CCULTURE AND ORGANISATIONS (HR0372)
TAN HUI KIAT
W16040809 BASLCM
Lecturer: Mr NIGEL TOH 170817
Word count per task
Introduction
349
Culture issue
143
Theoretical framework and limitations.
541
Justification of the Framework.
279
Analysis.
1097
Conclusion
200
Recommendation
106
Total word count
2715
Similarity
5%
1. Introduction. UNIQLO is a designer and worldwide chain of casual wear retailer consisting of more than 760 stores. Making it one of the largest chain in the world. The origins of UNIQLO stretches back to March of 1949 when Yamaguchi based Ogori Shoji was operating a men’s clothing shop in Ube, Yamaguchi. In 1984, the small company stretched its influence and opened its first doors in Hiroshima titled “Unique Clothing Wearhouse” headed by Tadashi Yanai. By joining those words together, Uniqlo was form. (Fast Retailing, 2013) The chain had grown in the early twenties. By 1994, the parent company, Ogori Shoji, was renamed to Fast Retailing. (Fast Retailing, 2014) By then, they had owned around 100 retail stores throughout Japan, their clothing chain, Uniqlo, had become the envy of retailers worldwide. Subsequently the company outranked their competitors to become the biggest clothing retailers in Asia. Uniqlo’s leader had ambitious goals on mass producing affordable basics in dozens of colours, which got its start in the Japanese suburbs. Less than 20 years later, it has laid it stake along swanky shopping street in major global cities. (Yanai, 2003). Additionally, the 1990s, the Japanese economic recession favoured the company’s sales as they offered a cheaper option in the clothing industry. The company seized the opportunities from this “Great Recession” and reaped major benefits by catering to the citizens who were trying to cut back on spending. (Insider, 2013). Most of its original growth was centred in the Japanese suburbs through roadside stores. However, Uniqlo also tried to grow via expanding their operation in locations such as United State, France, Singapore, Malaysia, Philippines, China and Taiwan. (Forbes , 2017). The success of UNIQLO was made possible by the mission and vision of the company. Their vision is to be committed to enrich people's lives through great clothing. Furthermore, the corporate activities are always focused on the growth and development of unity with society. Their efforts to promote understanding of
Japanese culture and values abroad while taking on aspects of established global business practices may offer another path to globalization. ( USHIJIMA, 2014) 2. Culture Issue. This report takes references to UNIQLO as a case study and analysed Uniqlo’s Culture and investigate the myth behind the practices in their retail outlet. What is it that makes the Uniqlo culture different from their competitors? In such competitive market, how did UNIQLO stand out from the crowd to establish its brand? This assignment will analyse “Uniqlo’s unique culture’ by examining its business model, with focusing on the management of its working environment as well as their customer oriented services that shape their organizational culture which make it so attractive. In addition, the beliefs and values of the company which are shape by the founder himself who had influence on his employees to make the company more successful and effective. The implementation of innovation into his business model also helped the company to further prosper in the fashion industry. 3. Theoretical framework and limitations. We will be using the three levels of organizational culture theory by Edgar Schien (2010) for the analysis of Uniqlo’s organizational culture. Organizational culture describes as the pattern of values, belief and assumption shared by all members in an organization, which are often seen by the organization as the appropriate way to perceive and valid to solve problem. (Sigler and Pearson 2000). Whereas, some reseachers defined culture as the way of employee work and the thinking behind their action in the organization. (Williams, Dobson, and Walters, (1994) Uniqlo’s organization will be analysed by introducing Schein’s three level of organization culture mainly consisting of artefacts, values, beliefs and basic assumption. (Schein, 1984), The model’s suitability for analysing this issue is due to its ability to perform a structured analysis of the organizational culture, beginning at an observational level. The surface level of the culture was being describes as Artifacts, as they represent the activities that a person could see, hear and feel
when they encounter with the organization culture for the first time. However, Edgar Schein acknowledged that the theory could be tough to be understood and decipher sometimes. (Schein, 2010). Organizational artefacts is the keys in shaping identity and revealing status, rank and hierarchy of an organization, no matter the difficulties. (Bako, 2010). Therefore, we should contemplate and try to deeper understand the Schein theory in order to define the true culture of the organization. In the inner layer, it represents the values and beliefs factor which define as the aspiration, ideologies, goal, values, and commonly shared among the employee in the organization. Some scholars have argued that shared values are the central feature and distinguishing characteristics of a culture. (Straub, et.al, 2002). Schein advocates that these values are shaped by the founder or the top management of the organization through their written form of mission and vision statement (Schein, 2010, p. 25). However, he argued that the values and belief can be mutually contradicting sometimes. (Schein, 2010, p. 27) The innermost level of culture in the Schein Theory is Basic Assumption. It is defined as the implicit assumptions guiding individual behaviour; perceiving, thinking and things. (Schein, 1997). Culture is a set of basic assumption that guides us what to pay attention to, how to react emotionally to what going on and what cause of action to be taken in various type of situations. (Cheung, et.al, 2011) In this regard, Schein (2004) advocates that leadership and organizational culture are contradict with each other because very often these basic assumptions are those of the leader. In conclusion, the main factors of a culture lie in the pattern of basic underlying assumption (Schien 2010, p. 32). If the basic underlying assumption are not being relayed well enough, It will affect the understanding and deciphering of the artefacts and value and beliefs correctly. As Schein himself had concluded, any organization culture can be analyse through the study of the three layers. These three levels of culture help in analysing UNIQLO’s organizational culture from the observational levels.
