Blog 1: Can Culture Be Managed Within Organisations?

What is a culture? Unfortunately the universal understanding of culture does not exist. Some people considered culture as the “glue” that holds the organisations together and the “compass” that leads the directions. It also believes that culture refers to the mindset and values of an organisations as what Furnham and Gunter (1993) said “culture is the way we do things around here”.

Organisational culture is a tool that defines the behavior of a person in a various kind of situations in an organisation (Ravasi and Schultz, 2006). This tool influenced the ways of individual and groups communicate with each others, with clients and with stakeholders (Schrodt, 2002).

As a person that is born in the capital city of Indonesia and grow in the metropolitan country of Singapore, I am equipped with the necessary knowledge on how to manage culture in different businesses. Coming from an enthusiast business family has lead me to several knowledge in the world of business, especially in the organization culture change. Changing organisational culture is not an easy task for the employee as they might resist the new culture. Therefore, it is the leaders duty to persuade their employee on the benefits of changes.

Organisation Cultural Challenges

Cummings and Worley (2004) explored four barriers that an organisation faces when accommodate changes in its cultural practices. The first barrier is formulate a clear strategic vision for culture change. Then, the favor by the top of the organisation to implement change. Furthermore, the changes in systems, policies, procedures and rules of the organisation. The last barrier is the loyalty of the employee to the company.

Challenges faced by Nokia Corporation

Nokia Corporation has been one of the best selling mobile phone brand in the World with operating profit of $4 billion in 1999 (Steinbock, 2001). However, a significant thing happened in 2007, where Apple launched iPhone. Nokia was unable to challenge Apple and started losing market share to 25% in 2011. Thus, it was announced that Nokia sold its entire mobile business to Microsoft in 2013 (Cord, 2014). This is causes due to the lacks in competitive innovation, visionary leaders, transparency within directors and employees, decision making and many others organisational structure.

Strategies to Manage Organisational Culture

Handy (1981) describes four main types 0f organisational cultures: Power culture; Role culture; Task culture; and Person culture. In the scenario of Nokia Corporation, they have weak power culture as the company unable to compete with the competitor. Moreover, the lacks of role culture also happened in the company as the bureaucracy of the organisational structure is obvious, where decisions were made in committees and each hierarchical level present their own assessment on the projects and innovations (Lamberg and Vaara, 2016). Whereas, the issues can be solved by improving each types of culture above.

Nonetheless, Hofstede (1991) states that culture is the collective programming of the mind that discriminate the members of one group or category of individual from others. Large power distance, weak uncertainty avoidance and short term orientation are the biggest problem of Nokia Corporation when implement changes. Thus, Nokia have to create a low power distance, strong uncertainty avoidance and a long term structure plan for the future.

Changing organisational culture will be successful if it is align with its strategy and its structure. Whereas, some leaders think that cultural change is too complicated to be managed and it takes time to make it worth dealing with. However, leader is the person who needs to implement several strategies to manage the culture of the organisation. In the case of Nokia corporation, the top management is too egocentric and arrogant as the company have been constantly praised without any criticism which causes the resistance to change its organisation culture (Lamberg and Vara, 2016).

Can culture be managed? YES

Strong corporate culture could be a crucial success factor to manage organisational culture. The main aspects of managing corporate culture is lead by example as Yukl (2010) states that leaderships is the process of influencing others and the process of helping individuals and cumulative efforts to accomplish the objectives. Organisational culture is the most important attribute to successful companies. Nowadays, it is changing due to the modernization which effect the failure of Nokia corporation. However, the failure of Nokia could be prevented if the leaders able to change its culture and produce a good organisational structure. To a certain extent, great corporate culture does not exist without any exertion, lets not forget that “Culture eats strategy for breakfast”.

Reference

Cummings, Thomas G. & Worley, Christopher G. (2004), Organization Development and Change, 8th Ed., South-Western College Pub.

Cord, D. J. (2014). (2014). The decline and fall of Nokia. Schildt & Söderström.

Eldridge, J and Crombie, A (1974) The Sociology of Organizations, Allen & Unwin, London

Furnham, A and Gunter, B (1993) Corporate Assessment, Routledge, London

Handy, C (1981) Understanding Organizations, Penguin Books, Harmondsworth

Hofstede, G. (1991). Cultures and Organizations: Software of the Mind. London, UK: McGraw-Hill.

Laamanen, T., Lamberg, J. A., & Vaara, E. (2016). Explanations of success and failure in management learning: What can we learn from Nokia’s rise and fall?. Academy of Management Learning & Education, 15(1), 2-25.

Medium. (2018). Why did Nokia fail and what can you learn from it?. [online] Available at: https://medium.com/multiplier-magazine/why-did-nokia-fail-81110d981787 [Accessed 16 Mar. 2019].

Ravasi, D.; Schultz, M. (2006). “Responding to organizational identity threats: Exploring the role of organizational culture”. Academy of Management Journal,49 (3): 433–458.

Schrodt, P (2002). “The relationship between organizational identification and organizational culture: Employee perceptions of culture and identification in a retail sales organization”. Communication Studies 53: 189–202.

Steinbock, D. (2001).The Nokia Revolution. The story of an extraordinary company that transformed an industry. New York: AMACOM.