CHAPTER – III

CONCEPTUAL FRAME WORK

3.1 ORGANISATION CULTURE

In the 1960’s and 70’s for the first time the usage of the phenomenon called
Organisational culture came to be newly introduced in to the management literature
and Burns and Stalker (1961) had pioneered the study, dividing organisations into two
– namely the mechanistic and organic types which was based again on their business
environment being either stable or an unstable one. Mechanistic type of organisations
was compared to bureaucratic ways of working and suitable to stable systems like that
of governmental organisations, the public sector enterprises etc. While the organic
type of organisations denoted organisations operating in an unstable business
environment and with focus on specialized knowledge.

Deal and Kennedy (1982) contributed a definition for culture to be a value set
of the firm which guide in forming organisational structure, and on how to related and
deal with employees inside the organisations, and these factors further influence how
the employees behave in the firms or organisations and in turn can have an effect on
the performance of an organisation, the way it performs and likelihood of its success.
It was Frost (1985) who defined the Organisational culture to be a binding factor
which kept together several parts of the organisation together which he said is its
culture and it determined the manner in which the organisations functions and
activities got executed and this included its decision making.

According to Schein (2010) the term culture defines how stable, deep, wide
and integrated pattern of unconscious, invisible ways in which a group becomes
coherent and this provides structural stability to the organisation or group and he felt
that the organisation’s culture gives stability to the values of the organisation, makes
them to be definable and predictable and relatively difficult to change. The
philosophical ideologies vision and beliefs of owners, leaders, managers and other
stakeholders of the organisation working as per formulated policies, principles, rules
and guidelines of an organisation and the perception, attitudes, behavior, commitment
and responses of the employees or people working therein towards the organisation

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and leaders of the organisation when it gets prolonged over a period of time, executed
in day to day functions and activities becomes a way of their life that which then
crystallizes and takes the shape of culture of an organisation. The organisation
accordingly builds its reputation and brand amongst its own employees as well as in
the stakeholders including customers, shareholders and society at large.

The organisational culture differs from one organisation to another since no

two organizations are likely to have the same approach in the strategic leadership it
gets and the adherence, commitment and identification with the organisation on the
part of the subordinates. There are certain organisations, where the management have
been observed and found to be fully involved even in the day to day running and
affairs of its employees and the same time there are organisations where the
management and the employees show lesser concern and commitment to the day to
day employee concerns and the way employees are handled and dealt with in the
organisation. They may limit their relations only within boundaries of their office and
after the working hours everybody is free from their formal obligations and workplace
relationships. There are certain incidents which occur in different organisations and
the circumstances it leads to in relation with those incidents and the consequent
behavior of the persons involved be it the supervisor or the employees of those
organisation which would go to clearly reflect the type of organisational culture
which exist in these organisations. In certain organisations the employees are involved
in decision making process for bringing any significant change in the organisational
working pattern whereas in certain other organisations decisions are taken by the top
management and communicated to the employees and the employees have to just
abide by the same and implement the ideology of the top management. In some of
these organisations there could be zero tolerance to the mistakes committed by the
subordinate employees.

In contrast there are some organisations where the belief is help that mistakes
are committed only by those people, who work and therefore mistakes are taken as
learning opportunities and as ways for improvement in furtherance of organisational
development which would shape the mindset of the employees working therein
accordingly. Employees’ perception about their organisation and its management/
leaders is the outcome or the reflection of their mindset on the basis of attitude of top
management/ leaders of the organisation which determines workplace behavior of the

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employees of an organisation and when the practice continues for a long period of
time evolves and becomes the culture of the organisation.

Kreitner and Kinicki (1998) stated that organisational culture affords the
organisation’s members a distinct identity, builds commitment, gives stability to the
system gives a direction to the organisation and defines the ways in which the
employees or group members behave, which in turn defines the aspirations and
careers they achieve, their status in society etc.

3.2 FACTORS RESPONSIBLE FOR CONSTITUTION OF

ORGANISATIONAL CULTURE

There are several factors that are responsible for the constitution of
Organisational Culture, few of them are explained below:

3.2.1 Geographical Location of the work place of an organisation

It has been seen that place shapes culture. Whereas certain countries and cities
have local culture which can either help in employees conforming with or opposing
the culture the organisation is trying to build. Geographical location – be it the
geography, climate, topography, the layout, aesthetic, ambience, or design etc. are all
found to have impacts on the values, attitudes and behaviors of employees in the
work place.

3.2.2 Employee strength wise size of the organisation

The effect of the organisation’s size, the culture and organisation’s

effectiveness would mean that the culture of the organisations can provide a
foundation for the management to set up a set of practices and expectations of
employees’ behaviour which the organisation will try to ensure. Studies show that
organisational size has great relationship with organisational culture either directly
or indirectly through the structure or values of organisations. Studies have shown that
organisational culture tend to change with the through their life cycle, while in smaller
organisations clan culture grows so that the company tries to ensure employees feel
they are part of the organisation and with the organisation growing rules and
regulations with the organisation moving towards hierarchy or market culture, mores

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seen in medium-sized organisations indicating that organisational size changes with
requirements and objectives of the organisation.

