Question 2 – Changing Dysfunctional Culture
“Culture is the set of values, norms, guiding beliefs, and understandings that is shared by members of an organization and is taught to new members” (Daft & Armstrong, 2015, p. 332). If left alone, a culture eventually becomes dysfunctional (Allen, 1980). Human fear, insecurity, suspicion, oversensitivity, and dependency seem to take over unless a concerted effort to establish a healthy, adaptive culture is undertaken (Schaef and Fassel, 1988). If an organization’s culture is dysfunctional, there are several strategies that could be used to change that culture. I feel that the most important strategy would be changing the culture of the company itself to become more adaptive.
An adaptability culture “is characterized by strategic focus on the external environment through flexibility and change to meet customer needs” (Daft & Armstrong, 2015, p. 337). Most successful companies don't end up the way they began. They usually tend to grow over a period. Business success is a process of trial and error, learning and adapting. It's no coincidence that human development and the scientific method work pretty much the same way. A flexible organizational structure and the rise of delegation will help in increasing adaptability.
According to a study that examined several high-technology firms, reputed authors come to a consensus that firms who were characterized by higher intensity adaptability performed better three years later than those firms that were characterized by lower adaptability intensity (Caldwell, O’Reilly and Doerr, 2014). This study further portrays the importance of adaptability and how crucial it is for corporations to indulge in, in order to maintain a competitive advantage over its rivals.
To encourage an adaptive culture in the workplace, it’s important that senior level employees like a CEO or director enforce adaptability. Many a times, senior level employees are hesitant towards change and I feel that this can be solved by hiring a CEO or senior level employee from outside the company, and from people who are not directly homegrown. Although this can involve a certain amount of risk, in terms of a drastic change in a corporation, it’s usually worth it. We live in a time when most corporations routinely change their senior level employees, it has worked out in favor for many multinationals and corporations.
After incorporating an adaptive culture in terms of strategy, I feel that a company would need to work on its formal structure and control imposed on employees. Being primarily horizontal with both mechanistic and organic components, will help change the company’s dysfunctional culture.
A mechanistic structure is “when the external environment was stable, the internal organization was characterized by rules, procedures, and a clear hierarchy of authority” where as an organic is one where “rules and regulations are often not written down and decision-making authority is decentralized” (Daft & Armstrong, 2015, p. 156).
While structure would typically tend to be based upon the type of business, I feel that a hybrid model would work wonders in a dysfunctional workplace. This is because a combination of a mechanistic as well as an organic structure will not only establish a well-defined hierarchy, but provide the freedom required to quickly adapt to a dynamic environment.
Social forces are transforming our groups. Cultural norms develop, teaching us what is expected, supported, and accepted by the people we live and work with. These norms exert powerful pressure, causing us to behave in ways that often-run counter to our real wishes and goals (Allen, 1980: pp. 31-32). This is one of the main reasons why I think adaptiveness is not only determined by visible features like ceremonies, stories, slogans, etc. but also, it’s set of underlying values, beliefs, attitudes, feelings, etc.
Successful companies and their cultures are built on a common crucial pillar which is adaptability. As I mentioned in the start of this answer, adaptability comes along with the need to deal with uncertainty and ambiguity.
Therefore, in order to change an organization’s dysfunctional culture, I would recommend starting straight with the culture itself and slowly making the general culture of the business more adaptive. I would also try introducing a more decentralized structure, so the employees can take part in effective two-way communication, and the sharing of ideas would not only fasten up the decision-making process in the organization, but the delegation would also help keep the employees motivated, reducing the chances of a dysfunctional culture.
If the company was to implement an adaptive culture as a strategy to tackle their dysfunctional culture, I feel that they would be able to benefit from several different positive outcomes. The most obvious one being better productivity. Employees who understand their workplace culture will be more committed in being productive. Another positive outcome I anticipate would be a better brand image. A company’s culture is part of the brand that they create and if they have a strong adaptive culture, their brand name would increase, making them more popular amongst their rivals, which in turn could increase their sales and revenue.
