Table of Contents
Introduction JC Penney's organisational culture and experience Leadership's influence on organizational culture Conclusion References
Current research aims to assess the value of organizational culture and leadership in contemporary strategic management. The case study of JC Penney will be used to analyze the best practices and procedures necessary for the successful implementation of strategic management, with a particular focus on the business practices of contemporary corporations. We hope that the current research will be useful to anybody interested in strategic management, leadership, and organizational culture.
Business executives and savviness are becoming increasingly aware of the significance of organisation culture as a component of strategic management growth; yet, they do not comprehend or have uniform knowledge of the theory itself. In contrast, they have practical knowledge of other concrete areas of organization administration, such as the design of a trade strategy and the organization's structure.
The process of culture formation and maintenance gives a foundation for comprehending the cultural management of numerous organizations. It also offers insight into the approach for analyzing the organization's culture. By integrating culture to business strategy, the emphasis is on culture as a practical concept and there is a shift in the analysis of the idea from a generic to a practical context. Therefore, the notion is investigated to provide insight into the elements that influence the establishment and maintenance of organizational culture and those that determine its substance. There is a contrast between the dominant culture of the organization and the subcultures that develop inside it.
Particular focus is placed on the role of the organization's founder in the culture formation process of evolutionary management. Various techniques for interpreting organization culture have been developed. In order to provide insight into the process for decoding organization culture, a quick summary of these methods is provided. Emphasis is focused on the importance of the cultural audit and the management of culture as a component of the strategic management process. Examining the difficulties experienced in comprehending organization culture in order to acquire a better understanding of the duties involved. In some instances, organisation culture can be classified in terms of identifiable cultural characteristics, yet Thomas and Whittington’s typology of culture is analyzed in order to gain an understanding of the cultural categories and to determine their relevance within the context of strategic management (ICFAI, 2002, p. 13). (ICFAI, 2002, p. 13).
Finally, the process of culture perpetuation is used to highlight the methods for effecting cultural change within organizations. This is especially important from a strategic management standpoint.
JC Penney's organisational culture and experience
The definition of culture is "historically transmitted patterns of meaning embodied in symbols, a system of inherited conceptions expressed in symbolic forms through which men and women communicate, perpetuate, and develop their knowledge and attitudes about life" (Chakravarthy and White, 2002). Despite the fact that organization culture has been defined at the societal level, it influences the behavior of individuals, which impacts the performance of businesses (Robbins, 2004).
Culture of an organization defines how things are conducted within the organization. Depending on the organization's strength, it is a source of stability or a barrier to change. The organization’s culture has numerous qualities among them innovation and risk taking people orientation, outcome orientation, aggressiveness stability and team orientation. Organization culture deals with ways in which employees perceive the organization features including leadership, delegation, communication channels and management of change (Robbins, 2004, p. 78). (Robbins, 2004, p. 78).
Information system, organizational structure, reward system, processes, people, and leadership are cultural variables that have received significant study from the perspective of strategic management (Drummond, 2000, p. 14). Formal and hierarchical organizational structure, it is asserted, impedes the implementation of effective strategic management efforts.
Among the frequently cited organizational structures that make strategic management more permeable are learning organizations and communities of practice. Reward system is a cultural component that involves performance and pay system. Strong and dedicated leadership that walk the speak is considered as a must-have cultural component. In addition, it is the responsibility of the leadership to establish the organization's vision, goal, objectives, and code of ethics.
Myron E. Ulmman, chairman and chief executive officer of JC Penney Corporation, correctly asserts, "The business is no longer just about store managers; it's more complicated than it used to be, and I must motivate employees from the entry level to the officers." If I could honor the past and lose or go forward and win, I would choose to win (ICFAI, 2007, p. 2). This postulates the idea that the role of organizational culture as acknowledged as crucial part of strategic management. As suggested by the case study, JC Penney's business performance was improved by strengthening its organizational structure to make it into a "place to work in." The primary focus was on fostering a customer-centric culture throughout the organization. There is no denying the significance of the fact that this strategy is consistent with the ideas of theorists such as Tannenbaum, who asserts, "Reaching a common understanding about the inherent beliefs in the organization provides a platform for further explorations of the behavioral norms that help define the organization's culture." (Tannenbaum, 2003, p.19).
