Stability and Flexibility of the Organizational Culture 2 after the Transition of Economy — The Case of Serbia 3

The main goal of this paper is to address how quickly and to what extent are international 12 organizational cultures, brought by the world companies after the process of privatization, being 13 implemented in a single monolithic culture. For this purpose was adopted and applied Denison 14 model of organizational culture, which has been chosen because it emphasizes the need for balance 15 between requirements for organization’s stability demands and its required flexibility. Considering 16 that a different organizational culture reflects systematic change of an entire organization, this 17 paper focuses on exploring the differences in culture dimensions among companies in domestic 18 and foreign ownership in Serbia. A sample of 1000 employees was statistically processed. Changes 19 in organizational culture tend to be relatively slow. The results confirm that organizational culture 20 is a complex working environment, concerning organizational values, which represents a 21 fundamental element of organizations. Given that the process of company ownership changes 22 occurred fifteen years prior to the research implementation, obtained results show effects of 23 interaction between national and organizational culture in this, relatively short, period of time. 24 Obtained results can be generalized to countries that are passing or have recently passed a 25 transition, and are similar in cultural characteristics. 26


Introduction
Modern age is characterized by new economic paradigms, information technologies, competition in price and transport speed, demands for expanded range of services of a "post-industrial" society, privatization of companies and development of state regulations, global market, new social movements (feminism, accelerated migration, social networks).All of the above affects the organizational culture of modern industrial systems.
Organisational challenges are related to the turbulent complex environment and the ever-changing world, which makes predictions difficult [1] (p. 73 ).Most managers and employees nowadays work in a climate that can be best described as "temporary".The challenge in establishing appropriate organizational culture in terms of permanent and faster changes is reflected in finding the balance between demands for organization consistency and its adaptability to changes.In order to succeed in the long run modern organization has to be proactive to change and to adapt quickly to what the future holds and that makes flexibility the most desirable global trait of today.Successful organizations use more ideal forms of organizational structures and processes that enable them to become organizationally more flexible and adaptable and to generate amazing products and services.That enables them to keep more proactive control of their future, rather than to wait and react to changes in their market [2] (p.139).However, we cannot ignore the fact that it is equally important for an organization to develop elements that allow stability.Stable organizations with a high degree of unity are more likely to survive in times of crisis.Realization of flexibility while maintaining the stability is the organizational culture formula, which is believed to bring prosperity and sustainability to organizations in the long term.Because of these desirable characteristics of modern organizations, we choose Denison organizational culture model, based on four traits of organizational cultures; involvement, consistency, adaptability, and mission [3] (p. 204).Mission and consistency in work contribute to stability, while the involvement and adaptability bring desired flexibility to organizations.Numerous studies have tested Denison organizational culture model in a specific pattern.Thus, for example, Kokina and Ostrovska [4] in their research on a sample of 63 employees working in the X region Council, involved in the survey find that all factors, which Denison offers as external and internal factors affecting organizational culture, are important for the work of region municipality and essentially affect its efficiency.
Because of its proven effect on business, organizational culture has become significantly represented in the hierarchical structure of problems with companies' organization.
Organizational culture in enterprises in Serbia has long been exclusively influenced by factors of national culture.During the last fifteen years, as a result of transition and accelerated privatization, there has been a sudden influx and influence of other national cultures.
Companies in transition economies are faced with far greater challenge because drastic changes in an organization's external environment require major changes in its internal organizational structure.Johns (2006) [5] (p.242) states explicitly that 'national culture constrains variation in organizational cultures'.
For companies in Serbia, the situation has become complicated by the process of economic, political and social long lasting transitions that set requirements to organizations to increase effectiveness and efficiency.The resulting changes in the functioning of economic systems require a comprehensive change of organizational culture and this work is an account of those changes and attempts to measure Denison model and the differences that exist among the workers in Serbia depending on whether they are employed in domestic or foreign company.

