Organizational Culture

In this essay I will discuss the pros and cons of different organizational structure for a US Plastic manufacturing company in Thailand based on the cultural dimensions affecting the organizational structure based on current theoretical framework and analysis and also on credible empirical evidence.

In addition I will discuss the challenges

the company will face in developing a cross-cultural organization based on current cultural issues affecting organization on a theoretical and empirical basis. In addition I will discuss how cultural issues in Thailand will affect the phase of change and how to overcome resistance to change using effective strategies in Thailand in a cross-cultural context and building an organizational culture, which is inclusive of diverse cultural perspectives and accepts diversity and minimize conflict and intolerance.

Pros and cons of different organizational structure and the most suitable organizational structure given the cultural dimensions of Thailand:

The organizational structure is the means to combine tasks, technology and human resources to achieve organizational objectives. There are two opposing forces in designing organizational structure. They are grouping similar tasks together to enable specialization so that people can focus on what they do best and the need to integrate functions so that they work as a system and not optimizing a sectional objectives, which is conflicting with the organizational objectives as different grouping may have different interests and values. That is in all organizations there is a need to balance these opposing forces so that it is suitable given the nature of technology, human resources, and products.

The traditional organizational structure can be a hierarchical functional to be done centrally and line of communication are top down and there is upper level management; middle level management and lower level management and the employees and they may have different functions like marketing, production, human resources, administration, finance, information technology purchasing and stores etc.

As well managers make decisions mostly individually or in a group regarding the operations of the organization and employees mostly do not participate in the decision-making process and they accept formal authority of the management and they like specific instructions in doing their tasks and the company produces less variety of different products.

The advantages of this organizational structure is enhanced co-ordination and control, efficient use of managerial and technical talent, improves organizational perspective within the organization, centralized decision making which enhances control of activities and reduce discretion of middle and lower level and employees to make decisions which is not compatible with organizational objectives as well it enables career paths in specialized areas.

The disadvantages are as there are specialized units they may have different values and interests and pursue short-term goals and also reduce communication and co-ordination. In addition it is difficult to establish uniform performance standards because sub unit objectives may differ and conflict with each other and there fore difficult to establish uniform performance standards.

Another organizational structure also can be a matrix organizational structure where a combination of functional and divisional structures is used where the individuals have to be responsible for project manager and functional manager. The advantages of matrix organizational structure is that it utilized specialized personnel and equipment effectively and also make mangers to have a broader range of experience and responsibility. The disadvantage is that it causes uncertainty and intense power struggle and work relationship becomes more complex as well decision make take longer time than in other organizational structure.

As one can see from traditional organizations they have vertical boundaries, horizontal boundaries external boundaries such as suppliers, customers and regulators and boundaries of location, culture and markets. So an international organization can also have a boundary less organizational structure if there is high trust and have a common shared interests.

These organizations can have flexible organizational boundaries, use of teams, and build mutually beneficial relationship and communication flows with internal and external parties. The advantages of this organizational structure are it uses the talents of all employees, enables co-operations between functions and divisions, faster response to changes in external market conditions, it enables to coordinate key suppliers, customers and other partners as it benefits all parties.

The disadvantages are it is difficult in practice to overcome political boundaries, lack of common vision and leadership, which may cause coordination problems, democratic processes may be time-consuming, trust is not at high level may affect organizational performance.

The cultural dimensions as per Geert Hofstede are power-distance, uncertainty avoidance,
Individualism Vs collectivism, masculinity, long-term orientation Vs short-term orientation. Power distance means the inequality in society accepted by the social structure. Thailand is more unequal compared to US.

According to Geert Hofstede rank of 64, which is very high and shows a high level of inequality in wealth and power, which is due to the acceptance of Thai society because of their cultural heritage rather, inequality forced upon the population. Thai society also is a society, which avoids uncertainty by rules, regulations, and religious practices and by laws. They like certainty and they tend to be risk averse. For example the Geert Hofstede ranking for Uncertainty avoidance is very high for Thailand like the power distance ranking.

In US individualism is encouraged compared to Thailand. That is in Thailand relationships are valued than anything else compared to US. Thai values collectivist norms than individualism because of their society encourages strong relationships where everyone take responsibility of the group than every body to themselves and to stand on their own feet like in US.

The masculinity refers to the assertiveness and competitiveness of societal members. According to Geert Hofstede the masculinity ranking is 20, which is very low. This shows the Thai culture is not very masculine and the males and females have traditional roles in society and the society reinforces these roles.

As discussed above as Thai culture more readily accepts authority and like certainty and not like ambiguity and risk averse modern organizational structures like matrix and team organizational structures are not suitable to Thailand because the Thai culture like rules, regulations and safety and like to avoid uncertainty.

In this cultural and religious context
the traditional bureaucratic organizational structure with group decision-making is more appropriate to the Plastic company at least in the initial stages to become established in Thailand. However as all cultures are dynamic and after they expose their culture and overcome resistance effectively they can move to a more modern organizational structure with an incremental change process rather than a rapid change process which is not viable in Thailand cultural context.

The challenges the Plastic company faces to build a cross-cultural organization in Thailand:

Challenge of change power dynamics

When the company introduces new employees who are different from the traditional cultural background the existing players will perceive or experience an erosion of power.

