BA Accounting Organisation studies

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BA Accounting Organisation studies

• Week 6
• Organisational Culture

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Session Objectives

• To understand what is meant by the term
  organisational culture
• To understand the key influencing factors in
  organisational cultures
• To understand the role of managing culture

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Structure and Culture

• Previous weeks
• Examined issues of formal organisational
  structure
• Dimensions of structure
• Organisational design
• Organisational culture is the informal side of
  structures
• It complements rather than contradicts the formal
  side

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DEFINING ORGANISATIONAL CULTURE(Cooke and
Rosseau, 1988)

• the ways of thinking, behaving and believing
  that members of a social unit have in common

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DEFINING ORGANISATIONAL CULTURE (Goldstein 1983)

• organisations, like persons, have values, these
  values are integrated into some coherent value
  system
• Therefore, in any organisation, the members
  generally have a set of beliefs about what is
  appropriate and inappropriate organisational
  behaviour

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DEFINING ORGANISATIONAL CULTURE

• the shared beliefs, values, norms and traditions
  within the organisation (Amsa 1986)
• the collective programming of the mind which
  distinguishes the members of one organisation
  from another (Hofstede 1991)

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Key issues implied from the definition

• Organisations are viewed as independent entities
• Therefore, its goals may differ from those of its
  members
• Culture is shared amongst the members of the
  organisation
• Culture acts as a constraint on the actions of
  managers and workers

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ORGANISATIONAL CULTURE Schein (1986)

• There is no such thing as a culture-free concept
  of management
• Culture controls the manager - through the
  automatic filters that bias the managers
  thoughts and feelings
• Setting objectives, measuring, following up,
  controlling, giving performance feedback and so
  on - are themselves culturally biased to an
  unknown degree in any organisation

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Organisational Culture is

• A shared set of attitudes, beliefs, values and
  patterns of behaviour common to a group of people
  
• The way we do things around here Not static or
  permanent - culture evolves over time (Peters
  1986)
• Culture responds to changes in internal and
  external environment, new technology, new
  products, new customers, new personnel,
  introduction of new systems and new procedures,
  as well as macro social and political trend

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The 3 levels of Culture (Schein)

• Artefacts and creations - the things one can see,
  hear and observe.
• Dress codes,
• Patterns of behaviour,
• Physical symbols,
• Organisational ceremonies
• Office layout

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The 3 levels of Culture (Schein)

• 2. Values and Beliefs can be identified from
  stories
• language
• symbols
• how people explain justify what they do

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The 3 levels of Culture (Schein)

• 3. Basic assumptions beliefs so deeply embedded
  in a culture that members are no longer
  consciously aware of them.

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SOURCES OF ORGANISATIONAL CULTURE

• the national culture (Hofstede, 1991)
• the vision, management style and personality of
  the founder or other significant dominant
  managers (Schein, 1985)
• the nature of the business, the type of products
  and the environment within which the organisation
  operates (Gordon, 1991)

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National cultures (Hofstede)

• Hofstede analysed 40 countries in terms of
  national cultures in work
• He ascertained 4 dimensions of difference in
  national cultures
• Power distance
• Uncertainty avoidance
• individualism
• Masculinity

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Power distance

• The degree to which people accept inequality
  amongst institutions and organisations
• Indian workers would be tolerant of high levels
  of inequality due to their Caste system.
• Swedish workers would be intolerant of
  inequality- Pay is relatively equal with workers
  having a strong influence on working conditions
  with their works councils.

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Uncertainty avoidance

• This is a measure of the degree to which people
  are willing to accept change and work in
  uncertain circumstances.
• The higher the degree of uncertainty avoidance
  the more structured people like things to be.
• Examples Low Sweden, High France

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Individualism and collectivism

• This refers to degree to which people see
  themselves as being part of a group or as
  individuals.
• Examples include for individualistic USA, UK,
  Australia
• Examples for Collectivist Norway, Japan

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Masculinity/ femininity

• Masculine cultures place a high value on things
  like Heroism, success, achievement, Leading.
• Feminine cultures place a high value on groups,
  quality of life, caring.
• Examples- Masculine Germany, USA Feminine
  Sweden, Denmark, Finland

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Senior ManagementThe Founding Fathers

• High level of impact on the early culture
• Not constrained by previous regimes
• Based on their biases on how things should be
  done
• Therefore it is a case of how the biases are
  shaped by their subsequent experiences.

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Keeping the culture alive

• An additional influence in shaping an
  organisations culture are the internal
  influences
• Three main internal influences help to shape this
• Selection
• Top Management
• Socialisation

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Keeping the culture alive Employee Selection

• Organisations must select those who match the
  skills, qualifications etc in selecting new
  employees
• Most organisations will also try to select
  candidates who they believe fit in
• Once in, candidates learn about the
  organisations culture (Indoctrination)

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Keeping the culture alive Top Management

• Employees observe the behaviour of top management
• Senior management set objectives and standards
  which help to establish organisational norms
• Socialisation senior management influence
  employees behaviour in adapting to the existing
  culture

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How employees learn culture

• Formal methods include induction and training
• In addition a number of informal means exist
• Stories
• Rituals
• Material symbols
• Language

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Influences on Culture Development

• History
• Primary function and technology
• Goals and objectives
• Size
• Location
• Management and staffing
• The environment

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Some cultural typologiesReynolds (1986)

• internal / external focus
• task / social focus
• safety / risk
• conformity / individuality
• individual / group rewards
• centralised / decentralised decision making
• ad hocery / planning
• stability / innovation
• co-operation / competition
• simple / complex organisation
• informal / formalised procedures
• high / low loyalty
• ignorance / knowledge of organisational
  expectations

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Cultural Dimensions

• (Hofstede)
• normative / pragmatic
• process / results oriented
• employee / job oriented
• parochial / professional
• open / closed system
• loose / tight control
• (Handy)
• role culture
• power culture
• task culture
• existential culture

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Strong Versus Weak Cultures

• Strong Cultures - Key values are deeply held
  widely shared
• The more that employees accept the
  orgganisations key values the greater the
  commitment to those values, then the stronger the
  culture.
• Research suggests that strong cultures are
  associated with high org. performance, and
  increased employee commitment.
• Weak Cultures - lack of clarity in what is
  important and what is not

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Creating a Strong Organisational Culture

• Values
• Beliefs and ideas about the kinds of goals
  members should pursue the types of behaviour
  people should use to achieve these goals
• Norms
• Emerge from values - Unwritten rules or
  guidelines that prescribe appropriate behaviour
  in particular situations

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Conclusions

• Organisational culture is a crucial element of
  structure
• It is self-reinforcing
• Managers can play a role in shaping the
  dimensions of culture