Friday, June 29, 2012

Creating high performance organizational culture

             Organizations are the most important aspect of modern day’s human society but they have not received the desired attention that deserved. Organizational Behavior is the study and application of knowledge about how people, individuals, and groups act in organizations. It does this by taking a system approach. That is, it interprets people-organization relationships in terms of the whole person, whole group, whole organization, and whole social system. Its purpose is to build better relationships by achieving human objectives, organizational objectives, and social objectives. The behavior of organizations constantly undergoes changes with business trends and evolving global strategies. To succeed in increasingly competitive domestic and global markets, organizations must create and motivate a workforce that is able to realize competitive advantage.

What type of performance is necessary to attain such an advantage is heavily dependent on the market a firm is in and the strategic choices a firm makes. Firms that operate in markets where, for example, price is the dominant performance indicator likely will opt for producing large quantities of a limited set of products or services. Standardization and repetition of work processes will contribute to high levels of efficiency, and, thus add to competitive value.  Manufacturing organizations fall into this category. Facilitating outstanding routine performance requires an appropriate management of human resources by creating structures, rules and procedures so that work across individual employees and groups can be coordinated and controlled in effective and efficient ways according to Human Resource Management.

            If innovation and being innovative are prime performance indicators an organization may prefer a strategy to offer customer made products that fulfill the unique needs of individual clients. This will lead to work processes that are primarily non-routine in nature and demand creative workers. Such a firm needs a HRM (Human Resource Management) policy that stimulates employees to engage in creative and innovative courses of actions that may substantially deviate from fixed patterns of work behavior.  The HRM policies should focus on interpersonal relations, interdependencies and processes such as trust, learning, communication, and information exchange between employees. IT Services and Consulting organizations fall into the innovative category.

            The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcome is performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from.

            Four major models or frameworks that typical organizations operate are:

Autocratic - The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

Custodial - The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation.

Supportive - The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives.

Collegial - The basis of this model is partnership with a managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior and self-discipline. The employee need that is met is self-actualization. The performance result is moderate enthusiasm.

            Although there are four separate models, almost no organization operates exclusively in one. There will usually be a predominate one, with one or more areas over-lapping in the other models. The first model, autocratic, had its roots in the industrial revolution. The managers of this type of organization operate out of McGregor's Theory X. The next three models begin to build on McGregor's Theory Y. They have each evolved over a period of time and there is no one "best" model. The collegial model should not be thought as the last or best model, but the beginning of a new model or paradigm.

            Finally, creating a high performing and innovative organization also requires cooperation among employees who differ in their knowledge, skills, and abilities. Cooperation implies knowledge sharing, finding solutions together, learning from one another and realizing synergy in creative and innovative processes.

I wish you good luck and see you next week! 

Saju Skaria


Rubicon said...

A high performance organization can only be built if its employees are well trained and efficient.

Saju Skaria said...

Yes, you are right on target.

Aju Pau said...

What are your thoughts on the changing culture of the same organization as it goes through the growth curve ? Do you think it will take a shade of all four styles or at least a few ?

Saju Skaria said...

organizations go through constant change, which is more pronounced when there is growth. Leaders play a very important role in defining and refining culture and its up to them to follow a path that is ethical and meaningful. Organizations fail in the long run when they choose unethical practices for short term gains.