Culture as Liability
Culture can enhance organizational commitment and increase the consistency of employee behavior, clearly benefits to an organization. But there are potentially defective aspects of culture, like Barrier to change, Barrier to diversity, then it is said to be Culture as Liability
When an organization undergoes institutionalization and becomes institutionalized —that is, it is valued for itself and not for the goods or services it produces—it takes on a life of its own, apart from its founders or members.
Example:- Sony is known to us for it’s up to date technology, not for name members or founder, it is been an institutionalized organization
“ A condition that occurs when an organization takes on a life of its own, apart from any of its members, and acquires immortality. ”
Acceptable modes of behavior become largely self-evident to members, and although this isn’t entirely negative. It does mean behaviors and habits that should be questioned and analyzed become taken for granted, which can stifle innovation and make maintaining the organization’s culture an end in itself.
Barriers to Change
Culture is liability when the shared values don’t agree with those that further the organization’s effectiveness.
This is most likely when an organization’s environment is undergoing rapid change, and its fixed culture may no longer be appropriate. Consistency of behavior, an asset in a stable environment, may then burden the organization and make it difficult to respond to changes.
Barriers to Diversity
Hiring new employees who differ from the majority in race, age, gender, disability, or other characteristics create a paradox.
Management wants new employees to accept the organization’s core cultural values. But at the same time, they want to support the differences that these employees bring to the workplace.
Strong cultures put considerable pressure on employees to conform. They limit the range of values and styles that are acceptable.
Barriers to Acquisitions and Mergers
Historically, the key factors that management looked at in making acquisition/merger decisions:
Cultural compatibility has become the primary concern. Whether the acquisition actually works seems to have more to do with how well the two organizations’ cultures match up.
A survey by consulting firm A. T. Kearney revealed that 58 percent of mergers failed to reach their financial goals.
As one expert commented, “Mergers have an unusually high failure rate, and it’s always because of people issues”
Here, the reasons for the culture as liability. Where most of the organization fell for the trap. Every organization keeps track of its culture and tries to avoid or overcome these barriers for adopting a new culture.