Comments by the former Federal Reserve Board president Allan Greenspans
The researcher introduces the paper by echoing comments by the former Federal Reserve Board president Allan Greenspan’s who reiterated that risk taking is a primary economic function for regulated entities including banks and other financial institutions. The author argues that minimizing risk taking behavior totally, would eliminate the purpose for banking systems. It is therefore imperative that banking systems are designed to address risk challenges. In this regard, economic conditions have led to concerted efforts from different stakeholders. The author explores how central bank governors from the G-10 countries embarked on proactive measures to safeguard banks from increased financial risk during the economic crisis of 1970/1980. For instance the author examines how the establishment of the Basel Committee helped to safeguard international financial institutions from the surging financial risks occasioned by the global economic depression. Similar strategies were employed in 1988 with the introduction of capital measurement system for regulation on requirements for exposure to market risks. The Basel accord has undergone tremendous development since its inception. The author reveals that during the Asian economic crises of 1997 (BCBS 1999), economic integration and forces driven by globalization led to financial instabilities that necessitated refinement of the Basel accord. The author holds that this led to the proposal of introducing guidelines for new capital adequacy frameworks in 1999. This new framework also refers to as the Basel two accords are made up of three pillars. One of the pillars identified is the minimum capital requirements. The second pillar identified under the Basel two accords is the supervisory review while the third pillar is the market discipline aspect of the guidelines. A critical analysis of the changes in the accord reveal that the main objective of revising the accord enacted in 1988 was to put in place a framework for stabilizing international banking systems. However, it is also notable that this review was also made to eliminate inconsistencies and competitive inequalities in players within the international banking sector. Under this project, it is very clear that although operational risks have been ignored in the past, such risks have the potential of crumbling the global international financial systems. It is under this realization that the committee included operational risks in the Basel two frameworks in line with emerging trends where operational risks have been shown to have greater value in defining international financial stability and trends. The increased attention on operational costs has also led the author to examine its definition, meaning the risk from internal and external factors.
Jack (King 1998) has also stated that operational risks may emanate from not only operational failures and internal challenges but also from such external factors like terrorism attacks, failure in management or natural disasters. As such, it is imperative that financial institutions and banks must be cushioned against financial risks which are the fundamental reason for the inclusion of operational risk compensation (Walter 2003). The author uses this purpose as the lynchpin to state his thesis which is to explore on various statistical methods to calculate capital charge for operational risk and their effectiveness.
In chapter two, the researcher explores the ration for the research by underscoring how financial institutions are under pressure to manage operational risks. There is pressure for financial institutions to comply with regulatory requirements as well as for the institutions to adopt new technologies and sophisticated financial products and operational systems. These challenges and the existence of other inevitable risks threaten the sustainability and stability of financial institutions. As such, the primary goal of operational risk management is measurement of the scope and size of risk exposure factors. The author establishes that the research evaluates the various approaches suggested under Basel two accords with particular emphasis on the Loss Distribution Approach administered under the Advanced Measurement Approach.
On the research methodology, the researcher critically examines other studies on the differences between Basel one and Basel two as well as literature on the effect of these regulations on the global financial industry. In addition, the author reviews other literary works focusing on exploring how banks and other financial institutions are dealing with operational risk management issues as well as the calculation methods they are using arrive at capital charge. Based on the reliance on expert’s opinions on operational risks the study is qualitative. In conducting the study, data is collected through filling of questioners. In doing this the researcher approaches banks to participate by making their views.
The researcher raises the primary research question ‘How can a bank quantify its operational risk based on limited historical loss data?’ as such, the author clarifies that the objective of the dissertation is to contribute in the development of methods of quantifying operational risks within banks when historical data loss is limited. In this regard, the loss distribution approach appears to be the most appropriate framework for measuring the distribution of losses by leveraging on the application of actuarial models. Similarly, actuarial loses emanating from operational risks can be derived by combining two random variables that is the frequency of loss and the severity of loss. This is useful in the determination of capital requirements. The second question is therefore based on this basis; ‘Is it possible to use Loss Distribution Method as an Advanced Measurement Approach according to Basel two and determine the capital for operational risk?’ in answering this question, the author plans to use questionnaires and case study analysis.
Under the Scope and Limitation of the Study, the author clarifies that the main limitations of the study pertain to
Confidentiality of data
Size of the banks in UAE (most of the banks in UAE are middle or small sizes.
The author maintains that these limitations are common to studies relying on case research for the collection of primary data. However, the author assures that these limitations will not impede the accomplishment of stated research goals.
In chapter three, the researcher discuses the literature review by attempting to answer the question how banks can quantify operational risks based on scarce historical loss data and whether it is possible to use Loss Distribution Approach as standard approach based on the Basel two and in determining capital for operational risks. The researchers established that the Basel Committee was put in place in late 1974 by the central bank governors of the G-10 member countries in response to instability in international currencies and global banking markets (The Banking Association-SA 2005). Some of the member countries include the United Kingdom, United States, France, Canada, German, Japan, the Netherlands, Spain, Switzerland and Sweden.
Late in 1980s, the Basel committee came out with the first framework of banking supervision called the Basel one. The Basel one framework emphasized on capital risk and capital adequacy guidelines. Under the Basel one, recommendations were made on setting aside eight percent of the capital spend on loans using the matrix system (Lnaka Rating Agency Ltd 2006). Practically, this requires banks to set aside eight million if they sanction loans amounting to hundred million.
However, the author points out that this has come under heavy criticism due it its bias towards financial systems employed by the G-10 member countries. In addition, the guidelines were criticized for being narrow and their failure to enhance financial stability in the global financial market. In response to the heavy criticism, the Basel Committee resolved to come with a revised framework.
Basel two refers to the new guidelines which have replaced the Basel Two framework. According to the Basel Committee on Banking supervision, (2004, p6), the new framework uses three pillars to safeguard banks from the increased global financial risk. These pillars are;
Minimum capital requirements
As such, the principle objectives behind the Basel two are:
Promotion of sound and stable global banking and financial system
Enhancing competitive equality
Provision of competitive approaches for addressing risk exposures and promoting best risk management practices
Provision of scalable approaches to capital assessment
The author emphasizes that Basel one was a major breakthrough in international banking supervision although market changes and sophistication of risk management techniques become a huge challenge for industry players. As such, Basel two differs from the original framework in several dimensions with the author maintaining that the dissertation deals only with capital adequacy and capital calculation. In this regard, the author maintains that while Basel one deals explicitly with two types of risk in defining weighed assets, Basel two focuses on calculating risk-weighed assets in risk assessment for financial institutions. This means that under Basel two, risk assessment has two elements, that is; substantive changes to treatment of credit risk relative to Basel one and the introduction of an explicit treatment of operational risk resulting in capital measure of operational risk.
Operational risk has been defined as the risk loss due to inadequate or failure of internal systems or external events. As such, the definition of operational risks deliberately includes legal risks although it excludes reputation claims and strategic risks (BCBS, 2004 P137). However, Nystrome (2002, p 1) maintains that operational risk is not applicable only to financial institutions and banking companies. Organizations with heavy investments and complex information technology systems have also traditionally employed operational risk management strategies.
With globalization and increased internationalization of banking and other financial service ha changed the traditional ways of operational risk assessment and management. In addition, the advancement in computer technology has also led to the development of new and efficient systems for performing risk assessment. The author points out that operational risk could also be as a result of management mistakes in terms of failure of processes or external events. This is based on the understanding that proper planning, adequate control of processes and functional human resource strategies enhances arrival at appropriate capital charge. In addition, the author also points out that system risk could also result from system failures hence resulting in the disruption of internal and external business processes. In addition, the author identifies risks emanating from natural disasters and calamities, terrorism, vandalism and violence as some of the external factors that contribute to operational risks. However, a critical analysis reveals that some factors are commonly associated with operational risks. These factors include but not limited to;
Heavy reliance on technology
Proliferation of products using superior technologies in the market place
The expansion of e-banking and resulting exposure to operational risks.
An example of a banks operational risk exposures is the 1.3 billion dollars lost by the Barring Bank in inappropriate and unauthorized trading arrangements leading to bankruptcy and insolvency of the bank. The author uses this case study to show how failure to comply with the Basel two guidelines has exposed banks and other financial institutions to increased risk due to failure to employ appropriate frameworks for measuring and quantifying operational risks in Bael two regulations.
The author has discussed operational risks in the perspective of European and American banks. In the additional chapter, the author expands his definition to cover Japanese and Islamic banking systems to meet international expectations and requirements.
A publication by Bank of Japan (Mori 2001) gives the Japanese perspectives of operational risk definition and management. The Japanese perspective of operational risk is that firms may not necessarily incur direct loses and the profits may no decline in the short run. However, the loss of public confidence and trust coupled by poor reputation could lead to investors pulling away depriving institutions of much needed capital investments. Such an eventuality would not only harm the institutions affected but would also cause considerable harm to clients and strategic partners. The author notes that operational losses could also be categorized to small-scale problems arising due to clerical errors or whilst remitting small sums to clients.
The author defines Islamic banking as the system of banking or banking activities that are consistent with the Islamic values and principles. Islamic banking has been in practice in most Islamic countries based on the Islamic laws. The author explains that the Islamic Financial Services Board (IFSB) recognizes that failure to comply with regulations and guidelines to be a major exposure to operational risks. As such, there are different frameworks for enacting regulations and frameworks for minimizing the exposure to operational risks. Nevertheless, through the respective Shari a boards or other relevant boards, jurisdictions are able to cancel registrations for non-compliant organizations. In addition, under the Islamic banking principles, financial institutions are expected to maintain fiduciary responsibility and uphold public trust and confidence. Failure to maintain public positive image leads to loss in reputation hence affecting the company’s ability to attract investments and capital injections. Damage in reputation could also lead to liquidity crisis as clients make abrupt withdrawal of funds presenting a huge challenge.
The author describes operational risk management as one of the financial management strategies that have unique elements and definite and clear goals. As such, it very clear that operational risk management, must develop a mechanism for implementing operational risk policies and strategies as well comprehensive data capturing for assessing risk exposure. At this point, the author points out that every organization has unique environments that requires unique set of solutions. This means that there is no single framework that can be equivocally used in all situations. However, the author maintains that there are fundamental elements that are generally prevalent in effective frameworks. This includes policies and procedures that give clear direction of actions to be taken in the management of operational risks and the use of appropriate tool for identifying risks and measuring risk exposures.
The researcher examines the evaluation of operational risk management as practiced in Japanese and Islamic financial institutions.