Factors of organizational culture according to Denison model
Figure 1 organizes these four traits into a framework designed to acknowledge two contrasts: the contrast between internal integration and external adaptation and the contrast between change and stability.For example, involvement and consistency have as their focus the dynamics of internal integration, while mission and adaptability address the dynamics of external adaptation.This focus is consistent with Schein's [6] (p. 111) observation that culture is developed as an organization learns to cope with the dual problems of external adaptation and internal integration.In addition, involvement and adaptability describe traits related to an organization's capacity to change, while consistency and mission are more likely to contribute to the organization's capacity to remain stable and predictable over time.High performing organizations have the mission that tells employees why they do the work they do, and how the work they do each day contributes to the organizations goals.Smith et al. (2003) in their work emphasize studies that show that, after formulating and presenting the views of the mission, realization of goals has been increased by 50% [8] (p.327).A clear planning and vision, i.e., shared picture, which is accepted by every employee in the implementation of change is crucial in this process otherwise financial and individual consequences of the expansion will be disastrous (Belasco 1990) [9] (p.404).Unfortunately, the research shows that nearly 40% of employees don't know, or don't understand, the mission of their companies [10] (p.96).
Another important factor that brings stability to an organization is consistency in its work.
Although the flexibility and speed of work have been considered as the sources of competitive advantage in a dynamic environment, research development strategies see consistency (instead of aggression or full speed) as the necessary condition for the survival of a company (e.g.Barnett & Hansen 1996; Sheth and Sisodia 2002) [11] (p. 2).According to Denison model, consistency means defining values and systems that are the basis of a strong culture.The indices of consistency trait are: coordination and integration, agreement and core values [7] (p.2-10).By using established business practices, a company develops efficient processes and routines that support its long-term goals and strategies through knowledge which remain in the organization, regardless of the individual's departure.Also, sharing core values and expectations among employees will facilitate resolution of disputes and other efforts in the functioning of an organization.Since conflict can prevent you from giving your best, work in accordance with your values can be a strong source of strength and motivation [12] (p.295).
Aspects of employee involvement, in accordance with Denison model, have been seen through empowerment, personal development and team orientation.Effective organizations empower their people, build organizations as teams and develop human resources at all levels [13] (p. 100).Those individuals, who receive higher levels of inducements from their organization, are likely to be more strongly committed to change than those who receive lower levels for two reasons.
First, the experience of receiving abundant inducements from the work context will help employees to bounce back from stressors and thus to feel positive emotions during change.As a result, they will be more willing to invest their resources in committing to the success of the change [14] (p.730).
Employee involvement, centered on building employee capabilities and empowering people to act in accordance with those capabilities, is a powerful element of culture that has strong relationships with financial growth in this context [15] (p.21).
Adaptive companies are considered to be those which continuously monitor their environment (customers and competitors), respond quickly to current trends and requirements and anticipate future developments on the market, which enables them to be successful and to have a more proactive control over the future.According to Denison model, adaptability means translating the demands of the business environment into action.The indices of the adaptability trait are: creating change, customer focus and organizational learning [7] (p.[2][3][4][5][6][7][8][9][10][11][12].Similarly, Ramon and Koller [16] (p.843) explain organizational adaptive capability " as a dynamic process of continuous learning, which permits an increase in firm innovation, leading to the potential for the company to create the change through innovation".

Methodological hypothetical framework
In order to present the state of organizational culture in Serbia, we have conducted a research according to Denison questionary [7].The survey was conducted by technique of written interviewing.A questionnaire in the form of scale of Likert type for measuring statements (1completely disagree, 2-partly disagree, 3-neither agree nor disagree, 4-partly agree, 5-completely agree), constructed according to Denison model [7], was used for data collection.
The survey was conducted in direct contact with respondents as well as via social network Facebook.Data were collected throughout 2015.The data were analysed and interpreted using programs IBM SPSS Statistics 21 and EXCEL (MS Office).In doing so, we described data in a descriptive manner, and to determine differences in the implementation of Denison model dimension for domestic and foreign companies, we used the t-test for independent samples.The survey started from the basic research hypotheses: H1.There are differences in the organizational culture of enterprises in Serbia in relation to the ownership factor, in terms of whether they are domestic or foreign-owned.

