Personality, perception and attribution + attitudes and values

Summary of the reading: "Organizational capital as competitive advantage of the firm"
Gregorio Martín-de-Castro, José Emilio Navas-López, Pedro López-Sáenz and Elsa Alama

The aim of the document, was for the authors to describe the characteristics of strategic resources and capabilities and why they are important within the organisation's frame, then according to some field work that they did in the Spanish knowledge Society Research Center they discuss the importance and the nature of intellectual capital. They also explain the concept of organizational capital.

To begin with resources and capabilities, the authors state that resources are basic units of production that are ready for the company, on the other hand, capabilities are organizational routines which happen from the combination and coordination of different resources. There is a key difference between both of them, mentioned in the document which is "resources are independent, simple and static, as opposed to capabilities that are collective, complex and dynamic." There are some relevant characteristics that they must complete:

• Inimitability: They must be hard to copy for the competitors.
  
• Value: The effectiveness of the resource in order to compete in a certain industry.
  
• Apropiability: When the company owns the rents derived from both capabilities and resources.
  
• Durability: Life expectancy of both.
• Insubstitutability: There is no resource or capability that can replace them.
• Non-transferability: Is not easy to buy or sell them in the market.
  

There is an author named Barney (1991) who states that "the resources that are simultaneously rare and valuable can generate competitive advantage, and if these resources are also hard to imitate, irreplaceable and hard to transfer, they will sustain the advantage".

Nowadays is known that almost all the economic wealth is derived from knowledge, but managing such valuable asset for the company is not an easy task because of its measuremet and identification. This knowledge can be clasified as "intellectual property assets that are focused on technological knowledge and infrastructure assets that are focused on organizational knowledge" according to Brooking (1996).

According to the study and workfield realized by the authors of this document at the Spanish Knowledge Society Research Center in Madrid, they could identify in the inellectual capital assets five components:

• Human capital
• Technological capital
• Organizational capital
• Business capital
  
• Social capital

The authors focused their study in order to "justify the strategic analysis of the main components of organizational capital: culture, structure and organizational learning" .

Regarding culture as a sustainble competitive advantage for the organization the authors state that "organizational culture adds financial value for the company and relates it with the competitive environment". It is not easy to imitate because is not easy to describe, it implies history and certain conditions of the company itself, is difficult to transfer because it can't be bought or sold in a market and has a long life expectancy.
Secondly, the structure as a sustainable competitive advantage is difficult to imitate and transfer to competitors because it represents several ways of communication, cooperation and integration among the different members of the company.The last of all is the organizational learning as a sustainable competitive advantage we can say is the best of all because is hard to imitate, to transfer and to replace because it is related to every organization in particular, it is developed gradually in the company to all the people working there and it has a long life expectancy even if some members leave the company.

The Pygmalion effect

This concept was first introduced to explain the relation and the result of the power of expectations. All supervisor has at some extent expectations of its subordinates and at the same time they communicate this expectations in a conscious or unconscious way, in that way, people understand and read what they're communicating in also a consciuos or unconscious way and their performance strongly depends on the expectations they have understood and received from their supervisors.

For instance, if the supervisor has positive expectations and express it to a group of employees it is more feasible for the employees to reach their goal and keep motivated because what the supervisor thinks is very important and affects their performance in a positive way, in this case. But the opposite can happen too, the supervisor might not have much expectations on its team or perhaps in one employee in particular, so in this way, the performance of the team might not be very successful. The supervisor doesn't have necesarily to tell them in words what his expectations are but he can express it in an unsconscious way and the group might pick it up. For instance, he might talk and interact with the group more frequently than with one person in particular, so this person can feel forgotte, useless and pushed away by the supervisor, so in consequence, its performance might be lower that the rest of the group because is thinking that the supervisor doesn't have much hope or expectations on its role in the company.

There are challenges arising from the internationalization of the company because one has to deal with different cultures. For instance, if there is a person from a country where the hierarchical structure is very vertical and there is none or very little interaction between managers or supervisors and employees, and this person goes to a country where the hierarchical structure is horizontal and there is a lot of communication between managers and employees, meaning that has a low PDI (Power Distribution Index) is more feasible that in this situation the Pygmeon effect takes place more deeply than in the other country, not meaning that in countries with a high PDI cannot be seen but for instance the expectations from managers to employees can be communicated in a more unconsciuos manner. Going back to the person going to the country with low PDI, can be a critical change for its performance, because for instance he or she could feel more appreciated in the company just because for the fact that the manager is talking to him or her and might think that has very positive expectations about his or her work in this company.

The relation between national culture and organisational culture can be explained utilising the concept of the pygmalion effect, in the way that depending on the culture, there are forms of communication within a country and an organisation. For instance both cultures can coincide in the same and perhaps in this culture the expectations that the manager has over the employees will not be that strong for them in order to affect their performance, but on the other hand, the opposite case could happen as well.

Organisational behavior, national and organisational culture

An organisation's performance depends strongly in its employees and human resources rather than in machinery or technology itself. In order for the working parties to perform effectively, there must be an acceptance of behavior within the organisation and among all the employees.
It can be seen that in a globalized world, there are many influences which direct people's behavior to a certain way, but as humans there are two perspectives exposed by authors Nelson, D.L & Quick, J.C that try to understand the human behavior regardless of the culture and other factors that difference people.