In terms of a structure, I feel that a mix between a mechanistic and organic structure (mainly organic) would allow for a free flow of information. Top level management and subordinates would easily be able to communicate with each other. Lastly, this structure would also for a wide span of control meaning that employees will work independently for the completion of their jobs. They won’t need close supervision which could help eliminate supervision costs.
Question 4 – Objects and Physical Representations at Starbucks
The objects and physical representations that I will use to understand the organization’s culture will be based on Starbucks. Apart from the fact that I’ve worked at Starbucks, it’s also one of the biggest franchises in the world. “To identify and interpret culture requires that people make inferences based on observable artifacts” (Daft & Armstrong, 2015, p. 334). At my time at Starbucks, I noticed several artifacts within the business which gave me a first-hand taste of its culture.
I’d like to start by talking about rites and ceremonies at Starbucks. “The elaborate, planned activities that make up a special event and are often conducted for the benefit of an audience” (Daft & Armstrong, 2015, p. 334). When I started working at Starbucks, they gave me a normal apron, which they give most new recruits. Although I found out that some of my co-workers had their names embroidered on their apron. When I asked them why their name was embroidered, they explained that Starbucks holds a ceremony, every three months, in which the manager gets all the employees aprons embroidered with their names, only catch being that your days off for whatever reasons weren’t counted in the three-month process.
Now while this may not appear like a big deal, I actually started looking forward to work every day and made up my mind to at least work for three months to get my name embroidered on the apron as well. While this ceremony does might not appear significant to the outsider, I was really overjoyed at the fact that Starbucks goes out of their way to make their employees feel special. Even though I didn’t get my embroidered name at the start, I felt part of the team from day one and never took any days off.
For the next object, I’d like to talk about a ritual at Starbucks which is performed on every recruit, regardless of the region. Rituals are a form of social enactment that portray cultural values and beliefs within events or occasions (Islam and Zyphur, 2009, p. 372). rituals reinforce organizational culture, infuse meaning into business activities and create stronger business relationships (Cabral-Cardosa and Pina e Cunha 2003, p. 120).
The ritual that I want to elaborate on is coffee tasting. The first thing I was made to do when I joined Starbucks was to undertake a coffee tasting of the store manager’s favorite coffee. Right off the bat, this demonstrated the store manager’s passion for coffee, and thus displays the desired behavior expected of me.
These values are driven home by the company’s training modules. Over several weeks, I was required to taste and document my reactions to all the coffee blends that we offered. I was also taken through the economics of coffee: the challenges faced by coffee-growing communities; coffee’s place as one of the world’s most traded commodities; and how Starbucks’ fair-trade practices make a difference to those communities.
I chose this particular ritual because taking up a class of Fair Trade at UFV, I fully understand the importance of moral purchasing and was proud to know that I worked for a corporation that cares about people and the environment.
Next up, I would like to talk about a very important Starbucks symbol. A Symbol “is another tool for interpreting culture” (Daft & Armstrong, 2015, p. 335). The symbol that I want to talk about is the controversial Starbucks logo. While a lot of people think the Starbucks logo is a mermaid or a siren, it’s neither. In fact, it’s a combination of both.
The fact that the combination of a mermaid and siren makes a lot of people on the internet think it’s satanic. The most popular conspiracy theory is that it is a symbol of the Illuminati. The main idea is that the Illuminati are placing satanic symbols all over the world. Every time you grab a cup of Starbucks coffee you are actually being brainwashed by their secret symbolism.
This is actually huge and there’s hundreds of thousands of pages on the internet in the form of reddit posts and discussion forums that explain the origin of the Starbucks symbol and how it’s connected with the Illuminati. While this might seem like a reach to the educated person, I feel that it’s negative advertising for Starbucks and could slowly but surely affect its brand name and brand image.
The last cultural signifier that I would like to talk about goes back to the aprons. While most people think the Starbucks aprons are always green, that’s wrong because the aprons have several different colors and hidden codes. Although yes, most employees wear the green, which has become the signature color, there are also black, orange, red, or even purple aprons which are rare but still present. Any employee can wear the green Starbucks apron, but employees who have served in the military also have the option of getting their aprons embroidered with an American flag. If you're a deaf barista, the company will embroider the word "Starbucks" in sign language on the fabric.
