Tag: Organizational strategies

Culture and Strategy Research Paper

Culture and Strategy

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Culture and Strategy

Abstract

The relationship of organizational culture and progression has been subject of different examinations over the span of the latest years. The colossal number of social variables under investigation has incited an isolated thought of society for development.

Further, managerial practice requires a concealed structure remembering the final objective to pick what society should be completed in order to improve and to study if a specific culture is a convincing and powerful coordination instruments. The motivation behind this paper is to inspect the idea of the hierarchical culture and give a brief discourse on the methodologies utilized for overseeing it in culture and strategy of organizations.

  1. Introduction

Hierarchical culture emphatically influences organization and administration, which ascend out of its slant and its substance. Hierarchical society is described as a course of action of assumptions, qualities, norms, and perspectives, appeared through pictures which the people from an organization have made and gotten through basic experience and which offer them some help with deciding the essentialness of their general surroundings and how to absorb it. (Janićijević, 2011).

Presumptions, qualities and gages which the general population from a firm shares completely shape their interpretative game plans. Through interpretative courses of action, the general populations from an association assign repercussions to events inside and outside the association and comprehend reality that incorporates them (Janićijević, 2011). The conduct, activities and trades of the general population from an association rise out of the inducing that reality of that association has for them.

Various leveled society is a sort of aggregate interpretative course of action shared by the general population from an association, because of which they dole out proposals to events, individuals, and occasions inside and outside of the association correspondingly and treat them moreover (Janićijević, 2011). In this way, the lifestyle of an organization surmises that each one of the people from the organization likewise appreciate the organization.

The character of different parts of management and organization, for instance, methodology, structure, activity style, Organizational taking in, a game plan of prizes, and motivation, rises totally from the way in which delegates and administration understand authoritative reality and carry on in it (Janićijević, 2011). Thusly, Organizational society, through its effect on the interpretative plans and direct of the people from an organization, shares in framing distinctive portions of organization and administration.

Subordinate upon the qualities and measures contained by the Organizational society, top organization picks the technique and courses of action progressive structure, boss shape their drive style, delegates depict their behavior of intuition and needs, and the human asset executive plots the pay framework in an affiliation. A solid sort of the effect of Organizational society on an association and organization is found in the way that parts of an association and organization vary in various sorts or sorts of legitimate society. By the day’s end, specific sorts of society in association’s propose different techniques, legitimate structure models, pay frameworks, organization styles, and so forth  (Janićijević, 2011).

One of the key parts of organization that are impacted by definitive society is the organization of progressive society. Definitive society impacts the choice of satisfactory Organizational culture organization correspondingly it impacts every single another bit of organization. Social suppositions and qualities shared by the general population from an association pick the path in which workers and executives will value the association itself, and thusly the satisfactory approach to manage transform it (Janićijević, 2011).

Culture and Strategy

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What will be resolved as a suitable, effective, or steady methodology for changing the association will rely on upon an exceptionally fundamental level on the common suppositions and estimations of operators and managers worked in their interpretative game plans. Whether the developments are incremental or radical, complete or deficient, encouraged starting from the top or from the base up, concentrated on the culture of the “hard” or of the “touchy” some segment of association, will all, metaphorically talking, rely on upon how the pioneer and the general population from the association see its working and a suitable, strong, or down to earth method for taking off improvements (Aguiree, Post, and Alpern, 2013).

This is the motivation driving why the strategy of legitimate culture organization will be all around assorted in various Organizational social requests. For instance, if various leveled society is told by the estimation of adaptability, this recommends the general population from the association will consider cultures to something unprecedented and obliging for the association and themselves.

For this situation, cultures are slanted to be reliable, and thusly additionally incremental in nature, in light of the way that there will be no need for radical cultures adequately by virtue of the way that they are consistent (Janićijević, 2011). Additionally, cultures will be driven with less resistance yet rather more eagerness by the agents. Then again, if Organizational society contains the estimations of predictable quality and conservatism, then the general population from the association will consider cultures as dangerous, both for themselves and the association.

Cultures will be phenomenal, yet when they do happen they will be radical and wide. They will be composed to a wonderful level of resistance from and an all around insignificant level of sponsorship by the general population from the association, who will be for the most part sit out of gear powers of progression (Janićijević, 2011).The degree of this paper is to appreciate and examine the legitimate society and organization philosophies to manage the troubles stood up to by the various affiliations.

Culture and Strategy

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  • Review of Strategies for Organizational Culture

In the extent of various leveled culture association, the considered scholastic specialists and honing boss has been basically focused on three central solicitation: what cultures, why it cultures, and when it cultures. Along these lines, the three key subjects in various leveled culture research have been causes or variables of legitimate culture, definitive culture content, and the character of the progressive culture process.

The conclusion came to has been that authoritative cultures are begun as a result of either internal or external causes. From this time forward, two sorts of hierarchical culture have been isolated by the measure of cause: authoritative headway and alteration (Aguiree, Post, and Alpern, 2013).

Concerning culture content, the survey of forming demonstrates that progressive cultures are segregated in two imperative courses: cultures of definitive statics (structure and framework) and cultures of legitimate segments (process), besides cultures of work structure (assignments) and cultures of social structure (relations)). At long last, research has displayed that, as showed by the character of the strategy, various leveled cultures can be tireless or sporadic.

Tenacious cultures are incremental (first request cultures), divided, and transformative while sporadic cultures are radical (second request cultures), complete, and dynamic. The part of the pioneer in the midst of the time spent culture has moreover been a fundamental issue in definitive culture research (McGuire, 2003; Madu, 2005).

Not at all like the issues of cause, substance, have process, and authoritative culture organization, hierarchical culture methods been less present in investigation. Authoritative culture framework joins the system, strategy, or route in which cultures are realized in an affiliation. This definition proposes that movements are continually orchestrated and that, at whatever point we examine culture execution method, we truly discuss masterminded hierarchical cultures (McGuire, 2003; Madu, 2005).

The way that the primary course of action of authoritative culture strategy oversees organized culture system in like manner adds to this impression. In any case, this does not for the most part should be the circumstance. Cultures can similarly be unconstrained or unconstrained, and their anticipated approach, strategy, or the best approach to constitute a culture framework. They can be a strategy for recognizing authoritative culture, regardless of the way that the movements are off the cuff (McGuire, 2003; Madu, 2005).

Culture and Strategy

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While most specialists while examining business or corporate approach truly mean adjusted, formalized, organized decisions, distinctive scientists point out that strategy, can rather be fathomed as a bona fide security partner particular business decisions and giving them consistency, which is new and just thusly legitimized as a framework, rather than a normal, orchestrated decision arranged early (McGuire, 2003).

Likewise, in the field of hierarchical culture, culture framework may be fathomed as a masterminded decision of the administrators of advancement, furthermore as a creating case of development through which cultures are recognized and which grabs its shape entirely when the movements have been made sense of it. Starting now and into the foreseeable future, the discernment of legitimate society structure in this paper is to some degree more wide than the one in the much grasped work by Chin and Benne, who were the first to accumulate progressive society frameworks (McGuire, 2003).

The judicious observational system is developed on the suspicion of the common sense of Organizations and the comprehensive group who constitute them (Sami, 2012). Affiliations are seen as a shrewd means for completing the common focuses of their kin through aggregate activity. Individuals are overseen as regular creatures lead with no other individual’s data interest.

Along these lines, societies are executed by demonstrating the general population from an association that they are reasonable, i.e., reinforced and critical from the viewpoint of accomplishing progressive objectives, furthermore obliging to the self-vitality of the general population from the alliance (Sami, 2012). The supposition is that the general population from the relationship in which the developments are performed will, as normal creatures, carry on as exhibited by their reasonable given side hobbies.

Therefore, in the event that they are given watch that a society is to their most essential purpose of inclination, they will remember it.Cultures are driven through the typical system of information party and utilization of learning in dealing with the issues that the affiliation faces. Essentially, cultures are driven through the methodology of utilization and testing of specific theories, which give off an impression of being adequate in a given setting (Long, 1997).

Culture and Strategy

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Authoritative cultures are driven in five stages: issue conspicuous verification, information get-together and examination, the time of alternative diagrams, determination of the perfect procedure, and execution of the game plan. In the adjusted framework, the key driver of societies is accurately the data with respect to the issue which should be taken care of and the conceivable fundamental reasoning strategies.

On the off chance that the data is instigating and clear, and on the off chance that it is decisively in all actuality, the general population from an association will, as shrewd creatures, perceive the execution of societies (Luthans, and Doh 2008; McGuire 2003). It is thusly vital that data gathering is driven purposefully and in a methodologically noteworthy way, ideally by an authority (it is as regularly as could reasonably be expected the case that advice are contracted in this way).

The strategy of granting information concerning the issue and with respect to the movements which will deal with the issue is uneven and beginning from the top. Correspondence includes top organization, or authorities picked by top organization, showing the “truths” of the bona fide condition, the theoretical model which enables the offered situation to be understood ‘legitimately’, and also the proposition for culture which really ascend out of this perception (Luthans, and Doh 2008; McGuire 2003).

No dialog or talk is joined into which the people from the affiliation would be allowed to test, address, or rename the “truths” or theoretical models showed to them (Luthans, and Doh 2008; McGuire 2003).

Culture and Strategy

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It is clear that the executives of headway in this system are the top association, and that the heading of progression is starting from the top. The part of the general population from the connection is sit without moving and is obliged to enduring the data and acting in like way. The level of support of the alliance individuals is low, and the response to this course of action of the people in the developments is, most perfect circumstance, assertion. As a last resort, the imperviousness to culture is high (Luthans, and Doh 2008; McGuire 2003).

  • Leadership/Management and Organizational Culture

Organizations are not any more liable to accomplish business objectives without a key business process that are associations liable to accomplish new social abilities without a key authority process. Whenever consolidated, the business methodology and authority system can work all the while to grow new center capacities essential for the association’s future.

We present the defense that it is administration, as a deliberate gathering of similarly invested individuals, which can exhibit and take part in the better approaches for doing and being that advances the way of life and empowers diverse business results (Dilobe &Haccoun, 2010; House, Javidan, Hanges, & Dorfman, 2002; Eromafuru 2013; Woszczyna , 2011; Salamzadeh, , Ahmadi & Akbari, 2012; Eromafuru, 2013).

Culture and Strategy

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 It is an initiative that imagines future course, adjusts assets, and rouses the dedication of individuals toward this normal reason. A Leadership Strategy can control that basic procedure of the association’s advancement through initiative toward a typical reason for building the couple of, new capacities inside of the heart of the association – its way of life. Adjusting to culture recommends that associations need go to new center capabilities. The movement from an item prompted administrations drove IBM required that the way of life of this once ambling behemoth turn into a group based, the client engaged, elegant organization (McGuire, 2003).