Facts and Statistics information can be readily obtained from journal article, business review, news on UNIQLO’s website, therefore making Edgar Schein three level of culture an ideal model for analysis of UNIQLO’s Culture. 4. Justification of the Framework. In comparison with the Hofstede framework, The Schein framework is deemed as much appropriate to be used to analyse on the UNIQLO’s culture. Hofstede and Schein shared the same views in defining culture, whether national or organizational, are being observe at a different level (e.g., practices, values, fundamental assumptions (Hofstede, 1980; Schein, 1992) Hofstede, (1990) concept is usually being applied on the national levels of culture which define culture as a many-layered concept. The Onion Diagram of Hofstede consist of Symbols, Hero’s and Ritual. On the other hand, Schein’s frameworks is used to applied on the organization levels of culture, define as a three levels concept (Gerhart, 2009). It consists of Artefacts which has includes Hofstede theory of symbols and rituals viewing organizational culture on a surface layered. While Values and Belief form the inner layer of the framework to understand the culture. Assumption are the core values of the organization which are usually hard to be understand. (Ismail, et.al, 2014). In the context of UNIQLO, Schein framework are better choice to be applied because the studies of the case are on an organization levels. The facts and information fulfil the three layers of concept. Whereas, Hofstede theory surround the nationality of the studies and distinct the assumption apart from the values of the organizational culture. The differences ways of viewing organizational culture from both theory allow the comparison of the values which was identified from the research. It is important to find out the way to understand at a deeper level of a culture, and to assess and challenge the functionality of the assumptions on which the practices. (Rajala, Ruokonen, & Rusimaki 2012).
5. Analysis. UNIQLO’s Organisation culture, “Customer Oriented, Innovation and Producing quality products’ is the underlying assumption by all the members. This underlying assumption is supported by evidence from their way of doing things and values perceive from the leaders and employee which will be further analysed. Artefacts such as rites and ceremony can be clearly identified through their daily working environment in UNIQLO. Ritual is a form of cultural expression which was to be staged and executed to create a certain atmosphere and to express the right value and ideas. (Alvesson, & Sveningsson,2015). Anyone who have worked in retails industry would understand that each company has their own set of rituals and traditions. UNIQLO is no different from others, in fact they are well-known for their requirement on their employee to follow the Six Standard phrases such as “Good-bye, we hope to see you again soon, please let me know if you need my help” and other common replies which are the benchmarks of polite service. (Buiness insider. (2017). It can be debatable the UNQILO are being rigid in demanding their employee to follow the Six Standard phrase to interact with customers as sometimes it can be deemed to be robotic. To further enhance the experience of their customer, UNQILO analysed and dictated every activity undertaken by every employee, from having a standard way of folding to the way adviser returns their payment to consumers which required them to use their two hands and remain eye contact. (Edmundson, 2010) The norms which distinguishes UNIQLO being outstanding from their competitor is their pricing of their products. Cultural norms focus on creating a standard which emerged from an organization values. (Chatman, et.al 2014) It helps members to interpret, evaluate and set expectations about appropriate behaviour in various events. (O’Reilly & Chatman, 1996). The UNIQLO business strategy is to set their product at a lower cost as compared to their competitors ZARA and Top Shop while keeping high quality goods. Their primary aim will be to maximise market share by increasing the sales volume as it will moderate distribution and production costs. (Uriarte , 2016). This will be achievable by reducing the design costs and investing more on quality fabric. Example like selling items such as pure cashmere sweater at affordable prices could attract both the quality seekers and those who are budget
conscious customer base. This aligns with Tadashi Yanai mission on “We want to sell good-quality clothes to everyone, not just a small percentage of wealthy people.” (Varma, 2016). Symbols are one of the factors that contributes to the defining of the organization culture. Symbols are logos, the office layouts and the informal or formal dress codes which are visual representations of the company. (Johnson & Scholes, 1999) The in-store experience are also symbols which tells the culture of the organization. UNIQLO display their clothing in-store in an organized colour, culminating in a rainbow. They maintain a neat and tidy sales floor and embraces modern minimalism free from any distraction leaving the clothing central to the design of the space. UNQLO also demonstrate a contemporary and culturally inclusive experience by adopting an “unbranded” fashion philosophy which is aligned to the Japan culture. In