ORGANIZATIONAL CULTURE
A popular and simple way of defining culture is: ‘how things are done around here’. Atkins
explains organisational culture as reflecting the underlying assumptions about the way work
is performed; what is ‘acceptable and not acceptable; and what behaviour and actions are
encouraged and discouraged. A more detailed information is:
The collection of traditions, values, policies, beliefs, and attitudes that constitute a pervasive
context for everything we do and think in an organisation.
The culture of an organisation is also often likened to the personality of an individual.
According to Varey, culture and communication cannot be separated. For us to communicate
and cooperate, we must share some common assumptions about the world we live in and
some common standards by which to judge our own and each other’s actions. Cartwright
sees culture as a system of management authority. When accepted by employees, cultural
values increase the power and authority of management in three ways. Employees:
1. Identify themselves with their organisation and accept its rules when ‘ it is the right
thing to do’.
2. Internalise the organisation’s values when they believe they are right; and
3. Are motivated to achieve the organisations objectives.
Culture is reinforced through the system of rites and rituals, patterns of
communication, the informal organisation, expected patterns of behaviour and
perceptions of the psychological contract.
TYPES OF ORGANIZATIONAL CULTURE
There are a number of ways in which to classify different types of organisational culture. For
example, developing the ideas of Harrison, Handy describes four main types of organisational
cultures; power culture; role culture; task culture; and person culture.
1. Power culture depends upon a central power source with rays of influence from the
central figure throughout the organisation. A power culture is frequently found in
small entrepreneurial organisations and relies on trust, empathy and personal
communications for its effectiveness. Control is exercised from the centre by the
selection of key individuals. There are few rules and procedures, and little
bureaucracy. It is a political organisation with decisions taken largely on the balance
of influence.
2. Role culture is often stereotyped as a bureaucracy and works by logic and rationality.
Role culture rests on the strength of strong organisational ‘pillars’-the functions of
specialists in, for example, finance, purchasing and production. The work of, and
interaction between, the pillars is controlled by procedures and rules, and co-ordinated
by the pediment of a small band of senior managers. Role or job description is often
more important than the individual and position power is the main source of power.
3. Task culture is job-oriented or project oriented. In terms of structure the task culture
can be likened to a net, some strands of which are stronger than others, and with much
of the power and influence at the interstices. An example is the matrix organisation.
Task culture seeks to bring together the right resources and people, and utilises the
unifying power of the group. Influence is widely spread and based more on expert
power than on position or personal power.
4. Person culture is where the individual is the central focus and any structure exists to
serve the individuals within it. When a group of people decide that it is in their own
interests to band together to do their own thing and share office space, equipment or
clerical assistance then the resulting organisation would have a person culture.
Examples are groups of barristers, architects, doctors or consultants. Although it is
found in only a few organisations many individuals have a preference for person
culture, for example university professor and specialists. Management hierarchies
and control mechanisms are possible only by mutual consent. Individuals have
almost complete autonomy and any influence over them is likely to be on the basis of
personal power.
Every organization will have its own unique culture and most large businesses are likely to be
something of a mix of cultures with examples for each of the four types in varying areas of
the organisation. Different people enjoy working in different types of organisation culture
and they are more likely to be happy and satisfied at work if their attributes and personalities
are consistent with the culture of that part of the organisation in which they are employed.
Four generic types of culture
From an examination of hundreds of business organisations and their environments, Deal and
Kennedy categorise corporate cultures according to two determining factors in the market
place:
1. The degree of risk associated with the organisation’s activities; and
2. The speed at which organisations and their employees receive feedback on the success
of decisions or strategies.
These factors give rise to four generic types of culture; the tough-guy, macho culture; the
work-hard/play-hard culture; the bet-your-company culture; and the process culture.
1. Tough-guy, macho culture-an organisation of individualists who frequently take high
risks and receive quick feedback on the right or wrong of their actions. Examples
cited include police departments, surgeons, construction, cosmetics, management
consulting and the entertainment industry. Financial stakes are high and there is a
focus on speed. The intense pressure and frenetic pace often results in early ‘burn
out’. Internal competition and conflict are normal, stars are temperamental but
tolerated. A high staff turnover can create difficulties in building a strong cohesive
culture.
2. Work-hard/play-hard culture-characterised by fun and action where employees take
few risks, all with quick feedback. There is a high level of relatively low-risk activity.
Examples include sales organisations such as estate agents and computer companies,
mass consumer companies such as Mc Donald’s, office equipment manufacturers and
retail stores. Organisations tend to be highly dynamic and the primary value centres
on customers and their needs. It is the team who produce the volume, and the culture
encourages games, meetings, promotions and conventions to help maintain
motivation. However, although a lot gets done, volume can be at the expense of
quality.
3. Bet-your-company culture-where there are large-stake decisions with a high risk but
slow feedback so that it may be years before employees know if decisions were
successful. Examples include oil companies, investment banks, architectural firms,
and the military. The focus is on the future and the importance of investing in it.