3.2.3 Background of the employees

Social and cultural  background of employees which includes their beliefs,

values, educational background, socio-economic conditions, socio-political
conditions, religious beliefs, caste and creed, customs and practices, tradition, social
norms, fashion, market and business activity can influence the way people behave,
take actions, take decisions at their work and life. The socio-cultural aspects of the
employees have major effect on the way marketing and other managers take positions,
bargain, take decisions and also affect the company’s strategic focus when they
compete and also start operations abroad. Besides these the legal aspects which have
impact on the business and competition are also part of the socio-cultural aspects
which influence the way organisations work, compete and grow.  

3.2.4 Effect of nature of business carried out by the organisation on culture

The business purpose, the market in which the business of an organisation

operates in impacts the way the employees’ behaves in the organisation and with the
organisation’s customers. Where the employees feel confident that the products and
services of the organisation can make a definite and meaningful effect on the
customers and the lives of people can directly affect the organisation’s culture and
how the employees in the organisation feel satisfied, committed and feel good
working for the organisation.

3.2.5 Financial position of the organisation

When organisations show a good financial performance they are regarded as

healthy. Where the organisation emphasizes sales growth, increased market share,
financial stability and profitability it follows a market oriented culture where
performance, strategic preparedness for competitiveness prevails. This emphasis on
good financial performance which can give more value to shareholders and public
brings in to play building healthy organisational culture responding to various
challenges and leading a financially thriving productive life, where the organisation
does not suffer any issues related to any of its functions and there is positive work

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environment, humanistic approach, satisfied employees and customers through a
culture of organisational performance.

3.2.6 Annual turnover capital wise and production-wise and culture

When an organisation focuses on building a strong culture which is having

alignment with its mission and vision the organisation gets built with wide alignment
where employees share a sense of purpose, work to a culture defined strategy and
achieve the goals and these resulting in higher performance be it annual capital or
production turnover. Since culture is a shared set of values and beliefs it will define
how the employees in a given culture will behave, respond to customers and other
stake holders and perform their work, with clear communication and inter-
relationships with one another and in teams. The organisational culture will help its
leadership with the required structure by helping build their teams and work groups,
arrange their work and guide how they behave and manage their customers. Where
the culture is not managed and not clearly spelt out, communication channels get
clogged, the organisation has no direction or clear goals and expectations which can
impact the employee commitment and retention and also adversely impact the bottom
line of the organisation. Company’s culture impacts its revenue, effective and strong
culture can help increase engagement which helps companies outperform other
companies which do not engage their employees.

One can see how an undefined, unmanaged, and unnurtured culture can lead to
chaos, mixed messages, poor hires, and unclear direction and expectations ‒ all of
which affect employee retention, client retention, and the bottom line, the employees
who are engaged make positive impact on business helping to build excellence, teams,
manage change and builds performance.

Culture helps build teams and retention of its members, reinforcing values of
the organisation throughout the company matching strategy with company goals.
Rewards to such employees build and reinforces positive mindsets and behavior
which gives good performance and results. Culture helps build high degree of trust as
a social norm which is formed at the top of the organisation and which in turn impacts
care and concern for employees and helps improve engagement and productivity.
Strong culture helps build voluntary adherence to the rules and regulations and builds
discipline, practice, training, responsibility vis a vis accountability which in turns

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helps in organisational transformation and growth. So along with leaders sticking to
achieving goals, the teams and employees discipline in tone, behavior which sustains
on the critical and important things to be performed in the interest of meeting the
organisational goals.

3.2.7 Size/ Type of Management/ Board of Directors

Management culture can be relatively described as part of formal

organisational culture. The size of the organisation and the type of management and
its board of directors would determine how the business objectives are translated into
more concrete goals to guide and direct the manager’s work. The top management’s
general leadership style and philosophy statements would get converted into
managerial behaviors, activities, and roles so that the way the organisation is led and
directed and how management gets work done through people as per the shared
philosophy and values system will get defined. These leaders should think and
communicate using a common set of managerial activities and roles, with their
behavior; management effectiveness culture will emerge, which serves as a strong
influence on the future leaders conduct and activities. The top management or board
of management may adopt different approaches ranging from managing dishonesty,
understanding culture’s impact on performance, managing culture for meeting
business goals, providing best practices and benchmarking culture for defining vision
and value.

3.2.8 Qualifications, experiences and social back-ground of the Board of

Directors

Board members qualifications, experience and social background will

influence the way they define their vision, set goals and monitoring mechanism,
communicate and build trust and transparency, form strategies, chose their senior
management personnel, man the organisation etc.

