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Study on Inter-organizational Macro-cultures in the North American Automotive Manufacturing Industry:- Social responsibility is an ethical theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem.
Study on Inter-organizational Macro-cultures in the North American Automotive Manufacturing Industry
The recent turmoil within the global economy has placed direct focus on the struggle of entire business sectors. Perhaps a generalization in absolute terms, it is reasonably accurate to state that entire industries were uniformly affected by the economic downturn. Although there are numerically many more examples of failures from the banking and financial sectors, this article will conceptualize around the North American automotive manufacturing industry as an exemplar of this phenomenon, and theorize from a social constructivist philosophical tradition.
One may pose the question how is it possible that the entire North American automotive sector teetered, and indeed teeters, on the verge of bankruptcy at the exact same time and under the exact same circumstances? Surely one of the three North American automotive manufacturers could have managed to avoid near bankruptcy by producing a product that consumers desired, while being capable of managing their finances accordingly; avoiding the need for a taxpayer-funded government bailout. Apparently, this was not the case and, almost simultaneously, the 'Big 3' came to the U.S. and Canadian governments requesting taxpayer-funded capital to continue with their existence as solvent organizations. Some would say that the issues stemming from a global recession, whereby most consumers delay large purchases, were the reasons for the 'Big 3'
experiencing these problems simultaneously; yet there may be other contributing factors that warrant exploration. Within the management literature, the reader will come across terms like organizational culture, business culture and corporate culture being used in reference to drivers or inhibitors of business performance. While it is true that every organization has a unique set of practices that define the way ¡t does business, the depth of these practices is potentially superficial and, at times, transient as individuals and groups move in and out of organizations. Some researchers in the field even question the existence of the term 'culture' when married within 'organizational', 'business' or 'corporate'; preferring to use 'practices' instead. Regardless of the terminology the literature employs, we can broadly define this contributing factor as a set of values, norms or behavioural patterns that influence the way organizational members interrelate and the organization functions. Also within the management literature is a less-used term that may help us conceptually and contextually understand this phenomenon of the simultaneous collapse within the automotive manufacturing industry: interorganizational macroculture. These organizational practices, or interorganizational macrocultures, can remain stagnant for extended periods of time if no external stimuli are introduced, resulting in a detrimental influence to organizational performance. Abrahamson and Fombrun (1994, p. 728) define interorganizationai macroculture as 'relatively idiosyncratic beliefs that are shared by managers across organizations'. One particular recent media event allowed a rare glimpse for the general public to simultaneously look upon the CEOs of General Motors, Ford and Chrysler and understand this concept. This event occurred after all three CEOs flew their corporate jets to Washington D.C. to ask the U.S. Congress for a financial bailout. The irony was evident, and certainly the U.S. Congress was not impressed. This is only a single upperlevel example of a culture that extends across
21
organizations within the same industry. Another example of this, set at a 'micro' level within the organization, s the i practice vyithin the 'Big 3' to promote from within. Most senior positions vyithin the 'Big 3' are filled from more junior-level positions in the organization. Only rarely are positions within the organization recruited from outside the organization. While this is arguably effective for developing and maintaining internal organizational knowledge, there is a danger of perpetuating ineffective practices or practices that should have been retired years, or decades, ago. This employment practice certainly inhibits cross-fertilization of ideas and the introduction of new ideas into an organization from outside of the specific industrial sector. There are certainly organizationai improvements to be gained in the automotive sector by looking to other sectors of the economy that have the capability to react quickly to environmental change. The development of interorganizational macrocultures often stems from the backgrounds of their leaders creating the norms. Since this industry in particular is dominated by few companies, it begs the question, if organizational norms exist, are more pronounced industry norms found within the macroculture? The old adage of an organization reflecting its leader is very appropriate when analyzing this concept. The concept of interorganizational macrocultures may be linked to the management of these organizations by managers that have shared experiences, values and norms through educational institutions, social networking, and working within specific industries for extended periods. Even national culture (i.e. American, Japanese, German, etc.) can play a factor and exert a significant influence on these interorganizational macrocultures; yet that is a topic for another article. Many organizational CEOs may have attended the same business
schools or belonged to the same professional or industrial associations. Perhaps these CEOs have memberships to the same golf courses or frequent the same restaurants? Interorganizational values and norms held by managers within industries can significantly influence organizational cultures; minimizing the distinction between organizational practices within industries. Even if an employee were to leave General Motors for a position at Ford or Chrysler, would the difference be pronounced? Would this employee experience a 'culture shock'? These interorganizational macrocultural dynamics may have dire consequences to industries that survive on the basis of rapid adaptation to the consumer market, and indeed may lead to the potential failure of entire industries, as has been recently observed. If all the leaders interpret market signals, eternal influences and the dynamics of the industry in the same way, there is a strong likelihood they will react in the same manner. If this reaction is flawed, then the entire industry will suffer, The difficulties experienced by the North American automotive manufacturers during the Global Financial Crisis that began in 2008 could warrant research into the possibility that interorganizational macroculture was a contributing facilitator of the simultaneous difficulties observed. These recent events warrant exploration into the macroculture of the industry and the norms set by the industry leaders.
doc_477197747.docx
Study on Inter-organizational Macro-cultures in the North American Automotive Manufacturing Industry:- Social responsibility is an ethical theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem.
