School of Business University of Leicester

Module Handbook 2018

MN 2131

Module: Human Resource Management

Level: Undergraduate

Semester: 2

Module Leader: Feim Blakcori (fb167@leicester.ac.uk)

Huseynli Khosrov 179051834 MN2131

What is organisational culture and to what extent is it

important in HRM?

Humans are social species. Throughout the history people have grouped together and
created societies. Within every society people form common habits and behaviours.
These methods and norms then began to called culture. Culture is considered to be the
way of thinking between individuals in a society, but it also consists of tangible things
(William Little). That is why culture is separated between material and nonmaterial
culture. Material culture refers to tangible things that people owe within a culture.
Nonmaterial culture, on the other hand, is thoughts, beliefs, and perceptions that are
accepted by the population of that society. It is ideas, values and rules for living. With
the rise of globalisation, however, the concept of culture has taken on a broader meaning
and become an important element of organisations in last three decades. In 1957, for the
first time in history Th. Szelnic addressed the organisation as a social organism. Within
the borders of organizations, the cultural factors affects the determination of strategy,
establishment of goals and generally the way organisation operates. The purpose of this
essay is to identify the true meaning of organisational culture and its importance in the
field of human resources management.
Until 1980s there was little interest in treating culture as a tool for organizational
improvement. During the 1980s, however, the study of Japanese companies
demonstrated the importance of organizational culture in the economic and
organizational sphere. Afterwards in 1990s several books published about
organizational culture and its impact on organizational outcomes, reasoning that culture
could be used as a resource to affect employee actions, distinguish firms from one
another, and create competitive advantage for those with superior cultures. In the
companies of 21st century culture plays an essential role. Under the circumstances of
globalisation people from different parts of the world migrate between countries for
better job opportunities and living circumstances. Hence, organizations of today have to
think about the beliefs and values of different people, coming from different cultures,
and create a positive work environment.
There are certain levels of culture, as well as national culture, organisational culture,
corporate culture and others. The organisational culture is the one which is created
within every organizations. The concept of organisational culture has so many
definitions in terms of sociology, anthropology and psychology which make it
ambiguous and imprecise to comprehend. It is the spirit and belief demonstrated within
it, norms and values that define how people should behave and treat each other, most
importantly the nature of working relationship and attitudes to customers that should be
developed. It is revolving, interactive, and engaging dynamic force which is created by
employees and management gestures, behaviours and attitudes. Although Schneider and
Smith think that culture begins with leadership and passed on to the organizational
member, it is seen as a set of forces that shape and determine human behaviour. The
culture is about intangible deep structure of organization. Some authors approach
organizations like individuals. Wally Olins cites the example of the world’s similar
chemical companies which produce almost identical products selling at the same price.
Each company have powerful identities and in culture are as different as human beings
(Corporate identity, 1989). Yet others even argue that the culture is the organizations
itself. Henry Mintzberg: “Culture is the soul of the organization — the beliefs and
values, and how they are manifested. I think of the structure as the skeleton, and as the
flesh and blood. And culture is the soul that holds the thing together and gives it life
force. It is the way people are chosen, developed, nurtured, interrelated and rewarded
within the organisation”. The culture of an organisation is the consequence of variety of
factors including the impacts of national culture, previous events in the organization, the
different personalities and the socialisation individual members experienced as a result
of past educational and work settings.
When talking about culture it is rather intangible and covers so many matters about
company, so that the leaders ignore the importance of it. Culture might be the main
reason for the strength or weakness of the major business functions. Organizational
culture significantly affects the process of strategy formulation and selection, as well as
its implementation. On the other hand, the selection and implementation of strategy can
change the organizational culture and make the existing of organizational culture strong.
The culture affects the partnership relations, managing employees, strategic
management and communications with customers. A study of selected Nigerian private
universities has shown a close relationship between organizational culture and
recruitment process, training programmes, job performance management, performance
of employees, pay structure, and compensation administration. Organisational culture
is so important, it can even result in the failure or success of the business.
Culture as one of the components of an organization plays an essential role in the
strategic management of firms. In this essay its influence on strategic management is
analysed from 3 aspects, including employees, customers and partners. Within the
organizational culture, people and groups interact with each other, counting clients,
partners and employees. It signifies that good organizational culture can result with