3.2.9 Personal Character and habits and practices of the Board of Directors/
Directors at their work place

A new startup venture would try to create its culture for which the
organisational head and even the leader of even small firms have an opportunity to
define the culture which would spell out the performance and the satisfaction and

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happiness of all the employees. An organisation may be trying to inculcate a new
culture or it may already have a very good culture which it would like to maintain as
the organisation grow or attempting to improve the culture which is already existing
in the organisation, the personal habits and practices of the board of directors at the
work place would define and set in tot motion instituting that new culture and later it
has to be adopted and broad based throughout the organisation for it to take roots and
sustain. The leader has to see in the mirror and take a hard look asking him/ her as to
how they can be part of the solution through their actions in ushering in the culture
that is desired in the organisation.

3.2.10 Vision and Mission of the Board of Directors/ Directors regarding the
organisation and its business

An organisation could set about getting a great culture by starting with the
organisation’s vision or mission statement. A good vision or mission statement can
provide the path for guiding the company’s values providing it with a great purpose,
which thereafter provides guidance for each decision taken by the employees. The
board of directors when they set a very authentic and highly valuable vision statement
which they got communicated broadly and displayed prominently can provide the
guidance for suppliers, employees, customers and all other stakeholders. The vision or
mission statement set up by the board of directors and other leaders lay the foundation
of a great culture guiding the way the business is set up and carries out its business.

3.2.11 Organisational Polices in connection with various acts and conducts i.e
standard operating procedures in managing the affairs of the
organisation

Each firm or organisation sets up a set of policies, procedures, rules and

guidelines for the way the employees carry out the work and behave in the
organisation. The organisation’s culture are representative of its policies and rules
which help in guiding the employees and provide them the path to be taken and for
meeting its stated and intended goals. The organisation sets up clear roles, authorities
and responsibilities for its employees. Moreover the organisation’s policies provide
guidance for the employees to form habits, attitudes and behaviors which help the
employees to become successful professionals.  It is only the culture of the
organisation help in tapping the best out of each member of the team.

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3.2.12 Policies, rules and procedures related to Human Resources

In case of clash in the policies followed by the human resources departments

polices. When HR policies and the organisation’s adopted culture are at divergence
then the way the organisation works get affected. There may be different types of
employees working in an organisation that is while some would be aligned with the
organisation, there may be others who only pay attention to the policies which are
beneficial to them and they may adapt their behavior accordingly, which can help the
organisation itself to try and meet their goals by using their available human
resources. In order to prevent this HR departments could align their policies from
time to time in tune with the organisational culture.

3.2.13 Infrastructural position i.e. availability of resources and methods of their

utilization

For the smooth operation of the business, the work places of different
departments have to work together and need to be aligned and integrated. When the
different organisational functions work to full capacity then the organisation has good
performance with good profits. The different ways to improve effective resource
utilization are: Planning well at the very start by identifying properly the resources
needed keeping type of resource and time constraints in vie. Adopt a systematic
approach by reviewing previous performance as base for productivity improvement
and adopting bench marks for the same within the company and with competition and
formalizing a strategic action plan fixing goals, authorities and responsibilities and
monitoring time and cost adherence. Reviewing actions and performance with
continuous improvement in view by usage of technology for automation, mistake
proofing, proper resource allocation and optimizing resource utilization. Use
Resource management software sharing resources plan with employees where needed
to enhance business operations and boost performance and productivity. Use the
software to do proper work scheduling, organizing work with targets broken down to
say weekly schedules, providing customers progress of work where resource
management is implemented well the usage of resource will be done well with good
performance and productivity.

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3.2.14 Qualification, Knowledge, Skills, Experiences of Supervisors/ Managers/
Team Leaders of various Departments and their habits and practices at
work place

A good manager should work on acquiring qualifications, knowledge, skills

and experience to gain managerial effectiveness. A good manager knows his own
strengths and weakness and of his subordinates. He should have clarity about the
objectives and be able to plan to achieve the goals. The manager should be able to
form and develop teams who share the organisational commitment to reach the goals.
In order to achieve this, leader should be good at communication to different layers of
management, should have good energy level and enthusiasm with a can-do attitude
for goal achievement, have good leadership skills to form and lead teams challenging,
and encouraging team members. The good manager or leader also has to delegate
tasks well empowering people and monitoring progress. One good leadership quality
to be cool under pressure exhibiting confidence to reach the objective. The leader
should co-ordinate well between different groups of people, helping teams and
members to set targets and to help them find solutions to problems, he should be a
good mentor and coach with good listening skills, and finally be very effective,
working with the right tools capable of creating a good work environment and
ambience. The leader should be skillful getting to improve performance using his
skills to reinforce proper attitudes and behavior inspiring employees to adapt
dynamically to the changing organisational requirements.

3.2.15 Management’s attitude and behaviour with and towards the employees

Managers help their employees to accomplish their goals by the way they care
for and treat their employees, communicate and help them to accomplish their goals,
motivate them with rewards etc. and influence the employees’ morale. Leaders
perform at a high pace in order to infuse these to their employees who often follow
and mimic their leader and because people learn from an early age focus on the way
their superiors perform. Leaders also remain in contact with their employees through
good work place communication. Leaders also convey to their employees positive or
negative attitudes and the employees’ attitude reflects the positive or negative
attitudes. Negative attitudes of leaders result in their employees becoming cynics.