Research sample
The study included 1000 respondents employed in domestic and foreign companies in 29 cities in Serbia.Sample description is given in tables 1 and 2.   The results shown in the Table 3 and Figure 2 show that the average value complies with certain aspects relating to the mission, between 3-neither agree nor disagree, 4-partly agree.The least mean values consistent with the statements of the mission are shown in the Table 4, it can be observed that the statement towards a vision, as a motivator for employees, is largely indifferent both in companies in domestic and foreign ownership.

Statement Domestic Foreign
There is a long-term purpose of the company existence as well as its There is a clear mission that gives meaning and direction to our work 3,87 3,91 Our strategic direction is clear to me 3,77 3,71 Independent Samples t-test has been applied to ratings on compliance with paragraphs related to the mission of companies owned by domestic owners as well as of those owned by individuals.The result of Independent Samples t-Test, shown in the Table 6, shows that there are some significant value differences between local and foreign companies regarding following statements: • There is widespread agreement about goals

•
The leadership has "gone on record" about the objectives we are trying to meet

•
We continuously track our progress against our stated goals The difference indicates a statistically significant higher level of compliance with these statements in foreign companies.

Consistency
The following statements have been observed: •

The leaders and managers do what they say
• There is a characteristic management style and a distinct set of management practices

•
There is a clear and consistent set of values that governs the way we do business

•
Ignoring core values will get you in trouble

•
There is an ethical code that guides our behaviour and tells us right from wrong

•
When disagreements occur, we work hard to achieve "win-win" solutions • There is a "strong" culture

•
It is easy to reach consensus, even on difficult issues and key issues

•
There is a clear agreement about the right way and the wrong way to do things Perceptions of consistency in domestic and in foreign-owned companies have been shown in the Table 7 and in the Figure 3 indicating that all the answers are in the interval between 3neither agree nor disagree and 4 -partly agree.The least mean values consistent with the statements related to consistency are shown in the Table 8.It can be seen that the lowest level of agreement is related to the statement "People from different parts of the organizational share a common perspective."The degree of consensus obtained is: neither agree nor disagree.The highest average levels of agreement with statements in terms of consistency are shown in the Table 9.The closest value 4 -partly agree (3.88) is related to the statement, "Our approach to doing business is very consistent and predictable" in domestic-owned companies and the statement, "When disagreements occur, we work hard to achieve ʼwin-winʼ solutions" in foreign-owned companies.The high degree of consensus in the domestic and foreign companies is related to the statement, "Ignoring core values will get you in trouble."Theobtained results show a difference in the way that the values of consistency with almost all statements are higher in companies with foreign ownership, except the degree of compliance with statement, "Our approach to doing business is very consistent and predictable", which is interpreted as continuity of work in local companies with the same national culture where workers easier predict what awaits them at work.
The result of Independent Samples T-Test, Table 10, shows significant differences among companies owned by domestic or foreign persons when it comes to the following statements: • There is a "strong" culture

•
Our approach to doing business is very consistent and predictable A higher degree of compliance with the position of a "strong" organizational culture is shown at foreign-owned companies.
A higher degree of compliance, related to the statement "Our approach to doing business is very consistent and predictable," is shown for domestic owned companies.This result is not unexpected if we think of the transition period.Turbulent period following the privatization of companies led the employees to a state of uncertainty since the new owners have introduced a large number of changes with the aim of companies streamlining.In addition, the foreign-owned companies are more responsive to market demands with their adjustments and that also conditioned some changes in operating procedures.

