Critical analysis: Impact of Organizational Culture on the Operations of a Business.
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CRITICAL ANALYSIS: IMPACT OF ORGANISATIONAL CULTURE ON THE OPERATIONS OF A BUSINESS
USA is a multicultural country due to having a large number of immigrants across the world. Almost 13.7% population of this country is consists of immigrants by birth. In this study we are going to shed light on impact of cultural diversity at a workplace. In this study, different theoretical framework regarding cultural identity theory has been discussed. According to this theory managers and leaders of an organization need to make different identity for different group of people by understanding individual requirements, values, thinking patterns and behaviors. Cultural diversity can influence internal as well as external factors of an organization. Strong organization culture has a direct impact on the operation management of an organization. It helps to improve communication quality among the culturally diverse employees. Cultural diversity helps to improve organizational performance by improving coordination and team work between the employees of an organization. Strong organizational culture helps to provide good working conditions to the employees thus it can motivate people to improve their performance in order to increase growth and productivity of a company. In addition to that this study will also include detailed research method of analyzing impact of organizational culture at a workplace with the help of large amount of data. In this study discussion about impact of cross-cultural interaction on employee as well as organizational performance. Cross cultural interaction can create some conflict situation regarding language and communication problem. Thus it can affect the overall performance of an organization. It will also discuss about the influence of cultural diversity on the working strategy of leaders and mangers of a company.
Table of contents
Presence of different culture in workplace all over USA
Theoretical framework for analyzing culture at a workplace
Factors affecting business performance
Importance of organizational culture
Impact of organizational culture on the employee performance
Effect of cross cultural interaction as per organizational culture in an organization
Impact of organizational culture on operations management
Appendix: Immigrants in USA
The current report focuses on the effect that organizational culture has on the overall working and operation of a business. This study will discuss about the presence and importance of different cultures in workplaces all over USA. It will include a discussion about different types of research methods from different sources. Different types of theoretical frameworks for analyzing the presence of wide range of cultures at a workplace have also been discussed in this study. It will include evaluation of different factors which affects different business operations of an organization. This study will shed light on the importance of organizational culture. It will also include analysis of the impact of organizational culture on operations management of a company as well as on the performance of employees. It will discuss about the effects of cross cultural interaction. In addition to that it will also include some recommendations to mitigate all challenges and a self reflection report also.
USA being the centre for scientific as well as different kinds of business development has a variety of cultures giving rise to a multicultural society. This results in the presence of a diverse workforce in the workplace with a variation in the culture. USA has turned multicultural society because of several factors including social relation as well as immigration. As supported by census report of USA, 13% of population consists of African-American. Along with that, there are 17% Hispanic and 5% Asian (America’s Tipping Point: Most of U.S. Now Multicultural, Says Group, 2014). In terms of immigration, USA is also subjected to multicultural society because of the rising number of immigrants. In 2017, there were 13.7% immigrants in the country because of their birth (Migration Policy Institute, 2017).
(Refer to appendix)
Diversification of culture in terms of population and society also influence the organizational practices. Such large number of population is also working in different organizations of USA which is influencing organizational culture of those companies. As the country still have large of population from single cultural group, obviously they face a cross cultural interaction in workplace. This influence the organizational performance and strategies in both positive and negative way. This diversified population plays a significant role in terms of organizational workforce. Hence, originations are required to consider their strategies as well as environment to maintain that cultural diversification.
The research for preparation of this report has been done based on secondary sources. Based on this several journals and reports were consulted to analyze the impact that cultural difference have on the operations management of a business. Secondary research allows identifying the impact of organizational culture on its performance based on established concepts and data. According to Walliman (2017), this also allows to access large number of data considering different aspects of the research topic. In this context, it allows to investigate the impact of organizational culture as well as different other factors of cultural difference on organizational performance and employee motivation. In terms of a research, primary data collection can be time effective as well as limited to sample population. On the other hand, as stated by Johnston (2017), secondary research concentrates on the existing data considering different aspects of the research topic. Deductive approach has facilitated to consider the theoretical frame to identify the impact of cultural difference on organizational performance (influenced by Zalaghi & Khazaei, 2016).
