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Stockton Energy Solutions: Guidelines and Organizational Culture
Stockton Energy Solutions: Guidelines and Organizational Culture
Team 7: Organizational Culture
Andi Zhu
Jorge Rubles
Pan Yiheng
Alaya Hubbard
Jiashuang Ding
University of the Pacific
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Stockton Energy Solutions: Guidelines and Organizational Culture
Executive Summary
Our topic is organizational culture. We introduced Edgard Schein’s three levels of
organizational culture at the beginning of our article as it will be a reference to what we
recommend Stockton Energy Solutions’ culture to be like and what we don’t want
Stockton Energy Solutions’ culture to be like. Through researching academic literature
we found the incentive theory, Maslow’s hierarchy of needs theory, resource-based
theory, and Herzberg’s two-factor theory. We will be using these theories to contribute
to our decision of what our company’s organizational culture should look like. We also
looked at large companies with upstanding organizational cultures like Apple, Google,
Deloitte, and Amazon to draw inspiration from them so we may make our own
recommendations regarding our company’s organizational culture.
Through our research, we found four recommendations of what we want to do
with our company while referring back to the three levels of organizational culture as
well as the research we found. We also critiqued Apple, Google, Deloitte, and Amazon’s
organizational culture. We concluded what we liked about their culture, what we didn’t
like, and what we hope to learn from them and possibly implement some of their
organizational culture into our own company.
Introduction
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Stockton Energy Solutions: Guidelines and Organizational Culture
What is the single best predictor of job satisfaction? It is behavior. But how do we
influence good behavior in a workplace environment? By developing an organizational
culture around the company. Therefore, in order to achieve our goal of increasing
productivity and performance in a workplace, an organizational culture must be founded
to provide guidance for employees. Our research covered many ways to implement
organizational culture into our company as well as the different kinds of favored culture
that our company should have. We did so by reviewing scholarly journals as well as
using real world application.
Before we started our research we often found ourselves questioning what
exactly is organizational culture. To define this term as simple and efficient as possible
we rely on Edgard Schein’s definition, “a pattern of shared basic assumptions that the
group learned as it solved its problems of external adaptation and internal integration,
that has worked well enough to be considered valid and, therefore, to be taught to new
members as the correct way to perceive, think and feel in relation to those problems.”
(Schein, 1992)
Edgar Schein is a former professor at the MIT Sloan School of Management. He
has made a notable mark on the field of organizational development in many areas,
including career development, group process consultation, and organizational culture.
According to him there are three levels of organizational culture, much shaped like a
pyramid. We will list these levels in descending order starting from the very top of the
pyramid.
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Stockton Energy Solutions: Guidelines and Organizational Culture
1. Artifacts: “Artifacts” are what’s visible in an organization culture. This could be a
dress code, office layouts, how to address each employee. While these
superficial features of a company is easy to discern, there are underlying reasons
behind them.
2. Espoused Values: These are the public statements of an organization. For
example, their goals, mission statements, and “core values.”
3. Basic Assumptions and Values: These are the foundations, the bottom of the
pyramid, on which every organization culture is based. These underlying
assumptions are very hard to discern as they are often intangible. They are
simply, “the way things are done around here,” where employees and employers
alike share the same feelings.
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Stockton Energy Solutions: Guidelines and Organizational Culture
Like the Basic Assumptions and Values level of Schein’s pyramid, we will be
basing our guidelines on what we like to do with our company’s organizational culture
and what we don’t want to do with our company’s organizational culture off of this
pyramid. According to our research on the Resource Theory, we have come to
understand that manpower is the most important resource for our company. Therefore,
we are evaluating potential practices, policies, and theories to best insure our company
culture provides our employees with everything they need to flourish in the workplace,
nationally and internationally. We will do this by discussing what we want to do with our
company’s organizational culture, what we don’t want to do with our company’s
organizational culture, and a critique of a company we want to be like.
Description of Choices
While many theories linking organizational culture and workforce performance
exist, the principal theoretical frameworks for this paper include incentive theory,
Maslow’s hierarchy of needs theory, resource-based theory, Herzberg’s two-factor
theory. Apple, Google, Deloitte, and Amazon have used these theories to design
programs that not only motivate the workforce but also enhance performance and
productivity.
The theories stated above are practical and instrumental in looking into the
affairs of the workforce, an indispensable component of organization’s success. The
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Stockton Energy Solutions: Guidelines and Organizational Culture
successful firms have understood that the workforce performance due to motivation and
opportunity as well as skills, and a couple of studies affirm this assertion. According to
Ellingsen and Johannesson (2008), the incentive theory attributes performance to the
rewards received upon the completion of specific tasks. The theory holds that people
embrace the behavior that tends to pull them towards gaining incentives, which give
them the needed external reinforcement. The rewards are both monetary and nonmonetary, and many organizations are increasingly providing them to their workforce.