Japanese financial institutions recognize the need to identify and quantify operational and prevalent risks. The writer reveals that Japanese banks and financial institutions recognize the need to introduce time –series analysis as one of the strategies for enhancing the effective management of operational policies. The author reinforces this argument by examine a study case done by a Japanese group (Study Group 2006) which came up with various technical caveats using the Loss Distribution Method (LDM) a method that is also commonly used in operational risk quantification techniques. The writer argues that by focusing on narrow spectra of technical shortcoming, the method presents other challenges that must be stressed.
The self assessment and control method is also used in Japanese banking institutions and other financial institutions by identification of inherent risks and establishment of appropriate controls to safeguard the financial institutions from risk exposures. This method also makes use of key risk indicators to give forecasts on prevalent risk dynamics. This method is more effective since it gives institutions the time to take preemptive actions and mitigation measures.
In Islamic banks, the concept of operational risk management is designed to ensure that financial products are compliant to Sharia rules and regulations and to enhance the capacity and ability of financial institutions to carry out their fiduciary roles effectively. In addition, the author points out that under Islamic banking and financial systems other elements useful in assessing operational risk is the observation of people risk, technology related risk and risks born from legal processes. A critical analysis reveals that under Islamic banking peoples risk has a greater and deeper meaning compared to the convectional banking principles. As such, the general understanding is that this could lead to increased exposure to operational risks. The author points out that Islamic banking and other financial system focus on sources of operational losses.
The author notes that in advanced financial industry, Islamic banking leverages on technology just like the conventional banking systems. However, the success of the effective use of technology depends largely on the ability to assemble and manage data bases that help in timely decision making processes to meet client expectations and keep abreast with industry changes and general trends. The use of advanced technologies has shaped the competitive dynamics leading to increased use of information technology solutions in enhancing competitive advantage and market leadership based on market share and positioning strategy.
The author maintains that measuring and identification of operational risk is almost rudimentary with old and inconvenient systems for the formal measurement systems while other institutions are at the level of adopting strategies for measuring operational risks. In addition, the author reveals that the existing methodologies are relatively simple with few banks and other financial institutions using advanced techniques and implementing systems for risk management in general and operational risk management in particular.
One of the findings revealed through this dissertation is that operational risk measurement is still a form of art which not only adds economic value and assumes multivariate value but also a top-down and bottom-up approach using sophisticated methods and procedures in measuring risks. The author clarifies that the bottom up approach provides a structural model that is applicable in identifying operational risk causes.
The author explores the development and application of the balanced score card in strategic management. The balanced score card was developed by Drs. Robert Kaplan (Harvard Business School) and David Norton. The balanced score card captures the weaknesses and vagueness of previous management approaches in providing an effective perspective in strategic financial management. The author argues that the balanced
Scorecard is a management and measurement system, used in facilitating achievement of organizational goals. The balanced score card, helps in putting actionable plans into practical strategies that help organizations achieve goals and objectives.
Under this section, the author examines scenario based approach in performing evaluation of operational risks. This includes critical examination of the preparation of scenario packages, functional design, system demos and evaluation ( heuristic, lab-based and real-world).
The LEVER approach stands for the Loss Estimation by validation Experts in Risk. This method of loss estimation uses scarce and lost data by leveraging on internal and external systems for advanced measurement.
Under this section, the author examines the suitability of using the AMA approach in calculating operational risks. The suitability of the AMA approach is based on its ability to enhance flexibility in operational risk management based on the unique business environment and internal control systems. Ideally, the AMA approach has been adopted under the Basel Committee recommendation and as such remains a key approach in enhancing operational risk management. The author uses the supervisory Guidance on Operational Risk Advancement Measurement Approaches for Regulatory capital literature propagated under the Federal Deposit Insurance Corporation guidelines for US banks as an example (FDIC 2003). Under this framework, the author establishes that board members in corporations are mandated to have vital control on risk exposures and are therefore expected to put in place strategies for effective risk management (Tshoegl 2004). The author continues by asserting that operational risk management and implementation of policies and activities remains a vital role of the top level management.
The researcher examines the AMA requirements with particular regard to internal and external loses of data that may predispose operational risks. This includes adequate assessment of the business environments, control mechanisms as well as the measurement framework which are implemented to meet the AMA requirements. This includes identification of the key elements in risk quantification such as frequency and severity of the loss identified through the application of the Aggregate Loss Distribution.
Under this section, the author critically examines the importance of risk mitigation measures that are vital in considering the implementation of AMA. As such, it is evident that institutions have to put in place mechanisms for tracking and manipulating data to meet organizational needs in line with the legal requirements and regulations.
The author examines the Industry Technical Working Group (ITWG) which presented a paper on LDA-based AMA (New York Federal 2003). This paper structurally reflects the fundamental elements including internal data, scenario and factors that reflect the unique business environment and internal control systems. This strategy is based on the need to determine the horizon of loss in particular year and elucidate the relationship between risks in all business lines.
The researcher maintains institutions must use appropriate criteria for data collection in line with the ITWG financial institution requirements. However, distinguishing loss events remains a critical aspect of the data collection strategy.
The author maintains that there are more issues highlighted under the ITWG guidelines in regard to data security, collection, impact on taxes and completeness among others. Data insufficiency has been identified as one of the greatest challenge under this framework. As such, firms and financial institutions have been forced to supplement their AMA model by use of external data collection strategies. This includes the use of vendors who have a deeper understanding of the general trends.
The researcher critically explores the challenges faced in implementing the AMA model. One of such challenges pertains to data accuracy and completeness which plays a critical role in enhancing risk management strategies. Setting of data threshold has also been identified as a significant challenge in implementing the AMA model.
The incorporation of external data has been credited with enabling completion of data capture in the event such data is lost as well as the modification of parameters used in internal loss of data. The author maintains that this helps in enhancing quality and credibility of external data hence leading to increased scalability band relevance of data.
The section on scenario analysis highlights the ITWG definition of scenario analysis as the expert forecasting of operational risk loses. As such, it is very clear that the scenario analysis enables the generation of additional data to complete frequency and severity. As such, there are three kinds of data loses identified under this section. These are unexpected data loss causing severe and catastrophic scenario, unexpected loss of data leading to pessimistic scenarios and expected loss leading to optimistic scenarios.
The author examines the scenario based AMA also referred to as the sb AMA. As such, it is notable that scenarios have the potential for influencing future management strategies and therefore must be evaluated to determine the prevalent potential frequency of operational risks as well as the associated severity of the risks.
The author approaches scenario analysis from the perspective of a case study of the Federal Reserve Bank in the US and the American framework for quantifying operational risks. Due to increased need for operational frameworks for analyzing operational risks, financial institutions have been compelled to address the challenges emanating from internal data loss and the use of new data quantification methods like the Value-at-Risk model that relies on computation outcomes (NYFRB 1996). This includes frameworks for creating standard procedures for different business lines within financial institutions. In addition, the writer examines literature by Kabir Dutta and Jason Perry of January 2007 which discussed the problems financial institutions faced in choosing operating models. The author argues that the LDA enhances frequency and severity of data collection in the event of loss. The performance measures used include good fit statistics, flexibility and simplicity.
In chapter four, the author examines the methodologies for calculating capital chargers including the basic indicator approach, the standardized approach and the advanced measurement approach. In addition, the author critically explores Basic Indicator Approach and its application in calculating amount of operational risk. Similarly, the author looks at the scorecard approach and its application in enhancing the accuracy of operational risk measurement. As such the author gives deep analyses of the practical use of loss distribution approach as well as the severity of estimation and capital charge calculation and estimation. Under this chapter, the author reveals the results of the questioners, experience of respondents and the actual findings.
In chapter five, the researcher gives his conclusions based on the study revelations as well as the recommendations for improvement in operational risk management. As such, it is imperative that operational risk management enables financial institutions to mitigate loses due to operational risks. Basel two remains an important development which is ideally an improvement of the existing framework for operational risk measurement and evaluation. The score card approach is also an effective tool for risk management and estimation of the capital charge. The author recommends continuous risk assessment and monitoring based on the Basel regulations to help financial institutions cope with the vulgarity of the global economic instabilities. In this regard, the author argues that educating management officers and relevant organizational teams enhances operational risk measurement and assessment. However, the author also raises concerns about the benefits of implementing the Basel accord by arguing that compliance with the Basel accord could lead to increased cases of defaults in loan payments due to using supplementary methods like the KRI. This is based on the finding that 62% of participants in the study approve the accord in its ability to stabilize global financial markets while 40% believed that this tool could not prevent global financial problems.
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THE RIGHTS OF THE MARGINALISED women’s rights history essay help: women’s rights history essay help
OPTIONS FOR PROVIDING JUSTICE AND GUARDING THE RIGHTS OF THE MARGINALISED IN HEALTH POLICY
Options for Providing Justice and Guarding the Rights of the Marginalised in Health Policy.
World Health Organization (WHO) is the most influential organization working within United Nations. Its main objective is to improve the living conditions and environment of the people by providing practical support to countries, witnessing, and monitoring health projects (WHO, 2011). World Health Organization established a Commission on Social Determinants of Health (CSDH) in 2005 to study the cause for health inequalities, and ways to overcome them. The commission published its report in 2008 named “Closing the gap in a generation: Health equity through action on the social determinants of health”. This report also thoroughly explained the recommendations and analysis of the policy on health equity (CSDH, 2011).
The report is in three parts; the first part of the report is a debate about the social determinants of health and health equity. According to the first part, poor health of the poor, the health disparities between the people and countries are due to the inadequate distribution of authority. However, income, goods, and facilities both nationally and globally also affect health and health equity. The inadequate distribution of health resources is not a natural phenomenon; it is the result of deadly mixture of poor social strategies with biased economic activities and corrupt politics. Second part of the report points out a new developmental approach. In that approach, health equity holds a fundamental place in all social policies while the principal significance given to economic growth policy. It is impossible to achieve growth without proper social policies because equal distribution of goods, services, power and income brings rational fairness of benefits among all modes of life. However, there is little allocation of health equity benefits where the poor are left out in health equity. The third part of the report is about closing the gap between the generations by providing pleasant surroundings in which people grow and live, and properly tackling the unbalanced supply of money, supremacy, and resources. The last recommendation of the report sheds light on measuring and understanding the problem and evaluating the effect of action (CSDH, 2008).