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Management style which is positive can encourage formation of positive thinking
which can help in building work place performance.

3.2.16 Employees’ perceptions about their management/ directors/ BODs/

supervisors and team leaders at their work place

Employee develops a perception about their supervisors’ attitudes which

influences the employee’s adjustment norms and attendance pressure norms. Positive
supervisors’ attitudes towards adjustment of work influenced the desire to attend work
despite ill health, and this can reduce costs associated with sick leave. The norms
followed by the firm are the behavior, attitudes and beliefs which are collectively
accepted in the organisation, which gives a direction and idea of the roles to be
accomplished by the employee. The behaviours covered by the arena of norms will
vary across organisations, but explicit or implicit guidelines would guide about dress
and appearance, performance of work, the way inter-personal relationships are
managed and the communication is managed at the work place. Employees may form
their opinions as to how their work contribution are viewed by the firm and how much
the organisation is concerned about the employees’ well being, and presumes that
employee performance at work will be more if the work or job fulfils his beliefs and
needs. Direct supervisors become the management’s representative as they provide
direction and also are involved in evaluating employee contribution and in rewards
decision. Superiors’ supportiveness has great effect on the way employees perceive
the support they get from the organisation.

3.2.17 Periodically practiced customs and traditions

Culture reflects the organisations personality and is guided by its customs,

traditions, values, beliefs, behaviors, attitudes. It drives the way employees are
engaged, motivated and retained and when things are done properly the culture with
its customs and traditions can become the glue which inspires happiness and
satisfaction. Employee happiness and satisfaction have been studied and found to be
linked to a strong workplace culture, which in turn ensures good performance.
Organisation with stronger cultures outperform their competitors

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3.2.18 Employees’ inter-personal behavior at all levels

Interpersonal relationship refers to the relationship they develop with one

another while they work together in the same organisation and good relationships can
help individual employees to give their best at work. Transparency and honest
relationships build a positive work environment build on mutual trust. One third of
work life is spent at work and since man cannot work like machines at a stretch, they
interact with one another and share their feelings while at the work place. An
employee working in isolation could be more prone to stress and also find their job
monotonous, to remedy which trustworthy fellow workers. Work also often gets done
better in teams with ideas shared by the team members through brainstorming and
sharing of strategies and ideas. Interaction is needed on regular basis is important in
order for the relationship to develop in a healthy manner. Interpersonal relationship
directly impacts culture. Employees look for appreciation of their hard work, for
motivation, guidance and getting their mistakes corrected from trustworthy co-
workers.

3.2.19 Working conditions and work environment

When the organisation creates a work environment where knowledge can be

shared throughout the firm then the work environment itself becomes an asset for the
organisation. Such a work environment can help build employees to gain from shared
knowledge and for becoming more effective in building employee’s satisfaction, for
free exchange of ideas and information, and which can help motivate employees to be
more productive. The work environment is composed of a technical environment,
the human environment and the organisational environment, where the technical
environment could refer to the machineries, tools and tackles and other equipments,
the physical or technological infrastructure etc. which stimulates employees to better
perform their roles and duties. The human environment can be referred to as the co-
workers and team mates, supervisors and leadership in the organisation with whom
the employees are required to interact with, which environment if its design helps
formal and informal interaction for the sharing of ideas, information and knowledge
can help to enable productivity. The term organisational environment consists of the
philosophies, vision, values, policies, procedures, and systems etc as part of
organisational environment which are under the management’s control. Performance

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evaluation mechanism, rewards etc are also a part of the organisational environment
which influences employee’s productivity.

3.2.20 Changing Technology and Market trends

The change in customer behaviour driven by technological developments is

the biggest market trend offering big challenge and opportunity for digital marketing.
Voice assistants and continuously changing gives access to new customer segments
providing newer challengers for marketers. The changing market trends needs to be
tracked and marketing strategy needs to keep pace staying ahead of competition. Data
protection and privacy are new challenges for marketers. Data leaks and hacking of
sites provide issues of trust and are challenges to large and small businesses,
customers and marketers. The way the data hacks are handled can impact consumer
trust and brand reputation, providing new challenges in terms of technology and also
for marketers. Rising technology of voice search means widespread usage of smart
speakers or personal assistants on mobile devices, which provides new avenue for
product and brand searches which calls for optimizing content for voice search and
for making the organisation’s sites ready so that more people can use this technology.
Machine learning has become a latest trend which marketers are choosing with the
biggest benefits of machine learning being the insight it provides marketers with the
data which is mined which can help marketers make better strategy enabling to
interpret the data and make better return on investment estimates and to create better
customer profiles and personas. Machine language will provide that competitive
advantage so that the marketing campaigns are better focused and data base oriented
than merely working based on hunches. Machine learning can enhance searches for
products, provide better brand and product visibility which could help better the
customer experience. With differentiation based on individualization or providing
personalized services and attention, providing this personalized service would be the
trend which will impact marketers which can help provide better challenges and
opportunities for marketers with the evolution of the next generation customer-centric
focus for a enhanced experience which is personalised across channels be it through
the organisation’s web site, social media, email etc. Personalisation can help suggest
the product and services for customers along with related alternative items which are
individualized and provide a good experience which can convert the prospects
funneling them towards closing of purchase deals in a surer manner.

