Purpose – The purpose of this article is to examine different theories of an organizational culture as part of the human resource environment in the context of staff and management positions in the banking industry. A real life example has been explored which discovered the existing and preferred features of organizational culture for the banking industry through valid research design: collection of data and their analysis, as well as interpretation of the organizational culture at SEB bank. Methodology – Survey questionnaire for evaluation of an organizational culture. Two main research instruments for measuring the organizational culture at SEB bank were used: the first was the Organizational Culture Assessment Instrument (OCAI) by Cameron and Quinn; the other - 24-item Organizational Culture Index (OCI) by Wallach. Originality / value – Theoretical and empirical research of an organizational culture is done by using testing and re-testing research methods. A hypothetical assumption is that effectiveness and thereafter development of sustainable organizational culture depend on different subcultures, which, in their turn, are integrated into the main organizational culture as a background for the research management in Latvia. Practical implications – The theoretical concept of the study and the research methodology can be applied in a more extensive further research on organizational culture with leadership and organizational efficiency in mind.
Key words: Organizational culture, subculture, value, roles
Development of sustainable entrepreneurship means creating certain management models leading to implementation of appropriate business strategies and other necessary activities, which would help to ensure the needs of an enterprise itself and its stakeholders. Such a development can be divided into two time-scale dimensions – present and future. One important aspect which should be especially emphasized is sustainability. It should be oriented towards promotion of organization's long-term objectives through human resource management (HRM) and environment development (Business strategy for Sustainable Development 1994).
The question of sustainable development of an organization is directly related to organization’s long term effectiveness. Wallach (Wallach, 1983) determined two main criteria of effectiveness of an organization:
The long-term enterprise strategy is based on two criteria:
An organizational culture has to respond to the question “how” (Wallach 1983).
The purpose of this article is to assess internal effectiveness (based on organization’s self-assessment research) of the organizational culture of SEB bank, one of the leaders in the commercial banking sector of Latvia. The research has been done with an acceptance and support of the management of SEB bank.
The research has some limitations regarding the need to expand its scope and supplement it with an objective evaluation of effectiveness to be compared with the best practices of the industry.
At present there are dozens of organizational culture definitions. Most of the authors of the management science define organizational culture as a value system (Schein 1985, 1990; Vanaerde, Jowrnee 2003; Taormina, 2004; Barets 2008).
Schein is the author of the most popular organizational culture definition: an organizational culture is „[…] a pattern of basic assumption – invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration – that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in to those problems”(Schein 1985, 9).
The most famous bipolar classifications of an organizational culture are: strong / weak, functional / dysfunctional, efficient / inefficient, positive / negative cultures (Dubkevics 2009).
Deal and Kennedy stated that one of the ineffective features of an organizational culture is the existing subcultures in the organization itself which can be laid to have different views (Deal, Kennedy 1982).
Weak organizational cultures are characterized by a high level of cultural entropy – a proportion of energy wasted on non-productive activities by a group of people (Barets 2008).
Any organizational culture, as it was mentioned before, consists of subcultures. Subcultures are relatively independent systems of values, norms and behavioral stereotypes that exist in a cultural context and are not in a sharp conflict with it (Zepa 1997).
Schein determines three general subcultures which exist in every organization:
On the one hand, organizations are the mirror images of their leaders (Collins 2001), because leaders are the main players towards creating organization culture, shaping organization aggregativity, effectiveness, and promoting sustainable development (Schein 1985).
On the other hand, short-term and long-term results depend on people's behaviour on both sides of power verticality (Zaleznik 2008).
It determines the basic research criteria for an organizational culture evaluation:
This research is based on assumptions that effective organizational culture is characterized by a high degree of approximation between subcultures at all levels of research criteria.
Currently there are about one and a half dozen of typological theories for assessment of an organizational culture.