Study on Inter-organizational Macro-cultures in the North American Automotive Manufacturing Industry
The recent turmoil within the global economy has placed direct focus on the struggle of entire business sectors. Perhaps a generalization in absolute terms, it is reasonably accurate to state that entire industries were uniformly affected by the economic downturn. Although there are numerically many more examples of failures from the banking and financial sectors, this article will conceptualize around the North American automotive manufacturing industry as an exemplar of this phenomenon, and theorize from a social constructivist philosophical tradition.
One may pose the question how is it possible that the entire North American automotive sector teetered, and indeed teeters, on the verge of bankruptcy at the exact same time and under the exact same circumstances? Surely one of the three North American automotive manufacturers could have managed to avoid near bankruptcy by producing a product that consumers desired, while being capable of managing their finances accordingly; avoiding the need for a taxpayer-funded government bailout. Apparently, this was not the case and, almost simultaneously, the 'Big 3' came to the U.S. and Canadian governments requesting taxpayer-funded capital to continue with their existence as solvent organizations. Some would say that the issues stemming from a global recession, whereby most consumers delay large purchases, were the reasons for the 'Big 3'
experiencing these problems simultaneously; yet there may be other contributing factors that warrant exploration. Within the management literature, the reader will come across terms like organizational culture, business culture and corporate culture being used in reference to drivers or inhibitors of business performance. While it is true that every organization has a unique set of practices that define the way ¡t does business, the depth of these practices is potentially superficial and, at times, transient as individuals and groups move in and out of organizations. Some researchers in the field even question the existence of the term 'culture' when married within 'organizational', 'business' or 'corporate'; preferring to use 'practices' instead. Regardless of the terminology the literature employs, we can broadly define this contributing factor as a set of values, norms or behavioural patterns that influence the way organizational members interrelate and the organization functions. Also within the management literature is a less-used term that may help us conceptually and contextually understand this phenomenon of the simultaneous collapse within the automotive manufacturing industry: interorganizational macroculture. These organizational practices, or interorganizational macrocultures, can remain stagnant for extended periods of time if no external stimuli are introduced, resulting in a detrimental influence to organizational performance. Abrahamson and Fombrun (1994, p. 728) define interorganizationai macroculture as 'relatively idiosyncratic beliefs that are shared by managers across organizations'. One particular recent media event allowed a rare glimpse for the general public to simultaneously look upon the CEOs of General Motors, Ford and Chrysler and understand this concept. This event occurred after all three CEOs flew their corporate jets to Washington D.C. to ask the U.S. Congress for a financial bailout. The irony was evident, and certainly the U.S. Congress was not impressed. This is only a single upperlevel example of a culture that extends across
21
organizations within the same industry. Another example of this, set at a 'micro' level within the organization, s the i practice vyithin the 'Big 3' to promote from within. Most senior positions vyithin the 'Big 3' are filled from more junior-level positions in the organization. Only rarely are positions within the organization recruited from outside the organization. While this is arguably effective for developing and maintaining internal organizational knowledge, there is a danger of perpetuating ineffective practices or practices that should have been retired years, or decades, ago. This employment practice certainly inhibits cross-fertilization of ideas and the introduction of new ideas into an organization from outside of the specific industrial sector. There are certainly organizationai improvements to be gained in the automotive sector by looking to other sectors of the economy that have the capability to react quickly to environmental change. The development of interorganizational macrocultures often stems from the backgrounds of their leaders creating the norms. Since this industry in particular is dominated by few companies, it begs the question, if organizational norms exist, are more pronounced industry norms found within the macroculture? The old adage of an organization reflecting its leader is very appropriate when analyzing this concept. The concept of interorganizational macrocultures may be linked to the management of these organizations by managers that have shared experiences, values and norms through educational institutions, social networking, and working within specific industries for extended periods. Even national culture (i.e. American, Japanese, German, etc.) can play a factor and exert a significant influence on these interorganizational macrocultures; yet that is a topic for another article. Many organizational CEOs may have attended the same business
schools or belonged to the same professional or industrial associations. Perhaps these CEOs have memberships to the same golf courses or frequent the same restaurants? Interorganizational values and norms held by managers within industries can significantly influence organizational cultures; minimizing the distinction between organizational practices within industries. Even if an employee were to leave General Motors for a position at Ford or Chrysler, would the difference be pronounced? Would this employee experience a 'culture shock'? These interorganizational macrocultural dynamics may have dire consequences to industries that survive on the basis of rapid adaptation to the consumer market, and indeed may lead to the potential failure of entire industries, as has been recently observed. If all the leaders interpret market signals, eternal influences and the dynamics of the industry in the same way, there is a strong likelihood they will react in the same manner. If this reaction is flawed, then the entire industry will suffer, The difficulties experienced by the North American automotive manufacturers during the Global Financial Crisis that began in 2008 could warrant research into the possibility that interorganizational macroculture was a contributing facilitator of the simultaneous difficulties observed. These recent events warrant exploration into the macroculture of the industry and the norms set by the industry leaders.
doc_477197747.docx