Organizational Culture

Management of Organizational Culture and Structure In Pursuit Of Generics Business Strategy – A Case Study of Apple

Organizational Culture and Strategic management is concerned with the activities of various domain of the organization, which encompasses the creation and management of business strategy, values, and various organizational constitutions. Through proper management of strategy, firms are able to translate its vision and sustain a competitive positioning in the industry. Therefore, strategic management involves the dedication of organizational resources to meet its various challenges associated with its internal and external environment.

With a vision to make great products, Apple Inc. represents one of the most successful organizations in these days. Apple has revolutionized personal computer, computer software and mobile and portable device market through integrating innovation with design and functionality to bring performance and sophisticated user experience and has manifested itself as the most notable iconic designer in the consumer electronic market. Apple has achieved numerous awards for its innovation and design and was Fortune Magazine’s most admirable company several times. Due to this outstanding achievement in innovation and creativity, Apple has become one of the most valuable company with a market value equivalent to US$623 billion by the year 2012 (Heracleous, 2013).

The aim of the current study is to determine what business strategy the organization has adopted in order to achieve this rank and to assess the implications of its business strategy with its corporate culture and structure. The research will also investigate the effects of organizational structure on its communication and decision making processes.

Review of Relevant Literature

Generic Business Strategy

Firms’ profitability depends upon industry structure and the firms’ competitive positioning within the industry. Professor Michel Porter (1985) devised two theories to explain firms’ profitability–i) five forces theory to determine the industry structure or attractiveness and ii) a generic competitive strategy to determine firms’ positioning within the industry. Porter (1985) distinguished three successful generic strategies to outperform competitors in an industry: overall cost leadership, differentiation, and focus.

Overall cost leadership: According to Porter (1985), if a firm can achieve a sustainable cost leadership, it will perform above average in the industry, assuming that the firm has the ability to command an industry average price. In order to achieve an overall cost leadership, firms need to adopt a number of low cost production strategies, such as cheap suppliers, special R&D efforts, appropriate inventory management, enhanced distribution channels, reduced advertising and promotional costs, etc. (Porter, 1985).

Differentiation: Through differentiation, firms create products and services with special values to the customers and position themselves uniquely in the industry. Through successful differentiation, technology firms can gain customers’ loyalty and can command a premium price for the products (Porter, 1985).

Differentiation strategy is peculiar to the industry type and structure, and based on this peculiarity, firms can undertake a product differentiation strategy (such as new features, enhanced values, etc.), a marketing differentiation strategy (such as launching special campaign to target particular class of buyers from a mass market), etc. or a combination of both. Through differentiation strategy, firms can mostly target price insensitive buyers. However, differentiated products are vulnerable to low cost competitors offering similar products. So in order to make differentiation sustainable, strong R&D outcomes, innovation, and creativity are tied with the products so that it becomes difficult to emulate by the competitors (Porter, 1985).

Focus: Focus strategy allows firms to narrow the competitive scope to gain advantages. In this strategy, firms select a segment of the industry that can facilitate them to pursue either a low cost strategy or a differentiation strategy. The selection of one of these strategies solely depends upon the nature of the customers in relation to the product within the segment (Porter, 1985).

Organizational Culture
Organizational Culture

Organizational Culture

Organizational culture can be defined as a set of value, assumption, beliefs, artifacts, rituals, and ceremonies that help organizations to accomplish various goals and to coordinate with internal and external environment (Schein, 2010). Deshpande and Farley (1999) recognized four types of corporate culture: consensual, entrepreneurial, bureaucratic, and competitive. This classification of culture is very similar to the widely accepted classification of organizational culture described by Cameron & Quinn (2006): hierarchy culture, clan culture, market culture, and adhocracy culture.

The hierarchy (or bureaucratic) culture: German sociologist Max Weber found seven attributes in bureaucracy culture in government organizations–rules, specialization, meritocracy, hierarchy, separate ownership, impersonality, accountability (Cameron & Quinn, 2006). Cameron & Quinn (2006) determined hierarchy organization as a formalized and structured place to work leading to stable, efficient, highly consistent products and services. Hence, organizations that require efficient, reliable, smooth-flowing and predictable output seem to adopt this culture. Other principle characteristic of hierarchy culture are– clear lines of decision making authority; standardized rules and procedures; and strong control and accountability (Cameron & Quinn, 2006).

The clan culture: The typical values of clan culture are shared goals, cohesion, participation, individuality, and a sense of togetherness. This type of organization is largely managed through employee empowerment, employee commitment, and loyalty. In a clan organization, customers are treated as partners (Cameron & Quinn, 2006).

The market culture: Market culture is the typical to an organization that functions as a market. The foundation of market culture is the strong emphasis on various external constituencies, such as suppliers, customers, contractors, and other market regulators to achieve competitiveness and productivity (Cameron & Quinn, 2006). In a market culture, organizational effectiveness is determined by transaction costs, i.e., exchanges, sales, and contracts, and other market dynamics, instead of internally defined rules and controls. The core values of a market culture oriented organization are competitiveness and productivity which are opposed to the complacent, hierarchy and arrogance observed in a hierarchy organization.

The adhocracy culture: Adhocracy culture represents an organizational culture that is typical to the modern high-tech firms where the organizations have to face the ever challenging and ever changing landscape. The assumption in an adhocracy culture is that the innovation and entrepreneurial initiative is the central to the organizational success or profitability, and the organizational activities are product and service oriented. The organizational configuration is temporary and takes the shape around project and product based structure such as teams, taskforce and committee.

The major characteristics of the adhocracy culture are the absence of organizational chart, lack of centralized power and authority relationship, temporary role of employees, creativity, and innovation. Leadership applied to the adhocracy culture is visionary, innovative and risk oriented, and the power flows from person to person on the need basis.

Formal Organizational Structure

Organizational structure can be determined through both formal and informal contexts. While informal organizational structure relates the social structure of the organization, such as culture, behaviors, interactions and social connections within the organizational context, formal structure can be understood as the abstract form of structure that is comprehended more easily through management structure, hierarchical relationship, leadership type, etc. (Meyer & Rowan, 1977 ).

As organizational structure determines the relationship within various elements of an organization, it has profound impact on the behavior of employees, various organizational units, and the whole organization (DeCanio, Dibble & Amir-Atefi, 2000). Dissanayake & Takahashi (2006) recognized that the development of organizational structure is typically the result of two constructs–i) a “system organization” which is formed through the sharing of perception of their actors and ii) a “structural configuration” based on the first one. Csaszar (2012) noted that organizational structure can be conceptualized as the decision making structure among the people within the organization and argued that this structure substantially affect different initiative taken by the organization.

