Uber and theories - Assignment 1 PDF

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Introduction In order to deeply understand the complex nature of organisations and related management issues, certain organisational theories are necessary to aid this investigation. In particular, this essay will explore both organisational culture and institutional theory in order to interpret the issues, behaviours and scandals faced by multinational company, Uber Technologies Inc. (Uber). In this essay, these theories will also address and examine the limitations and differences in perspective also relating to Uber.

Uber has become an organisation which has been subject to public scrutiny due to the several sexual harassment, discrimination and bullying claims within and outside the workplace. There have been several complaints by employees being treated unfairly due to minor mistakes and performance errors. As well as customers being victims of sexual harassment and assault. Therefore, with issues as scandalous as these it is clear Uber is in a cultural crisis. So, both these theories can help to address and understand these issues being face by Uber.

Overview of Uber Uber was first founded in 2009 by Garret Camp and Travis Kalanick under the name of Uber Cap. In 2011, the company name was shortened to Uber and in 2012, Uber rolled out Uber-X, a service which rolled out people to work for Uber driving their own car (Kumari & Sharma, 2019). Uber is now a multinational and publicly listed ride haul company (Anjoul, 2020), offering transportation via vehicles, deliveries, package deliveries and other transportation services. Today, Uber operates in over 300 cities across 6 continents, and in 2016 Uber grossed 200 billion dollars (Kumari & Sharma, 2019), employing over 22000 employees. Ubers hierarchical structure has been traditionally highly hierarchical when established by former CEO and co-founder Travis Kalanick (Dudovisky, 2018). However, due to the lack of leadership skills possessed by Kalanick, he was forced to resign due to the vast amounts of bullying, discrimination within the workplace and harassment. With now the former CEODara Khosrowshabi the organisation structure is subject to more changes to present these types of management issues from occurring.

In recent times, it has been evident that Uber is experiencing increasing losses as in 2017, losses grew up by 60% to 4.5 billion dollars from 2016 losses of 2.8 billion dollars (Kumari

& Sharma, 2019). Although there are several reasons for Ubers downgrade in profits such as competition and higher cost base. Management issues are also a major issue for Uber. Multiple management problems have effected Ubers financial and competitive position fuelling growing distrust from customers, drivers and regulatory agencies (Kumari & Sharma, 2019). Examples of Ubers unethical behaviour include sexual harassment, discrimination and bullying within the workplace. Investigations have discovered that there have been almost 6000 sexual harassment reports as of 2017-2018 (Winsor, 2019). Hence, the Equal Employment Opportunity Commission labelling the organisation as one that has “permitted a culture of sexual harassment and retaliation against individuals who complained about such harassment” (Conger, 2019). Additionally, an employee confirmed that their management threatened to beat there head in with a baseball bat due to the underperformance (Isaac, 2017). As a result of these incidents, it was only valid that previous CEO and cofounder Travis Kalanick was to resign from his position.

Why organisation culture and institutional theory is relevant to Uber

Institutional theory emphasise that organisation structures are ‘adaptive vehicles’ shaped by participants (Scott, 1987). Supporting this is Dacin, Goldstein and Scott (2002) suggestion that it is the weakening and deinstitutionalisation of a set of beliefs and practises that leads to the creation of new ways in institutions. Specifically, the concept of deinstitutionalisation is what strongly relates to the change in Ubers formal institutional structure. If an organisation violates the demands the institutional environment imposes on them, it will be the cost of their legitimacy and thereby its operations (Sjoqvist, 2019). This is in fact a consequence of Ubers poor institution structure resulting in their loss in finances and consumer trust. The weakening and extinction of Ubers beliefs and practises is reflected in their most current management and ethical issues both within and outside the workplace environment. Therefore, institutional theory is essential in explaining the crippling of Ubers organisation structure and hence explain the various reasons why the company has abandoned the many ethical standards and expectations. According to Reiger and Roodt (2002), organisation culture is described as the elements of an organisation such as its structure, size, policies and style of leadership. Hence, focusing on the shared norms and expectations that influence the thinking and behaviour of members within the organisation (reference). Organisational culture is generally a broad concept that can relate and encapsulate a variety of concepts. However, it explains and recognises the

