Impact of Organizational Culture in Decision Making Essay

In any organization, decision making has traditionally been put in the hands of the management or superiors. An organization’s hierarchy emerges when an organization experiences problems in coordinating and motivating employees. As an organization grows, employees increase in number and begin to specialize, performing widely different kinds of tasks; the level of differentiation increases; and coordinating employees’ activities becomes more difficult (Jones, 2004).

As globalization and information technology has changed every sector of the world, business organizations have attuned to demand their leaders to make decisions quickly, without needless ado, and move on to other pressing matters.

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This creates the temptation to make the decision unilaterally, for the sake of speed and efficiency, and be done with it. On the other hand, it is becoming increasingly clear that healthy organizations characteristically find strength in opening up participation in decision making and empowering relevant people at all levels of the organization to contribute to the quality of the decisions made.

There are two reasons for making decision making in organizations more dynamic.

First, empowering people to participate in important decisions is highly motivating to them and second, broad participation infuses the decision making process with the full spectrum of knowledge and good ideas that people throughout the organization have to contribute. On the other hand, the concept of organizational culture is at the core of understanding organizational behavior such as decision making.

Organizational culture involves the norms that develop in a work group, the dominant values advocated by the organization, the philosophy that guides the organization’s policies concerning employees and client groups, and the feeling that is evident in the ways in which people interact with one another. Thus, it clearly deals with basic assumptions and beliefs that are shared by members of the organization. Taken together, these define the organization itself in crucial ways: why it exists, how it has survived, what it is about.

As an organization’s culture influences decisions made by its members it also influences its members’ acceptance or rejection of decisions made by its leaders. So when an organization changes its strategy, the primary interest involves assessment of the compatibility of a decision option with the organization’s culture–where an option is defined as a possible course of action in the case of a member who is making a decision, or a proposed course of action in the case of a decision that has been made by leaders (Beach, 1996, p. 118).

For example, CEOs in different industries vary considerably from one another in terms of their background characteristics and experience, an observation that has intrigued the business and academic press. For example, a widely scrutinized and publicized CEO selection decision was Apple Computer’s decision in 1985 to replace founder Steven Jobs with John Sculley, an industry outsider with virtually no experience in the technology-driven personal computer industry. The arguments in this controversial decision centered around the relative suitability of these individuals given the changing nature of the personal computer industry.

As a result of changing industry conditions in which marketing and advertising were viewed as increasingly important strategic levers, Sculley’s marketing background and experience at Pepsi’s beverage operations were expected to make him a better “fit” as CEO than the technologically oriented Steve Jobs (Datta, Guthrie & Rajagopalan, 2002). In this regard, the impact of organization culture in decision making is seen to be very vital. Organizational culture is a powerful environment that reflects past experiences, summarizes them, and distills them into simplifications that help to explain the enormously complex world of the organization.

Efforts to reduce this complexity through simplification processes such as imposing decision-making models on it are not likely to be very workable. In this view, therefore, the culture of the organization represents significant thinking prior to action and is implicit in the decision making behavior of the organization’s leaders. So when two organizations merge, there will be an impact in it uniting the culture as to who will make the decision and the issue of empowerment and participation. Empowerment and participation would be viewed by some leaders as losing power by giving it away to others.

However, modern empowering leaders understand that one gains power by sharing it with others because in collaborative effort the power available to the group multiplies. To make this effective, this effort should be accompanied by the support of ongoing technical training and consultation to help all participants to master the group process skills that are essential to making empowerment succeed. They must also be accompanied by the development of concrete and publicly known processes through which one participates in the collaborative process.

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