I feel that the ceremonies, rituals and traditions at Starbucks exemplify the amazing work culture at Starbucks. They definitely have employees more engaged with the company which directly helps in shaping the company’s values and strengthening its organizational culture.
Question 5 – Differences in the Rational, Carnegie and Garbage Can models of Decision Making
Organizational decision making “is formally defined as the process of identifying and solving problems” (Daft & Armstrong, 2015, p. 411). The decision-making process has two major stages, the first one in which the problem is identified and the second stage in which solutions for the problems are generated. With that being said, there are several different models posed by individual decision making and I’ll be comparing and contrasting the Rational, Carnegie, and Garbage can model.
The first decision making model is the rational approach. Much like its name suggests, “the rational approach to individual decision-making stresses the need for systematic analysis of a problem followed by choice and implementation in a logical, step-by-step sequence” (Daft & Armstrong, 2015, p. 412-413). The Carnegie model on the other hand introduces a set of more realistic assumptions with regards to the decision-making process. This involves three distinct steps which involve satisficing, problematic search and coalitions (Daft & Armstrong, 2015, p. 423-424).
I find that the most obvious difference between the Rational and Carnegie model is that the decision making is costless in the rational approach versus it being costly in the Carnegie model. There is also a lot of information available in the rational approach versus limited information in the Carnegie model.
What really makes me prefer the Rational model over the Carnegie model is the fact that there is a long list of alternatives that are generated versus a limited range of alternatives in the Carnegie model. Another advantage in favor of the Rational model is the fact that the best solution is chosen for the organization contrary to a solution which is satisficing for the organization. Satisficing means “organizations accept satisfactory rather than a maximum level of performance, enabling them to achieve several goals simultaneously” (Daft & Armstrong, 2015, p. 424).
The Garbage Can model describes decision making in highly ambiguous settings, also known as ‘organized anarchies’. The ambiguity surfaces in 3 principal ways:
1. Problematic Preferences: which takes places amongst decision makers.
2. Unclear Technology: People have a loose understanding of means and ends.
3. Fluid Participation: involvement of participants depends on their energy, interest and other demands of time.
According to (Eisenhardt, K. M. and Zbaracki, M. J. 1992), Garbage Can Model Streams:
• Decisions depends strongly on timing and luck
• Decisions are fuzzy and are not the result of analysis
• Individuals are not sure about what they want and change their mind often.
I feel that one of the major problems with the Garbage Can model is that the process of coalition has several implications for organizational decision behavior. These are not necessarily the best solution as because unlike the rational model, decisions are made to satisfy rather than to optimize solutions. Similar to the Carnegie model, in the Garbage can model, managers are concerned with immediate problems and short-run solutions. Managers don’t expect a perfect solution and would go with an immediate remedy, which is similar to Satisficing from the Carnegie model.
A decision-making model which I can relate to would be the Carnegie and the Rational models respectively. I’m taking up five courses at the University of the Fraser Valley this semester and in one of my business electives, we were put into groups of four people based on random selection and couldn’t change groups for the rest of the semester.
For the first half of the semester, coming from different majors and cultures, none of us really bonded. This is one of the main reasons why none of us individually maximized our performance in the group and mainly just stuck to Satisficing. I can’t speak for my group, but I would personally just incorporate a Problematic Search as I would always look for an immediate solution for a problem instead of sitting down with my group and talking about the best possible solution.
The fact that we operated like the Carnegie Model was no good as our group wasn’t really getting good results on the bi-monthly group presentations and I knew we had to switch things up if I wanted to end the rest of the course and semester on a good note. This is when I took time off a day and created a Facebook group, and invited the other three members of my team to the group.
While it did take some time for my team members to start talking about our problem, we all wanted to do better and eventually came up with a step-by-step game plan on what we would be changing in order to do better as a group. While our first group meeting took place virtually, I knew that it was a start and at least now we had a game plan to try and tackle the rest of the presentations. Due to the fact that most of us worked part time, took up different courses at UFV, and lived in different cities, we just met once throughout the semester but the fact that we rationally started to state our opinions over a virtual group conference helped us drastically improve our grades in the latter part of the semester.