The Adelaide statement on health:
The Adelaide statement evolved after the United Nations Summit held a discussion on developing goals that relate to the well-being of the society, in April 2010. It is now a portion of a global procedure to improve and support the approach established on equity, and a number of countries have adopted this approach. It embarks on a serious discussion and now the members of World Health Organization (WHO) are part of it. It also engages leaders and lawmakers at various governmental levels such as regional and national. The Adelaide statement summarises the necessity for a fresh social bond among all the segments to progress in human improvement, sustainability, and fairness. The statement delivers appreciated contribution to the World Conference on Social Determinants of Health in Brazil, the eighth Global Conference on Health Promotion in Finland-2013 and planning for the Millennium Development Goals (MDGs) post-2015 (The Adelaide statement on health in all polices, 2010). This involves a different practice of governance that consists of a mixture of guidance within governments, through all sectors, and amongst all levels of government. The statement highlights the influence of health sector in solving intricate problems across the government. It also aims to improve health outcomes, advance human development by creating a new social network between all sectors, and improving on equity and sustainability in health (Oxford University Press, 2011). The report says that good health improves the value of life, develops workforce productivity; escalate the capacity for learning, supports families and communities. It also contributes to safety, decline in poverty, and social inclusion. For this purpose, governments can develop policy making by evolving calculated plans that have mutual goals, assimilated replies, and improve accountability through government divisions. This involves cooperation within the public and private sectors. The “Health in All Policies” approach supports the leaders and plan makers to assimilate contemplations of equity, welfare, and health throughout the improvement, implementation, and assessment of strategies and services.
Social justice and human rights
Life and death depends on social justice and human rights. Forces in the political, social and economic arena significantly influence the conditions in which people live and die. The conditions in which a child is born can determine if the child lives a flourishing life or he grows to his full potential. This is especially with the social and economic policies that the society in which the child grows implements (WHO, 2011). It affects people’s lifestyles, their subsequent risks of illness, and the danger to premature death. The social justice practiced in a given country means that basic needs such as shelter, food, clothing and appropriate medical care must be offered to all citizens. There should be no discrimination in the distribution of resources and all citizens should have access to all the resources without discriminating or criticizing the citizens who make poor choices (Haughton and Khandker 2009). Social justice, therefore, determines the life expectancies of individuals in a given country. Research has shown that prospects of life and dependable health increases tremendously in some developed countries and decreases constantly in developing countries. Globally, there are obvious inequalities in areas such as employment, taxation, gender, income, class, race and ethnicity (Waters and Devine, 2004). Countries that lack the basic social facilities such as decent living conditions, clean sanitation and appropriate medical care have lower life expectancies and poor health conditions. For example, a girl in a developed country will live up to 85 years while one in an underdeveloped country lives less than 45 years (CSDH, 2008). This explains the discrepancies in the social justice systems practiced in these countries.
Global Health inequity and governance
The WHO report shows that the poor and less privileged in the society are the marginalised people in terms of health equity. Health is the biggest challenge to global governance in terms of giving rights and justice to the people. Development in the health sector is necessary in order to make it equitable and universal. Some of the developments include making provisions of health insurance coverage for different households that are at a poor level. In addition, the health sector can undergo development by availing financial support for the health programs (Asian Development Bank, 2011). Ultimately, the report elucidates that the low-income countries require financial boosts in the health-care system to improve the health sector. Moreover, the report also recommends investing in recruitment and training of health workers may improve the health care sector in the various countries with health inequities. However, various health workers opt to migrate to better paying countries; hence, the report calls for better payment of the newly recruited and trained health staff. Social, political and economic forces profoundly influence health equity. Unequal distribution of income, power, goods and services contributes to the poor health of the underprivileged in the society. The poor cannot access decent health facilities, schools, homes, and social facilities. Concurrently, there is the lack of adequate, trained personnel at the health facilities; thus, the people are in denial of proper health care. On the other hand, lack of financial support in the health sector deprives people quality services and commodities such as medicines. This exposes them to health risks and diseases. Commercialization of the health sector by the high and mighty in the society has led to health inequity (CDSH, 2008). Gender inequity is another contributing factor to health inequity. Improving the well-being of girls and women is necessary to improve global equity. Provision of decent places to give birth, improve on the living and working conditions, emphasize on early child development and offer health education to all can facilitate gender equity. Creation of social protection policy and favourable conditions in older life is also necessary. Emphasis on equity in norms, values, property and power is also crucial since they contribute immensely to the health of individuals. The WHO report aims at implementing ways in which to bring about health equity. These include ways such as developing equitable ways of providing regional fair-share housing programmes, fair distribution of tax credits to provide social amenities like schools, hospitals and commercial centres (WHO, 2008). It is crucial to address inequalities between men and women due to the organization of the society. Daily living conditions also have a significant impact on health equity. There is a need for quality housing with clean drinking water, sanitation and electricity facilities, and properly built roads. Growing children need safe and healthy living environments in order to lead a healthy, disease-free life. All these factors lead to the establishment of well-developed places where healthy people live. Provision of quality health care and preschool education program for children will promote the well- being of the children, disease prevention, survival and illness recovery. In order to achieve such a healthy living condition, the government and global societies need proper planning and design (Bauknecht and Kemp (eds). Upgrading of slum dwellings, provision of affordable urban housing, water and sanitation services, electricity and paved streets for all households are part of proper planning and design strategies. In order to curb these inequities, provision of health care is necessary for the poor since they need it the most. It is necessary to incorporate the marginalised in health care into the health care system, and appropriate health services offered to them. Implementation of appropriate social policies is vital in order to distribute the health care resources equally. The condition in which people, live, work, born and bred should improve in order to ease the burden of illness. The government, civil society, local communities and international agencies should be part of the implementation program.
Global governance is a system made up of political interactions that address problems that affect more than one region. Such problems include gender inequities. The CDSH claims that a strong, committed, and adequately financed government backed up by a capable private sector is necessary for effective changes (CDSH, 2008). The United Nations developed an approach to human development. This is the right-based approach to development. Development is as a procedure that the state community maintains by building domestic bodies that produce capital for the whole population, and decrease poverty, and vulnerability of the weakest section of the people. The prevailing problems in the society, whether related to health, gender discrimination, or improper living conditions, rights-based approach provides solutions to such problems. Some of these solutions include a country providing better health facilities that are accessible even by the poor. In relation to gender discrimination, the governments should provide equal opportunities to both men and women in all sectors such as education and health. United Nation defined the right-based approach to development as a theoretical outline for the procedure of human development, constructed on global human rights principles and focused at stimulating and shielding human rights (UNDP, 2006). Right-based approach to development bases its practices on the importance to the method as well as the results. It ensures the home-grown ownership of the improvement processes by providing support for the accountability of all the performers (UNDP, 2006). World Health Organization has a role to play in adept governance development. In recent years, development cooperation practices have gone through significant changes. Local and international parties fuel cooperation and development (Patrick, Els & Wanyama, 2005).
For attaining sustainable development, governance can constitute different types of concepts. One concept is reflexive governance, which depicts an open system. While another concept is multi-level governance, which presents a system grouped into levels with each level having a leader. Reflexive governance addresses the level of difficultly in determining societal improvement in the light of reflexive developed strategies and thus poses questions to the foundation itself. These questions are about the ideas, performance and establishment of structure that governs societal improvement and development (Voss & Kemp, 2006). This governance focuses on the marginalised people in the community and the problems that they are facing. It incorporates an open system of problem- solving strategy. This system is of little benefit to the marginalised since it does not integrate them in the processes of decision- making, which could result in inequity of distribution of health care resources. The lowly people in the society do not have their problems addressed accordingly because they lack a close political figure to address their problems. The open system does not have a representative to whom they can convey their problems; thus, the top figures in the government are not aware of the predicaments of the marginalised. This way, their problems are not addressed since they are not presented to the government. The system could be of benefit to the marginalised by reducing complexity of governance. This could be achieved by appointing a representative of the people who can convey the problems to the top figures in government for their problems to be solved. This way, they be allocated resources that help them to solve their problems.
However, WHO has adopted multi-level governance concept for development. The multilateral system ensures that all countries, regardless of their economic status, receive an equal share of the resources (Gurría 2011). It draws concepts from political science sub-disciplines that contribute to creating awareness regarding numerous contemporary matters and problems requiring analysis that transcends the conventionally distinct boundaries. All countries are part of the decision-making process regarding health equity where all people have access to conditions that promote health. The main value of this concept is that it gives understanding of complexity at and between hierarchies within the multilevel governance. It helps to understand the significance between the relationships of state-owned and non-state actors, and new arrangements for public-private partnerships (Stubbs, 2005). WHO surpasses the conventional boundaries of domestic and international politics, and highlights the problems related to health. It follows multi-level governance and focuses on globalization, as mentioned in the report, ‘Closing gap between a generation’.
Challenges of Good Global Governance
Good governance constitutes characteristics like accountability, participation, responsiveness, equitable and inclusive, transparency, effectiveness and efficiency and follows the rule of the law in the management of public affairs. It is the process of decision-making and implementation. The international community should commit to a multilateral form of governance where all countries and all people regardless of their class and background engage with an equitable voice. Coherent health equity is only possible if such a system of governance is adopted since it places fairness at the heart of development and genuine equality in decision-making (WHO, 2010).
If society failed in achieving these characteristics, the goal of good governance would not be achievable (UNESCAP, 2011). Participation in governance is the backbone of sound governance. Its role in the provision of justice and guarding of human rights of the marginalised people is vital. All the members of a community should participate in the decision-making process so that their concerns considered. This is especially the most vulnerable and marginalised in the community. Through participation, the marginalised get to express their concerns and their views aired. This way, they get an equitable share of resources. The marginalised could also appoint representatives or intermediate institutions to fight for their rights. This is not an effective way of providing justice and guarding the rights because their concerns are not fully and appropriately represented in the system. This could lead to denial of justice and deprivation of their human rights. However, there are barriers that create hurdles in reaching the purpose of good global governance and depriving the poor of their rights. Some of the barriers are discussed below.
Poverty is one of the challenges. By definition, it is “definite scarcity in well-being”. The orthodox view connects well-being mainly to possession of commodities, so the people in the poor category are those who do not have sufficient income or resources to place them above some adequate threshold. This interpretation of poverty is in monetary terms (Haughton & Khandker, 2009). The quality of governance is critical to poverty reduction. The poor appreciate the efficient provision of the basic life requirements of life; therefore, weak governance harms them excessively (Poverty Reduction in ADB).
It is the expectation of many that both the State governments and the politicians actively involve themselves in the improvement of public welfares, but this is not the case. The political figures do not have any respective duties and they do not even know the rules and regulations that govern their respective department or organization (Beck, 2006). This negligence leads to the poor management. Poor or inept management in the public sector is also a hurdle to achieve good global governance. Cost management is the key challenge the public sector is facing. In the public sector, the structure and behaviour of the organization is the barrier in managing project cost. Public sector schemes face restrictions due to public law and administrative rule. Those cost restrictions can be a limit to the budget, workers’ salaries, and sometimes, purchasing the required equipment. Mostly, public projects are functioning on the standard that employees are free to do anything, since they get their pay after all (Wirick, 2009). Because of such an attitude of employees and management, the public sector is going down, and the poor and marginalized people consider it as their only hope.
