Organizational culture refers to the set of shared values, beliefs and assumptions that make up the psychological environment of a business concern. Every business concern has its unique personality and culture (Alvesson & Sveningsson, 2015). This invisible component has significant influencing power on the behaviour of the members of the specific business entity. The particular scenario that has been presented here involves the CEO of a multinational manufacturing business concern who plans to align the organizational culture across all the sites of the business operations. The headquarters of the concern is situated in the U.K. but its operations are spread across different parts of the globe including the U.S., Japan and Finland. To successfully align the organizational culture across all of its sites of operations, the CEO needs to take into consideration the various factors that come into play in the organizational scenario.
The various elements that come into play include the particular industry in which the organization functions, the organizational design that exists within the organizational culture, diversified work setting, the cultural differences, strategies and goals of the business organization, etc. Since the headquarters of the business is located in the U.K., the dominant organizational culture would reflect the general characteristics of the U.K.-based organizations. But the business must make sure that it can effectively integrate and align the common organizational culture across all of its business sites. The various factors, models, and theories that come into play in this organizational situation have been highlighted here.
The management of organizations across national borders is not an easy task for any business concern irrespective of its size and the industry in which it functions. It poses a unique set of challenges in front of the CEO and the management team of the business concern. As per Alvesson (2016), the various elements that operate in the organizational cultural setting need to be taken into account while planning the aligning strategy. Different nations adopt a different organizational culture which is influenced by the national culture of the country (Alvesson, 2016). The various aspects that could lead to differences and conflicts must be identified so that the organization can have complete control over the rising cultural conflicts due to the changing operational setting.
To effectively manage the different operational sites of the manufacturing entity, the CEO must identify the major factors and elements that influence the organizational cultural environment. The factors share the elements that have been covered in the theories that must be considered while aligning organizational culture.
Several factors come into play that the CEO and the management team must take into consideration while attempting to align the organizational culture across all the sites. The key elements include the nature of the industry, organizational design, hierarchical structure of the business, basic cultural differences, etc. Various factors that come into play include an articulation of organizational functions, arrangement of functional alignment, mechanisms of coordination and control, rewards and performances, achieving effective leadership. Aligning organizational culture with the culture of the countries where the organization is operating can be very challenging and will require identifying and analyzing various factors that can significantly improve the operations. Therefore, it becomes significant to understand the culture of the country to which the CEO wants to align. Therefore, for this purpose, some of the important theories can be used.
The success of the organization lies in its strong culture. The organization starts t grow through establishing a common culture in its different divisions and CEO have to manage the subsidiaries at different locations. The culture at different locations develops through different needs. Therefore creating the influence of the dominant culture, the organizations are required to attach the sub-cultures as well. The main leaders of the organizations must understand the significance and advantage of the sub-cultures, yet it can also pose the risk of cultural divergence, which can be a warning for the company as it may be moving towards the dispersal phase as explained by Schein (2010). As he has explained that this can decline the performance of the people and can significantly lead to the destruction of the organization. Schein (2010) has also defined the culture as “a pattern of shared basic assumptions that was learned by a group as it solves its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel about those problems”. According to this given definition, if the groups of people can solve their problems in the past then they can be able to preserve the learning through the culture. However, it is important to evaluate that whether the learning is successful in solving the current problems.
According to Mintzberg (1979,1993), the structure of the organization can be seen in the five different categories. These categories correspond to power, or they have to influence the organization to run collectively. According to this point of view, the pentagon structure of the organization has the potential to change and adapt to the power shift, which can influence the emergence of a new organizational structure. Mintzberg (2009) has suggested the three main dimensions of the organization’s success. The first dimension is the key part of the organization that plays important role in the success or failure of the organization. The second dimension is the prime coordinating mechanism for coordinating activities within the organization and the third is the decentralized operations, which means the extent to which organizations include the subordinates in decision making (Lunenburg, F. C. (2012).
One of the significantly identified organizational structures in manufacturing companies is the bureaucratic machine form. Therefore, the key parts of an organization conceptualized by Mintzberg have specifically conceptualized the five main variables, which are the strategic apex, middle line, operational core, technostructure, and support staff.
Therefore, a manufacturing organization is significantly required to adopt the ‘Machine bureaucracy’, because its main focus is on the standardization of the work process and involves decision making within subordinates to maintain the divisional layout of the organization (decentralization) (Mintzberg, 1993). However, the structure suggested by Mintzberg can be very challenging for the CEO in the given case scenario because, if all the operational sites take independent decisions, then the idea of aligning the culture could not be obtained nor the single cultural identity could be established. If the CEO applies this system to the organization then he has to ensure that all the divisions follow the blueprint of the parent company. Therefore, the traditional divisional structure may not be apt for the organization and foraging the culture.