The non-cash incentives that many companies use as rewards for their employees
include recognition awards, paid vacations, merchandise, and travels. Apple is one of
the successful organizations that have utilized the incentives to motivate and give the
employees a sense of belonging. The prolific tech firm provides the workforce with an
annual discount amounting to 25% upon the purchase of products such as computers,
iPads, and iPods (Cain, 2017). The discounts also extend to the employees’ family
members and friends as well. Additionally, the company offers an extended paid leave
before and after they deliver their babies. In early 2016, Apple launched a reward
program that aimed at motivating the retail staff to sell more iPhones. According to
Gurman (2016), the incentives of the program included the all-expense paid vacations
to Cupertino. Moreover, Apple also reimburses the funds the employees use to pursue
further education. As Ramlall (2004) indicates, the design of the reward system
according to the incentive theory not only aims at attracting and retaining the workforce
but also motivating it.
Maslow’s hierarchy of needs theory has also been instrumental in motivating
employees to maximize their potential for the long-term benefit of the organizations.
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Stockton Energy Solutions: Guidelines and Organizational Culture
Fulfilling the hierarchical needs of the employees is vital in spurring their motivation.
According to the theory, meeting the basic needs should happen before fulfilling those
that rank higher in the hierarchy (McGuire, 2012). The employment of Maslow’s theory
in Google, a giant tech firm, demonstrates the real world application of the theory. The
giant search firm is one of the best-paying companies in the United States. It offers the
employees competitive basic salaries to cater for both fundamental and higher needs as
contained in Maslow’s hierarchies. According to Dill (2017), the annual median base
and total compensation for an employee at Google is $120,000 and $155, 250
respectively. Additionally, provides the workforce with non-financial benefits including
but not limited to parental leave, massages, and paid meals as well as travels (Dickler,
2017). Google also offers job security and a variety of insurances ranging from life to
medical insurance schemes. All these benefits aim at satisfying the needs of the
employees and keeping their motivation at the highest levels. The design of the
compensation structure and benefits not only motivates the workforce but also provides
a sense of job security and actualization with the ultimate goals of retaining and
attracting knowledgeable, innovative, and creative workers.
The human resource is one of the most valuable assets of a company, and
resource-based theory affirms this assertion. According to the theory, the workers are
precious resources that help firms to attain a sustainable competitive advantage
(Clardy, 2008). The nature of the competitive edge that companies derive from the
workforce is diverse and includes attainment of the organizational goals as well as
improvement in performance. A corpus of literature points out that the deployment of
resource-based theory together with sound human resource initiatives has positive
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Stockton Energy Solutions: Guidelines and Organizational Culture
impacts in enhancing the employees’ contributions to organizational performance.
Leiblein (2011) contends that the knowledge of the critical principles contained in the
resource-based theory is useful in enabling the human resource managers to design
initiatives that maximize the employees’ potential. One of the well-performing firms that
have employed the principles of the resource-based theory is Deloitte. The company
appreciates that a competent workforce is irreplaceable, and thus, organizations should
safeguard this rare resource. Deloitte supports human capital through the robust
programs including offering financial help for its employees pursuing advanced studies
(Deloitte, 2018). Additionally, the company also has designed a development initiative
targeting to empower the women and traditionally labeled minority communities. The
sound programs instituted by companies such as Deloitte indicate that firms have
embraced the resource-based theory to attain competitive advantage and design
competitive programs for the enhancement of the welfare of the organizations.
The practical application of Herzberg’s two-factor theory in the real world is
profound. As the theory indicates, satisfiers or motivators promote job satisfaction while
hygiene factors lead to dissatisfaction. According to Herzberg, Mausner, and
Snyderman (2011), the prospects for growth, recognition, job status, and performance
motivate the workforce. In contrast, issues surround compensation, manager-employee
relationship, workplace, and working conditions cause dissatisfaction. The employers
seek to provide high hygiene and high motivation to minimize complaints and keep the
employees motivated. Many organizations work on reducing the things that cause
dissatisfaction among the workers. They attempt to eliminate bureaucracy by creating a
seamless organizational structure without silos. Herzberg, Mausner, and Snyderman
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Stockton Energy Solutions: Guidelines and Organizational Culture
(2011) assert that providing a supportive working environment with minimal supervision
is critical in giving the workforce a sense of belonging and autonomy. The
accommodating workplace fosters respect. Amazon is a classic example of the firms
that have deployed the Herzberg’s two-factor theory. The e-commerce gives job
guarantees, and it focuses on continuous employee training. Amazon has an intensive
training and leadership programs that equip the workers with relevant skills as one way
of enhancing motivation and career growth (Thottam, 2018). Marriott International Inc. is
another company that promotes employee satisfaction through training. According to
Thottam (2018), the firm utilizes in-person as well as virtual methods to train workers
and cultivate skills that prepare them to take jobs demand advanced abilities. These
real-world applications indicate that Herzberg’s two-factor theory is relevant in the
contemporary world and firms should deploy it.
Recommendations Chosen
From our findings we will draw upon the possibilities presented in the previous
section and choose an overall approach for our company. To do this as efficiently as
possible, we will split this section into two subsections. First we will recommend four
proposals of what we want to do with our company culture, second we will look at two
well-known companies and try to implement the company cultures that we like and
hopefully implement that into our own, nationally and internationally.