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3.2.21 Values, practices and behavior of employees at workplace

Values are guiding principles employees, groups and of organisations and

motivational with ability to drive the direction of the actions and its emotional
intensity and normally imbibed through induction and through socialization. Values
could be besides individual employee’s learning can be the dominant group values.
Values are shared and have capability of motivating behavior. The values could help
in openness to change as against resistance to change and benevolence versus power
and achievement. Values at a highpoint can build openness to change, and on the
other extreme can encourage status quo and non changeability. Employees’ personal
values systems could be related closely to motivate explaining employee behavior,
expressed as personal values, which enables employees to fulfill their personal
objectives. Behaviour based on motivation relies on values as they are linked
resultant behavior and actions. Employees personal values in shaped how they take
decisions, selecting action among several alternatives which support their behavior.
Where individual values cannot be realized at the work place job burnouts can happen
and resultant negative job satisfaction.

3.3 IMPACT OF CULTURE

The impact of culture on the way organisations work can be reflected by the
basic beliefs held by management and employees and employee and leadership
behavior. Some of the impacts of culture in the way management approaches
employees and work in organisation are as under:-

i. It focuses attention on the human side of organizational life, and finds

significance and learning in even its most ordinary aspects.

ii. It clarifies the importance of creating appropriate systems of shared meaning

to help people work together toward desired outcomes.

iii. It requires members especially leaders, to acknowledge the impact of their

behavior on the organization’s culture.

iv. It encourages the view that the perceived relationship between an organization
and its environment is also affected by the organization’s basic assumptions.

v. It provides consistency for an organization and its people.

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 vi. It provides order and structure for activity within an organization.

vii. It establishes an internal way of life for people.

a. It provides boundaries and ground rules.

b. It establishes communications patterns.

c. It establishes membership criteria.

viii. It determines the conditions for internal effectiveness.

a. It sets the conditions for reward and punishment.

b. It sets up expectations and priorities.

c. It determines the nature and use of power.

ix. It strongly influences how an organization is structured.

x. It sets the patterns for internal relationship among people.

xi. It defines effective and ineffective performance.

xii. It fixes and organization’s approach to management.

xiii. It limits strategy.

xiv. It is fundamental to an organization’s productivity.

xv. It parallels individual character.

3.4 CHARACTERISTICS OF GOOD ORGANISATIONAL CULTURE

An organisation is said to have good organisational culture where every

employee irrespective of his or her level feels happy, comfortable and satisfied. In
such an organisation the employees would be getting opportunity to work according
to their level of knowledge, skill and competence and to grow and accomplish their
individual goals as well as help in the organisation to fulfill its organisational goals.
Organisations having good culture would give their freedom to express themselves
and communicate their views to their reporting officers irrespective of their position/
rank in the organisation and they would also be heard fully. Organisations with

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positive culture would have systems and process in place where all the employees are
treated fairly in all matters irrespective of their designation and grade. An
organisation with good culture would ensure that there are no discrimination between
the employees on the basis of their social background, caste, creed, religion, gender,
race etc., or in other words every employees shall be treated as member of the
organisational family and given due recognition and rewards according to his or her
contribution.

3.5 CREATING AND SUSTAINING ORGANISATIONAL CULTURE

3.5.1 Creating organisational culture

The main source in the organisation for setting the organisational culture can be
said to commence with the organisation’s leadership. Leadership in this context refers
to often the founders or other influential individuals, who influence greatly in the
creation of the organisation’s early culture (Schein, 1985). According to Brown
(1998) founders tend to impose their world view, about other organisations, human
nature, their own values and beliefs etc., while building the organisation’s culture,
which can lead us to the belief that the founders of the organisation do have a major
role in the formation of the initial culture of the organisation. Martins and Martins
(2003) underlined the several ways in which the organisation’s founders impose their
influence in the process of the organisation’s culture-creation:

 Founders tend to only appoint and retain employees who think and feel the way
they do.

 They indoctrinate and socialize such recruited employees into their way of
thinking.

 Founders’ behaviour becomes a role model which stimulates employees to

identify with them, to internalise their beliefs, values and assumptions.

 It may therefore stated that formation of the organisational culture is not

spontaneous or accidental but reflect the specific values and beliefs in that their
founders endeavor to cultivate in the organisation in consonance with the vision
and goals of the founders.

