Organizational Culture &
Various Stakeholders In A
Business
Definition of culture
The collective programming of the mind.
The expression of the attitude of people within a group and
their collective beliefs and values.
The set of shared values and norms that characterise a social
group.
The way we do things around here.”
Demonstration of culture in organization
Factors that shape the culture of the
organisation
Size. How large is the organization in terms of turnover, physical size
employees numbers etc
Technology. How technologically advanced is the organization either in terms
of its product or its productive processes
Diversity . How diverse is the company either in terms of product range,
geographical spread etc
Age. How old is the business or the managers of the business etc
History. What worked in the past? Do decision makers have past successes to
draw upon, are they willing to learn from their mistakes
Ownership. Is the organization owned by a sole trader? Are there a small or
large number of shareholders etc
Culture definition by Schein
In order to try and define culture schien describe three levels.
1.
Artefacts. (what you see):These are the aspects of culture that can
easily seen e.g the way people dress, interior etc
2.
Espoused values. (What They Say): These are the strategies, goals
and rules of an organization including company slogans Nike – Just
Do It, Apple – Think Different. etc
3.
Basic assumptions and values. (What They Believe): These are
difficult to identify as they are unseen and exist mainly at the
unconscious level
Practice
BlueBell company’s CEO, Jim, has always had a luxury car. It is a part of his
remuneration and he likes to tell the employees that ‘the better the company
performs, the shinier the car’. Employees believe that the car is a reward for
company’s outstanding performance. According to Schein, what level of culture
has been specified?
a)
Espoused values
b)
Artefacts
c)
Basic assumptions and values
d)
Attitudes
Culture & Structures
Handy identifies four distinct types of cultural in an
organizations
Power culture
Role culture
Task culture
Person culture
Power Culture
Handy associated this type of culture with the Greek god Zeus.
Here, power is concentrated in the hands of one person. This culture
is often found in small businesses(sole trader). Rules and regulations
are very flexible. Fast but perhaps random decisions can be made.
Example: Steve Jobs’ Apple Inc. (Early Years).
Role Culture
Handy linked this type of culture to Apollo. Structure is defined and
operations are predictable, rules and regulations are very strict in
this culture. where individuals know their job, report to their superior.
This is characterized by a traditional organizational structure in
which jobs are arranged by function and seniority. Role culture is
suitable for a large scale or is adopted in a beau acratic
organisations. Example: Government Agencies.
Task Culture
Handy linked this culture to the goddess Athena. Teams are
formed to solve particular problems. Power is derived from
membership in teams Here, the emphasis is on getting the
job(target) done. Flexibility and creativity is encouraged.
Example Consulting Firms like McKinsey & Company.
Person Culture
In a Person Culture, the focus is on individual employees. The
organization is structured to support the needs and development of
its members. Example: Professional Services Firms like Law Firms or
Creative Agencies. Handy associated this culture with Greek god
Dionysus
Contingent approach:
It is necessary for organizations to exhibit one specific type of
culture throughout the organization, it is quite common for
different types of culture to prevail in different departments or
areas of same organization.
Practice
ABC plc is a traditional organization, growing from a sole proprietorship 10 years
ago to a listed company now. Since operations are growing, the company has
adopted a more divisional role where every division has a senior manager
leading it. Which kind of culture will be found within ABC Plc?
a)
Power culture
b)
Task oriented culture
c)
Role culture
d)
Existential Culture/ person culture
Practice
Adam’s is the very old furniture manufacturing company. The current CEO, Tim
Adams, inherited this business from his father and has been the CEO since his
father passed away 15 years ago. Tim is a difficult, hard headed person and
often takes decisions regarding the company without consulting the rest of the
board. The culture at Adams’ is most likely to be:
a)
Existential culture
b)
Power culture
c)
Task Culture
d)
Role Culture
Hofstedes Cultural Dimensions
1. Power Distance: Power distance is simply the degree to which an authority figure can exert
power and how difficult it is for a subordinate to contradict them. High power distance prevails in
countries where subordinates are afraid of their boss. They usually have paternalistic and
autocratic style. Low power distance countries in which subordinates and their boss have some sort
of informal relation. (They usually have democratic and consultative management style.)
High power distance is found in Centralized organizations with complex hierarchies. There are
large gaps in compensation. Low power distance is found in Flatter organizations where supervisors
and employees are considered almost as equals
2. Uncertainty Avoidance: Uncertainty avoidance describes an organization's
comfort level with risk-taking. Organizations need to be comfortable with
analyzing and taking risks as the higher the risk, the higher the return.
Strong/high Uncertainty avoidance: where people tend to avoid uncertain
events, their uncertainty to avoid risks. They do not face these events,
Weak/low Uncertainty avoidance: where people tend to face uncertain events,
risk and they face these risks to eliminate, in this people are more creative.
Organizations with high uncertainty avoidance may find themselves unwilling to
change and may lose market share if they don’t adapt to changing external
factors. Organizations that exhibit low uncertainty avoidance may be open to
change and innovation and may readily adapt to changing environmental
factors.