Chen (2006) noted four different types of leadership style, such as transactional, charismatic, transformational, and servant, and then identified interrelationship between the leadership style and organizational structure. Mintzberg (1989) demonstrated seven forms of organization in the effort to demonstrate organizational structure: entrepreneurial, machine, diversified, professional, innovative, missionary, and political organization.

Research Methodology

The aim of the current research is to assess the business strategy, organizational structure, and culture of Apple Inc. The research evaluated Apple’s business strategy through Porter’s theory of generic business strategy and investigated various cultural elements through the cultural classification (Section 2.2) of Cameron & Quinn (2006). The structural aspects of the organization were analyzed on the light of generally perceived organizational constructs and conventional leadership concepts. Due to the nature of theoretical implications with the research, a qualitative research approach in the form of case study was adopted, which fulfilled the purpose of the research as well as revealed important insights on the subject.

The method of investigation was both descriptive and explanatory (Baxter & Jack, 2008). An explanatory approach was adopted on contextual investigations, where a descriptive approach was taken to document facts and figures (Yin, 2003). Data used in the research was secondary in nature that comprises of case studies, peer reviewed journals, and blog articles collected through internet research.

Results and Discussion

Apple’s Generic Business Strategy

Porter (1985) demonstrated that an organization will be able to sustain profits and perform above average if it adopts a differentiation strategy that can incorporate substantial values for what users are willing to pay a premium price. Apple successfully integrated differentiation strategy through serial innovation with its various product lines (Heracleous, 2013). The organization can successfully command a premium price which is the principle sources of revenue growth, highest profit margin, and substantial market share.

Apple’s Mac computer was the onset of the masterful combination of innovation and design in hardware and software in computer industry. Mac particularly targeted K-12 education, graphic artists, and high-end users, which is a unique indictor to differentiation (Gamble & Marino, 2011). Mac was unique from other computers, and the added values were realized by customer classes who were willing to pay high. The campaign that the Mac computers are immune (relatively) to viruses also attracted creative workers who need a very stable and consistent work environment (Bhatnagar, Gupta & Chauhan, 2012).

The most notable differentiation strategy of Apple’s iPhone was its 3.5 inch scratch resistance gorilla glass display–a unique attribute that carry substantial value for the product (Mickalowski, Mickelson & Keltgen, 2008). But this is one of the many features that the product offered, including the ease of use, simplicity, faster performance, and overall users’ experience.

Apple implemented differentiation in iPad through, among others, incorporating attractive design, introducing its own line of applications, and a built-in App store. Apple introduced focused differentiation by introducing sleeker and lighter second generation iPad. Apple added more value to the third generation iPad through incorporating processing speed. In both cases, Apple targeted high-end customers who are willing to buy the new products with extra price for its added value. Brand image, customer loyalty, etc. served to quickly reach differentiated products to the customers. Mac also gained a boost in sale after the success of iPad and iPhone, which indicates the effect of image and customer loyalty significantly created opportunity for Apple (Porter, 1985; Gamble & Marino, 2011).

Strategic route in differentiation: In order to successfully differentiate a product, firms may adopt extra means, such as outsourcing and strategic partnership (Porter, 1985; Hill & Jones, 2011). Apple successfully utilized both in its operation, for example, conducting high value added functions in California and outsourcing manufacturing activities to the cheapest locations (Heracleous, 2013).

Strategic partnership of Apple with AT&T helped the organization distribute their iPhone quickly first time to the US market (Yoffie & Kim, 2011). Apple also was able to command cost substantially over other players. When Apple launched its first iPhone, the major rival Nokia was selling their N95 at $749 in the US market (Mickalowski, Mickelson & Keltgen, 2008).

Apple’s differentiation strategy in marketing and sells: Porter (1985) argued that organizations can adopt more than one differentiation strategy to successfully pursue the strategy. Apart from great innovation and product design, Apple incorporated differentiation in its marketing strategy. Apple seems to create all sort of marketing buzz and creative marketing ploy before product launch, which adds substantially to the product success (Anderson et al., 2013).

Apple dedicates substantial resources and multiple subsidiaries in marketing and sells. Each retail points are organized with trained employees. In the retail outlets, customers have the opportunity to test and experiment with the products (Wooten, 2010). Apple indeed trained employees to interact creative ways to teach customers about the product, such as through one-on-one or workshop training, so that the customers can enjoy the best buying experience (Wooten, 2010).

The Nature of Apple’s Corporate Culture

Apple has a highly unique organizational culture that serves its vision and innovation. The principle characteristics of Apple’s organizational culture are–innovation, confidentiality, compliance, and self-responsibility.

An innovative culture: Innovation is the cornerstone of a successful differentiation strategy. Apple’s CEO Steve Jobs created an innovative culture that sustains enthusiasm and hard work (Anderson et al., 2013). Jobs and his leadership team put substantial efforts to recruit employees and socialize employees into its innovative culture (Wooten, 2010). The most emphasis Jobs would give was on intelligence and passion. To cultivate true entrepreneurship and innovation, Jobs established “Apple University” that teaches employees the fundamentals of Apple’s corporate DNA and creative culture.

A secretive culture: According to Porter (1985), an organization’s differentiation strategy will be sustainable if the product cannot be easily imitated. In today’s competitive landscape, corporate information is vulnerable to leakage and exploitation. Apple maintains a very secretive culture to protect its intellectual property. Each project or product development initiative takes a team-based structure, where teams work individually, tasks are micromanaged, and one unit is physically separated from other units (Anderson et al., 2013). Apple does not encourage people to discuss projects and share ideas. Instead, ideas are directly incorporated within the products. Team coordinates under the direction of CEO or top executives and on the need basis (Anderson et al., 2013). Despite this secretive nature of the organization, Apple has been able to manage seamless co-ordination of projects through clear direction, self-accountability, and constant feedback.

A culture of responsibility: Another feature of Apple culture is a strong sense of self-responsibility. Jobs would instill responsibility through clear and directive instruction to demonstrate employees’ positions and tasks. The term DRI is an integrated jargon in Apple’s culture which points to the “Directly Responsible Individual”, particularly at the executive level, for various agendas (Barry M. P., 2013).

Employee motivation: The employee perks in Apple are not similar to that of other high-tech companies, and in this regard, employee motivation comes from other sources, which is the product itself. Despite being a big multinational company, employees’ salaries in Apple are not better than the other places (Anderson et al., 2013). Apple believes that a great product development opportunity will retain people who are motivated (Anderson et al., 2013). So, Apple sustains a culture with people having some kind of passion for the organization. Nonetheless, employees are able to choose a customizable benefit package to suit their individual needs under the program called FlexBenefits (Anderson et al., 2013).

