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Sirawit Chutikarnmongkol (GAP)

MBA Global Business student, Coventry University London Campus

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This blog gives guidance for leading in a changing world and organizational culture in the age of globalisation.

Leadership in the age of globalization

Leaders must deal with economic challenges, epidemics, and rapid industrialization both now and in the future. A competent leader is always at the helm of a successful organization. Leaders in the past might well have required to be skilled in using command power, managing people in an orderly system, and controlling work in any form…

by sirawitchuti November 30, 2021December 2, 2021

Honda’s organizational culture in the age of globalisation adapts to change.

Honda logo (Pixabay, 2016)

Attracting outstanding people to join our business is no longer just about position and compensation. Organizational Culture must also be a mind-friendly working environment and capable of guiding processes in the right way. It’s no surprise that this topic has been mentioned so frequently.

This blog will show you how the Honda Motor Company adapted their organizational culture in response to a changing world. By classifying types of organization culture by using Handy’s framework, then discuss if the existing culture is suitable or not. And using the Iceberg Model to identify a problem and then analyse solutions by Johnson and Scholes cultural web. Finally, using McKinsey’s 7s to evaluate the effectiveness of solutions. The purpose is to use the Honda example to evaluate the impact of organizational culture on improving a company’s success. The article is not meant to be an assault on any organization. Please let me know if you discover any errors, and don’t be hesitant to provide feedback. I hope you enjoy reading my blog and learning new things from this.

What is an Organizational Culture?

Organizational Culture does not have a rule or conceptual idea to define it as a clearly definition since it is intangible (Schraeder et al., 2005). Organization Culture is a shared of traditional, beliefs, values and behavior within the company, that supports the moulding of individual attitudes and behaviours. It also determines how to work in accordance with the business strategy (Aktaş et al., 2011). In a nutshell, the evolution of organizational culture involves everyone concocting, developing, and utilising it altogether until it becomes customary for the company.

Importance of Organizational Culture

(Nate Woodbury, 2017)

According to Peter Druckler (2006), “Culture eats strategy for breakfast.” The meaning should be stated as follows: no matter how smart a firm’s plan is, if organizational culture cannot support it, there will be no success (Whitzman, 2016). Glassdoor, the most popular website for expanding employment and recruitment, polled over 5,000 individuals in the United States (U.S.), the United Kingdom (UK), France, and Germany on the subject “What is the priority to looking for a job?” According to the findings, respondents would evaluate a business’s culture before seeking employment there, and a majority (56 percent) believe that corporate culture is more important than salary when it comes to work happiness (Valley & Calif, 2019). From the viewpoint of today’s modern employees, organizational climate may be more significant than compensation and job position. Employees in the modern day are extremely versatile. If the firm’s organizational culture is constantly updated, it will entice them to join and fully use their capabilities, which will result in significant advantages for the business. We don’t want to lose such a brilliant person. As a result, the relevance of organizational culture in the age of globalisation cannot be overstated.

Honda Motor Limited Company

(Honda History – How Soichiro Honda Started Company, 2019)

Honda, a Japanese vehicle manufacturer, was founded in 1948. The distribution of motorcycles and multifunctional engines from Japan was just the start. Honda, on the other hand, aspires to be a leader in ecologically friendly vehicles. They began to expand the automobile market. Honda Civic manufacture began in 1972 with the introduction of a low-emission engine. Honda was named the world’s most fuel-efficient automobile at the time, and the company soon rose in popularity, ultimately becoming one of the world’s major manufacturers (Honda, 2018). With the vision that goes along with the company’s fundamental beliefs, not being restricted by prejudices, initiative involves thinking differently and acting on your own effort and discernment, but also realising that you must take accountability for the outcome of the situation (Honda, 2020).

Operating profit of Honda Motor 2016-2021

(In billion Japanese yen)

(Carlier, 2021)

The bar chart shows that the company’s highest profit was up to 840 billion yen from 2016 to 2021. Profit, on the other hand, has clearly decreased during the previous three years. The company did not overlook the fact that earnings were declining as a result of the COVID-19 crisis. The company has made efforts to make the work environment more flexible for workers who work from home, such as assisting employees with equipment expenses and internet fees (Sugiura, 2020). As a consequence, profitability could gradually increase in 2021. This emphasises the significance of altering organizational culture in the globalization age.

Identifying Honda’s Existing Culture

The inventor of Handy’s framework, Charles Handy (1996), divided organisational culture into four categories: power, role, task, and people.

(AQA, 2015)

Honda has a culture that emphasises “Respect for the individual,” according to its ideology. Honda discovered that each person has their own methods for resolving issues and developing innovative things (Honda, 2020). That matches with Handy’s framework. Role culture is about understanding an employee’s strengths and encouraging them to accomplish their task (Machado & Carvalho, 2008). Everyone has a specialty that they excel at. This culture is beneficial because it allows everyone to use their own abilities. They will labour joyfully, not merely to make money.

Identifying Honda’s problem

(Casalino et al., 2019)

According to Edward Twitchell Hall’s iceberg dimension (1989) of organizational culture, each company has a visible part of only 10percent that demonstrates a positive nature of the organization, such as strategy, vision, and goal, but they also have a covert part, such as norms, relationships, and social rules (Casalino et al., 2019).  All of this shady practices might be a constant problem for the organization. According to some Honda workers, everyone on the team is very adept at working, which means there is no space for mistake and they are expected to provide a fantastic outcome. Some employees also complain about an overwhelming workload, long work hours, and insufficient time for breaks. This demonstrates that Honda places an excessive amount of responsibility on the employee’s shoulders. And Honda still hasn’t found a way to strike a work-life balance.

