Organizational performance Essay
Today’s society is diverse and rapidly changing and it is the organisation’s ability to adapt or be in fit with the external environment that will determine its overall performance. Ethical issues arise throughout all organisations daily activities but it is the continual debate about what is right or wrong that will shape ethical decision making now and for generations to come.
This essay aims to investigate culture within the internal environment and how culture plays a role in an organisation’s ability to fit in with the environment. According to (Samson and Daft, 2003:80) the internal environment is “composed of present employees, management and business culture”. This essay will investigate how culture plays a role in the organisations overall success.
In addressing the issue it will be shown how the external environment has changed in terms of how organisations are evaluated. How changing an organisation’s culture can help the organisation be in fit with the external environment and how the success of changing culture may depend on the level of employee moral development. It is argued that the organisation’s performance depends on a fit between the organisation and its external environment.
Key point 1: How the external environment has changed in terms of how organisations are evaluated.
The external environment has changed with respect to how organisations are evaluated today. According to ( Samson and Daft, 2003:79) the external environment is “all elements existing outside the organisation’s limitations that have the possibility to affect the organisation”. Companies around the world have started to realise that investors are not concerned exclusively with financial performance (Tschopp, 2003). The days of companies being evaluated on their financial performance are gone and companies are now finding that they are being evaluated on a more overall perspective.
Increasing the ethical obligations can help an organisation when adapting to the external environment. According to ( Samson and Daft, 2003:147) ethics is ” the code of honourable principles and standards that governs the behaviours of an individual or group with respect to what is correct or incorrect.” If ethics is incorporated as part of the organisation this can lead to improvements in the workplace and towards society. The triple bottom line approach has been introduced as a way of achieving overall success both internally and externally throughout the organisation.
Triple bottom line entails reporting on economic, social, and environmental issues. Corporate success should be considered not just by the traditional financial bottom line, but also by its social/ethical and environmental performance ( Samson and Daft, 2003). Triple bottom line has not only put the emphasis on managers to not only make a profit but to also consider the surrounding external environment that they could be affecting. Businesses now report annually on social and environmental performance as well as their financial performance because they know it provides a more complete measure of long-term value creation and strategic opportunity (Tuchman. J, 2004).
Key Point 2: Organisations need to change to fit. They can do this by changing an organisation’s culture to fit in with the external environment.
The external environment has altered and it’s the organisation’s ability to change to keep in touch with the external environment that determines its performance. One way an organisation can change to keep in contact with the environment is by altering it’s culture.
According to (Samson and Daft. 2003: 94) culture is “the knowledge, beliefs, values, behaviours and ways of viewing shared among members of a society”. Organisational culture has been defined, in very simple but intuitive words, as “the way we do things around here” (Domenec, 2003). The notion that we can make others do what we want them to do by persuading them to want to do it is one that has a long pedigree. This notion became formalised as an integrative view of organisation culture and became more ingrained after the publishing of the book In Search of Excellence in 1982 (Thomas J. Peters and Robert H. Waterman, Jr., 1982)
Moving towards greater corporate responsibility may require culture change or at least cultural re-enforcement. The fundamental values that exemplify cultures at these and other organisations can be understood through the noticeable manifestations of symbols, stories, heroes, slogans and ceremonies. Any organisation’s culture can be interpreted by observing these factors (Samson and Daft, 2003:95).
By incorporating symbols, stories, heroes, slogans and ceremonies into an organisation’s culture they will be able to adapt to the changing external environment. According to (Samson and Daft, 2003:97) slogan is ” a phrase or sentence that succinctly expresses a key corporate value”. Hungry Jacks for example has the slogan ” The burgers are better at Hungry Jacks”. They have incorporated this slogan as part of their culture to try and separate them from the other competitors.
By incorporating the different types of culture into and organisation, may change the way managers and employees think to incorporate social and natural environmental responsibilities into the workforce.
Key Point 3: The success of changing culture may depend on the level of employee ethical development.
The success of changing culture can depend on numerous factors but the level of employee ethical development plays a role. The three levels of personal moral development could pose a problem for employee ethical development.
The theory developed by Kohlberg goes through the different stages of employee development from pre-conventional to post conventional. Starting at the pre-conventional level which focuses on right vs. wrong and the behaviour is on one’s self to the conventional level which focuses on the group rather then one’s self. Then lastly Kohlberg’s post-conventional level of individual development which focuses on abstract and self-chosen principles (Arnold and Lampe, 1999).
Kohlberg’s theory brings attention to the fact that if employees are going in different directions it can hinder the success of an organisation. If there are employees who are focusing on what is right vs. wrong and other employees who are following self chosen principles even though they know people hold different views. In this sense, the greatest danger to modern organisations is the betrayal of “ambitious, selfish, untrustworthy people who care more for their own progression than the mission of the organisation” (Domenec, 2003). Since each person is unique, each one can focus on personal accomplishment in very different ways (Domenec, 2003).
This essay investigated culture within the internal environment and how culture plays a role in an organisation’s ability to fit in with the environment. In support of this argument there has been evidence supported to show how organisations incorporate culture to be in fit with the changes of external environment. Organisations are finding that they are being evaluated not only on their financial status but also their social and environmental performance. This has meant that organisations have had to change their culture to compensate in the change in evaluation.
An organisation culture can be observed through such factors as slogans and symbols which now have to coincide with the external environment. The success of the changing culture can depend on the level of employee ethical development and at what stage everyone is at. If an organisation is united and following the same path or views they may find greater overall success. Views that link an organisation’s culture with its performance seek to shape managers and employees understandings in a common and coherent direction (Kolter and Keskett, 1992).
1. Samson, D., & Daft, R.L. (2003) Management: Pacific rim edition. Victoria: Thomson.
2. Thomas J. Peters and Robert H. Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies (New York: Warner Books, 1982),
3. Tuchman, J. 2004, Big Owners Balance Triple Bottom Line [online], Available from URL: http://www.enr.com/news/bizlabor/archives/040809-1.asp