Organizational Culture – Service Industry

One of the most underrated aspects of making a business successful is the importance of the organizational culture. The culture is built on the shared values, beliefs, and principles of individuals within the organization. Instead of focusing on building a strong, sustainable culture, organizations are more concerned with cutting costs. The service industry is a prime example of this. I have worked in different facets of the service industry for the past five years and all the organizations I have worked for are structured the same way. They use labor, food, and bar costs as a barometer to measure how well the organization is operating. Management is judged by how well they are able to manage these costs.

How much total revenue the organization brings in seems to be almost irrelevant. The overall goal of the organization is to maximize profit. Lowering labor, food, and bar costs and maximizing profits do not go hand in hand. For example, a manager could decide to cut the number of employees working on a Saturday night in half. The manager could also order poor quality food in attempt to lower food cost. Meanwhile, the service and quality of the product suffer because of the structure put in place by the organization, so no one wants to patronize the organization, thus actually reducing profits. Organizations structured in this manner suffer from weak cultures. The organization’s goal, maximizing profits, and the management’s goal, lower costs, are not aligned, resulting in a large organizational performance gap. According to the article “Importance of Organization Culture”, building a strong organizational culture helps with many aspects of making a business successful including the following:

• Aligning individual and organizational goals
• Creating healthy competition amongst employees
• Helping create a positive brand image of the organization
• Creating a common platform allowing employees to perform at their best
• Helping unify employees from different backgrounds
• Promoting healthy relationships between employees
• Extracting the best out of each individual

A strong organizational culture conveys the goals, beliefs, ideas, and appropriate behaviors to individuals within an organization in order for the organization to achieve its goals (Gupta,2009). Poorly structured organizations in the service industry need to adapt by making changes to their culture. Changing the culture of an organization can be a very difficult task to accomplish. Leaders of the organization need to facilitate the change by evaluating ineffective strategies and recommending new strategies (Gupta,2009). The leaders must promote the cultural values of the organization by conveying these values to all individuals in the organization and encouraging socialization among employees. By developing a strong, sustainable culture, organizations will extract the best out of their employees, become more efficient, and increase profitability(Gupta,2009).

References

Gupta, A. (2009). “Changing Organizational Culture”. Practical Management Retrieved from
http://practical-management.com/Organization-Development/Changing-organizational-culture.html

“Importance of Organization Culture”. Management Study Guide. 2013. Retrieved from
http://managementstudyguide.com/importance-of-organization-culture.htm.