3. Masculinity vs. Femininity: This refers to the way that behavior is
characterized as "masculine" or "feminine" within an organization. For example,
an aggressive and hyper-competitive culture is likely to be defined as masculine.
Staff in feminine culture will be motivated more by work life balance, quality of
life and relationship at work.
Organizations exhibiting high masculinity may show strong egos where feelings
of pride and importance are attributed to status. Money and achievement are
important factors and rewards are thought of in those terms. Organizations that
exhibit high femininity may focus more on interactive relationships at work with
a view to enhance the quality of working environment.
4. Individualism vs. Collectivism: This could best be described as the degree to
which an organization integrates a group mentality and promotes a strong sense
of community (as opposed to independence) within the organization. It means
that in a few countries people work individually whereas in other countries the
same work is carried out in the form of groups or collectively.
A high IDV indicates weak interpersonal connection among those who are not
part of a core "family." Here, people take less responsibility for others' actions
and outcomes. In a collectivist society, however, people are supposed to be loyal
to the group to which they belong, and, in exchange, the group will defend their
interests. The group itself is normally larger, and people take responsibility for
one another's wellbeing.
Long-Term vs Short-Term Orientation
Long-Term Oriented Culture (e.g., China, Japan)Focus: Future rewards,
perseverance, and thrift.Example:In Japan, companies often invest in employee
training for years even before expecting major results. Employees might work in
the same company for life, showing loyalty and patience.
Short-Term Oriented Culture (e.g., USA, Nigeria)Focus: Respect for tradition,
fulfilling social obligations, quick results.Example:In the U.S., quarterly profits
often drive decision-making. Companies may prioritize short-term performance,
even if it sacrifices long-term strategy.
Indulgence vs Constraint
Focus: Enjoying life, freedom, having fun.Traits:People feel they control their
life.Leisure and personal happiness are valued.More open to expressing
emotions.Example:In the U.S., it's common to prioritize work-life balance,
celebrate personal achievements, and promote individual freedom and
spontaneity.
Focus: Suppressing gratification, following strict social norms.Traits:People feel
less control over their lives.Leisure is not a top priority.Expression of emotions is
more controlled.Example:In Russia, people may be more reserved, and there is
often an emphasis on duty, discipline, and self-control over personal enjoyment.
Summary
Practice
Janet has recently been hired by Bexace as the operations manager. She quickly
discovers that her staff seem unwilling to make major decisions for themselves
and expect her to monitor their work closely. Which of the following features of
Hofstede’s cultural dimensions is Jane’s department demonstrating?
a)
High individualism
b)
Low power-distance index
c)
High uncertainty avoidance
d)
Femininity
Practice
Charcoal Ltd’s employees are skilled and like to be given the space to achieve
tasks according to their knowledge. They have always disliked any interference
from the managers in accomplishment of tasks. According to Hofstede, this
means that the culture is:
a)
Masculine
b)
High uncertainty avoidance
c)
Low power-distance
d)
Collective
Informal Organization
A type of structure in which rules, regulations, specific
duties, and formal hierarchy is not designed; People usually
have informal relation like friends group.
Features of an informal
organization
The speed of communication is faster.
Employees are more committed.
Informal organization gets work done quickly and efficiently.
because of level of co-operation between employees.
It is more flexible as it is not bound by formal rules and regulations.
There is greater knowledge sharing among employees.
there are other, less attractive effects
of an informal structure as well like:
Social groupings may act collectively against organizational interests, as employees may
be engaged in interaction rather than performing their tasks leading to reduced
efficiency.
The grapevine is often inaccurate and can carry morale-damaging for employees that
get to hear inaccurate details about the organization or themselves from others.
The informal organization can become too important in fulfilling employees' needs:
individuals can suffer acutely when excluded from cliques(means group of people or
circle) and networks.
Informal work practices might 'cut corners', violating safety or quality assurance
measures. Informal structures may encourage employees to overlook compliance with
safety rules and other regulations.
Stakeholders Goals & Objectives
A stakeholder is a person, group, organization or a system that
affects or can be affected by an organization’s actions. Some
types of stakeholders
Internal
Connected
External
Mendelow Matrix
Medlow’s matrix is a method for performing stakeholder mapping.
Practice
For DigiTech, Tom Fire is a billionaire investor who bought millions of the
company’s shares. His holdings amount to close to 10 percent of DigiTech’s
stock. Tom closely follows the operations of the company and actively pushes for
reforms. Which category of stakeholders does Tom Fire belong to?
a)
Minimum Effort
b)
Keep Informed
c)
Keep Satisfied
d)
Key Player
DIFFERENT STAKEHOLDER GROUPS AND HOW
THEIR OBJECTIVES MAY CONFLICT WITH ONE
ANOTHER.
Conflict Type Example
Profit vs. Wages
salaries.
Low Prices vs. Quality
quality
Customers want low prices, but businesses need to maintain
Environmental Impact
control.
Businesses want lower costs, but communities want pollution
Government Regulations Companies want fewer rules for flexibility, but governments
enforce laws to protect the public.
Owners want to maximize profits, but employees want higher
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