ORGANIZATIONAL CULTURE SHIPS IN ERA I4.

Muhamad Azis Firdaus

Universitas Ibn Khaldun
Bogor, Indonesia
azisfirdaus@uika-bogor.ac.id

Diah Yudhawati
Universitas Ibn Khaldun
Bogor, Indonesia
diahyudhawati@uika-bogor.ac.id

ABSTRACT
The Industrial Revolution as a process shows that the development of industrial technology has
implications for aspects of human life and the process strategy of an industry, whether
manufacturing or service. Process strategy by involving modern technology, including internet
technology, encourages companies to shape the attitudes and behavior of employees who are
well-capable, and quickly adapt to the development of information and communication
technology (ICT). Organizational culture or corporate culture, as a result of human studies, will
continue to change along with the phenomenon that occurred in his time. The efficient use of
ICT in various production transformation processes requires an organizational culture model
that can contribute maximally in achieving company / organizational goals.

Keywords: Organizational culture, the industrial revolution, internet, information and

communication technology.

1. Background
The organization's ability to respond to changes in the work environment is inseparable from
how culturally / culturally the organization is managed. Organizations with an open culture can
easily adapt to changes in the external environment and changes in the internal environment.
On the other hand, organizations that are managed in a closed manner and who maintain the
status quo can experience difficulties in adapting the work environment to what is expected by
members of the organization or employees.
Habits carried out by employees, building forms, office layout, relationships between
employees will reflect an organizational culture/corporate culture that it adheres to. The
organizational culture or corporate culture is the result of thoughts, observations, and
experiences of the members of the organization/employees which then become a shared value
system. Some studies show the influence of organizational culture on employee engagement
variables (Kaliannan & Adjovu, 2015), also on organizational commitment (Silverthorne,
2004), and on organizational performance (Nikpour, 2017). Based on the results of several
studies, describing organizational culture is a variable that can affect many aspects of the
organization. Organizations/companies that are aware of this, of course, need to invest in
building a better organizational culture.
The industrial revolution 4.0 makes the efficiency of the use of labor increasingly high, which
is characterized by the use of artificial intelligence technology as a necessity in the company's
process strategy. Employee involvement in the overall process strategy to distribution to users
shows a diminishing indication. This can have implications for the expertise needs of workers
who have a high speed of adaptation to the development of knowledge and technology,
especially information technology. The term revolution itself has not been agreed upon in
general among academics, but there are several terms that are often used by groups of
academics and non-academics including Cyber Physical Systems (CPS), Industrial Control
Systems (ICS), Supervisory Control and Data Acquisition (SCADA), and Industrial Internet
(Boyes, Hallaq, Cunningham, & Watson, 2018).
The industrial revolution indicates the diminishing contribution of employees in the production
process (Wyrwicka & Mrugalska, 2018) and subsequently affects the labor market (Sandrine
Kergroach, 2017). I3.0 is characterized by the development of automation and computerization
that forms new needs such as the need for labor with ICT mastery qualifications, legal
instruments, data security, and infrastructure to support ICT. To support the company's
performance in the long term integration and artificial intelligence that marks I4.0 is not
enough, other factors are needed from human resources, which are greater which can lead to
efficient and effective employee behavior with ICT mastery.
Progress in information technology, especially internet technology, pushed the industry to an
increasingly competitive situation. Terminology Efficiency in resource allocation and
effectiveness in achieving the company's strategic goals are two priority things. The use of
