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Understanding and manipulating organizational culture to improve performance is of particular interest in the light ...

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SHAPING ORGANIZATIONAL CULTURE. THE IMPACT ON PERFORMANCE

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CRISTIAN ODAGIU, PhD Student Valahia University, Târgovişte, România

Abstract Understanding and manipulating organizational culture to improve performance is of particular interest in the light of the modernization programme within the public sector. Bibliographic sources of information from the national and international literature on organizational culture provided a picture of cultural management issues in relation to explain dynamics that can be used to manipulate culture to accentuate change. A good practice example of managing organizational culture in terms of implementing change and flexibility is seen in the Sports Department of Bucharest. A briefly description of the interaction between organizational culture and the agenda for change in the example given develops conclusions and recommendations, in particular identifying appropriate responses that need to be developed in order to create an awareness of organizational culture to further shape the modernization agenda in the public sector. Keywords: organizational culture, management, performance, change, public sector

Introduction Organizational culture is a widely used term representing the climate and practices that organizations develop around their handling of people. Furthermore, the concept of culture should take on board the way organizations do business as well as the way they handle people (O. O’Donnell, R. Boyle, 2008). Expression of the organizational identity, culture means what unifies the organization in its practices and what distinguishes it from the others. Therefore, organizational culture is a binder for the members of the organization and a sign of its identity (R. Zghal, 2003). Schein emphasises that there are visible and invisible levels of culture (the “culture iceberg” analogy). Organizational culture, then, is made up of more “superficial” aspects such as patterns of behaviour and observable symbols and ceremonies, and more deep seated and underlying values, assumptions and beliefs (O. O’Donnell, R. Boyle, 2008). Organizational culture: an important issue for managers Organizational culture is indeed something that managers should pay attention to because it affects the performance of organizations by influencing it in a positive manner (O. O’Donnell, R. Boyle, 2008). 1

This article is developed in the project “Doctoral Preparation of Excellence for the Knowledge Society-PREDEX”, cofinanced by EUROPEAN SOCIAL FUND: Sectoral Operational Programme Human Resources Development 20072013. No. contract identification: POSDRU/CPP107/DMI1.5/S/77497

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Organizations must have not a culture that encourages only rule adherence, resulting in a greater likelihood of goal displacement away from effectiveness, they must have a culture focusing on finding ways to use the rules flexibly to improve performance. Besides the definition, structure, operationalization and implementation of certain strategies of organizational change and development, a successful management must take into account the organizational culture which is the “soft” component of the change process. It is basically a strategic tool, an indispensable component of an effective and efficient management. Thus, management strategy addressing is how can organizational culture be directed or changed to best serve the organization’s goals of improving its performance (C. Mereuţă-coord., 1998). How can managers shape culture? Organizational culture affects substantial all the processes, relationships and results of an organization. The enhance of the overall functionality and performance of the organization is the result of perceived value system, aspirations and expectations of the employees, of the specific organizational behaviour providing a useful informational support for a superior management approach. Management methods for changing organizational culture include staff training in the spirit of culture, the insurance of a real motivation, the use of selection, promotion and dismissal criteria that reflect values assessed, of rituals and ceremonies to strenghten the feeling of belonging to the organization (Gh. Gh. Ionescu, A. Toma, 2001). Organizational culture is a tool for diagnostic and change. The need to converge the views of the members of an organization requires that organizational culture analysis can assess the degree of consensus within the organization. Etzioni believes there are several areas of consensus, according to the following table (R. Zghal, 2003): Table No. 1 Consensus on General values Organizational goals Means Participation Performance Cognitive perspectives

Explanation social or community values objects to which the organization directs its efforts policies, tactics and instruments constraints, individual or voluntary commitment the perception of the relationship between contribution and retribution they involve an agreement on the facts, based on the language community, the frame of reference and rules that underlie the apprehension of facts and reality

Manager’s concern of increasing organizational performance targets the essential aspects based on the two interest centers: the results of the organization and the human factor requiring the involvement and satisfaction of the employees, working conditions and job security, salaries. A higher level management plays an important role to create and maintain a positive ethical climate which creates favorable conditions to increase the impact on performance of the organizational culture (O. Nicolescu-coord., 2004). Culture is important in shaping organizational practice and performance in public sector organizations. But a subsequent issue is the extent to which managers can actually shape or influence culture. On the one hand, interventions can influence culture but on the other hand, there is a real danger of attempting to influence the more superficial aspects of 412

culture such as symbols and ceremonies, while ignoring the more pervasive and deep seated aspects of culture such as values and beliefs. These more deep seated aspects of culture are much more difficult to influence. O’Donnell identified six key issues presented in the table below, that managers need to address in order to contribute to creating a more developmental and performance oriented culture in their organization (O. O’Donnell, R. Boyle, 2008): Table No. 2 Creating a climate for change

culture is only effective if it is applied to the relevant area needing change or is tied to some organizational issue

Leaders as champions

strong leadership is a key ingredient in driving the change process and ensuring that a culture of change is implemented and sustained it is crucial to ensure that the culture is effectively managed and aligned with the cultural assumptions of the organization as a whole team working is a common feature in terms of crossing existing barriers and as a useful means of promoting and disseminating new cultural traits it is important in terms of assessing whether there are issues or challenges to be addressed which could undermine the cultural ethos and underlying assumptions of the organization culture is an aspect of general management training or, sometimes, it is deemed appropriate to learn from leaders and managers about the prevalent cultural norms and assumptions; significant emphasis on reward and recognition is how to encourage a winning culture

Employee engagement and empowerment Team orientation Tracking cultural change Training, rewards and recognition