There is a sense of deliberateness throughout the organisation typified by the ritual of
the business meeting. There is a hierarchical system of authority with decisionmaking from the top down. The culture leads to high-quality inventions and scientific
breakthroughs, but moves only very slowly and is vulnerable to short-term
fluctuations.
4. Process culture-a low-risk, slow feedback culture where employees find difficulty in
measuring what they do. Typical examples include banks, insurance companies,
financial services, and the civil service. The individual financial stakes are low and
employees get very little feedback on their effectiveness. Their memos and reports
seem to disappear into a void. Lack of feedback forces employees to focus on how
they do something, not what they do. People tend to develop a ‘cover your back’
mentality. Bureaucracy results with attention to trivial events, minor detail, formality
and technical perfection. Process cultures can be effective when there is a need for
order and predictability.
THE CULTURAL WEB
In order to help describe and understand the culture of an organisation, Johnson presents a
cultural web, which brings together different aspects for the analysis of organisational
culture.
Routine: the ways that members of the organisation behave towards each other and towards
those outside the organisation and which make up how things are done or how things should
happen.
Rituals: the special events through which the organisation emphasises what is particularly
important and can include formal organisational processes and informal processes.
Stories: told by members of the organisation which embed the present and flag up important
events and personalities, and typically have to do with successes, failures, heroes, villains,
and mavericks.
Symbols: such as logos, offices, cars, titles, type of language or terminology commonly used
which become a shorthand representation of the nature of the organisation.
Power structures: the most powerful individuals or groups in the organisation which may be
based on management position and seniority but in some organisations power can be lodged
with other levels or functions.
Control systems: the measurement and reward systems that emphasize what it is important to
monitor, and to focus attention and activity upon-for example, stewardships of funds or
quality of service.
Organisational structure: which reflects power structures and delineates important
relationships and activities within the organization, and involves both formal structure and
control and less formal systems.
Paradigm: of the organisation which encapsulates and reinforces the behaviours observed in
other elements of the cultural web.
Other focuses of analysis
There are, however, many other ways in which people attempt to describe and understand
what constitutes organisational culture, and different areas of attention for analysing the
elements of culture. For example, Wilson suggests that culture is a characteristic of the
organisation, not of individuals. One way to examine the culture of an organisation is to look
at its corporate image to see what and who is valued in the organisation. The corporate image
provides a mental picture that clients, customers, employees and others have of an
organisation.
ACAS distinguish two different organisation cultures and different ways of doing things;
Control culture with the emphasis on rules and procedures, control and compliance with
precedent providing guidelines; and
Quality of working life culture with the emphasis on core values, with mission statements
providing guidance and commitment via shared goals, values and traditions.
Stories and
myths
symbols
Power
structures
Rituals and
The
paradigm
routines
Control
systems
Organisation
al structures
The cultural web of an organisation.
(Source: Long Range Planning, vol. 25, no. 1, Johnson, G. ‘Managing Strategic Change-Culture and Actions’, p. 31, @ 1992, Elsevier
Science, Reproduced with permission from Excerpta Medical Inc.)
THE IMPORTANCE OF CULTURE
At the heart of organisation development and improved performance is the need for effective
management. It is the role of management to act as an integrating activity and to coordinate,
guide and direct the efforts of members towards the achievement of goals and objectives.
The process of management, however, does not take place in a vacuum but within the context
of the organisational setting. Applications of organisational behaviour and the effective
management of human resources are dependent therefore not only upon the nature of the
industry or business, but also upon the characteristic features of the individual organisationand its culture.
The pervasive nature of culture in terms of ‘how things are done around here’ and common
values, beliefs and attitudes will therefore have a significant effect on organisational
processes such as decision-making, design of structure, group behaviour, work organisation,
motivation and job satisfaction, and management control. For example, many managers
claim that their organisation’s culture contributes considerably to their stress.
Harrison and Stokes maintain that organisational culture influences the behaviour of all
individuals and groups within the organisation.
Culture impacts most aspects of organisational life, such as how decisions are made, who
makes them, how rewards are distributed, who is promoted, how people are treated, how the
organisation responds to its environment, and so on.
A similar point is made by Reigle who refers to culture as an important factor in successful
technology implementation, innovation, mergers, acquisitions, job satisfaction, organisational
success and team effectiveness; and to the importance of determining whether organisations
exhibit organic or mechanistic cultures.
The pervasive nature of organisational culture means that if change is to be brought about
successfully this is likely to involve changes to culture. For example, Steward makes the
following comment on the relationship between culture and change.
In recent years attention has shifted from the effects of the organisation of work on people’s
behaviour to how behaviour is influenced by the organisational culture. What is much more
common today is the widespread recognition that organisational change is not just, or even
necessarily mainly, about changing the structure but often requires changing the culture too.
A similar view is held by Naylor who points out that: ‘In the holistic system, any change will
affect the culture and the culture will affect or constrain the change. . . Cultural change is
intimately bound up with process of organisational change.
