Culture and Organizations
Class Outline
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The importance of culture
Societal cultures and organizations
Internal culture of organizations
Video
Definitions of Culture
• National culture is defined as the values,
beliefs, and assumptions learned in early
childhood that distinguish one group of
people from another
• Organizational culture is similarly defined
as the values, beliefs and assumptions that
distinguish members of one organization
from those of another
Why is Culture Important?
• Culture is the ‘software of the mind’
• Societal culture is an important aspect of an
organization’s environment
• external culture determines:
– acceptable behaviors for an organization
– acceptable behaviors of individuals
• internal culture determines
– who will be hired and retained
– how individuals behave within the organization
– whether an organization achieves its goals
The ‘External’ Culture
• National/regional cultures can be characterized
in terms of five dimensions
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power-distance
uncertainty avoidance
individualism-collectivism
masculinity-femininity
time orientation
• Variations in these dimensions have a direct
impact upon the success or failure of specific
management practices
Power-Distance
• Meaning:
– The extent to which power is distributed equally in
society
– the extent to which this is accepted as appropriate
– the extent to which people are willing to interact
across status levels
• Low in the US - High in Asia and parts of
Europe
• influences: hierarchy, centralization,
participation
Uncertainty Avoidance
• Meaning:
– the extent to which people are threatened by
uncertain and unstructured situations
– high levels lead to greater reliance upon rules
and procedures
• US is low; France and Latin Europe are
high
• influences: levels of formalization and
bureaucracy
Individualism-Collectivism
• Meaning:
– The extent to which identity is derived from the self or
the group
– The extent to which the needs of the individual or
group are prioritized
• US (and all Anglo countries) highly individualistic;
East Asian countries are very collectivist
• Influences: emphasis on individual responsibility,
and rewards
Masculinity-Femininity
• Meaning:
– masculine orientation is doing/acquiring and
values success
– feminine orientation is thinking observing and
values affiliation
• US, Japan, and Germany are masculine;
Nordic countries are feminine
• Influences: merit based pay versus quality
of work life and interpersonal relations
Time Orientation
• Meaning
– long term orientation values patience,
perseverance, and respect for ancestors
– short-term orientation emphasizes immediate
rewards, de-emphasizes history
• US,UK, short term; East Asian countries
long term
• influence: time frame used for problem
solving and organizational goals
External Culture - Summary
• Culture represents an important aspect of
the organization’s task environment
• Culture determines values and beliefs
• Therefore it determines what management
techniques are acceptable
• Work units managed in ways that are
congruent with national culture perform
better
Internal Culture
• The values and beliefs shared among
employees of an organization
• As with national culture, this determines
acceptable and unacceptable behavior
• Transmitted through war stories, myths, and
rituals
• The dominant sources are the founder(s)
and of course the external environment
Attraction-Selection-Attrition Process
• The organization’s values attract likeminded
individuals
• Existing managers select those who are
similar to themselves in their beliefs
• People who’s values do not fit with the
dominant culture will ultimately feel
discomfort and leave
• The result is a more culturally homogeneous
workforce
Internal Cultures and Performance
• Organizational performance requires that
the culture be consistent with the goals of
an organization
• Internal consistency of strategy and culture:
– low-cost strategy may be supported by
willingness to follow rules in exchange for
security
– innovation strategy may be supported by
culture emphasizing individual thought and
freedom, risk taking
Summary
• Culture adds another dimension that
managers must consider
• fit includes external consistency of
management practices with societal culture
and internal consistency of organizational
strategy and culture
• fit results in performance and survival