Long ago, JC Penney's organizational culture was characterized by rigidity and strictness, which intimidated new employees and hindered the development of human capital, which, according to Carpenter et al.(2001), "is a crucial component of business development under globalization" (ICFAI, 2007, p. 34).
Transformations in communication and symbols were implemented as part of the organizational culture modifications. This mostly refers to the "Call me Mike" program, which aimed to break down communication barriers between regular staff and managers.
In addition, JC Penney's management introduced development programs and trainings such as 'Winning together' in order to foster a democratic culture within the corporate organization. These modifications were intended to foster the development of human capital and a positive work environment at JC Penney, in accordance with current best HR practices and procedures. According to Mcgoldrick et al. (2002), the main prerequisites for developing a successful organizational culture are: 1. a shared understanding of the organization's goals by all employees; and 2. the organization's integration into its environment, which fosters positive relationships with all relevant parties. Perfect social interaction between units and between employees, healthy work environment Creating activity patterns that can be implemented on a daily basis without assistance or special attention. 5. Stress training is an essential technique for ensuring the health and well-being of employees (Mcgoldrick J., Stewart J., Watson, S., 2002). The benefits of these strategies proved beneficial in drawing new talent from colleges and institutions, as news of the positive corporate culture spread rapidly among job seekers. In addition, it should be highlighted that the implemented policies were beneficial in terms of boosting the company's economic performance, which is a strong indication of the relationship between organizational culture and business success.
According to Pfeffer (1998, p. xvi), "the returns from managing people in a manner that fosters high commitment, involvement, learning, and organizational competence are typically in the 30 to 50 percent range, which is substantial by any standard." And later he adds (Pfeffer, 1998, p. 32): “substantial gains, on the order of 40 percent or so in most of the studies reviewed, can be obtained by implementing high performance management practices.” (ICFAI, 2007, p.33).
In conclusion, the actions made by JC Penney's leadership were effective in terms of fostering a new democratic organizational culture that improved employees' commitment to the company's interests and facilitated the implementation of sound strategic management decisions.
Leadership's influence on organizational culture
In his work, Johnson et al. (2005, p. 78) highlighted the important responsibilities of leadership in the establishment and management of organizational culture throughout the growth of an organization. Leaders or founding members of an organization are the first leaders and have the most influence on how the organization will be managed during its formation. At this point, a definition is made. This is due to the fact that founders or leaders are typically entrepreneurs with a great degree of self-confidence and resolve; they typically impose strong preconceptions on newly created businesses (Drummond, 2000). Their assumptions are thriving in the firm; they will be viewed as accurate and will eventually be incorporated into the organizational culture. A founder member will to choose associates who share the same ideals, similar assumptions, and so reinforcing the foundation of the company culture per se. Keyton proposed two sorts of techniques that powerful members of an organization employ to incorporate their assumptions into the organizational culture, thereby influencing strategic decision making (2004, p. 56-59). (Table below)
Secondary mechanisms are the organizational environment, and they are a reflection and manifestation of cultural assumptions received from the leaders, particularly during the establishment of organizations. These secondary mechanisms can constitute a potent reinforcement of the leaders' primary mechanisms (Brass B., Riggio, R., 2006). The secondary mechanisms must be congruent with the core mechanisms, and leaders must set the appropriate example.
Principal Implantation Mechanisms Mechanisms for Secondary Articulation and Reinforcement
What leaders regularly pay attention to, measure, and control
The responses of leaders to crucial situations and organizational crises.
observable criterion leaders use to allocate scarce resources
Intentional modeling, teaching, and mentoring
observable criteria leaders use to give prizes and status
Observed criteria by which organizational leaders recruit, select, promote, retire, and expel individuals. Organizational design and structure
Organizational systems and procedures
Institutional rites and ceremonies.
Design of physical space, building facades, and structures
Legends, myths, and folklore concerning persons and events
Official declarations of an organization's ideology, principles, and credo.
