- Organizational and corporate culture
- Defined as what is normal to the organizations; how workers behave w/in the business
- Set of norms (based on mission and vision)
- Helps people fit in based on the organization’s traditions and routines
- A manager has to understand in order to:
- Train the employees to fit company norms
- Improve communications between employees
- Better job description
- Other groups conform to subcultures, which can cause conflicts or culture gaps
- Culture gaps are discrepancies among subgroups
- Difference between cultures exists within a business
- Elements of organizational culture
- N.O.R.M.S (nature of business, organizational structure, rewards, management styles, sanctions)
- External factors such as location can also affect corporate culture (concern from cross border joint ventures)
- Advantages of strong organizational culture
- Belonging and security
- Reducing mistakes
- Team cohesiveness
- Minimizes culture clash/gap
- Cultures can change due to:
- Mergers, takeovers, acquisitions
- Change in NORMS
- Types of organizational cultures
- Charles Handy’s 4 Types of Culture
- Power culture
- Power is centralized, quick decision making
- Results-based, likely flat
- Role culture
- Jobs are clearly stated, little creativity
- Highly structured, tall organization/bureaucratic
- Task culture
- Focuses on getting results from work done
- Individuals and teams are empowered and given flexibility
- Decentralized power
- Person culture
- Staff have similar positions with similar expertise
- Staff form groups to share knowledge
- Individual may benefit which may carryover to firm
- Edgar Schein’s 3 levels of corporate culture:
- Artifacts (e.g. history, facilities, buildings, dress code, etc.)
- Espoused values (e.g. mission, branding, slogans, etc.)
- Basic assumptions and values (values in behavior/action)
- Deal and Kennedy
- Corporate culture is the way things get done
- Two dimensions feedback/reward and risk
- Rapid feedback means bad culture is quickly removed
- High risk businesses needs people that fit well in their culture
- 4 types of culture:
- Tough-guy Macho (rapid feedback, high risk)
- e.g. stock market, police force
- Work-hard, Play-hard (rapid feedback, low risk)
- Stress from pace of work instead of risk (e.g. hotel)
- Bet-the-company (slow feedback, high risk)
- e.g. oil exploration, pharmaceuticals
- Process (slow feedback, low risk)
- e.g. governments, insurance (bureaucracy)
- Knotted and Heskett
- Adaptive cultures – flexible work practices, entrepreneurial
- Inert cultures – strict work protocols
- Goffee and Jones
- Sociability – extent of concern for colleagues
- Solidarity – cohesiveness/unity in the organization
- Ideal culture will have high sociability and solidarity
- Gerry Hofstede
- Several factors in culture:
- Power distance – extent of unequal power distribution
- High – centralized
- Low – decentralized, delegation
- Individualism vs. collectivism
- Masculinity vs. femininity
- Uncertainty avoidance
- Long-term vs. short-term
- Culture clashes
- Occurs when there conflict between subcultures in an organization
- May lead to lowered productivity, staff walkouts, losses
- Happens during times of change
- e.g. takeovers, acquisitions, mergers, expansions
- Common causes
- High cost of implementing change
- Resistance to change from workforce
- Public opinion
- Difference in national cultures (e.g. job practice)
- Importance of understanding the organizational culture
- Culture gaps can cause major problems since individuals affect culture as much as the other way around
- Poor culture may lead to absenteeism, lateness
- Cultural intelligence or cultural quotient
- Ability of individual to blend into a culture; attitude of workers to change
- Rational, motivated, and attentive workers help establish good culture
Kim De Leon2.5. Organizational and Corporate Culture (HL only)