machines or robots as well as digitization of physical devices, as part of the industrial
revolution, leads to use combined with internet technology. The Cisco Systems report predicts
that in 2014 there will be 21.1 billion physical devices connected to the internet, and by 2020
it can reach 50 billion devices connected to the internet. Cisco systems also predict that there
are 1.5 trillion physical tools, and 99% of these physical objects will be part of a network in
the future (Greengard, 2015, p. 14). Other research reports predict that by 2020, IoT (Internet
of Things) will reach 26 billion (I. Lee & Lee, 2015). Regarding the use of robots, the results
of the study illustrate that the use of robots in 1000 workers in the USA, Europe, China, and
Asia. The USA and Europe show more use of robots than China and Asia. Among Europeans,
the German state is the country that uses the most robots. On the other hand, China and Asia
countries have shown that the use of robots is relatively slower, until 2015. And the industry
that is most in the use of robots in the automotive industry (Chiacchio, Petropoulos, & Pichler,
2018).
The use of machinery as it is currently developing, which is part of the production process, has
an impact on employees. As a company resource, employee behavior is something more
complex than machines or other assets (King, 2017). Thus, the position of employees becomes
important in the framework of an organization/company resource, and in the industrial
revolution era, the company will compete to get employees who have the expertise, knowledge,
and capabilities that will become the company's assets in the long run. The use of internet
technology in the future allows employees to be able to freely move and at any time but still
connect with the company (Gilchrist, 2016, p. 236).
The industrial revolution 4.0 will significantly affect the work environment such as the process
of buying, producing, automating and overall the process of the company (Prifti, Knigge,
Kienegger, & Krcmar, 2017). Industry 4.0 with internet technology, encourages interaction not
only between humans, or humans with machines, but also on the interaction of machines with
machines (Roblek, Meško, & Krapež, 2016). This phenomenon shows that there are indications
of the emergence of technology in the form of artificial intelligence that can replace humans in
creating value, using information and communication technology. IoT, IoP, IoS, make the
industry become dependent on its ability to adopt internet technology. ICT trends encourage
industries to reach greater potential in efficiency and effectiveness with their ability to manage
large data in the present. Artificial intelligence will ultimately reduce the role of employees in
various production processes to the delivery process to end consumers. The industrial
revolution indicates that there is less human involvement in the production process (Wyrwicka
& Mrugalska, 2018) and affects the labor market (Sandrine Kergroach, 2017). The
development of the ICT era I4.0 changed the industrial environment in I3.0 which was
dominated by automation and computerization. I4.0 towards new environments with changes
to the needs of the workforce with ICT mastery qualifications, legal instruments, data security,
and infrastructure to support ICT. Upward integration, downward integration and horizontal
integration in the use of internet technology are driving the industrial environment to be more
competitive and promising more certain sustainability, and making it a smart company.
History shows that since the first industrial revolution until the third industrial revolution, there
have been changes in the human aspect, especially labor. Changes in technology are driving
changes in the labor market, where the need for new skills makes it a polarization of work that
raises new jobs and removes some of the old work. In addition, polarization also changes the
level of salaries to be higher for groups of workers who can master the latest technology
(Bárány & Siegel, 2018).
In order to be able to use new technology in I4.0, such as in the Internet, people of the internet,
cyber physical systems (CPS), and the interaction between employees which is diminishing, a
new corporate culture model that can adapt to high technology is needed.