In terms of the effect of leaders, the dynamics of organizations in their midlife, maturity, and decline are substantially distinct from those of organizations in their formative years. For example, in the midlife firms, the culture defines the leadership as founders have been replaced by newer generations of CEOs. The next generation of leaders must comprehend the organizational culture and determine which cultural assumptions must be altered (Clegg et al., 2005, p. 45). In short, they become agents of cultural transformation. They can promote change through the systematic promotion of desired subcultures, the implementation of planned organizational development projects, the creation of parallel learning structures, or the defrosting and induction of change by technology seduction. When organizations enter the maturity and decline phase, which may suggest that the current organizational culture has become obsolete, the leaders must initiate a more extensive reform process. At this time, executives with a transformative leadership style are frequently sought after (Politis, 2001; Carpenter et al., 2001).
The case study of JC Penney indicates that leadership development was one of the most important criteria for building an effective organizational culture and strategic management within the company. Through the mechanisms of training and motivation, the management tried to nurture the development of leadership qualities in a variety of employee categories, beginning with low-level managers, group leaders, and upper management. The emphasis was placed mostly on fostering a "emotional connection" between personnel and clients. According to the case study, JCP hosted a leadership seminar for store managers in January 2006. This conference's primary objective was to foster leadership, autonomy in decision-making, and creativity. During the conference, the plan titled 'Long Range Plan' was formulated with the participation of all employees. According to the company's chief executive officer, "We have invested extensively in executive education and leadership training for our managers, as well as strategic skills for our top employees… We're devoted to being a fantastic place to work, and we believe that lowering our turnover rate to the lowest in the industry would be the first benefit of altering (p. 10). According to the case study, new leadership strategies were effective in boosting JCP's economic success and consumer confidence. The formation of customer-tailored solutions-designing teams was one of the primary outcomes of employee leadership development.
All business and management professionals applauded JC Penney's management's move to overhaul the company's organizational culture. One of the most significant obstacles to quick expansion and great performance in the retail industry is the skill gap. Prior to the business's reformation, JC Penney's rigorous culture had a negative impact on strategic management and corporate performance, which cannot be denied. Job satisfaction depends not only on monetary pay but also on the working environment and organizational culture that unites all employees and management in achieving the strategic goals of their company. As smart managers say, ‘Happy employees generate happy customers’.
The strategy to developing organizational culture in JC Penneys’ company was elaborated not voluntarily but through broad and rigorous consultations with representatives from other organizations, employees, theoreticians and practitioners. Before making any decisions, sensible and effective management is exemplified by the development of a thorough action plan, according to the analysts who evaluated the company's recent transformation. In addition, one of the most important lessons that can be learnt from JC Penney's case study is the significance of the involvement of top management in the execution of reforms. JC Penney's management was in constant communication with low-level employees who participated in trainings, seminars, and other gatherings. This pertains specifically to the Retail Academy education for which they invested countless hours.
There is no denying the significance of the fact that organizational culture is not only about management involvement in the lives and work of their workers, but that it is only effective if implemented in a consistent manner. It indicates that for organizational culture to be cost-effective and dynamic, the conditions necessary for its systematic replication must be maintained. Therefore, a system of norms, self-control, and checks and balances must be in place to regulate the effectiveness of corporate culture on an ongoing basis.
Notable is the fact that JC Penney's strategy for enhancing organizational culture was designed to fulfill the company's broader economic objectives, i.e., to succeed in the severe competition with other retailers and department shops. Therefore, JC Penney's strategic management was dependent on a combination of technology, culture, and business procedures. The successful implementation of these strategic features was one of the most important criteria for the company's effective business performance.
According to the case study of JC Penney, changes in organizational culture led to improved customer service, the creation of exclusive design lines (creativity), and other enhancements in the quality of business operations. In conclusion, the impact of a flexible approach to organizational culture and strategic management was clearly apparent in JC Penney's business.
It is evident from the preceding discussion that organizational culture has a significant impact on the implementation and development of strategic decisions. Therefore, the organizational culture must encourage self-confidence in personnel. I emphasized the pervasive influence of leadership on the organizational culture. The organizational culture should reflect the goals of the leadership. This is due to the fact that only leaders can collect organizational resources to achieve desired goals.
I believe that leadership is the most important issue to address before corporate culture. This is especially true because businesses tend to disregard the significance of culture. I will propose that the organization continue to promote a culture of integrity, ethics, and innovation in corporate governance.
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