Involvement of employees
The following statements were observed: • Most employees are highly involved in their work

•
Authority is delegated so that people can act on their own

•
There is continuous investment in the skills of employees

•
The capabilities of people are viewed as an important source of competitive advantage

•
Problems seldom arise because we have the skills necessary to do the job The Table 11 and Figure 4 show the mean values of compliance with the statements related to domestic and foreign companies.The results show that it is not in one paragraph that describes the involvement of employees has a value that is close to 4 which is an agreement with the statement.
The result shows that the mean value of compliance in companies in domestic and foreign ownership are the lowest for the statements presented in the Table 12.Authority is delegated so that people can act on their own 3,24 3,13 It can be seen that the lowest values are obtained related to the involvement of employees.
Particularly low compliances are obtained in terms of planning, investment in development, delegation of authority and the following statement, "Problems seldom arise because we have the skills necessary to do the job." To analyze the difference in the involvement of employees in domestic and foreign companies, we applied the Independent Samples Test.Table 13 shows the test result.
There was a statistically significant difference in statement "Decisions are usually made at the level where the best information is available", so that there was a higher degree of compliance with this statement in foreign companies.We examined whether there was a significant difference between employee involvement in relation to the fact that they worked in domestic or foreign companies.
Table 13 shows the results of t-test for independent samples.In the first part of the table, the results of Levene's test of equality of variances are shown.The outcome of this test determines whether we have to use the t-value when the variance is equal (Sig> 0.05) or the t-value when equality of variance hasn't been implied (Sig<0.05)as is the case in the particular situation.There is a statistically significant difference in the attitude that decisions are usually made at the level where the best available information are.The mean value of compliance with this statement for foreign companies is 3.77, and for domestic companies is 3.54.This means that better decisions in terms of necessary information for their adoption, are made in foreign companies.For all other variables we didn't get a statistically significant difference on the involvement of employees in domestic and foreign companies.The result is interpreted in a following manner: Domestic and foreign companies in Serbia work so that there is a strong interaction of the organizational culture of a company and a national culture of its employees.
To examine the degree of adaptability in the surveyed companies, according to Denison 327 model, we studied the following statements: • • The way things are done is very flexible and easy to change The difference is expressed so that for the majority of statements, employees in companies with foreign ownership expressed higher level of agreement, Figure 5.The least mean values of consistence with statements relating to adaptability are shown in Table 15.The highest average rate of compliance with statements on adaptability are shown in Table 16.To analyze differences in adaptability of employees in domestic and foreign companies, we applied the Independent Samples Test.
Table 17 shows the result of Independent Samples Test.There is a statistically significant difference in attitudes: • New and improved ways to do work are continually adopted

•
Customer wants and needs are being mentioned and have directly influence on decisions and business

•
We encourage direct contact with customers by our people According to the authors Marković and Pavlović, "improvement of competitiveness of Serbia should be sought in shifting the focus on the microeconomic level of business decision-making and in the acceptance of new economic philosophy, ie.strategic management and innovation " [17] (p.89) which is recognized as the critical point of organizational culture of Serbian companies in presented results and the goal that has to be worked on in the future in order to improve the competitiveness of local companies.

Discussion and conclusion
The research has given results in the degree of satisfying organizational culture dimensions of companies in the domestic and foreign ownership relating to their flexibility, stability, internal integration and external orientation.The findings offer some valuable insights for further research on organizational culture.
Besides, it should be noted that smaller number of respondents come from companies that are foreign-owned, but their number is 141, which is sample large enough for the credibility of the research results.
From the conducted research we can conclude that Denison model can be applied to the organizational culture of companies in Serbia.
Foreign companies have brought their organizational culture and although people from Serbia work both in domestic as well as in foreign companies, significant differences are noted related to: • Mission: defining goals, goals agreement and their achievement monitoring • Consistency: the existence of "strong" organizational culture and approach to business predictability • Involvement: common decision-making at the level where the best information are available • Adaptability: improving working mode and focus on consumers All values obtained are between marks 3 -neither agree nor disagree, and 4 -partly agree.The lowest values obtained are related to employee involvement.It is shown in those areas where employees can make decisions, have input, and in those areas that are beyond an employee's scope of responsibility.
The highest values are obtained for definition of the mission.This means that employees are generally aware of the purpose of the existence of their company.It can be observed that the degree of consensus by all four investigated factors is higher in foreign companies operating in Serbia, which can be explained by the influence of different organizational cultures.
Entering the Serbian market, foreign companies have brought their organizational culture hitherto fairly stable form of functioning enterprises.Bearing in mind the fact that people from the same country with different organizational cultures work in domestic and foreign companies and that organizational culture implementation period has lasted for 15 years, the observed differences are significant in terms of implementation speed changesand can be generalized to countries that are passing or have recently passed a transition, and are similar in cultural characteristics.

