Theories and Management of Organizational Culture

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Organisational culture is an outcome of developments over the years, but its seeds are sown as soon as an organisation originates. Understanding and appreciating organisational culture is important, as it moulds our expectations and influences our working style. Culture is an integrated pattern of shared human knowledge, beliefs, behavior, attitudes, goals, and practices. From the domestic level to that of large organisations, each particular culture produces its own outcomes, and every culture is different.

Organizational culture has been given a lot of thought in recent years. Culture consists of the shared values of an organization - the thinking and norms that affect every part of work life, from how people address each other to how major policy assessments are made. The power of a culture determines how difficult or easy it is to know how to behave in the organisation.

6.6.1 Levels of Culture

Schein considers culture in terms of three levels:

Artifacts - Tangible Signs of culture and include structures, systems, policies, procedures and physical aspects of the organisation such as working environment setting, corporate image, customer relations, and methods of communication.

Values - The more strongly based the values, the more they are likely to affect behavior.

Basis Assumptions - These basis assumptions form around deeper dimensions of human existence such as the nature of humans, human relationships and activity, reality and truth.

6.6.2 Development of organisational culture

The formation of 'culture' will depend upon a whole host of factors including:

company history,


organization structure,


critical business incidents and environment,

leadership skills,

management style,

objectives and goals,

So HSBC, BOV, APS, Lombard and Banif could be considered to operate in the financial sector and have the same corporate status, it is their own culture that will distinguish them from each other, resulting from the variables described above.

6.6.3 Classifications of culture

The British management writer, Charles Handy suggests that we can classify organizations into a broad range of four cultures. The four cultures he discusses are:

Apollo - Role Culture

Zeus - Power or Club Culture

Athens - Task Culture

Dionysus - Person Culture

The purpose of the study is to review the degree to which the major culture reflects the real needs and constraints of the organization. Handy uses diagrammatic representation to illustrate his ideas:

1. Apollo-Role

A strong role culture places a premium on order and efficiency. Power is hierarchical and clearly defined in the company's job descriptions. Decision making occurs at the top of the bureaucracy. An apollonian response to a change in the environment generally starts by ignoring changes in circumstances, and by relying on the existing set of routines. Life insurance companies reflect an Apollonian organization.

The strength of the culture lies in area within its supports. Relations take place between the functional specialism by job descriptions, procedures, rules and systems. Handy states that the job description is more important than the skills and abilities of those who people the culture. Performance beyond the role prescription is not required or encouraged.

The authority of position power is justifiable. Personal power is not. This reflects Weber's pure theory of bureaucracy. System effectiveness depends upon adherence to principles rather than personalities.

Handy suggests that this culture is appropriate in organizations which are not subject to stable change. The culture functions well in a steady-state environment, but is insecure in times of change. The role culture is typified in government departments, local authorities, public utilities and the public sector in general. This sort of culture finds it extremely difficult to change rapidly.

2. ZEUS-Power or Club Culture

Power is determined in the hands of one individual, the top boss. Control spread out from the centre's use of personal contacts over procedures. The most powerful person dominates the decision making process. Decisions are made quickly, but their value depends almost entirely on the boss and his inner circle. Investment banks and brokerage firms reflect organizations with a dominant club culture.

Handy describes the power culture as a 'web'. He suggests that this reflects the concentration of power of a family-owned business, which can either be extremely large or small. The family operation with strict responsibilities going to family members' responsibility given to personalities rather than expertise creates the power structure of the 'web'.

The ability of the power culture to get used to changes in the environment is very much determined by the perception and ability of those who occupy the positions of power within it. The power culture has more faith in individuals than committees and can either change very rapidly and adapt or 'fail to see the need for change' and die.

3. ATHENS-Task Culture

This type of culture is derived from the expertise required to complete a task or project. The work, itself, is the leading principle of coordination. Employees move frequently from one project or group to another. Task culture encourage a high level of adaptation and innovation by stressing talent, youth and team problem-solving, although extreme individual autonomy can lead to irresponsibility. Task cultures are expensive organizations that require experts that are highly paid driven to study organizational problems in depth.

These organisations are involved in large research and development activities they are much more active. They are continuously subject to change and have to create provisional task teams to meet their future needs. Information and expertise are the skills that are of value here. There is close contact between departments, functions and specialties, communication and integration are the means whereby the organization can anticipate and adapt to change quickly. Influence in this team culture is based upon expertise and up-to-date information where the culture is most in tune with results. The dangers for this culture exist when there is a restriction in resources causing it to become more power' or 'role' orientated.

4. DIONYSIUS-Existential Culture

In this culture, Individuals are independent in the organization, they do have their own tasks and duties and they are actually independent in spite of this, they have to share resources in the organization.

Organisations exist for individuals to achieve their goals. Employees see themselves as independent professionals who have temporarily lent their services or skills to the organisation. Management is considered an unnecessary counterweight and given the lowest status.

Decision making occurs by the blessing of the professionals. The Dionysius culture can lead to poisonous, ideological wars among its professionals. Universities and professional service firms reflect the dominant Dionysian culture.

Deal and Kennedy's model of culture is based on characterising different four types of organization, based on how quickly they receive feedback and reward after they have done something and the level of risks that they take.

Feedback and reward

A major driver of people in companies and hence their culture is the general feedback and specific rewards that tell them they are doing a good or bad job. If this feedback is immediate or shorter-term, it will quickly correct any ineffective behavior and hence lead to a consistent culture, those who cannot survive will quickly find out and either leave or be sacked.

If the feedback takes longer to arrive, then can leave mistakes uncorrected, but it also lets people look further out into the future. Either way, there is likely to be some substitute activity (such as process management) to help keep things on track until actual results are known.


