The Effects of the Organizational Culture on a Business Firm
Under the modern dynamic business conditions, the role of organizational culture tends to increase for almost all business firms. The reason is that it promotes the proper understanding of the main business challenges by all organization’s members, and it may be used for various aspects of the business performance. Organizational culture is defined as a system of shared beliefs and values which influence how people act and behave in organizations like how they dress, preform their jobs. And it have numerous effects on business firms. And by the interrelationships between the main organizational components with the corresponding practical outputs, firms can begin the required organizational adjustments for maximizing their effectiveness according to the current business conditions. Organizational culture allows harmonizing the internal and external business processes with the positive impact on flexibility, brand portfolio, and technologies’ utilization.
Organizations can increase their current flexibility by adjusting their organizational culture. Organizational culture allows addressing both customer and competitive pressure. Modern firms have to consider a large number of interrelated factors. One of them refers to the changing customer preferences. It is necessary to predict the future trends and make the organizational culture open to utilizing such opportunities to the maximum degree. Dai, Chan, and Yee (2018) use the example of numerous Chinese firms that successfully relied on the Schumpeterian view of competition. It is necessary to integrate all main challenges into the developed culture. The relevant statistics indicates that the higher employees’ engagement allows reducing turnover by 59% (Previte, 2018). Thus, both developed and developing countries may significantly benefit from promoting responsible corporate cultures in their firms.
All main challenges can be properly combine in the developed culture. In particular, leadership strategies are more effective when they utilize the recent advancement in organizational culture. By promoting responsible attitudes among their followers, the maximum organization’s effectiveness can be achieved. In particular, transformational leadership promotes subordinates’ morale and motivation for maximizing their performance (Rehman et al., 2018). Organizational culture reduces the need for applying formal interventions and sanctions as well as allows considering the needs and preferences of all people involved. However, a step-by-step approach should be used for reaching the intended outcomes. It means that temporary goals should be formulated to avoid the situation when the firm does not have precise criteria for evaluating its members’ performance. The possibility of enjoying the decent career and professional growth should be mentioned. The main interest of all employees should be the firm’s development and competitive growth. It will constitute the foundation of their individual achievements.
Organizational culture enables selecting the optimal brand portfolio for the firm. It is necessary for integrating the qualification and competence of many employees and managers in a way that orients to the changing external conditions and allows achieving the proper balance between strategic objectives on the one hand and current policies on the other hand. Moreover, it promotes the mutual understanding of policies among all members. Followers’ motivations can also be effectively maximized. Returns on investment and profits are the common measures of brand performance in practice (Laforet, 2012). It will ensure the consistent implementation of the organization’s mission. The higher value of the brand will allow setting the prices above the average level in the market. Thus, the firm can enjoy the higher profitability with the maximum opportunities for its capitalization maximization. Brand and financial aspects should be evaluated in a complex manner. The top-management should be responsible for it. Middle managers should communicate the vision to the rest of employees.
It is necessary to maintain shared vision and the long-term orientation among all organization’s members. Staff rewards should be proportional to members’ contribution as it will establish the proper collaboration between managers and employees. Both financial and non-financial aspects should be harmonized as organizational culture should address all forms of individuals’ behavior. Managers’ commitment, motivation and ownership are crucial for brand promotion effectiveness (Lafaret, 2012). Any conflicts should be resolved in an objective manner to maintain high professional devotion among all professionals. Business firms should rely on their internal regulations and broad industry’s standards to determine the optimal responses to various challenges. In any case, the rights and needs of all employees should be adequately respected with the possibility of integrating them in a non-contradictory manner. The higher employees’ satisfaction is crucial for their ability to constantly increase their motivation and professional performance.
Structural dimension of organization allows differentiating between organic and mechanical forms (Araesh et al., 2017). Organizational culture allows facilitating the interactions between employees and managers in various contexts. IT-adoption contributes to knowledge sharing in organizations as both time and resources required can be effectively minimized (Tsemg, 2017). It is applicable to both servant and charismatic leadership. It means that different business firms can effectively adjust IT technologies to their specific needs and business models. It also contributes to the higher leadership effectiveness due to the most efficient utilization of the existing business opportunities. Leaders should exercise their professional judgments in the changing external environment with the possibility of focusing followers’ attention on the main unrecognized opportunities. At the same time, they should not impose their will on others but consider their needs and preferences. The atmosphere of mutual respect is highly valued by modern business firms. Consistent efforts are needed for developing it.
It is possible to effectively introduce the latest ideas and innovations in firms. It may serve as a significant factor contributing to business firms’ competitive positions. Moreover, organizational culture and leadership style can be integrated in a way to maximize the firms’ competitive positions in the long run. There is the close correlation between leadership styles, IT adoption, and knowledge sharing (Tseng, 2017). The latest technologies also create additional opportunities for reaching strategic organizational objectives. They allow integrating all information sources into one system oriented to decision-making. At the same time, the structure of technologies used should depend on the industry of the firm’s operations and its strategic objectives. Both short- and long-term needs should be effectively integrated with one another. It is necessary for balancing operations at different levels. It may strengthen the firm’s industry positions due to the higher coherence of its business processes.
In conclusion, The role played by organizational culture in affecting performance of business firms at different levels is growing. It contributes in reaching the mutual understanding among all organization’s members involved and various departments. It makes the operations of most firms more flexible as they obtain new mechanisms for adjusting their operations in a way that corresponds to their strategic objectives. It also allows reallocating the rare resources among various spheres of applications in the most efficient manner. Firms can create effective brand portfolio that reflects the structure of assets own. It may lead to higher consumer loyalty and the higher demand for the firm’s products. Technologies’ utilization is also critical for increasing the competitive performance of modern business firms. In particular, they should be combined in a way to meet the strategic objectives and organizational goals.
The Effects of the Organizational Culture on a Business Firm