First of all there is the internal perspective, which contemplates all the factors inside the person in order to understand its behavior, for instance factors as thoughts, feelings and needs are of vital importance for this perspective. Second, there is the external perspective which aims to consider all the external events and environment that might explain the person's behavior towards certain situations. There are also several different disciplines such as psychology, sociology, engineering, management and so on, that have contributed to make a complete overview of people's behavior within an organisation.

In order to fully understand the role of behavior within the organisations, it is important to know first what an organisation is. According to the authors previously mentioned "Organizations are open systems of interacting components which are people, tasks, technology, and structure. These internal components also interact with components in the organization's taks environment". Organisations are entities wich hold a main goal or purpose with a mix of ingredients that allow them to work effectively, in which human reources is highly valued. This goal or main purpose is most of the time providing the best product or service in which the organisation operates and in order to do that is necessary to go through a process in which there is an input (people, raw materials, information, resources), a transformation process (management, production) and finally and output that in most of the cases would be the product or service that the organisation is supposed to deliver. There are also, two types of organisations in terms of the internal system operating, for instance, the formal organisation aims to lead people to think about the organisation in a very rational way making very important the role of legitimacy and official throug policies, objectives and mission and vision statements.
On the other hand, there is the informal type of organisation, which is the less visible part of the organisation, contemplating factors such as values, attitudes, feelings and beliefs of worker's and employees within the organisation. In this context there is also important to hightlight the role of change in organisations, there are several factors that can result as challenges for managers to handle according to every different situation, these factors are mainly globalization, workforce diversity and ethics.

Another equally important thing about organisations is globalization and culture. In a globalized world, it can be seen the increasingly important role of culture within organisations, in a daily basis and in many ways, like for instance in essential processes as decision making. Nowadays, for managers and working personal it is of vital importance to inquire and study culture for different reasons, like for instance predicting results and the impact of future negotiations within the business environment, to plan strategies and product development according to the country ,and many others.

It is important to understand the meaning of national cultural and the organisational culture in order to have a greater look of the big picture of the business environment. The national culture could be described as a sumatory of all those values and beliefs that are common to a human group and transmited from generation to generation, and that makes it different from another one. At the same time, the organisational culture is a set of expectations, norms and goals that are common to a group or an organisation to be more exact and that can change from one organisation to another.
Therefore, for managers the big challenge resides in succesfully linking and making work the two types of culture within the organisation in order for all the working parties to be motivated and perform effectively.

Approach to Hofstede's PD (Power/Distance) cultural dimension

According to Hofstede, this dimension "refers to the degree of inequality that exists - and is accepted - among people with and without power. A high PD score indicates that society accepts an unequal distribution of power and people understand "their place" in the system. Low PD means that power is shared and well dispersed. It also means that society members view themselves as equals." There could be several business implications because of different cultural behavior within the organisation.

For instance, imagine a Japanese company which has a high PDI (Power Distance Index), so they expect subordinates to comply with the manager's orders and reccomendations. But, because we are in a globalized world, there is an american employee who is going to work in the Japanese organisation for a certain period of time. In his home country (US) there is a low PDI, meaning that is normal for him to interact in a similar way with his manager and the decision making process can be shared between them. For a japanese, this is can't be possible at all. So, there could be a cultural clash regarding the organisational behavior of the two countries.

Now, let's see it from the other way around, the japanese employee is going to work for the american company, for instance, his manager would expect him to provide some feedback, to interact and make the decision process together according to the company's necessities, but the japanese might not feel comfortable doing this because of his organisational behavior and national culture, is not natural for him to do so and maybe the manager could misunderstand what is happening and might think that the employee is not motivated to do his job at all.

Is there a corporate culture in every organisation?

I do strongly believe that there is a corporate culture in every organisation indeed. It can be described in six words, as the author says, is "How we do things around here". Every organisation, doesn't matter how small or big it is, they have a way of doing things, a set of normsf and behaviors based on the beliefs, priorities and values that all the employees have in a daily working basis. It can be either implicit or explicit, but it will always be there, as long as there are human beings working for the company.

The company can directionate the corporate culture in order to fit the business and the context of the organisation and its goals. For instance, an explicit way to do it is to create a good statement of the mision and the vision of the company and make emphasys on the training of the future employees in this area, so they will know what is the goal that the company seeks to achieve and what the company expects from them. Another way, that I see is possible for the company in order to implement and direct its corporate culture is to keep an eye on the employees, work on their motivation, don't forgeting that they're people who might have career aspirations, no matter what their role in the company is, it would be good for the company to have conferences and meetings with all the employees where they can see what the company has achieved thanks to the effort of every single person working there, so they can feel more involved with the goals and it can becomes a sort of corporate culture with the time.

There is another way in which the corporate culture is represented in the company, the implicit way, is more common in small groups of employees or for instance in different areas of the company, is more "local" and it can vary from area to area in the same company. The use of certain lenguage, and dress code are part of the implicit way of corporate culture.

I think corporate culture can be modified, althought it is not an easy task. It requires time, patience, leadership from the managers and acceptance of the employees about the new issues that are being modified. It is a long term task, we cannot expect people to change the way they are used to work, their beliefs and their way to interact within the company and with their workmates and managers from one day to another, it requires time. For me, that is the main factor, time, things can be done but we need to be patient and perseverant in order to make it work.