upcoming benefits, including excellent customer service, efficient cooperation with
partners, consistent employee performance and strong social responsibility.
As mentioned above, the culture has direct impact on employees. Most of the employees
in an organization come from different backgrounds. Strong organisational cultures
provide that employees are like-minded and hold similar beliefs and ethical values.
Good organisational culture helps employees to interact with each other, share their
ideas and respect others’ beliefs and opinions. It ensures that each employee are treated
equally and no employee is neglected. A number of organisations support employee
wellbeing with free medical care, personal training, cheap cafeteria, etc. Strong
organisational culture keeps employees motivated to work and loyal to organizations.
When employees see themselves as the part of an organization, they are more eager to
contribute to organizations and achieve organisational goals. Shared organizational
culture improves healthy competition among employees which helps the organization
to flourish and prosper. It provide employees with a sense of direction and expectations
that keep employees on task, as the consequence of this employees do not have to spend
time to think about how to act in order to succeed. Within the high quality
organizational culture employees can communicate more efficiently and reach higher
levels of cooperation with each other because they share common mental models of
reality. According to Edgar Schein (2010), organizational leaders achieve success by
constantly sending clear signals about their priorities, beliefs and values. However there
are some arguments that, strong organizational culture keeps employees fixed in the
same opinions and traditions, which in long distance makes employees unable to think
and act differently and reduce their ability of creation and innovation.
Organizational culture has strong impact on partnership relations and customer service.
Collaboration is impossible to be achieved successfully, when there is communication
problems, inter-group conflicts and difficulty to integrate within the culture. Therefore
partners have to take the responsibility to do their best to interact with culture. It is also
necessary to take culture into consideration when thinking about new partnership
relations. Joining forces with another organization that own ideal culture to integrate
with can help to create and deliver unique product, which none of the organisations
could manage to produce on their own alone. On the other hand the strong
organizational culture will attract new customers and make loyalty to organizations.
That is because organizations with healthy organizational culture tend to spend more
time with training and teaching employees how to interact properly with the customers.
Organizations need high-skilled employees that can operate in difficult situations and
changing environment. Consequently, employee selection process is very important to
organizations. Selection of the wrong person to specific job can be very costly to
organizations. Generally organizations concentrate on hiring people based on their
skills and experience. The reason for this is if they have the right set of skills or have
done the same job in the past they will probably perform better in their new role.
However the key factor in the selection process is how the new employees will fit to
the culture of organizations. To what extent the expectations of employees and what
organization provides can match up is called motivational fit. Chartman, (2001) defines
motivational fit in two distinct ways: job fit motivation and organization fit motivation.
Job fit motivation is the degree to which the activities and responsibilities of the new
employee are suitable to activities and responsibilities of a specific job. The
organization fit motivation, also called ‘culture fit’, on the other hand is how the beliefs
and values of that new employee are consistent with the beliefs and values of an
organization. These two factors play a dominant role in the recruitment and selection
process. However, most managers forget the importance of the cultural fit. According
to numerous researches the culture fit helps to reduce absenteeism and turnover and
increase the motivation of the new employees to work. Therefore, managers should
ensure that individuals in the organization are adequately trained in recruitment
practices, including behavioural interviewing and motivational fit concepts and
describe values in behavioural terms and use behavioural based questions to assess
suitability.
The impact of organizational culture on training and development is another hypothesis.
Through the training process organizations try to simplify the learning process of
employees, increase the advancement of technology which has resulted in ever
increasing competition, rise customer’s expectation of quality and service and a
subsequent need to lower costs. These process includes improving the knowledge, skills
and behaviours of employees that are crucial for successful job performance. Through
the training and development process valuable information is made available and false
and irrational information are deleted. Training and development process help to
increase the effectiveness of utilization of human resources that will in the future help
employees to achieve the organizational and individual goals. All these factors help to
improve the general picture of organization and its culture. According to Tushman and
O’Reilly organizational culture lies at the heart of organizational norms that reflects the
influence of organizational culture on creativity and innovation. In summary, creating
and influencing an adaptive culture is one of a manager’s most important jobs and
which training and development programmes avail the opportunities.
The organizational culture influence performance management. Managers and