Corruption is also another major challenge in achieving good global governance. Transparency International (2011) defined corruption is the using power and authority for own gain. Dr. Kargbo (2006) defines corruption as the misuse of civil office for personal gain. By definition, corruption scope is limited to public office, but in a broader perspective, corruption covers the abuse of confidence for personal gain in all offices, both public and private sectors. Corruption occurs in various ways like personal corruption (private gain) and governmental corruption (political gain). Whether it is personal or political gain, corruption is increasing by every passing day and creating long-lasting hurdles in achieving good global governance (Kargbo, 2006). The WHO report points out that there should be more implementation of more rules and procedures that combat corruption within the countries affected. Moreover, The UN Convention Against Corruption, set up in 2005, needs to undergo ratification and implementation as a soon as possible as a different way of combating corruption. Deprived accountability system also poses a challenge to good governance. The term accountability is used in various ways, but the meaning remain same for public and private sector. The form of accountability is the compulsion of administrative institute to provide the documents of what it has done. An external, self-governing organization evaluates the documents. The accountability could be in terms of services provided and the success or failure of the program (Shah, 2007). Accountability exists in society when there is stability in the environment because it requires formal procedures to anchor accountability in the central, state institutions. The government should be accountable to all those affected by its decisions or actions. Good global governance is not achievable if the core state institutions lack the sense of accountability. The public also remains deprived of the basic needs (Burnell, 2000).
Overcoming the challenges of global justice-in the light of World Health Organization report:
The following are the some of the suggestions made by the WHO report in order to overcome the obstacles in light of the principles of multi-level governance.
Through the guarantee of impartial employment and decent working environments, government, employers, and workers can help to exterminate the poverty and social injustices. Government should make sure that fair employment and decent working environments are the heart of national and international economic policy-making.
In order to reduce the gap in health and poverty, governments should develop a system that allows a healthy living standard, and nobody falls below the threshold standard without their control. Social protection schemes can contribute a lot in achieving developmental goals. They can be effective and beneficial in plummeting poverty and domestic economies.
The Government should encourage public investment at all economic development levels across the social determinants of health, whether it is child development and education or working and health conditions. Public finance or investment will lead to the development of progressive taxation procedures, and it will help eliminate poverty and boost the economic growth.
The Parliament and corresponding equivalent bodies should promote a goal of refining health justice through activities on social determinants of health as a measure of government performance. The national government should establish a commission and pass legislation that the Member of Parliament or even the highest chaired politician is accountable to the commission.
WHO should support the growth of knowledge and abilities of national ministries of health to work inside social determinants of health agenda, and a stewardship role in a social determinant approach across the government (CSDH, 2008).
Asian Development Bank 2011. “Health Sector Development Project (HSDP)Philippines.” Indigenous Peoples. viewed on 24 November 2011 from >http://www.adb.org/Documents/IndigenousPeoples/PHI/phi-health-sector-dev-program.asp<
Beck, U 2006, Reflexive governance: politics in the global risk society.
Brunell, J, P 2000. Democracy assistance: international co-operation for democratization, Frank Cass & Co Ltd, London.
CSDH 2008. Closing the gap in a generation: health equity through action on the social determinants of health, Final Report of the commission on Social Determinants of Health, World Health Organization, Geneva.
Gurría, A 2011. Improving global governance in a changing world – A view from the OECD, viewed on 24 November 2011 from >http://www.oecd.org/document/25/0,3746,en_21571361_44315115_46135513_1_1_1_1,00.html<
Haughton, H, J, and Khandker, R, S 2009. Handbook on poverty and inequality, The World Bank, Washington, DC.
Kargbo, H, A 2006. Corruption: Definition and concept manifestation and typology in the Africa context, In The Training for members of parliament and members of Civil society from English speaking West Africa: Gambia, Ghana, Nigeria, Liberia and Sierra Leone, 4-8 September 2006 Aberdeen, 2-9.
Patrick, D, Els, H, and Wanyama, F 2005. The emergence of Multilevel Governance in Kenya. Working paper no. 7, viewed 24 November 2011 from >www.ggs.kuleuven.be/nieuw/publications/workingpapers/…/wp07.pdf<
Shah, A 2007. Performance accountability and combating corruption, The World Bank, Washington, Dc.
Stubbs, P 2005. Stretching Concepts too far? Multi-Level Governance, Policy transfer and the politics of scale in South East Europe, Southeast European Politics VI (2), Pp.: 66-87.
Transparency International, 2011. Frequently asked questions about corruption, viewed on 24 November 2011 from >http://www.transparency.org/news_room/faq/corruption_faq#faqcorr1<
United Nations Development Program (UNDP), 2006. Applying a Human Right-Based approach to development corporation and programming, viewed on 24 November 2011 from >http://www.undplao.org/whatwedo/bgresource/demogov/RBAindicators-usersguide(UNDP06).pdf<
United Nations ESCAP 2011. What is Good Governance, viewed on 24 November 2011 from >http://www.unescap.org/pdd/prs/projectactivities/ongoing/gg/governance.asp<
Voss, P, J, and Kemp, R 2006. Sustainability and reflexive governance: introduction. In: J. P. VoB, D. Bauknecht and R. Kemp (eds), Reflexive governance for sustainable Development (Pp.:3-30), Edward Elgar Publishing Limited, UK.
Waters, M,C, and Devine, F 2004. Social inequalities in comparative perspective, Wiley-Blackwell, Massachusetts.
Wirick, W, D 2009. Public-Sector Project Management: Meeting the Challenges and Achieving Results. Hoboken, John Wiley & Sons, Inc, New Jersey.
World Health Organization 2010. The Adelaide statement on health in all polices, viewed on 24 November 2011 from >http://www.who.int/social_determinants/hiap_statement_who_sa_final.pdf<
Oxford University Press, (2011). The Adelaide Statement on Health in All Policies: moving towards a shared governance for health and well-being. Oxford JournalsMedicine Health Promotion International Volume25, Issue2Pp. 258-260. Retrieved on 25th November 2011 from > http://heapro.oxfordjournals.org/content/25/2/258.extract<
ORGANIZATION AND BEHAVIOR FOR ORGANIZATIONS art history essay help
Organisation & Behaviour
by Student’s Name
Code + Course
Businesses across the world have transformed and contributed to the many changes and developments in the society. For a business entity to succeed in the stiff competition that is in the business environment, a lot of factors have to be considered and execute strategically to enhance the business capacity to realise its goals and objectives whether operating at the local and international setup. There are many businesses that have failed to realise the expected goals and in some instances it has led to collapsing and phasing out from the market of such entities, therefore, business skills in arts as science should be incorporated together in order to make it. Whether operating at the local or international level, organisational behaviour is one element that has proved to be crucial in business. However, my goal in this paper is to analyse factors that shape businesses operating at the local and international levels by comparing and contrasting business attributes such as organisation and culture among others of Samsung International as an international organisation and John Lewis as a local organisation that operates in the UK.
Business organisation is dependent on a variety of factors that include but not limit the size of the business (Contreras 2007). Samsung International and John Lewis are two business entities that have succeed in many aspects in the environment and area under which they operate and have merged among the best both at a local and international levels. The organisational cultures of the two organisations differ both in size and structuring. Samsung International has many partitions unlike Lewis organisation which has few. This is because as an international organisation it operates globally and therefore it has established regional divisions that serve the interests of its clients from those areas. For instance, it is organized into various divisions such as middle –East and Asia, Europe, America and the Caribbean, and Africa. Therefore the management structure of the Samsung Company is big unlike that of Lewis from the UK. The structure of John Lewis organisation is smaller due to the limited area that it operates in. John Lewis deals in many items and goods that it sells from a variety of brands and companies unlike Samsung Company which has specialized only in electronic products. Samsung Company’s corporate culture analyses issues differently depending on the region that it operates in but considers the organisations fundamental aspects while executing such a corporate action. The divisions are allowed to take actions independently that have to conform to the standards set up by the business group. This slightly different in John Lewis organisations which employ same corporate culture across its business and branches. Therefore the two organisations differ in many aspects.
The structures of the two organisations have to differ in a variety of ways due to the different geographical regions that the businesses cover. The business structure shapes the culture as well. By concentrating on the type of product as in the case of Samsung, that is, electronics devices only, it has encouraged specialisation and hence improved qualities in their products due to the research that is done encouraging innovation (Michell 2010). On the other hand, John Lewis Company sells many products across its branches in the UK having many avenues of generating revenue. The clients are able to leave the premises having purchased all they need under one roof including products from the Samsung Company. The mentioned structure and culture have impacted both businesses positively since it has allowed the businesses to exploit the best possible practices around them in order to realise the objectives and goals. It is important to note that structure and culture of business is dependent on various factors such as the type of business and geographical boundaries that such kind of businesses operates in (Nicotera, Clinkscales & Walker 2003).
Individual behaviour at work is important as it contributes directly or indirectly to either the success or failure of any business. It has noted that individual character is shaped by many aspects including the business culture. Irrespective of the type of business that one is involved in, it is important for workers to behave well as a part of the business ethics require especially toward clients and colleagues as pointed out in Cooper’s (2005) book titled Leadership and management in the 21st century: business challenges of the future. Leadership of an organisation determines the individual behaviour on the work places. Good leadership that values clients encourage workers to respect and value customers and hence this belief determines the workers’ behaviour in an organisation. Organisations internal policies and rules also shape individuals behaviour. For instance if the company rules do not allow romantic relationships between the colleagues, it will shape the way they behave. The culture of the environment and region that the business operates in determines behaviour as well. Workers at times have to change to conform to the societal expectations and behaviour in order to attract clients. However, it is pointed out that workers have to behave in a manner that will help the business realise the goals and objectives intended.
