Significance of Culture and Values in a Corporation Assignment Help
Executive Summary
The report aims to scrutinize the significance of culture and values in a corporation by analyzing the Human Recourse policy followed by Eastern Dairy in relation to corporate culture, ethical values and communication. In contrast, the report also represents the consequences of corporate performance where moral values and ethical culture lacks.
The researching illustrates the role of corporate culture in corporation success. The growing emphasis on corporate culture being a major differentiator to the overall success of a business is recognized univocally regardless of size, location and industry. If business strategy is the final goal of an organization human resource strategy is the pathway to achieve it. By integrating business strategy with human resource strategy the organization gives birth to organizational culture. It is necessary for an organization to web the organizational culture into its long term strategic goals and leverage it by optimizing human potential and exploiting market opportunities.
However, the level of importance of a firm’s corporate culture varies with the industry and its brand lifecycle. For example, a technology firm that belongs to the growth stage of service lifecycle requires a very aggressive and high performing corporate culture. On the other hand a manufacturing entity in the maturity stage of its product lifecycle can milk cash through its long standing distribution channels and doesn’t need to invest a lot on changing its existent corporate culture. The case study of Eastern Dairy that we will analyze belongs to the latter category. The organization located in the East Coast of Australia is comfortable with the traditional approach of depending on its production line and channel partners to generate revenues. However, because of a weak organizational structure and an uninspiring corporate climate it is suddenly faced with an unforeseen situation of contaminated product flow portending health hazard for the entire area. Thus, Eastern Dairy faces the prospect of either incurring huge monetary loss or taking legal and ethical responsibility of the damage done. Poor ethical standards pursued by the organization are percolated down to the values and behaviors of its employees reflected by their sole motive of self-preservation and conservation. The only anomaly to this culture is a new recruit called George Stein who experienced a conflict of his values with respect to societal ethics.
The weak quality control measures of Eastern Dairy are a direct consequence of ignoring the importance of corporate culture. Therefore, it is a lesson for organizations of all shapes, sizes, industries and locations to put their weights behind strategic human resource policy signifying effective organizational culture and values.
The following recommendations have been made:
The Eastern Dairy should immediately take steps for damage control mechanism seven at the cost of a substantial financial loss. After salvaging the spiraling situation, the organization should take immediate strategic and tactical measures to improve ethical standards and corporate climate for its employees. The organization’s business policies should be clearly communicated and a strategic HR policy should be integrated with it. Finally, revamp of its corporate structure is quintessential in normalizing the quality control of the product line.
Introduction
Background
The background of this short report is conceived from a case study prepared by Roland B. Cousins, LaGrange College, and Linda E. Benitz, InterCel, Inc., as topic for classroom debate. However, delving into the efficacy of Eastern Dairy’s human resource policy was not the purpose of the presenters. The case first appeared in Managing Organizations and People by Paul F. Buller and Randall S. Schuler in the year 2000.
Objectives
By analyzing the HR policy followed by Eastern Dairy in relation to corporate culture, ethical values and communication we tried to scrutinize the significance of culture and values in an organization. Conversely the study also reveals the consequences of corporate performance where moral values and ethical culture lacks.
Scope
The scope of this study helps the readers to understand HRM practice from the perspective of internal and external environment faced by business entities. The principle HR intends and strategies should include the following pointers.
- Influencers of HR policy directives
- Addressing contemporary socio-economic issues in managing internal organizational environment
- Developing prudent HR policies
- Need of research in implementing HR practices
Discussion
Culture and Values
Insight Overall
There are strong arguments in favor of national culture shaping the culture of organizations (Ravasi & Schultz 2006) nested within its society. However, homogeneity of national culture casting its influence on a country’s organizations in a uniform way is not beyond doubt. The multiplicity of organizational cultures within a given society is common (Schein 2009) and the organizational identity and Human Resource strategy is more central to sway the development of values and culture of an organization and its employees (Deal & Kennedy 2000).