Apple’s Formal Organizational Structure

The structure has profound impact on an organizational management. Apple has a very unique and flat organizational structure. Before returning of Jobs in Apple (in 1997), the organization maintained a large number of middle managers. Jobs fired 4000 middle managers and rebuilt a flat structure composed of only the executive team and vice presidents. The executive team would directly pass Jobs decisions onto the employees (Anderson et al., 2013). This would facilitate direct and more personal level interactions. This flat organizational structure and considerable authority to the executive team successfully managed a large organization with approximately 60,000 full time employees along with 364 retail outlets situated in fifteen countries (Anon, n. d.).

Organizational Communication and Decision Making in Apple

Organizational communication and decision making is very unique in Apple. Apple’s flat organizational structure typically serves to reduce the layers of bureaucracy and creates a fast paced and collaborative environment (Sawayda, 2011; Anderson et al., 2013).

Before Jobs’ returning to Apple, the projects were discussed openly. Jobs created a patchy, segmented and team-based structure where team interactions were absent. Despite this secretive nature in its culture, the flat organizational structure increases communication and faster implementation of decisions (Heracleous, 2013). The co-ordination is done on need basis with the direct supervision of CEO and the executive team (Anderson et al., 2013).

Apple conducts a series of weekly meetings, which is the central strength of its organizational communication. The purpose of the meetings is to bring clarity, unity, and simplicity of the message, keep everyone at the same page, and to set the right tone for its upcoming journey (Barry, 2013).

Decision making at Apple is very unique and unusual. During the time of Steve Jobs, most decision would come from Jobs without any analysis, focus group or thorough consultations (Morrison, 2009). This style of decision making imply the fact of authoritative rather than autocratic, which was one of the Jobs leadership skills who had exceptional ability to provide clear and powerful message (Chaffin, n. d.). In many cases, Jobs would directly interact with the employees.

Conclusion

In the core of Apple’s success, there remains innovation, performance, and reliability, where a combination of differentiation in product design, marketing and customer services has been adopted. Apparently, two most important factors driving these successes–Jobs’ leadership skills, and the right set of people. Organizations’ culture and structure have profound impacts on people and their behavior, which is important for the success of any business strategy. The successful composition of various structural and cultural components in organizations is achieved through appropriate directions and a competent leadership. The paper discussed how leadership of Jobs applied to simplify the organizational structure and processes, such as to enhance communication and decision making.

From the study of this paper, it can be concluded that the organizational culture of Apple is that of adhocracy category where all challenges and tasks circle around the product success. This product oriented culture can be attributed to the reflection of Jobs’ leadership vision to make great products that customers will fall in love with, which is a significant proposition for its differentiation strategy. Jobs successfully diffused his passion and motivation in Apple’s culture and instilled accountability, self-responsibility, innovation, and creativity. To sustain innovation and entrepreneurship, which is the central to an adhocracy culture, Jobs surrounded his workplace with creative people through recruiting right talent and rewarding the creativity.

Adhocracy organizations lack of centralized power and authority relationship, which may apparently seem contradictory in Apple’s case. However, it is notable that Jobs reduced the bureaucracy of the organization to support a more flattened organization where authority can do more interactions on the need basis. Jobs’ visionary, innovative and risk-oriented leadership style is the perfect match to that of an adhocracy organization culture. Apple’s project or product based business units and team oriented structure also reflect the nature of the adhocracy culture.

References

ANDERSON, R., FLORENCE, B., SHEPHERD, S., TILK, C., & TURNER, J. (2013) Apple Inc.: The Rise and Fall…and Rise Again. Salt Lake Community College. BUS-1050-025

ANON. (N. D.) Analysis of Apple Inc. business Strategic Unit Organizational Culture (iPad unit).

BAXTER, P. & JACK, S. (2008) Qualitative case study methodology: Study design and implementation for novice researchers. The qualitative report, vol.13, no.4, pp.544-559.

BHATNAGAR, N. G., GUPTA, V., & CHAUHAN, A. (2012) A Comparative Study of Differentiation Between Macintosh and Windows Operating System. International Journal of Research in Engineering, IT and Social Sciences; vol.2, no.6, pp.77-85, ISSN: 2250-0588.

BARRY, M. P., (2013) Lessons from Apple under Steve Jobs.

CAMERON, K. S., & QUINN, R. E. (2006) Diagnosing and changing organizational culture: Based on the competing values framework (Revised ed.) John Wiley & Sons.

CSASZAR, F. A. (2012) Organizational structure as a determinant of performance: Evidence from mutual funds. Strategic Management Journal, vol.33, no.6, pp.611-632.

CHEN, S. S. (2006) Leadership Styles, Organizational Culture and Organization Structural Configurations. The Journal of Human Resource and Adult Learning. pp.39-46.

CHAFFIN, M. (N. D.) Strategic Plan for Apple Inc.

DESHPANDE, R. & FARLEY, J. (1999) Executive insights: corporate culture and market orientation: comparing Indian and Japanese firms. Journal of International Marketing, vol.7, no.4, pp.111-127.

DECANIO, S. J., DIBBLE, C., & AMIR-ATEFI, K. (2000) The importance of organizational structure for the adoption of innovations. Management Science, vol.46, no.10, pp.1285-1299.

DISSANAYAKE, K., & TAKAHASHI, M. (2006) The construction of organizational structure: Connections with autopoietic systems theory. Contemporary Organizational Culture Management Research, vol.2, no.2, pp.105.

GAMBLE, J. E. & MARINO, L. (2011) Apple Inc. In 2011: Can It Prosper Without Steve Jobs?

HERACLEOUS, L. (2013) Quantum Strategy at Apple Inc. Organizational Dynamics; vol.42, no.2, pp.92-99.

HILL, C., & JONES, G. (2011) Essentials of strategic management. Cengage Learning.

LESHINSKY, A. (2012) Inside Apple: How America’s most admired and secretive company really works. New York, NY: Hachette Book Group.

MEYER, J. W., & ROWAN, B. (1977) Institutionalized organizations: Formal structure as myth and ceremony. American journal of Organizational Culture, vol.83, no.2, pp.340.

MINTZBERG, H. (1989) Mintzberg on Management, The Free Press, New York.

MICKALOWSKI, K., MICKELSON, M., & KELTGEN, J. (2008) Apple’s iPhone launch: A case study in effective marketing. The Business Review Cambridge, vol.9, no.2, pp.283-288.

MORRISON, C. (2009) How to innovate like Apple – Organizational Culture.

PORTER, M. E. (1985) Competitive advantage: creating and sustaining superior performance. The Free Press, New York London Toronto Sydney Tokyo Singapore

SAWAYDA, J. (2011) Apple Inc.’s Ethical Success, Organizational Culture and Challenges .

