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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