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Stockton Energy Solutions: Guidelines and Organizational Culture
What we want to do with our company culture
1. Referring back to Schein’s three levels of culture, we want our company’s core
values/espoused values/goals to be motivation and tension-free. Therefore, we
want our sales employees to be on a salary plus commission compensation plan.
According to Maslow’s Hierarchy of Needs all level of needs rest upon
physiological needs. Thus we want our sales employees to have some sort of
straight salary, enough for them to fulfill their physiological needs so that they
don’t have to stress about sales every day. As stated by Nancy Kurland, “The
salary provides a minimum level of security for the employee, while the
commissions provide incentives to “go that extra mile.” (Kurland, 1991) Besides
the base salary, there should be a commission. This fits into our “motivation” goal
for our employees. We want each sales employee to have a chance to shine.
The extra money that they may receive from doing sales will give extra
motivation for our employees to work harder. This value will keep the company
motivated while alleviating stress as supported by Maslow’s Hierarchy of Needs
theory. We also thought it would be a great idea to host an annual sales party,
where at the end of the year sales employees gather for a celebration and the
top sales employee would get an additional prize, like a new car, to help motivate
our employees further. We feel that this annual giveaway will also help
employees climb Maslow’s pyramid. By giving out recognition to the most hard
working employee, we are helping that person reach the “Esteem” stage of
Maslow’s pyramid and maybe even the “Self-actualization” stage. Thus, we are
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Stockton Energy Solutions: Guidelines and Organizational Culture
not only promoting our company’s espoused value of motivation, we are also
ensuring the satisfaction of our workforce.
2. Continuing to discuss the espoused values of the company’s culture to help
better our employees, we want to set up an error management system opposed
to an error punishment system. To form an error management culture,
companies need to understand that human errors will sometimes occur because
it’s impossible to completely eliminate them (Guchait, 2016). By forming a
procedure for early detection of errors, open communication, and sharing the
information regarding the error, we can have a strong error management culture.
The consequences of a weak error management culture, including an error
punishment system, disables communication about errors and reduces learning
opportunities. The benefit of a strong error management system includes greater
group cohesion (which can be connected to lower stress and employee turnover)
due to the open communication throughout the company about what has gone
wrong, how it was fixed, how to fix a similar error if made by another employee,
and who to speak to when a future error occurs.
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Stockton Energy Solutions: Guidelines and Organizational Culture
By having a positive increase to group cohesion, stress levels of employees will
decrease while at work. This is a positive affect because employees will be able to set
themselves on comfortable, more productive paces to complete their work. Lower stress
levels are more productive because employees are not rushing to complete a task,
sacrificing accurate information, and in result, decreasing errors made. By also having a
lower stress job, employees are more likely to stay in our company, decreasing
employee turnover. This will save the company in resources for training more future
employees since we will be keeping more of our current employees.
3. Referring back to Schein’s three levels of culture, we want the “artifacts” of our
company’s culture to be an open space office without cubicles, a business casual
dress code workplace, and an open door policy. Going back to what we’ve talked
about before, by reviewing Herzberg’s Two Factor Theory we realized that to
minimize job dissatisfaction we must improve our “hygiene” factor, which means
we have to improve working conditions, coworker relationships, policies and
rules, and supervisor quality. So we tried to incorporate all of these qualities into
our company culture by employing these artifacts mentioned above. According to
Dr. Jason Martin, the current Associate Dean of the Walker Library at Middle
Tennessee State University, the culture of a corporation is formed through four
areas: how an organization uses its resources, an organization’s structure, the
people within the organization, and the process of completing the work of an
organization. Tying these areas back to our company’s desired artifacts, it is
likely that all of the aspects we are trying to tie into the corporation would lead to
productive workers due to an increase of comfort and space and allocating more
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Stockton Energy Solutions: Guidelines and Organizational Culture
resources into training supervisors. This will give the office a comfortable work
environment due to the lack of employee separation (open office space),
business casual attire, and coworker relationships. Very few resources are
needed to make the culture comfortable for employees, employees are happier,
and the desired result is an increase of productivity. With less resources needed
to make a comfortable work environment, the company can put more resources
into supervisor training to increase supervisor quality. Training would include how
to work with an open-door policy, but also outline other policies and procedures
that need to be enforced. The enforcement of these policies and procedures will
obviously display the inner structure of the company. By valuing the “artifacts” we
have chosen for the company, the company will form a comfortable, but
productive culture. Employees won’t feel dictated, but properly managed.
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Stockton Energy Solutions: Guidelines and Organizational Culture
4. Continuing to focus on the happiness of employees, yet also keeping productivity
in mind, we would like to introduce a rewards system based on contribution and
achievement to employees. By rewarding employees according to those two
criterion, we can have an increase to company loyalty because those that are
making an effort and achieving goals are being rewarded (Otelea, 2014). By
focusing on overall goals, instead of minor goals, employees that are constantly
achieving goals are not putting in all this work for nothing (apart from a
paycheck). On top of that, the rewarded employees serve as inspiration to their
coworkers (Glaz). By giving setting up rewarded employees as role models, we
will be indirectly causing goals for employees to strive for.
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Stockton Energy Solutions: Guidelines and Organizational Culture
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