For instance, in Australia if we compare a mobile service conglomerate, a media firm and an ice cream mix company (like the Eastern Dairy); they will differ substantially in their culture, values and identity despite being located in the same country or even in the same city. The cultural differentiation is created by their industry, product and brand lifecycle, technology used and competition.
Organizational culture exists at two major levels: a) Observable symbols b) Underlying values
Observable Symbols
The understanding of actions, thoughts and feelings of the members of an organization framing their behavior, values and knowledge collectively (Pratt & Foreman 2000) can’t be accomplished without careful observation and comprehension of organizational symbols.
In our Case Study, the language used by the workers in the night shift (except George) evidenced by outrageous jokes and pulling legs of each other speaks of menial work culture. Paul’s insistence of taking breaks from the work in regular intervals and falling back on cracking jokes, hiding each other’s lunch boxes and balloon fights resembles a Clan Culture (where the employees collectively derive culture from the way the organization functions). However, the work used to be completed on time and the bottom line of the company was never sacrificed.
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Underlying Values
The Competing Values Model (Quinn & Quinn 2002) describes four major quadrants of valued outcomes in an organizational framework. The valued outcomes are determined by organizational ideologies with the means to achieve those outcomes.
Brief outline of the four quadrants are:
- Human Relations Approach (focus on internal environment and flexibility)
- Internal Process Approach (internal focus and control)
- Open Systems Approach (focus on external environment and the organization’s response to market and demand)
- Rational Goal Approach (external focus on productivity and goal achievement through tight control)
Note: The model proposes an organization is not required to be located in one quadrant but should exercise a prudent mix of all four domains.
It seems the Eastern Dairy, partly, follows Open System Approach of responding to the market and demand. But, instead of creating a demand pull by increasing organizational efficiency it is satisfied with product push approach through its traditional distribution channels. Since, the organizational goals of Eastern Dairy is not set on optimizing employees’ performance, the control on them is rather loose. The organization followed corporate familism by taking care of the basic needs of its employees and welfare instead of creating dynamism in their performances.
The management practice of continuing with the existing environment and being comfortable with the status quo reveals a Non-Constructive Culture (as opposed to Constructive Culture). (Ref: Appendix A).
Determinant of Organizational Culture & Values
Within a given industry, the culture and values of an entity (Eastern Dairy in this case) is determined by its Corporate Strategy, Human Resource Strategy, Organizational Task Control System, Power Relationships and Personal Values of Organizational Members.
Corporate Strategy
With stable and mature position in its geographical domain of operation, Eastern Dairy belongs to the Cash Cow resource grid (as per BCG Matrix) with slow growth and healthy cash generation.
The assumption is deduced from:
- Product Lifecycle of Ice cream ingredients manufacturers in Australian market
- Timely salary disbursement in accordance with industry standards (Ref: Appendix B)
With satisfactory revenue generation and little motivation to innovate, the organization structure is devoid of line managers and HR department is relegated to paperwork and recruitments. The foremost concern of the management is to satisfy the basic quality control requirements to escape complaints by health department inspectors. All they want are the pipes and equipment to be perfectly cleaned by end of each night shift along with completion of the daily production orders.
Human Resource Strategy
The employment policy of recruiting low technical and competence fit is designed for protection of the employees rather than providing them a growth chart (Kotter & Heskett 1992). Therefore, very little emphasis and investment is made for employee development, training and their performance optimization. Even resource optimization has taken a back seat with non-existent monitoring and control of production line and employee productivity (at least for the night shift).
Organization Task
With slow growth and low level of technology Eastern Dairy functions in a stagnant and reliable market. Since the threat of losing market share and business volume is low (as it usually happens for Cash Cow companies), the organization pursues steady and routine mode of operation, inculcating a culture of interdependence of its employees and follow employee protection tactics. This is a classics case of culture of embeddedness driven by conservation values (Plattner 1989) (termed ‘conventional’ by Holland (1985) in unity with Eastern Dairy’s strategy of survival and profitability.
Control System
Effective control system ensures the efficiency of converting inputs to outputs. The managers must set operational targets, monitor the operation and evaluate the situation through observation and feedback.