WOOTEN, L. P. (2010) Building a Company the Steve Jobs’ Way: A Positive Deviance Approach to Strategy Organizational Culture. Effective Executive.

YIN, R. K. (2003) Case study research: Design and methods (3rd ed.). Thousand Oaks, CA: Sage.

YOFFIE, D. B. & KIM, R. (2011) Apple Inc. in 2010. Harvard Business School Publishing. Boston. HBS No. 9-710-467.

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IHRM Human Resource Management

International Human Resource Management – IHRM

“With reference to relevant IHRM theoretical and research material, critically analyse ways in which IHRM is shaped by institutional and cultural/societal factors. How can firms balance the need for global integration of HR strategies, policies and practices with the pressures to adapt to host country requirements?”

The rise of globalization has brought in many changes across the world and has significantly impacted how businesses operate on a global level. Globalization is the process for achieving international integration that results from sharing of ideas, products, services and other such areas of culture. With globalization arises many other concepts touching upon various spheres of life and there are no hard and fast rules with regard to globalization. The process of globalization involves economic integration, the sharing of knowledge and information between countries, power discourse and cultural strength. It is looked upon as a platform for global free market that is devoid of any socio-political influence and brings about exchange of cultural and national resources across boundaries (Al-Rodhan, 2006, p. 1).

Globalization has attained its peak over the past few years as it promotes free trade. Exchange of goods and services have been leveraged in many ways and the transportation cost is low. Corporations functioning in developed nations across the world are able to get cheap as well as efficient labours from developing nations. On the other hand, the developing nations are benefitted with the huge surge in job opportunities and infrastructural development. Proponents of globalized business strongly believe that it is a mutually beneficial arrangement and leads to the upliftment of both sides on many fronts (Robertson, 1992).

While the concept of Globalization has turned out to be the best option for organization in many ways, it struggles when it comes to the most important internal function, human resource management. However, globalization has got its pros and cons. Organizations are struggling to create and implements Human Resource Management policies that fits into the global as well as domestic market. Corporations also need to face the pressure of integrating various HR strategies, processes and practices with that of the host country. This paper will analyse the impact that societal, cultural and institutional aspects have over International Human Resource Management and how the firm balances the whole integration process.

As provided in the website Business Dictionary, an Organization can be defined as,

“A social unit of people that is structured and managed to meet a need or to pursue collective goals. All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities, and authority to carry out different tasks.”

In order for a smooth functioning, the different members belonging from different cultural, societal and political background should come together and needs to work towards the common goal of the company. This is possible only with the help of well integrated international human resource strategies.

Institutional impact on IHRM

The institutional factor has a huge impact on the International Human Resource Management and it needs to be understood that the impact can be both external and internal. External institutional sources include the political set up of a country, legislation, national culture and local custom. Internal institutional impact is at the managerial level, corporate culture and strategies. The organization which is doing business with a host country company needs to comply with the rules, laws and regulations region and should set up a HR policy based on this factor. The distinction in the laws could amount to an altogether different approach on rules related to human resource and the main organization located in a different country should set up a code of conduct that is in sync with the host country. By taking an institutional perspective, the organizations need to adapt to HRM rules of the country in which they are doing business with. By standardizing the HR policy and practices according to the host country requirements, organizations are able to operate businesses smoothly (Svendsen, 2011, pg. 3-8).

IHRM
IHRM

The political set up of a particular country has got a significant impact on organization and its principles related to human resource management. There are various levels of operation and those countries that support liberal economics are the ones that derive maximum benefit out of it (Crouch and Streeck, 1997). Organizations would go for countries that supports liberal economics as they have the freedom to manage, provided with the option to bring about short term competition, training is considered important, payment could be made as per the performance of the individual and there will be flexibility as to the employment and deployment of staffs. In such an economic set up, the organizations are provided with complete freedom as to the business operation (Scullion, 2007, pg. 309-319).

This is a completely different scenario when it comes to CME countries as such countries give importance to long term performance rather than short term strategies. It ensures to develop product and service innovation and development of skills. Employees are placed in regular training and skill development program so that they achieve the necessary skill sets to meet up with the current day requirements. The Human resource principles are created in such a way that it provides for job security, invests on training the employees and other such areas.

Cultural and Societal impact on IHRM

The cultural impact on IHRM is considerably high. It needs to be understood that both the countries doing business with each other comes with a completely different cultural background and it is important for countries to understand the cultural difference and work towards setting up an IHRM policy that does not disturb the present cultural set up. The ways one dresses to the work ethics they follow are completely different in the two countries and it is necessary that companies be well aware of this before doing business. The cultural impact on an organization can never be ignored and it needs to be looked upon in the initial stage itself in order to prevent any sort of issues in the future. A proper code of conduct developed between the two countries will enable the smooth operation of business (Scholte, 2005).

There are certain practices of an organization are known to be derived heavily based on the culture of the country. The organizational structure that a company goes for is based on the culture of both the countries. It could be consultative set up or that of an authoritative set up and it could be some other structure that is new to the field. The next important area that culture comes into IHRM is recruitment. Recruitment could be done based on recommendations or a series of test, interview process. Gender difference is yet another important area that is touched upon when it comes to cultural impact. Certain countries may restrict certain terms of work condition when it comes to woman and the company needs to go by it. There could be restrictions as to time and the nature of work they carry on.

Based on the culture of a country, individual or collective group, the remuneration part is finalized. From this, it could very well be understood that cultural differences have a significant impact on the International Human Resource Policy and this aspect should never be taken slightly. There need to be a clear distinction with regard to the cultural variations of the two countries so that it becomes easy and simple to form regulated and balanced human resource management principles (Hofstede, 2001).

Having understood the kind of impact that culture has over the framing of human resource principles, the kind of impact that the societal setup of a country has over the IHRM policy should never be underestimated. Society is a collection of people from diverse backgrounds and it is regulated by way of rules and regulations in order to maintain order. The societal set up of the organizational country and host country turns out to be different altogether and it is imperative for the countries to develop an understanding over this area. The societal needs and differences should be brought together and a streamlined human resource management policy should come up. There are some activities and behaviour that accepted in one society whereas it is not taken easy in the case of another society. IHRM areas like long term orientation and continuous skill development is possible in countries that provides for a stable and streamlined society (Jing, 2010, pg. 43).

It is applicable to various areas of life including dress code, working hours and so on. The societal differences touches upon some of the most crucial areas which includes employment training and development, appraisal, working conditions, the right and regulations followed by people who are working in the different country set up. This same principle needs to be followed when it comes to developing an organization human resource policy for the two different countries with different societal set up.