employees work together to plan, review and monitor employees’ work objectives and
contribution to the company. Organizations try to create a culture which helps to keep
learning environment strong. As reported by Kandula (2006) a strong culture is the key
to better performance. According to his opinion, same strategies do not result same
consequences for two organizations in the same industry and in the same location that
is due to differences in their organizational culture. A positive and strong culture can
make an average individual perform and achieve brilliantly, even though a negative and
weak culture may demotivate an outstanding employee to underperform and end up
with no achievement. Organizations that practice performance management will not
end up with productive results if they do not consider the culture, because the culture
and performance management are interdependent and changes in one of them will affect
another one.
Apple is considered to be one of the prominent technological multinational companies
in the world. Company has the mindset of Think Different. Its label is always doing the
best thing possible. Apple prefers employees to work in small groups. There is a belief
that when you have the right people in the right group you can do not only hard but also
impossible. There is such an environment, that everybody does their best and tries to
do something new. According to the Vice president of human resources of Apple there
is no company in the world where there is such reverence to expertise. Apple companies
try to empower their people, build their organizations around teams, and develop human
capability at all levels. Executives, managers, and employees are committed to their
work. They work hard to achieve organisational and personal goals because they feel
that they own a piece of the organization. Employees in Apple companies at all levels
feel that they have at least some input into decisions that will affect their work and that
their work is directly connected to the goals of the organization. Every employee that
works in Apple has a clear sense of purpose and direction, so they do not have to think
about what to do in order to achieve organizational goals. Employees are so determined
in their purpose of achieving the organizational goals that are set by Apple, some of
them become experts in their field as they work hard on their own. Apple has created
the ideology that it only hires the people who are at the top of their field or have the
potential to be at the top of their field. As the result employees in Apple companies feel
special about themselves. This kind of organisational culture in Apple companies
attracts the quality staff that can operate in an environment of increasing complexity
and constant change. Creating such a powerful culture is probably one of the reasons
that had made apple to design the best products in the world.
Organizations are concerned about the importance of compensation system in order to
retain professionals and maintain their commitment. Compensation system, on the other
hand, is closely connected with the culture of an organization. According to some
scholars the organizational culture is demonstrated with the system of compensation. It
provides outsiders with the information about the less visible inside of the companies.
Compensation system attracts the right kind of personal because organizations
communicates through their compensation packages with individuals in the labour
force. The compensation system also affects the inside culture of companies. With the
appropriate reward and pay distribution system companies affect the motivations of
employees and their contribution towards companies.
Conclusion
This paper analyses the notion of organizational culture and its impact on overall
organizational environment. In the first part the meaning of organizational culture from
the points of different scholars has been described and brief history of organizational
culture has been given. We found out that the culture is shared beliefs and ideas that
are created by individuals within every organization. In the second part of the essay I
thoroughly examine the influence of culture on different factors. Organizations with
strong culture will attract professional employees and keep them motivated on
organisational goals. Partnership relations are operated successfully and these
organizations draw more customers. Subsequently I emphasise the effect of
organizational culture on training and development, recruitment and selection,
performance management and compensation administration. Successful leader will
consider the culture of his company while applying management techniques, shown
above. To achieve a success in a competitive global market organizations must possess
a culture that is adequate, adaptive and strong. In my opinion correlation between these
management practices and organizational culture are interdependent. However,
question still remains if the culture affects all these processes or culture itself is created
with these processes.
 BIBLIOGRAPHY
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Culture on Human Resource Practices: A Study of Selected Nigerian Private
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4. Giuseppe Maria Russo, Patricia Amélia Tomei, Antonio Braga José Linhares,
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SCIENTIFIC paper udk: 005.72:005.21 Date of Receipt: April 3,
The word globalisation has become very famousin past decades there are lots of definitions
od globalisation which make it ambigious and imprecise to comprehend. More widespread
and easily understandable definition is globalisation is the integration of markets in the
global economy. According to Khanna Parag globalisation is the process that cannot be
stopped unless everything stops. Globalisation is a phenomenon that is believed to have
dramatically changed in the international economy many people you have to have skills to
type fast