Figure: Leadership Strategy McGuire (2003).
Figure: Leadership Strategy McGuire (2003).

Figure: Leadership Strategy McGuire (2003).

According to Haccoun et.al, (2010);  Dorfman et.al, (2002); Eromafuru (2013); Woszczyna , (2011); Akbari et. al, (2012); Eromafuru, (2013), the key mechanical assemblies for executing society in perceiving observational procedure are assignments, or work positions, and not the social structure of the affiliation and the relations within it. Consequent to the affiliation is appreciated as a prudent contraption for achieving shared targets, societies in it are recognized fundamentally through changing the formal, masterminded, “hard” parts: endeavors, structures, methods, methodologies, strategies, and the association with its environment.

Simply first demand societies can be instated and coordinated through the sound observational system since the method does not allow renaming of the assumptions of reality; this future a bit of second demand societies. As a rule, societies don’t require all that much time; beside when the information gathering technique is greatly mind boggling (McGuire, 2003).

Culture and Strategy

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A deterministic, as opposed to the voluntary supposition of human activity, underlines this technique. The procedure of progress does exclude the through and through freedom and decision of individuals from the association. The strategy, or of progress, is as of now dictated by the target way of the issue, and it is the undertaking of the individuals who settle on choices in the association simply to apply it to sufficient information and hypothesis (Dorfman et.al, 2002; Eromafuru, 2013).

Power coercive strategy translates that a connection is seen as a political structure in which the general population who have the force likewise have the advantage to deal with the association and along these lines change it. The man is not a run of the mill but rather a political being, who submits to the will of the all the more compelling. Along these lines in force coercive framework force is the key driver and contraption for society (Dorfman et.al, 2002; Eromafuru, 2013).

The general population who have the force;  when in doubt the pioneer or top association, coordinate the developments and, by mauling the force they have, power these developments on interculture individuals from the connection. The general population from the alliance is relied on to obey and execute the developments unquestioningly. This strategy depends on upon the supposition that the advantage to urge the course of aggregate activity in one party in like way climbs up out of force. Along these lines, the sub-par individuals from a social event in like way anticipate that the pervasive individuals will set the course in which the developments will be executed (McGuire, 2003).

The correspondence is one-sided and coordinated starting from the top. It comprises of the pioneer or administration achieving a choice with respect to the tackling of an issue, and after that conveying to their devotees and association individuals how, when, where, and who will execute the progressions which will take care of the issue. The main operators of progress are the pioneer or administration of the association who has the ability to execute the progressions.

Culture and Strategy

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The interest of the individuals from the association in culture is low, and their part is uninvolved and boils down to minor dutifulness. In this methodology, the data stream course is starting from the top, in light of the fact that the specialists of progress just advises the association individuals from what is anticipated from them and does not get input. For the same reason, the culture exercises are one-sided (Dorfman et.al, 2002; Eromafuru, 2013; McGurie, 2005).

The power-coercive methodology can deliver just first request culture since it does exclude changing the suppositions, qualities, or states of mind of the individuals from an association. The pioneer who applies this culture system is not keen on changing the convictions and estimations of the individuals from the association so they acknowledge the progressions; rather, the pioneer, by the utilization of force, just drives them to consistence.

This is the reason the progressions will be conceivable just inside of the current worth structure, which prompts first request cultures. Of the considerable number of systems, force coercive procedure prompts the quickest results and this is its primary leverage and the motivation behind why it is utilized generally regularly. In any case, its inconveniences are exceptionally various; for instance, the decimation of inspiration and dedication, extremely solid imperviousness to cultures, and the absence of comprehension of cultures prompting their wasteful usage (Dorfman et.al, 2002; Eromafuru, 2013; McGurie, 2005).

They all Dorfman et.al, (2002); Eromafuru, (2013); McGurie, 2005) concur this society strategy is centered around relations and social structure, as opposed to on work structure and assignments. Since reliance relations are the establishment of this framework, it commonly relies on upon the relations between the effective overseers of societies and the humble individuals from the association. Therefore, control coercive strategy depends on upon relations and the social, nice, “delicate” segment of relationship as an instrument for society.

Power coercive strategy translates the viewpoint of human activity as unshakable, compelling a perspective of the world in which individuals are free directors who can independently pick their activities. In any case, this totally adaptability infers just to the capable pioneer or chief and not to the straggling remains of the alliance (Dorfman et.al, 2002; Eromafuru, 2013; McGurie, 2005)…

Culture and Strategy

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The developments are driven by first changing the suppositions, qualities, standards, and viewpoints shared by the association individuals, and after that besides changing their activities and correspondences, or relations. Along these lines, it is unequivocally these relations and social segments of the alliance that are the vital instruments of headway in regularizing re-educative framework, and not its “hard” parts, i.e. tries.

In this structure, societies happen at the level of relations between the connection individuals. Standardizing re-educative methodology merges the system of reframing, or changing, the socially-made picture of reality, from which societies of both aggregate suppositions and qualities rise (Dorfman et.al, 2002; Eromafuru, 2013; McGurie, 2005).

By researchers, Dorfman et.al, (2002); Eromafuru, (2013); McGurie, (2005); Akbari et. al, (2012); in this manner societies in this reasoning are created both starting from the top and from the base up, and the data stream is multilateral. In the standardizing re-educative structure, the managers of headway in a connection are both the association and the authorities. The alliance individuals are dynamic people in society with an irregular state of endeavor: from this time forward the solidness to culture is sensibly low.

Societies composed by regularizing re-educative philosophy assemble the dedication of the association individuals to the new picture of reality and new connection and is of a higher quality than the past two strategies which request the alliance individuals’ insistence and detached assent. The regularizing re-educative methodology might start and induce second request society since it determines changing the path in which the general population from an alliance handles their general surroundings. However the execution of this strategy takes longer, as creating suspicions, qualities, gages, and dispositions is not a quick technique.

Culture and Strategy

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  • Conclusion

The paper has demonstrated that there is a theoretical explanation behind the supposition that various leveled society is one of the variables in the determination of authentic society association systems. In a split second it is the key to correctly test this presumption by testing the speculations made in this paper. It is also fundamental to look at it and how the way of life impacts the ability of the way of life framework and its flourishing. From this paper, a supposition additionally develops that there might be a criticism impact of organization society strategy on various leveled society.

Inside and out that truly matters, this paper can be prescribed to affiliation association which is planning progressive societies, to help with picking the association strategy for society that is awesome with the way of life of their affiliation. This will add to the suitability and accomplishment of the way of life procedure. With the target this should be conceivable they should have an OK learning of the way of life of the connection they are changing, besides of the open organization society procedures.

Culture and Strategy

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References

Aguiree, D., Post, R. V., & Alpern, M. (2013). Culture’s role in enabling organizational culture. Booz & Company.

Dilobe, N., & Haccoun, R. (2010). Measuring Core Dimension of Organizational Culture: A Review of Research and Development of New Instrument. University De Catholique.

Divan, S. M. (2012). CHANGING “THE WAY WE DO THINS” (Unpublished doctoral dissertation). California State University, Sacramento, LA.

Donell, O., & Boyle, R. (2008). Understanding and Managing Organizational Culture. Dublin, Ireland: IPA.

Eromafuru, E. (2013). Building and Sustaining Organizational Culture through Innovative and Strategic Leadership. International Journal of Humanities and Social Sciences, 3(11).

Heracleous, L., & Langham, B. (1996). Strategic culture and organizational culture at hay management consultants. Long Range Planning, 29(4), 485-494. doi:10.1016/0024-6301(96)00040-4

House, R., Javidan, M., Hanges, P., & Dorfman, P. (2002). Understanding cultures and implicit leadership theories across the globe: an introduction to project GLOBE. Journal of World Business, 37(1), 3-10. doi:10.1016/s1090-9516(01)00069-4

Huiri, D. (2011). THE IMPORTANCE OF STRATEGIC MANAGEMENT. SAVONIA UNIVERSITY OF APPLIED SCIENCES.

Janićijević, N. (n.d.). THE INFLUENCE OF ORGANIZATIONAL CULTURE ON ORGANIZATIONAL PREFERENCES TOWARDS THE CHOICE OF ORGANIZATIONAL CULTURE STRATEGY. ECONOMIC ANNALS, 18(193).

Long, D. D. (1997). Building the Knowledge Based Organizations: How Culture Drives Knowledge Behaviors. Center for Business Innovation.

Lunenberg, F. (2011). Understanding Organizational Culture: A Key Leadership Asset.National Forum of Educational Administration and Supervision Journal, 29(4). Retrieved from http://faculty.mu.edu.sa/public/uploads/1360754959.415organizational%20cult63.pdf

Luthans, F., & Doh, J. P. (2008). International Managment (9th ed.). McGraw Hill.

Madu, B. C. (2005). Organizational culture as a driver of competitive advanatage. Journal of Academic and Business Ethics, 3(2). Retrieved from http://www.aabri.com/manuscripts/11791.pdf

McGuire, J. (2003). Leadership Strategies for Culture Culture Developing Culture Leadership as an Organizational Core Capability. The Center for Creative Leadership – Friends of the Center Leadership Conference, Florida.

Pudelko, M., Reiche, B. S., & Carr, C. (2011). WHY INTERNATIONAL STRATEGY AND CROSS-CULTURAL MANAGEMENT MATTERS IN BUSINESS RESEARCH AND EDUCATION. Schmalenbach Business Review.

Salamzadeh, Y., Ahmadi, A. A., & Akbari, J. (2012). Relationship between Organizational Culture and Strategy Implementation: Typologies and Dimensions. Global Business and Management Research: An International Journal, 4(3).

Sami, W. (2012, November). Organizational Culture. Helbing and Associates, 2-8.

Sliwa, M. (2011). Strategies for Culture. Culture for Development (3). mik.

Trompenaars, F. (1996). Resolving International Conflict: Culture and Business Strategy.Business Strategy Review, 7(3), 51-68. doi:10.1111/j.1467-8616.1996.tb00132.x

Tsai, Y. (2011). Relationship between Organizational Culture, Leadership Behavior and Job Satisfaction. Retrieved from BMC Health Services Research website: http://download.springer.com/static/pdf/576/

 Woszczyna K. (n.d.). THE IMPORTANCE OF ORGANIZATIONAL CULTURE FOR INNOVATION IN THE COMPANY. Scientia Oeconomia, 2(3). Retrieved from http://www.wsb.edu.pl/container/Wydawnictwo/Do%20pobrania/szczepanska-woszczyna-m.pdf

Culture and Strategy

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Strategic Management: Transocean Case Study

Strategic Management
Strategic Management

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1.0 Introduction

The paper will evaluate the strategic position of Transocean, a major player in global offshore drilling services in the oil and gas industry. Strategic management is a process that entails formulating and implementing main objectives as well as initiatives a company takes based on the available resources. It also takes into consideration the evaluation of external and internal environment in which the firm operates.