issues and crises faced by management and possible factors for its cause, hence being evident within Ubers organisational culture. This theory highlights culture exists regardless of recognition and holds a powerful force both through artefacts and symbols as well as internally through knowledge and skills. Therefore, being relevant in the exploration of Ubers poor organisation culture which can be supported through the several sexual harassment and bullying claims. As well as recognising the actions and decisions of Ubers management that may be the cause for such adverse leadership failure (Anajoul, 2020).

Describe the organisational theories

Organisational Culture According to Sempane, Reiger and Roodt (2002), organisational culture is described as the elements of an organisation such as its structure, size, policies and style of leadership. It is the combination of collective and group assumptions and values that are shaped by external adoption and internal integration and all together form the environment of the organisation (Schein, 1985). When a culture fails to follow their social norms and ethical standards the consequences can be heavily reflected in the performance of the business. Therefore, an organisation should be built on realistic and sustainable values and morals in order for stakeholders to work towards shared organisational goals and objectives. Further complementing the above concepts, Cooke and Rousseau (1988) depict organisational culture as something an “individual must accommodate in order to fit in, and in certain cases survive”. This paper is greatly appreciated in the aspect where it sheds light on different aspects of organisation culture as well as explaining the motives and goals behind them.

The one way to effectively analyse and understand organisation culture theory is through the framework created by Schein in 1985, where he depicted and recommended a variety of dimensions if culture within organisations (Schein & Scheiner, 2016). Schein called these layers as ‘levels’, differentiating very obvious aspects that lay on the surface- “artefacts”; continuous strategies and philosophies that are beneath the artefacts- “espoused values” and at the core of the culture is the “basic underlying assumptions”, which forms the essence of the phenomenon, but where behaviour, beefs and values are unconscious (Schein & Scheiner, 2016). Institutional Theory

Institutional theory posits that the social context in which firms operate influence the behaviour in and of organisations, leading firms in an industry to adopt similar structure and practices (Hilliebrand, Nijholt, Nijissen, 2011). In this view, organisational structures are viewed as adoptive vehicles that are shaped in the response to the characteristics and commitments of participants, as well as, pressures and limitations from the external environment (Seznick, 1957). Hence, this allows management to determine and understand where the wrongdoings are coming from and what the causes of it was. This can then determine if the failing of social norms and practises are the reasons behind the destruction of established institutional structures (Dacin, Goldstein & Scott, 2002). The failure of the social norms and cultural practises within an organisation will not only result in the poor performance of the organisation financially and competitively but will also impact the employees of the institution ultimately resulting in the downfall of the firm as a whole.

Furthermore, Scott (1987) identifies that the concept of institutions and institutionalisation have been defined in several ways as for each and every organisation the outcome of the institution culture and environment differs. Institutional theory strongly highlights the importance of value within an organisation and its strengthening overtime. Additionally, when looking into institutional theory the key concept of denationalisation is referred to as the “process by which institutions weaken and disappear” (Dacin, Goldstein & Scott, 2002). Hence, further emphasising when an organisation falls to follow its social norms and expectations, denationalisation is also another negative consequence that follows.

