The Culture of Uber

Organizational culture is an essential component of competitive advantages especially in the current business environment associated with levels of dynamism and competition. Companies with poor organizational culture usually have bad reputation and image within the marketplace as they can neither attract talented employees neither attract loyal consumers. At Uber, for example, the company has a toxic organizational culture that was associated with employee discrimination and sexual harassment. The company had to fire the then CEO and install a new leadership which has since improved the company’s culture. The culture at the company can be understood through the Schein’s cultural model and the Hofstede’s dimensions of culture.

Organizational culture

Organizational culture describes the commonly held and firm, corporate beliefs, values, and attitudes existing within an organization. According to Alvesson and Sveningsson (2015), culture underlines the majority of human activities which go on within an organization, and as such, should be seen as increasing incrementally throughout the history of their organizations. However, there are companies which through their organizational leaders can engineer corporate culture to achieve particular goals such as innovation. Major issues which define corporate culture include the regulatory history, organizational mission, procedures, the business industry and sector the society or the nation where the business is found, and the past and present corporate leaders. According to Alvesson (2016), corporate culture can be determined through various elements within the organization. Some of these elements include the organizational structure and hierarchy, rules and regulations, language, symbols, norms, communication, history, layout, uniform, and power status. Organizations should always strive to establish strong organizational cultures because such strong cultures lead to increased stability, rapid decision making, coordination, lack of creativity, group thinking and teamwork, and flexibility.

An issue which helped to inform the organizational culture of Uber

The resignation of Travis kalanick in 2017 is perhaps one of the most problems which could be used to explain the corporate culture of Uber. Before his departure, Mr. Kalanick received several letters requesting him to resign because there were reports that the company was involved in several problems including issues to do with sexual harassment in the workplace.

After the resignation of Kalanick, what followed was a series of leadership problems that culminated in a crisis. The organization has been accused of discrimination and sexual harassment over the past years. In June 2017, the company sacked over 20 employees after it was found that they were involved in inappropriate sexual harassment and discrimination.

After the resignation, the company was faced with a plethora of management and leadership issues. First, the company was already searching for a chief financial officer and chief operating officer, and now the company was in need of a new CEO. The problem was that none of the company was ready to take these posts because they had not been groomed for those posts.

However, there are several organizational culture issues which can be learned from the crisis that followed the resignation of its CEO. First, it is essential to ensure that an organization develops a culture of leadership with a robust pipeline.

Schein Organizational culture and leadership

The Schein organizational culture and direction can be used to explain the Uber corporate culture. According to Schein, organizational culture and guidance can be referred to as two sides of the same coin because neither of the two can be understood on its own. According to this model, culture is a consequence of group learning which is mostly influenced by the actions and behaviors of the leaders. Furthermore, when the survival of a group within a particular organization is threatened by its culture and as such becomes maladapted, it is the role of the organizational leaders to recognize and take necessary steps about the situation. In such a case, organizational leadership and culture can be said to be intertwined. In the case of Uber where there were issues and allegations of sexual harassment, it is the role of the organizational leaders to recognize this and take the necessary steps.

Furthermore, when there were allegations that the company culture promoted antagonism between employees and the managers, it is the role of the leaders to take the necessary corrective steps. The Schein organizational culture proposes that the culture of organizations can be analyzed through three primary levels (Ohnsman, 2017). The levels include the artifacts, espoused beliefs and values, and the underlying assumptions. Figure 1 below illustrates the different levels of corporate cultural analysis according to Schein.

Figure 1: the Schein’s levels of culture

At the fundamental level are the artifacts which include all the issues an individual feels, sees, and hears upon encountering unfamiliar culture. The objects contain all the visible actions and products of a group including its physical environment, its technology, language, products, artistic creations, and style. The artifacts at Uber would include all the physical actions which employees do at the company including its environmental climate. All easy to observe issues within an organization is termed as artifacts. For example, the artifacts components of the Uber culture could be determined through its products and cars it uses for its operations. The company uses luxury cars for its taxi operations, and this makes part of its culture. Also, the buildings and the layout at Uber form its artifacts as part of the company’s organizational culture.