Founded in 1953, the company is headquartered in Houston Texas. Transocean administrative division has since shifted to Vernier, Switzerland for tax and client servicing reasons. Various models such as STEEPLE, Ansoff and Porter’s Five Forces will be used to paint the company’s strategic position when it comes to, macro-environmental review, competition, diversification strategy, market development, product development and market penetration. To wrap up, the paper will make recommendations regarding the direction the company has to take to remain sustainable.

1.1 Strategic Analysis of Transocean Limited

Transocean is a prominent global provider when it comes to offshore drilling services for energy establishments. The company owns and operates the world’s most multipurpose flotillas that concentrate on deep-sea and extremely harsh environment drilling (Deepwater.com, 2016). With a fleet of sixty-one portable offshore drilling components, the company offers powerful rigs for deepsea drilling. Transocean helps clients to establish and develop oil as well as natural gas stockpiles.

The company offers an exceptional drilling performance that is anchored in a solid experience that spans more than a half a century. Transocean shares are listed on the New York Stock Exchange under the acronym RIG and Swiss Stock Market under the acronym RIGN.Transocean operates more than 140 offshore rigs in almost all mainmarine markets. Apart from offering drilling services offshore, the company offersdrill management services globally. Transocean operates not just the largest extreme-deepsea flotilla of drill ships global, but it is also the largest offshore fleet worldwide.

The company hires more than 20,000 employees with the technical expertise that is the envy of their business rivals(Deepwater.com, 2016). Moreover, Transocean provides management and accomplishment services for assessment and production firms regarding offshore drilling schedules. The company’s mission is to become a leading offshore drilling organisation that provides rig-based services with a global reach, by incorporating a highly dedicated workforce,state of the art machinery and ultra-modern technology, while concentrating on technically demanding environments (Transocean, 2007b)..

The company is dedicated to values that represent its focus, innovativeness, safety, trust and reliability. The company promises to surpass not just the anticipations of theclient, but employees and shareholders as well (Deepwater.com, 2016). Transocean’s strategic goals include getting aligned with its customers when it comes to supporting and ensuring delivery of clients’ business objectives.

The company conducts its operations with distinction which is characterized by safety and efficientoffshore solutions (Deepwater.com, 2016). In addition,Transocean keeps on enhancing its corporate culture and processes to optimize returns. Lastly, the company not only attracts but also nurtures and retains the industry’s best employees.

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2.0 Strategic Industry Trends

Drilling oil and gas was previously dependent on backlogs. Contract bores alter their rates based on their rig charges relative to retailing oil and gas prices. Usually, contract bores tend to wait on the day down, and speedily adjust their prices upwards depending on how the markets are performing (Redall, 2012). There has been a widespread pattern of extreme deepsea rig business with strong daily charges.

However, there has been a downward trend in mid-water rig markets. The most lucrative market lies of the Gulf of Mexico and West African coastal line, down to the south of Africa. The demand for deep-sea rigs is anticipated to remain jerky in the short-term(Helman, 2015).As of now, approximately 206 floaters are operating under contract across the industry (Deepwater.com, 2016).A large percentage of the total number is idle for completing major contracts.

3.0 Strategic Analysis the different types of strategic options

3.1 Ansoff Matrix:

    Existing Markets    Market Penetration      Product Development  
    New Markets  Market Development      Diversification    

Existing Products
New Products

Transocean is a dominant player in a market that is not highly saturated. However, to remain at an edge over its closest business rivals, the company has adopted different approaches. Based on the Ansoff matrix, Transocean has been using a low pricing model to penetrate the market. When it comes to market development, Transocean has been offering ultra-deepsea drilling and management services in various parts of the world. What makes the company the envy of its business rivals is the fact that Transocean’s product development strategy works magic. Apart from ultra-deepsea boring services, the company offers rig and deepsea drilling consultancy services which is certainly some form of diversification hence competitive edge.

In short, Transocean operates in the same market by adopting a horizontal strategy in terms of expanding the product line. Lastly, Transocean has a predominantly diversified portfolio. To diversify risks, the company has necessitated mergers and acquisitions when it comes to financial management and technical expertise. The company operates in various regions such as the United States, the Gulf of Mexico, the North Sea, West Africa, and Southeast Asia, Middle East and the Arctic.

3.2 Porter’s Five Forces of Strategic analysis

3.2.1 Competition

Transocean threat of competition is moderate to high. For example, following a merge in mid-2007 between Rig and Transocean’s chief rival Global Sante Fe, this attempt reduced competition particularly, in ultra deep-water segments. While Transocean has almost a monopoly in ultra deep-water drilling, It is likely to enjoy less competition in ultra deep-water, especially in harsh climates that require technical personnel.

In fact, this contributed to the need for anti-trust lawsuit following the merger between RIG and GSF. Nonetheless, the firm has exposure to different offshore markets such as jackupsegment that is associated with intense competition in various regions globally as well as pricing (Porter, 2008). By and large, the organisation has less competition in ultra deep-water segments, with a somewhat intense competition in mid-water floater and also jackup segments.

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3.2.2 New entrants

Transocean enjoys a low threat of new entrants. With respect to offshore contract drilling sector, it requires huge investment in fleet and rigs before getting inflows from gas and oil organisations (Porter, 2008). This makes nearly impossible for new firms to enter this sector.

3.2.3 Substitute

The main threat of substitute is the changing the energy source from hydrocarbon to renewable sources across the world, which is not likely in the short-run (Turner, 2007). Therefore, the threat of substitute is low.

3.2.4 Strategic Purchasing power

Transocean’s purchasing power is moderate. Much as exploration and production firms have power when it comes to negotiating, especially in mid-water floaters and jackupsegments, they have sufficient ability and provision of idle rigs. In essence, the buyers are in aposition to negotiate low daily rates in the contracts while ultra deep water segments maintain stringent rates (Schlumberger, 2008).

3.2.5 Suppliers’ power

The supplier power is moderate. Transocean providers have some degree of power. For instance, suppliers like National Oilwell Varco take part in the decision making in constructing Transocean’srigs andother essential parts. Luckily, this is crucial for Transocean since National Oilwell Varco has a few plans of increasing the fleet of drillships. In general, benefits from pricing since they are the main clients to themajority of their specialised providers (Porter, 2008).

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3.3 STEEPLE

3.3.1 Social

The organisation takes part in various social activities, including charitable contributions to developing environmental initiatives to increase its reputation.

3.3.2 Technological

Technology is necessaryfor drilling sector as such Transocean gets its strength in technological development. While oil drilling and the ecology are related, so is technology and demand. Drilling in deepwater is more and more vital from drilling organisations since they are considered to be more profitable. The firm is positioning itself to capitalize in this segment. For instance, in 2007, Transocean acquired a drillship worth USD 470m to take advantage of deep-water drilling, which allows the firm to drill up to ten thousand feet.

Due to advanced underwater drilling, there has been a decrease in jackup rigs demand (Associated Press, 2007). This presentsTransoceanwith the opportunity to beat their rivals like Noble Corporation in the struggle for innovation. Currently, the firm is leading in deep-water exploration (Katsaros & Christy, 2005).

3.3.3 Economic

Cost is a major challenge for drilling organisations. As oil price rises, the cash flow increases too, which makes organisationsinvest considerably in drilling activities? Furthermore, the new techniques of recovering oil though they are essential in the growth of petroleum production, are leading to an increase in the gasoline price. Implicitly, thehigh price of oilis required to make drilling firms profitable. High global investment drives drilling.

With great interest to drill in foreign regions, global investors are significantly investing, hence leading to expansionof oil and gas sector (Maksoud, 2007).Even though raising oil cost will adversely influence Transocean, in reality, will be beneficial in the long run. Oil cost is inelastic. In other words, afluctuation will insignificantly affect demand. Therefore, increasing oil prices willboost cash flow for Transocean, which means additional business like funding new drilling projects.

3.4.4 Environmental

On environmental protection, Transocean is committed to enhancing its stringent police on Environmentalmanagement system (EMS). Transocean’s EMS visitation is conducting its operations in a standardised manner that fulfills the high levels of stipulated laws to drive continuous enhancements while instilling ownership across its facilities (Transocean, 2007a). The organisation is environmentally sustainable by way of using green products and assessment is utilized as part of routine operations.

The firm also focuses on recycling. Additionally, Transocean has set up a recycling plan, where recyclables are sorted and compressed in rigs. After compression, they are transported to Tech Oil Products and donated to a recycling hub in the ARC of Iberia.

Transocean has collaborated with different oil and gas firms such as Subsea 7, and BP in the SERPENT project. Thisentails necessitating access to the installations, in partnership with their customers to present scientific knowledge to experts in the SERPENT project (Dictionary.Cambridge 2012). In turn, the analysts conduct various projects including assessing biodiversity and effects of drilling on the environment.

The analysts also work on the company’s rigs to study marine species (Transocean, 2007a). By and large, Transocean protects the environment in which it operates to demonstrate that the company recognises the consequences of natural demand shifters.

3.4.5 Political/Legal

Oil presents this organisation with a strong political force. Because oil is the primary source of energy internationally, thus, the supply of oil is related to power regardingpolitics; oil firms leverage authority over regimes (Dictionary.Cambridge 2012). With no oil organisations, United States is likely to lose its dominance in developing nations remarkably. Though oil drilling firms are fundamental in giving regimes the authority, they are still regulated and work as per government laws, such as prohibiting drilling in particular regions like the Gulf of Mexico to protect the environment.

In 2007, the Congress was promoting the closure of a quarter-century ban on the production of offshore energy. This decree banned 85 percent of all drilling in United States’ continental shelf, greatly affecting oil drilling firms including Transocean (Kamalick, 2007). Furthermore, the Congress were supporting the opening of additional shorelines, which was associated with renewable sources of energy, as such they sought for support from environmentalists. While regimes exercise their authority on oil and gas providers, these providers, in turn, have authority over the very regimes.

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3.4.6Ethical Standards

Transocean aspires to ensure financial discipline in their disclosure, honesty and candor in all their engagements with clients, ahigh esteem for employees, customers and suppliers, the safety of employees, property and the ecosystem and technical leadership. Loyalty to these core values demands the company to execute its operations in tandem with thelaw and the utmost standards of business ethics.

In advancing that objective, the company embraces the Code of Business Conduct and Morality, the firm’s environment is also a corrupt free zone and an Anti-Corruption and Business Conduct Policy takes care of that. Again, directors and employees are not allowed to enhance the culture of inside trading. Nonetheless, all employees should adhere to the privacy policy.

