Organizational behavior is the environment where the individual behavior and the group dynamics meet.
When talking about an OB we have to take into consideration de internal and external perspectives of people. The internal being everything that goes on inside a person like its feelings, thoughts, experiences, needs, desires, etc. and the external is everything that happens outside the person, like external events and off course how this person is influenced by its environment.
OB has its origins on many sciences from which it takes different elements to complement itself. Sciences like psychology from which it takes the concept of human behavior. Sociology and how group dynamics work. The design of work and performance is taken from engineering. From anthropology OB takes the human learned behavior meaning culture and from medicine it takes everything that covers physical and psychological health.
But, what is an organization? well we can say that it is a social entity, very goal-oriented and deliberately structured, linked to an external environment and with an identifiable boundary . And how does it work? first there is an input of raw materials, information, people, financial resources, etc. and then there is the transformation process and finally the end product comes out, the output.
The organizational behavior allows us to categorize the organizations according to how well they actually function. These two types of organizations are:
1. Clockwork: Where everything goes smoothly and there’s balance in the work place, harmony.
2. Snake pit: Where there’s daily conflict which hurts the efficiency and everything is complex.
There is also another category of organizations based on the nature of their focus:
1. Formal Organizations: Based on policies, objectives. It has a very clear mission and vision and offers products and/or services.
2. Informal Organizations: Based on values, beliefs, feelings and attitudes.
In a globalize world where there is an ever growing competitive business environment, which means more diversity and multiculturalism, organizations have to realize that sometimes they have to adapt their organizational culture and behavior to meet this new standards and expectations. These are some of the challenges that organizations face today.
NATIONAL AND ORGANIZATIONAL CULTURE
An organization and therefore its OB is highly influenced by the national culture of the territory where it operates, creating a sort of culture within the organization. This is to be expected given that even we all as a person are the fruit of a culture, particularly that of the country or territory where we live, because sometimes we immigrate and we take our culture with us but in order for us to fully integrate and be a part of the host culture we have to adapt to this new way of life and of doing things, and this is exactly the same a company must do when it thinks about going global, which is something that most companies want to achieve, but to be successful at it the organizational culture has to be well known in order to make the appropriate changes in the new territory.
But first let’s start by defining what culture is and what elements form it.
According to Helen Deresky, the culture of a society comprises the shared values, understandings and goals that are learned from earlier generations, imposed by present members of the society and finally passed on to the next generations.
Some of its components are aesthetics, values, attitudes towards time, work and cultural change, manners and customs, social structure, religion, personal communication, body language, education, and physical and material environments.
Several authors have identified different cultural dimensions that facilitate the study and comprehension of a culture. Some of these dimensions are:
• Project Globe: the project globe was a research done by a group of 170 researchers and 18.000 managers, in 62 countries for a period of seven years to determine the differences between societies and its managerial implications. Among the cultural dimensions that were established are:
o Assertiveness: the degree at which people are expected to be tough, competitive instead of tender and modest. Germany and Austria are very high in assertiveness which means they are very competitive and Sweden and Japan are low, they prefer warm relations and focus on people.
o Future Orientation: The importance a society places on planning and investing for the future. Overall future-oriented behaviors. Switzerland and Singapore are high on this dimension, so they are more planning oriented; Russia and Argentina are very low on this, which means they lean more towards instant gratification.
o Performance Orientation: How important it is for a society performance improvement and excellence and covers also if people are encouraged to strive for continued improvement. Singapore, Hong Kong and the US are high. People tend to take initiative and have the confidence to get things done. Russia and Italy are low; they hold other priorities ahead of performance (tradition, loyalty, family and background), they associate competition with defeat.
o Human Orientation: It’s all about how the society rewards and encourages certain values like fairness, altruism, generosity and being kind and caring. Egypt, Ireland, Malaysia and the Philippines are high. They have a focus on sympathy and support for the weak. Spain and France are low; they favor power, material possessions, and self-enhancement.
• Hofstede’s Value Dimensions: In a study conducted by Gerard Hofstede in 50 countries with over 160.000 people led to the foundation of 5 cultural dimensions , which are:
o Power Distance: measures to which extent people are willing to accept an uneven distribution of power in institutions. In the workplace, it refers to hierarchical relationships between bosses and subordinates. }
o Uncertainty avoidance: The extent to which people in a society feel threatened by ambiguous situations.
o Individualism: it studies the tendency people may have in a society to look after themselves.
o Masculinity: the degree of “masculine values” that prevail in a society like assertiveness, materialism and lack of concern for others, on the other hand caring for other people and relationships are “feminine” values, followed by both genders male and female in a society.
o Long-term orientation: measures the extent to which a culture programs its members to accept delayed gratification of their material, social and emotional needs.
