Aligning organizational culture and strategy at the university level for corporate sustainability – The case of national economics university

ALIGNING ORGANIZATIONAL CULTURE AND STRATEGY AT THE UNIVERSITY LEVEL FOR CORPORATE SUSTAINABILITY – THE CASE OF NATIONAL ECONOMICS UNIVERSITY Ha Son Tung, PhD. National Economics University Abstract Organizational culture, strategy, and corporate sustainability are different but interlinked. Lately, researchers are motivated to study on the relationship between these elements. This study aims to explore the concept of current organizational culture at National Economics University (NEU). Then, aligning culture and preferred culture types at NEU with the strategies of the University for Sustainability. The results of this study show that for Sustainability, the preferred culture types are not mostly being met with the University’s mission, goals, and strategic objectives. This requires a change in the culture type. Key words: Organizational culture, strategy, corporate sustainability, National Economics University (NEU). 1. Introduction Culture and strategy are different but interlinked. No matter how far reaching a leader’s vision or how brilliant the strategy, neither will be realized if not supported by an organization’s culture. The cultural paradigm is at the heart of organizational culture. It is a way in which those within organizations attempt to deal with complexity, making sense of the world through a series of taken for-granted assumptions about the way in which things work. The cultural paradigm is also central to strategy formulation in most organizations because it determines the way in which the people within organizations believe the strategy is played out. Only if aligning strategy and culture, an organization can avoid the situation of “right strategy but poor implementation” and go further for corporate sustainability. Thus, understanding culture and strategy within the framework of corporate sustainability is necessarily. In fact, many researchers have studied this topic in companies. However, this study sought out to align organizational culture and strategy at the university level for corporate sustainability; then, applying this absorption on the case of National Economics University (NEU). 2. Organizational culture Organizational culture is relatively new and first came up at the end of the 70s. During the 80s, the concept of organizational culture become increasingly established (Baumgartner & Zielowski, 2004). Kotter john P. & Heskett (1992) mentioned about the organization culture from the perspective of management. Organization culture is a pattern of shared basic 596 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 (Schein, 1992). In 2004, this author modified the understanding of organizational culture as “a pattern of basic assumptions that the group learned as it solved its problems that has worked well enough to be considered valid and is passed on to new members as the correct way to perceive, think, and feel in relation to those problems. This understanding is in line with statement of Dess and et al. (2007), organizational culture is a system of shared values, representing the company’s most important elements, and beliefs, representing the way in which thing are done inside the company, that shape the employees, the organizational structure and control systems, in order to produce commonly accepted behavioral norms. This definition added on the understanding of Hitt et al. (2006) of the organizational culture as the way in which people behave is influenced by the ideologies, symbols and core values shared throughout the company. Among cultural paradigms, the organizational culture assessment instrument (OCAI) by Cameron and Quinn (1999) is one of the most widely known and used models. With two dimensions as stability/ flexibility; internal/external orientation, the model is divided into four quadrants. Each quadrant represents different set of organizational effectiveness indicators. Four quadrants determine core values by which the organization is evaluated. Each quadrant is given a distinguishing label that denotes its most notable cultural characteristic; clan, adhocracy, market and hierarchy cultures (Cameron et al, 2006). Each of the organizational culture types can be briefed as the following: Table 1: Organizational culture types Organizational culture types Core values of the organizational culture Hierarchy Formalized and structured, smooth functioning, and stability, efficiency, punctuality Market Competitive organizations, increasing market share, and productivity Adhocracy Personal creative freedom, orientation towards change, innovation, risk Clan (a family type culture) Loyalty or traditions, unity (“we” consciousness), teamwork, participation, consensus, mutual respect, trust, friendly place to work, individual development, high motivation, morale Source: Cameron et al, 2006. Each type of organizational cultures has its own values. That’s why there’s no such thing as a good or bad culture, just an effective or ineffective one. Ultimately, effectiveness depends largely on how well the culture aligns with the business strategy. 597 3. Strategy at the university level Choosing the right strategy is always one of the key points of any universities. In fact, a university could be both profit or non-profit driven. For example, in the five year period be in 2005, a total 483 new colleges and universities gained regional or national accreditation in the US. Of those new institutions, some 77% were for-profits, compared to only 4% public and 19% independent non-profit institutions (Douglass, 2012). Thus, strategies of universities could be a mix of profit and non-profit oriented companies. As profit maximization is never a test for success in the public sector, Hansen Rosenberg and Ferlie (2014) suggested there are further possibilities for applying theories about strategic positioning (an outward-looking perspective) in non-profit oriented companies, especially when rating highly on the three core dimensions of administrative autonomy, performance- based budgets and market like competition. Johansson (2009) in turn says that in the public context, the emphasis on cost is the most prevalent feature of competition e.g. agencies may define additional features of service quality. In addition, Miles and Snow (1978) introduced their four strategic typologies: ‘prospector’, ‘defender’, ‘reactor’ and ‘analyzer’ (Andrews et al. 2005, 