2. Literature review
2.1. Organizational Culture
Culture is a picture of right and human intention that takes place in a relatively long period of
time in certain groups formed through the interaction of fellow humans. The results of human
creation and intention are the basis for group members in acting and even thinking. Thus in
culture, there is a shared order of values, so that when there are group members who violate
their culture, then there will be direct or indirect consequences from other group members.
According to Schein in Cooper and Rothman (2008, p. 8) that culture consists of four parts,
namely form, mythology, rules and norms, and assumption, Schein (2010, p. 2) categorize
culture into 4 categories namely Macroculture, Organizational Culture, Subculture, and
Microculture. Macroculture speaks at the cultural level of a nation/country, or a certain
ethnicity, a particular religious group, in the world. Organizational culture limits the category
of companies, public organizations, non-profit organizations, and government institutions.
Subculture focuses on discussing certain parts of an organization. And Microculture is more
limiting to smaller systems within organizations or outside the organization.
While the cultural characteristics of Giffords in Alvesson (2008, p. 32) are divided into seven
characteristics. First, that culture covers a broad range and is a phenomenon that cannot be
reduced in scope as an individual phenomenon, culture includes many individuals. Second,
culture is a relationship that has historically become a phenomenon that continues to develop
through tradition. Third, culture is difficult to change, people are more likely to maintain their
initial ideas, values and traditions adopted. Fourth, culture is a phenomenon of social
construction that is produced and divided which is owned and shared by the group. Different
groups form different cultures. Fifth, culture is soft, vague and difficult to capture, original
qualitative and not easily measured and classified. Sixth, the forms of myths, rituals, symbols,
and other anthropological forms are generally used to create cultural characteristics. Seventh,
culture generally refers to ways of thinking, values, and ideas of something concrete/real,
objects and visible parts of an organization.
Alvesson's explanation related to cultural characteristics, it can be concluded that culture is the
result of human group thinking that shapes behavior and with that culture humans produce
physical forms that are used to communicate with each other. Thus, an organization in which
there are groups of people can certainly have a culture that can be different from other
organizations. The behavior of individuals in organizations depends on internal and external
forces that influence individuals, namely value, trust and assumptions (Bavik, 2016).
An organization is a gathering place for people in which there is a division of tasks, and there
are goals to be achieved. To be able to achieve this goal, a behavior that leads to achieving
goals is needed. All forms of behavior will be directed to programs to achieve goals by using
efficient resources.
Culture in an organization needs to be formed and continue to be synchronized with
environmental conditions, both internal and external. This is part of an effort to maintain the
organization in the long term or in the indefinite period. Environmental changes (internal and
external) can be an opportunity or threat for the organization, for this change needs to be
anticipated by forming habits that are held firmly by members of the organization.
The culture of an organization according to Schein is a form of the basic assumptions that are
shared and studied by a group and use it to solve problems in adaptation with external and
internal integration, which run quite well to be considered and then taught to new members in
terms of the right way in perception, thinking and feeling related to the problem (Schein, 2010,
p. 18). From what Schein said, it can be said that the culture of an organization is a tool in
solving problems faced by organizations, also as a way of thinking, or perceiving something
related to relationships with members of organizations and relationships with institutions
outside the organization.
Thus, organizational culture can help in solving organizational problems and organizational
culture can be changed according to internal and external environmental conditions. Some
things that can change the organizational culture from the external include legal aspects
(government regulations), technology, economic conditions, and competitive conditions.
While internal conditions that can affect organizational culture are the composition of
employees, the health condition of the organization and the interests of the owner.
Another definition explains that organizational culture is shared values, principles, traditions,
and ways of doing things that affect the way members of an organization act (Robbins &
Coulter, 2012, p. 52). The definition explains that organizational culture is a shared value, and
is a tradition and how the members of the organization behave. From this definition, Robbin
shows that organizational culture is not only related to the values espoused but also how
organizational members act or behave within the organization. Thus that organizational culture
will also influence the behavior of members of the organization associated with the delivery of
opinions or ideas, creativity, attachment to the organization and others. Robbin also arranged
the cultural dimension into six dimensions, namely People Orientation, Outcome Orientation,
Attention to detail, Innovation and risk taking, Stability, and Aggressiveness.
Joanne Martin in Luthans (2011, pp. 71–72) writes that someone who enters their organization
communicates with clothing norms, stories of how the organization operates, formal
organizational rules and procedures, formal codes of behavior, rituals, duties, payment systems,
jargon, and jokes that are only understood by insiders and others. These elements are
manifestations of organizational culture. Luthan also compiled indicators of organizational
culture into six dimensions or indicators, namely Observed behavioral regularities, Norms,
Standards of behavior exist, Dominant values, Philosophy, Rules, and Organizational climate.
