The way we do things around here
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Organisational culture refers to
- values
- attitudes
- beliefs
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of an organisation’s employees
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Culture is built up slowly over a long period of time and it will be different in every organisation
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Culture consists of
- shared values of a business
- beliefs and norms that affect every aspect of work life
- the behaviours that are typical of day-to-day behaviour
- the strength of a culture determines how difficult or easy it is to know how to behave in the business
Factors Influencing Culture of an Organisation
- Influence of the founder (shadow of the leader)
- Size and development stage of the business (eg, start-up, multisite, multinational)
- Leadership & management style
- Organisational structure, policies & practices
Ways of Identifying Culture Within an Organisation
- Company Rituals
- Celebrating a birthday
- Reward systems
- Are employees still rewarded for acting in an unethical manner?
- Are staff rewarded for high sales or happy customers?
- Physical environment
- What pictures hang on the walls?
- How much investment do facilities receive?
How culture might be demonstrated
- How employees are recruited
- The way that visitors and guests are looked after
- How the working space is organised
- The degree of delegation & individual responsibility
- How contracts are negotiated and agreed
- The personality and style of the sales force
- The responsiveness of communication
- The methods used for communication
- How staff call each other
Strong or Weak
Strong
- Staff understand and respond to culture
- Little need for policies and procedures
- Consistent behaviour
- Culture is embedded
Weak
- Little alignment with business values
- Inconsistent behaviour
- A need for extensive bureaucracy & procedures
Culture: Strong or Weak?
- A firm’s cultural hold over their employees can be either strong or relatively weak
- A strong culture is where employees agree with the firm’s corporate values and are committed to helping the firm in the long-term. Such staff are loyal and hence turnover is low.
Handy’s Four Types of Culture
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Charles Handy devised a model which identified four distinct types of culture that might exist within an organisation
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This theory explores classifications of business structures and organisation based upon the functions and roles of the individual.
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Power
- Power radiates from a few individuals
- Found in entrepreneurial organisations
- Few rules/little bureaucracy
- Swift decision making
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Role
- People clearly delegated authorities
- Highly defined structure role
- Typically tall detailed organisational structure
- Decision making slow
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Task
- Teams are formed to solve particular problems
- Power derives from expertise as long as a team requires expertise
- No single power source
- Matrix organisation
- Team may develop own objectives (potential risk)
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Person
- People believe they are superior to the organisation
- Common in professionals
- Success depends on retaining key personnel
| Cultural Type | Suitable Leadership Style |
|---|---|
| Power | Autocratic |
| Role | Autocratic or paternalistic |
| Task | Paternalistic/democratic |
| Person | Democratic |
Why might a culture need changing?
- Improved business performance
- Declining profits and sales
- Inadequate returns on investment
- Low quality or standards of customer service
- To respond to significant change
- Market changes (growth, competitors)
- Political and legal environment
- Change of ownership (acquisition)
- Change of management or leadership (eg, a new CEO)
- Economic conditions (eg, downturn)