Business

Organisation
Topic 6 : Organisation Culture
 Organisation Culture

The set of shared, taken-for-granted

implicit assumptions that a group
holds and that determines how it
perceives, thinks about, and reacts to
its various environments.

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Organisation Culture

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 What drives an Organisation
Culture
• Founder’s values.
• Industry and business
environment.
• National culture.
• Organization’s vision and strategy.
• Behavior of leaders.

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Drivers and Flow of
Organisation Culture

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 Three Levels of Organisation
Culture

Level 1: Observable Artifact:

Physical Manifestations of Culture
Level 2: Espoused Values:
Explicitly Stated Values and Norms

Level 3: Basic Assumptions:

Core Values of the Organization

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 Three Levels of Organisation
Culture
Level 1: Observable Artifacts—Physical Manifestations of
Culture. At the most visible level, organizational culture is
expressed in observable artifacts—physical manifestations such
as manner of dress; awards, myths and stories about the
company; rituals and ceremonies and decorations; as well as
visible behavior exhibited by managers and employees.

Level 2: Espoused Values—Explicitly Stated Values and Norms.

Espoused values are the explicitly stated values and norms
preferred by an organization, as may be put forth by the firm’s
founder or top managers.

Level 3: Basic Assumptions—Core Values of the Organization.

Basic assumptions, which are not observable, represent the core
values of an organization’s culture—those that are taken for
granted and, as a result, are difficult to change. 7
 Four Types of Organisation
Culture
• Internal focus.
Clan culture • Flexibility over stability.
• Collaboration among employees.

Adhocracy • External focus.

• Values flexibility.

culture • Adaptable, creative, and quick to respond to changes in the

marketplace.

• Focused on the external environment

Market culture • Values stability and control
• Driven by competition and a strong desire to deliver results

Hierarchy • Has an internal focus

• Values stability and control over flexibility
Culture • Formalized, structured work environment

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Competing Values Framework (CVF)

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 How Employee Learn Culture
• Symbols: an object, an act, a quality, or event that conveys
meaning to others.

• Stories: narrative based on true events repeated—and

sometimes embellished upon—to emphasize a particular
value.

• Heroes: person whose accomplishments embody the

values of the organization.

• Rites and rituals: activities and ceremonies that celebrate

important occasions and accomplishment.

• Organizational socialization: the process by which people

learn the values, norms, and required behaviors of an
organization.

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The Importance of Culture

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 The Importance of Culture
1. An organization’s culture matters.
2. Employees have more positive work attitudes
when working in organizations with clan cultures.
3. Clan and market cultures are more likely to deliver
higher customer satisfaction and market share.
4. Operational outcomes, quality, and innovation are
more strongly related to clan, adhocracy, and
market cultures than to hierarchical ones.
5. An organization’s financial performance is not
strongly related to organizational culture.
6. Companies with market cultures tend to have
more positive organizational outcomes.
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 How Organisation
Culture Change
1. Formal statements: mission, vision, values.
2. Language, slogans, sayings, and acronym.
3. Rites and rituals.
4. Stories, legends, and myth.
5. Leader reactions to crises.
6. Role modeling, training, and coaching.
7. Through physical design.
8. With rewards, titles, promotions, and bonuses.
9. Establishing goals and performance criteria.
10. Through measurable and controllable activities.
11. By changing organizational structure.
12. Using organizational systems and procedures. 13
 Hofstede : International
Perspective on Culture
Culture as “the collective programming of the mind
distinguishing the members of one group or category
of people from others”.
The six dimensions of national culture are based on
extensive research done by Professor Geert Hofstede,
Gert Jan Hofstede, Michael Minkov and their research
teams.

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Hofstede : SIX Culture Dimension

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 Power Distance
This dimension expresses the degree to which
the less powerful members of a society accept
and expect that power is distributed unequally.
The fundamental issue here is how a society
handles inequalities among people.
In societies with high Power Distance accept a
hierarchical order in which everybody has a
place and which needs no further justification.
In societies with low Power Distance, people
strive to equalize the distribution of power and
demand justification for inequalities of power.