4.0 Recommendations

Since oil is directly associated with international authority, oil drilling organisations have authority over regimes, nevertheless, with another alternative, Transocean should continuously go this direction to maintain the lead if the primary source changes

Much as the company has advanced drillship tools, it should take a notch higher by researching new products in comparison to its rivals.When it comes to maintaining competitiveness in oil and gas industry, Transocean should use differentiation strategy that will be vital in developing clients’feedback and service delivery. The differentiation strategy should focus on quality rigs, particularlydeep-water drilling and ability to survive environmental disasters such as hurricanes.

While this threat of substitute islow, in future it may reduce the demand for oil. For that reason, Transocean should create awareness among clients about the benefits of oil in comparison to other energy sources. This can be carried out through advertisements. For instance, the organisation should use ads that demonstrate even with the use of alternative sources such as ethanol, which is considered environmentally sustainable compared to oil. Ethanol requires aconsiderable quantity of biomass. In the even that US, ethanol from corn is employed on a large scale, then it will contribute to increased costs of corn.

The prices of beef will also skyrocket remarkably as cows feed on corn products. On the other hand, if Brazilian corn is used thatis produced from sugar; rainforests in the region will be cut to provide land to grow sugar. Creating awareness through ads will help Transocean increase the demand for oil while increasing the demand for petroleum products from the company.

The company should embrace Ansoff model to diversify its portfolio. Instead of concentrating on drilling and consultancy, the company can take a leap of faith and venture in other business like marine transport, finance, healthcare, real-estate, heavy metal processing among others. Diversification is critical because it will help the company spread risks, when oil business is at its low.

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5.0 Conclusion

The study set out to evaluate Transocean position in the offshore drilling services. The company’s background, values and strategic goals were highlighted at the outset. To understand the company’s product and market development; market penetration and diversification, the Ansoff Matrix was used. The Porter’s Five Forces were employed to establish the intensity of the competition. However, STEEPLE model was used to evaluating the company macro-environment. In the end, the paper touched on the best practices as assured by ethics codes. Recommendations were made regarding the corporation’s future. 

6.0 Bibliography

Associated Press 2007. JP Morgan Securities analyst upgrades GlobalSantaFe, Transocean to “neutral.” Retrieved 17th March. 2016 from Factiva.

Berman, A. 2007. Drilling advances. World Oil, 19. Retrieved March 17, 2016 from Business Source Premier Database

Deep Sea Drilling Project 2015.” The Columbia Encyclopedia, 6th ed.. 2015. Encyclopedia.com. 17 Mar. 2016 <http://www.encyclopedia.com>.

Dictionary.Cambridge 2012. PESTLE analysis. [online] Available at: http://dictionary.cambridge.org/dictionar0y/business-english/pestle-analysis?q=pestle+analysis [Accessed: 6th august 2012].

Helman, C, 2015. Forbes.com, Retrieved March 17, 2016 from http://www.forbes.com/sites/christopherhelman/2015/03/16/oil-layoffs-itemized-75000-andcounting/

Deepwater.com, 2016. Deepwater.com accessed on 18th March. 2016 at <http://www.deepwater.com/>

Katsaros, J.&Christy, P. 2005. Getting It Right the First Time: How Innovative Companies Anticipate Demand. Westport, CT: Praeger

Kamalick, J. 2007. Untitled. Chemical Business Americas, p. 26. Retrieved March 17, 2016

Maksoud, J. 2007. International investment pours into Africa. Pipeline and Gas Journal,pp. 42-44.

Porter, M. 2008. The Five Competitive Forces That Shape Strategy. Harvard Business Review, 15 January 2011.

Redall, B, 2012. Reuters.com, Retrieved March 17, 2016 from http://www.reuters.com/article/us-fieldservices-powerstruggleidUSBRE8AC05S20121113#y2LttEqUfwzf4Kja.97

Schlumberger 2008. Day rate. Oilfield Glossary. Retrieved March 17, 2016 from http://www.glossary.oilfield.slb.com/Display.cfm?Term=day%20rate

Transocean, Inc. 2007a. Responsibility. Retrieved March 17, 2016 from www.deepwater.com

Transocean, Inc. 2007b. Our company. Retrieved March 17, 2016 from www.deepwater.com.

Turner, H. (2007). Conversation about Transocean and alternative fuels.

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Corporate Culture and Strategy

Corporate Culture and Strategy
Corporate Culture and Strategy

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Corporate Culture and Strategy

An organization’s mission strategy is a précis of the way in which the firm perceives its role and the beliefs the company employs in attaining its objectives. The culture of an organization signifies the professional values an organization espouses which dictate how the company interacts with its customers, partners, vendors and workers. Since the culture of the organization is a driving force in how the business organization carries out its business, it has a significant impact on developing business strategy (Hofstede, 2014).

This paper delves into the topic of culture and strategy. In this investigation of the topic, the subject of culture and strategy is analyzed exhaustively and critically. In particular, this paper provides an in-depth discussion of the relationship between company culture and strategy, importance of alignment between culture and strategy, and how national culture really influences an organization’s strategy.

Correlation between corporate culture and strategy

There is a strong relationship between corporate culture and strategy. In general, strategy is considered as a product of culture while culture, on the other hand, is considered as a product of strategy (Browaeys & Price, 2009). In spite of how good the company’s strategy is, when it really comes down to it, Schneider (2011) noted that it is the people who usually make the difference. At its core, strategy is logical and rational, simple and clear.

Strategy has to be easy to talk about and to understand. A business organization is lost if it lacks a clear strategy. In essence, strategy is the pattern of activities that a company follows as it pursues its long-term purpose. Put simply, it refers to where the company is at the moment, where the company wants to go, and how the company intends to get there (Akbar et al., 2012).

Strategy comprises a number of factors which include the following: objectives and goals of the company; mission statement and vision; and critical success factors, or the things which the company has to get right for it to succeed in its mission. It also includes core values; reputation/brand, which entails developing and communicating meaningful and powerful differences between the company’s offerings and the offerings of the company’s competitors; and positioning, whereby a company builds a preferred and valued position within the minds of its target audience (Cristian-Liviu, 2013).

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Conversely, culture is understood as the set of beliefs which drive the behaviours of workers. These could be things that everyone within the organization knows and shares, in addition to implicit rules. It is worth mentioning that the range of acceptable behaviours of workers in the company is rooted in these underlying beliefs (Weick, 2014). On the whole, organization culture consists of the shared values, norms as well as ideals in a business organization and it actually sets the basis and groundwork for strategy.

An important starting point of understanding the culture of a company is to understand its founding principles: that is, its legacy, heritage, the clients and markets which it serves, and its points of differentiation. Anderson, Anderson and Lee (2015) pointed out that culture of a company is an aggregation of the beliefs and mindset of the company’s workers. It is the manifestation of the mission, vision and principles which bind employees in the organization together.

In the current business world in which sell-offs, diversifications, acquisitions, expansions and mergers are becoming increasingly common, it is becoming very important to understand corporate culture in strategic decision-making. The consolidation of AOL with Time Warner did not succeed because of culture clash as did the DaimlerChrysler merger. Organization culture is a very powerful factor in an organization’s lasting success.

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For a strategy in a company to develop and be successfully executed, that strategy has to align fully with the corporate culture. As such, goals and initiatives need to be established within the company in order to support and establish a corporate culture which embraces the strategy of the company over time (Su, Yang & Yang, 2012). Corporate culture has a significant impact on strategy execution within the organization.

Characteristics of stability: an organization culture that is stable, a culture that would systematically support implementation of strategy, is one which promotes a culture of cooperation, unity, partnership and teamwork amongst staff members. This kind of organization culture would certainly enhance commitment amongst workers and focus on productivity in the company instead of resistance to regulations and rules or external factors which prohibit success.

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Flexibility and adaptability: according to Fombrun (2012), companies which remain flexible tend to embrace change and establish an environment that is open to both communication and production. This creates a model which welcomes cultural diversity and helps in clarifying implementation of the strategy. In any company, corporate culture could serve a number of different purposes such as unifying employees in the company and helping to establish a set of common rules or norms within the company that members abide by.

Goal unification: corporate cultures that are unified, strong and flexible would approach strategy execution and affect execution positively through aligning goals. In essence, goals could come into alignment when the culture of the business organization is working to focus on productivity and getting the mission of the company achieved. This might include shipping out more product items compared to the company’s main competitors, getting products delivered to the company’s clients on time, or similar objectives.

This would create a domino effect within the company which would ensure that all work carried out by every work group and employee within the organization is really focused on performance and on the company’s strategic importance (Dutch, 2013). This would allow corporate culture of the company to be in alignment with strategy execution at the most basic level. Hanson and Melnyk (2014) noted that for this unification level to work, it is important that goal setting aligns with and is supported by processes, procedures, policies and systems within the company, which would help to attain strategy execution and continuing the organization’s cultural integrity.

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Process implementation: part of strategy implementation and cultural alignment entails process implementation. It is noteworthy that processes include the use of technology in facilitating goal achievement as well as the results which an organization is looking for when it works with clients to satisfy their needs. Although the hard problems and needs of a company are attained most of the time, the corporate culture becomes overlooked during the process. This is where processes actually come into place and execution of the strategy slowly comes into existence to maintain and sustain corporate culture and strategies (Dutch, 2013).

Cultural alignment: when corporate culture is in alignment with implementation of the strategy, a company can operate more efficiently within the international marketplace. Corporate culture allows the senior managers of a company to work both as teams and individually in developing strategic initiatives in the company. These might include re-establishing old partnerships and creating new partnerships to continue to deliver the best services and products to an international marketplace (Slater, Olson & Finnegan, 2011).

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Organizational strategic alignment, in its simplest form, is lining up the strategy of the company with its organization culture. For an organization to experience organizational strategic alignment, then its goals, processes and management should align. In order to create a supportive culture, an organization should clearly define the competence of its resources by assessing whether its processes, employees and equipment could actually handle new changes. If staff members do not have the competence for handling a new strategy, then the organization should offer training to improve the skills of its workers and managers.

If there is no sufficient support and training, the relationships between managers and staff members within the organization would suffer and the company would lack flexibility. To establish a culture of support, the top managers need to be involved in organizational strategic alignment from the beginning and provide the right resources to help in ensuring success of the workers and the organization (Yarbrough, Morgan & Vorhies, 2011). Workers should commit to supporting an organization’s strategic alignment and senior managers could help ensure this success by defining the goals of the organization in a clear manner and giving incentives to help workers accept new strategies.

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When strategy and organization culture are misaligned, the misalignment would short-circuit performance and increase the probability that the company will not attain its goals. An organization culture which all employees within the company subscribes to will help in creating focus amongst the workers.

When workers comply with the values and beliefs of the organization, it will give a unified impression to partners, customers and vendors (Bushardt, Glascoff & Doty, 2011). The organization could then formulate a strategy knowing that every member would uniformly apply the guidelines and improve the likelihood that a strategy would succeed.  

In aligning corporate culture with strategy, the following steps are important: first, the senior managers should define their company’s long-term set of guiding principles – the philosophy and purpose –, which are essentially the organization’s identity. A strategic plan would not succeed if the strategic plan is really not supported by these key principles of the company’s core culture.

