DP World
Organizational culture is one of the most significant aspects that determine whether the organization will achieve its goals and objectives, thereby influencing organizational performance. Consequently, it is critical for companies like DP World to develop robust cultures that will support their goals and objectives. Tharp argues that organizational culture is a critical term that refers to series of a group’s shared basic assumptions acquired when solving internal integration and external adaptation problems, have performed perfectly enough to be considered valid and, thus, to be passed to new members as the suitable method to feel, think, and perceive regarding those problems (Tharp, 2009, p. 5). Therefore, organizational culture refers to the pattern of practices, expectations, and values that guide and inform team members’ actions. Consequently, DP World has built up a robust culture since its humble inception at Dubai’s Port Rashid in 1972 to its current status as a regional leader and global player with more than fifty thousand (50,000) employees in one hundred and fifty (150) operations globally (DP World, 2021). Therefore, the analysis reveals that DP World has a market culture that focuses on getting the job done, achievement competition, and results-orientation. However, it also has some aspects of clan culture, including mentoring and nurturing.
Organizational culture at DP World is susceptible to impact from a myriad of internal and external factors. For example, leadership, workforce composition, resources/technology, value statement/codes of ethics/, and mission statement are some significant examples of internal influences on DP World’s organizational culture. In addition, DP World’s leadership has played a crucial role in shaping the organizational culture since its inception. The company states that it has developed a workplace environment that recognizes performance, collaboration, and innovation as critical aspects of its culture (DP World, 2013). It adds that it aims to become an industry leader through the formal management of an innovative, performance-related driven culture. Consequently, promoting the organizational culture entails ensuring the leadership styles align to the firm’s leadership pillars. In addition, the firm’s more than fifty-thousand employees have also significantly impacted the organizational culture since they are the elements with a prominent role in organizational culture development. Finally, DP World’s mission statement, “to maximize shareholder value through leveraging our portfolio of world-class infrastructure assets, strengthening global supply chains and generating sustainable economic growth,” also influences the creation of a market organizational culture. These factors have combined to shape a market culture in a company that believes growth is a critical success measure. Alternatively, external factors related to the political, economic, social/cultural, and technological aspects also have a significant bearing on DP World’s market-based organizational culture.
The robust organizational culture (mostly market culture with aspects of clan culture) has enabled the organization and its employees to weather and overcome the challenges posed by the COVID19 pandemic, which affected global trade, especially the logistics industry. For example, DP World increased its gross capacity from 91.8 million TEU (twenty-foot equivalent unit) in 2019 by 1.5 million TEU to 93.3 million TEU (DP World, 2020). This increase revealed resilience even as the company’s Return on Capital Employed (ROCE) declined from 7.5% in 2019 to 6.0% in 2020. Group Chairman and CEO of DP World, Sultan Ahmed Bin Sulayem, suggested that “Our ability to adapt and change has been the key to our success, and we must continue to evolve for continued growth” (DP World, 2021). Consequently, the firm’s market culture was vital to its resilient 2020 financial results. As a result, the firm’s revenue increased by eleven percent (11%) from 2019 to $8.533 billion in 2020. Additionally, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew by 0.4% to $3 .319 billion. Therefore, organizational culture has significantly influence DP World’s financial performance in the last two financial years.
Recommendations
One of the primary recommendations for DP World to strengthen its organizational culture relates to how it handles its workforce. The market culture adopted by DP World can have significant negative implications on its employees, despite the tremendous financial and productivity benefits. It is a results-oriented organizational culture with a focus on getting the job done, achievement competition. Consequently, this approach can neglect the needs of the employee, especially the physiological needs, safety needs, love, and belonging needs, esteem needs, and self-actualization needs as identified by Maslow. Therefore, this report proposes that DP World should integrate more aspects of the clan culture into the organization backed by transformational leadership style within the next one to two years (1-2 yrs.) to improve employee welfare, satisfaction, and safety thereby enhancing employee recruitment and retention. The transformational leadership style is proven to enhance a clan culture through its four elements of individual consideration, intellectual stimulation, inspirational motivation, and idealized influence (Atkinson & Pilgreen, 2011). However, these changes are expected to cost the firm as they require investment in employee safety and welfare, such as paid leave, safe working conditions, and training and development.
Another critical recommendation for DP World relates to constant engagement with employees all year-round to ensure that they are geared towards the organizational mission, vision, goals, and objectives. Communication is one of the most crucial mediating factors in the development of cultures as it enables the passing of values, beliefs, and other qualities from one individual to another, either verbally, visually, or non-verbally. The firm’s management should schedule regular meetings with employees, most preferably weekly or monthly meetings, to reaffirm commitment to the firm’s goals and objectives. These meetings ensure that the organizational culture that will develop revolves around and support’s the organization’s goals and objectives. Additionally, they also provide management with an opportunity to influence how the culture develops by communicating with employees directly. This action can be implemented within six months at minimum costs to DP World compared to the potential benefits of increased productivity.
Conclusion
This research study is an in-depth analysis of the impact of organizational behavior on the performance of the DP World organization. The study delves deeper to ascertain the behavioral structure of the organization and how it, directly and indirectly, impacts the firm’s performance both from an economic and productivity perspective. In a nutshell, the study determines the correlation between organizational behavior and organizational performance. Organizational culture is one of the most significant aspects that determine whether the organization will achieve its goals and objectives, thereby influencing organizational performance. Organizational culture refers to the pattern of practices, expectations, and values that guide and inform team members’ actions. Consequently, DP World has built up a robust culture since its humble inception at Dubai’s Port Rashid in 1972 to its current status as a regional leader and global player with more than fifty thousand (50,000) employees in one hundred and fifty (150) operations globally. Organizational culture at DP World is susceptible to impact from a myriad of internal and external factors. For example, leadership, workforce composition, resources/technology, value statement/codes of ethics/, and mission statement are some significant examples of internal influences on DP World’s organizational culture. Additionally, organizational culture has significantly influenced DP Worlds’ financial performance in the last two financial years. Therefore, one of the primary recommendations for DP World to strengthen its organizational culture relates to how it handles its workforce. Finally, another critical recommendation for DP World relates to constant engagement with employees all year-round to ensure that they are geared towards the organizational mission, vision, goals, and objectives.
References
Atkinson, T. N., & Pilgreen, T. (2011). Adopting the Transformational Leadership Perspective in a Complex Research Environment. Research Management Review, 18(1), 42-63.
DP World. (2013). DP World: Our Strategy in Action, People and Learning. https://ar.dpworld.com/2013/people-and-learning.html
DP World. (2020). DP World Annual Report and Accounts 2020. DP World | Smart Trade & Logistics | Parks & Economic Zones | Ports & Terminals. https://www.dpworld.com/-/media/project/dpwg/dpwg-tenant/corporate/global/media-files/investor-relations/esg/dpw-annual-report-2020.pdf?rev=191f1aee97bd4a90b03f666054426071
DP World. (2020). Our Business Strategy. DP World | Smart Trade & Logistics | Parks & Economic Zones | Ports & Terminals. https://www.dpworld.com/investor-relations/strategy
DP World. (2021). Who we are. DP World | Smart Trade & Logistics | Parks & Economic Zones | Ports & Terminals. https://www.dpworld.com/about-us/who-we-are
DP World. (2021, March 18). DP World announces resilient financial results for 2020. https://www.dpworld.com/news/releases/dp-world-announces-resilient-financial-results-for-2020/
Tharp, B. M. (2009). Defining “culture” and “organizational culture”: From anthropology to the office. Interpretation a Journal of Bible and Theology, Harworth, 7.