The cultural identity theory indicates that presence of heterogeneity does not affect the operations in a business. On the contrary as per this theory heterogeneity increases conflict that might be detrimental o organizational performance. Cultural Identity Theory refers to the analyzing the beliefs, values, behavior, thinking patterns learned from different characteristics of different group of people at a workplace. This theoretical framework helps to understand the requirements of culturally diverse employees due to having language problems. As mentioned by Ozer et al. (2017), cultural identity theory helps to give a proper identity to a particular group of people.
According to cultural identity theory, heterogeneity cannot create a major issue in workplace. This theory helps to create different identity of different groups of people to create better communication as well as to improve business strategy. Thus it can help the organization to make better and effective strategies in order to improve business performance (Epstein & Lindner‐Pomerantz, 2017). Cultural identity theory helps to identify each group of people which helps to create more organized working strategy for the purpose of improvement of organizational performance.
On the contrary, according to cultural identity theory, wide range of language, social structure, and religion of an organization can have negative influence on the overall performance of an organization. Employees sometimes don’t have multilingual setups, so it can cause a challenge for those employees who don’t use same language (influenced by Valmohammadi & Roshanzamir, 2015). Thus this language problem can cause poor communication which can affect the overall performance of the organization.
Figure 1: Cultural identity theory
(Source: As influenced by Valmohammadi & Roshanzamir, 2015, p.171)
The major factors that affect business include both internal and external factors. Among the internal factors the workplace culture plays a pivotal role. The cultural different and presence of a multicultural environment affects the overall performance of the employees as well as the human resource management. Workplace culture can affect the ability of an organization in order to innovate, engage employees as well as customers compete with other organizations. Workplace culture is the mixture of values, mission, vision, and daily aspects of interaction, communication, and operational goals which helps to create a better organizational atmosphere that encourages the employees to improve their performance. Effective workplace culture can make a huge difference in the innovation, performance, skill development of the employees, and retention. It helps to keep the workforce more engaged towards their work for providing better work to improve business strategies and overall performance. Better workplace culture helps the managers and leader to create a better vision and effective mission for an organization by understanding individual behavioral tendencies of the employees. Workplace culture helps to maintain the financial balance of an organization to achieve smooth run of the business. Newly recruited staffs can be easily attracted towards a better and strong corporate or workplace culture. As suggested by Wang (2018), workplace or corporate culture can help to motivate their employees by providing good working environment.
Multicultural environment at a workplace can help human resource management to seek different potential employees from different cultural background. Different people from different cultural background comes with different kind of thinking process, different work ethics, values, and other factors which influences overall working performance of an organization positively. Multicultural environment of a workplace can influence overall dynamics of the employees in order to achieve successful business goals. Multicultural environment helps people to communicate with different people coming from different countries as well as different backgrounds that can improve cross-cultural communication in order to improve organizational growth sustainability. It helps the organization to improve business communication with different clients across the globe.
Some external factors can affect the business performance of an organization such as economy, finance, market fluctuation, changing trends and technologies as well as changing customer base. Economy of the country and financial condition of an organization can influence the business of the organization. Sudden change of target customer base can affect the overall business performance of the organization.
There are various perspective and working types in the workplace based on organizational culture which can be beneficial to the productivity of the company. As per a recent obtained report it can be seen that cultural difference results in 22% increase in total revenue generation. Organizational culture helps to define external as well as internal identity of an organization. Organizational culture represents the way of doing a business, thus it helps to determine how customers and peoples perceive the organization. As opined by Guiso, Sapienza & Zingales (2015), clear vision and mission of an organization helps to provide increased productivity. Thus, it can generate good revenue.
Organizational culture can help to reflect the core values of an organization. Organizational culture helps to sum up company’s belief into action. Thus, it can help to reflect the way of conducting business, interacting with other people, and managing the workflow.
Organizational culture can help to transform the employees into critics so that they can rectify their own faults in order to improve overall business performance. It helps to celebrate team and individual success in order to give due credit to their employees. It helps to provide improved productivity and generate good revenue for the business. As opined by Pakdil & Leonard (2015), organizational culture can act as the essential guiding force for an organization which helps to align potential workforce on board in order to improve overall performance of an organization.
