CORPORATE CULTURE
hmmmm,,,,, this time to doing my assignment. This last assignment for us at Business ethic class. Now I will write my blog about Corporate Culture. So lets know about what is Corporate Culture first……
so see the explanation….
Cultural understanding by Susanto (2000):
1. Corporate culture is the values which become the handle human resources in carrying out basic obligations and behave in organizations.
2. Corporate culture is values that guide human resources to overcome the problems of external adaptation and integration of business within the organization so that they know how they should act or behave.
UNDERSTANDING ORGANIZATION CULTURE
According to Hofstede (1994), culture is the collective mental programs that differentiate group members from other groups.
Organizational culture is the style and way of life of an organization that is a reflection of the values or beliefs that have been adopted by all members of the organization.
Organizational culture is a pattern of trust, Period, rituals, myths members wholeheartedly, which affects the behavior of all individuals and groups within the organization (Harrison & STIKES, 1992)
Understanding Corporate Culture
Corporate culture is one of those focus areas that are not always fully understood and are not optimally utilized either in an organization
A basic definition of organizational culture is the collective way we do things around here. It involves a learned set of behaviors that is common knowledge to all the participants. These behaviors are based on a shared system of meanings which guide our perceptions, understanding of events, and what we pay attention to. As Sun Tzu, a Chinese military general from 3000 BC, indicated in his explanation of strategy, culture forms an integral part of any organizational strategy. It consists of Tao - the created and shared beliefs, values, and glue that holds an organization together, and it also involves the very nature of the organization. Culture is about individuals in a group sharing patterns of behavior. There is no cultural absolute. Because culture is relative, we have the power to create a culture that is the best fit for an organization’s future direction.
Observing Culture
Culture plays out in a variety of ways. We can identify the specifics of it from how information is communicated, feedback is given, performance is managed, and projects are co-coordinated within the organization. It is reflected in the way the corporation or institution is structured; whether work is conducted cross-functionally or within silos, how the hierarchical levels are set up, and the types of job titles used. Culture is often defined by the systems that are used, the processes that are followed, and the rituals, symbols, and stories that abound in the organization. It is even reflected in how meetings are held in an organization.
Aligning Culture for Success
Once a strategy is set for the organization, the way deliverables are produced in the organization needs to be examined and challenged. This is to ensure that every process is geared towards achieving the strategy.
Every component of the corporate culture needs to underpin what is required from all stakeholders in order to realize the strategic goals. There must be a reinforcing stream of communications. All the actions in the organization need to translate into the cultural realities. A culture can be created or reinforced through the use of socialization. Avenues for socialization abound in functions like selection, placement on the job, job mastery, the measurement and rewarding of performance, and recognition and promotion. Reinforcing a culture can emerge through the stories told and the folklore propagated and, most importantly, through the adherence to chosen important values. The key to the success of the above is to ensure that the culture you wish to socialize others into is an ideal one, necessary for breakthrough performance in your work area or organization. If it is not, then you need to involve everyone in the evaluation and creation of a more suitable culture.
And now this time to article…… I will give an example about.
HP at Cultural Crossroads
The case discusses HP's organization culture and the role of 'HP Way' in strengthening it. It also discusses the steps implemented by the new CEO Carly Fiorina in a bid to cut costs and improve the financial performance of HP, which proved to be a major departure from HP's long cherished culture.
"The HP Way is a tricky thing. It's what makes HP great, but it can also be used as an excuse for practices that are no longer relevant. It can be an excuse for not changing. When you boil it down to its fundamentals, it's about keeping core values constant and frequently changing practices - and a lot of people inside HP and outside HP get confused about that."
- Lewis Platt, former HP CEO, in August 1999.
"The HP Way gave me the courage to change it as quickly as we are. Because it really is all about having this company achieve what it is capable of. It is important, and it is worth doing."
- Carly Fiorina, Chairperson, HP CEO, in February 2001.
A Company in Trouble
During the late 1990s, HP, the second largest computer manufacturer in the world, faced major challenges in an increasingly competitive market. In 1998, while HP's revenues grew by just 3%, competitor Dell's rose by 38%. HP's share price remained more or less stagnant, while competitor IBM's share price increased by 65% during 1998. Analysts said HP's culture, which emphasized teamwork and respect for co-workers, had over the years translated into a consensus-style culture that was proving to be a sharp disadvantage in the fast-growing Internet business era. Analysts felt that instead of Lewis Platt, HP needed a new leader to cope with rapidly changing industry trends.
