Organisational Culture

All you need to know about organisational culture including Handy's cultures and Hofstede's national cultures.

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  • Created by: GeorgeB16
  • Created on: 18-10-16 18:36

Corporate Culture

The way we do things around here.

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Culture Factors

  • Shared values of a business
  • Beliefs and norms that affect every aspect of work life
  • Behaviours of typical day to day behaviour
  • Strength of a culture determines how easy or difficult it is to behave in a business
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How Culture Is Reflected

  • Way employees are recruited as one applicant may be deemed more suitable than the other
  • Way that visitors and guests are looked after
  • Way the working space is organised
  • Degree of delegation and individual responsibility
  • How long new employees stay within a business
  • How contracts are negotiated and agreed
  • Personality and style of sales force
  • Responsiveness and methods of communication
  • How staff refer to each other
  • Nature and style of marketing materials
  • Speed of which decisions are made
  • Number of layers in hierarchy
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Signs Of A Strong Organisational Culture

  • Staff understand and respond to culture
  • Little need for policies and procedures
  • Consistent behaviour
  • Culture is embedded
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Signs Of A Weak Organisational Culture

  • Little alignment with business values
  • Inconsistent behaviour
  • A need for extensive bureaucracy and procedures
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Handy's Models of Culture

  • Power culture
  • Role culture
  • Task culture
  • Person culture
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Power Culture

  • Control radiates from the centre
  • Concentrates power among a few
  • Few rules and little bureaucracy
  • Swift decisions possible
  • Often a strong culture but can quickly turn toxic
  • Collapse of RBS often attributed to a strong power culture
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Role Culture

  • People have clearly delegated responsibilities within a highly defined structure.
  • Long chain of command
  • Hierarchical bureaucracy
  • Power derives from person's position
  • Little scope exists for expert power
  • Communication slow
  • Less likely to take risks
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Task Culture

  • Teams formed to solve particular problems
  • Power derives from expertise as long as team requires it
  • No single power source
  • Matrix organisation
  • Team may develop own objectives (risky)
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Person Culture

  • People believe they are superior to the business
  • Business full of people with similar training, background and expertise
  • Common in firms of professionals such as lawyers and accountants
  • Power lies in each group of individuals
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Hofstede's National Cultures

Distinguishes the ways in which businesses work in different nations.

Categories are:

  • Individualism v Collectivism
  • Power Distance
  • Short Termism v Long Termism
  • Masculinity v Femininity
  • Uncertainty Avoidance
  • Indulgence v Restraint
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Individualism v Collectivism

  • Some societies value performance of individuals
  • Others think it's more important to value performance of a team
  • Important implications for financial rewards at work such as individual bonuses v profit sharing for larger groups
  • USA very individualist while South Korea very collectivist
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Power Distance

  • Extent to which inequality is tolerated and whether there is a strong sense of position and status
  • High score indicates national culture that accepts and encourages bureaucracy with a high respect for authority and rank
  • Low score indicates national culture that encourages flatter organisational structures and a greater emphasis on personal responsibility and autonomy
  • China have very high score while USA score is relatively low
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Long Term Orientation

  • Concerned with the different emphases national cultures have on the time horizons for business planning, objectives and performance
  • Some countries have greater emphasis on the short term with financial and other rewards biased towards a period of a few months or years
  • Other countries have a much longer term perspective which encourages longer term thinking
  • Key implication is the impact on investments and risk taking
  • South Korea have a very long term orientation whilst Australia focus more on the short term
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Masculinity v Femininity

  • Considers the differences in decision making style
  • Masculine approach considered hard edged, fact based and aggresive
  • Feminine approach involved much greater degree of consultation and analysis
  • UK considered more masculine in approach while South Korea adopt a more feminine style
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Uncertainty Avoidance

  • Considers different attitudes towards risk taking
  • Level of anxiety people feel when in uncertain or unknown situations
  • Low levels indicate willingness to take more risks, work outside the rules and embrace change. May indicate more entrpreneurial national culture.
  • High levels suggest more reliance on rules, data, clarity of roles and responsibilities. May be less entrepreneurial as a consequence.
  • South Korea have high levels however Singapore have low levels
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Indulgence v Restraint

  • Indulgence stand for societies which allow relatively free gratification of basic and natural human drives related to relaxing and having fun
  • Restraint stands for societies which suppress gratification of needs and regulates it by means of strict social norms
  • Australia very indulgent whilst India are very restraint
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