According to the definition of culture given by Hofstede (1980), culture can be understood as the ‘collective mental programming of the people within the organization. Therefore, according to the definition given by him, culture is not just the work of a single person, but the culture belongs to the groups of people that are trained to work with certain assumptions and beliefs, which is difficult to be changed. To explain the different national cultures with less ambiguity, he had explained different dimensions of national culture that are important to be understood. These dimensions are Power Distance (PD), Uncertainty Avoidance (UA), Masculinity-Feminism (MAS) Individualism-Collectivism. The power distance could be understood as to how the different cultures receive and perceive social inequality. Therefore according to it can be said that the autocratic leadership style displays more power distance as the employees do not gain the opportunity to exercise their power. However, in democratic leadership, there prevails the culture with low power distance and cultural imbalance does not exist. The power distance in UK, USA and Finland is low, therefore, they require more resourceful and a democratic leader. Whereas in Japan they have a hierarchical structure and high power distance, therefore they require autocratic leaders.
According to Trompenaars & Hampden-Turner, (1994) hierarchy is intrinsic to Japanese culture and also collective decision making. UK and USA have acknowledged the importance of individualism, while Finland displays lower scores in terms of individualism. The culture in Japan is significantly different, though they embrace collective decision making, Japan also displays high Masculinity, Uncertainty Avoidance, and Long Term Orientation (Trompenaars & Hampden-Turner, 1994). According to Hofstede’s model of the cultural dimensions, the national culture of Japan should be the priority for the organization, because they display high work involvement and also have a long term perspective towards work (Trompenaars & HampdenTurner, 1994). The hierarchy that is inherent to Japanese culture will help in creating clear decision making and will support the organization in avoiding ambiguity and will enhance the solid foundation. This can also be associated with employee motivation in Japan. However, aligning the culture of the organization with the culture of one operational site is not enough. The subtle difference in the culture of the UK, USA and Finland also requires some effort.
The earlier model or the structure on which the organization is working was way too self-sufficient and decentralized (Bartlett & Ghoshal,1999). Therefore, in the first phase in transforming the culture of the company, the CEO has to focus on how to centralize the operations and core competencies of the company. Therefore, the CEO of the company has to focus on the local culture of the divisions and develop new competencies that can be transferred to other units. Therefore, the transformational model suggested by Ghoshal can be useful. The cultural alignments can be supported through the study of Ghoshal and Nohira (1994), who have analyzed the company and suggested the hybrid form of the organizational cultural alignment. Such cultural alignment requires the core values that are shared in the company across the border, as well as the customized set of values that can help in managing the subsidiaries in different locations. The advantage of such an approach is that it provides the opportunity to the organization through knowledge sharing and learning and will also facilitate the adoption of the international organizational model, as suggested by Ghoshal. This model or approach will also allow the leader of the organization to rethink their mission and their long terms goals by strengthening the core values of the dominant culture. The significant assembling of the subcultures will allow the organization to merge what has been learned from the subsidiaries. Organizations can use it as a competitive advantage and this way organization’s ability to deal with current challenges will also improve (Ghoshal & Bartlett, 1999).
Ghoshal & Bartlett (1999) has suggested the two-way communication approach, which will help to disseminate the core values and the vision of the headquarters and will also help in adopting the local cultures. This two-way communication will enhance the learning ability of the organization. Ghoshal & Bartlett (1999) also found that to transform the international culture into the transnational culture, the organization requires to intensify the dispersion of the message from the headquarters. Creating interdependence is sinfi9cant for aligning the culture; therefore, every unit has to contribute to the worldwide operations of the organization. Therefore, this system when adopted by the organization will help in developing the knowledge jointly and sharing it globally Ghoshal & Bartlett (1999). Strategic thinking is required for bringing such kind of transformation. Strategic thinking is used to analyze the influence of the national cultures, outcomes of organizational design and information about the fundamental structure of the company. This will help in developing a macro perspective towards the challenges that the company is facing. The micro perspective can be achieved through focusing on leadership, job design and cultural influence on motivation that would help the organization to apply transformation strategy.
The culture of an organization is influenced by the belief, values and experiences of the founders (Schein, 2010). Therefore, the organizational
design should be suitable for motivating the employees. Ghoshal (2005) have also considered the factor of motivation to be significantly associated with organizational design. Another significant aspect is the techno-structure of the organization that can significantly influence the flow in the organization. Another significant view towards the organization design comes from the model proposed by Mintzberg. The theory proposed by Mintzberg displays the pattern of flow from the CEO to the operation structure of the organization that is influenced by techno-structure and subordinates of the organization (Mintzberg, 1993). Galbraith (1967) has also discussed the techno-structure of the organization. By examining both the theories it can be found that specifically explain the actions of the management that are taken to influence the activities of the organization. However, it has been found that the theory given by Mintzberg is a little weak because it states that structure is standard for the organization which may not fit all the organizations. However, Galbraith focuses on a different idea, where he states that suggestions should come from the employees, as this will provide a competitive advantage to the company, as the company will have a variety of solutions to the problems and everyone will have the access to decision making in absence of conflicts (Galbraith, 1967).
This motivational theory that was introduced by Abraham Maslow is a five-stage model that covers the various elements that motivate an individual to perform his or her task. Appendix 1 presents the diagrammatic representation of the particular theory (Bishop, 2016). The basic needs comprise physiological and safety needs, the psychological needs encompass belongingness and self-esteem need. Ultimately the self-fulfilment needs include elements such as status, creativity, etc.
