1. 10.2 Managing organisational culture
The importance of organisational culture

2. Learning outcomes You should be able to understand:
The importance of organisational culture
Different models of organisational culture

3. Overview of key concepts
Organisational culture is all about ‘the way things are done around here’.
There are many influences, both internal and external, that affect it.
National cultures also affect how people work together.

4. The importance of organisational culture

5. Organisational culture
Definition:
The behaviour of people within an organisation and the meaning that they attach to those behaviours. Culture includes the organisation's vision, values, norms, systems, symbols, language, assumptions, beliefs and habits
Organisational culture is 'the way things are done around here‘.

6. The organisational culture gives a sense of identity to employees
Who we are.
What we do.
What we stand for.
A strong organisational culture is one that is internally consistent, widely shared and makes clear what is expected and how people should behave.

7. Where does culture come from?
Organisational culture
The behaviour of leaders
Organisational practices
Shared beliefs, values and assumptions
Ways of working
The behaviour of individuals and groups

8. Where does culture come from?
It is created unconsciously based on the values of the:
Founders
Senior management
Core people.
Over time, culture can change and evolve.

9. How do staff find out about decisions, what happens daily?
Patterns of behaviour, formalised in everyday life of organisation, e.g. training availability.
Sources of organisational culture
Company routines
Formal controls
Organisational structure
Power structure
Symbols
Rituals and myths
How do staff find out about decisions, what happens daily?
Rules and procedures – the amount of autonomy.
Emblems representing the organisation: pay scales and status, size and location of manager’s office!
Vertically, layers of hierarchy, functional areas, delegation etc.
Interrelationships between individuals or groups.

13. Types of organisational culture
Charles Handy in Understanding Organisations (1981) identified four different types of culture.
Power culture
Role culture
Task culture
Person culture.

18. Hofstede’s national culture
Professor Hofstede stated:
‘Culture is the collective programming of the mind distinguishing the members of one group or category of people from others.’
He studied how values in the workplace influenced culture. His studies were across countries and he distinguished the values that underlie a country.
As we are living in a global age where digital technology means we can all communicate and work with each other, more people find themselves working with people from different cultures. This can be exciting, frustrating and uncertain. Businesses need to connect with people globally but still motivate employees, structure projects and develop strategies globally as well. Therefore, understanding national cultures is important.
Each country is scored from 1-120

19. Hofstede’s national culture
Four groups of national culture:
Power distance
Individualism vs. collectivism
Masculinity vs. femininity
Uncertainty avoidance.

20. Power distance (PD)
This refers to the degree of inequity between people with and without power. A high PD score indicates there is an unequal distribution of power. Low PD means that power is shared and well dispersed.
Characteristics
Tips
High PD
Centralised structures
Strong hierarchies
Large gaps in compensation, authority and respect
Acknowledge the leader’s power
Be aware that you may need to go to the top for answers
Low PD
Flatter organisations
Supervisors and employee considered equals
Use of teamwork
Involve as many people as possible in decision making

21. Individualism (IDV)
This refers to the strength of ties people have with others in the community. High IDV indicates loose connections with the community beyond family. Low IDV would indicate a strong cohesion with loyalty and respect for the community.
Characteristics
Tips
High IDV
High valuation on people’s time and their need for freedom
An enjoyment of challenges and expectation of rewards
Respect for privacy
Acknowledge accomplishments
Don’t ask for too much personal information
Encourage debate and expression of own ideas
Low IDV
Emphasis on building skills and becoming masters of something
Work for intrinsic rewards
Harmony more important than honesty
Show respect for age and wisdom
Suppress feelings/emotions to work in harmony
Respect traditions and introduce change slowly

22. Masculinity (MAS)
This refers to how much society sticks with and values traditional male and female roles. High MAS scores are in countries where men are expected to be 'tough', women are in separate professions to men. Low MAS scores roles are blurred.
Characteristics
Tips
High MAS
Men are masculine and women are feminine
There is a defined distinction between men’s and women’s work.
Be aware that people may expect male and female roles to be distinct
Advise men to avoid discussing emotions or making emotionally based decisions or arguments
Low MAS
Women can do anything a man can do
Powerful and successful women are admired and respected
Avoid an ‘old boys club’ mentality
Ensure job design and practices are not discriminatory to either gender
Treat men and women equally

23. Uncertainty/avoidance index (UAI)
This refers to the degree of anxiety that society members feel when in uncertain or unknown situations. High UAI nationals avoid ambiguous situations, they are governed by rules and order. Low UAI scores indicate a society that enjoys novel events and values differences; there are few rules.
Characteristics
Tips
High UAI
Very formal business conduct with lots of rules and policies
Employees need and expect structure
Sense of nervousness spurns high levels of emotion and expression
Differences are avoided.
Be clear and concise about expectations and parameters
Plan and prepare, communicate often, provide detailed plans, focus on tactical aspects of job
Express your emotions through hand gestures and raised voices.
Low UAI
Informal business attitude
More concern with long term strategy than what is happening daily
Accepting of change and risk
Don’t impose rules or structure unnecessarily
Minimise emotional response by being calm/ contemplate the situation before speaking
Express curiosity on the discovery of differences

24. Long-term Orientation (LTO)

25. Indulgence versus Restraint (IVR)

26. Criticisms

27. Applications of Hofstede’s national cultures
Power distance – Malaysia has a PD score of 104 – here reports would be sent to top management only and there would be closed-door meetings by only a selected few powerful leaders.
Individualism (IDV) – Central American countries have a low IDV therefore marketing campaigns should emphasise the benefits to the community.
Masculinity (MAS) – Japan is a highly masculine society scoring 95 whereas Sweden has the lowest at 5. In Japan a team is more likely to succeed if lead by a male. In Sweden it would be the person with the best skills.
Uncertainty/avoidance Index (UAI) – Belgium scores highly at 94 and here it is better to offer a limited choice for consideration but with very detailed information available.