Conclusion

To conclude, we can understand that the institutional, societal and cultural differences has a significant impact on the International Human Resource Management policy developed and practiced by an organization. It needs to be understood that every society has got its own culture which leads to the development of a particular institutional set up. These three main aspects are interlinked and can never be ignored when setting or framing a human resource management policy that works perfectly for the countries. Both the host company and the company that is giving business should be able to work in coordination with each other in order to balance any sort of pressure that may arise from the venture.

Reference

Al-Rodhan N (2006) Definitions of Globalization: A Comprehensive Overview and a Proposed Definition, Program on the Geopolitical Implications of Globalization and Transnational Security, pg. 3-12

Robertson R (1992) Globalization: Social Theory and Global Culture, Social Science, pg. 8-23

Scullion H (2007) International Human Resource Management IHRM in the 21st Century: Emerging themes and Contemporary Debates, Human Resource Management Journal, 17(4), pg. 309-319.

Scholte J (2005), Globalization: A Critical Introduction, Political Science, pg. 230-267

Svendsen K (2011) International Human Resource Management IHRM : Drivers of Subsidiary Performance – The Impact of Subsidiaries’ Autonomy in Determining HR Policies, International Business, Copenhagen Business School.

Jing P (2010). Cross Cultural Human Resource Management (IHRM), Business Economics and Tourism, pg. 43-53

Hofstede, G. (2001) Culture’s Consequences: Comparing Values, IHRM Behaviours, Institutions and Organizations Across Nations 2nd edn., Thousand Oaks, CA: Sage Publications

Crouch, C. and Streeck, W. (1997) Political Economy of Modern Capitalism, London: Sage Publications.

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Hofstede and Trompenaars

How Do Different Cultures Affect Consumer Behaviour and Organisational Structure: An Inquiry Using Hofstede and Trompenaars Models

This study will analyse the effect of different cultural practices on consumer behaviour belonging to different cultures. Utilizing Hofstede’s cultural framework and Trompenaars dimensions of cultural framework, this study will exhibit the cultural differences create differential impacts on organizations and structural changes associated with them. Furthermore, theoretical frameworks constructed by other behaviourists as well as psycho-sociologists will be discussed in brief to determine the stimulant triggering consumers to consumer goods. How far cultural orientations are effectively managing consumer behaviour and how much these orientations are making organisations to adapt to specific set of practices in local context will be studies Moreover, this study will argue that cultural differences affect not only the behaviour of consumer but lead the managers to change their decision making style and to make strategic decisions on the basis of consumers’ choice.

Culture: What It Holds for Consumers

Culture consists of collective elements and practices which provide a conduit for perception, judgment, calculation, correspondence, and action amongst those who share a historical period, a language, and a geographic location according to Arnolds and Thompson (2005). Culture is a prevailing power in regulating human behaviour and shaping their values in the formation of their collective actions. According to the authors, the culture is comprised of a commonly-accepted set of behaviour models that are transported and well-preserved by the members of a specific society through different means. Cultural values touch almost every facet of human life according to Mourali et al., (2005). The cultural value scheme includes cultural fundamentals that the people of a particular region have in common with the group to which they belong as observed by Luna and Gupta (2001). From the start of an individual’s actuality, the personal experiences the profits and restrictions of a particular culture, and those profits and limitations may become a leading stimulus upon consumers’ purchasing choices.

Hofstede’s Model of Cultural Dimensions: Analysis of Consumer Behaviour and Organisational Ethos

Hofstede’s (1984) study entitled as ‘Culture’s Consequences’ investigates into the field of studying multinational companies and international organizations. Hofstede collected and analysed data collected from different countries to formulate concrete theoretical framework for the analysis of culture on various aspects of organisation. Through that data analysis, he concluded that “organizations are culturally-bounded” implying that structure and functions of organisation are deeply affected by the culture in which it functions. Hofstede used the analysis to create different “dimensions of culture”, the consumer behaviour and organizational styles have been discussed below.

Individualism-collectivism

This cultural dimension developed by Hofstede expounds that the kind of relationship an individual has with him or herself and with others in every culture. In societies where idea of individualism is of paramount importance, most of the individuals are expected to take attention and upkeep of themselves and their immediate family. In this kind of culture the consumer behaviour is self-dependent, which implies that societal values are of less significance for their consuming habits. In these cultures the management style revolves around the self-efficiency which is driven by motives of promotions and development. However, in collectivistic-oriented societies which are, by and large traditional societies, focus has been on societal good and community’s welfare as observed by Yeniurt and Townsend (2003). In these cultures, consumers’ behaviour is largely dependent on societal approval for the consumption of goods and services being offered by various companies. Moreover, the organizational styles are deep rooted into efficiency, but they also take into consideration the cultural values. In these cultures, individuals are merely regarded as the members of groups who are expected to look after them in give-and-take for allegiance to organisation. Furthermore, Yeniurt and Townsend (2003) are of the view that in collectivistic culture, there has been greater chances of innovation as these cultures are better equipped to trap organizational energies.

Uncertainty Avoidance

According to Hofstede (1991), this dimension mainly deals with the necessity to formulate rules and regulation for prescribed and proscribed behaviour of people against their sense of uncertainty. Hofstede observes that countries marked with political stability and strong sense of cultural identity score low on this dimension as they feel usually secure. However, countries like those of Latin America score high on this dimension because people (consumers) feel insecure about political climate which adversely affect their collective psyche. In these states, organisations usually rely on ad hoc practices as they could change or wind up their business owing to uncertain prevailing conditions. Consumers in these states are quite inactive as they do not indulge into buying spree out of trust problems.

Power Distance

This dimension unravels the costs of discrimination found in the authority and power relations within a specific society according to Hofstede (1991). It adversely affects the hierarchy and reliance relationships in the outline of family and organisations. For example in patriarchal societies, power within a family rests on the male. His decisions will be regarded as the most influential with regard to what is to be bought. Applying similar analogy at organisational level, in such societies the organisational structure is predicated on gender relations which value more to male workers.

Masculinity-Femininity

Hofstede (1991) through this dimension points the in masculine cultures the dominant values are success and achievement. The implication of this dimension at organisational level incorporates that in masculine societies organisations prefer to focus on success and achievement and its structural style is male-dominated which propels the values of competition, progress and organisational efficiency. However, contrary to this finding, the feminine cultures put a great of emphasis on the concern for others. In this situation, organisation mainly focuses on social responsibility which forms the part and parcel of their organisational ethos. At consumer level, it would certainly imply that countries which have concerns for other will pay less heed to consumer values; whereas culture which puts lot of significance to success and achievements in terms of their financial strength and professional success, these states (or cultures) will put more emphasis on consumption values.