Secondly, the senior management should evaluate the weaknesses and strengths of the company as well as the external factors which could impact success (Simoneaux & Stroud, 2014). Thirdly, the executives should create the company’s vision and then set strategic goals that are measurable and specific. Fourthly, the senior management should decide the strategic priorities which are in alignment with those strategic goals. It is worth mentioning that strategic priorities are a part of the organization’s core culture.

They are basically the values and principles which could alter given that their function is to align the corporate culture with the organization’s strategy. A company’s core corporate culture has to drive the company’s strategy and align with it (Mintzberg, 2011). Fifthly, with a clear understanding of the organization’s core corporate culture, strategic goals and vision, the top managers should create an action plan with measures for guiding performance. Finally, the senior executives should turn the strategic goals into measurable outcomes. Processes and employees should be aligned with the company’s core corporate culture and strategy (Simoneaux & Stroud, 2014).  

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National culture and strategy

A country’s national culture greatly influences the strategy adopted by a company. National culture has an impact on organizational strategy and implementation of the strategy, and can ultimately result in business failure or success. In essence, all national cultures have an impact on companies in both negative and positive ways, depending on the particular business, the business cycle, as well as the specific strategies being pursued (Hammerich & Lewis, 2013).

Cultural dynamics could either derail or enable performance depending on these different factors. It is important that a company’s senior management recognize the cultural factors which have a negative impact on performance and the ones which could be harnessed to foster superior performance (Hammerich & Lewis, 2013). To formulate strategy, a company needs to identify and interpret strategic issues.

In this process, the company scans, selects, interprets and validates information and establishes priorities amongst issues. The national culture of any country could actually influence this process given that it affects the nature of the relationship of a company with its environment and the nature of the relationships amongst employees in a company (Schneider, 2011). 

Whether it is big company pursuing international growth strategies or a small start-up firm in its initial phases of the growth curve, culture plays a vital role in making sure that the company does not swerve off the path and that it remains on course. Usually, driving and executing effective strategic change is a medium-term to long-term priority for a company’s management.

Likewise, the corporate culture of a company also develops with time, with a combination of active support by the company’s top leaders and voluntary cohesion and dissemination as the company’s purposes and beliefs pervade through the hierarchy. Owing to the intrinsic patience which the company’s top management requires to drive a strategic change and establish a focused culture, it is really sensible that both of them – strategic change and purposeful culture – work alongside each other and not against (Schein, 2012).

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Companies which are highly successful in driving strategic change and implementing it share 3 fundamental principles by which they embrace corporate culture and utilize it in the process as an enabler. Firstly, such companies are aware of differences in global cultures – this factor might be more pertinent and applicable to multinational corporations although it is equally applicable to small start-up firms that have ambitious aspirations for growth.

For instance, knowing the way that a worker in Malaysia would react to a new strategic initiative in comparison to how a worker in the Netherlands would react is of great importance in executing strategic change at the ground level (Schwartz & Davis, 2011). In essence, it implies that the overarching aspects of the strategy should be modified to fit the with local market-level ways of operation.

The second underlying principle is recognizing what culture means to different peoples – Cristian-Liviu (2013) reported that this second principle is more of a challenge for big companies with scale than to new, start-up firms. Within an organization, culture implies different things for different individuals.

In a brand consultancy company for example, the design/creative department might think that their department is really the best place to work in the organization, but the sales and marketing department whose role is to sell the design solutions, might think that the design/creative group’s capabilities are dull and outmoded. Broader changes within the company would impact employee groups in different ways and the cultural aspect of the change should be carefully measured (Schwartz & Davis, 2011).

The third underlying principle entails aligning strategic change initiatives with corporate culture – the Time Warner-AOL and DaimlerChrysler mergers were both in the same industry but still they did not succeed, they both failed. This evidently illustrates the dangers of overlooking culture as a factor when planning and executing a company’s strategic initiatives (Mühlbacher, Vyslozil & Ritter, 2014).

Although both Chrysler and Daimler produced vehicles, the styles of management and the collaboration processes in each firm were driven very much by their nation of origin; that is, the German and American cultural ethos. These 2 cultural ethoses were never reconciled and adapted in the merged organization and they clashed all the time. In essence, every form of strategic planning should take in corporate culture as a factor that impacts success, as well as manpower, finance and capabilities (Weick, 2014).        

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Conclusion

To sum up, there is a really strong correlation between corporate culture and strategy. Strategy is considered as a product of culture while culture, on the other hand, is considered as a product of strategy. For a strategy in a company to be formulated and executed successfully, this strategy has to align completely with the culture of the organization. Thus, goals and aims need to be established within the firm so as to support and establish a corporate culture which embraces the strategy over time.

When organization culture is in alignment with execution of the strategy, a firm can operate more efficiently within the international market. When strategy and organization culture are not aligned, then this misalignment would short-circuit performance and increase the likelihood that the firm would not accomplish its goals. National culture has a significant impact on organizational strategy and implementation of that strategy, and could eventually result in business failure or success.

References

Akbar A. S. A., Salamzadeh, Y., Daraei, M., & Akbari, J. (2012). Relationship between Organizational Culture and Strategy Implementation: Typologies and Dimensions. Global Business & Management Research, 4(3/4), 286-299.

Anderson, G. M., Anderson, M. J., & Lee, J. B. (2015). Defining Corporate Culture. NACD Directorship, 41(2), 36-37.

Browaeys, M. J., & Price, R. (2009). Understanding cross-cultural management (1st ed.). Boston, MA: Pearson Education Limited

Bushardt, S. C., Glascoff, D. W., & Doty, D. H. (2011). Organizational culture, formal reward structure, and effective strategy implementation: A conceptual model. Journal Of Organizational Culture, Communications & Conflict, 15(2), 57-70.

Cristian-Liviu, V. (2013). Organizational culture and strategy. how does it work? An empirical research. Annals Of The University Of Oradea, Economic Science Series, 22(1), 1690-1696.

Dutch, M. A. (2013). A Symbiotic Framework of Human Resources, Organizational Strategy and Culture. Amity Global Business Review, 89-14.

Fombrun, C. J. (2012). Corporate Culture, Environment, and Strategy. Human Resource Management, 22(1/2), 139-152.

Hammerich, K., & Lewis, R. D. (2013). Fish can’t see water: How national culture can make or break your corporate strategy. New York City, NY: Wiley

Hanson, J. D., & Melnyk, S. A. (2014). Culture Eats Strategy … and how to deal with it. Supply Chain Management Review, 18(4), 20-26.

Hofstede, G. (2014). Cultural dimensions in management and planning. Asia Pacific Journal of Management, 12(9):81-99.

Mintzberg, H. (2011). Patterns in strategy formation. Management Science, 24 (9): 1-18.

Mühlbacher, H., Vyslozil, W., & Ritter, A. (2014). Successful Implementation of New Market Strategies–A Corporate Culture Perspective. Journal Of Marketing Management, 3(2), 205-217.

Schneider, S. C. (2011). Strategy formulation: The impact of national culture. Fontainebleau, France: ISEAD.

Schein, E.H. (2012). Organizational culture and leadership. San Francisco: Jossey Bass, Inc.

Schwartz, H. & Davis, S.M. (2011). Matching corporate culture and business strategy. Organizational Dynamics,11(9): 30-48.

Simoneaux, S. L., & Stroud, C. L. (2014). A Strong Corporate Culture Is Key to Success. Journal Of Pension Benefits: Issues In Administration, 22(1), 51-53.

Slater, S., Olson, E., & Finnegan, C. (2011). Business strategy, marketing organization culture, and performance. Marketing Letters, 22(3), 227-242. doi:10.1007/s11002-010-9122-1

Su, Z., Yang, D., & Yang, J. (2012). The match between efficiency/flexibility strategy and organisational culture. International Journal Of Production Research, 50(19), 5317-5329. doi:10.1080/00207543.2011.618149

Weick, K.E. (2014). The significance of corporate culture. In Frost, P.J. et al. (Eds.) Organizational Culture. Beverly Hills, California: Sage Publication, 381-390.

Yarbrough, L., Morgan, N., & Vorhies, D. (2011). The impact of product market strategy-organizational culture fit on business performance. Journal Of The Academy Of Marketing Science, 39(4), 555-573. doi:10.1007/s11747-010-0238-x

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Strategic Change at the American Red Cross

Strategic Change
Strategic Change

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Strategic Change at the American Red Cross

American Red Cross is a non-profit humanitarian organization which provides emergency assistance or services and disaster relief to Americans. In addition, the organization educates people inside the United States on how to avert risks in the society. It is beyond doubt that the American Red Cross performs functions significant to the lives of Americans. 

Founded in May 21, 1881, the organization has alleviated human suffering in various ways. It has save a number of lives especially those affected by natural disasters and victims and survivors of war or terror attacks. The lives of the police or army policies are in the hands of the American Red Cross, a role which further highlights its significance (McGovern, 2011).

The organization has been applauded by most Americans for its effective service delivery. However, the organization has been plagued with a number of problems in the recent past and this has subjected the lives of many Americans to danger. The organization continues to face other challenges have impacted its growth and development. With the significance of this organization in mind, it is critical for the entity to pursue strategic change as a way of realizing stability and growth which it enjoyed in the 20th century.

The nature of disasters has changed significantly hence becoming hard to save the lives of Americans using the traditional methods employed in the 20th century. The causes of death around the world have become complex hence demand more complex solutions. Therefore, strategic change should be assumed in order to turn around things in the country and to restore confidence that Americans had in it.

Additionally, the activities of the organization have expanded. While it was meant to help those affected by natural disasters, soldiers and victims of war, American Red Cross is expected to offer community education and outreach. Generally speaking, strategic change is necessary at American Red Cross in order to change its design of response to disasters hence effectively alleviating human sufferings (The American Red Cross, 2014).

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SWOT Analysis of the American Red Cross

Strengths

Strong brand quality

The success of the American Red Cross is largely influenced by its brand strengths.  It has strong brand quality which is attributed to its contributions to humanitarian history. The entity has gained popularity and respect from the Americans owing to the previous contributions to saving humanity. For an entity to have a strong foundation, it must have depth.

The American Red Cross is supported by more than 700 locally chapters throughout the United States, which perform more than 200,000 blood drives every year. This explains why this organization is the largest blood supplier in the country (The New York Times, 2015).

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Strong resource base

It is not easy for an entity to achieve strong quality brands if there are no sufficient resources. The American Red Cross has a wide network of both human and financial resources, and this explains why it has been able to deliver the services as expected by the public.

Advanced volunteers network            

         The strengths of the American Red Cross lie in the advanced volunteers’ network. There is a high number of youth who have volunteered to support the functions of the organization. The entity has youth marketing program which has about 169,000 volunteers, and all of them work towards ensuring realization of the organization’s objectives and mission (The American Red Cross, 2014).

