The impact of the organizational culture on the Human Resource Management in Banking Sectors

 

According to the Kotter john P. & Heskett, (1992) organizational culture is a concept that is practicing by the companies from the year of 90 s after the experience of scientific management, According to the Barney (1986); Kotter john P. & Heskett, (1992); Gordon & Tomaso,(1992)there might be two main branches for the research on the organization culture-,one on the measure of the organization research and the other on the relationship between the organization culture and corporate performance(Cui and Hu, 2012). Deshpande and Webster (1989, p. 4) stated that the “the pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them norms for behavior (our emphasis) in the organization”. Culture describes about the employees, customers, suppliers and all the internal external stake holders and also define how those firms will interact with these actors also. Future more the culture can be classified as a source of competitive advantage where the it will help the business to maintain the strategies efficiently and effectively(Slater, Olson and Finnegan, 2011).

Hofstede’s Cultural Dimensions Theory

Hofstede’s cultural dimensions theory is a framework for cross-cultural communication, developed by Geert Hofstede. It shows the effects of a society’s culture on the values of its members, and how these values relate to behavior, using a structure derived from factor analysis. (accounting, 2023)

Dimensions of national cultures:

Power distance index (PDI): The power distance index is defined as “the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally”.

Individualism vs. collectivism (IDV): This index explores the “degree to which people in a society are integrated into groups”.

Uncertainty avoidance (UAI): The uncertainty avoidance index is defined as “a society’s tolerance for ambiguity”, in which people embrace or avert an event of something unexpected, unknown, or away from the status quo.

Masculinity vs. femininity (MAS): In this dimension, masculinity is defined as “a preference in society for achievement, heroism, assertiveness and material rewards for success”. Its counterpart represents “a preference for cooperation, modesty, caring for the weak and quality of life”.

Long-term orientation vs. short-term orientation (LTO): This dimension associates the connection of the past with the current and future actions/challenges. A poor country that is short-term oriented usually has little to no economic development, while long-term oriented countries continue to develop to a level of prosperity.

Indulgence vs. restraint ( IND ): This dimension refers to the degree of freedom that societal norms give to citizens in fulfilling their human desires. Indulgence is defined as “a society that allows relatively free gratification of basic and natural human desires related to enjoying life and having fun”. Its counterpart is defined as “a society that controls gratification of needs and regulates it by means of strict social norms”.

Organizational culture of the NDB bank defines the set of beliefs, traditions, customs and norms that organizational employees are expressing, NDB bank has different types of shared beliefs and values which have been converted into policies and practices within the organization. 

Decision making within the company will explains about the culture of the organization, centralization and decentralization of decision making the will express the culture of the organization. If the NDB bank conduct a centralized decision making system the decisions are taken by the few managers of the organization who are in the top chairs of the organization but if the ban conduct decentralized decision making all the line managers and the employees of the organization have a certain kind of autonomy or power to making a decision, therefor the organization culture of the organization will directly and indirectly affect to the human resource management of the organization NDB. 

Freedom of the employees at different levels and the management will also defines how will be the organizational culture impact on the human resource management, there are different levels of employees within an organization and the power of each level and the freedom the employees at each level will be different, if the freedom of the employees are same at every stage of the organization are having the same freedom the organization culture is in a better position and if not there are discrimination within the organization and it will leads to arise conflicts within the organization. 

Frankness on communication simply means the honesty or the openness to the communication which will affected by the organizational culture, if the employees are acting to be honesty and descent within the organization the it will be a huge impact to the organization goodwill therefore the organizational culture will effect on the frankness of the employees within the organization, the leadership styles that are been conducted by the managers will also result the organizational culture of the organization, whether the managers are employee oriented or task oriented will be depend on the organizational culture of the organization, if the organization practiced the manages to act solely on the work the manager will be task oriented and if the organization trained the managers to act fairly on people the managers will be people oriented.

References

accounting. (2023). Retrieved 04 26, 2023, from https://accounting.binus.ac.id/2021/11/15/hofstedes-cultural-dimensions-theory/#:~:text=Hofstede's%20cultural%20dimensions%20theory%20is,structure%20derived%20from%20factor%20analysis.

gothamculture. (2023). Retrieved 04 20, 2023, from https://gothamculture.com/what-is-organizational-culture-definition/

Harvard Business Review. (2013). Retrieved 04 20, 2023, from hbr.org: https://hbr.org/2013/05/what-is-organizational-culture

shrm. (2023). Retrieved 04 23, 2023, from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/understanding-developing-organizational-culture.aspx#:~:text=An%20organization's%20culture%20defines%20the,employee%20perceptions%2C%20behaviors%20and%20understanding.