Monday, June 2, 2014

Fit - prespective of Organizational Culture

In the last byte, we looked at the role a strong culture is believed to have on performance of an organization. In today's byte, we look at another way in which organizational culture is believed to have an influence on its performance - the "fit" perspective.

The "fit" perspective, claims that a culture is good only if it fits the industry or the firms strategy. It identifies three particular characteristics of an industry that may affect its culture:
  1. Competitive Environment in which it operates
  2. Requirements of the Customer
  3. Expectations from Society
Lets take the example of the computer manufacturing industry - it is notes that there is a highly competitive demand for products - new features, new experience and every vendor is pushing something new; customers wish for a highly reliable product; the overall society expects a state-of-the-art technology and high-quality service. The traditional hierarchical structure and stability wouldn't work well in this industry - there should be a lot of experience, team/project centered decision making with keen oversight from the top management right!
Note here that - the fit perspective is used in explaining short-term performance but not long-term performance.
It is not going to be any easy to change culture quickly, especially if the culture is widely shared and deeply held.

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