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Introduction to E-Business - Management and Strategy

Introduction to E-Business - Management and Strategy

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Published by Summia Saleem
Introduction to E-Business - Management and Strategy
Introduction to E-Business - Management and Strategy

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Published by: Summia Saleem on Dec 10, 2011
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Organisational culture is the set of beliefs, values, norms

of behaviour, and attitudes shared by members of a firm that

influences individual employee preferences and behaviour. These

bases of culture are very often difficult to observe and measure.

Nevertheless, culture plays an important role in determining

performance by providing a guide to employee behaviour that is

not governed by contractual duties but that, nonetheless, constrains

and informs the managers and employees. There are many factors

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Figure 9.3

Learning curve

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Introduction to E-business

Chapter 9

that determine organisational culture. Some of the more prominent

ones include:

g The vision of the person or people who established the

organisations;

g The historical precedence set by previous generations of

managers and workers;

g The type and range of activities a particular firm undertakes;

g The nature of interpersonal relationships within the

organisation;

g The management style: autocratic, consensual, participative;

g The control mechanisms: freedom of association and

movement, monitoring;

g The reward structure: financial, promotion, status, freedom,

peer acceptance;

g The level of technological dependence;

g The geographical location: national and regional

characteristics.

Very often it is difficult to pinpoint exactly what determines the

organisational culture because of the complexities involved in the

combined effects of all the key elements that influence the culture.

Nevertheless, it is important for managers to understand and

influence culture because it plays an important role in achieving

organisational aims and objectives. Organisational culture influences:

g The ability to recruit staff with key skills and experience;

g The motivation and morale of workers;

g The level of output;

g The quality of work and output;

g Industrial relations;

g Attitudes, beliefs and values of managers and workers;

g Innovation, creativity and the sharing of knowledge.

Managers in e-business are concerned as to whether the organ-

isation’s culture affects its performance. Linking the two can be

problematic since, although culture may be associated with high

performance, it may not necessarily cause high performance. A firm

may be seen as having a strong culture, combining customer service,

employee development and professional standards that contribute

to its success. However, if it has strong competitive practices that

result in high earnings, then this may have created an environment

where a strong culture could develop and persist. In this instance

Chapter 9

E-business strategy: implementation

247

it remains ambiguous as to whether the culture caused the firm’s high

performance or vice versa.

Barney (1986) describes conditions under which culture can be a

source of sustained competitive advantage. He concludes that the

culture must:

g Be valuable to the firm;

g Be particular to the firm. If the culture is common to most

firms in the market it is unlikely to lead to relative

competitive advantage since most rivals will share the same

cultural attributes;

g Be inimitable. If a culture is easy to imitate, other firms will

begin to emulate it, thereby undermining any competitive

advantage gained by the firm that first developed it. The

more complex the set of factors that determine culture

the more difficult it is for rivals to imitate it. However,

complexity also makes it difficult for managers to modify

the culture of the firm to significantly improve performance.

One of the key determinants of creating a competitive advantage

based on organisational culture in e-businesses is the way in which

knowledge is shared among workers. Traditionally, businesses have

operated on the basis of rewarding individual performance rather

than around principles of collaboration and sharing. A feature of

traditional businesses has been a culture where employees recognise

knowledge as providing them with a strategic advantage (Katzenbach

and Smith, 1994). These knowledge-based advantages are protected

rather than shared.

The task facing managers in modern knowledge-based industries is

to create an environment where the organisational culture is built

around employee recognition that shared knowledge rewards the

group as well as the individual. This enhances teamwork, creates a

mutually supportive working environment and boosts efficiency.

To create a collaborative and knowledge sharing culture requires a

specific organisational design built around core values that underpin

sharing, alongside an implementation strategy based on incentives

for participation in achieving organisational goals. Managers can

rate performance based on each employee’s co-operation and parti-

cipation in the knowledge sharing working environment. Rewards,

whether financial, status orientated or peer acceptance, can be linked

to the level of participation observed. Meanwhile, managers need to

be constantly emphasising the benefits of knowledge sharing.

248

Introduction to E-business

Chapter 9

There are practical measures that managers can take to shift the

culture of a firm towards that which has knowledge sharing at its core.

Two key measures are:

g Setting aside specific time slots for learning; practicing

knowledge management and knowledge sharing such that

employees witness the real benefits that can be gained;

g Commiting to developing and implementing the culture

throughout the organisation and not just in some well-

chosen, isolated departments. The ultimate goal is for

collaboration and the sharing of knowledge to become the

dominant culture within the organisation, so that it becomes

a naturally occurring process.

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