ABSTRACT

The concept of a quality work environment or the existence of an

organizational culture never received much appraisal or
acknowledgement until the development of the Human Resource
management practices. As a result, many organizations were the victims
of massive labour turnover and even dysfunctional staff who lacked the
motivation to display optimum efficiency. Until the late 1990’s
employment, practices and policies were mainly focused on the economic
feasibility of activities within the organisation’s scope of procedures. The
workforce was viewed upon as merely a means to the end goal of
monetary gain. To this end, organizations would often enforce abrupt and
sudden change decisions on the employees. The change would happen on
a variety of events such as alterations in the working arrangements,
mergers or amalgamations, technological change globalisation or
managerial restructuring.

There is evidence that employees seem dissatisfied with management’s

performance, which seems to be directed more at improving “bottom
line” performance and satisfying the shareholder’s desire for improved
profits (Salmon, 1996).

What the managers of that era ignored was the necessity for the
integration of the organisation’s culture with that of the economic
objectives. They failed to realise that the atmosphere within the
organization could be an invisible boost to the employee morale. All of
the managerial effort revolved around the monetary and procedural
aspects of running a business with little or no regard to employee welfare
apart from a few legal health and safety compliances. However, the
present management approach to people is unique in that it sees people as
an asset in itself. Many organisations even project the logo ‘investor in
people’ on its papers and advertisements.

The purpose of this thesis is to explore how the considerations behind

organizational success have changed and now give the work culture a
dominant place in an organisations success factors. This paper examines
what has been said in favour of organisational culture by noted authors
through literature review at various points in the report. The use of
organizational culture as a management tool and how a culture can be
created and used to gain a competitive advantage forms the core part of
this discussion.
 INTRODUCTION

The success of any organization is based primarily on what is called the

critical success factors. The critical success factors differ from firm to
firm and from industry to industry. However one factor that is critical to
all types of enterprises, government or non-government, profit or non-
profit making, manufacturing or service sector, is the human element.
The human factor is often not just one among the other critical success
factors; it is the factor that brings all the other factors together in unison
to work towards the organizational objectives.

When it comes to human performance, the vital element is the group or

collective interaction of the personnel and not just individual
performances. It is this interaction and cooperation that is the signature of
a firm’s culture.

Organisational culture: An Intangible Asset.

Organisational culture can be felt in the implicit rules and expectations of

behaviour in an organisation where, even though the rules are not
formally written down employees know what is expected of them
(Mintzberg et al, 2003).

The culture of an organisation can be described as the collective set of the

values, attitudes and beliefs and work relations of the people in an
organisation. It is usually set by the middle management whose decisions
greatly influence the environment within the organisation. The
organisational culture should support the organisational goals.
Organisational culture is an intangible framework of inters personal
relations.

Culture in organisational terms is broadly the social/behavioural

manifestation and experiencing of a whole range of issues such as :

• The way work is organised and experienced

• How authority exercised and distributed
• How people are and feel rewarded, organised and controlled
• The values and work orientation of staff
• The degree of formalisation, standardisation and control through
systems there is/should be
• The value placed on planning, analysis, logic, fairness etc
 • How much initiative, risk-taking, scope for individuality and
expression is given
• Rules and expectations about such things as informality in
interpersonal relations, dress, personal eccentricity etc
• Differential status
• Emphasis given to rules, procedures, specifications of performance
and results, team or individual working

(SOURCE: http://www.brunel.ac.uk/~bustcfj/bola/culture/culture.html.
Likert R, The Professional Manager, Wiley).

In other words, organisational culture is how things get done in

organisations. The term organisational culture encompasses every aspect,
which affects the authority-responsibility relationship and the reward and
behaviour codes within any organisation.

Organisational culture: Influence on the chances for success.

Organisational culture is often to be so influential on the firm that it could

make or break organisations. Organisational culture can have two facets:
a positive culture and a negative culture.

A positive culture can be experienced through the dynamic and

cooperative interpersonal relations between the personnel and the
management on all levels. Transparency, communication and
coordination are all a given where there is a positive work culture. An
organisational culture is where employees co-operate with one another,
remain loyal to their employers, and work hard and with commitment to
fulfil organisation objectives and corporate goals. The effects of a
positive work culture are not only felt within the organisation, customers
dealing with motivated staff are usually quick to spot the difference.

