Elements of the Case Study Management Term Paper Essay

Elements of the Case Study
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Elements of the Case Study
Organizations as Culture or the Culture Metaphor
Culture is a term that has been used extensively in organizations today. People talk of organizational cultures and how they impact the performance of an organization as well as the productivity of its employees without fully comprehending the term culture. Initially, people talked about the term culture alongside the ideas or concepts of norms, values, shared ideologies, and the day-to-day rituals. However, as Morgan notes, the world has moved from this understanding of culture to one that denotes the different perspectives or understandings that people have regarding a similar concept or idea. Organizations today employ different techniques and appear to submit or subscribe to ideologies which in the end shape the behavior and image of the organization entirely. Seeing an organization through the lens of culture means looking at its set of values as well as how the interactions between different groups within an organization ends up shaping behavior.
Every country has its own set of cultures which influence how things are done as well as how people approach work. These influences trickle down to the organizations which are found in a particular country. In his book, Gareth Morgan (139) agrees with the above notion and notes that “the point is that culture, whether Japanese, Arabian, British, Canadian, Chinese, French, or American, shapes the character of organization.” Organizations in Britain, for example, will embrace a culture that is guided or influenced by the culture of Britain. However, it goes further than this in that organizations further develop their own cultures which in turn influence how they conduct themselves and how their employees work. It is thus appropriate to say that organizations are mini-societies within the larger society of the country. These mini-societies also have their sub-cultures as well as other subcultures within the main subculture. However, it is crucial to stay vigilant as some of these subcultures could negatively influence the trajectory of an organization. Morgan (122) notes that “in Great Britain, generations of social change and class conflict often perpetuate antagonistic divisions in the workplace that no amount of conciliation and management technique seems able to overcome.” It is thus crucial to have certain rules and limits which seek to curtail or oversee the subcultures to avoid the instances when subcultures interfere with the goals of the organization.
AIG does adhere to the culture metaphor in the sense that it does have an organizational culture. The organization is multinational, and its influence is always felt in the world just like it was during the 2008/2009 financial crisis. AIG has been a leader in the world for several decades. However, because of its dysfunctional culture, the company found itself at the center of the financial crisis which almost crippled the entire world. This multinational organization almost fell, and it took a government bailout of $180 billion as well as the fact that it was too big to fall. The company’s culture has always been a liability in the sense that it denies people or the organization’s employees to challenge the status quo (Flamholtz and Randle, 2012). While it is always indicated that AIG failed because of the failure of statistical analysis, Flamholts and Randle note that it was “the failure to adhere to a core cultural norm that led virtually to disaster.” Greenburg had cultivated the culture where people could challenge any trade or business the organization got into. However, this culture was slowly but permanently abrogated to the point where the company’s employees would not speak out. As noted by Engle (2013), AIG was among some multinational organizations that were forced to change its internal cultures to help prevent further damage and downfall of the organization. As earlier indicated, subcultures could lead to events which damage the reputation of the company or even interfere with the running of an organization. The culture within AIG eventually became toxic and thus warranted a change. While it can be seen that AIG is now in the process of recapturing its former glory, a lot of it starts with the culture metaphor.
Psychic Prison
Psychic prison metaphor describes how organizations are more like human thinking processes. CITATION Dav132 \l 1033 (Spicer, 2013) describes the psychic prison as ‘the idea that organization is psychic phenomena in the sense that they are ultimately created and sustained by conscious and unconscious processes with the notion that people can actually become imprisoned or confined by the images, ideas, thoughts and actions to which these processes give rise.’ Humans are victims of their own imaginations and approach situations, ideas, opportunities and or any other information from a subjective perspective often defending what they know or what they think they know. Psychic prison can be defined as the mental trap of the individual’s imagination, and it is often very dangerous because it shuts out critical thinking and approach to new information and ideas. New ideas are treated as potentially dangerous and a threat to the stability of the organization. it is very much likely the reason why authoritarian governments suppress dissenters using force because they threaten the stability of their regimes and thus free media, free speech and other civil liberties are curtailed since they can potentially threaten the regimes.
Some people have described Morgan’s idea of psychic prison and describe it as a derivative of Plato’s republic allegory. Plato described a hypothetical situation in which some prisoners where held in an underground cave prison such that they could not see what was happening around them other than the walls around them. if these prisoners were held in prison since birth, they would have imagined and created their own version of the nature of things with the existent information they could get around the cave, i.e., sounds, shadows, etc. Plato imagined that if one of the prisoners was freed such that he saw the world and understood how it things operated, he would have some hard time explaining it to the other prisoners. The other prisoners would rather cling to the way they understood how the world worked rather than accepting the truth as narrated by the freed prisoner. Morgan’s psychic prisoner metaphor and Plato’s prisoners in a cave allegory can describe how people in organizations can "be trapped by favored ways of thinking" and "by unconscious processes."
Prison psychic prison helps us understand the unconscious and why many people are resistant to change. It explains why many organizations are bureaucratic as they want to stick with the old proven ways of operations rather than try new ways however promising they may be. Many organizations have fallen victims to his psychic prison pitfall, and they have either declared bankrupt or ceased to exist for many varied reasons. For example, the founders of Google offered their product to yahoo long before they created the company it is today for a million dollars, but Yahoo bet on its ‘proven’ products. Today Yahoo was recently acquired after poor performance and losing its technological innovation luster that had towered over many other organizations barely two decades ago. Other companies that failed to embrace change to stick to their proven ways of life is Kodak which failed to embrace the digital age of photography, blockbuster video stores which underestimated the power of the internet and the potential held by streaming services like Netflix which had offered itself to the company for acquisition.
AIG has also been a victim of psychic prison mentality. With over 56400 employees, there are various steps along the way that AIG has exemplified it's not open to ideas and criticism’ side. The period leading to the financial meltdown of 2008, AIG was highly profitable. It had got hooked to the lucrative financial products engineered by the banking industry. The financial products were catastrophic, and the company did not hedge on the insurance it took on the financial products which left the company largely exposed during the meltdown. The government came to its rescue by pumping 185 billion dollars since the collapse of the firm would have a domino effect on the rest of the financial industry and the American economy. Insuring tens of billions of derivatives against default and failing to hedge against the insured items was an ill-advised move that was short-sighted and catastrophic to the company. In a...