Professional Documents
Culture Documents
ITB
yuniros@sbm-itb.ac.id
A. Organizational Culture
As mentioned above, organization culture serves as an
organizations DNA template, which forges employee
behaviors, linking them the organizations business intent. A
strong organization culture potentially increases an
organizations success by serving three important functions:
(1) Control system, (2) Social glue, (3) Sense-making
(McShane and Van Glinow, 2009).
Base on the Denison Model, organization culture could be
a source of competitive advantage if it posses four cultural
traits, which are: involvement, consistency, adaptability, and
mission.
These four traits have shown to relate to
organizational effectiveness (Denison et.al, 2006). Detailed
explanation of the four traits could be seen as follow:
Adaptability: Able to translate business environment demands
into action. Measured by three indexes: creating change,
customer focus, organizational learning.
Mission: Able to define a meningful long-term direction for
the organization. Measured by three indexes: strategic diretion
& intent, goals & objectives, vision.
Consistency: Able to define the values and owns a system
that are the basis of a strong culture. Measured by three
indexes: core values, agreement, coordination & integration.
Involvement: Building employees capability, ownership, and
responsibility. Measured by: empowerement, team orientation,
capability development.
Value,
I. INTRODUCTION
In definition, organizational change or transformation is a
process of a planned or unplanned respond of organization
movement from its current state to a desired future state, with
a goal to find improvements within the organization in order
to create added value for its stakeholder (Jones, 2007). Surely,
such transformation will intersect with various elements of the
organization, such as: business processes, organizational
structure, technology, and organization culture.
An organization culture could be analogized as a DNA of
an organization. It could not be seen, yet it is a powerful
template that shapes what happens in a working environment
of an organization. It defines what is important and
unimportant for the organization and shapes how member
should behave and carry out work (McShane and Van Glinow,
2009; Haid et.al, 2010). Nowdays, organization culture is
seen as a source of competitive advantage, which links
behavior to strategy (Kaplan & Norton, 2004). Denison et.al
(2006) mentioned that an effective organization should at least
posses the following cultural traits: involvement, consistency,
mission, and adaptability.
One must also remember that the success or failure of
culture transformation is determined by its leader. Values and
assumption which a leader brings into an organization will
have a direct effect on the organizations culture, especially
Literature Review
B. Transformational Leadership
Bass (1990), defined transformational leaders as follow:
Transformational
leaders
inspires,
energize,
and
intellectually stimulate their employees.
Transformational leader also provides its follower with
motivation to perform hard work that is self rewarding, they
also make major changes in the way of doing business, human
resources management, overhaul the entire philosophy,
system, and culture of an organization (Ivancevich et.al,
2005). These kind of leader could be also be defined as agents
of change.
Transformational leadership is probably more appropriate to
be implemented when an organization is adapting to its
external environment and intend to become a strategy-focused
organization (Kaplan and Norton, 2004; McShane and Von
Glinow, 2009). Transformational leaders usually display
behaviors which are associated with a five transformational
styles:
Table 1 Styles and beavior of transformational leader
(Source: Bass and Avolio, 1994)
Transformational style
Idealized Behavior
Inspirational Motivation
Intellectual stimulation
Individualized
consideration
Idealized attributes
Leader Behavior
Talk about their most important values and
beliefs
Specify the importance of having a strong sense
of purpose
Consider the moral and ethical consequences of
decisions
Champion exciting new possibilities
Talk about the importance of trusting each other
Talk optimistically about the future
Talk enthusiastically about what needs to be
accomplished
Articulate a compelling vision of the future
Express confidence that goals will be achieved
Provide an exciting image of what is essential to
consider
Take a stand on controversial issue
Re-examine critical assumptions to question
whether they are appropriate
Seek differing perspectives when solving
problems
Get others to look at problems from many
different angles
Suggest new ways of looking at how to complete
assignments
Encourage non-traditional thinking to deal with
traditional problems
Encourage rethinking those ideas which have
never been questioned before
Spend time teaching and coaching
Treat others as individuals rather than just as
members of the group
Consider individuals as having different needs,
abilities
Help others to develop their strengths
Listen attentively to others concerns
Promote self development
Instill pride in others for being associated with
them
Go beyond their self-interests for the good of the
group
Act in ways that build others respect
Display a sense of power and competence
Make personal sacrifices for others benefit
Reassure others that obstacles will be overcome
Background
Internal pressure
Poor financial
performance
Uneffective business
process
External pressure
PSO rate
Government regulation
Competitor
TRANSFORMATION
Literature Review
Denison Organizational
Culture Survey
Leadership
Idealized Behavior
Involvement
Consistency
New Culture:
5 Nilai Utama
Idealized Attribute
Mission
Intellectual
Stimulation
Adaptability
Inspirational
Motivation
Individual
Consideration
Expected
outcome of
employee work
behavior
Gap
Current employee
work behavior
Propose suggestion to
strengthen
implementation of
5 Nilai Utama
N = population size
e = margin error
Mission
Culture
Traits
Consistency
Integrity
Professional
Adaptability
5 Elements
of
Corporate
Value
Inspirational
Motivation
Innovation
Safety
Transf.