Business organisations have to determine a lot of factors and issues that make them successful, including leadership (Bertocci 2009). If all other factors are done perfectly and the leadership of the business organisation is poor, it will most likely result into poor performance, therefore good leadership is a key factor for any organisation not only in business but in other area as well. Many business experts have noted that business works like machine and system that are dependent upon each other where by if one element does not function properly it might lead to failure of the whole process. Leadership style chosen by an organisation is depended on many factors such as the type and size of the business. Samsung International has embraced the leadership style that is democratic and that embraces delegation of duties. Decision making process is not centralized at one place but across all its divisions from various regions. Mullins (2013) in his work Management and organisational behaviour noted that this leadership style has allowed the organisation to make independent and effective decisions that consider the peculiar resources and business potential across the region. This has allowed the organisation to get positive reception and good business across the places that they operate in. Such leadership has delegated decision –making powers to the divisions that conform to leading and guiding principles from the head of the company. On the other side, John Lewis leadership style is that of concentrating power and decision-making in one person (Sarasohn 2014). It is the top leadership of the organisation that makes most of the decisions that impact on the business. This is possible because of the size of the business and the limited geographical position of the operation. Such kind of leadership, however, in many occasions does not allow contributions from other stakeholders in making decisions and therefore if the person makes wrong decisions that will not enhance growth and development of the business, it might lead to negative results.
Theories that are stated support development of practical solutions across many issues and subjects. From theories, it is possible to formulate models that conform to concepts from theories and ally it in business context to see the outcomes and verify if they subscribe to what the theory purports. Management involves very crucial measures and action that have to be taken by those in leadership and authority (Fox 2006). Theories provide several options of reaching certain goals and therefore this allows the management to choose the best decision that suits their organisations depending on the resources available and hence supports management and guides them in terms of decision-making. Theories in many occasions present a variety of ways in which results can be achieved. Management in some occasions have been compelled to use certain strategies in running the business that theory points out to be most likely successful when applied at certain conditions not only in the business world but other areas as well. It is imperative to note that business conditions and environment changes differ across many organisations and institutions. For international business organisation such as Samsung which is represented above, in its execution of business and marketing strategies for instance, the management has to adopt various diverged theories that would guide it in making decisions that would lead to adoption of effective and efficient results. In some instances, a mixture of such theories is blended to come up with management decisions that have great potential for expansion and growth. Theories therefore have supported management decisions made by those in authority and leadership. Theories in some instances present a cause-effect relationship and predict potential results and outcome. This therefore allows management foretell the most likely cause of a challenge being experienced within the business set up. It can also allow those in management to detect early in time certain problems or issues within the business environment through analysis of symptoms and early warning systems.
The two organisations use varied management structures and organisational structures. This is because management style embraced by a business is determined by many factors as well as the size of the business and area of operation among others. Organisational structure is also dependent on the resources that the company has and they have to plan it in such a way that will lead to the best results that prove to be effective ad efficient (Nicotera, Clinkscales & Walker 2003). Samsung International uses various management styles across the regions that they operate in while John Lewis relies only on one management style. Samsung International operates globally as an international organisation and therefore it has to apply different theories and management decisions that result into positive returns for the company. The global economy varies greatly as well as cultural attributes across countries. In implementing corporate measures in the business, such values have to be considered and therefore it varies from division to division and also between different countries of the world. Doing business internationally has resulted into great benefit but also it experiences drawbacks in equal measure. Cultural factors among other challenges have to be factored in decision-making process for the business to enhance the chances of such business realising positive results. This therefore requires such business to adopt varied approaches and theories that puts it at a better position and enhances its potential in terms of success and business goals. This therefore justifies the use of various theories as noted in the Samsung Organisation that operates internationally. On the other hand, John Lewis organisation operating from one culture can use limited theories because of the many similarities that its target clients might have and because of the common culture. The management of the two organisations and the theories that they use to guide them in taking decisions has to differ because of the different business environments that they operate in.
In conclusion, business organisation and structure are determined by many aspects such as culture and size. They further determine the kind of leadership and organisational style used by the business and this applies both to business organisations that exist at both the local and international levels. Good leadership among other factors is necessary to realise success in business. Organisation’s structure, culture, management and leadership style are critical factors that have to be incorporated together for a successful business whether operating locally or internationally.
Bertocci, DI 2009, Leadership in organizations: There is a difference between leaders and
managers, University Press of America, Lanham, Md, viewed 17 March 2014,
Contreras, C 2007, Organizational structure and culture: promising practices that lead to
cultural and intellectual diversity, The University of Wisconsin, Madison.
Cooper, CL 2005, Leadership and management in the 21st century: business challenges of
the future, Oxford University Press, Oxford.
Fox, W 2006, Managing organisational behaviour, Cape Town, South Africa, Juta.
Michell, T 2010, Samsung Electronics and the struggle for leadership of the electronics industry,
John Wiley & Sons, Singapore.
Mullins, LJ 2013, Management and organisational behaviour, 9th edn, Prentice Hall Financial Times / Pearson, Upper Saddle River.
Nicotera, AM, Clinkscales, MJ, & Walker, FR 2003, Understanding organization
through culture and structure relational and other lessons from the African American
Organization, Taylor and Francis, London.
Sarasohn, D 2014, ‘David Sarasohn: John Lewis talks about unfinished business’, The
Oregonian, viewed 14 March 2014,
ORGANIZATIONAL BEHAVIOUR OVER VIEW. do my history assignment: do my history assignment
By (Insert both names)
(Name of class)
Table of Contents……………………………………………………………….Page
The Common method variance quandary…………………………………………6
The present Study…………………………………………………………………7
Data and Material Source…………………………………………………………9
Mono-method and self-report prejudice frequently make threats to the validity of study conducted within corporate setting and therefore obstruct the establishment of premises of organizational behavior. This study describes the conceptual structure for appreciating elements that affect the motivation of a worker to prejudice his or her replies to the questions put forward by an organizational researcher.
Applying a multi-trait-multi-method longitudinal data set, we describe different facets of the problem and bicker that customary advancements for controlling self report partiality do not sufficiently hinder the problem. The findings propose the need for establishing a conjecture of process effects and companion logical techniques to enhance the truth of psychological study in business setting.
Theoretical approaches in organizational psychology and behavior are very much reliant on practical confirmation and disconfirmation. This implies that the hypothetical views supported by various studies become prominent in the discipline. Conjectures related to a gathering of mixed or null practical findings become contentious and frequently fade away.
This trend is advantageous if the practical studies are correct. Nonetheless, there is a growing concern regarding the correctness of some of the very frequently applied approaches in an organizational research. Correct measurement of organizational behavior is necessary for improving the discipline. Despite its significance, measurement in corporate setting is frequently referred to as one of the major challenges of organizational behavior study. This is due to the fact that researchers have to depend to a greater scope on self reports. Those measures are rampant since they are relatively simple to obtain and are normally the only viable means to asses build up of interest.
(Larson and Sackett 1990) established that more than a third of all the works published in conventional organizational behavioral periodicals between 1977 and 1987 were based on questionnaires. It was established that 81 per cent of these publications applied across sectional platform and 52 per cent depended singularly on the measures of self report.
Works that depend on self report to be the solely parameter of organizational behaviors have recently experienced setback for two fundamental reasons: one; the self reports are vulnerable to a number of forms of response bias; and two inferences concerning causal and correlational relationships could be overblown by the troubles of common approach variance. (Schmitt 1994) pointed the need for a conjecture of method bias within the organizational behavior study so as to comprehend how to control and prevent for it. He established a sample matrix describing means motivational approach biases could affect different measures. (Brannick and Spector 1995) pointed out that due to the nature of the measurement prejudice ranges based on attributes of the build-up of interest, measurement bias would be best comprehended if it studied in connection to a particular construct or possibly a specific study domain (for example, health promotion in investment environment).
The aim of this paper is to make a step towards that course by using what we have learnt concerning mono-method bias and self-report bias in corporate setting to constructs usually examined in employee assistance and organizational health promotion study (Weiss and Donaldson 1998; Weiss and Gooler 1998; and Klein 1997). This will be achieved through (a) assessing a general conceptual outline for comprehending probable motivational prejudices in self report applied to collect factual statistics within a workplace study, (b) using this outline particularly to constructs pertinent to the domain of organizational health promotion.
As a whole, the study respondents want to act in such a manner that makes them appear a good as they can. Therefore, they tend to under report conducts deemed unsuitable by scholars or other observers, and at the same time they tend to over report conducts deemed as suitable (McDowell & Newell 1987).
Self report prejudice is specifically possible in organizational behavior study since staffs normally think that at least there is remote likelihood that their bosses or employers might acquire a copy of their responses. This inclination for persons to respond in socially desirable means has been explored expansively (Podsakoff and Moorman 1992;
Paulhus and Zerbe 1997). Podsakoff and Moornam (1992), in a meta analysis they established that a public desirability, as considered by the Crowne-Marlowe scale (Marlowe and Crowne 1964) was connected to numerous generally applied constructs in organizational behavior study (for instance, role conflict, overall job satisfaction, organizational commitment and role ambiguity).
It was reported by Borman (1991) that on average, supervisor and peer performance were correct compared to self ratings due to the varying leniency impacts in self reports. In addition, Spector (1994) explored the challenges of self report and underlined the significance of considering the particular questions that are asked and the kind of questions individuals may prefer to respond to when applying self reports.
The common method variance quandary
The soundness of conformist studies depending on a single method (source) of information/data has been queried more frequent in the recent times (Gupta and Jenkins 1999, Shadish 2001; Brown and William 1996; and Schimitt 1994). The quandary of self report prejudice is complex by the fact that when every determinant in an organizational behavior research are based on a single approach of measurement, substantive outcomes are could be contaminated by the shared approach variance.
It is significant to highlight that the common approach variance quandary is not exclusive to measures of self report. In a policy based perspective, an earlier editor of the Journal of Applied Psychology suggested that the sole application of the self report procedures is a deplorable approach in a number of fields of organizational study (Schmitt 1989).
Nonetheless, the degree to which common approach variance (for example works based exclusively on self reports) influences the study conclusions remain fiercely debated. For instance, (Spector 1987) established in his conclusion, that there is minimal evidence of the quandary in a research that investigated the relationship between alleged working conditions and impact.
(Buckley 1989) allege that his conclusion was incorrect and the finding of reprehensible analytical procedures. A couple of year thereafter, the Journal of Organizational Behavior made available an invited package of essays describing the significance of the quandary discipline (Schmitt 1994, Spector 1994 and Howard 1994 ) and supported researchers to carry out pragmatic studies to comprehend the impacts of the method variance within organizational study.
The Present Study:
The objective of the present study is to establish knowledge regarding self report prejudice in connection to constructs pertinent to psychological study in corporate background. First, we allude that it is important to comprehend motivational self report prejudice as a function of the below four common elements:
The true status (for example the accurate score on the construct against systematic or random error)
The affairs of the construct of interest (for instance, the information sensitivity).
The respondents’ dispositional characteristics.