addition, UNIQLO has even standardized the music used in-store: they have a “global music palette” meant to be familiar, optimistic, and vaguely international. (Yi, 2016). These efforts are to give the best experience to their customers, which align to their vision on putting the customer first. The normative trust that underline the values of UNIQLO helps to promote their belief in quality and being customer oriented. Trust can be defined as interpersonal and co-worker trust which are both essential attributes in organizational culture. It was believed to have a strong influence over knowledge sharing Interpersonal trust is known as an individual or a group’s expectancy in the reliability of the promise or actions of other individuals or groups (Politis, 2003). Team members require the existence of trust in order to respond openly and share their knowledge (Gruenfeld et al., 1996). In the context of UNQILO, they inculcate the trust element into their values through the cooperation with their suppliers. It was mandated in their corporate social responsibility reports that even though UNIQLO has the power of buying goods in bulk, they do not just work with anyone in the market. Unl ike others, UNIQLO maintains working with approximately 70 suppliers as compares to other company which working around 300. Takao Kuwara, chief executive of UNQLO UK advocates that the company personally make effort to approach the supplier in order to ensure quality. “We make a lot of our products in China. However, through of our approach of manufacturing, we can maintain very good quality control.” (Marati, 2013). When they have found a factory, they want to work with, UNIQLO
will commit to buying all their product for the next five years under the condition that the supplier meet their standards. They will then cooperate with them by sending their own team of craftsmen to train the workers on how they like their finished goods to be produced and the teams will stay until they get it right.” These kinds of trust that the company gives to their suppliers will help to ensure that their product is always of a good quality. The effort element is clearly identified in the organization culture through their belief in Innovation. Effort incorporate with the organization identity. It is an ideology of organizational culture and acts as a context for sense making, which contributes to underline how these efforts attempts at internal self-definitions (Hatch & Schultz, 2002). In the context of UNIQLO, their effort in transforming its business identities through innovation helps to shaped their organizational culture. As Shenker (2010) suggests, innovation create value through replicating and extending an existing model. UNIQLO have evolves its business model through trial and error and by innovation. (Huang et.al, 2014). One of their signature innovations is HeatTech, is made to retain heat through a fabric developed in conjunction with a material science firm which turns moisture into heat as well as air pockets in the. The HeatTech’s fabric is thin, comfortable and enables stylish designs which was in contrast with standard of warmth clothing. (Aaker, 2014). This effort was workable due to the belief from the founder, Yanai says. “At Uniqlo we're thinking ahead. We're thinking about how to create new, innovative products ... and sell that to everyone.” (Tate, et.al, 2017) He demands innovation to be the centre core value in his company in order to bring the best products to the consumer. 6. Conclusion. The success of UNQILO can be attributed very much to it s founder, Tadashi Yanai. As the founder of the company, he laid down the culture and structure of the company which paved the way for UNIQLO to shine on the global stage. Tadashi Yanai also led by example in forging the balance of relationship between technology and fashion as mentioned earlier and driving the importance of customer oriented services. From an observer’s point of view, UNIQLO seems to be the perfect company for anyone to work in. As a company which has grown
tremendously from its humble roots, one can argue that UNIQLO will continue to grow and enjoy critical success in the future. However, with growth comes threat as well. UNIQLO has enjoyed great success largely because their employees are able to operate effectively as a team. This will become challenging if UNQLO continues to grow. When an organization becomes too big, it may be hard for them to function effectively together. Also, the founder had been at the helm of UNQLO from the very beginning. When the time comes for him to retire, there is a danger that UNIQLO’s culture could be gone together with him. 7. Recommendation. From the above analysis, we can find much evidence of UNIQLO planning for their future by injecting new blood and constantly promoting constant innovation collaboration with other companies. However, not much can be found on the planning for the succession of the leadership. The threat of Yanai leaving one day is real. He has also identified that the ultimate test of whether having his goals is by UNIQLO enjoying the same level of success when he is gone from the company. To preserve the UNIQLO culture, career development programs can be rolled out, not just to the management level, but within all hierarchies in UNIQLO.
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