Leader
s
Idealized
Attributes
Intellectual
Stimulation
Serv.
execellence
Idealized
Behaviour
Individual
Consideration
Figure 3 Relationship model of cultural traits and transformational leadrship towards the five values
Internal
Consistency
Realibility
Culture traits
0.894364
Transformational
Leadership
Average
Variance
Extracted (AVE)
Largest
Squared
Correlation
0.679615
0.590406
0.709188
0.613123
0.685
0.933372
Significancy
Indicators
Loading
t-value
0.811
2.133
2.338
3.372
2.949
0.6929
0.7539
0.8037
0.85
0.8823
P
0.417
0.033
0.019
0.00075
0.003203
t-value
Culture traits
Transformational Leadership
8.455
2.255
3.62 x 10 -17
0.024
0.442
Significant
Adaptability
0.306
Significant
Involvement
0.263
Significant
-0.023
Non-significant
Consistency
Indicator
Inspirational
Motivation
Individualized
Consideration
0.377
Significant
0.193
Non-significant
Idealized Behavior
0.09
Non-significant
Idealized Attribute
0.011
Non-significant
Remarks
Meaningful
relationsip
Non-meaningful
relationship
Non-meaningful
relationship
Non-meaningful
relationship
Tend to be Tend to be
weak
strong
64.11%
Mision
69.42%
Adaptability
70.65%
Involvement
Strong
76.58%
10
20
30
40
50
60
0.6
(0.422)
(0.377)
(0.306)
0.3
(0.263)
0
Very Weak
Weak
Tend to be
Weak
Tend to be
Strong
Strong
Very Strong
Implementation
Remarks:
: Inspirational Motivation
: Involvement
: Adaptability
: Mission
1.0
Path Coefficient
Mission
Remarks
Meaningful
relationsip
Meaningful
relationsip
Meaningful
relationsip
Non-meaningful
relationship
Weak
Indicator
Moderate
70
80
90 100
Proposed Solution
Do not hesitate to get close with
subordinates and shower them with
inspiration stories, perhaps historical
stories of the organization, or words
Energize subordinates by being
optimistic in viewing the future
Express confidance that goals are
achievable
Provide an exciting image of what will
be achieved and what actions are
essential to achieve this state
Routinely schedule a one-to-one
moment
for
coaching
and/or
mentoring session
Involvement
Table 9 Maintaining the involvement trait
Actual Condition
Team Orientation:
Team work is carried out in a situational
manner, where an individu knows how
and when to use team work in
completing a certain work
Capability Development:
PT. KAI states that theyre commited in
developing employess capability, where
members of the organization is
encouraged to participate in soft and
hard skills trainings, which is monitored
using an SAP and will automatically
link this to employees historical of
training. In the future, an individus
career path and promotion will also
depend on its training experience
Proposed Solution
Capability Development:
In order to provide a more well
targeted development program, the
organization should asses their
employee based on skill and
knowledge towards organization
demands. At the same time,
employees should also get the chance
to conduct self-assesment to identify
area of improvements. Therefore it
is expected that the organization will
develop the right people concerning
the right area of improvements.
