Australia and its culture and strategies

Influence of Culture in Business

1. Describe Baird et al (2007)’s paper in terms of research methodology

As the authors said at the beginning of the paper “The culture of Australian organizations and its relation with strategy”, the first purpose of it is to add and corroborate the research of Sarros and co-authors by examining the culture of Australian organizations, but using a different version of the Organizational Culture Profile and a different subsample of Australian managers.

So, been persistent with their objective, they selected randomly from the Kompass Australia Directory 400 financial controllers in manufacturing and services industries in the country and sent to them a format with some questions via mail. Only 184 completed surveys where receive which represents the 46% of the total of the questionnaires.

The results that the research dropped was grouped and analyzed in order to realize if the hypothesis that they had established (According to what the authors that they mentioned in the paper said) and their research about the topic converged with the findings.

The hypothesis where the following:

1. Organizations with a prospector strategy will have an organizational culture that is (a) more innovative, (b) less stable, (c) less focused on attention to detail, and (d) more outcome oriented than organizations with a defender strategy, with analyzers in between.
2. Organizations with a reactor strategy will have an organizational culture that is weaker in respect of all organizational cultural dimensions than organizations with a defender, prospector, or analyzer strategy.
These hypotheses are developed after two structures were well thought-out. In the first one Organizational culture was measured using the Windsor and Ashkanasy (1996) adaptation of the Organizational Culture Profile (OCP) of O’Reilly et al. (1991) and the second one, was done under Sarros et al. (2002)

Both structures showed similarities because in some way, the authors that were selected to make them used the adaptations of the OCP that was derived from O’Reilly et al.’s (1991). But according to the authors of the paper “the main difference between the two structures is that Outcome Orientation in W&A is split into two factors, labelled Performance Orientation and Competitiveness by Sarros et al. (2002). The Outcome Orientation values of ‘being results oriented’ and ‘having high expectations for performance’ loaded on Sarros et al.’s (2002) factor labelled Performance Orientation, while the values of ‘being achievement oriented’ and ‘being competitive’ loaded on Competitiveness”

By the other side, the results of the questionnaire help the authors to develop a table about the factor loadings and descriptive statistics for organizational culture component items, where they could identify how much important was for the sample, in average, each of the principal component of the OC. Also, they did the same, but just with the principal factors, and in conclusion, the order of importance that the Australians gave to these factors in the organization was:
Outcome Orientation
Respect for People
Attention to Detail
Team Orientation
Innovation
Stability

Then the next analysis was base on notice how much importance each strategic types gives to these principal factors and for last, the same exercise was made, but instead of the strategic types, they analyzed the case of the services and manufacturing companies.

In the analysis of the strategic types, according to the authors of the paper, the results for Innovation, Outcome Orientation and Stability are significant and in the expected direction (taking into account that the financial controllers classified from 1 to 5 the factors, where lower scores represent higher levels of cultural factors) For Innovation, prospectors have the lowest mean score (indicating the highest level of Innovation) at 2.58, followed by analyzers (2.74), defenders (2.76) and reactors trailing at 3.58. For Outcome Orientation,
prospectors have the lowest mean score (indicating the highest level of Outcome Orientation) at 1.75, followed by analyzers (1.84), defenders (2.07) and reactors (2.27).
For Stability, defenders have the lowest mean score (indicating the highest level of
Stability) at 2.26, followed by analyzers (2.35), prospectors (2.77) and reactors (2.85).
The results for Attention to Detail show no significant differences (although the means
are in the expected order of greatest importance for defenders followed by analyzers,
prospectors and reactors).

Hence, while the results were in the expected direction for all four cultural dimensions,
Hypothesis 1 is only partially supported in terms of two of the four cultural factors
(Outcome Orientation and Stability).

For last, the results of the analysis of Services and Manufacturing companies where very similar, According to the authors “While previous studies have produced mixed findings, our results suggest no difference in culture across the two industries. The egalitarian nature of Australian societal culture might also explain the lack of observed differences in the organizational cultures of service and manufacturing organizations.”

2. What were the main findings on Baird et al (2007)?

The Culture of Australian Organizations

In the study the Organizational Culture Profile (OCP) of O’Reilly et al. (1991), was used to describe the culture of Australian organizations, as perceived by those organizations’ financial controllers.

The study found the perceptions of financial controllers of Australian organizational culture were similar to the perceptions of managers.

One of the finding was that that the most prominent characteristic of Australian organizational culture was Outcome Orientation, followed by Respect for People, with Stability and Innovation being the least prominent characteristics.

Organizational culture is an important determinant of managers’ and employees’ work attitudes, decisions and behavior and, ultimately, an organization’s financial performance.

Less auspicious is the low ranking of Innovation, a cultural factor characterized by a willingness to experiment, being innovative, being quick to take advantage of opportunities, and risk taking. Most of the findings are consistent with Sarros et al. (2002) study.

With respect to Australian social or national culture, and its implications for organizational culture, tell us that the country is egalitarian, mateship and Individualistic characteristics, Ashkanasy et al. (2000, p. 42) found that the “mateship” characteristic of Australian national culture “represents a leadership style that focuses on the group”, with leaders expected to be “one of the boys” (or girls?).

Egalitarianism (the belief that people should be treated the same and as equals) has consistently been identified as an Australian cultural trait, and seen by Sarros et al. (2005, p. 176) as “the ability of Australian leaders to engage socially with workers while also nurturing and developing their careers”.

