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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 mens 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.

Uniqlos 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 companys
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 Uniqlos
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 Uniqlos 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 Uniqlos 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)

Uniqlos organization will be analysed by introducing Scheins three level of


organization culture mainly consisting of artefacts, values, beliefs and basic
assumption. (Schein, 1984), The models 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 UNIQLOs organizational culture from the
observational levels.
Facts and Statistics information can be readily obtained from journal article,
business review, news on UNIQLOs website, therefore making Edgar Schein three
level of culture an ideal model for analysis of UNIQLOs 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 UNIQLOs 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, Heros and Ritual. On the other hand, Scheins 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.

UNIQLOs 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. (OReilly & 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 groups 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. Unlike 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
HeatTechs 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 its 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 observers 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 UNIQLOs 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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