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Organizational culture

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(Redirected from Corporate culture)

Organizational culture comprises the attitudes, values, beliefs, norms and customs of an organization. Whereas organizational structure is relatively easy to draw and describe, organizational culture is less tangible and diffcult to measure.

There have been numerous studies in this area.

Contents

Influences on organizational culture

National culture is an important influence in culture. Geert Hofstede demonstrated that there are regional differences, and the following broad categories are suggested for Europe:

  • Germanic
  • Scandinavian
  • Anglo-Saxon
  • Latin

The members of the organisation bring their own individual experiences, beliefs and values.

Work-groups within the organisation have their own interactions and behaviours which impact on the wider organisation.

Task culture can be imported. That is to say, for example, that computer technicians will have expertise, language and behaviours gained independently of the organisation, that set them apart from colleagues, and yet that influence the culture of the organisation.

Senior management may determine a Corporate Culture. They may wish to impose corporate values and standards of behaviour that specifically reflect the objectives of the organisation.

Strong/Weak cultures

Strong culture is said to exist where staff respond to stimulus because of their alignment to organisational values.

Conversely, there is Weak Culture where there is little alignment with organisational values and control must be exercised through extensive procedures and bureacracy.

Where culture is strong - people do things because they believe it is the right thing to do - there is a risk of another phenomenon, Groupthink. This is a state where people think so alike that they do not challenge organisational thinking, and there is a reduced capacity for innovative thought. This could occur, for example where there is heavy reliance on a central charismatic figure in the organisation, or where there is an evangelical belief in the organisation's values.

By contrast, bureacratic organisations may miss opportunities for innovation, through reliance on established procedures.

Innovative organisations need individuals who are prepared to challenge the status quo - be it groupthink or bureaucracy, and also need procedures to implement new ideas effectively.

Classifying organisational culture

Several methods have been used to classify organisational culture. Some are described below:

Hofstede

Hofstede demostrated that there are national and regional cultural groupings that affect the behaviour of organisations.

Hofstede identified five characteristics of culture in his study of national influences:

  • Power distance - The degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.
  • Uncertainty avoidance reflects the extent to which a society accepts uncertainty and risk.
  • individualism vs collectivism - individualism is contrasted with collectivism', and refers to the extent to which people are expected to stand up for themselves, or alternatively act predominantly as a member of the group or organisation.
  • Masculinity vs femininity - refers to the value placed on traditionally male or female values. Male values for example include competitiveness, assertiveness, ambition, and the accumulation of wealth and material possessions.
  • Long vs short term orientation

Deal and Kennedy

Deal and Kennedy defined organisational culture as the way things get done around here. They measured organisations in respect of:

  • Feedback - quick feedback means an instant response. This could be in monetary terms, but could also be seen in other ways, such as the impact of a great save in a soccer match.
  • Risk - represents the degree of uncertainty in the organisation's activities.

Using these parameters, they were able to suggest four classifications of organisational culture:

The Tough-Guy Macho Culture. Feedback is quick and the rewards are high. This often applies to fast moving financial activities such as brokerage, but could also apply to policemen or women, or athletes competing in team sports. This can be a very stressful culture in which to operate.

The Work Hard/Play Hard Culture is characterised by few risks being taken, all with rapid feedback. This is typical in large organisations which strive for high quality customer service. They are often characterised by team meetings, jargon and buzzwords.

The Bet your Company Culture, where big stakes decisions are taken, but it may be years before the results are known. Typically, these might involve development or exploration projects, which take years to come to fruition, such as could be expected with oil exploration or aviation.

The Process Culture occurs in organisations where there is little or no feedback. People become bogged down with how things are done not with what is to be achieved. This is often associated with bureaucracies. Whilst it is easy to criticise these cultures for being over cautious or bogged down in red tape, they do produce consistent results, which is ideal in, for example, public services.

Charles Handy

Handy (1985) popularised a method of looking at culture which some scholars have used to link organizational structure to Organizational Culture. He descibes:

  • a Power Culture which concentrates power in a few pairs of hands. Control radiates from the centre like a web. Power Cultures have few rules and little bureaucracy; swift decisions can ensue.
  • In a Role Culture, people have clearly delegated authorities within a highly defined structure. Typically, these organisations form hierarchical bureaucracies. Power derives from a person's position and little scope exists for expert power.
  • By contrast, in a Task Culture, teams form to solve particular problems. Power derives from expertise so long as a team requires expertise. These cultures often feature the multiple reporting lines of a matrix structure.
  • A Person Culture exists where all individuals believe themselves superior to the organisation. Survival can become difficult for such organisations, since the concept of an organisation suggests that a group of like-minded individuals pursue the organisational goals. Some professional partnerships can operate as person cultures, because each partner brings a peculiar expertise and clientele to the firm.

Elements of culture

Johnson (1988) described a cultural web, identifying a number of elements that can be used to describe or influence Organisational Culture:

  • The Paradigm: What the organisation is about; what it does; its mission; its values.
  • Control Systems: The processes in place to monitor what is going on. Role cultures would have vast rule books. There would be more reliance on individualism in a power culture.
  • Organisational Structures: Reporting lines, hierarchies, and the way that work flows through the business.
  • Power Structures: Who makes the decisions, how widely spread is power, and on what is power based?
  • Symbols: These include the logos and designs, but would extend to symbols of power, such as car parking spaces and executive washrooms!
  • Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary.
  • Stories and Myths: build up about people and events, and convey a message about what is valued within the organisation.

These elements may overlap. Power structures may depend on control systems, which may exploit the very rituals that generate stories.

Figures in organizational culture

Sources

Kotter, John. 1992 Corporate Culture and Performance, Free Press; (April 7, 1992) ISBN: 0029184673

Johnson, G. (1988) "Rethinking Incrementalism", Strategic Management Journal Vol 9 pp75-91

Hofstede, G. (1980) Culture's Consequences: International Differences in Work Related Values, Beverley Hills, CA, Sage Publications

Handy, C.B. (1985) Understanding Organisations, 3rd Edn, Harmondsworth, Penguin Books

Deal T. E. and Kennedy, A. A. (1982) Corporate Cultures: The Rites and Rituals of Corporate Life, Harmondsworth, Penguin Books.

Black, Richard J. (2003) Organisational Culture: Creating the Influence Needed for Strategic Success, London UK, ISBN: 158112211Xlt:Organizacinė_kultūra

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