The second level of organizational culture according to Naranjo-Valencia,Jiméne z-Jiménez, and Sanz-Valle (2016), is the espoused beliefs about the company. Group learning ultimately leads to the original values and beliefs, including their sense of what should be especially when the group faces new tasks, problems, and issues. The first solutions which the group comes with must reflect some own assumptions concerning what they perceive as right and wrong or what will work or not. However, when the group borrows into the individual ideas and implements the prosed plans, such thoughts and beliefs become part of the organizational culture.

At Uber, for example, after realizing that there were increasing instances of sexual abuse and discrimination issues within the company, the board members set up a special task force to develop recommendations necessary to avert any possible negative impacts of such activities. Upon receiving the proposals, which also included the resignation of the CEO, the board then unanimously voted for the resignation of Mr. Kalanick. The espoused beliefs in this instance were that the organization’s culture is against any form of discrimination against anyone and anyone. Furthermore, the espoused belief was that anyone within the company, irrespective of their positions, should be able to carry out their responsibilities and show maximum accountability. The unanimous agreement to sack over 20 employees also helped to validate the company’s culture of intolerance to any form of discrimination.

The Uber organizational culture

After the resignation of the New CEO, there was a need to create a new corporate culture for the company. According to a study by CNBC in 2017, the Uber employees indicated that some of the characteristics that formed the company culture include being customer obsessed, building globally and living locally, celebrating differences, persevering, valuing ideas over hierarchy, and doing the right things.

Whenever new employees join Uber, they usually subscribe to fourteen core company values.

The values have helped to drive the company to one of the biggest and most successful taxi companies in the world. However, there have been claims that the company’s culture of always pushing for the best result has led to situations where the employees are pitted against each other and where top performers are not correctly recognized. According to a former employee, the company’s culture allowed the employees and the managers to appear as they were fighting against each other and that everyone was attempting to undermine their direct supervisor so that they could get the jobs of their immediate supervisors. Having such cultures can be detrimental to the success of a company. Managers and organizational leaders must, therefore, initiate measures which aim to change the culture and eliminate antagonism among employees and supervisors.

Analyzing the Uber culture before the resignation of Kalanick

While examining the corporate culture of Uber, it is essential to consider the organization’s culture before its CEO resigned and after the VEO resigned, and new leadership was installed. The managers of most organizations are responsible for engineering or directing the learning of the companies so that they can achieve particular results. In the same manner, it can be said that the Uber CEO was able to engineer the organizational culture that led to increased instances of workplace sexual harassment and discrimination. According to (), All the scandals attached to the firm are a result of a toxic culture that was instituted by the former CEO. The issues that happened at Uber depict the firm as an organization whose culture promotes aggressiveness and predatory. The Uber culture allowed sexual harassment of employees, discrimination of the drivers, dishonesty, and illegal business practices (Isaac, 2017).

Testimony by one of the company’s former employee by the name of Susan Fowler disclosed how the company had had a toxic and hostile culture in the firm made it impossible for employees to serve the company effectively. The negative organizational culture at Uber did not place any disciplinary measures on a manager who had sexually harassed Susan Fowler previously since the manager was considered a high performing employee. In another instance, the former employee narrated how she was threatened that she could face dismissal if she reported her seniors to the HR department. Such a case showed that the Uber culture discourages whistleblowing which according to Isaac (2017) is one of the essential elements of positive corporate culture and image. The employee also described that the managers struggled significantly to be promoted. From this description, it could be seen that the Uber culture is one that places performances and encourages antagonism between employees instead of fostering harmonious coexistence and teamwork.