A negative work culture exists where the relations between the staff and
the different management levels are non-cooperative and the running of
the business is uncoordinated. A negative work culture can mean the end
of an organisation’s hope for success. Dissatisfied and frustrated staff
would show no loyalty and therefore be dysfunctional in the approach to
their duties.
 ORGANISATIONAL CULTURE: A TOOL FOR
ORGANISATIONAL PERFORMANCE.

Since organizational culture is the personality of any

organisation, it can greatly influence the performance
capability of the staff. The key thought behind the concept
of organisational culture is that it is the all-pervasive
cloak, which determines how the employees relate to each
other and how they fit into the organisational structure. If
organisations are to be sustainable in the medium to long-term,
employees must be motivated to care about the work they do, to acquire
knowledge-related skills, and to perform the work to the best of their
abilities (Lawler, 1994).

The bureaucratic and hierarchical organisational structures have given

way to broader and flatter structures where self-managed work teams
have become more prevalent and workers and employees have an input to
the decision-making processes affecting their work. Managers now have
to address complex issues associated with competing in a fiercely
competitive global marketplace. Recent literature in the late 1990s places
strong emphasis on the need for high-involvement work practices, greater
employee participation in decision-making and control over how the
work is performed and increased flexibility and casualisation of the
workforce (Burgess,1997; Gollan, 1999). High involvement work
practices primarily have the advantage of instilling a greater sense of
achievement and pride in getting it right. This is a great method of staff
motivation without the need for a controlled and regulated feel to the
tasks each employee is responsible for.

Culture directly affects how the employees carry out their

role in the firm. Only a satisfied employee can perform
what he is required to perform or perhaps contribute more
in the way of job loyalty. The relationship between job satisfaction
and organizational culture is difficult to measure but very strong and
interdependent.

Organisational performance can be enhanced in many ways. An

organisation should not only focus on profit generation if it wishes to
flourish in the future. There are many other co factors which contribute to
the profitability and reputation of an organisation. These factors are all a
direct result of the interaction between the internal members of the
organisation. How organisational culture can be a manager’s tool in
improving the firm’s performance is discussed below.
Sincere and unambiguous communication

Unsystematic and disrupted lines of communication could be what

diminishes an organisations chance for success to a great level. Clear and
up-to-date communication is perhaps the most appealing aspects of a
positive work culture. Human resource managers should focus on
attaining an environment where fast and accurate communication among
employees and to outsiders is ensured and smooth.

Such a smooth flow of information sets the foundations for an amicable

and less confusing working environment. Managers can then use
communication prowess to develop creativity and expand productivity.
Transparent or clear communication develops a learning company and its
people are prepared to speak, willing to listen and assimilate instructions,
express frank opinions or speak without fear or fervour, and every one is
prepared to give chances to each other's opinions or ideas and in the end
grow and progress together (Lawler, 1994).

Achieving Customer Delight

A positive organisational work culture is essentially customer-focused.

Placing importance on satisfying the demand and needs of customers is
an indispensable asset that employees in many leading businesses posses
and value. To any organisation, small or big, customers are the source of
revenue and therefore the customer needs to be kept satisfied. Loyal
customers mean corporate growth while disloyal or unhappy customers
can quickly disrepute the organisation and thus the firm’s market share
and standing among consumers will be substantially affected. It is vital
then that employees working in an organisation focus on activities and
jobs that satisfy attract and retain good clientele base. The manager’s role
is to identify and evaluate the current measures or attitudes of the
employees towards customer generation and retention. This is one area
where detailed analysis of the organisation’s culture may bring to light
any flaws or areas for improvement.
Employment security

Employment security is different from job security. Employment security

is fundamental to the implementation of most other high-performance
management practices, such as selective hiring, extensive training and
development, information sharing, and delegation. Employment security
assumes flexibility and means that employees are not quickly laid-off for
reasons such as economic downturns or the strategic mistakes of senior
management, over which employees have no control. The policy focuses
on maintaining total employment and not on protecting individuals from
the consequences of their individual behaviour or incompetence on the
job (Morgan, 2001).

