Corporate Culture: Different Definitions
The purpose of this report is to compare the different definitions of Organizational Culture from different authors, to show the challenges that a company can face in commercial relationships with other countries due to cultural dimensions, in addition to outlining my opinion on why culture is an important concept in organizations.
1. Theory from different authors about Corporate Culture: Compare 3 to 4 different definitions/concepts of ‘Organisational/Corporate Culture’. (20 Marks)
“Culture is how organizations ‘do things.” — Robbie Katanga
In this definition, we can clearly recognize that culture is a notable standard of conduct in organizations. According to Aristotle: ‘We are what we repeatedly do’. This understanding raises behaviours or recurring habits as an effect of culture and highlights what people experience, believe or think. It also focuses our consideration on the forces that make up conduct in organizations and thus highlights a relevant question: are all these forces (including structure, processes and incentives) ‘culture’ or is culture merely a behavioural output?
“In large part, culture is a product of compensation.” — Alec Haverstick
Based on this concept, we can say that culture is strongly built from incentives. As proof of this, we can see in some organizations that people do what they are encouraged to do. We can mention here some types of incentives such as: pecuniary and non-pecuniary rewards, such as recognition, status and etc., to which company members are subject. However, where does incentives come from? As in the previous definition, there are possible “chicken and egg” problems. Are patterns behaviour the object of incentives or have they been shaped in an essential way by beliefs and values that support the culture of a particular organization?
“An organization [is] a living culture… that can adapt to the reality as fast as possible.” — Abdi Osman Jama
In this concept, the author suggests that Organizational Cultures are dynamic and must always be open to internal and external changes in order to adapt to the reality of the modern world as quickly as possible. Changes in an organizational culture can happen for several reasons. One would be in response to crises. On the other hand, even if there is no need for change, the culture of an organization must always be learning and evolving.
2. Geert Hofstede’s six cultural dimensions: Imagine this scenario: you are working for an Irish company that wants to start exporting to Spain and Portugal. Outline what might be the challenges you may face in relation to each of the 6 dimensions. Use as many practical examples related to the scenario above in your analysis as you can. (20 Marks)
Power distance index (PDI)
This dimension will affect the business through the acceptable degree of inequality between the countries. It will cut across all the classes of life in the states that the company will involve. If there is a high level of inequality between the two countries, then the country and its people accept an unequal distribution of power, the citizens of these nations understand the role of unequal power distribution among their businesses (Beugelsdijk & Roth, 2017).
If there is low (PDI), then there is a widely dispersed power-sharing among the citizens, citizens raised in such culture will not tolerate business structures in which power is unequally distributed amongst its population (Khlif, 2016).
Both Spain and Portugal have slightly above average PDI, and the Irish business owner is likely to encounter either or both low and high. If the business in either country encounters a high PDI, there is a high likelihood of business stalling when the managing or an authoritative figure to instruct the team members if no one takes charge; the business would be regarded as unimportant or unnecessary. In the same business model, if there is low PDI, the members of the organization will take initiatives on their own to solve arising problems in the business, they would not wait for the supervising or team leader to instruct them. The company will run as usual in the absence of an authoritative figure to guide them (Team, 2018).
Individualism versus collectivism IDV
In Individualism versus collectivism society, the members could have strong ties or bong to the other members of that society within the community. A low IDV in the business enterprises would be due to strong interpersonal bonds among those that are not part of that family or society. The society takes high responsibility for each other and their actions and results. Community members are expected to be loyal to the group of origin; they will unite to defend their interests from outsiders. A community with high IDV, on the other hand, takes less interest in the actions of an individual, privacy is respected, and business enterprises’ success would be attributed to sheer hard work (Khlif, 2016).
Portugal is a society set up with deficient IDV scores, a marketing campaign to emphasize that the import business is meant to bring benefits to the country should precede the company. Otherwise, the community would not receive it well and might sabotage the business. As long as the country is not addressed well to feel part of the enterprise, the industry would not earnest the entire market. A portion of the business in Spain is also likely to experience the same challenge since it registered a score of 51%, this record indicates that a section of the customers, business partners or employees would log flat files of IDV. Similarly, of the citizens involved in the business might have very high IDV, and the company would be considered private property. The citizens would not interfere with their market share. It will run parallel to existing import businesses; the residence of the countries would not have prejudice on deciding the legitimacy of the transaction (De Mooji, 2017).
Masculinity versus femininity (MAS)
Masculinity and femininity (MAS) cultural practice have an impact on the daily activities of several countries. The distribution between the responsibilities of men and women are likely to overlap less in countries where men are assertive. Success, strength, and speed are the most desired characteristics of these masculine societies. In feminine organizations, the community experiences a significant overlap in social responsibilities; all genders are expected to be modest when conducting businesses. Employees highly value their relationships in the workplace, especially their direct supervisors (Team, 2018).