This may reduce commitment to the organization. As well they also increase power struggles because they compete for scarce resources and with this the inclusion of new employees and the dynamics of this interact with unstable power structures and can lead to poor performance due to high labor turnover, absenteeism and perceived procedural injustice. At the initial stages of intolerance and tolerance stages the managers must mange the power struggles within bounds by appropriate strategies and inter personnel skills to move the organization where the diversity is valued by all employees and by all levels of management.

Challenge of diversity of opinion

As discussed above the introduction of new employees may increase the diversity of opinion in any issue in the workplace. This increases the possibility of mis interpreting communication and can leas to more conflict in the organization and in some circumstances if the conflict is excessive if not managed well by the managers and leaders in the organization may lead to poor performance. Lack of political skills and conflict resolution skill and real concern for tolerance than lip service may inhibit the use of skills and talents of new employees from different cultures if the diversity opinion and the resulting conflict are not managed effectively.

Challenge of perceived lack of empathy

The diversity of opinion is linked to the lack of empathy. Perception that managers and leaders do not have the capacity for empathy with followers may lead to most disruptive in organizations where it is characterized as intolerant. Many may have a lack of empathy to people from other cultures. This may place the leader or manager in the middle of a political battle between different factions. If managers in deeds and words do not show the followers that all are respected and their needs and concerns are appreciated and manger perceptions and anticipate to misperceptions and situations then this may lead to poor performance and organization and will not move towards a more appreciative of diversity and genuine cultural tolerance within the organization.

Challenge of perceived and real tokenism

If new employees are hired under a quota system to fill vacancies from different cultural background or from different face may be perceived that they are hired not because of their talent but they are from a different background. This may produce mistreatment of the newly recruited member and the employee may become uncomfortable and may become alienated because of mistreatment by the other staff and peers.

There fore quota system must be not a method to increase diversity in the organization. However even if recruited on merit a person from a culturally different background the existing staff may perceive tokenism because they attribute they are recruited because of race, age or gender.

As well if tokenism is perceived the failure is attributed to race, age and gender and if success happens they attribute to the benevolence of the organization or to happenstance. This may affect the self-esteem of the employees and lead to poor performance if these perceived perceptions are not managed effectively.

Challenge of participation

Participation is an essential process in a diverse workforce organization. However at an initial stage participation is difficult to achieve because the voice of different groups are not heard and implemented. If participative processes are not adequate and every one has a voice then he organization will not move from an intolerant organization to a more appreciating organization which value tolerance and diversity of opinion and creativity in an organization and genuinely value the possible benefit of diversity.

Challenge of overcoming inertia

If leaders are familiar with rapid agreement and implementation from a more homogeneous culture and have to spend much time resolving diversity issues in a diverse organization particularly in a tolerant stage where the leader has to resolve all diversity issues and may have problems of inertia as these sap lot of energy. If they don’t take steps to address this challenge effectively as diverse organization can become dysfunctional if they loose their vision and their inertia.

Cultural and other issues affecting the phase of change in Thailand and how to overcome resistance to change in Thailand by the plastic company:

As discussed above Thailand’s culture avoids risks. That is it needs certainty and likes stability. In addition it’s not a masculine society and it lacks assertiveness and competitiveness. These cultural characteristics are not conducive to a dynamic change process and like a planned change with limited disruptions to its social and religious system. As well in Thailand is a Buddhist country and it affects its economic system to a greater degree and most of the people are short-term oriented and not long-term oriented.

These characteristics do not allow for a fast changing business world in Thailand. There fore given the risk averse character of most Thailand people the change process must be slower and the phase of change must be slower. However all societies change and evolve over time. If the Thailand economy grows in the future due to global economic influences the cultural climate also change.

However as Thailand is a strongly a traditional conservative country the changes in culture may take a long time compared to other Asian countries like Malaysia, Korea, Vietnam and Singapore. The US plastic company must understand this in the phase of change and the strategies they adopt to manage change effectively.

As well the challenges to make the organization as a cross-cultural organization as discussed above will take a lot of time and it also retards the phase of change in Thailand. To overcome resistance to change the top management must support a new organizational culture and must re define its vision and values and communicate all levels of management and also enhance the managers cross-cultural knowledge by appropriate training if they require training in this field and also give opportunities to work and pair with Thai employees and also improve their ability to resolve conflict and enhance cooperation.

In addition they also can address the issue of acquiring language skills, which may increase their acceptance in the Thailand work place. By appointing managers who are skilled in resolving conflict and have a tolerant approach to a variety of opinion also may increase the use of talents of all employees including the Thailand employees at all levels. The managers must have good leadership skills and other cultural and political and perceptive skills so that they can anticipate misinterpretation and misperception and situation they can arise and minimize damaging conflict or erosion of self-esteem of Thailand employees at the initial stages when the organization is intolerant to a new organizational culture.

In addition the managers can be a role model for US employees and The Thai employees and must be mentor and facilitator to resolve any work problem and also be a person to resolve inter personal dispute and perceive by the employees that they are objective in all deliberations and show empathy and are not biased to any group. This is vital for the organization to change to become more productive and take acceptable risk in new market opportunities in time as well also increase the organizational performance.

The human resource policies also can be reformed so that its pay structure and other human resource policies help to reinforce diversity and the benefits of diversity and cross-cultural understanding so that it minimizes the damaging conflicts and to forge integration and find common ground other than parochialism or ethnocentrism which may alienate some employees and not enable to use their talents fully to achieve the organizational goals.