Selective hiring of new personnel

Firms need to build long-term commitment to retaining their work force.

This can be achieved through more rigorous recruitment and selection
and greater investment by firms in training and developing their work
force. Many organisations need to change their philosophy to regarding
people as assets rather than costs (Fruin, 2000).

Employment security policies need to reflect more careful staff selection

and leaner hiring. Leaner staffing can result in a more productive work
force with fewer people doing the work, increased flexibility and
employees working closer to the customer. People are often happy to be
more productive if they know they have a secure long-term job with a
career. More importantly, firms need to take a long-term strategic view
to HR resources rather than a short-term operational cost-cutting
approach (Fisher and Dowling, 1999).

The main questions to be asked when hiring or recruiting a new employee

would be:
• What qualifications the person has?
• What practical experience he has gained?
• Would he be able to commit full time to the organisation?
• What personal qualities does he have?
• Is he a team player?
Self-managed teams and decentralisation of decision-making

There is considerable literature providing case studies and empirical

evidence that workers in self-managed teams enjoy greater autonomy,
flexibility and discretion. Employees have more opportunity to use their
wider skills. This translates into intrinsic rewards and job satisfaction
resulting in teams out-performing traditionally supervised work groups
(Pfeffer, 1998). The manager can effectively carry out more strategic
roles if the organisational culture is one that encourages decentralisation
of responsibilities and authority.

Extensive training and development

Training is an essential component for optimum performance. This is

because the organisations directly rely on front-line employee skill and
initiative to identify and resolve problems, to initiate changes in work
methods, and to take responsibility for quality. This requires a motivated
work force that has the knowledge and capability to perform the core
tasks. Knowledge and intellectual capital are becoming increasingly
important if firms are to be successful in highly competitive global
markets (Wright et al., 1994).

Human resources manager’s can employ the existence of a positive work

culture to conduct training and development programmes targeted at
improving employee performance. These programmes are likely to be
much more effective if the culture is a peaceful and cooperative system.
Skilful use of the resources leads to lesser wastages in time, effort and
material. This would indirectly affect the costing figures within the
production functions of an organisation.

Employee management relationship

An essential element for a good work culture and teamwork is trust. The
delegation of operating authority and the sharing of sensitive performance
and strategic information requires trust. It is important that if the work
force is to provide quality service to its customers, then they must be
given the opportunity to use their ideas, initiative and knowledge. This
involves decentralising decision-making and permitting people at all
levels to exercise substantial influence over organisational decisions and
processes. All this requires trust that is markedly different from
hierarchical organisations where the emphasis is on control. Trust
develops as part of the process, as it will rarely be there from the start e.g.
the Olympic Games. Leadership is also important is fostering trust in an
organisation. Competitive rivalry rather than cohesive teamwork leads to
lack of trust not only at executive levels but can generate mistrust at all
levels of the organisation (Morgan, 2001).

It is therefore important that managers view the organisational culture to

in such a way that their action would lead to the creating, sustaining and
development of the kind of organisational culture that will lead to
excellence in performance both in the way of organisational objectives
and in the way of communal harmony among an organisation’s personnel
and the different management hierarchies within an organisation.

SUMMARY

Managers who ignore the significance of a positive work culture would

not be able to nurture effective growth for the organisation. How each
manager approaches the relation between the existent work culture and
the corporate strategy is of paramount importance. Managers who tend to
seek corporate solutions to their competitive challenges by downsizing;
outsourcing and weakening their organisational culture need to consider
the sustainability and long term effects of such drastic measures.

Organisations need to match HR policies and practices with long-term

business strategies. This compatibility is essential to compete in the
global market place, and generate employee productivity, commitment
and retention over the long-term. Human resource managers need to
introduce tasks that are incremental and collaborative and provide the
opportunity to employees to make decisions affecting their work and to
share in the rewards of their creative efforts thereby creating a feeling of
stakeholder interest in the employees. This generates the positive work
culture which is prerequisite for the performance of any organisation.
Regardless of the way in which organisational culture can enhance an
enterprise’s performance, one essential element is commitment from the
human resources department to foster a positive organisational culture.