Organizational Culture

Today, we began our discussion not with any extraordinary tools or toys but on the basis of an extraordinary story of the Alibaba Group.

AliBaba Group is a privately owned China-based family of Internet-based eCommerce businesses that cover business-to-business online marketplaces, retail and payment platforms, shopping search engine and data-centric cloud computing services.

It started with the vision of its founder, Jack Ma, that :

(a) Empower SMEs through the power of the internet.

(b) At least 80% of these SMEs who are working with AliBaba MUST grow unimaginably.

(c) 0.0001% of the shares of AliBaba must be enough to support generations together.

Today AliBaba's consumer-to-consumer portal Taobao (similar to eBay) features nearly a billion products and is one of the 20 most-visited websites globally. Alibaba Group's sites account for over 60% of the parcels delivered in China.

And why was this so?

It was made possible due to the exceptional culture embedded in the fibre of the organization.

So, one asks, what is organizational culture?

Organizations, just like individuals, have their own personalities—more typically known as organizational cultures. Understanding how culture is created, communicated, and changed will help you to be a more effective manager. But first, let’s define organizational culture.   

Organizational Culture encompass the values and behaviours that contribute to the unique social and psychological environment of an organization.

Organizational culture includes an organization's expectations, experiences, philosophy, and values that hold it together. It is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written (sometimes) and unwritten rules that have been developed over time and are considered valid.   

There are various types of organizational cultures. We discussed a few of them in class. I am listing them below:

1. Open Culture - One where employees are motivated to voice their values-driven concerns regarding problematic business practices. An open culture helps to counteract any occasional lapse into passivity at the board level or on the part of institutional investors.

2. Safety Culture - One where safety is  ALWAYS first no matter what the cost. A safety culture is one were all employees are proactive in ensuring safety at work place. People immediately report any perceived short comings in the work place safety and in the safety of products given to customers or clients.

3. Quality Culture - A culture where utmost importance is given to the quality of the product or service being rendered. Volume takes a back seat. So does cost. Batch recalling of cars/computers when defects are found is a good example of the quality culture. Toyota is a notable example.

4. Performance Culture - We could also call this OUTCOME ORIENTED CULTURE.  This is one that emphasize achievement, results, and action as important values. A good example of an outcome-oriented culture may be the electronics retailer Best Buy. Having a culture emphasizing sales performance, Best Buy tallies revenues and other relevant figures daily by department. Employees are trained and mentored to sell company products effectively, and they learn how much money their department made every day.

5. Ethical Culture - A culture where great importance is given to ethical business practices and this importance is seen at all levels in the organization. We see that in such organizations, ethics are given precedence even if being so may lead to a loss of business and profit. The TATA Group is a good example to note.

The culture of organizations is usually inferred and remains invisible, much different from rules, which are explicit. It is not enforced as a rule but is much more powerful than rules in many cases.     

    

In creating organizations, you must have an understanding of both the rules and the culture. Being appreciative of both these parameters would help you guide yourselves and others through the organizations channels, which is what makes you a good manager. 

This was the most important takeaway from today’s lecture.