affected the success and revenues.
Mission – The mission statement of Yahoo is based on providing the most important global internet based services to the consumers and the business organizations. The ways of pursuing the mission by the company is based on the values that are set by Yahoo The standards are based on the ways of interacting with the fellow colleagues of the organization. The principles are mainly based on the ways by which the company provide its services to the customers and the ideals which drive the jobs that are performed by them. The values of the organization were thereby put into practice by the two founders of the organization and the other employees also reflect the same values as the company has grown further (smallbusiness.chron.com 2018).
The Challenges Related to Change in Organizational Culture
Objectives – The goals or objectives that are set by the organization are as follows,
- The 1st goal that has been set by the new CEO of Yahoo is to improve and develop the products that are offered to the customers.
- The 2nd goal of the organization is to bring innovation in the products by including the ideas and the opinions that are provided by the employees.
- The 3rd goal is related to the change of the bureaucratic culture of the organization to create a new collaborative culture.
- The 4th goal is related to the intention of the CEO to manage the staff of the organization in an effective manner so that the huge rates of turnover can be reduced.
- The 5th goal is based on providing the new and innovative products to the customers to the organization can compete with its rivals in the industry (smallbusiness.chron.com 2018).
Strategy – The medium term strategy that has been implemented by the new CEO for improving the operations of Yahoo in the industry is the PB&J program which enables the inclusion of the employees in the decisions that are taken by the management.
The long-term strategy that can be implemented will be related to the implementation of the innovative methods of developing the products. The innovative products will help the organization in providing tough competition to the organizations like Google.
Tactics – The PB&J program will be implemented by the new CEO of Yahoo to increase levels of innovation in the company. The bureaucratic culture of the organization will be changed and the employees will be provided with more freedom to provide their ideas and opinions in the long-term strategies that are formulated (Icmrindia.org. 2018).
Yahoo can diversify its operations with the help of the innovative products and services that the organization can offer to the customers. Diversification is considered to be a strategy which is implemented for the purpose of entering the new industry or market where the business organization does not operate currently. Yahoo can expand its market can create new and innovative products by making changes in the culture. The PB&J program has been formulated by Marissa to make Yahoo competitive with the other organizations in the industry namely Facebook and Google. The employee turnover of the company had increased and the revenues had fallen. The organization thereby needs to implement strategies that can help in improving the position of the company in the market (Page 2018). The lack of collaboration between the employees and the managers or supervisors of the organizations have led to the lack of innovation in Yahoo. The employees are not able to provide their opinions about the various changes that can be implemented in the organizational processes and introduction of new products. The PB&J program has been setup for the purpose of collecting the suggestion and feedback from the employees. The program was implemented by Marissa in the year 2012 (Pentland and Hærem 2015). The CEO had also taken steps to provide various facilities to the employees which are related to the improvement of their collaboration with managers. The feedback was collected with the help of the program so that the innovation levels of the organization and further formulate new products and services to the customers to compete with the other organizations (Smallbusiness.chron.com 2018). The initiatives were taken for the purpose of improving the morale of employees so that they work harder for the profitability of the organization. The aim of the CEO was to make Yahoo a better place for the employees to work and provide the best services to the customers. The employees needed to provide their suggestions and feedback to the organization with the help of PB&J program (Graham, Ziegert and Capitano 2015). The ideas and the opinions that are provided by the employees can be used for the purpose of increasing their productivity and improving the culture of the organization. The initiative that was taken by Yahoo was accepted in a proper manner by the employees of the organization. The program was used to provide more power to the employees so that they are able to take part in the operations of the company and make changes in the services and products that are offered to the employees. The bureaucratic nature of the organization had been the most significant barrier to the increase of increase of the revenues of Yahoo. Marissa had also proposed many other initiatives to implement changes in the culture of the company (Lu 2014). The CEO started spending a lot of time in the email discussions and conversations with the employees. Marissa also announced the four Cs based strategy in Yahoo. The four Cs strategy consisted of the company goals, culture, calibration and compensation. The consensus culture that was prevalent in Yahoo was replaced by a democratic nature of operations. The introduction of the feedback loops was related to the identification of problems and developing solutions as well. The orthodox system that was being followed in Yahoo needed to be changed and the employees needed to be provided with rewards based on the inputs that they provide in the organizational processes. The cultural changes that were proposed by Marissa were suitable for the successful operations of Yahoo. The change in the culture will relate to the change in the productivity of the employees and the services and products that are offered to the customers (Punnett 2015). The cultural changes can also provide long-term success to Yahoo and improve its competitive position in the industry. The bureaucratic culture needs to be changed to the collaborative culture so that Yahoo can form a better position in the market. The compensation system of the company needs to be improved so that the inputs provided of the employees can be rewarded accordingly. The fortunes of Yahoo can be increased with the help of the employees who can play a major role in the improvement of the profitability of Yahoo (TYLER 2014). The implementation of the cultural changes in Yahoo was quite difficult in nature as the organization has established business in various countries. The initiatives related to culture that were formulated by Yahoo were all based on the revenue improvement of the company and the increase of innovation in the organization. The changes that need to be implemented in the culture of the company was related to the improvement of revenues and the improvement of employees as well.
The organizational culture has major effects on the long-term success of the company and this has been proved by the analysis of the case study of Yahoo. The implementation of the cultural changes in the organization can affect the revenues of Yahoo in the future if the they are implemented in an effective manner. The improvement of culture with the help of the initiatives taken by the new CEO can thereby help in the increase of the revenues of the organization and its sustainability of the company (The Information. 2018).
References
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