The situational distinctiveness of the environment or measurement situation. For instance, a
study participant or member who is perhaps abusing drug at work (exact state of affairs), to report his/ her drug use level (is no doubt a sensitive construct) who may tend to provide social appropriate answers (which is a dispositional characteristic) and is in a position where s/he thinks that the true answers may lead to his/her to be fired or punished, by the employer; that is a situational characteristic. Such individuals are likely to prejudice responses on a study questionnaire. However, a participant who is abusing drug at work setting with varied dispositional characteristics or / and different situation would be more likely to give correct responses.
The role of the following assessment is to begin to evaluate the quandary of self report prejudice in relation to meticulous constructs. To begin, we will analyze how proper co-worker or self reports of similar variables congregate across various constructs often examined in psychological study conducted in corporate setting.
This evaluation will disclose whether there is inconsistency in the conformity regarding the state of constructs and if this comparative conformity or disagreement is steady across time. Secondly, we will analyze the impacts of an employee’s susceptibility to deliver socially appropriate answers (which is a dispositional characteristic) the employees level of panic of punishment (which is a situational construct or can also be a construct reliant on the true status on answers to questions regarding the well being of the employee and the organizational behavior. Thirdly, we will describe how mono-approach prejudices distort conservative measure estimates of the substantive interactions among constructs measured in organizational behavior study. Lastly, we will discuss the question of how to arrive at which material source to apply (for instance co-worker or self report) when there is a minimal conformity concerning the construct of interest.
Data and Material Source:
The Workwell project was structured to provide insight on the nature of response prejudice in organizational behavior and also in the occupational physical condition psychology study. Applying a multitrait-multimethod (MTMM) set of data, the projected aimed to illustrate some of the empirical value formerly forecasted (Fiske and Campbell 1959).
In a nut shell, by gathering data concerning the employee’s mental health, lifestyle and job-related behavior; (i) from the individual person (ii) from the individuals who are well with acquainted the employee, for instance (co-workers), an individual is in a position to comprehend and probably correct for some of the prejudices linked with each data source (such as employee self report prejudice).
The initiative WORKWELL records comprises two waves of statistics (they have an interval of six months) drawn from 408, that is (204 workmate pairs) ethnically varied nonprofessional caliber employees (Donaldson & Mersman 2000; Donaldson, Ensher & Grant-Vallone 2001). Out of the 408 participants, 68 per cent of them were women and 22 per cent European American, 45 per cent Latino, 10 per cent Asian and 16 per cent African-American. About 56 per cent of the sample was single employees, 3 per cent separated, 13 per cent divorced and two per cent widowed.
In addition, 50 per cent indicated a sum personal income of below $20,000 annually and 87 per cent indicated a sum personal income of below $30,000 annually. Greater than 87 per cent indicated that their altitude of education to be below second year junior college graduates. The respondents worked a typical of 38 hours weekly (Standard Deviation 11.2, while median is 40, and have worked for their firms for a mean of 4.8 years. (The Standard deviation (SD) is 5.25 while the median is 3 years). Lastly, the participants reflect a wide range of industries, occupations and companies. For instance, an estimated 20 per cent were employed in the education sector, 17 per cent worked in the health care industry, 11 per cent in the financial companies, 7 per in retail sector, 7 per cent in county organizations, 6 per cent in the general services firms (for example movers, hair salons, united postal services among others), 5 per cent in manufacturing sector, 4 per cent in utility firms, 3 per within municipalities
3 per cent in grocery stores, 3 per cent in law firms, 2 per cent in churches, 2 per cent in nursing homes, 2 per cent in automobile repair and sales, two per cent in hotels, 2 per cent in insurance organizations, 2 per cent in federal agencies (for example US Census office and Attorney’s office, FEMA, 2 per cent temporal agencies. Every participant got $25 for the initial visit and $25 for the subsequent appointment, a lifestyle evaluation and an abstract of the preliminary study findings. Just 11 per cent of the original mock-up did not get back to finish the 6-month feedback assessment (e.g. 89 per cent rate of completion).
A set of strategies were applied to program for the working adults to take part in the research. At the beginning, fliers were posted at highly visible sites at work locations with a radius of 10 miles of the collection point (hallways, parking structures, lunch rooms, and different central meeting centers). Then, the second ads were posted in a broad variety of local dailies, company newsletters and community publications. Lastly the attempts were made to develop referrals from individuals who not eligible for the survey, the likely participants and people who actually visited the Research organization to take part. A number of the referral sources were offered an incentive of $5 for every co-worker pair to get people to participate. All the recruitment resources gave the working adults $50 so that they would offset the expenses connected with the involvement, a free lifestyle examination and complimentary copies of the study outcomes in exchange for their engagement. The basis of all these attempts was to acquire more likely participants to make calls to the research telephone line. The selection telephone outlined the criteria for eligibility to taking part in the survey.
Individuals who were qualified were requested to submit their telephone numbers so that they could be contacted and arrange for an appointment. Every probable participant was screened in the course of the follow up call. Just employees a) who been working for at least 20 hours each week, b) who have resided at the very address and have used the same phone line for a minimum of 6 months (this was required to avoid extreme attrition) or have worked in an organization for a minimal of 6 months and c) the ones who didn’t have 4-year college certificate were admitted in the research. The respondents were encouraged, though not a requirement to come with a co-worker who they are well acquainted with, ideally a co-worker who they best knew. The respondents finished a set of questionnaires at their initial appointment and later after six months. The materials were counterbalance to check for the order impacts at both waves of information gathering.
The agreement between co-workers:
The results indicated that the convergence between co-worker and self reports differed significantly across the constructs. For example, the following occurred at first wave a) staff tobacco consumption (p<.o1; r=.80), staff drug use (p<.01; r=.40), attendance (p<.01; r=.36), staff vitality (p<.01; r=.34), job performance (p<.01; r=.26), loafing at job (p<.01; r=.28), staff grievances (p<.01; r=.12). Though the degree of agreement differed significantly among the variables, steady results were obtained in the variables within the wave’s one and two respectively of the data gathering.
Waves 1 and 2 zero-order Correlations between co-worker and Self reports:
Wave 1: convergence
Wave 2: convergence
Loafing at work
Which source of data is more accurate?
Due to the fact that it is reasonable to presume that both co-worker and self reports pose at least some prejudices, it is imperative to understand which standpoint is least biased or more accurate. Of course, the solution will highly likely rely on the kind of variable being examined. Moreover, to respond to the question, facts of the “true states of affairs” have to be known. Though it was not possible to get the “truth” concerning the staff depression, decision latitude, job performance, and the rest in the WORKFORCE project, we were able to establish the “true state of affairs” for the worker weight and height. So as to answer the concern of accuracy, we gathered co-worker, self and data collector approximations of staff weight and height. At the end of the study, the employees were asked to the researchers to measure their actual weight and height. And their analysis indicated that the self report were most accurate than co-worker report.
The findings of this work indicate that self report prejudice appears not to be homogeneous across the constructs analyzed in behavioral study conduction in corporate setting. For instance, the correlations of zero order between the co-worker and self reports of similar determinants disagreed significantly across the constructs assessed in this work (Wender, & K.F. Widamen 1998). The different assessments carried out appear to support the impression of the construct (for example level of sensitivity) together with the worker characteristics (i.e. true, score, actual behavior and tendency to provide socially appropriate responses), and also the situational stresses should be looked into in order to entirely account and understand the self report prejudice within organizational behavior study.
These results have at least 2 significant insights: a) even the highly classy analytic systems presently available for checking for response prejudice, comprising the different methods of applying multitrait-multimethod matrices (see Browne 1993; Becker & Vance 1992, Brannick & Spector 1993; and Graham et al. 1993), may not sufficiently configure such a multidimensional intricacy, and b) at least two sources of data are required to assist work out the validity of fear of mono-method and self report prejudice in organizational psychology study. In addition, the present results depict explicit variables to be affected by response prejudice, and propose that further studies are required to establish a more complete structure which indicates which behavioral and psychological parameters under particular situations are likely to be applicable.
Averagely, workers with the tendency to give socially appropriate responses showed more constructive behaviors as oppose to the workers who were poorer in this dispositional characteristic. These results imply that despite the situational elements within a measurement set up, certain participants are obviously vulnerable to prejudice their responses. Future pragmatic study may emphasize on other aspects that are essential for controlling and understanding the dispositional characteristics which misrepresent the correctness of organizational behavior determination.
The other significant point to be highlighted from these assessments is that though the variance of the common method seems to significantly overstate parameter estimates, determining constructs with various but also flawed methods (for instance, reports of co-worker) seemed to underrate the relationships. In any work given, this kind of trend may work as confidence level (interval), showing that the exact parameter falls between these estimates of the parameter. Lastly, it is vital to underscore that applying multiple data sources as oppose to solo (i.e. self reports), is an advantageous strategy to evading the problem of not being able to rule out the tribulation of solo-method prejudice in corporate psychology study (Shadish 2003; Donaldson 1995).
The experiential evaluations carried out in this work were founded on prospective materials gathered at two schedules of time. While all the constructs were determined (vs. manipulated) which confines our aptitude to work out cause-effect relations. For instance, the socially appropriate prejudice and panic of reprisal assessment are prone to issues related to checking for annul causality and undetermined “third variables” as substitute illustrations. Of course, the kind of framework that may permit undeniable interpretation of these fundamental relationships (a true experiment) cannot be feasible with the particular determinants that we selected to examine in this study.
However, the findings in this work should be interpreted guardedly. The criterion determinants chosen for the evaluation are a sample of determinants frequently assessed by firms’ health promotional scholars. The results showed could be very different for certain constructs of interest to organizational scholars. In addition, we only applied one criterion determinant and a confirmed number of predictor determinists to describe the tribulation of solo-method prejudice. Though the common fundamentals explored appeared to apply within the variables range in the WORKWELL Project, the stoutness of this trend should be measured in the future study. Lastly, we appreciate that it is probable that the external soundness of our results is somehow limited. Because of the scope and the nature of the proposed work, getting a representative sample of culturally-dynamic non-professional caliber workers was not viable.
It is probable that the recruitment procedures have generated a rather exceptional sample. Further study is required to assess if the outcomes of this work generalize to other populations and samples.
Empirical works may have long-term effects on our hypothetical comprehension of business psychology and organizational behavior. This means that the extinction or popularity of hypothetical perspectives could at times be the function of unsatisfactory practical study as oppose to that valid or faulty hypothesis. This matters presented in this study indicate that it is viable of a number of empirical works carried out in corporate set up to today could be deceptive.