Figure 1Theoretical
Figure 1Theoretical Model of Culture Traits

156 158 ••••••There is widespread agreement about goals 165 •••••
In order to measure awareness of employees about the mission, the following statements 157 were observed: There is a long-term purpose of the company existence as well as its development direction 159 Our strategy leads other organizations to change the way they compete in the industry 160 There is a clear mission that gives meaning and direction to our work 161 There is a clear strategy for the future 162 Our strategic direction is clear to me 163 Leaders set goals that are ambitious, but realistic • The leadership has "gone on record" about the objectives we are trying to meet • We continuously track our progress against our stated goals 167 People understand what needs to be done for us to succeed in the long run 168 We have a common vision of what the organization will be like in the future 169 • Short-term thinking seldom compromises our long-term vision • Leaders have a long-term thinking 171 Our vision creates excitement and motivation for our employees 172 We are able to meet short-term demands without compromising our long-term vision 173 Mean values for compliance with individual positions are given in the Table 3, in which 174 the meaning of the Levene's scale values are:1-completely disagree, 2-partly disagree, 3-neither agree nor disagree, 4-partly agree, 5-completely agree.

Figure 2 .
Figure 2. Differences in perceptions of mission in domestic and in foreign-owned companies

Figure 3 .
Figure 3. Differences in perceptions of consistency in domestic and in foreign-owned companies

Figure 4 .
Figure 4. Differences in perceptions of involvement in domestic and in foreign-owned companies they are part of a team Teamwork is used to get work done, rather than hierarchy Teams are our primary building blocks Each person can see the relationship between his job and the goals Authority is delegated so that people can act on their own There is continuous investment in the skills of employees The capabilities of people are viewed as an important source of competitive advantage Problems seldom arise because we have the skills necessary to do the job INVOLVEMENT Domestic Foreign Preprints (www.preprints.org)| NOT PEER-REVIEWED | Posted: 22 November 2017 doi:10.20944/preprints201711.0141.v1

Figure 5 .
Figure 5. Differences in perceptions of adaptability in domestic and in foreign-owned companies

Figure 6 .
Figure 6.Differences in dimensions of Denison model in domestic-owned and in foreign-owned companies.

Table 1 .
Description of the personal characteristics of the

Table 2 .
Description of the respondents' companies

Table 3 .
Statements about the mission in domestic and foreign companies

Table 4 .
The least mean values-mission

Table 5 .
The highest level of agreement, partly agree, is shown for the following statement, "There is a long-term purpose of the company existence as well as its development direction."

Table 6 .
Mission-Independent Samples Test

Table 7 .
Perceptions of consistency in domestic and in foreign-owned companies

Table 8 .
The least mean values-consistency

Table 9 .
The highest average compliance-consistency

Table 10 .
Consistency-Independent Samples Test

•
Decisions are usually made at the level where the best information is available•Information is widely shared so that everyone can get the information he or she needs when it's needed•Everyone believes that he or she can have a positive impact•Business planning is ongoing and involves everyone in the process to some degree • Cooperation across different parts of the organization is actively encouraged • People work like they are part of a team • Teamwork is used to get work done, rather than hierarchy • Teams are our primary building blocks • Work is organized so that each person can see the relationship between his or her job and the goals of the organization

Table 11 .
Statements on employee involvement in domestic-owned and foreign-owned companies

Table 12 .
The least mean values-involvement

Table 13 .
Involvement -Independent Samples Test

Table 14 .
Attitudes towards adaptability in domestic-owned and in foreign-owned companies Preprints (www.

Table 15 .
The least mean values-adaptability

Table 16 .
The highest average compliance-adaptability