Apply the theories to Uber

Cooke and Szumal (2000) define an aggressive/defensive culture as one that encourages participants to approach tasks in a forceful way, to protect their status and security. This example of an organisation culture helps to understand Ubers organisational failure and lack of ability to meet the norms and social expectations of society. It also highlights Ubers management failure as a major cause behind its cultural crisis. As we know, organisations influence the decision-making process, behaviours and leadership of an organisation, hence this can be reflected through Ubers former CEO Travis Kalanick and his poor management style and leadership. The sexual harassment claims, the bullying, the intellectual property lawsuit is all attributable to former CEO Travis Kalanick’s brash and admit no errors leadership style (Kumari & Sharma, 2019). Kalanick’s failure is to invest time to grow and

improve his employees, lack of leadership skills and quick temper are all influences as to why Ubers reputation has lowered as well as the resignation of his position as CEO. This can be identified through the aggressive threats from managers due to employee performance as well as video evidence of Kalanick yelling at one of the Uber employees. This nature of leadership style Kalanick presents can be reflected through his motto of “always be hustling” with the belief that “anything must be done to get on top” (Forgione, 2020) hence creating a negative and toxic workplace culture resulting in the dissatisfaction of employees, the workplace and society.

Additionally, the behaviours and style of management set out by Travis Kalanick can then be reflected through employee behaviour and their shameful sexual harassment of Uber passengers as well as the cover up of scandals to save the reputation of the organisation. According to a report by CCN, at least 103 Uber drivers have been accused of sexual abuse by clients in the USA in the past 4 years (Kumari & Sharma, 2019). Furthermore, Ubers disgusting management style can be evident through its HR department and the silencing of the victims of harassment and bulling within the workplace because “they didn’t feel comfortable punishing them” (Tait, 2020). Organisational culture theory helps to depict the toxic and vile workplace culture Uber has instilled into its management in order to boost its financial performance, disregarding the importance of a positive workplace culture.

Institutional theory is another organisational theory that offers great insight and perspective of Ubers workplace culture and environment. Institutional theory is viewed as an adoptive vehicle shaped in reaction to the characteristics and commitments of participants as well as the influences and constraints from the external environment (Scott, 1987). When an organisation fails to properly institutionalise their business, the infused values and cultural meaning begins to diminish and disappear. This can be evident through the various scandals faced by Uber negatively effecting both the internal and external environments. In June 2017, Uber fired over 20 employees for bad behaviour due to 215 complaints regarding harassment, bullying, discrimination and unprofessional behaviour (Taylor & Goggin, 2017). Hence, portraying the type of culture employees have adapted to within Ubers workplace environment, with so many complaints and misconduct it clear that this is a growing culture for Uber.

Additionally, Uber has also set out to pay 4.4 million dollars to alleged gender discrimination victims and strengths tits defence against sexual harassment (Siddiqui, 2019). The Equal Employment Opportunity Commission has also stated in 2017 that “Uber permitted a culture of sexual harassment and retaliation against individuals who complained about such harassment”. This can hence highlight that Uber has created an institutional culture around harassment and unethical behaviour in order to boost the performance of the firm both financially and competitively disregarding other crucial factors to the success of a business.

Limitations of the organisation theories

Although the theories play a crucial role in explain and highlighting the issues faced with Ubers workplace both internally and externally, it is also important to note the limitations associated with both organisation culture and institutional theory.

As we know Arnold (2005) indicates that organisational culture is the distinctive norms, beliefs and principles and way of behaving that combine to give each organisation its distinctive character. However, it becomes confusing to understand the certain norms, beliefs and behaviours Uber contributes, as evident through the several ethical issues and cultural problems within the workplace. Organisational culture can emphasis the many problems face by Uber however it becomes limited when it comes to answering the questions as to why it is occurring as every organisation is highly different and unique. Therefore, being an outside observer of Ubers harassment claims and bullying is a limitation as one doesn’t truthfully know what is happening within the organisation. Furthermore, the authors (Schein & Scheiner, 2016), imply that the elements and factors with Ubers culture are very difficult to cognitively interpret and understand as employees may have created their own expectations, values and behaviours hence only leaving room for assuming which in itself is a limitation.