National cultural characteristics: according to Triandis (1995, pp. 44-48) Australian society is “horizontally individualistic”. Horizontal individualism recognizes the egalitarianism aspect of Australian culture and describes a culture where people are regarded as independent of each other and self-reliant and self-directed (individualism), countries that are horizontal individualist do not like people who “stick out”,

The egalitarian nature of Australian societal culture might also explain the lack of observed differences in the organizational cultures of service and manufacturing organizations. That is, in a less egalitarian society, organizational culture might be consciously articulated to fit the organizational context such that service industries might seek to generate more people-oriented cultures than manufacturing. However, in a highly egalitarian society, where a people-oriented culture is generally strong, the societal-driven cultural characteristic might transcend industry differences.

References:
Baird, K,. Harrison, G,. Reeve, R. 2007. THE CULTURE OF AUSTRALIAN
ORGANIZATIONS AND ITS RELATION WITH STRATEGY. INTERNATIONAL JOURNAL OF BUSINESS STUDIES . VOL 15, NO1, pg 15 of 41.


3. How does the culture of Australian organizations relate to their strategy?

Before we can explain the relation between the Australian culture and their strategy, as Baird, Harrison and Reeve (2007) did, it is important to define first the general relation between culture and strategy.

As the authors say, a lot has been studied between this relation, and while some findings said that cultures are strategies themselves to overcome basic life difficulties and survive (Bate, 1994), others say that culture limits strategic options (Schein, 2004) and others that it is the strategies that limit cultures (Joyce and Slocum, 1990).

So no matter how it is studied the truth lies in the fact that culture and strategy are interrelated and are basic to make possible for the organization the accomplishment of its goals as (Baird, Harrison and Reeve, 2007).

After clarifying that relation, we can start studying the factors relating those concepts in Australia.

In the research Baird, Harrison and Reeve (2207) carried out and compared to other research they conclude that the most important feature from the Australian organizational culture is their “Outcome Orientation” as well as the “Respect for people”, while the less relevant has been “Innovation”.

Like that when Australians define their strategies they are seeking for concrete results and the important thing is the result achieved more than the pat to get there. As the authors mentioned those results influence the concept of a successful company and determines how the workers should behave and what attitudes there are. That has also made the companies’ strategies to focus in the financial performance (Thanks to that some authors as Windsor and Ashkanasy (2006) consider the Australian organizations “financial controllers).

Due to the importance of results, the companies also define strategies that allow them to have lasting results on time, maintaining the good performances (Baird, Harrison and Reeve, 2007).

That organizational culture and strategies have advantages, but there are lacks in other aspects as Innovation, what makes companies afraid to experiment and be more aware of new opportunities. Somehow, it is also related to their Outcome Orientation, since Innovation also means taking risks, and when your working toward a result you want to achieve you want to get there in the less risky way possible.

But it also depends on other factors as the economical and social ones that are forcing Australia to consider more Innovation (Sarros, 2002).

Some of the economic reasons shown by Sarros are concerning the recent change the industry is facing because of the transition of a protectionist government to the exposure of micro- and macroeconomic reforms that have changes from the labor market to other as tariff.

The social changes motioned by Baird, Harrison and Reeve (2007) are more related to a new tendency leaving behind its “mate” and layback oriented work environment. Australian companies are becoming more aware of the need to innovate in order to succeed in today’s world and as Sarros (2007) said be “more competitive in the global stage”.

Still the mateship orientation has some good features as the importance of the group work and the support among its members. It is pretty much related to “People Respect”, which also encourages the individual rights and the values of people. Like that Baird, Harrison and Reeve (2007) describe the society as horizontally individualistic; it means that they are self-reliant but equalitarian too (Triandis, 1995).

These tendencies in the society makes the strategies of the companies to look for social responsibility establish a good reputation and have a clear philosophy (Sarros, 2002).

After this analysis of the three main characteristics between culture and strategies within the organization, one of the main conclusions was that in Australia stability plays an important role, and that the culture is an essential part of the definition of the strategies.

References:
Baird, K. & Harrison, R. & Reeve, R. 2007. The culture of Australian Organizations and its relation with strategy. International journal of Business Studies, 15(1): 15-41

4. How does Roy Green (2009)’s article relates to Australian culture and Australian organizations?


Roy Green is relating both parts first when he asseverate the willingness of Australia to get out of the crisis, in this is possible just by following the advises given by some economic authorities. In this way they will try to accomplish the challenge of the short term boost to demand, and by creating a sustainable value creation supported in a long term capacity for innovation and entrepreneurship. So, this is the moment when firms can’t just stay rigid waiting for others to act in behalf of them, but is time for firms to be more innovative, to impulse that creativity in their employees. Those that because their culture has that sparkle of creating things easily, thinking about the consumer and its needs, the products and services that could be bought in a store so they can launch them into the market with more success So by the time they are solving something that have more immediate effects by giving what the market is exactly looking for, is injecting some prosperity and hope with that inventive in a long term using their population which its majority like to live in better conditions improving their lives

References

Business Studies, 15 (1). 15-41), and Green (2009) (full reference: Green, Roy (2009). Innovation the key to recovety. The Australian. 1st April 2009).

Special Note: This blog was made by Juliana Chacón Piedrahita, Mónica Ordoñes Buitrago, María Camila Restrepo Zuluaga, Julia María Rodas Jaramillo and María Natalia Suárez Vallejo