Quinn and Cameron determine four basic types of organizational culture:
This typology is based on four criteria:
|Flexibility and discretion|
|Figure 1: Compenting Values Framwork (Cameron, Quinn, 1999, p32)|
In terms of typology Quinn`s and Cameron`s approaches are very similar to Wallach`s theory (Wallach 1983). Wallach uses the term “cultural dimensions” to emphasize that cultures are not monolithic, but multidimensional subculture phenomena and that we can only talk about the dominants. Wallach determines three main cultural dimensions:
The difference between Wallach's approach and that of the authors of the article is more terminological. The similarity of both theories is reflected in Table 1.
|Table 1. Characterization of Cameron, Quinn and Wallach organizational culture types / dimensions (Dubkēvičs, Barbars, 2010)|
Organizational culture types by Cameron and Quinn
Organizational culture dimensions by Wallach
Core values of the organizational culture
Hierarchy (similar to market but characterized with a stronger market orientation)
Efficiency, results orientation,
stability, power, control, loyalty, competition
Personal creative freedom, orientation towards change, innovation, risk
Clan (family type culture)
Unity (“we” consciousness), team, loyalty, mutual respect, trust, trust in tradition
Example of an organizational culture research design is presented below (Dubkevics, Barbars 2010) which has been realized in 2010.
The survey included the questionnaires of 84 respondents. The majority (76%) were female and the rest (24%) male respondents. All the respondents were personal adults of the bank aged from 23 to 62. The majority of the respondents were to be laid in the age group from 31 to 45, (45%). All the respondents who participated in the research were subdivided into two groups – staff and management. The outcome of the research was presented for each group separately. The majority (69%) of all respondents represented the management – mainly, medium level managers, while (31%) respondents represented the staff of the bank.
The responses obtained from the management and staff were summarized to find out the average response rate in accordance with OCAI for the existing and preferred culture profiles. The existing and preferred culture results are shown in the competing values framework radar graph. Each line represents 5 points. The maximum points to be reached are 35. First, the graf shows the culture profile for staff divided by existing (line) and preferred (dot line), see Fig. 2.
|Figure 2: Culture profile 1 under staff by OCAI|
The staff prefers the hierarchy culture which, according to the questionnaire, is currently the existing culture type in the bank. Hierarchy culture is characterized as a very formalized and structured working place for employees. Besides, there are written procedures that govern what employees have to do. Such formal rules and policies can keep an organization and its staff together. The long term target for such an organization is stability and performance. Stability has to be one of the most important parts of banking business. Employees also appreciate the security of their employment and predictability of such an organization type.
The research done shows that the hierarchy culture is still dominating as an existing organizational type,as well as the preferred organizational culture. Although the staff pointed out that preferred organizational culture should be more balanced among all the other organizational culture types.
Next, the same analysis has been done for management, see Fig. 3.
|Figure 3: Culture profile 2 under management by OCAI|
Management has showed an ever-growing interest rate in transforming from a hierarchy culture, which is currently stated as the main, to a clan culture. Both a hierarchy culture and a clan culture are focused on internal environment maintenance. While the hierarchy culture is a very formalized and structured working place, which specifies the need for stability and control, clan culture displays a very friendly working place, where employees share their behaviour by themselves. It is like an extended family where leaders are considered to be mentors or even parents. The clan culture organization type is held together by loyalty and traditions. This type of the organizations emphasizes the importance of premium and teamwork, participation and consensus.
The next step was comparing the existing evaluation of culture preferences by staff (line) and management (dot line), see Figure 4
|Figure 4: Culture profile 3 under existing staff and management by OCAI|
The analysis of the existing organizational culture shows that both – staff and management, replicate the hierarchy culture as a dominating organizational culture type, searching maximum level (35 points) from both staff and management point of view.
There is a difference regarding the second dominating culture type within the organization which was characterised by the management as clan culture, while the staff preferred market culture.
The analysis confirmed that the staff, as well as management, first of all believe and accept that the organization is based on stability, formal rules and policies. Mismatch between the staff and management opinions became more apparent when the management stated that organization is a family of loyal and self motivated employees, while the staff saw it more as a group of competitive and goal oriented employees with tough and demanding leaders on top of it.
The last graph shows the results when comparing the preferred staff (line) and preferred management (dot line) position on evaluation of an organizational culture, see Fig. 5.
|Figure 5: Culture profile 4 under preferred staff and management by OCAI|
There is a mismatch regarding the preferred culture between the staff and management. The staff has preferred hierarchy culture while the management has marked clan culture. It shows that staff has accepted hierarchy as an existing dominating organizational culture type and most suitable for the organization in question. From the management perspective clan culture should dominate in the preferred organizational culture. The management would like to be see the organization as more employee oriented and based more on trust instead of exhibiting pure control functions.
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