The business would have problems gaining advancements within the marketplace in both Spain and Portugal due to female populations who are used to a gender-friendly environment struggling with family commitments. First, the business leadership and the owner from Ireland, a country with high masculinity, be read to ease how they treat women of both Spain and Portugal; these countries have low MAS records. The import business should not operate or conduct business with a harsh environment for female partners, employees, or customers. Although Irish society works for long hours, and in most cases, female team members (Beugelsdijk & Roth, 2017).
Uncertainty avoidance index (UAI)
In countries with very high uncertainty avoidance score, its population is more likely to make businesses environment predictable and controllable as much as they can. If the import business introduces a lifestyle that they find out of control, they will stop attending to it. Business relations in regions with low UAI should be conducted at ease, with inclusivity and openly; otherwise, it would fail. On the other hand, business scoring in high UAI regions has room to take high risks to avoid failure (De Mooji, 2017).
Both Spain and Portugal very high UAI; consumers might reject the business since its populations have been cultured to go for the conservative and safest options despite the benefits of the transactions. It is, therefore, better to conduct a consultative meeting with the stakeholders before setting up the business. This type of consumer is less likely to adopt a new product in the market, and the company will register low customers of they are not encouragers to try out the new business (Beugelsdijk & Roth, 2017).
Long- versus short- term orientation
This cultural practice revolves around the time horizon of members of a particular society. Citizens of a long-term direction have been cultured to be modest pragmatic and generally thrifty. In contrast, those from short-term oriented nations put a lot of emphasis on consistency, regulations, and facts, and they are more likely to side with a religious person than a nationalist (Team, 2018).
Both Spain and or Portugal have a short-term orientation though Spain is slightly fair; the business will be deserted if the employees and any involved partner do not realize quick returns. However, due to fairness in the long-term short-term orientation in Spain, the company can hold on to profits, losses, and or wages until it is stable without facing any backlash (De Mooji, 2017).
Indulgence versus restraint (IVR)
This culture refers to the citizen’s public displays of emotions. In Countries with low IVR, feelings, and feedback are suppressed, whereas society with high IVR levels has culture the citizens to give input, encouraged its citizens to act on their own will and gratification. They are allowed to enjoy life and have fun to their fullest (Team, 2018).
Setting up business regions Spain and Portugal, which are slightly below average in IVR levels, requires strict regulations since the population might act on free will. Some members of the organization may focus on enjoying every moment, while others devote their lives to the business, causing disunity in the company (Team, 2018).
3. Outline your personal view on why culture is an important concept in business. (10 Marks)
Corporate culture has always been significant; however, it has only become a famous subject in the past two decades or so. For some, it has actually become a modern expression, therefore losing some of its importance because of the excess of substance and the conversations that surround it.
Anyway, I would say that corporate culture has never been more exalted than it is today. And it is becoming even more significant as the modern work environment continues to advance.
A solid organizational culture can bring several benefits to a company. For example, Identity. Culture helps to distinguish and appreciate your organization. For example, if your corporate culture is one that organizes the definition and achievement of objectives, your workers will be required to define and fulfil their own objectives. It is an efficient method to define and maintain the direction of your representatives and, without it, it is difficult to maintain the rationality of your qualities.
We can also mention the retention of qualified labour. A solid organizational culture attracts better work capacity and, even more relevant, maintains that capacity. The moment individuals feel they have a place in an association, they want to stay as long as possible. This means less turnover, less new contracts to manage and better science among your group.
The corporate culture also contributes to the character and image of the company. If you treat your employees well and cultivate a relaxed and light corporate environment, your customers will consider you a liberal and carefree brand, in a good sense of course. This can have a positive impact on your business, as customer reliability will result in loyalty. Not to mention that happy employees produce more.
One of the biggest inspiring components is the way in which corporate culture is becoming an increasingly well-known thought and improvement. More organizations are moving their attention towards creating progressively exhaustive brand societies and saving them through continuous advancement.
Studies show quantifiable increases in the turnover of organizations with a poor or non-existent culture, and conversationally, culture is referenced even more now and again among businesspeople. In order not to be left behind, you need to keep pace with a solid culture and find out how to do things differently. Otherwise, organization’s development will be stagnant.
In conclusion, young professionals want a solid organizational culture more than anything when they choose who to work for. If you do not have a solid or engaging organizational culture, you will begin to lose the war of selection, that is, top professionals.
When you understand that organizational culture is really critical to the future of your business, and that it has progressed significantly, you may need to perform a ‘culture review’. Essentially, this is an approach to assess where your lifestyle is, to imagine a scenario where something is missing, and to create an arrangement for making rectifications.