A high trust from the public

      The American Red Cross is trusted by majority of the Americans, some of them have volunteered to supports its functions. Majority of the Americans are of the view that the organization is effectively delivering its mandate. There has been no case of corruption or mismanagement of funds, and this is the main reason why majority of the Americans have donated their money to support organization’s programs (The New York Times, 2015).

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 Youth Marketing Strategy

    The presence of the youth marketing strategy puts the American Red Cross ahead of other humanitarian organization in the United States. With this strategy, the company has been able to use interactive mediums to conduct marketing activities.

Better Coordination

          Proper coordination of activities is one of the aspects which have contributed to the success of the American Red Cross. This means that the company is functioning effectively and efficiently (McGovern, 2011).

The strengths discussed above are critical for the success of the strategic change process. The American Red Cross should capitalize on this strength in order to succeed in this pursuit.

Weaknesses

Poor Handling of the Resources

       Management of resources is critical for success of any organization. Hurricane Katrina wrought a widespread devastation which compelled Americans to rethink of the responses adopted by the government as well as the humanitarian organizations. The American Red Cross, which is the de factor human side of the Federal Emergency Management Agency, was on the spotlight.

The issues which unfolded after this unforgettable event raised eyebrows about mismanagement of the resources by the entity. The entity later admitted that it had miscalculated the number of personnel to engage in evacuation of the victims in hotels and motels.

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Assumption that it is a government project

    There is a widespread believe that the American Red Cross is the project of the government hence should be supported and funded fully by the government. Consequently, the number of supporters continues to decline every year (Weerawardena & Mort, 2012).

Low Transparency Level

     The American Red Cross has been accused of providing misleading information and data about how it has been spending Donor’s Dollars. How the company used Hurricane Sandy funds remains a secret up to now, something which would definitely inflict a competitive harm (The American Red Cross, 2014).

In the pursuit of the strategic change, the American Red Cross must identify these weaknesses and establish the right approaches to handle them as it would negatively affect the whole process.

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Opportunities

Wide network which enables the company reach global community

          The American Red Cross has established its presence in majority of the parts in the United States. However, it has the opportunity to capitalize on its ability to establish more presence in all regions both locally and internationally and this would enhance its efficiency in delivering the services.

New Media Channels Exploding

         The modern generation is innovative and technology savvy. This provides a golden opportunity for the American Red Cross to embrace new technologies to market its operation. Additionally, the entity can use celebrities to influence the actions of the modern youth (Dolnicar & Lazarevski, 2009).

New Ways of Connecting to the Public

         Other than social media platforms, which have emerged in the recent past, the American Red Cross can use blood drive activities to connect to the public.

Threats

Huge Competition

         There are numerous humanitarian organizations which offer services similar to those of the American Red Cross. Some of its rivals offer to pay those who donate blood (The American Red Cross, 2014).

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Regulatory Compliance

 The government of the United States established policies which governs operations of every non-profit organization. For the American Red Cross to perform its operations, it must meet specific requirements. In some cases, meeting all the requirements is costly to the company. In the event that the organization is not able to meet the regulatory compliance, then the strategic change process will not be undertaken.

Busier Target

  The American Red Cross depends on the contributions of the young professionals, majority of whom are always busy. As such, the entity risk delays of its operations in some situations. Therefore, strategic change process is likely to be negatively affected.

Appreciative Inquiry 4-D cycle

Discovery

   While the organization faces some challenges and shortcomings, it is also important to highlight that it has good history marked with great successes. The organization uses the success story of the past as a tool for developing better outcome for the future (Whitney & Cooperrider, 2011). Notably, the fundamental goal of this strategy is to capitalize past success to create an image of excellence for its customers and shareholders. This strategy will paint the organization as effective and excellent thus making customers and shareholders ignore any shortfall associated with it.

Dream                                      

       In regard to design, the organization projects poor strategies. Specifically, it has poor strategy in regard to sustainability as it depends mainly on donors as one of their sources of finances. With great scrutiny and many conditions that come with this source, sustainability is not secured (Whitney & Cooperrider, 2011).

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Design

          Evident in its strategies, American Red Cross has successfully crafted a good and ideal organization using the positive successes from the past. This will inform a clear image of the future and this will be felt both at individual and organization levels, making the organization to achieve future possibilities.

Destiny

         In regard to this strategy, the organization posts positive results. For instance, there is a great sense of belonging and purpose within the organization, and employees as well as shareholders taking part in major decisions. This will create a shared vision that will also be executed through shared values (The American Red Cross, 2014).

Comparison of the Organizational Outcomes using the Two Analysis Methodologies

       From SWOT analysis, it is clear that the American Red Cross has the right resources and capabilities necessary for successful strategic change. The organization can capitalize on its strength to succeed in this pursuit. Strong quality brand is vital in this endeavor. The company is trusted highly by the public and this is important towards realization of the intended objectives of strategic change.

Notably, the weaknesses discussed are likely to pose challenges in this process. The company has the responsibility to identify these weaknesses and convert them to be strengths if predetermined objectives are to be achieved. Appreciative Inquiry analysis points out some of the strengths that are similar to those identified by SWOT analysis.

AI identifies good long history as one of the aspects which will enable the company succeeds with regard to this strategic change. The strategic change is closely linked to the mission of the company, which is to offer quality services, something which is also identified in SWOT analysis.

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Conclusion

        The American Red Cross has gained popularity for its strong quality brand and the nature of services it offers to Americans within and outside the United States. While it is easy to conclude that the organization is doing perfectly well, critical analysis shows otherwise. The nonprofit organization has faced myriad of challenges in the recent past, which has negatively service delivery.

This demands the management to undertake strategic change so as to restore the pride of the company. To achieve the intended results, it is important for the management to employ SWOT analysis and Appreciate Inquiry 4-D analysis to understand some of the aspects that will influence the process.

References

Dolnicar, S. & Lazarevski, K. (2009). Marketing in Non-Profit Organizations: An International Perspective. International Marketing Review, 26(3), 275-291.

McGovern, G.  (2011). The American Red Cross: On the Path to Stability and Growth. Retrieved March 31, 2016 from http://www.redcross.org/images/MEDIA_CustomProductCatalog/m6340469_PresidentialThree-YearReport.pdf

The New York Times (2015). Re-Examining the Red Cross. Retrieved March 31, 2016 from http://www.nytimes.com/2005/12/04/opinion/reexamining-the-red-cross.html?_r=0

The American Red Cross. (2014). About Us. Retrieved from, http://www.redcrossblood.org/about-us

Whitney, D. & Cooperrider, D. (2011). Appreciative Inquiry: A Positive Revolution in Change. New York: ReadHowYouWant.com.

Weerawardena, J. & Mort, G. S. (2012). Competitive Strategy in Socially Entrepreneurial Nonprofit Organizations: Innovation and Differentiation. Journal of Public Policy & Marketing, 31(1), 91-101.

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Knowledge Management Research Paper

Knowledge Management
Knowledge Management

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Knowledge Management

Introduction

Knowledge refers to awareness or a theoretical or practical understanding of someone or something that originates from a combination of data, information, experience, discovery, learning and individual interpretation (Edvardsson, and Durst, 2013). Knowledge can also be defined as the ability of an individual to respond to a body of facts and principles that have been accumulated over a period within his or her environment (Groff and Jones, 2012).

In an organizational viewpoint, knowledge is seen as the total of what is known by the people/employees within an organization. It is the intelligence and ability of the people within the organization. This intelligence and ability are what helps an organization to be more successful regarding achieving the organizational set goals and objectives. Failure to use the peoples’ intelligence and ability in an organization well may be fatal to an organization as far as organizational goals and objectives achievement is a concern.

Knowledge is what makes the difference within organizations. Most of the well-performing organization has useful and relevant knowledge they use to outdo their competitors. As such, this knowledge must be managed to ensure continued performance of an organization as a whole.

Knowledge has lately been recognized as a key factor in an organization. Additionally, knowledge is crucial in production and operation of an organization. It is, therefore, important to manage knowledge within an organizationn. There are different types of knowledge including explicit knowledge, tacit knowledge, embedded knowledge, procedural knowledge, detailed knowledge and so on (Groff and Jones, 2012).

This paper evaluates knowledge management in small businesses. Moreover, the paper will set out by defining what knowledge management is, its significance and purpose with respect to tacit and explicit management. The paper will also examine assumptions made by KMS, and also SMEs definitions.

What is a KMS and what does it do?

Knowledge management is a systematic process of capturing, processing, assessment, sharing, storing, distributing and using of knowledge (Croteau, 2016). It involves the best use of knowledge for achieving organizations set goals and objectives. Knowledge management consists of the initiatives, processes, strategies, and systems that ensure and heighten the creation, improvement, sharing, storage and application of the knowledge (Croteau, 2016).

Knowledge management is based on two main activities. The first activity is about capturing and documenting of all employees knowledge within the organization. With this capturing and recording of such knowledge, the organization can know what kind of assets it has regarding human manpower is a concern. That fact that people drive organizations, it makes it more logical to know what the organization has. It is people within the organization that sets the organization’s goals and objectives. As such, these employees are likely to work hard to achieve their organizational set goals and objectives.

The second activity is about the distribution of the valuable knowledge to all staff around the organization. Dissemination of such knowledge can be done through various means including; on the job training, direct supervising by respective line managers or heads of departments, through one on one talks with employees of an organization, hiring a trainer to come and train the employees and so on. As such, Knowledge management will not only allow the organization to have all the relevant information needed by the organization but also to use such information to organizational benefit.

Knowledge management encourages or focuses more on organizational learning with an aim of achieving the organization’s objectives such as continuous improvement in employee’s performance, acquiring more market share, being more innovative, improved profits, teamwork and togetherness through sharing of information learned or trained and so forth.

Valuable knowledge is very crucial for the success of any organization. As such, the organization that can create and diffuse knowledge to its employees is likely to gain a competitive age against its competitors. Having knowledge employees is great for an organization though it’s difficult to keep such employees within the organization. They may be lost through turnover, competition or even through retirement (Dalkir, 2011).

Knowledge management is closely linked to organizational success. It highlights the importance of managing useful knowledge to an organization. This useful knowledge is the one that will help in the achievement of organizational set goals and objectives.

Knowledge management is also defined as a systematic coordination of organizational resources in a way that can add value to an organization through use, reuse and innovation. These organizational resources include; people within the organization, processes within an organization, technology, organization structure and so on. This coordination is realized through creation, processing, distributing and application of the knowledge.

Knowledge management is the use of organizational brain power in a systematic manner to ensure that an organization gains a competitive age against its competitors, to achieve efficiencies in operations of an organization and to spur innovation within the organization (Groff and Jones, 2012).