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 Power Distance

High Power Distance Low Power Distance

• Inequality is • Inequality is
considered normal considered wrong
part of society and should be
• Autocratic reduced if possible.
leadership. • Democratic
• Societies prefer leadership.
centralization. • Societies prefer
• Subordinates do as decentralization.
they told. • Subordinates
• More income expect to be
inequality. consulted.
• Less income
inequality.
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 Individualism vs Collectivism
Individualism, can be defined as a preference
for a loosely-knit social framework in which
individuals are expected to take care of only
themselves and their immediate families.
Its opposite, collectivism, represents a
preference for a tightly-knit framework in society
in which individuals can expect their relatives or
members of a particular in-group to look after
them in exchange for unquestioning loyalty.

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 Individualism vs Collectivism

Individualism Collectivism

• “I” identity. • “We” identity.

• Classified as • Classified as
individuals by group
their own • Relationship
particular comes first.
characteristics. • High context
• Task comes first. communication.
• Low context • Harmony in
communication. society is
• Self-actualization ultimate goal
is ultimate goal
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 Masculinity vs Femininity
The Masculinity side of this dimension
represents a preference in society for
achievement, heroism, assertiveness and
material rewards for success.
In Masculine cultures, difference between gender
roles are more rigid.
Its opposite, Femininity, stands for a preference
for cooperation, modesty, caring for the weak
and quality of life.
In Feminine cultures, difference between gender
roles are less rigid.

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 Masculinity vs Femininity

Masculinity Femininity

• Tough, logical, • Gentle, emotional,

aggressive, worldly calm, home-oriented
and cruel. and kind.
• More illiteracy. • Less illiteracy.
• Many people live • Many people live
below poverty level. above poverty level.
• Less aid consumption • More aid consumption
on poor. on poor.
• Only men shop in • Both men and women
market. shop in market.
• Salary is more • Leisure is more
important. important.

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 Uncertainty Avoidance
The Uncertainty Avoidance dimension expresses
the degree to which the members of a society
feel uncomfortable with uncertainty and
ambiguity.
Countries exhibiting Strong UA maintain rigid
codes of belief and
behavior and are intolerant of unorthodox
behavior and ideas.
Weak UA societies maintain a more relaxed
attitude in which practice counts more than
principles.

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 Uncertainty Avoidance

Strong Uncertainty Weak Uncertainty

Avoidance Avoidance
• More stress and • Less stress and
anxiety. anxiety.
• Need rules even if • Don’t like rules or
they are impractical need fewer rules
or never practiced. and may
• Believe in sometimes broke
in case of
formalization.
necessity.
• People tend to stay in
• Believe in
the same job as long deregulation.
as they can to avoid
• People can easily
uncertainty.
change jobs.
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 Long Term Orientation vs Short
Term Orientation
Those with a culture which scores high
(Long Term Orientation), on the other hand,
take a more pragmatic approach: they
encourage thrift and efforts in modern education
as a way to prepare for the future.
Societies who score low on this dimension
(Short Term Normative Orientation), for
example, prefer to maintain time-honoured
traditions and norms while viewing societal
change with suspicion.

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 Long Term Orientation vs Short
Term Orientation
Long Term Orientation Short Term Orientation

• Perseverance in • Focus on achieving

achieving results. quick results.
• Learn from other • Proud to have our
countries. own country.
• Traditions can be • Traditions are
changed sacrosanct.
• Important for • Important for
resolving problem resolving problem
is common sense is fundamentalism
and certainly (could be religious
choosing the but also
middle way ideological/political
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 Indulgence vs Restraint
Indulgence stands for a society that allows
relatively free gratification of basic and natural
human drives related to enjoying life and having
fun.

Restraint stands for a society that suppresses

gratification of needs and regulates it by means
of strict social norms.

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 Indulgence vs Restraint

Indulgence Restraint
• More healthier & • Less healthier &
happier. happier.
• Societies have • Societies have work
leisure ethic. ethic.
• Optimistic. • Pessimistic.

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THANK YOU

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