Question 8 – Some organizations are “Too Big to Fail”
The size of an organization directly relates to its structure and control. “Organization size is a contextual variable that influences organizational design and functioning in the same way as the contextual variables” (Daft & Armstrong, 2015, p. 293). After doing some research on the internet, I found out that the concept of “Too Big to Fail” is mainly associated with banks and hence my answer will mainly revolve around banks.
“A bank is deemed to be Too Big to Fail if the bank has implicit government guarantee during a crisis” (Ivanof, 2017, p. 63). While saving a bank was never intended to be a government’s objective, it has become a reality for many governments in North America and across the globe, mainly due to the sheer size of the bank and the amount of interdependence it’s stakeholders have with the bank.
I feel that being too big to fail is definitely not a good thing because failure of one large, complex financial institution could bring down others and threaten the broader financial system. While the complexity of a large bank enables the opportunity of creating many jobs, the fact that only a few of them have the resources and backing to constantly develop makes them operate like monopolies.
In a mixed market economy like Canada, there are already multiple government run monopolies like BC Hydro, ICBC, etc. which might appear to be good because the services are standardized but it’s bad for consumers and entrepreneurs. It’s bad for consumers because they don’t have a variety of options to choose from, and it’s bad for entrepreneurs as they aren’t able to legally establish themselves in the market due to governmental regulations.
Coming back to dilemmas of large banks, the potential for the collapse of a large bank to impose significant losses on other firms or seriously impact the functioning of the financial system in a negative way, and the consequent risks to the broader economy, have made governments generally unwilling to let large banks fail.
As a result, governments have often treated large banks as ‘Too Big to Fail’ and have committed themselves into making sure of their survival, even though it’s not fair for the other smaller and local banks. Although giving large banks a preferential treatment lessens risk, the concept of “Too Big to Fail” has a negative aspect known as moral hazard.
“The asymmetric information about loss distributions between banks and the regulator could distort significantly the insurance premium, the optimal indemnity, and probably affect entirely the major insights of the capital insurance market” (Ivanof, 2017, p. 67). This means that Moral hazard encourages risk-taking from banks and, thereby, make an insurance payout more likely.
It goes without saying that giving this preferential treatment to large banks extends their protection to all the bank's creditors, not just depositors, which gives the bank a funding advantage and more incentive to take on risk compared to smaller banks have. While encouraging large banks would look morally wrong, limiting its size also has several cons.
“Small organizations have a flat structure, and an organic, free-flowing management style that encourages entrepreneurship and innovation” (Daft & Armstrong, 2015, p. 295). While these advantages might seem desirable, (Wheelock, 2012) points out that governments could raise the cost of providing banking services by preventing banks from making use of economies of scale. Economies of scale takes place when the cost of producing one unit drops with an increase in the amount of production. This again would be undesirable by both the consumers as well as the entrepreneurs. It’ll be bad for the typical entrepreneur because the cost for banking services has gone up meaning that they would now have to charge a higher amount of money, which could lower their customer base. It’ll obviously be bad for the consumer because you’ll just end up spending more money for the same service.
I feel that the best possible scenario for banks is to incorporate a hybrid model in terms of organization size. “The development of new organizational forms, with an emphasis on decentralized authority and cutting out layers of the hierarchy, combined with the increasing use of information technology, is making it easier than ever for organizations to be simultaneously large and small, thus capturing the advantages of each” (Daft & Armstrong, 2015, p. 296-297).
The preferential treatment of large banks as ‘Too Big to Fail’ could generate scale economies by lowering the risk premiums demanded by creditors of large banks, thereby giving them a funding advantage over smaller banks. While there is some data on the internet, it was hard to carry out a rational analysis on this topic due to lack of information available on the topic.
While I think that the preferential treatment from governments to larger banks is unfair and unjust, I also think that not helping these larger financial institutions could have several negative impacts on all the stakeholders apart of the financial institution.
Therefore, in order to truly examine some of these issues at a deeper level, further research needs to be conducted within the banking industry and the government. With more research on this topic, I’d have a better stance on whether these banks should receive financial aid from the government if they run into a financial problem or not.