Relationships between organizational cultures and HR

For an organization to be successful over the long term, its management style needs to be designed depending on its culture. Many researches show that human resource practices are belong to strategic management practices and have significant impact on organizational success. The importance of HR function is increases and recognized in many ways. Top executives’ attitudes about the importance of the HR function have a significant impact on an organization’s bottom line (Phillips, 1996). HRM practices have a positive and significant impact on organizational productivity. Companies have been encouraged to adopt a variety of performance-enhancing or progressive human resource management practices to improve their global competitiveness (Zhu, Chew and Spangler, 2005).

This study aims to find a relationship between organizational cultures and human resource management outcomes. If there is a relationship, then organizational culture can be change and directed towards a desired one. This study will be a useful research in the Human Resource Management discipline and a useful guide to professionals in work life.

The study will use survey as instrumentation. Survey will be designed to identify the culture and to get numerical answers to human resource management metrics.

The research question and hypotheses

Human resource practices outcomes will differ depending on organizational culture. Alternately, Human resource practices outcomes do not differ depending on organizational culture. The dependant quantitative variable is Human resource practices outcomes and the independent categorical variable is Organizational cultures in this study. There will be questions to identify extraneous variables such as Survey respondent type (committed or not committed, honest or not etc.), Industry, Company size, Company age, Importance level of human resource practices to the company.

Definitions

Human Resource Management – employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

Organizational culture – the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.

Assumptions

For the purposes of this study, it is assumed that participants are aware of their environment and will respond honest to the survey questions.

RELATED LITERATURE

Organizational Culture

Schneider (1988) argues that the construct of culture has caused much confusion. While there are multiple definitions, they tend to be vague and overly general. This confusion is added to by the multiple disciplines interested in this topic, which while increasing richness, does not necessarily increase clarity. Anthropologists, sociologists, psychologists, and others bring with them their specific paradigms and research methodologies. This creates difficulties in reaching consensus on construct definitions as well as their measurement or operationalization (Schneider, 1988).

According to Hansen et al. (1994), the study of cultural patterns allows us to understand the ideologies, beliefs, values, and norms that drive corporate behavior. Attempts to describe shared belief systems have traditionally focused on the role of the company’s founding father in defining fairly stable parameters (Schein, 1985, 1990). However, organizations can also be viewed as dynamic entities whose norms and values are created through the social interactions of their members (Smircich, 1985). It often begins with a founder or a leader who articulates particular ideas and values as a vision, philosophy, or business strategy (Ngo and Loi, 2008) but when these ideas and values bring about success, they become institutionalized through the implementation of management practices (Daft 2007).

The previous studies show that the culture is extremely difficult to imitate or duplicate (Fitzgerald, 1988; Mueller, 1996), according to its inherent tacitness, complexity and specificity (Barley, 1983; Gregory, 1983; Lippman and Rumelt, 1982; Meek, 1988; Reed and DeFillippi, 1990). Additionally, some researchers stated that organizational culture can provide a source of sustained competitive advantage for companies, especially when it is seen as a firm-level resource that is valuable, rare, and difficult to imitate (Barney 1986; Fiol 1991). The ‘necessary’ culture is a culture that offers direction for employees to develop their skills and learn new innovations, clear guidance for allocating firm resources for competing for the future (Hamel and Prahalad, 1994), a strong sense of need for creativity, positive and proactive attitudes toward changes and commitment to work with a high degree of flexibility (Denison andMishra, 1995; Kotter and Heskett, 1992).

According to Hansen et al. corporations are composed of many subcultures that represent differences in values, meanings, and thinking patterns. Examples include perceptual differences about ways to resolve conflict effectively, the information needed for sound decision making, the structure of motivational reward systems, timeliness, and the appropriate level of assertiveness. When beliefs are shared by members of the same culture or subculture, they become a kind of code of organizational meaning-making a means to decipher and distinguish the acceptable from the unacceptable and the effective from the ineffective (Hansen et al. 1994).

Human Resource Management and Organizational Culture

Human resource management capabilities serve to attract, retain, motivate, develop and use human capital in a company (Coff, 1997; Kamoche, 1996; Mueller, 1996). Organizational culture, on the other hand, serves to mobilize, allocate and leverage resources in achieving company goals through values, ritual, behaviors, management systems, decision criteria, visionary planning, etc (Barney, 1985; Lado et al., 1992; Merron, 1995). Culture and HRM are connected to each other from many ways and as pointed out by Jackson and Schuler (1995), organizational culture and HRM are not separable in an organization. Corporate culture is in part managed through the HRM practices (Evans, 1986) and culture has persuasive impact on the management of human resources (Adler 1997). Culture influences how blue and white collar workers respond to pay and non-pay incentives, how international firms organized and even how executives compose and implement business strategies (Graham, 2001).The culture of an organization is in part shaped by its HRM system (Brockbank 1999; Lau and Ngo 2004). Some scholars viewed organizational culture as control and exchange mechanisms in managing workforce (Jones 1983; Wilkins and Ouchi 1983). Organizational culture can be used to guide employees toward desirable behaviors as well as to develop high performers (Sherwood 1988; O’Reilly 1989; Lau and Ngo 1996).

According to Schneider (1988); corporate culture serves as a behavioral control, instilling norms and values that result in following “the way things are done around here.” The methods by which this is accomplished are: recruiting “like-minded” individuals, i.e., those that share the values of the company; socialization through training and personal interaction; and developing strong organizational commitment through various other HR policies such as life time employment, stock option plans, recreational and housing facilities, and expatriate rotation (Schneider, 1988). It is known that so-called excellent companies such as IBM, Hewlett-Packard, Digital Equipment – known for their strong corporate cultures- frequently use these methods (Pascale, 1984).