We concur with (Schmitt 1994) that a lot more pragmatic studies needs to be conducted to establish a proper understanding of approach effects in corporate study. This study develops certain initial scales for understanding which determinants are likely to be deceptive (for instance, certain determinants of mental health and performance). It is our desire that more study be carried out to further improve understanding regarding the tribulations of self report prejudice in corporate psychology study. A conceptual outline of approaches effects supported by pragmatic results and trustworthy companion systematic techniques may go a long way towards deepening the process of behavioral theory and study in organizational setting.
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ORGANIZATIONAL CULTURE OVER VIEW ap world history homework help
Interaction of human groups leads to a natural development of culture (Argyris & Schon, p. 27). As a result of continual interaction, members of formal organizations face common ambiguities and uncertainties, just like in the wider society, and hence develop a distinct way of doing things, and this becomes the organizational culture (Kotter & Heskett, p. 186). The organization therefore uses the organizational culture to manage the work environment. Culture has always been a fundamental phenomenon to the human endeavors. However, exploration of culture in the organizational context is a recent phenomenon and increasingly becoming an area of scholarly interest. Organizational scholars discovered that culture plays a vital role in determining the behaviors, beliefs, and attitudes that relate to work at the workplace, since the late 1970s. However, a common and consistent theoretical view of organizational culture is lacking because of its newness and complexity. Instead, there are many different perspectives of organizational culture as put across by various scholars.
The purpose of this paper is to discuss organizational culture as a current managerial challenge. The basis argument of the paper is that organizational culture significantly impacts organizational performance despite multifaceted perspective of organizational culture studies. Therefore, an organization can adapt, adjust, or alter culture to optimally fit the strategic position of the organization. Two key theoretical perspectives of culture formation are discussed and compared in this paper: Edgar Schein’s perspective and Loius perspective.
As already stated, there lacks a common concept or theoretical background from which organizational culture can be defined. However, through a consideration of several literatures, it is evident that organizational culture is a two-level construct that entails the observable features or symbols and unobservable forces of the organization (Kotter & Heskett, p. 186). The observable features of the organization include the physical characteristics such as the architecture, the dressing pattern, language, artwork, behavior, appearance, ceremonies and formal language. On the other hand, the unobservable characteristics of the culture as indicated by the symbols include ideology, norms, beliefs, values, assumptions, and shared perceptions of the members of the organization.
A set of scholars defines organizational culture as a set of broad, tacitly comprehended rules that show employees what to do under a variety of unimaginable circumstances. Consequently, the configuration patterns of the interpretations of the interpretation of the observable features make up the organizational culture. In a clearer way, it can be said that organizational culture is the shared meanings, beliefs, and assumptions that the people in the organization use to adapt to external conditions or cope with problems, and develop internal integration.
Perspectives of Organizational Culture Formation
Scholars put across the observation that culture is not static but keeps changing and organizational cultures emerge and change as the organization itself alters (Argyris & Schon, p. 13). However, scholars’ views vary on the process of culture formation in the organization. Two theoretical perspectives are discussed: Edgar Schein’s and Meryl Loius perspective.
Edgar Schein’s Perspective of Culture Formation
According to Schein, as people seek to satisfy needs, they form groups (Schein, p.13). People who come together in a group bring goals, values, and hopes to the group process and the group endeavors to find ways in which they can obtain their desires or needs. Schein further suggests that the groups usually progress through a series of stages that affect culture. That is, throughout the group development stages, maintenance and group continuation depends on the group’s ability to find ways to preserve the shared values and norms that hold it together.
Stage 1 of cultural development: Dependency/Authority Confrontation
Schein describes the first stage of cultural development as that which revolves around issues of authority and dependency (Schein, p.13). The focus of this stage is on leadership selection and the dominant assumption is that a leader will guide the group to its maximum benefit. At this stage, the question of who will be the group or organization leader is matter of focus. The group at this stage looks for someone to give it direction. The type of person selected to lead the group and give it direction is usually indicative of many values and norms of that group or organization. Characteristics such as age, background, training, gender, and experience are considered in the leader and importantly influence the formation of culture. The group or organization or organization must grapple with issues of whom they want to be the leader and how they want to be led. Schein outlines some of the issues that may arise in selecting the leader. These include statements as to whether one is too inexperienced or young to be president, or that the group cannot be led by an outsider who does not understand the requirements of the group. These, according to Schein, are the first stages of cultural development.
This stage reflects in the practical arena of culture development. Historically, initial leaders and founders of group or organizations have had great impact on the future culture of their organizations. An example is the JC Penney Company which still reflects its founder’s belief about customer satisfaction and fairness. Some of Penney’s ideas and beliefs include serving the public with all the ability to the public’s complete satisfaction, to pack the customer’s dollar full of value, quality, and satisfaction, and to improve the human factor in the business. Penney’s ideas are still followed in the conducting of the business. Similarly, Henry Ford’s ideas of building and handling of workers influenced the Ford Motor company both positively and negatively, long after Ford’s death.
Stage 2 of cultural development: Intimacy, role differentiation and peer relationship issues
The second stage of cultural development entails the confrontation of intimacy, role differentiation, and peer relationship issues. The dominant assumption of this stage is that the group is successful and the members like each other. The group focuses on normative consensus and harmony. If the first stage of leadership selection efforts proved successful, it is likely to produce a sense of success and good feeling about the group membership and this can be carried over for an extended period of time. Schein states that early successes motivates employees and increase their commitment to the organization. Schein outlines examples of extended triumph in organizations in which the leaders demonstrated early success. These include NASA’s early success of putting Neil Armstrong, the first man on the moon. Other experiences include those felt by winning athletic teams especially in the cultures of Notre Dame Football programs, the Boston Celtics, and Chicago Bulls professional basketball teams, the Dallas Cowboys, San Francisco 49ers professional football teams and the Montreal Canadiens hockey team. These groups owe much enthusiasm to early success even long after the success has faded. Schein further observes that these organizations have developed strong and unique cultures around winning traditions. For example, the divine blessing of Notre dame, the Celtic mystique, the worldliness of the Michael Jordan-led Chicago bulls, the finesse of the 49ers,and the business approach to football of the Cowboys.
Stage 3 of cultural development: Creativity and Stability Issue
The third stage of cultural development in Schein’s model entails confrontation of creativity and stability issues. The dominant assumption of this stage is that the group can be innovative and stable at once. The focus of the group is on team continuity and accomplishment of goals and objectives. The group or organization begins to cope with the innovative and creative approaches that brought its initial success as that innovation and creativity come into conflict with the needs for order and stability. Schein asserts that as much as the creative and innovative forces may be critical in the formation of the organization, the same forces can lead to disruption of the order of the organization.
In the practical world, the clash is typical of the entrepreneurial firms. An example is Steve Jobs, a confounder of Apple Computers who was a creative, energetic and visionary manager (Schein, p.130). The company became highly successful in the start up with unique products, and in many regards, Apple Computers defined the concept of personal computer production and selling. However, in the early history of Apple, the company experienced difficulties reining in the creative and innovative spirit. Consequently, the company faced difficulties in establishing order and stability and this was most noticeable in the company’s haphazard approach to the early product development and inability to successfully market its products to the large business users. The owners and management finally decided to introduce a skilled business manager to create the order and stability that the firm needed to grow and prosper. The firm then hired a former manager of Pepsico, John Sculley, who provided professional managerial skills which were deemed necessary for Apple’s success and prosperity. However, the arrival of Sculley brought great turmoil because his philosophy and managerial style clashed with that of Steve Jobs and the people who were initially present in the Apple Company. The company then faced much turnover, and tumult as the company struggled to come up with a more bureaucratic management system. Jobs and many other managers also left Apple. Nevertheless, Sculley was able to bring order and stability to the organization although his tenure was rocky because he attempted to challenge Apple’s ways of doing things, and he finally stepped down in 1994. Several other leaders were recruited but failed to provide inspiration and direction and this prompted the return of Steve Jobs. Later, the company struggled to regain its early position as an innovative leader in personal computing as analysts questioned whether Apple would survive with a hovering 5 percent market share. This illustration shows the influence of first leader and early success in withholding the culture of the organization. It also shows how innovation and creativity can hold the group together or disrupt the unity.
Stage 4 of cultural development: Survival and Growth
The fourth stage involves the maturity of the group or organization and the issues confronted at this stage are growth and survival issues. The dominant assumption in this stage is that the group has endured and so it must be right. The focus of the group is on the group’s attention which entails the status quo or resistance to change. The group or organization learns whether it is flexible and adaptable to the changing conditions in the surrounding environment or whether its survival will be challenged.
Practical examples that fit on Schein’s fourth stage of cultural development perspective concerns the airline industry and the dramatic deregulation upheaval in the recent years. Some companies successfully dealt with the survival and growth issues and have made various cultural adjustments. For example, the Southwest Airlines has developed a unique culture that delivers a casual, relaxed, and less expensive transportation to the frequent business and recreational travelers (Schein, p.123). The culture also involves a high degree of employee involvement. Continence Airlines on its part has experienced several instances of failure but survived when it began on an emphasis on customer service. Another example involves the Chrysler Corporation which was saved from bankruptcy by Lee Iacocca in the early 1980s because of leading a major cultural change. The previous culture at Chrysler was characterized by aversion to risk, pessimism, unidirectional top down communication, and the insularity of different Chrysler subunits. Chrysler’s culture underwent a tremendous transformation under the leadership of Iacocca as the company became aggressive in pursuing new markets, products, government support, and technology. Additionally, the organization adopted a new optimism. A new optimism prevailed among the management and production workers, and the organization became more streamlined with emphasis on two way communication, that is top down and down to top. Importantly the production workers became important sources of business ideas and this increased creativity and innovation. Cooperation among subunits also became the standard procedure. Nevertheless, Daimler-Benz merged with Chrysler to become Daimler-Chrysler and this resulted to a new cultural challenge because of the integration of two different cultures. The two companies had different histories, different values and symbols and were representations of two different national cultures although the two were both familiar with the initial requirements of the automobile industry. Daimler has always been a leader with emphasis on engineering quality while Chrysler had occupied a mid-price market niche and also known for engineering innovations but an enduring reputation for quality. Still on contrast, Daimler was a quintessential German company while Chrysler was a typical American company. The combination of the two and the formation of an integrated culture was thus a challenge.
Schein’s perspective of cultural development represents changed goals, values, and focus of the organization. The underlying question throughout the four developmental stages is whether organization can forge a kind of culture that can sustain its survival. Schein’s perspective has also emphasized on the role of the leader and the initial success as a source of cohesion force that keeps the culture intact. The happenings in all the stages of the model are practically true even when the members of the organization are not necessarily aware of the attempts to form and change the culture.