The CEO of the manufacturing concern must refer to this model to understand the intangible needs of the human beings or employees that function in different sites including the U.S., Japan, and Finland. In the organizational setting in Japan high priority is given to the psychological needs since the people believe in establishing long-term relationships in the professional setting (Cherry, 2014). Similarly, the organizations that operate in the U.S. focus on the output and intend to strengthen the self-actualization needs. The U.K.-based manufacturing concern must try to reach a consensus in terms of the organizational culture so that all the needs of the organizational personnel can be effectively met without many conflicts.
The cultural alignment that would take place in the particular manufacturing organization would have implications on the overall leadership scenario of the concern. The organization’s situational leadership model, transformational leadership model, and the leader-member exchange theory could be affected due to the alignment process.
Due to the alignment of the organizational culture, a common leadership model would be followed and this could change the organizational output and overall productivity. The situational leadership theory states that there is no particular best style of leadership. This could encourage the formation of different kinds of leaders in the organizational setting.
The transformational leadership technique could be encouraged in the new organizational setting where the leaders would operate with their subordinates to produce the most profitable results for the business concern. This leadership approach could be adopted to focus on the primary purpose of the business (Avolio & Yammarino, 2013).
The leader–member exchange (LMX) theory is another leadership model that could be introduced which could strengthen the relationship between the managers and the subordinates. Such implications could arise in the organizational setting due to the cultural alignment process.
The organizational culture is a crucial component that has a direct and significant impact on the productivity of the concern. The CEO of the multinational manufacturing company must take into consideration the organizational culture of its operational sites that are located in the US, Japan, and Finland. This would help it to bring moderate changes on the organizational front so that all the sites could continue to deliver quality performance. The employees should be able to have a certain degree of liberty in the new organizational setting so that they can adapt to the new organizational culture. Various theories that must be taken into account by the CEO have been highlighted to simplify the change model.
Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change work in progress. Routledge.
Alvesson, M. (Ed.). (2016). Organizational culture. Sage.
Ashkanasy, N. M., & Dorris, A. B. (2017). Organizational culture and climate.
Avolio, B. J., & Yammarino, F. J. (Eds.). (2013). Introduction to, and overview of, transformational and charismatic leadership. In Transformational and Charismatic Leadership: The Road Ahead 10th Anniversary Edition (pp. xxvii-xxxiii). Emerald Group Publishing Limited.
Bishop, J. (2016, January). An analysis of the implications of Maslow’s Hierarchy of Needs for networked learning design and delivery. In Proceedings of the International Conference on Information and Knowledge Engineering (IKE) (p. 49). The Steering Committee of The World Congress in Computer Science, Computer Engineering and Applied Computing (WorldComp).
Cherry, K. (2014). Hierarchy of needs. The Five Levels of Maslow’s Hierarchy of Needs. About. com Guide.↑| Link.
Galbraith, J. K. (1967). Capital Techno Structure and Power. KW Rothschild. Power in Economics, 192-204.
Ghoshal, S., & Bartlett, C. A. (1999). The individualized corporation: A fundamentally new approach to management. Harper Collins.
Hofstede, G. (1980). Motivation, leadership, and organization: do American theories apply abroad?. Organizational dynamics, 9(1), 42-63.
Karnatovskaia, L. V., Gajic, O., Bienvenu, O. J., Stevenson, J. E., & Needham, D. M. (2015). A holistic approach to the critically ill and Maslow’s hierarchy. Journal of critical care, 30(1), 210-211.
Lee, Y., & Kramer, A. (2016, January). National Culture, Organizational Culture, and Purposeful Diversity and Inclusion Strategy. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 11858). Academy of Management.
Lunenburg, F. C. (2012). Organizational structure: Mintzberg’s framework. International journal of scholarly, academic, intellectual diversity, 14(1), 1-8.
McLeod, S. (2007). Maslow’s hierarchy of needs. Simply Psychology, 1.
Mills, A. J. (2017). Studying the Gendering of Organizational Culture over Time: Concerns, Issues, and Strategies☆. In Insights and Research on the Study of Gender and Intersectionality in International Airline Cultures (pp. 71-91). Emerald Publishing Limited.
Mintzberg, H. (1993). Structure in fives: Designing effective organizations. Prentice-Hall, Inc.
Mintzberg, H. (2009). Rebuilding companies as communities. Harvard business review, 87(7/8), 140-143.
Nohria, N., & Ghoshal, S. (1994). Differentiated fit and shared values: Alternatives for managing headquarters‐subsidiary relations. Strategic Management Journal, 15(6), 491-502.
Schein, E. H. (2010). Organizational culture and leadership (Vol. 2). John Wiley & Sons.
Trompenaars, F., & Hampden-Turner, C. (1994). The seven cultures of capitalism: Value systems for creating wealth in the United States, Britain, Japan, Germany, France, Sweden, and the Netherlands. London: Piatkus, 12.Order Now