A successful and effective organizational culture can help to bring people together and keep them aligned in order to achieve success of an organization. It helps to gather different perspectives with common purposes. An effective and potential workforce can help to generate good revenue as well as increased productivity of the organization. As stated by Nichols, Horner, & Fyfe (2015), good organizational culture has a direct impact on the wellbeing of employees as well as performance of the organization. It helps to find balance between employees and the company. It helps organization to make better strategies for the wellbeing of the employee. Thus it can increase overall productivity of the organization.
Organizations with defined culture can develop better relationship with their employees as well as customers which help to create better working environment. It also helps the organizations to reach long and short term goals which can increase the productivity and growth of the organization. It helps to generate good amount of revenue (influenced by Valmohammadi & Roshanzamir, 2015).
Organization culture helps to improve loyalty of the employees towards the organization. It can make their employees more interested to work harder in order to increase overall productivity of an organization. It helps to provide better working condition for the employees. As suggested by Cao et al. (2015), better organizational culture makes helps to bring different kind of employees with different innovative ideas and ideologies in order to improve productivity of an organization. A strong corporate culture can improve the organizational growth by creating a low employee turnover.
A strong organizational culture can play a vital role in order to retain as well as engage valuable employees. Valuable and effective employees can help to generate good business by providing good revenue. Thus it can help the organization to improve its productivity and growth (influenced by Guiso, Sapienza & Zingales, 2015).
The organizational culture is the major inertia that motivates the employees. It improves the values among the employees thus improving the overall employee collaboration and performance. Organizational culture helps to motivate the employees of an organization in order to provide good business growth. In a multicultural organization different employees comes with different work ethics and different values. Thus it helps improve the overall value of the workforce. Good organizational culture helps to improve communication skills among the culturally diverse employees (influenced by Chao, Kung & Yao, 2015). Thus, it can create a better environment of good collaboration for all the employees. Employees from different cultures can bring different values, thus, a strong organizational culture can make their employees able to adapt good values. This can help to improve organizational environment in order to provide business growth. Organizational culture is highly influenced by the beliefs of the employees as well as organization. As mentioned by Chatterjee, Pereira & Bates (2018), organizational culture helps to provide better working environment to the employees that can help them to collaborate and communicate with other employees. Good internal collaboration among the employees can help them to inspire as well as motivate each other for providing better work (influenced by Saad & Abbas, 2018). Strong organizational culture can have a huge role in order to motivate their employees by providing good working conditions.
There might be prevalence of conflicts and challenges due to prevalence of more than one ideology and culture. Different peoples from different cultures used to have different ideas and perspective which can create a conflict situation at a workplace. Culturally diverse people can have different ideologies, different perspectives as well as different work ethics. So it can have a negative impact on the overall performance of an organization due to presence of conflict situations among the employees. Culturally diverse people can face serious challenges regarding communication due having language barriers. It can also create conflict situation among the employees which will have a direct impact on the organizational performance.
Although it might give rise to conflicting situations still it can change the perspective of the organization. A workplace with different culture is also subjected with certain issues in terms of employee communication because of cultural diversity. Due to cross cultural interaction, lack of awareness about different lifestyle practices as well as beliefs can cause conflict between the employees of an organization. As mentioned by Shiraev & Levy (2016), cross cultural interaction can create conflict between employees of an organization due to divergence in religion, nationalities, and ethnic groups. Such issue also generates conflicts in terms of communication due to cultural insensitivity or ignorance. Cultural differences can bring change in attitude as well as behavior among the employees towards other employees of the company. Thus, it can create conflict situations at the workplace. The language barrier due to cross culture can bring about communication issues to the company. Cross cultural interaction can create challenges because of language barrier due to having people from different language background. It also considers the differences of preferences which generate miscommunication as well as misinterpretation (influenced by Ting-Toomey & Dorjee, 2018). Thus, it can affect the organizational performance in a negative way due to lack of internal communication among the workforce. Lack of respect, lack of communication, and cultural ignorance can be a major issue that lead challenges and communication issues in terms of cross cultural interaction. Communication issue arises because of having language diversity. Considering these factors, management needs to develop specific strategies to maintain organizational performance. In terms of effective organizational performance team combination is a major factor. As suggested by Minton, Kahle & Kim, (2015), cross cultural work creates communication issues in the workplace which generates challenges to convey organizational objectives as well as operational strategies. Hence, this influences the organizational performance in negative way. However, as suggested by Pakdil & Leonard (2015), cross cultural interaction also put some positive impact on organizational performance. Employee motivation is one of such benefits. In terms of diversified workforce, organizations support their employees to feel free and engaged towards the organizational goals. This also requires engaging them in work culture and team development for the company. Hence, such support from the management as well as respective authorities influences employee motivation.