The Uber culture after the resignation of the CEO

After the exit of Travis Kalanick, Uber has become a better organization with a better culture under the leadership of CEO Dara Khosrowshahi. According to the Schein organizational culture model, corporate culture and leadership are intertwined, and it is easier to see how the company’s culture gained positive reviews immediately after Travis kalanick reassigned and a new direction was installed. The new administration recognized the problems which led to the negative reviews of the company and directly put measures in place to help correct it. The improvement was further aided by the fact that all employees embraced the ideas of the new CEO and thus, according to the Schein Model of organizational culture, socially validated the plans as part of the company culture. According to Isaac (2017), Uber has made bold steps towards correcting its dysfunctional culture. The business has learned from its mistakes as it has been fined following numerous lawsuits. Moreover, it has been banned from operating in various regions around the world. Uber is developing strategies that will create a culture of shared learning among the employees and empower them to be increasingly involved in the organization’s activities.

The Hofstede’s Organizational culture and Uber

The Hofstede’s cultural dimension is also one of the major frameworks which can be used to explain the current organizational culture of Uber. According to this model, an organization’s culture is affected by issues such as uncertainty avoidance, power distance, masculinity vs. femininity, and individuals vs. collectivism. The power distance dimension describes an exploration of the extent to which individuals consider possible inequality at the workplace acceptable. The individualism vs. collectivism dimension describes the area to which individuals in a particular company are expected to look at their interest. Highly individualistic cultures are ones which promote personal benefit at the expense of group interest. Collectivist cultures, on the other hand, encourage team interests. The uncertainty avoidance dimension measures the extent to which people within a particular company or country accept ambiguity and other deviant behaviors. Employees from countries in Latin America and even Europe have high uncertainty avoidance while employees from Africa, Asia, and the united kingdom tend to how low uncertainty avoidance. The masculine vs. feminine dimension describes the extent to which dominant values such as money, and work ethic are associated with men while achieving such as concern for life and people are associated with females.

An analysis of Uber culture using the Hofstede’s dimensions

The theoretical aspects of Hofstede’s cultural dimensions significantly apply to the current case of Uber and its organizational culture. Among the dimensions that Hofstede explores in his conceptual framework are power differences. The aspect of power differences explores whether employees find inequality acceptable in the workplace (Hofstede, 2011). The culture at Uber is inclined towards high power distance. The employees are struggling to be promoted to a higher level in the organization. Susan Fowler witnessed hostility among managers and supervisors who would outdo each other to receive recognition from the top management. Furthermore, there were instances of employment discrimination which created a lot of a culture of inequality in the Uber workplace. Therefore, the company’s culture before the resignation of Travis Kalanick can be regarded as one that values high power distance.

Regarding individualism and collectivism, Hofstede focuses on the extent to which an employee is expected to handle their problems individually rather than collectively or within a team. At Uber, organizational values require the employees always to strive to develop. Such a profit means that employees are responsible for their actions. Besides, employees need to work individually to deliver towards the goals of the business. The fact that employees within the company always worked to outdo each other means that the company is of a high individualistic culture.

Furthermore, there were claims that the employees always worked with a view of replacing their immediate supervisors. The culture portrayed through this claim is one that is individualistic and has no regard to the need for teamwork and group performance. The comparison that Hofstede makes regarding individualism and collectivism is that national cultures that are focused on individualism are more prosperous than those that concentrate on socialism (Hofstede, 2011). Furthermore, the fact that Uber operates in over 70 countries around the world is an indication that its organizational culture will further be complicated. There are countries in Africa and Asia which are highly collectivist, and the current culture of individualism will not be preferred. Therefore, for the curses of the company in these markets, the company will have to adjust its lifestyle to accommodate the preferences of customers and employees from different countries.

Another cultural aspect that Hofstede tackles are uncertainty avoidance. The dimension deals with how a specific culture manages issues of risks and ambiguity’ Employees at the institution at the time of former CEO Travis Kalanick had subscribed to a culture that encouraged higher risks. Among the values that the Uber culture advocated was for its employees to make bold risks. They were required to ensure they win the customer at all costs. The culture of Uber was high tolerance to risks as evident from the numerous lawsuits that the company has faced while Kalanick was CEO.

