ORGANIZATIONAL CULTURE

1
ORGANIZATIONAL CULTURE
3.6.0
Needle p. 94 127, 183 194Ex-31
2
CULTURE AT THE LEVEL OF THE FIRM - DEFINITION
3.6.1

• Although used interchangeably by others, the
  business in context model distinguishes between
  organizational culture and corporate culture
• Organizational culture (Descriptive, analytical)
• Analysis of the difference between organizations
  as a product of history, technology, product
  market, strategy, national culture, management
  style
• Corporate culture (Prescriptive, managerial)
• An attempt by senior management to achieve
  strategic ends by manipulating the culture of the
  firm

3
CULTURE Trampenaars (1993)
3.6.1

• Artefacts
• Lay-out, technology, language,
• art, visible behaviour, signs of
• status

Can be observed
Values Opinions about reality. Can be tested to
see how behaviour is acceptable in the society
Higher consciousness level
Basic assumptions Relations to environment. The
nature of human relations
Preconscious
4
The culture-free hypothesis (Kerr)
Suggests that culture has less influence over
business practices than, for example, technology
and economics. Businesses in the same sector in
all countries are converging on similar types of
technology, strategies, products and forms of
business organization.
5
The culture-specific hypothesis (Hofstede)
Suggests that business practices and ideas are
rooted in specific cultures and that transference
is only possible between nations displaying
similar cultural characteristics.
Example from Ford The workers in Dagenham
(London) could not be as effective as those in
Gent (Belgium) in exactly the same work
environment producing car sides with stamp
equipment.
6
CULTURE analyses
3.6.1

• Cultures differ with respect to
• Individual initiative
• Risk tolerance
• Direction
• Integration
• Management support
• Control
• Identity
• Reward systems
• Conflict tolerance
• Communication patterns

7
CULTURE analysesHofstede
3.6.1
Hofstedes survey Carried out between 1967 and
1973 116000 IBM employees across 40 countries.

• Cultures differ with respect to
• Individualism versus collectivism
• Uncertainty avoidance (Risk tolerance)
• Masculinity versus femininity
• Power distance
• Long- versus short-term orientation

8
Power distance (Hofstede 1980)
This is the extent to which members of a society
accept that power is distributed un-equally in
organisations. Examples of high power distance
France, Mexico, Hong Kong Examples of low power
distance Israel, Scandinavian countries,
Germany, USA, UK.
9
Individualism (Hofstede 1980)
This is the extent to which members of a society
prefer looking after yourself and your family, a
belief in freedom. Examples of high
individualism USA and the UK Examples of low
individualism (Collectivism) Pakistan,
Venezuela, Colombia, Peru, Taiwan.
10
Uncertainty avoidance (Hofstede 1980)
This is the extent to which members of a society
feel uncomfortable with uncertainty. Examples of
high uncertainty avoidance Greece, Japan,
Portugal, Belgium. Examples of low uncertainty
avoidance Singapore, Scandinavian countries, UK,
Hong Kong.
11
Masculinity (Hofstede 1980)
This is the extent to which members of a society
display a strong belief in gender roles,
preference for achievement, assertiveness and
material success even if it costs quality of life
and care for others. Examples of high
masculinity Japan, Austria, Venezuela. Examples
of high femininity Scandinavian countries,
Netherlands, Yugoslavia. (almost equal rights for
men and women)
12
Hofstedes findings 1Position of Forty Countries
on Power Distance and Uncertainty
13
Hofstedes findings 2 Position of Forty
Countries on Uncertainty Avoidance and
Masculinity
14
Hofstedes findings 3 Position of Forty
Countries on Power Distance and Individualism
15
Exercise
16
STRONG CULTURES
3.6.2

• Exist where values of top management are widely
  shared throughout the organization
• Process operates through
• Top management sets goals
• Guidelines emphasising core values - usually
  include loyalty, enthusiasm, customer care,
  quality
• High investment in communications network and
  processes
• Rituals to strengthen and reward appropriate
  behaviour
• Use of corporate heroes
• Importance attached to physical environment at
  work
• Careful selection of employees
• Emphasis on individual contribution
• Strong introduction and training programmes

17
EXCELLENT FIRMS
3.6.3

• Associated with strong cultures. Eight
  attributes of excellence defined by Peters and
  Waterman (1982). These are
• Bias for action
• Closeness to the customer
• Autonomy and entrepreneurship
• Productivity through people
• Hands on - value driven
• Stick to the knitting
• Simple firm, lean staff
• Simultaneous loose-tight properties

18
CULTURE AND PERFORMANCE
3.6.4

• Culture determined key elements of the strategic
  process - how environment is perceived (Brown,
  1998)
• Different types of organization pursue different
  strategies (Miles and Snow, 1978)
• Successful implementation of strategy requires
  appropriate culture fit
• Some evidence linking culture with short-term
  financial performance
• Culture clashes within a firm can lead to poor
  performance
• But many other variables at work and direct
  links are difficult to prove
• Does culture influence performance or vice versa?

19
CRITICAL QUESTIONS
3.6.5

• Much of the research is anecdotal and reveals
  little
• The concept is highly complex and comprises many
  variables, many of which are difficult to measure
• Corporate culture as a management tool may not be
  feasible. Limitations in type of job, type of
  firm, etc.
• Influence of corporate culture may be overstated
• Corporate culture as a management tool may not be
  desirable, issues of ethics and conformity.

20
POTENTIAL VALUE OF CORPORATE CULTURES
3.6.6

• Management gains through greater co-ordination
  and control
• May reduce conflict and uncertainty
• Gives employees a sense of belonging
• Successful firms reward employees well
• Enables students of business to gain richer
  insights into organization life

21
Japanization
Page 108-127