The importance of culture raises interesting questions relating to its nature and influence in
‘short-life’ organisations-that is, organisations created to run for only a short period of time
such as arts festivals or national garden festivals. For example, how does culture develop
when the organisation has little or no prior history, has short term goals and objectives, and
has only limited time for top management to exercise influence?
How do managers in such organisations attempt to inculcate culture? From a study of the
Garden Festival Wales, Meudell and Gadd found that success in creating a culture occurred
as a direct result of their recruitment and training initiatives. However, it not only culture but
climate that is important for organisational effectiveness.
Rigorous training in customer care/corporate culture might produce an automatic ‘Have a
nice day’ but only the engendering of a suitable climate will encourage people to say it and
mean it.
CULTURE AND ORGANISATIONAL PERFORMANCE
Culture can help reduce complexity and uncertainty. It provides a consistency in outlook and
values, and makes possible the processes of decision-making, coordination and control.
Culture is clearly an important ingredient of effective organisational performance. In their
study of 62 American companies with outstandingly successful performance, Peters and
Waterman draw attention to the importance of corporate culture.
Without exception, the dominance and coherence of culture proved to be an essential quality
of the excellent companies. Moreover, the stronger the culture and the more it was directed
to the marketplace, the less need was there for policy manuals, organisation chart, or
detailed procedures and rules. In these companies, people way down the line know what they
are supposed to do in most situations because the handful of guiding values is crystal clear.
Although a number of the original ‘excellent’ organisations have since fallen from grace, the
importance of culture to effective organisational performance still stands and has been
reinforced by a study by Heller of Europe’s top companies. For example, in commenting on
Heineken’s superiority in world markets, Heller makes the point that it rests in part on its
remarkable corporate culture:
There is nothing accidental about cultural strengths… There is a relationship between an
organization’s culture and its performance.
In their original study of highly successful companies, Goldsmith and Clutterbuck identified
eight characteristics built into the day-to-day culture of the organisation. From their
subsequent study of the world’s top companies a key characteristic of high performing
companies is a challenge culture. All the companies are very demanding of the people who
work for them but this is balanced by a nurturing culture which shows that they also care for
their employees in numerous ways.
Brown suggests that organisational culture can be a powerful tool for improving performance
and the key to effective leadership and organisational development. However, it is important
that:
Effective leadership and workable organization design and development programmes must be
based on sensitivity to, and understanding of culture. Excellent leaders are not merely aware
of the organization’s basic assumptions, they also know how to take action and mould and
refine them. This process of cultural management appears to have been achieved through the
skilful use of artifacts, stories, myths and symbolic actions to reinforce desired patterns of
thought and behaviour.
Chatman and Cha suggest that every company has a culture-good or bad. However, there is
more to a good culture than happy staff. In order to aid long-term performance, there are
three main criteria needed to develop a suitable culture:
1. It must be strategically relevant.
2. It needs to be strong in order that people care about what is important.
3. The culture must have an intrinsic ability to adapt to changing circumstances.
In order that leaders can develop, manage and change their culture for better performance,
Chatman and Cha refer to the use of three managerial tools.
1. Recruitment and selection: hire people who fit the company’s culture even if this may
involve overlooking some technical skills for a better cultural fit. Look carefully at
the characteristics of your recruiters and consider your selection decision in the light
of culture.
2. Social tools and training: develop practices that enable new people to understand the
values, abilities, expected behaviour and social knowledge in order to participate fully
as an employee, and to create strong bonds among members.
3. Reward system: culture is an organisation’s informal reward system but it needs to be
intricately connected to formal rewards. Examples include staff meetings where the
seating arrangement is in accordance with level of sales, name badges that include
inventory losses, and payments of large commissions in front of customers and other
staff.
Schneider and Barsoux suggest that cultural beliefs and values influence the meaning of
management and also show up differences in conceptions of organisations. National
differences and cultural reasons raise concerns about the transferability of organisational
structures, systems and processes and question the logic of universal ‘best practice’. Cheng
et al. also question the universality of theories of management organisational behaviour on
the ground that they have not adequately addressed the factor of culture. Those fortunate
enough to have shared the experience of the author in visiting both Disneyland in Florida and
Disneyland in Paris would probably have witnessed the cultural differences in the attitudes to,
and acceptance of, the Disney approach and procedures between American and French
employees.
References
1. Naylor, J. Management, Second edition, Financial Times Prentice Hall (2004), p. 79
2. Goldsmith, W. and Clutterbuck, D. The Winning Streak Mark II, Orion Business
Books (1998)
3. Chatman, J. A. and Cha, S. E. ‘Culture of Growth’, Mastering Leadership, Financial
Times, 22 November, 2002, pp. 2-3.
4. Laurie J. Mullins, 2005, Management and Organizational Behaviour, Seventh Edition,
Prentice Hall, ISBN: 0273688766, pps: 891-899.