Do You Agree That a Successful Organisational Culture Must Focus on How Employees Are Treated? Essay

Submitted By MichaelS1994
Words: 1278
Pages: 6

Do you agree that a successful organisational culture must focus on how employees are treated?

An organisational culture is the accepted norms, attitudes, beliefs and behaviours which prevail within an organisation. According to Charles Handy there are four main types of organisational culture – power, rule, task and person culture. An organisational culture is usually implemented by the leadership and the strength and depth of the culture will rely upon the acceptance from the employees. There are numerous examples of businesses that have/haven’t a successful organisational culture but I am going to use three examples to help me answer this question – Wal-Mart, John Lewis and Google.

‘The Wal-Mart Way’. Sam Walton created a unique culture at Wal-Mart, and by investing in cultural indoctrination of all of his managers has turned Wal-Mart’s culture into a powerful sustainable competitive advantage. However ‘The Wal-Mart Way’ has come under some scrutiny in recent years. Wal-Mart’s authoritarian culture and profit led business focus has led to an unsuccessful organisational culture. Wal-Mart places a high emphasis on the bottom line consequently this has resulted in managers cutting salaries and other employee bonuses such as health care payments to increase profit margins. Therefore the cuts placed on employees have seen a fall in employee relations, motivation and organisational culture. However due to the current economic climate employees have no option than to accept lower wages due to the excess supply of labour in the labour market forcing wage prices down. Furthermore the absence of trade unions due to Wal-Mart regulations has decreased the power of the employees further resulting in the lack of industrial action. Consequently the absence of trade unions and excess supply of labour has resulted in a fall in absenteeism and labour turnover further cutting costs for Wal-Mart such as training costs and cover staff wages due to employees being fearful of loosing there jobs, coupled with lack of benefit payments for the unemployed in the US. Therefore Wal-Mart employees have no option but to accept lower wages and benefits. Therefore the cut throat nature of Wal-Mart has resulted in an increase in businesses profits throughout the recession with an annual gross profit of $119.95 billion in 2012 which is 82.1% higher than there closet competitors Walgreen Company. However profits in the short term are strong Wal-Mart could see a dramatic change in the long term. Places such as New York have denied Wal-Mart to open stores in its community due to protests and opposition against low wages and poor employee’s benefits. Consequently Wal-Marts unsuccessful organisational culture in the long term could damage future profits due to a possible boycott by consumers decreasing sales or possible industrial action by employees possibly forcing wages up and decreasing profit margins. To conclude I believe that Wal-Mart is a good example of a company financially doing well but whom has an unsuccessful organisational culture due to the mistreatment of their employees. Wal-Mart has cut employee salaries and bonuses extras to increase profit margins.

The John Lewis Partnership's reputation is founded on the uniqueness of their ownership structure and commercial success. There purpose is 'the happiness of all members, through their worthwhile, satisfying employment in a successful business', with success measured on their ability to sustain and enhance there position both as an outstanding retailer and as a thriving example of employee ownership. With this in mind, John Lewis’s strategy is based on three interdependent objectives partners, customers and profit. Consequently the increased employee empowerment at John Lewis has seen the business thrive throughout the recession with like-for-like sales increasing by 9.2pc. John Lewis uses the scheme of profit sharing with partners (aka employees) to increase motivation and…