2006, 2008; 2009a, 2009b; Waker et al., 2010). The strategy of prospector tends to have a strong customer focus and highlight flexibility, innovation and risk taking. The defender focuses upon efficiency and effectiveness and takes its starting point in a narrow and well defined market domain that are stable and the organization are experts in. The reactor focuses upon the unstable organization because it actually lacks a strategy consistent with the organization's structure and goals. The analyzer is a hybrid of the defender and prospector with a core consisting of traditional products but is also prepared to consider new establishments. Many strategy scholars ignore to take the analyzer into account when addressing the context of public sector. However, for example Walker et al. (2010) argued that strategies in the public sector often are a mix of defenders, prospectors and reactors. In addition, for profit universities might refer to strategies of profit oriented companies. In that light, strategies can be used in order to diversify the company, and its offer, whether this diversification is related to the main business and managers are seeking economies of scale, or unrelated, if managers wish to go beyond its main business activity. In some cases, retrenchment can be used to eliminate all the redundant activities, in order to fortify the core competencies and strengthen the university; or increase their performance by creating strategic alliances with other companies, in order to combine the efforts and to create innovative products and services, and also to gain competitive advantages. It also means that universities, in some cases, can use generic strategies by M. Porter as differentiation, cost leadership and focus. 4. Aligning organizational culture and strategy at the university level for corporate sustainability Corporate sustainability is an alternative to the traditional growth and profit-maximization model. While corporate sustainability recognizes that corporate growth and profitability are 598 important, it also requires the corporation to pursue societal goals, specifically those relating to sustainable development — environmental protection, social justice and equity, and economic development (Mel Wilson, 2003). In other words, corporate sustainability is the integration of social, environmental, and economic concerns into an organization’s culture, decision-making, strategy, and operations. The different levels of corporate sustainability suggest a parallel to the different dimensions of organizational culture (Schein, 2004). Furthermore, changing in strategy must always be accompanied by an appropriate cultural change. In some cases, culture can be seen as a barrier to change which results in a momentum of misplaced strategic action. According to Pearce and Robinson (Pearce & Robinson, 2007), today’s managers come across difficulties in understanding the relationship between organizational culture and the key factors which influence the success of the strategic actions. The unprecedented growth, complexity and competitiveness of the global economy with its attendant socio-political and technological forces have been creating relentless and cumulative pressures on higher education institutions to respond to the changing environment (Cohen, 1997). That the reason why during the last two decades universities worldwide have come under increasing pressures to adapt to rapidly changing social, technological, economic and political forces emanating from the immediate as well as from the broader postindustrial external environment (Bartell, 2003). As a consequence, strategies of universities must be changed. To make this change sustainably, culture must be changed appropriately because achieving sustainability goals essentially depends on human accounts, actions, and behaviors which are, in turn, culturally embedded (Soini, Katriina and Birkeland 2014). For example, when one organization decides to shift its strategy from prospector to defender, it also needs to be reshaped the culture. Accordingly, core values of the organizational culture should be more with the market one. That is the reason why Janićijević (2012) stated the best strategy is the one marked as such by top management, starting from certain assumptions, values, beliefs, attitudes and norms, and not from numbers and analyses. 5. Findings of National Economics University Findings presented in this paper are a part of a much wider research conducted in 2016 on exploring culture of National Economics University (NEU). Founded in 1956, the NEU is one of the leading universities in Economics, Public Management and Business Administration in Vietnam. NEU places a high priority on the quality of teaching and on preparing students for employment in an increasingly competitive, international environment. With a long history, NEU now has over 17 professors, 124 associate professors, 178 PhDs and 433 masters. Mission statement, vision and overall goal of NEU as following: x Mission As a key national leading university in economics, management and business administration in Vietnam, the National Economics University (NEU)'s mission is to contribute to society with education products, research, high quality advisory services and implementing technology transfer. The university has an excellent reputation and a brand which achieves regional and international standards in the field of economics, management 599 and business administration. NEU also contributes to the process of industrialization and modernization during times of world economic integration. x Vision The National Economics University strives to become a prestigious multidisciplinary university that is research oriented, and achieves regional and international standards in the field of economics, management, business administration and other key majors. In the next decade, the University strives to be ranked among top 1000 universities in the world. x Overall goal until 2020 To improve and maintain the position of a vital national university and a leader in national higher education; to develop the university to become a multidisciplinary university in the field of economics, management, business administration, to achieve regional and international standards, to serve the necessity of national industrialization and modernization, and to serve the need for rapid and sustainable economic and social development of Vietnam. * Specific objectives to 2020 1. Ensuring quality improvement of comprehensive training, standardization of teaching and administration staffs; creating a breakthrough in quality training in a number of disciplines and key specialized disciplines; achieving regional and international standards in order to ensure international spillovers; and forming a basis for improving the overall quality of the education system. 