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3.5.2 Sustaining organisational culture

In order to nurture the organisation’s culture, the organisation has to ensure

that its culture is communicated to the employees in the organisation (Martins &
Martins, 2003). Brown (1998) presented that the organisational culture gets developed
and maintained in three stages namely, (i) pre-selection stage which is the stage where
the potential candidates desire for employment in the organisation and prior to that
they may make enquiries to learn about the organisation’s history, practices and
culture (Brown, 1998). (ii) During the process of selection of organisational members,
the organisation may induct or select employees who would be able to fit in with the
organisational culture, with the employees values aligning with those of the
organisation’s (Martins & Martins, 2003). (iii) After the selection stage follows the
induction and socialization of organisational culture phase which is also
“enculturation process” in which the employees imbibe the organisation’s beliefs,
values and behaviors, which would enable the employees to be a useful part of the
organisational group to which they are assigned. During the socialization stage, the
organisation enables new organisational members to adjust and imbibe the
organisational culture (Martins & Martins, 2003). (iv) The next state is the
incorporation or rejection stage in the process of sustaining organisational culture.
When the employee is incorporated they would be expected to be having acceptance
by the work group and grow the required understanding and acceptance of the culture
of the organisation (Martins & Martins, 2003).

3.6 FUNCTIONS OF ORGANISATIONAL CULTURE

The chief object of the organisational culture is to define the way of doing
things in order to give meaning to organisational life (Arnold, 2005). Affording
meaning is major function of organisational culture, because organisational members
need to benefit from the lessons of existing members, which results in the
organisational members being able to profit from avoiding the trials and errors in the
process of acquiring knowledge which others have been able to accumulate (Johnson,
1990). Organisational culture also determines organisational behaviour, by identifying
principal goals; work methods; how members should interact and address each other;
and how to conduct personal relationships (Harrison, 1993).

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Brown (1998) states the functions of the organisational culture is to develop a
common and consistent perception or view of the problem, the views or alternatives
available and the preferred action which the organisation is likely to take given its
culture. Since organisational culture enables for promoting uniformity and
consistency in the way things are viewed in the organisational context, culture fulfills
a very big function of ensuring organisational processes and co-ordination of the
employees and the organisation. When the frame-work of the organisation’s culture
is kept in view, the alternatives and actions of choice become evident and help in
taking rational decisions. When the organisation has good and conducive culture it
provides a mechanism for employees to identify with the organisation and to develop
organisational loyalty, and in the process it can help firm up the beliefs and values
which encourages the employees to perform better. When the organisation is having a
favourable culture, it can multiply the changes of success for the organisation in the
competitive market place. Culture can also have a role to define the distinctions and
boundaries between two organisations while at the same time defining an
organisational identity to its members and provide employees a common
organisational interest which is larger than the individual employee’s self-interest.
Culture in an organisation is like social glue by forming a social system which can
bind the organisational employees and define the standards which the employees’
speech, manners, attitude, behaviours etc., must maintain or measure up to. The
organisational culture can help the management by acting as a control mechanism
which can influence employees’ attitudes and behaviors.

The above details of the functions of organisational culture indicated that an

organisation cannot remain in a vacuum and needs a culture, because it can help the
organisation to define and meet its objectives and goals, provide a definite way or
direction for organisational members to follow which can help in the organisation
reaching its goals and objectives.

3.7 STRONG AND WEAK ORGANISATIONAL CULTURES

Organisations can have culture which could be positive and strong or can be
weak. Martins and Martins (2003) pointed out that when the culture is strong, the
culture helps in holdings firmly and sharing very broadly the organisation’s core
beliefs and values. When the organisational values are also accepted and shared by the

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organisational members it can build commitment among the members. Strong
organisational cultures dictate and define how organisational members behave at the
work place (Martins & Martins, 2003) which underscores that when the organisation’s
culture is strong, it can act as a very strong mechanism for controlling the behaviour
of the employees.

Brown (1998) also believed that when the organisational culture is strong it
can facilitate the organisation to perform better as a strong organisational culture
helps in goal alignment, leads to high levels of employee motivation and can help in
learning from past experience Martins and Martins (2003) further states that a strong
culture can help reduce employee exits or turnover, since members who agree with
what the organisation stands for, would be more committed and cohesive. Employees
working in an organisation with weak culture find it difficult in aligning with the
organisation’s core values and goals (Wilson, 1992) which can result in the different
departments holding different beliefs which does not help in meeting the
organisational main goals and can also result in increased turnover (Harrison, 1993).

3.8 HRM PRACTICES

In todays competitive environment, high performing organisations have

learned how to deploy human resources (HR) practices to enhance competitive
advantage. Human resources management faces challenges of bringing better fitted
workers in the organisation and meeting the workers needs and expectations. Thus
there is a compelling demand to better ideas, strategies to improve the interface
between employees and employers, and to elaborate comprehensive insight that
can help human managers get better results and improved performance.

Management of human resources basically aims at contributing human

efforts through personnel employed in the organisation towards achieving the
objectives of the organisation, and these should come out willingly with dedication
and high degree of morale amongst the employees. HRM systems are proactive
and are anticipated to bring about a cultural change in the organisation. It seeks
power equalization for building trust and collaboration. The human resource
practices need to be re-examined and needs constant updating to make it more
dynamic, effective and in tune with changing situation. The people management
in the organisation should cultivate a climate characterizing values such as open
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communication, trust and respect for human resources in order to promote
employee and organisational performance.

