Chapter 3 : Organisational Culture

1 Defining organisational culture
1.1 Definition
Culture- The way we do things around here
- The sum total of belief, knowledge, attitudes, norms and customs that prevail in an organisation

1.2 Components of culture
Key elements :-
(i) norms guide people’s behaviour
(ii) symbols or symbolic action
(iii) share value and beliefs

2 The factors that shape the culture of the organization
Six major influences on the culture :-
(i) size(how large-physical size, employee numbers)
(ii) technology(how advanced-product/productive process)
(iii) diversity(how diverse-product range, geographical spread/culture)
(iv) age(how old-experience)
(v) history(what worked in past-willing learn from mistakes)
(vi) ownership(is owned by sole trader-number of institutional shareholder)

Others influences :-
- individual initiative
- risk tolerance
- clarity of direction
- integration between groups
- rewards system
- conflict tolerance
- communication patterns
- formalization of clothing and office layout
- kind of people employed


3 Writers on Culture
3.1 Schein
1. Schein argues the first leaders of the company create the culture of an organization
2. Once the culture exists, attributes/criteria for the later leaders are determined by the culture.
3. 3 levels of culture:
a) Artefacts- can be easily seen, Eg. The way people dress
b) Espoused values-strategies and goals of organization
c) Basic assumption and values-unseen, mainly at unconscious level, difficult to identify

3.2 Handy
4 cultural types by Handy:
1. Power Culture – one major source of power of influence, usually owner. Usually consists few procedures and rules of a formal kind
2. Role Culture – people describe their jobs by its duties, not by its purpose. Bureaucratic, structure determines authority and responsibilities of individuals.
3. Task Culture –people describes their positions in terms of the results they are achieving. Eg, teams established to achieve specific tasks, Eg; project teams
4. Person Culture-structure and culture built around individuals. Educated and specialists –solicitors, consultants and academic researchers who have come together because of common interest, may use common office services but generally operate independently.

3.3 Hofstede
1. Study for National Differences between over 100,000 IBM employees in different region of the world
2. Five traits/dimensions of culture:
a) individualism vs. collectivism – cohesive/individualistic
b) uncertainty –France & Japan use bureaucracy to reduce uncertainty
c) power distance-tolerance of difference in power
d) masculinity & femininity – distinction between role of gender
e) confucianism & dynamism – attitude to change over the long term