Similarly, institutional theory has also been criticised for its limitations in explaining the reasons as to why institutions fail to run successfully and how they can lead to deinstitutionalisation. To fully comprehend institutional change, the researcher is in need of the behavioural and procedural changes within the organisation or else institutional theory isn’t enough to explain the issues and courses of change within Ubers workplace. This hence falls to explain why former CEO Travis Kalanick imposed a poor leadership and influenced his workplace to also execute similar unethical behaviours. Furthermore, institutional theory

also is limited in the fact that it fails to explain how institutional change could have occurred within Ubers institutional culture.

Differences in perspectives For organisational culture Hofstede, et al. (1990) perspective is that culture is thought to be difficult to change or maintain because of diversity, ambiguity accountability reasons. However, Giorgi, Lockwood & Glynn (2015) suggests that due to socialisation among employees and informal rules implemented by managers, it is possible to maintain and change culture. This can be highlighted through Ubers poor culture and workplace environment during the time when Travis Kalanick was CEO. Employees of this organisation begun to collaborate together and hence hold similar beliefs and values which have become a norm in the workplace. In this case, the harassment, bullying and discrimination complaints have addressed this culturally accepted way of behaving within Ubers workplace. However, with the resignation of former CEO Travis Kalanick, the management of Uber and its employees would be easier to change and hence create a positive workplace if the right management is employed.

In terms of institutional theory, it is also highlighted that government laws and regulations have profound effects on an organisations market structure (ScienceDirect, 2018). When placed in the context of Uber, it can be clear how the laws in certain counties can highly change the success of the business. International countries using Uber have had to decide whether they should take measures and impose regulations during the public scandals of Ubers unethical and socially unacceptable behaviour. These strict regulations can be identified though India prohibiting of Ubers operations in their country after the rape scandal in Delhi in 2014 (Wong, 2017).

Conclusion In conclusion, the theories explained and examined within this essay have helped to identify and understand the current management issues being faced by Uber both within its workplace and outside. It has helped to determine the culture of the organisation and how it is one which lacks ethical and socially responsible practises. However, it is important to note that there are limitations within the organisation culture and institutional theory, but they still provide

immense benefit to current and future managers to determine what type of leadership and culture the organisations should have.

An important lesson that can be learnt from this case on Uber is that the leadership style that the managers or CEO imposes plays some detrimental influences on employees’ behaviour and stakeholder perception of the business. As Ubers management and culture comes from the top down, it is crucial for management to provide a culture of respect, honesty and positivity. Management within Uber must respect all employees regardless of mistakes and poor performance as well as discourage any form of unethical practises like harassment and discrimination. Additionally, another lesson which can be learnt from Uber in relation to the chosen organisational theories is that organisational culture shouldn’t just solely focus on the financial and competitive success of the business. It is essential that senior managers initiate core values that help build the relationship and trust between employees in order to encourage them to perform more effectively and efficiently within the execution and adoption of these practises

REFERENCES Arnold, J. (2005). Work Psychology: Understanding Human Behaviour in the Workplace, 4th edition. Pearson.

Conger, K. (2019). ‘Uber Settles Federal Investigation into Workplace Culture’, The New York Times. https://www.nytimes.com/2019/12/18/technology/uber-settles-eeoc-investigationworkplace-culture.html

Cooke, R. A., Rousseau, D. M. (1988). Behavioural Norms and Expectations: A quantitative approach to the assessment of organisational culture. Group and Organisation Studies, Vol. 13, No. 3, pp. 245-273. DOI:http://doi.org/10.1177/105960118801300302

Cooke, R. A., Szumal, J. L. (2000). Using the organisational culture theory inventory to understand the operating cultures of organisations. Handbook of Organisational Culture and Climate, vol. 1, pp. 147- 162.

Dacin, T., Goodstein, J. & Scott, W. R. (2002). Institutional Theory and Institutional Change: Introduction to the Special Research Forum. The Academy of Management Journal. Vol. 45, No.1, pp. 45-56. DOI: http://doi.org/10.2307/3069284.

Dudovisky, J. (2018). Uber Organizational Structure. Business Re...