Culture Defined Organizational culture is the underlying values, beliefs, and principles that serve as the foundation for an organization’s management system. In addition, it includes the management practices and behaviors that exemplify and reinforce these basic principles.

Significant Components of Culture Relationships Language and communication Institutional and legal systems Values and value systems Time orientations Mindsets or world views

Studies show that culture is closely related to the effectiveness of organizations.

Effectiveness depends on... the core values and beliefs of the members of the organization. the policies and practices used by the organization. the success in translating the core values and beliefs into policies and practices. the match between values, beliefs, policies, practices, and the organization’s environment.

Effectiveness is related to... involvement = participation. consistency = shared beliefs and values. adaptability = ability to recognize the need for change and the willingness to change mission = shared purpose.

Major Factors in Hofstede’s Cross-Cultural Studies Power distance –level of acceptance of an unequal distribution of power in institutions Individualism-collectivism –“individualism” is the tendency of people to look after themselves and their family only –“collectivism” is emotional dependence on belonging Uncertainty avoidance –extent to which people feel threatened by ambiguous situations Masculinity-feminity –“masculine” values are assertiveness, materialism, lack of concern for others –“feminine” values are a concern for others and for relationships

Conclusions Culture plays an important role in determining organizational effectiveness. –“Disfunctional” culture –Mismatch of culture to the environment/situation Culture is an important factor in international management. –Cultural differences require different management practices and organizational forms –Cultural similarities often produce similarities in management and organizations