Continuous organizational learning is crucial to an organization. People especially of an organization need to keep learning the environment an organization operates in keep changing every time and then. As such, employees ought to keep learning so as to gain more and more knowledge that will help in the achievement of organizational goals and objectives.

Knowledge management helps to keep an organization running at a high and efficient level. As such, organizational goals and objectives are likely to be achieved.

Knowledge management was recognized in the 1980s as a competitive asset to an organization. It was fueled by the development of Information and technology systems which made it simple for creation, storage, display and dissemination of information (Edvardsson, and Durst, 2013). Currently, most organizations have or are trying to adopt to knowledge management systems mostly due to its efficiency.

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What is Knowledge and what is the purpose of managing tacit and explicit knowledge?

Knowledge

Knowledge is different from information as well as data. Individuals absorb information and data in the development of knowledge. With knowledge can easily convert data information Knowledge is the total of what is recognised, resides in intelligence and competency of in individuals. In the recent past, knowledge is considered as production factor; however it is related to labor. This is a clear indication of the connection between knowledge-information-data.

For instance, policy an analyst is requested to establish if changes in policy about marketing of ABC products, in the clothing sector. The analysts begin by assessing the numbers on the ABC sales for the previous three years. The analysts use these numbers and develop a pattern for ABC products demonstrating that they have significantly increased for 3 years, especially after policy changes.                                                                                                            

Such data is converted to information. To get practical descriptions that maximises sales, the analysts looks for further information, speaks with famous clothe retailers and distributers. Upon completion, the analyst and based of the analyst’s understanding, she states that attempts to market local fashion items expanded after policy implementation and positively increased the sales volume. In this case, the analysts used current and new knowledge. User her skills to recognise a certain element. Transforming data to information, while using current knowledge she reached a conclusion. In fact, she produced new knowledge (Hislop, 2013).                          

Knowledge is imperative because it encourages innovation – knowledge management system fosters innovation within an organization. Through sharing of information, employees of an organization can pick relevant information that may help them to develop some new within the organization. Knowledge management encourages the creation of knowledge. As such, new ways of doing things in an organization may be discovered. Knowledge is crucial to decision making since managers can access all relevant information they want for decision making within the organization.

In addition, knowledge, customers’ responses are timely received and may be acted upon quickly. Any organization that can respond to customers’ needs will be loved by its customer, hence more revenues to an organization.  Knowledge helps in staff retention within an organization. This `is done by recognizing of employees’ within an organization. Recognition may be in the form of rewards such as increased salaries or wages.

Again, knowledge improves organization’s revenues. The knowledge management system ensures improved revenues when products and services get to the market faster. Knowledge management system provides the necessary information of what is required at any particular point in time. As such, an organization can easily and quickly respond to customers’ needs well. 

With the adoption of knowledge system, an organization is likely to grow as far as technology is a concern since they can create, process, store, share and access all the relevant information that is beneficial at easy and quick. Consequently, knowledge is driving businesses to extend to other parts of the world. This international expansion is good for any business though it has to be undertaken carefully so as to reap all the benefits of globalization and avoid all the challenges that come with globalization such as management issues or difficulties.

Purpose of Managing Tacit and Explicit Knowledge

Tacit and Explicit Knowledge

People hold divergent forms of tacit and explicit information and employ their information in various ways. Moreover, people use divergent viewpoints to contemplate about anomalies and formulate solutions. Again, research shows that knowledge is disseminated in creative ways.

Tacit knowledge

This is knowledge that comes from common sense, it is automatic, and does not involve thought process. Tacit knowledge is critical when it comes to assisting firms not just in decision making processes but also impacting the corporate culture. In short tacit knowledge is individual, slanted form of information is informal. This type of knowledge is never found in books or written materials.

Mental tacit information integrates implicit mental representation and perspectives that are so entrenched and often never taken seriously.  Perceptive models impact how people conceptualize world events. People can investigate story content and actions and employ useful tacit information in executing work-related functions.

For example, workers of Datafusion Inc, an ICT consulting organisation, capture and shares meeting footages with employees.  This is to say that employees will

Explicit knowledge

Explicit knowledge is largely methodological or academic. Moreover, explicit knowledge is documented in formal prose such as manuals, computational formulas and shared through print media and electronic media among others. Explicit information is technical and involves a level of scholarly information or understanding that is attained through formal education, or structured education.

Explicit information is cautiously codified, stored in a hierarchy of repositories and is accessed with high quality, dependable fast data reclamation structures. Once classified, explicit knowledge assets can be used time and again to solve many comparable forms of issues or unite people with valuable reusable information.

For instance, Ernst & Young have developed an international brain of explicit data to comprise cultural disparities. Their database of best practices with a global reach is anchored on sharing and documenting information. The company’s approach to business issues stems from an array of perceptions.

Regardless of where problems occur, there is no right answer, but several practical methodologies. Ernst & Young see knowledge objects as templates of core insights that can be employed in any cultural setting.

Andersen Consulting for instance, developed ostentatious ways to classify, store and reuse explicit data. With this approach, any client sensitive data is removed while selected information is reprocessed. In short, data is transformed into a verified successful solution that can be employed in a similar industry.

Importance of knowledge management system

What are the assumptions made about KMS (Objective / practice-based)?

There are various assumptions of Knowledge management system. For example, KMS is associated with free circulation of information; it is assumed that information within an organization flows freely from one employee to another the information maybe about products an organization deals with, strategies, and structure. In reality, free flow of information within some organization is not possible. Some organizations have levels in which certain information can flow up to. Organizational information is mostly kept secretly and only shared with some few senior employees of an organization source

When it comes to knowledge sharing between employees – it is assumed that all employees of an organization trust each other and as such, they freely share whatever kind of information they have. In reality, particularly, where employees try to outdo each other in term of their performance and rewards. Source

There is the aspect of efficient research and retrieval system, which is assumed that all staff or employees of an organization can easily and efficiently search and retrieve all relevant information they need to help them perform their respective duties well. The reality may be different depending on an organization. Some organizations do not have efficient systems that can allow employees to search and retrieve information without difficulties.

Easy combination of different sources of information under KMS it is assumed that all employees of an organization can combine various sources of information and use that information for the better of an organization. This may not be true to some organization. Some organizations have departments or units in which employees are confined. As such, employees are restricted to what kind of information they can access depending on their respective departments or units. Source

With regards to employees’ abilities or competences information is easily accessible its assumed that all information about all employees abilities or competences within an organization is readily available in electronic form, and it can easily be accessible by anyone within an organization. In reality, some firms do not have such employees’ information on electronic yellow pages where everyone can access. Furthermore, some employees are not comfortable to have all their information available and accessible to anyone else apart from the ones they want them to get access to such personal information (Aggestam, 2015).

Owing to the fact that employees are experts in the particular area and can easily educate other employees, however in KMS; it is assumed that employees of an organization are experts in the certain field of their work and can quickly train and support other staff. This may not be true to some organization. Some employees may not be will to share their knowledge with each other for free. Unless some incentives are attached to information sharing within an organization, it will be difficult to for some employees to open up and share information with their colleagues.

It is widely acknowledged that project teams have virtual project offices, but under KMS, it is assumed that project teams have special virtual project rooms where all information and correspondence with internal and external customers is collected there. In reality, some organizations do not have such teams and rooms where such information and communication can be collected. Source

Bonus schemes are widely used in companies; nevertheless, it is assumed that most organizations have bonus schemes that are created to activate further knowledge sharing or flow with an organization. In reality, most organization do not have such bonus schemes to encourage employees to share and allow flow of information within the organization.

How do you define a small to medium enterprise (startup?)

Small and medium-sized enterprises (SMEs) are independent firms that employ fewer numbers of employees or workers. They are non-subsidiary firms. Small and medium-sized enterprises are those firms with fewer than 50 workers or employees, but this number of employees or workers may vary across countries all over the world (Hislop, 2013).

What is the Knowledge Economy and what does it have to do with SMEs?

Most of the small and medium-sized enterprises face several problems in their operations. Such problems include lack of enough capital, less marketing competition from large organizations, lack of quality operational knowledge (Croteau, 2016).

Some of these problems hinder Small and medium-sized enterprises to successful compete with other firms. It is, therefore, important for Small and medium-sized enterprises to adopt knowledge management system to help them improve their competitiveness. A good understanding and use of knowledge is an important boost to firms’ competitiveness. 

Knowledge management system aims at improvement of firms, profits. As such, Small and medium-sized enterprises should adopt it. Small and medium-sized enterprises will benefit since knowledge management ensures effective communication within the firm and knowledge sharing which is very critical to any firm’s success or failure (Hislop, 2013).

Small and medium-sized enterprises should aim at improving their competitiveness so as to be able to survive in this tough market. With the adaptation of knowledge management system, Small and medium-sized enterprises will definitely improve their competitiveness hence a high chance of becoming large organizations.

Why would SMEs want to have KMS (eCommerce)?

Small and medium-sized enterprises want to have knowledge management system so as to; Increase revenues – since knowledge management systems enhance business revenues through getting products and services to the market faster, small and medium-sized enterprises desire to make more revenues so as to expand will drive them to knowledge management system use (Dalkir ,2011).

Knowledge management encourages innovation – knowledge management system fosters innovation within an organization. As such, small and medium – sized enterprises also desire to be more innovative so as to acquire a competitive age to help them grow to large organizations.

Improved customer services – knowledge management system ensures improved client services. As such, small and medium – sized enterprises will also desire to satisfy their customers. Satisfied customers are likely to remain loyal to an organization. With loyal customers’, small and medium – sized enterprises are more guaranteed to grow or develop to large organizations.

Discuss key challenges to the implementation of KMS in SMEs.

Implementation of knowledge management system in SMEs is hindered by various challenges. For instance, SMEs considerably rely on technology – knowledge management system relay more on technology. Therefore, a failure in technology may have a negative effect on the operation as well as the profits of an organization. It’s worth noting that knowledge management system is a technology-driven system. As such, it’s intricate to distinguish knowledge management system and technology.

Moreover, it is difficult to get employees to effectively use information – availing information to employees is not enough. Getting employees to effectively and efficiently use available information is more critical. Some people take the time to get interested in some information. As such, knowledge management system implementation in SMEs may take time for it to be accepted and put in effective and efficient use.

Constraints of information circulation among employees are somehow difficult in SMEs particularly when such information is likely to empower another employee to become more relevant and competitive within an organization. Employees do compete for promotions in some organization. As such, it will be very difficult for an employee to share with other (Aggestam, 2015).

Another challengelle is the unwillingness of information sharing amongst employees’ of an organization – it is a great deal to get an employee to share whatever information he or she has free of charge. Therefore, implementation of knowledge management system may not be possible for some SMEs.

References

Aggestam, L. (2015). Learning Organization or Knowledge Management–Which Came First, The Chicken or the Egg? Information technology and control, 35(3).