The functional flow of control is demonstrated by a flow chart. (Ref: Appendix C) consisting of identifying anticipated problems, managing the problems and managing problem after they occur.
In Eastern Dairy, there was no mechanism of identifying potential problems; neither were any competent persons to manage them. The specific information, instructions and feedback needed to effectively control the operational process was a big void in the organization.
2.1.2.e. Power Relationships
Despite various models of hierarchical structure in HRM, the one common denominator for success of an organization is the smooth flow of communication among the hierarchical levels. Participation of the employees in management decisions through feedbacks and suggestions provides the management with invaluable insights in their strategies and decisions.
In our Case Study, however, the workers in the shift had no one to report to and there wasn’t any contingency management in case of a problem. Paul was the unstructured group leader and flow of instructions used to come from him. But the communication was not strategic but an ad hoc one. Further, he was not accountable to the management for lapse of any direction and instructions and the consequences there off. There is no mention of any feedback mechanism either.
Clan Culture
Although Easter Dairy’s work culture has been uninspiring, the workers did display loyalty in a culture framed by the understanding of expected manner of conduct according to the organization’s style. Extensive socialization and self-management represents the existence of Clan Culture in the organization.
Personal Values of Organizational Members
In an Unadaptive Organizational Culture (Cummings & Worley 2004) of Eastern Dairy, the workers follow the routine and risk-reducing type of functioning as opposed to leadership initiative in their expressed values. Weak organizational structure and conservative values comply with safety and security of employment rather than self-direction and stimulation. The workers in the night shift of the production line are content and satisfied with routine work where there are neither threats of retrenchment nor challenges of high performance.
Loyalty
The employees of Eastern Dairy seem to enjoy the affiliations of their co-workers and with regular payment of salaries they are content with the secured employment (perceived through their lack of urgency and desperation, to retain their current job) and sociable work groups (Harris 1994). The amicable relation between the union and the company management also points toward familism rather than individualism. Thus there is a decent measure of employee loyalty and comfort zone in the organization.
Culture Strength
As culture strength represents the degree of agreement among its employees on certain organizational characteristics. Our case study does shows strength in Eastern Dairy’s culture as there have hardly been any disagreements among its workers in the night shift. However, some researchers, like O’Reilly and Chatman (1996: 166) have stressed on the intensity rather than agreement among workers as the true definition of culture strength. Intensity of a culture is defined by certain specific values and norms held strongly by workers of an organization. In this perspective, however, Eastern Dairy fares poorly as it doesn’t seem to have any set of values that are specific and passed on its workers as part of its strategy.
Ethical Issues of Employees
Insight overall
The values, attitudes and motives of an individual are shaped, to a large extent, by his socio-cultural background with respect to his perception of desirable (Larsen 2000). The assessment of societal and organizational ethics is the outcome of socialization process (Matsumoto 1990) where an individual acquire attitudes, knowledge and values from his external environment of family, school, friends…et al.
Ethical Issues of George
Being brought up in a traditional middle class household, George is endowed with solid moral values. However, his values encountered a conflict with practices of Eastern Dairy, which he felt was unethical and even criminal on legal and philosophical context. He suffered melancholy on the prospect of kids consuming contaminated milkshakes produced by his company. Worse, he is a member in that production line. George knew his organization would place cost-benefit analysis before ethics of rights and justice. His ethical dilemma also led him to compare the ethical (Boylan 2000) decision of doing something to halt the contaminated run of the milkshake mix with following the direction of Paul that was driven by Paul’s self-interest and economic interest of the organization. (Ref: Appendix D)
Ethical Issues of Paul
Paul’s ethical values are based more on his own self-interests rather than on interests of the community and stakeholders (Caroll & Buchholtz 2009). Therefore, he was little bothered about the pulverization of the product flow and its potential fallout on wellbeing of the end users. His primary interest was to serve the monetary interest of his organization and his own (as monetary benefit of the organization is correlated to his own long term interest of employment, remuneration…etc). His need of going home early was of greater importance to him than a catastrophic health hazard involving many in the area his company operates.