Long-Term Orientation

This dimension in Hofstede Model envisages the bringing forth attributes which are oriented towards futuristic prospects by long term awards (Hofstede, 1991). Hofstede in his later studies proposed that long-term versus short term dichotomy is more useful for his theoretical construct. The societies having long-term collective vision usually rely on deferred gratification patterns. Their main thrust is on saving for the future; therefore consumer behaviour in those societies is usually tilted towards lower levels of consumptions. According to Hofstede (1991), this pattern is usually found in emerging economies like China and India. At organisational level, there is an increasing tendency towards competition in these cultures which focus on long-termism.

Hofstede Trompenaars
Hofstede Trompenaars

Trompenaars’ Dimensions of Culture Framework

The main dimensions of culture framework defined by Trompenaars and Hampden-Turner and summarized by Trompenaars and Woolliams (2003) are predicated on four cultural typologies which are as follow:

The Incubator Culture

According to Trompenaars and Woolliams (2003), this culture resembles like a leaderless and shudderless team. It implies that prevalence of informal relations and low level of centralisation at organisational level. In this culture, the role and responsibilities are not well defined and there can be serious infringes on the overall organisation’s motivations.

The Guided Missile Culture

This cultural typology is mainly task oriented with high level of centralisation and low level of authority (Trompenaars and Woolliams, 2003). The authors are of the view that ‘… rational culture is, in its ideal type, task and project oriented. ‘Getting the job done’ with ‘the right man in the right place’ are favourite expressions. Organisational relationships are very results oriented.’ It shows that Guided Missile cultures have strict sense of responsibility. In these cultures, the managerial style is based on problem solving solutions and managers are in full charge of authority. In these types of organisational culture, the level of adaptability is very high, therefore these organisations are best suited to work in multi-cultural framework.

Family Culture

Family culture is an inverse form of the Guided Missile culture—marked by high degree of authority consolidation and low level of formalisation according to Trompenaars and Woolliams (2003). The employees of organisations marked with such kind of cultural ethos revolve around the core of authority. But like family, there are little rules and therefore there is less room for bureaucratic style. All which matters most is the will of the authority, which is a rule unto itself. In these organisations, managers have little or no say. They remain at the mercy of top slots. There remains a permanent contest amongst organisation’s members to remain as close to authority as possible.

The Eiffel Tower Culture

According to Trompennars and Woolliams (2003), the Eiffel Tower Culture is marked with strict centralisation and high level of formalisation. This culture is highly oriented towards role fulfilment which makes employees of an organisation largely adhere to the organisation’s main motives and business slogans. The whole organisation and its energies are directed towards pre-defined sets of goals and ambitions.

Consumer Behaviour: A Melting Pot for Cultural Effects

The study of the dealings and consumption involve the procedure when people choose, buy, utilize, or dispose of products, services, designs, or experiences to satisfy needs and desires is known as consumer behaviour according to Solomon et al, (2001). From the definition above, consumer behaviour can be viewed as a course that encompasses the issues that affect the consumer before, during and after a purchase. But cultural values operate at each level in imperceptible way. Culture is more than an environmental or collective influence. People were imagined within a culture. Culture is in the heads of people while consuming things which influences their behaviour. To comprehend culture’s effects on consumer behaviour, culture must be incorporated in different aspects of consumer behaviour theory. Preferably, different theories of consumer behaviour are proposed within cultures by studying people’s behaviour within each nation.

Cultural Differences and Consumer Behaviour

At psychological level, the mental approach and general mindset of a consumer which he has begotten towards a product for making rational choices is known as the consumer decision-making style. However, it is well understood by Bennet and Kassarjian (1972) long before the initialization of systematic study that consumer decision-making style hinges upon an unvarying configuration of operative and cognitive responses to their needs and societal approval of these decisions. Moreover, the culture has also been proven to have a greater impact on individual attitudes and values according to Hofstede and Hofstede (2005). Hofstede and Hofstede (2005) pioneered the study of culture and its impact on various aspects of management and business related management practice. The Hofstede Model, which has been elaborated in the following paragraphs has been regarded a mould to study the impact of culture on management practices as well on the consumer-oriented decisions regarding consumption.

Furthermore, Sproles and Kendall (1986) devised three different ways to approach consumer decision making process, which includes consumer typology approach, psychographic approach which is also known as lifestyle approach and, lastly, consumer characteristic approach. The authors elaborated the consumer typology approach categorises customers according to the retail investment and the types of consumers which usually get into particular type of consumption pattern. The consumer psychographic approach hinges upon the overall lifestyle of the consumer. For example, a consumer with middle class lifestyle will tend to emulate the life style of the elite within his or her specific income. In the same, vein consumer characteristic approach depends on the detailed study of different traits and characteristics of consumers, which involves the study what consumer is looking after. Moreover, characteristic approach also underlines the cognitive positioning of consumer towards buying the specific product through their motives as observed by Westbrook and Black (1985). The authors are of the view that pre-defined mental constructs are important stimulants of general human behaviour which, in turn, also affects consumers’ behaviour as they are of the view ‘hypothetical and unobservable psychological constructs postulated to explain both the energized and directive aspects of human behaviour.

Conclusion

The study shows that culture has deep effects on the consumer behaviour as well as organisations’ structure which, in turns, affect organisations’ efficiency. The prevalent mode of cultural values best describes what kind of consumer behaviour and what kind of organisational goals have been embedded into them. Moreover, the study further suggests that an organisation with flexible rules with an adaptive style of operations is best suited in today’s world of multi-cultural workplace when the role of employees especially managers is also becoming complex in the face of global assignments.

References

Arnould, E. J. and Thompson, C. J. (2005), Consumer Culture Theory (CCT): Twenty Years of Research, Journal of Consumer Research, 31:4, 868–882

Bennett, P. D., and Kassarjian, H. H., (1972), Consumer Behavior, Chicago: US, Prentice-Hall

Hofstede, G., and Hofstede, G.J., (2005), Cultures and Organizations: Software of the Mind. 2nd Edition, US, McGraw-Hill

Hofstede, G., (1984), Culture’s Consequences: International Differences in Work-Related Values, New York: US, Sage Publications

Luna, D. and Gupta, S.F., (2001), An Integrative Framework for Cross-Cultural Consumer Behaviour, International Marketing Review, 18:1, 45 – 69

Mourali, M., Laroche, M., and Pons, F., (2005), Individualistic Orientation and Consumer Susceptibility to Interpersonal Influence, Journal of Services Marketing, 19, 164-173

Solomon, M. R., Polegato, R and Zaichkowsky, J.G., (2001), Consumer Behaviour: Buying, Having, and Being, Toronto: Canada, Pearson Education Canada