Conclusion & Recommendations

(Johnson & Scholes, 1993)

The world has evolved tremendously in recent years. The company’s organizational culture must also stay awake. Johnson and Scholes’ Cultural Web Model is one that strongly suggests This consists of six distinct pieces that, when linked, will provide a paradigm that reflects the company’s core values. This strategy is incredibly successful since it covers all that an organization should be concerned with. The technique for applying it is to identify each component of our organization and then compare it to the organizational culture we wish to have. We’ll find out what our organization’s culture’s strengths and weaknesses are.

(Demir & Kocaoglu, 2019)

The McKinsey 7S model (1980) is used to evaluate an organization’s skillset from several viewpoints and decide how to improve it. To assist in the development of new strategic orientations This approach is also suggested since it incorporates both hard and soft elements (Demir & Kocaoglu, 2019).

The hard elements will answer “what” about the business.

-Strategy: What is the company’s driving strategy?           

-Structure: What teams are there?

-Systems: What systems guarantee work progress?

Soft elements will answer “who” and “how” about the business.

-Staff: Who are the employees of the company?               

-Skills: How skilled are these workers?

-Style: How do leaders inspire their colleagues?

-Shared Values: How will the company demonstrate its core values?

As a result, the two instruments mentioned above will be very beneficial to the organization. If the business applies, it will transform an existing excellent company into an outstanding one. Analyzing and changing corporate culture over time will help our company become a leader in today’s globalization.

Charter Statement

Honda puts the emphasis on respecting their employees’ viewpoints as well as the satisfaction of the customers. They also attempt to company exclusively produces high-quality products. Because the corporation believes that excellent product emanate from clean environments, also workers are required to wear white clothing that might readily get soiled. In order for everyone to be able to enjoy Honda’s products, they must be affordable in addition to being of excellent quality.

References

1.Aktaş, E., Çiçek, I., & Kıyak, M. (2011). The Effect Of Organizational Culture On Organizational Efficiency: The Moderating Role Of Organizational Environment and CEO Values. Procedia – Social And Behavioral Sciences, 24, 1560-1573. https://doi.org/10.1016/j.sbspro.2011.09.092

2.AQA. (2015). Handy’s culture. [Image]. AQA. https://www.aqa.org.uk/resources/business/as-and-a-level/business-7131-7132/teach/teaching-guide-handys-culture

3.Carlier, M. (2021, May). Operating profit of Honda Motor 2016-2021. Statista. https://www.statista.com/statistics/1126585/honda-operating-profit/

4.Casalino, N., Żuchowski, I., Labrinos, N., Munoz Nieto, Á., & Martín, J. (2019). Digital Strategies and Organizational Performances of SMEs in the Age of Coronavirus: Balancing Digital Transformation with An Effective Business Resilience. SSRN Electronic Journal, 8(2), 369. https://doi.org/10.2139/ssrn.3563426

5.Honda. (2020). Honda Global | Announcing the Civic / 1972. https://global.honda/heritage/episodes/1972announcingthecivic.html

6.Honda. (2020). Honda Global | Philosophy. https://global.honda/about/philosophy.html

7.Honda. (2018). Honda History | The Vision of Soichiro Honda | Honda UK. https://www.honda.co.uk/cars/world-of-honda/past/history.html

8.Indeed. (2021). Working at Honda: 253 Honda Reviews. https://uk.indeed.com/cmp/Honda/reviews?fcountry=GB&sort=rating_desc

9.Machado, D. & Carvalho, C. (2008). Cultural Typologies and Organizational Environment: A Conceptual Analysis. Latin American Business Review, 9(1), 1-32. https://doi.org/10.1080/10978520802189047

10.Nate Woodbury. (2017, April 28). The Importance Of Organizational Culture. [Video]. YouTube. https://youtu.be/2IzT9hb4FYI

11.Past To Future. (2019, February 21). Honda History – How Soichiro Honda Started Company. [Video]. YouTube. https://youtu.be/31sN1NuoMI0

12.Schraeder, M., Tears, R., & Jordan, M. (2005). Organizational culture in public sector organizations. Leadership & Organization Development Journal, 26(6), 492-502. https://doi.org/10.1108/01437730510617681

13.Sugiura, E. (2020, September 29). Honda’s bow to ‘new normal’ points Japan Inc in a fresh direction. https://asia.nikkei.com/Business/Business-trends/Honda-s-bow-to-new-normal-points-Japan-Inc-in-a-fresh-direction

14.Valley, M. (2019, July 10). CULTURE OVER CASH? GLASSDOOR MULTI-COUNTRY SURVEY FINDS MORE THAN HALF OF EMPLOYEES PRIORITIZE WORKPLACE CULTURE OVER SALARY. Glassdoor. https://www.glassdoor.com/about-us/workplace-culture-over-salary/.

15.Whitzman, C. (2016). ‘Culture eats strategy for breakfast’: the powers and limitations of urban design education. Journal Of Urban Design, 21(5), 574-576. https://doi.org/10.1080/13574809.2016.1220157