Responding to these concerns, in July 1999, the HP board appointed Carleton S. Fiorina (Fiorina) as the company's CEO.
Fiorina implemented several cost-cutting measures to streamline the company's operations. Some of the measures included forced five-day vacation for the workers and the postponement of wage hikes for three months in December 2000. In January 2001, HP laid off 1,700 marketing employees.
In April 2001, Fiorina announced that HP's revenues would decrease by 2% to 4% for the quarter ending April 30, 2001 due to the decrease in consumer spending. In yet another move to cut costs, in June 2001, employees were forcibly asked to take pay-cuts. More than 80,000 employees volunteered saving the company $130 million.
A Company in Trouble Contd...
Things became worse when the HP management announced that it would lay off another 6,000 workers in July 2001, the biggest reduction in the company's 64-year history. The management also sent memos saying that the layoffs would continue and that the volunteering for pay-cuts would not guarantee continued employment.
In September 2001, HP and Compaq Computer Corporation announced their merger5. According to company insiders, once the merger was implemented, Fiorina was likely to lay off another 15,000 to 30,000 employees as a part of a major cost saving drive. The merger was expected to yield cost savings upto $2.5 billion primarily because of layoffs.
The steps taken by Fiorina surprised analysts. They said that these steps were a major departure from HP's organizational culture - 'The HP Way' of promising lifelong employment and employee satisfaction.
According to the company insiders, though change was necessary, employees' morale had suffered badly. Many employees had lost faith in Fiorina's ability to execute her plans. They also felt that her changes were destroying much of the company's cherished culture. HP Vice-President for Human Resources Susan Bowick admitted, "Morale statistics are lower than we've ever seen them."
Background Note
Stanford engineers Bill Hewlett and David Packard founded HP in California in 1938 as an electronic instruments company. Its first product was a resistance-capacity audio oscillator, an electronic instrument used to test sound equipment. During the 1940s, HP's products rapidly gained acceptance among engineers and scientists. The company's growth was further aided by heavy purchases by the US government during the Second World War. As their business succeeded, the confidence of Hewlett and Packard increased. The founders, who shared some basic values, also hired and promoted like-minded pe The Carly Fiorina Way
The toughest challenge Fiorina faced was in changing the HP culture, which had been influenced by the company's engineering heritage. The challenge was to keep the edge in engineering and innovation while making the employees more adaptable and responsive. Fiorina immediately introduced several changes to set things right at HP. She demanded regular updates on key units. She also injected the much-needed discipline into HP's computer sales force, which had reportedly developed a habit of lowering sales targets at the end of each quarter. Sales compensation was tied to performance and the bonus period was changed from once a year to every six months.
She linked compensation to improvements in customer-approval ratings. To develop better leadership skills, she instituted the 360-degree feedback concept. This meant that the pay for the company's managers would be based on input from employee surveys.
HP Labs, the company's R&D center, had only been making improvements to the existing products. This was because the engineers' bonuses were linked to the number rather than the impact of their inventions. To encourage innovation and product development, Fiorina increased focus on 'breakthrough' projects. She started an incentive program that paid researchers for each patent filing..
The HP Way Vs. Carly Way
The steps taken by Carly attracted lot of criticism among the analysts. Geoffrey Moore, a high-tech management expert, remarked, "HP was built as a collaborative culture - not a star system. She drives a competence culture, which puts performance ahead of teams, values and intuition. That's a wrenching problem." According to Grinstein, former CEO of Burlington Northern and Western Airlines, "Carly is articulate, with a wonderful style and flair. But in breaking from culture, you cannot elevate yourself too high above it."
Employees had their own share of grievances too. Larry Mitchell complained, "Layoffs had always been kind of non-traditional for HP. HP's culture is definitely changed these days. With the prior culture we probably would have figured out something other than laying off 6,000 people. There are other ways to get rid of performance problems other than just layoffs." The chances of massive layoffs after the HP-Compaq merger has met with stiff resistance from David W. Packard, Dave Packard's son. He was against the merger because of the changes it would bring into HP's egalitarian culture...ople.
You all can read that article guys….. I think it is a very difficult dilemma between laying off thousands of employees due to cultural change or retain their culture and their employees but the company is threatened, in my opinion is a better hp to maintain their culture and retain employees due to possible improvements in other aspects Hp interchangeable because the effect is too large if hp overhaul the culture, perhaps by creating innovative new products and diversification products that HP can solve the problem.
I think this is my opinion about the article and I apologize if possible in writing this blog there are many shortcomings.
Thank_you ^_^
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