Sproles, G.B. and Kendall, E.L., (1986), A Methodology for Profiling Consumers’ Decision-Making Styles, Journal of Consumer Affairs, 20:2, 267-279

Trompenaars, F. and Woolliams, P., (2003), A New Framework for Managing Change Across Cultures, Journal of Change Management, 3:4, 361–375

Westbrook, R.A. and Black, W.C., (1985), A Motivation-Based Shopper Typology, Journal of Retailing, 61, 78-103

Wong, N. Y., and Ahuvia, A. C., (1998), Personal Taste and Family Face: Luxury Consumption in Confucian and Western Societies, Psychology and Marketing, 15, 423-444

Yeniyurt, S., and Townsend, J.D., (2003), Does Culture Explain Acceptance of New Products in a Country?: An Empirical Investigation, International Marketing Review, 20:4, 377-396

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Corporate Governance

Corporate Governance

Corporate governance is a field in economics that investigates how to secure/motivate the efficient management of corporations by the use of incentive mechanisms, such as contracts, organizational designs, and legislation. This is often limited to the question of improving financial performance, for example, how the corporate owners can secure/motivate that the corporate managers will deliver a competitive rate of return.

It can also be defined as the combination of mechanisms, which ensure that the management (the agent) runs the firm for the benefit of one or several stakeholders (principals). Such stakeholders may cover shareholders, creditors, suppliers, clients, employees and other parties with whom the firm conducts its business.

It deals with the conflicts of interests between the providers of finance and the managers; the shareholders and the stakeholders; different types of shareholders (mainly the large shareholder and the minority shareholders); and the prevention or mitigation of these conflicts of interests. The principles of Corporate Governance are as follows:

  • Shareholder Recognition- it is a vital component in maintaining a company’s stock price. Good corporate governance seeks to ensure that all shareholders (both small and major shareholders) get the opportunity to participate and raise their opinions at the general meetings.
  • Stakeholder Interests- they should be recognized by the good corporate governance. This develops a positive relationship with the community.
  • Board responsibilities must be clearly outlined to the shareholders. All board members should be aware of the main vision and mission of the organization and should unite to achieve it efficiently and effectively.
  • Ethical behavior should be maintained and followed by all the board members, as the violations can negatively impact the company’s image and recognition.
  • Business transparency is an essential feature in promoting shareholder trust. All the financial records and reports should be clearly stated and exaggerations should be avoided.

The main purpose of these principles is primarily to clarify and explain the rights and responsibilities of the owners, the Board of Directors, the company’s management and other governing bodies, with reference to the company’s policies and rules, regulations and legislative framework. Thus, effective corporate governance is required by a business so that it is able to set and meet its strategic goals efficiently. A corporate governance structure combines controls, policies and guidelines that motivate the organization towards its objectives while satisfying the needs of the stakeholders.

It refers to a combination of various mechanisms. These mechanisms include: Internal and External Mechanisms.

Internal Mechanism

The internal mechanisms are the most important sets of controls that monitor the progress and activities of the organization and take corrective measures when required.  They tend to assist the internal objectives of the corporation and its internal stakeholders, such as the employees, managers, and the owners. These objectives primarily include the tasks to be performed and their reporting lines, along with the performance measurement systems.  So, the internal mechanisms include supervision of management, independent internal audits, structure of the board of directors into levels of responsibility, segregation of control and policy development.

External Mechanism

These mechanisms are controlled by the external or outside entities of the organizations, serving to their objectives. These external entities include regulators, governments, trade unions and financial institutions. Their objectives mainly refer to adequate debt management and legal compliance. The external stakeholders impose these mechanisms in the form of union contracts or regulatory guidelines. Finally, companies report the status and compliance of external corporate governance mechanisms to the external stakeholders.

The good corporate governance of an organization is depicted through the market share. So, the market share index is presented in the Financial Times Stock Exchange (FTSE). The FTSE 100 refers to a share index of the 100 companies listed on the London Stock Exchange, having the highest market capitalization. It serves the purpose of a tool for measuring the success and prosperity of the businesses regulated by the UK company law. From among the 100 companies, one of the companies that we will be analyzing is Unilever.

Unilever is a company, well known for the useful everyday products that it produces. Its vision is stated, as “Unilever is a unique company, with a proud history and a bright future. We have ambitious plans for sustainable growth and an intense sense of social purpose.” Their main purpose is to make a sustainable living. They aim to create a better future every day, with brands and services that help people feel good, look good and get more out of life. Most of the Unilever brands contain ethically and sustainable sourced ingredients that are independently certified. Around half of their raw materials are from agriculture and forestry, so they work towards making their key products 100% sustainable.

Unilever ensures good corporate governance and behavior. The Code of Business Principles represents the standard of conduct that each Unilever employee is expected to follow in their performance. A copy of this code has been presented in the document “Unilever’s Code of Business Principles.” The main components of this document includes: Ethical guidelines, Employees, Shareholders, Customers, Law and Regulations, Business Partners, Competition, Public activities, Compliance to the rules, monitoring them with the required and then reporting the final results. It also caters to the rights and responsibilities of the stakeholders. This document aids the employees in understanding what the organization expects from them and how they can all struggle towards achieving the organizational main goals and objectives.

Corporate Governance
Corporate Governance

Unilever focuses to corporate governance requirements in the Netherlands, the UK and as a foreign private issuer in the US. They constantly review their corporate governance arrangements and present it in the annual report. They conduct their operations according to the internationally accepted principles of good governance and best practice, also ensuring compliance with the corporate governance requirements applicable in the countries in which they operate, therefore catering to both national and international requirements.

The corporate governance of Unilever has been portrayed annually. Similarly, the Annual Report 2014 has been divided into two parts:

  • Strategic Report- it contains information about the organization, how the operations are conducted and how is the money earned. It includes the strategy, business model, markets and Key Performance Indicators as well as the approaches to sustainability and risk.
  • Governance and Financial Report– it contains detailed corporate governance information, how risk is mitigated, the committee reports and how hey remunerate the directors, also the financial statements and notes.

As mentioned earlier, the corporate governance includes two mechanisms- internal and external. Internally, a Board of Directors Committee is present to analyze and evaluate the performance of employees, to make organizational decisions and review the progress towards achieving those goals. The management of the company is committed to good corporate governance and complying with the best practices. The Directors are expected to present the financial statements, keeping in view the cash flows, analyzing the position and pattern of shareholders, discussing the annual board meetings and evaluating the results, further presenting it in the form of the report.