Human resource is an integral part of operation management. Considering operational strategies HR management of the company develops its workforce. On the other hand, operation management determines strategies based on the efficiency of the human resource. As opined by Thomas & Peterson, (2017), cross cultural work in this context influence organizational strategies in significant way. This includes positive aspects considering different skills and concepts and challenges because cultural barriers among the employees. Different cultures affect the operations management of an organization significantly. Cultural diversity of an organization allows it to have employees from different cultural background. This offers certain opportunities to the management. In terms of organizational performance, its culture and productivity are closely associated to determine its sustainability (If Culture Comes First, Performance Will Follow, 2019). Another factor in this context is employee motivation. Employee motivation is depended on organizational culture and also influences its productivity along with quality. Motivated employees find themselves engaged with organizational objectives which results positively on production (Arabian Journal of Business and Management Review, 2019). With cultural difference in the organizational culture the leadership and the managerial decision making also changes. In this context clarity of the workplace plays a major role in terms of direction, support and planning. Along with that decision-making process of the company is another cultural factor that influences in this context. Free-flowing structure of decision-making process allows the company to develop strategies considering transparent information which ensure positive outcome in terms of productivity. HR management is also responsible to play an effective role in this context as production of the company is vastly depended on the efficiency of the workforce. HR management in respect of the organizational culture offer skill development training based on organizational requirement and product development strategies. It is also related with organizational approaches towards employee motivation as well as other requirements which ensure their engagement
|Specific||Development of communication among the employees|
|Measurable||This can be measured by the amount of interaction among the employees of different culture|
|Achievable||This will allow the employees from different cultural background to come close to each other and understand others|
|Realistic||This facilitates the company to ensure effective communication among the employees|
Table1: SMART Recommendation 1
|Specific||Providing fair environment to the employees.|
|Measurable||This can be measured by good collaboration and bonding between the employees.|
|Achievable||This will help the employees coming from different cultural background to make good bond with each other and understanding each other properly.|
|Realistic||This helps the organization to ensure proper and fair working conditions to the employees|
Table2: SMART Recommendation 2
Making policies for imparting professionalism is essential for proper organizational culture maintenance.
|Measurable||This can be measured by proper teamwork and proper understanding between the team members.|
|Achievable||This can help the team members from different cultural background to come close and work together in order to achieve organizational goal.|
|Realistic||This will help the organization to ensure good teamwork in order to achieve success.|
Table3: SMART Recommendation 3
|Specific||Providing good working conditions to the employees with different cultural beliefs|
|Measurable||This can be evaluated by good coordination and respectful behavior among the employees.|
|Achievable||This will allow staffs with different cultural backgrounds to practice their cultural beliefs freely within the organization.|
|Realistic||This facilitates the organization to motivate and engaged their employees towards the organizational objectives|
Table4: SMART Recommendation 4
This it can be seen that although cultural difference in organizational culture creates barrier to the operations management still if proper interaction and communication is maintained then effective operations management can be done by properly managing the employees of the company and imparting values in organizational culture. Presence of cultural diversity can increase conflict situations in an organization because of having different cultural beliefs, language diversity and different perspectives. Cultural diversity can helps to motivate employees for better performance. Cross cultural interaction can create language barrier and communication issues which can affect organizational functions. Organizational culture can influence leaders and managers of an organization to improve their decision making strategies in order to improve growth and productivity of an organization.