From Gibson's definition (2011, pp. 31–32) about organizational culture can be interpreted as
what is perceived by employees and how these perceptions form trust, values, and expectations.
From this definition, it can be said that organizational culture is something related to what is
perceived and how these perceptions form beliefs, values, and expectations. These definitions
limit the various things that concern about how a person in the organization views, which with
that perspective someone behaves in his organization. Furthermore, Gibson also compiles
attributes of organizational culture, namely Documents, Physical Layouts, Furnishings,
Language, Jargon, Work Ethics and Practice, Fair day work for a fair day's pay, Loyalty,
Commitment, Helping others, Performance leads to rewards, Management equity, and
Competency counts. Furthermore, Kinicki (2016, p. 480) describes organizational culture as a
set of assumptions that are implicitly shared within an organization, with which they make
perceptions, think and react to various environments. Likewise (J. A. Wagner & Hollenbeck,
2010, pp. 283–284) it is explained that organizational culture is a way of sharing experiences
and membership in organizations that tie members informally and influence what they think
about themselves and their work. From this explanation, it can be said that organizational
culture as a way of perceiving life and the members of the organization that influence the way
they think about themselves and their work. In the Daft definition, there are indicators of
organizational culture influencing new members to improve their way of thinking, feeling and
behavior, namely values, norms and guidelines for trust and understanding that are shared by
members of the organization and taught to members as the right way of thinking , feeling and
belonging to each other (2010, p. 374).
Organizational culture can take the form of Value, norm (Norm), Artifact (Artifact) and
management style (Management Style). Value is the belief of what is good or the best for the
organization, and what should happen. Values can influence behavior. Values in organizational
culture can take the form of caring for people, competence, competition, customer service,
innovation, performance, quality, and work groups. Norms are rules of unwritten behavior that
informally guide people to behave. Norma shows people what they have to do, what they have
to say, what they have to believe, and what they have to use. Artifacts are aspects that can be
seen and held by an organization where people hear, see or feel that affects them on the culture
of an organization. Management Style or leadership style (Leadership style) is an approach that
managers use to make agreements with employees (Armstrong, 2009, pp. 387–398). Some
organizational cultural characteristics, namely 1) Behavior that can be observed, generally in
the form of language, terminology, and ritual, 2) Norms, is a reflection of a number of jobs to
be completed and the level of cooperation between management and employees, 3) Dominant
values suggested by the organization and expectations of employees to share. Certain values
that must be owned by employees and those desired by Management, such as service quality,
low attendance, product quality, A philosophy that is trusted by the company / organization so
that it can affect how employees and customers are treated, 4) Regulations that indicate that
they can and may not be from behavior related to productivity, customer relations and
collaboration between groups, 5) organizational climate or all the atmosphere of the company
as a reflection of how employees interact with each other, how employees relate to customers
and feelings about the treatment of employees from top management (Luthans, 2011, p. 169).
Other characteristics of organizational culture/corporate culture are the existence of espoused
values, assumptions, beliefs, norms adopted by members of the organization. Mejia and Balkin,
also mentioned that there are three aspects of organizational culture, namely: Visible culture,
Espoused Values, and Core Values. Visible Culture is a cultural aspect that can be seen and
heard such as how people dress, how quickly people talk and walk, the layout of rooms, the
layout of parking facilities, furniture, and others. Espoused Value, is a matter that is
consciously and openly carried out especially in communication. Core Values, divided more
broadly, operate unconsciously and are considered non-negotiable. In line with other writers,
Mejia and Balkin observed the existence of values that became guidelines in an organization.
Values, assumptions, norms, and beliefs are found in definitions of organizational culture from
several kinds of literature (Luis R. Gomez-Mejia & Balkin B., 2012, pp. 106–108).
Based on the Organizational Culture Assessment Instrument (OCAI), there are four types of
organizational culture, namely the first hierarchic (bureaucratic) culture. The first type is
characterized by the understanding that efficiency is the key to profit, leaders are mentors, and
supervision is the main value. Both market culture. The characteristics of this type of culture
are characterized by efficiency measured in the form of achieving organizational goals, leaders
are strict supervisors and competition is the main value. Third, clan culture. That the leader is
the main key (Parent), a positive climate and helps develop employees, dedication is the main
value. Fourth adhocratic culture. The fourth type is characterized by results are creativity and
growth, leaders are entrepreneurs (Entrepreneur), and innovation is the main value (Zavyalova
& Kucherov, 2010). The characteristics of other organizational cultures / corporate culture are
Trust, Openness, Freedom to experiment, Individualism (versus collectivism), Attitude
towards constructive dissent, Participation and Result orientation (Ghosh & Srivastava, 2014).
From the results of research in the hospitality industry using qualitative methods, through the
development of definitions found based on the definition of organizational culture, it was found
that there are nine factors that determine organizational culture, namely: Level of cohesiveness,
Ongoing-onboarding, Work norms, Social motivation, Guest focus, Human resource
management practices, Communication, Innovation, Job variety (Bavik, 2016).