Unilever pays importance to their shareholders. It values open, constructive and effective communication with their shareholders. They are provided an opportunity to raise issues directly with the Chairman and, if required, the Vice-Chairman/Senior Independent Director. They are supported by the Investor Relations department, which organizes presentations for analysts and investors. The meetings and information processed in the meetings are announced via teleconferencing and can also be accessible by telephone or via their website. The company through a frequent dialogue welcomes feedback from shareholders. The Chairman, Executive Directors and Chairmen of the Committees answer the questions put forward by the shareholders at the Annual General Meetings (AGMs) each year. This depicts the idea that the company appreciates the interests and opinions of the shareholders, with fulfilling towards the accomplishment of the desirable opinions.

The Annual General Meetings (AGMs) are conducted each year, where the Chairman presents his thoughts on the governance aspects of the preceding year and the CEO of the company provides a detailed review of the Company’s performance throughout the year. Shareholders are encouraged to attend these meetings and ask questions at or in advance of the meeting. Indeed, the question and answer session forms an important part of each meeting. The external auditors are welcomed to the Annual General Meetings and are entitled to address them.

The external mechanism of Unilever includes the financial institutions that provide loans and financial assistance to the production and then marketing of the products produced.

Risk Management is an important aspect that provides support to the internal stakeholders by assuring a comfort zone in the company. Every business face risks at various levels, but effective management is what differentiates a successful company from the least successful one. Likewise in Unilever, the Boards, advised by the Committees, regularly review the significant risks and decisions that could have a material impact on Unilever. These reviews consider the level of risk that Unilever is prepared to take in pursuit of the business strategy and the effectiveness of the management controls in place to mitigate the risk exposure.

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Action Research Dissertation

Action Research

From the time when Kurt Lewin coined the term, action research has crossed boundary from its application in social and medical sciences to organizational development and information systems. Baskerville (1999) lists a variety of action research under different designations such as soft system methodology, prototyping, participant observation, field work, action science, and process consultation.

Action research is a class of methodologies based in the culture of its researcher-participant collaboration. It aims to provide practical solutions in an immediate problem context and contribute new knowledge to science at the same time. In essence, the approach focuses on both action and research concurrently. The action researcher participates in the context of the social or organization problem in conjunction with the practitioners to effect change and also develop knowledge. This means that there is a dual commitment in action research; the action researcher collaborates with the client system therefore highlighting co-learning as a significant part of the process.

Concept of Action Research

“Action research simultaneously assists in practical problem-solving and expands scientific knowledge, as well as enhances the competencies of the respective actors, being performed collaboratively in an immediate situation using data feedback in a cyclical process aiming at an increased understanding of a given social situation, primarily applicable for the understanding of change processes in social systems and undertaken within a mutually acceptable ethical framework” Hult and Lennung (1980).

This comprehensive definition of action research covers the contextual setting of research, the double expectations, and the ethical considerations of the methodology. Action research differs from other research methodologies in various ways. The most significant of these differential attributes is its aim of transforming all the participants into researchers, as everyone ‘learns by action’. Asides this, the research takes place in real-life situations where practical solutions are developed to the contextual problem. The primary role of the action researcher is to train local leaders to a level where they can be responsible for the process, that is, able to continue with the research when the action researcher discontinues. During the course of the action research, the researcher may oscillate between different roles which include planner, leader, facilitator, teacher, designer, observer, and catalyzer.

Common Characteristics of Action Research

According to Peters and Robinson (1984), action research authorities seem to agree on four common characteristics of the research paradigm, which are;

Firstly, action research has both action and change orientations. This emphasizes the dual outcomes of the methodology, action and research. Secondly, it focuses on problem; it targets to identify and implement actions on the problematic situation. In addition, action research involves collaboration between the action researchers and the client system. In this regard, all participants can be described as co-researchers. Lastly, it is a cyclic or spiral process consisting of steps which are repetitive.

Action Research
Action Research

 

The Action Research Processes and Methods

The process of action research is a sequence of events comprising of iterative cycles of stages. There are different models used to describe this processes. However, the most common action research paradigm is that described by Susman and Evered (1978), which consider five steps in each cycle. They are diagnosing, action planning, action taking, evaluating and specifying learning.

Diagnosing involves identifying the primary problem of the organization; action planning involves specifying actions that will change these primary problems; action taking implements the planned action; evaluating involves determining whether the action was successful or unsuccessful, while in ‘specifying learning’, generalized findings are made in an ongoing process.

The methods used in data collection during an action research project include surveys or questionnaires, keeping of journals, structures and unstructured interviews, observation recordings, taking photographs, and case studies. All these are tools are common with qualitative research paradigm.

Criticisms of Action Research

Some researchers have criticized action research as a rigorous research approach, maintaining that it is just a bit more than consultancy. Such set of academics point to weaknesses of the methodology such as bias and impartiality of the action researcher, difficulty of generalizing results from the study, lack of validity of data, and the assumed absence of key attributes of rigor and discipline associated with normative scientific research methods (McKay and Marshall, 2001). In spite of these criticisms, action research has proven successful in some case studies across different disciplines.

Action Research in Practice

Action research is a powerful tool that can be employed by Information System researchers for investigating the interaction between humans, information systems and social community.

Lau and Hayward (2000) in their study, Building a Virtual Network in a Community Health Research Training Program, applied action research paradigm to explore the effect of IT on the transition of health workers into a collaborative work group. The study evolved following a seven-week training course of about 25 health representatives from various regions. Each participant was presented with a notebook computer, internet connection, and technical support, and were directed to apply the knowledge acquired from the training in their domains, The action researchers discovered that individuals who used the system interactively tend to undertake collaborative projects, and that the dearth of quality community healthcare information online was a shortcoming. Overall, the participants attested to learning a lot from the experience. The research outcome is the provision of a descriptive model involved in creating virtual networks which can serve as groundwork for future research.

It is evident that action research is a valid methodology that bridges the gap between traditional research paradigms and socio-cultural research approaches.

References

Baskerville, R. L. (1999). Investigating information systems with action research. Communications of the Association for Information Systems, 2(19), 1-32.

Hult, M., & Lennung, S. Å. (1980). Towards a definition of action research: a note and bibliography. Journal of Management Studies, 17(2), 241-250.

Lau, F., & Hayward, R. (2000). Building a virtual network in a community Action Research research training program. Journal of the American Medical Informatics Association, 7(4), 361-377.

McKay, J., & Marshall, P. (2001). The dual imperatives of action research. Information Technology & People, 14(1), 46-59.

Peters, M., & Robinson, V. (1984). The origins and status of action research. The Journal of Applied Behavioral Science, 20(2), 113-124.

Susman, G. I., & Evered, R. D. (1978). An assessment of the scientific merits of action research. Administrative Science Quarterly, 23, 582-603.

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