Culture is differentiated between nations too. In Eastern cultures importance is placed on social vs. task concerns, on the hierarchy, and on the group or collective (Hofstede,1980). On the controversy, in Western cultures, the focus is more on task, on the individual and the hierarchy is considered to be of less importance. However, research by Hofstede (1980) and Laurent (1983) demonstrate that along these dimensions there is variance between the U.S. and Europe as well as within Europe (Schneider, 1988).

HR policy and practices are often designed in such a way to elicit employees’ behaviors that comply with the strategic direction and corporate values of the firm. A close relationship has been noted between HRM system and organizational culture (Brockbank 1999; Ogbonna and Whipp 1999; Chan et al. 2004). Lau and Ngo (2004) found that HR practices that emphasize extensive training, performance-based reward, and team development help to create an organizational culture that promotes innovation.

Ngo et al. (2008) investigated the relationships among HR flexibility, organizational culture, and firm performance using a data set collected from MNCs in Hong Kong. They found that organizational culture appears to be more related to employees’ behaviors and HR practices than to employees’ skills. Additionally, they also found that adaptability culture had a direct impact on HR-related performance and an indirect impact on market-related performance as mediated by HR-related performance (Ngo and Lou, 2008). This reference study supports my hypothesis.

Wei et al. examined the role of corporate culture in the implementation of Strategic Human Resource Management (SHRM) in their study. They found that it is more likely that culture acts as an antecedent of SHRM. Their finding is consistent with Wei and Lau’s (2005) study about the determinants of SHRM. They argue that the perceived importance of HRM is actually a partial reflection of the firm’s values or corporate culture. The results of this study support the “culture determinism” argument that a good culture possibly leads to the adoption of effective management practices, such as SHRM, that may benefit the organization (Wei et al., 2008). My study will focus from the opposite direction but towards the same goal. I intend to examine Turkish companies’ HRM practices outcomes and try to find a relationship between their culture. If there is a relationship then it can be say that which culture result successful HRM outcomes.

It is now widely acceptable that if a corporation is to remain competitive and viable it must be able, regularly and routinely, to change various aspects of its culture. (Bate, 1996). Goffee and Jones (1996) claim that patterns of organizational life are often conditioned by factors outside the organization such as competition the industry structure and the pace of technological change but a company’s culture is also governed by choices. This study aims to find a relationship between organizational cultures and human resource management outcomes. If there is a relationship, then organizational culture can be changed and directed towards a desired one. The study I am proposing will be a useful research in the Human Resource Management discipline and a useful guide to professionals in work life.

Tseng and Lee (2009) demonstrate the existence of a suitable decision support of human resource practices such as hiring, compensation, training motivation and participation on organizational performance and compared them with different cultures. This investigation finds significant and obvious weights of employees’ participation and employees’ relations in development, common, stratum, and rational culture despite with some minor differences. According to their study results, managers focus more on the importance of the organizational participation on employees’ relations in stratum culture than in other culture types; there is a positive relation to employees’ participation, and the negative relation to employees’ compensation in stratum and rational culture. The study I am proposing target to find more focus relationships between HRM practices and cultures which are defined in Tseng and Lee’s (2009) study.

Research design

Tseng and Lee (2009) have attempted to compare the impact of human resource practices on organizational performance with Taiwanese electronic companies and branches in China according to each culture type. What I intend to do is to focus on only human resource practices and culture types using their questionnaire and rather than what they identified, I will identify human resource practices variable as a dependent variable and culture as an independent variable.

Sample

Five employees in human resource department from each Turkish company will be surveyed regarding their perceptions of organizational culture and human resource management practices outcomes. To increase the response rate I will try to reach as much company as I can depending their size and age. Only companies which are more than 2 years old and have more than 5 employees in their human resource department will be asked to participate to research. Data will be analyzed to test the hypotheses that suggest a relationship between human resource practices outcomes and organizational culture and determine which type of culture results high outcomes in human resource management practices.

Although the study will only reflect Turkish companies and probably will be resulted in the lower response rate and relatively small sample, generalizability can be increased by comparing Tseng and Lee’s study (2009) with this one.

Instrumentation

A survey instrument will be used to determine organizational culture and measure HRM practices outcomes. A questionnaire that Tseng and Lee (2009) developed and tested will be used without the organizational performance questions. The survey will use a Likert five-point scale (1 = strongly disagree to 5 = strongly agree) owing to their high convergence with objective measures (Venkatraman & Ramanujam, 1986).

As Tseng and Lee (2009) have used in their study I will use Coefficient alpha (Cronbach, 1951) and item-to-total correlation analysis to measure reliability and validity. Cronbach a exceeding 0.7 will be indicating acceptable reliability (Cuieford,1965).

This study has content validity because human resource practices and culture category items are supported by the authors and based on these literatures.

Procedural details

The questionnaire will be translated into Turkish and will be sent to companies with a letter in the appendix that prove the survey will be confidential. The results will be aggregated and only the respondents will see their companies result. A summary report will be sent to each company.

In order to maximize response rate, make the participants anonymous and avoid duplications; participants will be asked to complete the survey on a website with a password they received as an email.

A web survey will be used which is a standard instrument and confidential that the university licenses. The survey supplier assures that the database is secure and the survey has been approved by the University Institutional Review Board. The results will automatically aggregate in the database by the program.

Internal validity

To avoid selection bias which is threat to internal validity; partial correlations will be used company age, company size and industry variables to check if these variables have any effect on hypothesis relationship.

Data Analysis

For the statistical analysis; the results of the survey variables will be analyzed by using the statistical software program SPSS.