I have understood the main role that organizational culture plays in the operation of an organization and the importance that it has in creation of organizational values. The most important thing that I discovered from this study is cultural diversity has a great influence at a workplace. In this study I have discussed about cultural identity theory which helps me to understand that giving proper identity to different work groups can solve major issues regarding cultural diversity. From this study it can be evaluated that cultural diversity can create major issues regarding language difference, difference in cultural beliefs, communication problem, lack of respect and acknowledgement. It can create conflict situations amongst the employees from different cultural backgrounds due to poor communication and misinterpretation of thoughts. From this study I can evaluate different factors which can influence the business performance of an organization. Different kind of internal factors like mixture of values, daily aspects of interactions, vision, and mission of an organization can influence the overall organizational performance. Some external factors such as market fluctuations, changing technologies and trends, and changing customer base can also influence the overall performance of an organization. Financial situation of the organization as well as the economic conditions of the country have a direct impact on the organizational performance. A strong workplace culture can make huge difference regarding innovation strategies, skill development strategies, and recruitment as well as retention of the employees. Multicultural environment of an organization can help operation management to improve business strategies in order to improve organizational performance. Thus I discovered the fact that cultural diversity helps managers as well as leaders of an organization to make better strategies in order to manage culturally diverse workforce. From this study I came to know about the impact of cross cultural interaction helps the employees to adapt different perspective about work thus, it can help the operation management to provide better business strategies in order to improve overall business growth. I have discovered the fact that cross cultural interactions can help to increase better understanding level among the employees in order to improve employee collaboration as well as cooperation. From this study I have came across the fact that organizational culture can help to improve the productivity and revenue of an organization. A strong organizational culture plays a vital role for an organization by acting as the main guiding force which helps to motivate employees coming from different cultural background. Organizational culture helps to provide fair and better working environment to their staff members in order to improve overall performance of an organization. Better organizational culture helps to maintain overall balance regarding performance of the employees and financial balance of the company. It also helps to attract potential and effective workforce in order to generate increased productivity and growth. A strong organizational culture helps to develop improved and better bond among the employees. Better communication and collaboration can help to improve growth and productivity of an organization. A strong organizational culture can make their employees able to rectify their faults and imperfections. Thus, it can motivate them to improve their working strategies. I have come across the fact that strong organizational culture can influence the wellbeing of employees in order to provide better working environment to the staff members. It also helps the organization as well as employees to meet long and short term objectives of the organization to increase productivity and revenue of the organization. Good organizational culture helps to maintain proper balance between the workforce and the organization by providing same treatment to each of the employees. From this study I get to know that organizational culture helps the employees to understand and value each other’s perspectives and work ethics. Thus, it can help to motivate staff members to work together for the purpose of improving overall growth and productivity of the organization. Organizational culture helps to improve employee collaboration by bringing them together to work with each other. I found that organizational culture helps to encourage the employees to give their best in order to achieve company goals. From this study I get to know about the effects of cross cultural interaction regarding organizational culture at a workplace. Cross cultural interaction can create conflict situations among the employees due to having diverse cultural backgrounds. It can bring miscommunication issues and lack of respectful interaction between the employees. Lack of respect can be a major barrier for employee retention which can have a direct negative impact on the organizational performance. Diversified cultures in a workplace influence managers and leaders of an organization to make better, innovative, and effective strategies in order to provide improved business strategies. Thus, I have discovered that cross cultural interaction can have both positive as well as negative impact on the organizational performance. One of the major issues of cross cultural interaction is communication problem. Due to having different people from different background language problem arises which can affect overall organizational performance. Beside different challenges, I get to know about an important positive impact of cross cultural interaction that it helps to motivate employees directly in order to improve their performance. I have observed that cross cultural interaction helps to motivate people adapting different perspectives in order to improve their working strategy. From this study it can be evaluated that cultural difference at a workplace can influence the working environment of an organization. To mitigate all issues regarding cultural diversity leaders and managers need to make strategies to improve communication skills of the employees. They need to provide fair and stable working environment to all the employees in order to avoid any kind of discriminations. Managers and leaders need to provide proper training in order maintain good teamwork between the employees. Good teamwork has a direct impact on the organizational performance. Good teamwork can help to increase productivity of an organization thus; it can improve the overall business of the company. Leaders and managers of an organization need to incorporate different innovative strategies and skill development training programs in order to improve organizational performance.
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