There are many resources in an organisation. Human resource is one such

resource highly essential for an organisation. The process of developing human
resources is done systematically by an organisation to secure the competencies and
capabilities required to perform the various functions associated with their present
or expected future roles in an organisation. It improves the employees’ capabilities
and can help the employees to identify and work to their potential for their own
development and for the growth of the organisation. The management has to
nurture a culture in which the supervisor-subordinate relationships, team works
and builds collaboration amongst the sub-units to strengthen it and to contribute to
the professional well being, motivation, and pride of its employees. The HRM
mechanism and techniques including performance appraisal, counseling, training,
and organisation development interventions should help in initiating, facilitating,
and promoting the process in a continuous manner. As functioning of the HRM
has no upper limits, mechanisms may needed to be examine periodically and see
whether the HRM practices are promoting (or) hindering the organisational
performance and growth process. Organisations can facilitate this process of
development of suitable HRM practices by planning for it, and allocating
organisational resources.

Dynamic and growth oriented organisations require HRM to succeed in a

fast- changing environment. Organisations flourish mainly through the efforts and
competencies of their human resources personnel, the policies of the organisations
to ensure good employee morale and when motivation of employees is kept high.
But besides these efforts employee capabilities must continuously be sharpened,
and upgraded. When employees use their initiative, task risks, experiment,
innovate, and make things happen, organisations may be said to have a good
culture. Even organisations that have reached its peak in performance have to
adapt to changing environment in the wake of competition. All the organisations
do require the need for processes that help in acquiring skilled manpower and to
continuously upgrade the capabilities of its human resources for stability of the
organisation.

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3.9 FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

The functions of HRM can be broadly classified into two namely, managerial
functions and operative functions.

3.9.1 Managerial Functions

Managerial functions of Human Resource Management involve planning,

organising, directing and controlling of human resources. All these activities of
managerial function influence the operative functions.

3.9.2 Operative Functions

Employment: It is the first operative function of Human Resources Management

(HRM). Employment is concerned with securing and employing the human resources
possessing the required knowledge and skills to achieve the organisational objectives.
It covers functions such as job analysis, human resource planning, recruitment,
selection, placement, induction and orientation of manpower.

Human Resource Development: It is the process of improving, moulding and

changing the skills, knowledge, creative ability, aptitude, values, commitment etc, of
human resources based on present and future job and organisational requirements.
The activities under human resource development include performance appraisal,
training, management development, career planning and development, internal
mobility, transfer, promotion, demotion, change and organisation development.

Compensation: It is the process of providing adequate, equitable and fair

remuneration to the employees. It includes job revaluation, wage and salary
administration, incentives, bonus, fringe benefits and social security measures.

Human Relations: Practicing various human resource policies and programmes like
employment, development, compensation and interaction among employees, create a
sense of relationship between the individual employees, between worker and
management, among trade unions and the management etc.

Industrial Relations: Industrial relations refer to the study of relations among

employees, employer, government and trade unions. Industrial relations include
manpower availability in the labour market, trade unionism, collective bargaining,
resolution of industrial conflicts, workers’ participation in management, quality
circles etc.

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3.10. ORGANISATION CULTURE AND HUMAN RESOURCE
MANAGEMENT

Human Resources are the most important and valuable resource in any
organisation in the form of its employees. Human Resource Development is a
“continuous process which ensures the development of employee competencies,
dynamism, motivation and effectiveness in a systematic and planned way”.

The following are the HR variables considered in this research study.

1) Manpower planning

2) Staffing

3) Compensation and benefits

4) Appraisal methods

5) Training and development

6) Career growth and development

7) Employee relations

3.10.1 Manpower planning

Manpower Planning which is also called as Human Resource Planning

consists of putting right number of people, right kind of people at the right place,
right time and performing the jobs for which they are suited in order to achieve the
goals of the organisation. Human Resource Planning has got an important place in
the arena of industrialization. Man Power Planning has to be a systems approach and
is to be carried out in a planned manner. Manpower planning involves reviewing
current manpower resources, forecasting future requirements, evaluating the
manpower availability, and taking steps to ensure that the supply of people and
skills meets demand.

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3.10.2 Staffing

Recruitment is the process of searching for prospective employees and

stimulating and encouraging them to apply for jobs in an organisation. Famulrao
defines the recruitment process to consist of five elements, namely a recruitment
policy, a recruiting organisation, developing sources of recruitment, adopting
techniques to tap these sources, and evolution of a method of assessing the
recruitment programme as part of the recruitment process

3.10.3 Compensation and Benefits

The reward management system tool includes financial and non financial
rewards which are also called as extrinsic and intrinsic rewards. Financial rewards
may consist of salary increase, bonus mechanism, giving perquisites etc. On the
other hand, there are no financial rewards which could consist of giving employees
promotion responsibility and authority, vacation time and recreation, comfort at the
work place, undertaking social activities, obtaining feedback, introducing flexible
working hours, design of work, setting up recognition mechanism, ensuring social
rights etc. (Yang, 2008). The allocation of rewards for productive and non
productive staff was designed, in order to increase employee productivity and
satisfaction. Many human resource academicians and practitioners treat incentive in
a narrow sense to include only monetary aspects though it also can have non-
monetary effects.