Borchardt, U. (2012, January). Selecting KMS for SME-A Need for Value-Orientation. In Workshops on Business Informatics Research (pp. 26-37). Springer Berlin Heidelberg.

Croteau, J. (2016). Knowledge Management Best Practices.

Dalkir, K. (2011). Knowledge management in theory and practice (2nd Edition). Cambridge, MA: MIT Press.

Edvardsson, I. R., & Durst, S. (2013). The benefits of knowledge management in small and medium-sized enterprises. Procedia-Social and Behavioral Sciences, 81, 351-354.

Groff, T., & Jones, T. (2012). Introduction to knowledge management. Routledge.

Hislop, D. (2013). Knowledge management in organizations: A critical introduction. Oxford University Press.

Holtshouse, D. K. (2013). Information technology for knowledge management. U. M. Borghoff, & R. Pareschi (Eds.). Springer Science & Business Media.

Jung, J. J. (2013). Semantic wiki-based knowledge management system by interleaving ontology mapping tool. International Journal of Software Engineering and Knowledge Engineering, 23(01), 51-63.

Lin, Y. C., & Lee, H. Y. (2012). Developing project communities of practice-based knowledge management system in construction. Automation in Construction, 22,         422-     432.

Matayong, S., & Kamil Mahmood, A. (2013). The review of approaches to knowledge management system studies. Journal of Knowledge Management, 17(3), 472-490.

Montequín, V. R., Fernández, F. O., Cabal, V. A.,& Gutierrez, N. R. (2006). An   integrated framework for intellectual capital measurement and knowledge management implementation in small and medium-sized enterprises. Journal of Information Science, 32(6), 525-538.

Natek, S., & Zwilling, M. (2014). Student data mining solution–knowledge management system related to higher education institutions. Expert systems with applications, 41(14), 6400-6407.

Powell, W. W., & Snellman, K. (2004). The knowledge economy. Annual review of  sociology, 199-220.

Premkumar, V., Krishnamurty, S., Wileden, J. C., & Grosse, I. R. (2014). A semantic knowledge management system for laminated composites. Advanced engineering informatics, 28(1), 91-101.

Rehman, M., Mahmood, A. K., K Sugathan, S., & Amin, A. (2009). Implementation of Knowledge Management in Small and Medium Enterprises–Malaysian Perspective.

Wang, S., Noe, R. A., & Wang, Z. M. (2014). Motivating knowledge sharing in knowledge management systems a quasi–field experiment. Journal of Management, 40(4), 978-1009.

Wiig, K. (2012). People-focused knowledge management. Routledge.

Zaim, S., Bayyurt, N., Tarim, M., Zaim, H., & Guc, Y. (2013). System dynamics modeling of a knowledge management process: A case study in Turkish Airlines. Procedia-Social and Behavioral Sciences, 99, 545-552.

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Non-financial Rewards effect on Organizational strategy

Non-financial Rewards
Non-financial Rewards

Non-financial Rewards effect on Organizational strategy

IMPLICATIONS OF NON-FINANCIAL REWARDS ON DRIVING ORGANIZATIONAL STRATEGY AT THE COMMUNICATIONS AUTHORITY OF KENYA (CAK)

ABSTRACT

A major challenge in an organization is motivating its employees to become efficient with their tasks and how to encourage the workforce to become competitive in an inevitably uncertain and dynamic environment.  Thus, to uphold a higher level of productivity, the organization must run an effective strategy to motivate its employees. For this reason, there are managers in several organizations who see a reward system as an imperative factor that can influence its employee’s behavior.

These involve intrinsic and extrinsic motivation. Intrinsic motivation is driven by a natural sense of accomplishment; such as professional growth and personal achievement. Extrinsic motivation, on the other hand, is a tangible reward; and unlike an intrinsic reward system, the extrinsic reward can be identified as materials that can motivate its employees, such as salary and bonuses.

The objective of this study is to evaluate the impact of non-financial rewards on driving organizational strategy at the Communications Authority of Kenya (CA). Moreover, this study assumes that the use of non-financial rewards can retain employees in the organization.

1.1 Background of the Problem

The core objective of any business enterprise is to generate consistent and sustainable profits. All the internal functions must be aligned with this objective. Human resource management plays a critical role in harnessing skills and expertise needed to convert resources to finished goods and services.

The managers recruit and train the employees so that they meet individual and organizational goals for optimal performance. Doing so requires the application of strategies that keep the employees motivated to perform. Lack of motivation is detrimental to a firm since it leads to stagnation in performance and it’s the cause of high turnover rates.

As such, a Human Resource Management (HRM) department is mandated to ensure that a firm’s production capacity is optimal to ensure that performance is high by designing and implementing strategic human resource approaches. One of the main strategies that human resource managers can apply is a reward system (Irshad 2016). 

Zani et al. (2011) asserted that most of the successful public enterprises achieve better results and an increase in employee engagement by associating rewards directly to job performance. The strategy is not only applicable to sales personnel but to all levels and functions of a business. However, success of the reward system is guaranteed if proper implementation is observed.

Instituting a reward-based organizational culture may seem to be a short-term vision, but most successful managers claim that it’s an impeccable instrument for attaining success. A reward system unlocks employee capability, retains and motivates performers, and consequently generates higher revenues (Zani et al. 2011). Other benefits associated with a reward system include clear alignment of employee’s career path, a focus on development and growth, an increase in employee engagement and strategic decision making, and low turnover.

According to a research done by Giga Information Group on the impact of reward system to job performance, the researchers found out that retention improves by 27% when a firm exercises a reward system culture (Richard, 2010).

Like all strategic initiatives, a reward-based performance system requires comprehensive planning and flexibility. It should also integrate with HRM, the goal of the firm, and performance measurement. Since there hasn’t been identified a customized approach, managers should tailor the reward system to the current HRM processes and uniqueness of the firm. The approach is not just about setting up a framework and workers acting upon it.

Emotional and psychological realities have to be set up by asking the right questions and linking them to the human side of the incentives. While some employees are motivated by financial rewards, others get motivated through non-financial rewards (Lawler 2011).

According to Mowday et. al. (2013), some important questions that HRM should ask before deciding to apply a reward system is: “Are the tasks that people are taking moving the organization forward? Are the managers engaged with the employees throughout the year to make sure they carry out, and, achieve their objectives? Are individuals delivering against what is expected? Who is and who isn’t?

Are you objectively ensuring that bonuses, salary increases, and promotions are given to those high-performing individuals that you can’t afford losing?” These questions are paramount as they enable the managers to design a program that fits the needs of the firm; either a financial or non-financial reward system. Moreover, the employees should have full trust with the management in fairly administering the scheme and possess the needed skills and abilities to improve performance.

A reward system is in the form of financial or non-financial incentives. Financial incentives lead to extrinsic motivation whereas non-financial incentives generate an intrinsic motivation. It is crucial for managers to understand the difference between the two reward systems to determine the one that suits an organization. A financial reward system is tangible and usually involves the practice of provision of bonuses, commissions, and other monetary incentives to appraise employees for a job well done. The rewards are also given when an employee attains a certain target (Karwowski, 2014).

Economic volatility has seen many firms try to find ways to supplement financial rewards by concentrating on the non-financial rewards. Richard (2010) defined nonfinancial rewards as those not consisting of an employee’s salary. Often, workers tend to feel unappreciated by their firms due to layoffs, stressful working conditions, and increasing demands leading to their disengagement.

Employees can perform optimally if they feel valued, appreciated, plus a sense of job security. As such, non-financial incentives are programs that address these needs. The common non-financial incentives are reward, recognition, provision of career advancement opportunities, job security, and flexibility. The perceived importance of non-financial rewards differs across employee levels and it’s up to the HRM to establish what is appealing to the different groups.

For example, a fast growing firm may focus on work environment but a slow growing firm can focus on career growth and development. Investing in employees by appreciating them in diverse creative ways is a critical strategic approach that managers can apply in instituting a non-financial reward system. It is for this reason that non-financial reward system formed the basis of the study by focusing on the Communications Authority of Kenya (CA).

Just like other large organizations, CA faces the challenge of maintaining the motivation and productivity of its employees as it tries to upgrade its performance. The organization has previously applied both the financial and non-financial rewards. It therefore drives the question of the implications that non-financial rewards have had in facilitating the implementation of the firm’s strategic goals.

1.2 Statement of the Problem

The challenge of most organizations is establishment of an efficient rewards systems aimed driving the strategy of the firm. One of the affected firms is Communications Authority of Kenya (CA). According to Murray et al. (2014), it is imperative for managers to keep track of the needs of employees to match the expectations of the organization towards productivity.

Most employees tend to underpin the impact of non-tangible rewards and seek satisfaction in tangible or extrinsic rewards. Thus, firms should involve employees in creating nonfinancial incentives, and ensure they understand each employee level and expectations for better results. According to a study done by Zani et al. (2011), the results stipulated that non-financial rewards such as recognition, praise, and kudos from the employers or the organization had a greater impact on the employee’s behavior and motivation towards their jobs.

Moreover, according to Westover & Taylor (2010), intrinsic rewards provide a clear view towards job satisfaction. Within their study, they had a wave of respondents towards non-financial rewards related to job satisfaction. In that case, it was determined that non-financial rewards have a greater value than providing tangible rewards to the employees.

However, the context of wages and bonuses is an important factor for employees and can continue to function within the organization. In the case of a research by Griffin and Moorehed (2014), the author asserted that financial rewards initially had greater impact onspecific employees. However, as the programs continue over a long period of time, managers should combine financial and nonfinancial rewards since they equally affect the employees’ behavior which in turn reduces employee turnover.

To simplify the result, both equities are important when done in complimentary proportions. This study emphasized on the impacts of non-financial rewards in driving performance in an organization. This is in order to understand how to retain skilled employees and subsequently sustain a successful work-related culture and organization without the use of monetary incentives.

The Communications Authority in Kenya (CA) had recognized both rewards system; however, sustaininga motivated and skilled employee had been their utmost dilemma, attaining minimal improvement in employee production and rate. This study seeks to address the gap that will be filled in the firm, and other related entreprises, if non-financial rewards are to be implemented in driving the strategies of the organization.

Moreover, this study also gives room to address criticisms and oppositions that may arise if non-financial rewards are introduced in different departments within the Communication Authority of Kenya. Furthermore, this study seeks to determine the employees’ flexibility towards a different form of rewards rather than aiming for tangible rewards.

References

Armstrong, M., Brown, D., & Reilly, P. (2011). Increasing the effectiveness of reward management: an evidence‐based approach. Employee Relations, 33(2), 106-120. http://dx.doi.org/10.1108/01425451111096668

Armstrong, M. & Taylor, S. (2014). Armstrong’s handbook of human resource management practice, 13th edition (1st ed.). London: Kogan Page.

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