Meryl Louis Perspective
Meryl Louis gives a different perspective from that of Edgar Schein. Loius views the organization as having multiple cultures. On the other hand, Edgar Schein’s perspective is that the organizational culture is monolithic, and this implies that the entire organization can only have one culture. Louis shows that organizations and especially the large complex ones often develop different cultures at different loci or site such that there is existence of several cultures within one (Kotter & Heskett, p. 186). Louis description therefore suggests that the organizational culture is composed of unique or different subcultures. The subcultures may develop around different levels in the organization or within different departments or divisions. Conditions, problems, or the personnel at different loci can produce pressures or forces for different cultures within the organization. Moreover, the loci outside the organization may also produce condition for different cultures (Kotter & Heskett, p. 186). This is in contrast to Schein’s model in which the outside does not have much influence to the organizational culture within, and in the process where external forces would attempt to influence the organizational culture, disruption may occur. On the other hand, Louis model shows that external forces can influence the formation of other cultural subsets rather than disrupt the already existing culture.
A practical example that suits Louis model and how outside loci can produce loci for different cultures concerns several firms in Southern California which hire large numbers of Hispanics and Asian workers. These workers bring in beliefs, values, and norms which are derived from the ethnic cultures of the neighborhood. Therefore, once they meet within the organization, these values are no necessarily integrated in a monolithic manner but all exist within the same organization. Another example in which outside cultural locus is outside the firms concerns the legal departments. Legal departments in diverse firms such as Ford or Exxon could be having similar departmental cultures because of the shared values, beliefs, and norms of attorneys. Louis perspective can also be applied to the current trend in organization in which issues of globalization and diversity are on the rise. Many firms have realized that to become competent in the current business environment, diversity should be increased. Furthermore, a multinational firm that is centrally located in America could open a subsidiary in a country like China and this definitely leads to cultural mix as the firms recruits and selects its personnel. Additionally, many organizations are increasingly becoming complex and adapting divisional and matrix structures. Within such organizations, Louis perspective applies, for instance if it is a firm that deals with both manufacturing and sale of its products, the sales people and the production people will always have a different culture from one another.
From analyzing the two perspectives, it is understood why organizational culture lacks a single theoretical perspective. Organizational culture is as complex as the organization itself, and hence the multifaceted approach (Fiol & Lyles, p. 804). Scholars give the different approaches and they all seem correct depending on the organization that the scholar decided to base the observation from. With increasing changes in organizational environments today, there will still be a challenge in developing a single theoretical concept from which the organizational culture can be underpinned. Nevertheless, it is important for organizational managers to familiarize themselves with issues of organizational culture and develop strategies that can be used to adopt a culture that best suits the organization for optimal performance.
Levitt and March (p.319) assert that there is always encoding of inferences from history into the organizational routine. Organizational routines are then transmitted and improved through socialization, imitation, education, problem solving, and personnel movement. This observation suits both the general organizational culture and support Schein’s perspective of organizational culture development. Routine is always initiated by the pioneers of the group or the organization, for example, Penny dedication to customer service and Mary Kay’s insistence on the value of the human factor at work both show the kind of culture that the organization will stick upon. Levitt and March (p.320) show that people learn from one another and especially the leader of the organization. It is therefore suitable for the leader to set an example by which the entire organization can follow through success. Levitt and March (p.320) also show that successful leaders become mental models for the organization and future references to the rest of the employees. In organizations in which the leader has succeeded, the next generation leaders and workers will always want to work to match or even be at the standard that is set by these leaders. Levitt and March (p.329) also show that the maintenance of social order is important in creating an intact organizational culture although conflicts normally occur from time to time. The leader is therefore significant in creating a platform from which others learn the attributes of organizational culture.
With increasing cultural development in organizations, it is worth noting that organizational culture is not independent of the national culture. Nations exhibit certain beliefs, standards, norms, beliefs and practices that can be evident in almost all the organizations of a particular country origin (Fiol & Lyles, p. 804). For example by considering Hofstede’s cultural dimension, firms in Western countries hold different cultural perspectives from firms in East Asian countries. For example, the organizational culture in firms in America is marked with a higher culture of individualism whereas those in China are marked with a culture of collectivism. Low uncertainty avoidance is highly experienced in Western cultures while high uncertainty avoidance is experienced in the East Asian cultures. Moreover, firms in East Asian cultures will always have a high masculinity tendency in which males occupy more demanding tasks while women are restricted on the kind of occupations in which they can get involved. On the other hand, Western firms like the U.S have low level of masculinity, and high femininity in occupations is observed in the Scandinavian countries. These are some of the dimensions that managers should consider when establishing their firms in countries other than the origin. A successful organization is one where the norms, beliefs, standards, values and practices of the organization suit the country in which the organization is established. Employees will be more comfortable to work and experience job satisfaction in organizations in which the culture reflects their expectations or aspects to which they are used to.
Kinds of Organizational Culture: Thin and Thick
Organizational culture results from a complex interplay of forces as observed from both Schein’s and Louis’ perspectives. Additionally, scholars observe that some organizations have cultures that enable them to overcome challenges and continue to grow and sustain themselves while others are swept away with these challenges (Kotter & Heskett, p. 186). Organizational culture can therefore be thick or thin. Organizational culture is described as thick or thin through a measure of its strength. A thick organizational culture is widespread and accepted throughout the organization. The members of the organization subscribe to a shared set of norms, beliefs, and values. Ford is an example of a company that has a thick culture as seen from all the employees having a 5-inch plastic card which lists the company’s creed, an the firm’s basic values message as a reminder of the Ford’s culture. Ford’s reward of excellence not only focuses on sales but extends to services that the employees offer. In this way most of the employees get to feel appreciated in areas of service in which they excelled a similar strategy that Mary Kay used in her firm. Therefore, a successful firm that widely and broadly spreads its values, for instance, of quality and service, is more likely to develop a thick culture. A thick culture can help the organization to channel its energy into productive and predictable behaviors which can help the organization to manage uncertainty and ambiguity. On the other hand, a thin culture is less widely held and therefore does not enjoy acceptance throughout the organization. A thin culture therefore lacks a core of commonly held beliefs, values and norms. On their part, employees find it difficult to identify with the basic goals of an organization that has a thin organizational culture.
Effect of Culture on Organization
Culture can affect the organization through five major ways: direction, strength, pervasiveness, flexibility and commitment (Kotter & Heskett, p. 186). Direction involves the way that culture affects the attainment of the goal of the organization. Culture can drive the organization either toward attainment of the goals or away from the same through a positive force or inconsistency.
Pervasiveness refers to the degree to which the members of a group or organization share a culture. For instance, Mary Kay’s culture in which all the members shared the belief that in order to succeed, God must be put first, family second while career third. In pervasive cultures, there is widespread adherence to the basic tenets of the culture. Widespread adoption of culture is however, easier to achieve in thicker cultures than in weaker cultures.
Strength of culture refers to the impact that culture has on the members of the group or organization. For example, some Ekins at Nike who tattooed the swoosh emblems on their bodies show the influence that culture can have on the members.
Flexibility in culture refers to the adaptability of the culture to the changing situations. Flexibility is especially unavoidable in organizations that face continual changes or the complex ones as discussed in Louis’ perspective. The flexibility or inflexibility evidence is observed in situations where the organizations respond to crisis. Flexibility can be established using various techniques. These include establishing a senior management position responsible for questioning proposed actions and questioning the status quo in general. The person recruited should have considerable experience with the organization so that the person can see the situation from a total organizational perspective. Another strategy includes recruiting outsiders who can fill the governing boards and management positions. Outsiders can bring a newer perspective to the problems of the organization. Matters that relate to flexibility are exemplified by the IBM. Initially, IBM employees dressed in conservative dark suits muted ties and white shirts and this image provided reassurance to the IBM customers who paid a lot of money for mainframe computing systems. However, as IBM moved from mainframe computing and increased emphasis on innovation and creativity, a more relaxed culture was adopted and dressing changed to more or less casual. A third strategy to enhance flexibility is through availing frequent job assignments and cross-training such that workers are able to learn many different jobs. Flexibility assists in the integration of culture and strategy.
Commitment of members to the organization is also influenced by the culture. Commitment is a condition in which members are willing to focus their abilities, efforts, and loyalties to the organization and in turn gain job satisfaction. On the other hand, culture can also determine the unwillingness of the members of the organization to do the same.
Culture and Competitive Advantage
Strong thick culture offers a competitive advantage to the organization. Competitive advantage is a means by which the firm can achieve superior performance over its competitors and within the industry. To achieve competitive advantage, the behavior of the organization plays a significant influence. Organizational behavior on its part is influenced by the culture within the organization. Therefore to obtain competitive advantage, the culture must be valuable, rare, and adaptive.
Culture and Strategy
Culture plays a crucial role in organizational performance, and therefore is associated with strategy. The formulation and pursuit of a strategy concerns the allocation of the firm’s resources, and this includes human resources, and directing these resources into a specific set of long term purposes.
Culture Management and Change
Management of culture refers to a planned change on the culture while the change is of a more substantial or extensive nature. Management uses either a top-down change or a bottom-up change approach to impart change. The top-down change management changes culture by the decree that different norms of behaviors are to be observed. Top-down management can also entail use exemplary leadership to effect change. An advantage of top-down change is that implementation occurs quickly. Firms use strategies such as bringing in newer leaders in the top management teams to influence the changes. On the other hand, the disadvantage of top-down change management is that the changes may not be consistent with the values and norms of the lower-level members of the organization and hence resulting to resentment and resistance to change.
The bottom-up change management entails participative approaches from both managers and employees in the process of change management. The disadvantage is that implementation of the change may be slower because of the lengthy time used in decision making. However, it results to some of the best ideas regarding change. Moreover, employees get motivated as a result of their being included in the participation.
Organizational culture is a recent phenomenon in the scholarly works such that at the moment there is no single theoretical perspective from which organizational culture can be described. Organizational culture forms more or less in the same way as the culture in the society or nation and simply implies that there are common standards, beliefs, norms, values and practices that are shared among a group of people. This paper has discussed two perspectives of culture development in the organization: Edgar Schein’s monolithic perspective and Meryl Louis’ multicultural perspective. Schein’s perspective is that a single culture develops in stages when people converge in groups and the process begins by selection of a leader who can direct the group into achieving its goals. Mery Louis on the other hand believes that within a single organization various cultural subsets exist depending on the subdivisions and complexity in the organization. Moreover, an external factor such as employment of people from various cultural backgrounds introduces sub cultural aspects within the organization. Organizational culture is an important management issue that if strategically and well managed can drive the organization to obtain a competitive advantage and spectacular performance.
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