3.10.4 Appraisal methods

Performance appraisal is the systematic evaluation of the performance of an

employee’s job performance and his overall contribution to the company. It is also
known as “annual review”, “performance review or evaluation” or “employee
appraisal”. A performance appraisal process evaluates an employee's skills,
achievements and growth, Performance appraisal has three basic functions: (1) to
provide adequate feedback to each person on his or her performance; (2) to serve as
a basis for modifying or changing behavior toward more effective working habits;
and (3) to provide data to managers with which they may judge future job
assignments Performance appraisals also help employees and their managers create
a plan for employee development through additional training and increased
responsibilities, as well as to identify shortcomings the employee could work to

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resolve.

3.10.5 Training and development

Training and Development is a subsystem of an organisation which

emphasize on the improvement of the performance of individuals and groups.
Training is an educational process which involves the sharpening of skills, concepts,
changing of attitude and gaining of more knowledge to enhance the performance of
the employees. Good & efficient training of employees helps in their skills &
knowledge development, which eventually help a company improve. Training is
about knowing where the employees are in the present and after some time where he
or she could reach with set of abilities and contributions. By training, people can
learn new information, new methodology and refresh their existing knowledge and
skills. Due to this there is much improvement and add up the effectiveness at work.
The motive behind giving the training is to create an impact that lasts beyond the
training programme itself and the employee could get updated with the new
knowledge and skills. Training can be offered as skill development for individuals
and groups.

3.10.6 Career growth and Development

Career Planning is the determination of action plan and its effective

implementation by the ways of – education, training, finding of job opportunity and
getting work experience. Career development system helps to match individual
career aspirations with organisational manpower requirements. It includes internal
and external mobility. Internal mobility is the vertical and horizontal movement of
an employee within an organisation. It comprises of transfer and promotions.
According to Yoder and associates, Transfer is a lateral shift causing movement of
employees from one position to another without involving any marked change in
duties, responsibilities, skills needed or compensation. Promotion is an upward
advancement of an employee to a job which usually involves greater
responsibilities, higher pay, better terms and conditions and therefore, it has a higher
status or rank. Demotion has been defined as, the assignment of an employee to a
job of lower rank and pay usually involving lower level of duty and responsibility. It
is a punitive measure when there is serious misconduct by the employee. It could
often be a preliminary action prior to dismissal.

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75
 3.10.7 Employee relations

The interpersonal relationship which means dealing with subordinates

includes administration, communication, interpersonal, leadership and motivation
which are essential for a manager to be successful. Out of the five managerial skills
cited above needed for dealing with subordinates good interpersonal relations in
dealing with them is essential.

3.11 ORGANISATION PERFORMANCE

More amount of research has been made to prove the importance and the role
of human resources in enhancing organisational performance. The researchers suggest
that in order to survive in the present competitive era, any organisation needs more
competent, committed, and strategy oriented employees. Effective people can
contribute to the effectiveness of the organisation. They need to create a sustained
competitive advantage for the consistent organisational performance. Research works
undertaken to prove the functional worth of HR in the organisation i.e., as a strategic
or business partner has found some support.

The importance of the studies linking HR activities and organisational

performance are increasing. This is because; the challenge of HR measurement
becomes particularly important when the top management asks HR to justify its
contribution to the bottom line of the organisation. Scholars have devoted a large
amount of effort and attention to examine and had supported the linkages of HRM and
HRD practices with financial performance (Husleid 1995 and Guest 2002) and
competitive advantage (Barney 1991, Stroh and Caligiuri 1998 and Ahuja 2002).

A consensus has been developed amongst the HR practitioners’ worldwide

that if their HR practices were supported by its policies and procedures, it would
make a direct and economically significant contribution to firm’s performance.
Schuler (1992) had argued that human resource practices should be synergistic and
consistent with organisation strategy. If there is any conflict among the practices, they
would have an adverse effect on the individual and organisational performance.

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3.12 CONCEPTUAL FRAME WORK OF THE STUDY

Based on the Review of literature done in the previous chapter, the definitions
and discussions about the prime variables of the study are: Organisational culture,
Human Resource Management practices and Organisation performance, the following
frame work of the study is developed.

Figure 3.1: Conceptual Frame Work of the study

3.13 SUMMARY

After reviewing the early works done by the researchers in the same area of
study, the researcher is able to frame the objectives, identify the variables and frame
the hypotheses. Hence the Conceptual frame work is designed. To establish the
objectives, the framed hypotheses are to be tested. It will be answered in the next
chapter by analyzing the data followed by the Interpretation and discussion.

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