• Trompenaar’s Value Dimensions: Trompennar conducted a study over a period of 10 years, in 28 countries, 47 national cultures and 15.000 managers. At the end of the study he proposed a set of cultural dimensions, quite similar to others. Some of the relevant dimensions he proposed were:
o Universalism vs. particularism
o Neutral vs. affective
o Specific or diffuse
o Achievement vs. ascription
The definition of an OC is quite similar to that of a general culture. Within an organization you share values, beliefs, understandings but there are clear boundaries or limits with other groups, and as you work together a common way of achieving goals is born.
What aspects should be observed when talking about an organizational culture? We should take a look at the rites and ceremonies, symbols, language meaning sayings in the company, slogans, metaphors, etc.
To understand an OC is very important because it can show competitive advantages, it can influence decision making, etc. The OC also has functions, which are:
• Internal integration: members know how to interact with each other
• External adaptation: to assist the organization in adapting to the external environment
Knowing your OC can bring advantages and disadvantages. Some advantages are that when you have a clear understanding of your OC the core values are intensely held and widely spread, is easier to achieve consensus, potential conflicts can be prevented or avoided, the employees work harder more willingly. But one must be careful because it can also bring potential disadvantages like being stuck on a fixed and inflexible culture, which becomes a cultural barrier for you and other you want to deal or negotiate with you and resistance to change may arise.
Is there a corporate culture in every organization?
It’s hard to say if every company has an organizational culture or corporate culture. You may say yes, when you think of big companies like McDonalds, or Starbucks which are easily identifiable by their logos, symbols, colors, way of doing business, etc. but what about the smaller companies, such companies which can’t afford to have flashy logos or big stores; can we say that such companies also have an organizational culture? One might think so, because maybe it is a family business run only by its members who all have an Italian background therefore strongly influenced by that culture when it comes to running this business, so it can exist, but it is also possible to find small companies in the search for this identity or culture, companies which tend to imitate a lot what their competitors do, without really coming up with original inventions or ideas. So in the case of these companies, can you call this way of doing business a culture? If we define culture as what makes you who you are, or what in a way determines the way you act and react, then yes, but if a culture is about creating you r own personal mark, especially when it comes to companies and organizations, one can say that not every company has a clear corporate culture.
But moving away from this ambiguous conceptualization, I think personally that yes, every company has a corporate culture because every company has their own way of doing things, may not be as strong or clear or identifiable as others but it is unique. So assuming that every company has an OC, can it be modified? I would say yes, it is possible to change the way you do things and to reinvent the way you look. Companies may come to the point where they say that the way things are is not the way things should be, so they embark on the project of giving the company a total make-over, changing logos, signs, colors, publicity, products, etc. completely altering the previously conceived culture within the organization.
There is also the possibility of such changes when one company merges with another and only one brand or name will represent them both, so at this point the disappearing company and all of their employees who were accustomed to a specific way of doing things, will now have to change and adapt to the new way, the new culture, something that for a lot mergers go smoothly and for others a complete disaster, this usually happens when the two cultures are so different, maybe in two different countries, that the transition cannot be made easy or even not at all.
REAL LIFE EXAMPLES
Proctor & Gamble used a television commercial in Japan that was popular in Europe. The ad showed a woman bathing, her husband entering the bathroom and touching her. The Japanese considered this ad an invasion of privacy, inappropriate behavior, and in very poor taste.
FEDEX (Federal Express) wisely chose to expand overseas when it discovered the domestic market was saturated. However, the centralized or "hub and spoke" delivery system that was so successful domestically was inappropriate for overseas distribution. In addition, they failed to consider cultural differences: In Spain the workers preferred very late office hours, and in Russia the workers took truck cleaning soap home due to consumer shortages. FEDEX finally shut down over 100 European operations after $1.2 billion in losses.
This two examples show us the importance of knowing one’s corporate culture and understanding the national culture of the market we are trying to penetrate into. Both examples made the same fundamental mistake they didn’t take into account the very o important cultural aspects of the countries where they were going and they paid for the mistake. They not only failed to identify these potential risks but they tried nothing to adapt their business practices to the local culture, a crucial step in succeeding when thinking about going global.