Hofstede also discussed the aspect of masculinity and femininity in workplace cultures. In the dimension, Hofstede sought to determine the extent to which a company encourages dominating masculine values over feminine values (Hofstede, 2011). Organizations that support male cultures have little regard for the female workforce in the corporation. Uber`s management paid little attention to female employees in the workplace leading to most women leaving the organization. Female employees were sexually assaulted and were hardly ever promoted as the male workers. Therefore, the company’s culture put a more preference on masculinity than on femininity. Hofstede also investigated dynamism in corporate cultures. According to the scholar, a dynamic organization accommodates values and ethics similar to those experienced in a family (Hofstede, 2011). The lifestyle at Uber was not active and thus did not have significant regard for the family aspects and values. The former CEO, Travis Kalanick, was regarded as showing disrespect to his employees. For example, it is reported that he once had a heated verbal disagreement with an Uber driver regarding the issue of pay. Uber`s culture also failed to be dynamic due to lack of transparency considering that it has never declared whether it is a transport or a hi-tech company.

The previous organizational culture under the leadership of Kalanick was regarded as toxic. However, since the appointments of the new CEO and other corporate leaders, the company has learned and grown to develop a strong corporate culture which can improve its image and reputation among potential employees and customers. The company has since revamped its operations and departments including its human resource department. The company also developed the fourteen values that guide the firm`s employees. Supporting literature about learning organizations show that globalization, increased the competitiveness of firms in the market, and a tremendous change in technology, contribute to the alteration that most corporates are currently undergoing (Balakrishnan, 2017). Leaning organizations are developing new ways of operating by developing strategies that strengthen the workforce to be increasingly involved in decision-making. A learning organization requires a culture that accommodates all members to help the enterprise deviate from the problems it may encounter in the future. A learning corporation ensures the participation of all employees in realizing the vision objectively. Uber`s human resource team is working towards eliminating the culture of individualism to encourage team sharing sand system thinking in the company. Uber now fosters the sharing of ideas among the workforce to help it be innovative and competitive. Uber has also introduced a corporate, educational program to serve as a mental model to support the employees adapt to a new culture. The firm has revised its values from fourteen and reduced them to eight. Among the values developed is perseverance, doing the right things, and accommodating diversity. Such costs create a shared vision where each member extends their conduct, commitment, and determination based on the values.

Conclusion

The corporate culture determines the relationship a firm has with stakeholders, and its overall success in the current highly competitive market. A strict culture creates a toxic environment where employees are unproductive, unmotivated, and fearful of making the next move. Uber`s toxic culture under the leadership of Kalanick would destroy its reputation and leadership in the market. The destructive nature of Uber`s culture was threatening its internal and external operations. If a company’s relationship with employees is weak, then the authorities are likely to fail. Culture is intangible, but its impact on an organization should not be underestimated. Companies facing a similar challenge to that of Uber can follow Hofstede`s cultural dimensions to realize the positive aspects of the culture of a global organization. Companies should aim at having a culture that encourages teamwork, equality and diversity, risk-taking, and dynamism. Concerning the recent changes in Uber`s culture, corporations with failing values and principles can adopt the model of a learning organization to identify their weaknesses and respond to those faults effectively.

References

Alvesson, M. (Ed.). (2016). Organizational culture. Sage.

Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change work in progress. Routledge.

Balakrishnan, A. (2017). Uber employees voted on the new company culture-and it looks a lot like Google and Amazon. CNBC. Retrieved from https://www.cnbc.com/2017/11/07/ubers-new-cultural-norms.html

Isaac, M. (2017). Inside Uber’s unrestricted workplace culture. The New York Times. Retrieved from https://www.nytimes.com/2017/02/22/technology/uber-workplace-culture.html

Naranjo-Valencia, J. C., Jiménez-Jiménez, D., & Sanz-Valle, R. (2016). Studying the links between organizational culture, innovation, and performance in Spanish companies. Revista Latinoamericana de Psicología, 48(1), 30-41.

Ohnsman, A. (2017). Uber’s Travis Kalanick said to resign as CEO amid investor backlash. Forbes. Retrieved from https://www.forbes.com/sites/alanohnsman/2017/06/21/ubers-travis-kalanick-said-to-resign-as-ceo-amid-investor-backlash/#4c38b5f743c8