Performance improvement at Sports Department of Bucharest (SDB) The organizations that have reached maturity or decline stage, characterized by immobility or excessive internal stability which prevents innovation need to modify certain parts of the organizational culture provided to have a good vision (E. H. Schein, 1991). The main problem that stands in front of the management system in SDB organization refers to the efficiency of the institution activity in terms of budgetary allocations increasingly smaller. This means to find the opportunities of improving SDB performance indicators in the new created conditions. Manager's influence on organizational culture and thus on the organizational effectiveness of SDB involved the completion of several stages to change culture. As a positioning in managerial grid styles (caused by organizational internal and external factors and by manager’s personality), the modeling of SDB organizational culture resulted in displacement of the focus on power and role to focus on tasks and personnel. Kilmann, an expert in organizational culture, argued that to change it requires five major steps (Gh. Gh. Ionescu, 1997), described below to SDB:

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Table No. 3 Steps Revealing the real norms (expected behavior in organization) Articulation of new directions

Establishing new rules Identifying cultural faults Reduction of cultural differences

SDB managerial actions disclosed in the meetings of the organization, given the negative impact on the effectiveness of the organizational culture discussions with members of the organization to develop the organization's current direction and organizational behavior needed to obtain success together with members of the organization preparing the list of new rules that will have a positive impact on organizational effectiveness areas where there is a cultural gap between real rules and those that will positively affect organizational effectiveness consensus on new rules and tools design of their strengthening

A comparative method of the research data applied to the institutional performance indicators obtained for four consecutive years (2006-2009) has shown that managerial acts to achieve SDB objectives represent a first step to performance in the history of this organization. The analysis regarding the improvement of performance indicators proved that during the years 2007 and 2008, thanks to the unique period of stability at the management level, management tools could be used to influence organizational culture in order to obtain the best performances over both previous and next years. Recovery rate of the budgetary financing (efficiency financing) for each of the four years (ηF) is the percentage ratio between the aggregate performance indicators (API) and the amount (A) related to financing (in thousands of Ron), according to the formula: (1) ηF (%) = API/A As an eloquent example of the results of SDB performance management, in the table below are shown the values of the aggregate performance indicators, of the budgetary financing and recovery rate during 2006-2009 (A. Grigorescu, C. Odagiu, 2011): Table No. 4 Year API A(thousands of Ron) ηF (%)

2006 100,04 162 61,75

2007 123,16 141 87,35

2008 161,52 140 115,37

2009 124,89 203 61,52

Conclusions The importance of understanding, harnessing, managing and maintaining an appropriate culture in public sector organizations cannot be underestimated in terms of its impact on the modernization agenda. Developing appropriate measures to address culture issues in organizations in terms of increasing organizational capability and performance were addressed in this example about SDB. Leadership plays an important role in effectively managing and developing culture in organizations. It must be committed to managing culture in terms of developing and sustaining organizational performance. 414

It has been shown for SDB organization that ensuring employee commitment through culture programmes awareness and team oriented projects and initiatives (e.g. demonstrations, partnership, teambased projects etc.) creates a climate for change and further endorses the relevant culture advocated by manager. In order to adapt at the given conditions related to poor support of the budget and to inherent strength of the employees at the new conditions, management approach focused on four stakes to obtain performance (Jacob, Rondeau and Normandin, 2008) as shown in the case of SDB in the table below for 2007 and especially 2008: Table No. 5 Behavioral type Rational Political Human Symbolic

Ability capacity to improve capacity to collaborate capacity to contribute capacity to identify himself

Action, meaning to edify a more performant system to co-opt various partners to mobilize the people involved to make a sense of changes

The organization cited provided an useful example of how manager can effectively shape organizational culture as an integral part of both strategy and organizational change measures to enhance performance and innovation. This study contributes to the awareness and understanding of culture management in public sector organizations. But, the challenge is to develop this understanding into practical measures in public sector organizations to further bolster modernization and deliver the “performance culture where indicators inform policy choices, budgetary allocations and the day to day management of operations” (O. O’Donnell, R. Boyle, 2008, p. 73). References  Androniceanu A., 1998, Management of Change. Recovery of Human Creative Potential, ALL Educational Publishing, Bucharest  O’Donnell O., Boyle R., 2008, Understanding and Managing Organisational Culture, Institute of Public Administration, Dublin  Grigorescu A., Odagiu C., 2011, Managerial functions: leverage to improve performance indicators, The International Conference „Present Issues of Global Economy”, Constanţa  Ionescu Gh. Gh., 1997, Business culture. The American Model, Economic Publishing House, Bucharest  Ionescu Gh. Gh., Toma A., 2001, Organizational Culture and Transition Management, Economic Publishing House, Bucharest  Jacob R., Rondeau A., Normandin F., 2008, La gestion du changement stratégique dans les organisations des secteurs public et parapublic: le point de vue des practiciens, Télescope, Vol. 14, no. 3, p. 112, Québec  Mereuţă C. (coordinator), Pop L., Vlaicu C., Pop L., 1998, Organizational Cultures in the Romanian Area. Dominant Values and Profiles, Expert Publishing, Bucharest  Nicolescu O. (coordinator), 2004, Managers and Human Resource Management, Economic Publishing House, Bucharest  Schein E. H., 1991, Plaidoyer pour une conscience renouvelée de ce qu’est la culture organisationnelle, dans Tessier R. et Tellier Y. (coord.), Pouvoirs et cultures organisationnelles, Presses de l’Université du Québec  Zghal R., 2003, Culture et gestion: gestion de l’harmonie ou gestion des paradoxes?, Gestion, École des Hautes Études Commerciales de Montréal, Vol. 28, nr. 2, p. 26-32.

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