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DA8. Organizational Culture Strengths and Weaknesses

Statement

The text described organizational culture as a collection of common beliefs, values, and assumptions that define appropriate and inappropriate behaviors for organizational members (Carpenter, Bauer, & Erdogan, 2010). Drawing on your experience and the material in Chapter 8, describe an example of a company’s culture being a strength or a weakness. In what ways was it a strength or weakness? Share specific cultural factors you noticed to support your observation about the organization’s culture being a strength or a weakness.

Answer

Organizational culture is the set of assumptions, values, and artifacts that define the way an organization operates, its relationship with others, and its internal dynamics. It is a powerful driver to success when applied right, but it can also be a liability when it is applied wrong, or when it becomes a barrier to change, innovation, or retention of talent (Carpenter, Bauer, & Erdogan, 2010).

Enron, a company that was once a giant in the energy sector, then collapsed into bankruptcy in 2001 under the pressure of the biggest corporate scandal in history (Nguyen, 2021). The scandal involved accounting fraud, insider trading, and other unethical practices that ended the company and jailed some of its top executives for life. Enron’s corporate culture played an important role in its collapse. It was a culture of greed and money making — “In Enron, greed was good and money was God” (Nguyen, 2021).

Enron is an example where a strong organizational culture can be a weakness. The company had a strong outcome-oriented culture that was characterized by its aggression, competitiveness, and focus on results; no matter the ways that can be used to achieve them. This led to a culture that tolerated unethical behavior to achieve outcomes (financial outcomes) without seeing it as a problem.

Google, the famous search engine and tech giant, is an example where a strong organizational culture can be a strength. Google’s culture is characterized by its emphasis on creativity, innovation, and collaboration. Google’s flat structure, its openness, and its focus on employee empowerment align with its culture and where a great part of its success comes from. Such success comes from developing new products and services, entering new markets, and staying ahead of the competition (Google Organisational Culture, 2019).

To conclude, organizational culture is one element of an organization that can be a strength or a weakness. Both Enron and Google are examples of how organizational culture can be a booster or a barrier to success. Enron’s culture of aggressively focusing on financial outcomes no matter the means led to its collapse, while Google’s culture of innovation and people empowerment aligned with the industry needs and it still gave it a competitive edge.

References

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