2.2. Industrial Revolution

The terminology of the industrial revolution is definitely no agreement regarding the definition
of the industrial revolution. One definition of the industrial revolution is a period of time when
work that was initially started and completed at the plant, can then be started and completed at
home (Liao, Loures, Deschamps, Brezinski, & Venancio, 2018). Based on the definition, it can
be said that a process that allows the industry to carry out the operational efficiency of the
company. The shift requires a media or technology that allows employees to stay connected to
the office or by machine. Another definition states that the industrial revolution is the stage of
transition of economic development from domestic to manufacturing models (Unyimadu,
1989). Based on these definitions it can be said that the definition of industrial revolution will
continue to develop the following technological developments in the future. But at least there
is a characteristic of an industrial revolution, which is a big change that has a significant impact
on many things, especially on organizational / company process strategies.
In the 21st century, the development of information and communication technology is followed
by the development of artificial intelligence, the need and availability of large data and the
connectivity of technology users (Roblek et al., 2016). Since its inception in Germany in 2011,
there has been intense debate and controversy among academics and practitioners (Bertola &
Teunissen, 2018; M. Lee et al., 2018). The 4.0 industrial revolution was preceded by the
industrial revolution 3.0, 2.0 and 1.0. The Industrial Revolution 1.0 was marked by significant
changes in manufacturing, agriculture, transportation and technology which had an impact on
socio-economic and cultural conditions. Steam engines began the industrial revolution 1.0 in
the 18th century (Wyrwicka & Mrugalska, 2018), and with the steam engine technology, the
manufacturing industry could make mass production. the second industrial revolution (Industry
2.0) was marked by technological developments for industries, especially steel technology,
electricity which led to the discovery of telephones, cars, airplanes followed by the demand for
workers who had expertise in steam engines (Chin, Juhn, & Thompson, 2004). Industry 3.0 is
a digital era that changes the way people communicate, business people and other practitioners
who use digital technology (Zeng, 2016). The use of digital technology is changing the use of
industrial labor, where there is a shift in the use of labor towards the use of machinery.
Information technology in the industrial era 3.0 allows humans to find data, share data with
others to improve their lives (Fitzsimmons, 1994).
The industrial revolution 4.0 presented by the German government is aimed at creating
efficiency, flexible production, individual production through decentralized supervision of
production and digital supervision and in full (Prifti et al., 2017). I4.0 is also called a smart
factory, where physical forms and decentralization of decision making can be developed
(Morrar & Arman, 2017).
The characteristic of industrial revolution 4.0 (I4.0) is the existence of connectivity and
digitalization which forms a wide network with the use of a large amount of data. The
transformation of the use of information and communication technology (ICT) in industrial
systems is key in the fourth industrial revolution (Karabegović, 2017). Other characteristics of
I4.0 are full automation and the digitization process of the manufacturing and service sectors
through the use of information technology and electronics (Roblek et al., 2016). The term I4.0
is also called the digital revolution, where the line between physical objects and digital fields
becomes vague, as a result of the physical transformation to digital (Soares & Kauffman, 2018).
The digital transformation enables humans to connect with machines, machines with machines
(M2M) and contemporary human connections, known as the Internet of things (IoT) and the
internet of people (IoP). However, the concept of I4.0 has not been fully known and widely
understood by business people. Based on the research of Fernandez (2017), the new I4.0 was
understood by the middle and upper management levels. The benefits that can be obtained from
the development of information and communication technology through the internet of things
are among others the support and stabilization of the production environment that becomes
simpler, where there is less employee involvement. With the availability of large data,
computational models with statistics can help in designing the next framework (T. Wagner,
Herrmann, & Thiede, 2017).

3. Discussion
Organizational culture as part of the results of human thought and its environment form habits
that are relatively difficult to change. Employee behavior that has lasted a long time and is
recognized as a value that is generally within the company adopted, and used to solve problems
at work, is a manifestation of the company's organizational culture. Every company or
organization has a different organizational culture, even though the business sector or type of
organization is the same. This can happen because the individuals in the organization differ
from one another so that interactions between employees produce different habits and form
different organizational cultures. These individual differences can occur in differences in
values adopted, which give birth to different perspectives, different ways of solving problems,
and differences in behavior. According to Dawson (2011), it is relatively difficult to measure
organizational culture, because organizational culture is based on individuals.
The values adopted and then transformed into employee behavior can support the achievement
of the company's goals effectively and efficiently, when the value has conformity with the
individual employees concerned. Differences in individual employee perceptions of the
prevailing culture in a company can potentially lead to differences in behavior within a
company/organization, differences in a department or even the smallest unit of a company or
organization. Thus, the difficulty in changing organizational culture does not mean that it
cannot be changed. Organizational culture has the potential to be a driving factor for forming
habits, and then the behavior of employees as desired.
Changes that occur in the internal environment and the external environment of the company
slow sea can affect the organizational culture of a company. For this reason, cultural changes
within a company need to be designed as well as possible so that cultural changes lead to
behaviors that can encourage the achievement of company goals. Achieving company goals
through the intended organizational culture is through habits or behaviors that correlate with
company goals
Era Industry 4.0 indicates that the relationship between individuals in the workplace is
diminishing. This is a consequence of the efficient use of information and communication
technology. Machine connections with machines, machine connections with humans and
connections between humans can be done remotely through the use of technology. Thus the
connection will be physically reduced. Technology industry era 4.0 triggers the emergence of
human behaviors that encourage the fulfillment of stronger privacy rights, and freedom to
create and choose to be greater. The provision of information and communication technology
services has a great opportunity to serve the industry.
Thus it can be said that the organizational culture of a company can be influenced by the
development of information and communication technology in the era of 4.0. the impact is
companies/organizations need to prepare completeness to face the cultural shift of their
employees and company / organizational partners.

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