2. Expanding, strengthening and positioning ourselves as a centre for scientific research and a reputable leader in economic and business management consultant. 3. Promoting cooperation and close partnerships, enhancing the role of training, research and consultancy among the network of economics and business administration specialised universities within the higher education system and research institutes and enterprises in Vietnam; expanding cooperation and efficient exchange with regional and international universities, research institutes and organizations. Extending the impact and continuously improving and promoting the university’s reputation and brand recognition at home and abroad. 4. Becoming a modern university with full facilities and advanced equipment, facilitating an environment dedicated for learning and research up to regional standards, with high quality lecture theatres, a modern library system and other advanced services. By using OCAI instrument, the project conducted by NEU in 2016 revealed organizational culture profile of NEU as illustrated in the figure 1. 600 Figure 1- Culture profile of NEU according to OCAI (Source: NEU culture report, 2016) As illustrated in Figure 1, at present, NEU has dominantly hierarchy culture (the mean scores obtained 25.37) which has a traditional approach to structure and control as in bureaucracy. This type focuses on the domination of rule, system and procedure, internal problems, stability, predictability, controllability, and efficiency (Cameron & Quinn, 1999). Everything is governed by procedures, guidelines, instructions that are mainly in writing. Orderliness is especially encouraged... Any changes in organization are absolutely impossible without official changes of corresponding procedures, guidelines and instructions (Pushnykh & Chemeris, 2006). Besides, the second dominant type at NEU is the clan culture (the mean scores obtained 25.37) which promotes a human work environment, with the managerial goal of empowering employees by gaining their participation, commitment, and loyalty (Cameron & Quinn, 1999). Though other types perceived less dominant culture, market (mean = 24.8) and adhocracy (mean = 24.37) are the two cultures existing presently in NEU. In general, the present culture in NEU is the mix one. This is in line with the ideas that cited by Zammuto, R.Z. et al 1991, “no organization is likely to reflect only one culture”. In the future, the preferred culture is expected to change. Dominating culture types in the preferred one are clan (mean = 24.8) and adhocracy culture. It means in the future, culture type at NEU is expected to be highly blended with participation, commitment, loyalty, innovation and creativity; individuals are not kept under control but inspired. Though the gap between expected culture types is low, the preferred culture in NEU is still the mix one. Now, let’s see whether or not this culture in line with the strategies of NEU. As mentioned in specific objectives of NEU, some of which are to ensure quality improvement of comprehensive training, standardization of teaching and administration staff; creating a breakthrough in quality training in a number of disciplines and key Present Preferred 601 specialized disciplines, promoting cooperation and close partnerships, expanding cooperation and efficient exchange with regional and international universities, research institutes and organizations. Those show that the university aims at the strategy as a hybrid of the defender and prospector. Moreover, vision, mission statement, overall goal and specific objectives of NEU show some expected points such as international standards, high quality advisory services, excellent reputation and a brand, a leader in national higher education. It somehow implies that the university aims at the strategy of differentiation in quality. With the present culture types of NEU are hierarchy and clan culture, the university cannot meet the basic instincts of many faculties who frequently emphasize collegiality over standardized rules and procedures. This is in line with the findings of Smart & John (1996). With the preferred culture of NEU are clan and adhocracy ones. Though the clan culture helps the university to achieve cohesiveness, participation, team work and sense of family, loyalty, tradition, interpersonal cohesion, the limitations of clan culture is lack of authority. This leads to decisions are often made independently by employees or by common agreement, lack of a clearly-defined chain of command. With which, it is hard to create a number of disciplines and achieve regional and international standards as expected. As a result, good ideas could be abandoned as a majority vote cannot be reached. Though Smart & John stated (1996) that the most prevalent type of organizational culture in American higher education was the clan form, NEU shouldn’t put this one as the dominant one. On the other hand, the adhocracy culture like the clan culture emphasizes flexibility, individuality, and spontaneity commitment to experimentation and innovation. Thus, this also shouldn’t be put in priority for the future culture of NEU. Once to become a prestigious multidisciplinary university, maintain the position of a vital national university and a leader in national higher education to serve the necessity of national industrialization and modernization, the University should focus on the market culture. With this culture type, reputation and success are common concerns. Therefore, people are competitive and goal-oriented, major concern is getting the job done, leaders are demanding. The glue that holds the organization together is an emphasis on winning. Thus, this culture type should be the dominant one in the future at NEU. 6. Conclusion Accordance with changing of external needs and expectations, universities regardless profit or non-profit oriented should integrated strategies and culture for corporate sustainability. NEU is not an exception. The findings and discussion from the paper implies that preferred culture might not be absolutely appropriate one. 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