C. Additional Solution
Basically, all the four key drivers are basically an
expression of desired behaviors that should be possesed by all
members of the organization. The author believes that such
tools which could accommodate the implementation of these
desired behaviors in the employees daily work behavior is by
using the 360-degree feedback process. In line with the
authors findings, it is best if theorganization considers to
include the four key drivers into their list of competency.
Actual Condition
The organizations vision and
mission is translated into a five year
long-term plan and is continously
broken down into a yearly agenda,
and finally translated specifically
base on each direcotrates business
performance.
Every two weeks an executive
meeting is held, consisting of
Executive
(BOD),
head
of
operational area (DAOP), head of
division (Kadiv), Executive Vice
President
Every three month every directorate
is required to provide accountability
report base on their budget and
performance
If required and necessary, results of
meeting will be socialized to staff
Proposed Solution
Coordination meetings should aslo
be carried to the lower level of
employees, so that all strategic
directions and intent
will be
rooted and could be carried out by
all level of organizations member
At each coordination meeting it is
a strongly required that every
member of the directorate is
assigned with a certain objectives,
which links with the organizations
objectives, depending on his or her
role
Do not forget to show appreciation
to those whove successfully
complete his or her assigned goals
Adaptability
Table 8 Maintaining the adaptability trait
Actual Condition
Creating change:
To keep up with the organizations
external condition, the organization has
a public relation division which collects
external information which influence
the organization performace, and is
usually published in the organizations
monthly tabloid Kontak and its eoffice
Customer Focus:
Customer insight is usually obtained
from a yearly survey and/or by
collecting data from the organizations
call center
Organizational Learning:
The spirit of innovation is currently
monitored using a performance appraisal
called SIMAK, where a manager or those
who occupy a supervisory posistion will set
an agreement with his and her employee on
how to be innovative in their daily work life
Proposed Solution
Creating change:
Not
only
carrying
out
documentations
for
external
informations and/or occasion
which influence the organizations
performance, a discussion or
conversation related to these topics
should be mentioned in employees
work life, either in a one-to-one or
group condition
Organizational Learning:
Stimulate innovation and learning
by carrying out internal contest or
compettion, related to business
improvement
Adopt the philosophy of "forgive
and remember" where mistakes are
not to be punished but is seen as an
opportunity to learn and develop
skills
ACKNOWLEDGEMENT
This paper is written based on the authors final project at
MBA ITB supervised by M.Yuni Ros Bangun , who has been
relentlessly motivating the author to accomplish the final
project. The author would like to thank you to PT Kereta Api
Indonesia (Persero) where the final project has taken place.
REFERENCE
[1] Bass, Bernard.M. 1990. From Transactional to Transformational
Leadership: Learning to Share the Vision. Organizational
Dynamics, 18 (3), pp. 19-31
[2] Bass, Bernard M. and Avolio, Bruce J. 1994. Improving
Organizational
Effectiveness
Through
Transformational
Leadership. Sage Publications
[3] Denison, D., Janovics, J., Young, J., Cho, H.J. 2006. Denison
Organizational Cultures: Validating a Model and Method,
Working paper, International Institute for Management
Development
[4] Denison Consulting. 2010, June. Leadership and Organizational
Culture: Whats the Connection?. Ann Arbor, MI
[5] Farrel, Andrew M. and Rudd, John M. 2009. Factor Analysis and
Discriminant Validity: A Brief Review of Some Practical Issues.
Australia-New Zealand Marketing Academy Conference
(ANZMAC), December, Melbourne Australia
[6]
AUTHOR
Bangun,Y.R. Associate Professor at School of Business
Management, Institute of Technology Bandung. BandungIndonesia.
(e-mail: yuniros@sbm-itb.ac.id)
Rengganis,R. MSM student at School of Business Management,
Institute of Technology Bandung. BandungIndonesia. (e-mail:
renni.rengganis@sbm-itb.ac.id)
Fransiska,Y. MSM student at School of Business Management,
Institute of Technology Bandung. BandungIndonesia. (e-mail: