Organizational culture refers to the values and relationships held by individuals in an organization. The relationships will determine how colleagues relate to one another, share ideas and work together as a team. The values people hold will determine their priorities at the work place. They will also have an impact on the individual’s commitment and loyalty to the organization (Russo 2006). A positive organizational culture is vital for the success of any organization. It will boost job satisfaction and morale among the employees. It also makes the company be perceived in a positive light.
It is important for a number of reasons. The first is the importance of creation trust within the organization (Russo 2006). Trust in an organization is key contributor in a workplace. This is especially important in cases where workplace changes occur. One of the most common changes in a workplace is getting a new boss. For this new leader to be effective, he must gain the trust and respect of his juniors. A good organizational culture is also good in reducing the destructive potential of bad working relationships (Russo 2006 p.1). Russo gives an example of a case that occurred in one American Express department. A restructuring and leadership changed reduced the trust and engagement among the company’s top talent.
The organizational culture will set the guidelines for effective communication in the office (Russo 2006 p.2). Communication plays a vital role in making workplace changes smooth and free from any problems. Poor communications of management decisions will create anxiety, anger and rumor mongering in the organization. The result is employee apathy towards their work. This is especially common when effecting changes that affect job security of employees. A good organizational culture prevents procrastination when making important decisions on how to tackle any issues that may arise in the workplace (Russo 2006 p.2). It does so by providing up pre-set solutions to any hurdles the company may face. For example, the company may have policies that it will use when merging with another company. This will ensure that all its employees know their fate in the event that a merger occurs.
Organizational culture will show what needs to be done to ensure maximum production is achieved. An example of Nokia is given. The organization turned from a messy conglomerate to a successful mobile phone subscriber when it chose to concentrate on is primary business (The miracle 2008). Businesses that have made a positive turn around have had to make changes in the way they conduct business. This includes changes in management. Fiat made a positive turn around by hiring a new manager. This man provided an insider’s sense of how the system at the company worked. He was able to make changes because he had an outside perspective on what the problems were. He instituted changes that brought the company to the respected status it once held (The miracle 2008).
Organizational culture needs to be understood in order to make the best business choices how to effect changes within the organization. It creates a system that will be used to solve any problem at all management levels. It is important because one need to develop standards in the office that will translate into improved efficiency and effectiveness. Trust is the basis of this culture. Trust can be defined as communication, contractual and competence (Russo 2006 p.1). With communication, colleagues are open and honest. Contractual trust is achieved when people do as they say. Lastly competence means that one can be trusted to do his/her job the right way. When changes are being effected, trust is important so as to know who will be able to competently effect the changes that are needed.
Understanding the organizational culture enabled the new manager at fiat institute changes that improved the business productivity. He did so by first identifying the problems the company was facing. The changes he effected brought about changes in the way the employees worked. He did away with the bureaucratic management and inflexibility at the workplace (The miracle 2008). An example of the changes was setting up clear goals and the support needed to achieve them. This new organizational culture created clear benchmarks the company was to meet. It also created a support system to ensure that the goals set are met. Effective communication and trust form the foundation of a good organizational culture. When making changes, the two will make the transition as smooth as possible. They will also ensure that the changes effected will be for the good of the company.
The miracle of Turin. (2008). The economist. Web.
Russo, F. (2006). Meet the nicheperts. Time. Web.