Managing Cultural Change in a Business Process Outsourcing Organization in Makati City

Managing Cultural Change in a Business Process Outsourcing Organization in Makati City

Balisa, Daniel, Escobar, Hidalgo, Mariano, and Palamos

Far Eastern University – Makati

Professor Richard Pescador

Managing Cultural Change in a Business Process Outsourcing Organization in Makati City

        John F. Kennedy once said that change is the law of life; and those who look only to the past or present are certain to miss the future. The business sectors are constantly facing issues in relation with globalization and some changes in consumer and labor markets and in technologies. It is known that if organizations can’t adapt to these changes, then they will be risking failure (Alvesson & Sveningsson, 2008). Much of existing writings and of projects of organizational change involves organizational culture. Culture provides the organization a sense of identity and determines their rituals, beliefs, meanings, values, norms and language (O’Donnell & Boyle, 2008). Cultural changes occur both in the company environment and within the company. Corporate culture is created through every aspect that is incorporated in every company, every element that makes them stand out compared to others. Culture defines an organization’s overall lifestyle that reflects their relationship with the management and workforce and the quality of everyone’s performance (Jackson, 2013).

         The culture of an organization can have a powerful impact on the employees. A positive, open culture can create trust and loyalty among employees, giving them passion for their job and dedication to the company. If the employees feel comfortable in the culture, they are more likely to be engaged in their jobs and companies, which can inspire enthusiasm and productivity (Smith, n.d.). When cultures are aligned, employees tend to become highly engaged which reduces attrition and improves performance (Gangemi, 2013). Culture change is arguably the most powerful tool for transforming businesses, but it is also one of the least well understood. Without it, many well documented company turnarounds would not have happened (Moyce, 2015). Culture plays a pivotal role in the success of organizations and their ability to influence change in processes, attitudes, and initiatives that can further their success. Shared values connect employees, including a commitment to leadership, which is a shared performance competency (Parker, 2014). Culture can also affect the employee’s interaction with one another which is why it is very important for the different companies and organizations to guide the transition of culture change and lead their employees to better understand and cope up with the change the organization is undergoing.

        Most organizations undergo change; it is inevitable as new ideas promote growth for them and their members. It can create new opportunities, but are often met with criticism from resistant individuals within the organization (Brookins, n.d.). The employees affected by the change often resist it due to actual or imagined threats to an established work routine (Brown, n.d.). Despite of resistance and other reactions to change, when combined with a strategic plan, it would result to a positive corporate culture that is a major strategic asset (Flamholtz & Randle, 2012). According to Denning (2011), there is a strategy that enables organizations to cope with cultural change. It includes leadership tools, which bring inspiration such as vision, persuasion, and role modelling; management tools that provide information about role definitions, measurement and control systems; and power tools such as coercion and punishments as a last resort, when all else fails. Goldberg (1992), also identified several steps to make change programs successful, it includes opening channels of communication, developing a learning environment, and providing training. Change can only be successful if there is a clear awareness of purpose and process. People need to understand why it is needed, how it will be accomplished, their role in the process, and what it means for them at an individual level (Bevan, 2011).

        Culture is important because it can affect business outcomes in a number of ways, both positive and negative. For instance, if it is not aligned with the corporate strategy, it can result to decreased loyalty, a lack of motivation, and high employee turnover. In another sense, if it is healthy, it can impart pride and a sense of purpose to employees, leading to increased productivity and a greater understanding of corporate goals (General Electric Capital Corp., 2012). Schein (2004) believes that leaders play an important role in change management; that they must be able to create and manage culture; they must also be able understand and work with it; and that it is an ultimate act of leadership to destroy culture when it is viewed as dysfunctional (p. 11). Leaders must also be consistent in their own behavior as it helps in communicating what their priorities, values, and beliefs are (Schein, 2004). One of the significant ways in which a leader or HR manager can change an organization culture and embed their assumptions is through the process of selecting, recruiting, and retaining people in the organization (Madu, n.d.).

A Review of Related Literature

        According to Gagliardi (2002), the primary strategy of an organization is the maintenance of its cultural identity in terms of prevailing values. It is perceived that organizational culture is the single most important element in organizational success and it remains a central aspect behind organizational topics such as commitment and motivation, prioritization and resource allocation, competitive advantage, and organizational change (Alvesson & Sveningsson, 2008). The organization culture or company culture is the environment or habitat in which employees operate, where it powerfully shapes employees’ feelings, experiences, opinions, the connection with their organization and their interaction with their colleagues (Pietkiewicz, 2008).

Foreign Studies

Why Organizational Culture Matters

        A very basic explanation of what culture in an organization is it is the ‘feel’ of a workplace, the way things are done; the way people communicate and work (Pietkiewicz. 2008). It is as important as the business strategy because it either strengthens or undermines the business and the objectives it is trying to achieve. A research found that firms with strong cultures hold a cultural norm of adaptability and those firms who successfully cultivate adaptability tend to permit their people to express themselves in wide-ranging behaviours, and this freedom of expression helps employees to fully explore divergent solutions to a problem (Chatman, 2012). A strong, positive, clearly defined and well-communicated culture attracts the right fit and talent. It also creates a work environment that either strengthens or weakens employee engagement and retention. One research shows that employee happiness and satisfaction is linked to a strong workplace culture. And, organizations with stronger cultures outperform their competitors in financial performance and are generally more successful (ERC, 2013).