Uncertainty and risk are something that some people hate and some people thrive on. In either case, it is another motivating force that leads people to focus on managing it.

Where the risk is low, people may be willing to take risks up to their acceptable limit. Where they are high, the risks need to be managed or accepted. High risk companies are more likely to include people who enjoy the shake of taking a chance.







Feedback and reward







Tough-guy macho













The four cultures

Work-hard, play-hard culture

This has rapid feedback/reward and low risk, leading to:

Stress coming from quantity of work rather than uncertainty.

High-speed action leading to high-speed recreation.

Eg. Restaurants, software companies.

Tough-guy macho culture

This has rapid feedback/reward and high risk, leading to:

Stress coming from high risk and potential loss/gain of reward.

Focus on the present rather than the longer-term future.

Eg. police, surgeons, sports.

Process culture

This has slow feedback/reward and low risk, leading to:

Low stress, plodding work, comfort and security. Stress may come from internal politics and stupidity of the system.

Development of bureaucracies and other ways of maintaining the status quo.

Focus on security of the past and of the future.

Eg. banks, insurance companies.

Bet-the-company culture

This has slow feedback/reward and high risk, leading to:

Stress coming from high risk and delay before knowing if actions have paid off.

The long view is taken, but then much work is put into making sure things happen as planned.

Eg. aircraft manufacturers, oil companies.

6.6.4 Culture - the international dimension

Hofstede states that each culture must deal with questions that can be determined according to a series of extent, which results in a unique gestalt for each society, depending on the intensity of its tendency towards one or another end of each culture dimension spectrum.

Individualism/Collectivism: This means whether people see themselves at a very deep level as part of a group, or as a single, independent actor. It is important to realize that the dimension does not indicate that some people "like" to be in groups. Hofstede explains that the groups are "natural" ones, such as family or race. Furthermore, it is a question of human self-identity.

Uncertainty Avoidance: In various cultures, people prefer to have everything explained in detail so there will be few, if any surprises. In cultures where uncertainty avoidance is low, people have more relaxed expectations and are not worried when some factors of a situation are unknown.

Power Distance: Hierarchy is a feature of most human life, but in some cultures, the gap between high and low is wider, making for a society in which people respect the powerful, and there is lower expectation of movement between classes, castes, or levels. In cultures where Power Distance is low, people tend to expect that those in power will have earned it, rather than simply gaining power by virtue of position.

Aggressiveness: In this system, there is a gender gap, and women's values are said to be more similar across cultures. Women are said to value gentleness and agreement, and in cultures with a low Aggressiveness dimension, men also share these values. However, other cultures have more distinctive values for men, competition and assertiveness. In such cultures, the values of women also move somewhat towards the Aggressiveness end of the spectrum, although not as much as men's do.

6.6.5 Cultural and organizational effectiveness

Having a clear view of human nature is an important part of management in the work place. In order for managers and workers to work together as an effective and productive unit, the workers must know how they fit into the overall scheme of things, and the managers must have a clear understanding of how they can increase productivity by supporting their employees through the appropriate leadership style. It is also very important for managers to realistically appraise the working environment, as well as the characteristics of the task, in order to decide how he or she deals with and directs employees.

Aside from knowing how human nature speaks a worker's measures, the manager must also be aware of the specific working environment, personalities, and motivational forces, which drive employees. This can then be used to decide which actions are necessary to motivate the work force, and to obtain maximum productivity.

William Ouchi, with the view of a "Theory Z", looks at the attitudes of managers and workers. In this theory, Ouchi view various aspects of the relationship which exists between management and workers, in such areas as motivation, leadership, power, authority, and conflict, to name a few.

Ouchi's "Theory Z". Often referred to as the "Japanese" management style, Theory Z offers the notion of a hybrid management style which is a combination of a strict American management style (Theory A) and a strict Japanese management style (Theory J). Theory Z emphasises things such as job rotation, broadening of skills, generalisation versus specialisation, and the need for continuous training of workers. This theory speaks of an organisational culture which mirrors the Japanese culture in which workers are more participative, and capable of performing many and varied tasks.

Ouchi's Theory Z makes certain assumptions about workers, these include the belief that workers tend to want to build co-operative and intimate working relationships with those that they work for and with, as well as the people that work for them. These types of workers have a very well developed sense of order, discipline, moral obligation to work hard, and a sense of cohesion with their fellow workers. It is assumed, that they, can be trusted to do their jobs to their utmost ability, so long as management can be trusted to support them and look out for their well being.

One of the most important view of this theory is that management must have a high degree of confidence in its workers in order for this type of participative management to work. While this theory assumes that workers will be participating in the decisions of the company to a great extent.

Theory Z states the need for enabling the workers to become generalists, rather than specialists, and to increase their knowledge of the company and its processes through job rotations and continual training. In fact, promotions tend to be slower in this type of setting, as workers are given a much longer opportunity to receive training and more time to learn the requirements of the company's operations. The desire, under this theory, is to develop a work force, which has more of a loyalty towards staying with the company for an entire career, and be more permanent than in other types of settings. It is expected that once an employee does rise to a position of high level management, they will know a great deal more about the company and how it operates, and will be able to use Theory Z management theories effectively on the newer employees.

Managing organizational culture

A point of clarification on the issue of managing culture is that it is often referred to as changing culture. As the concept of organizational culture is structurally complex, it will affect most of the aspects of an organisation:

Its strategy

Its structure

Its rewards and control systems

Its daily routines

An organisation tends to be motivated to undergo a cultural change when it perceives some form of crisis and will typically start at the strategy, structure and procedures level. Management will then try to change its culture to make it more conductive to the achievement of organizational goals.

Some of the conditions or situational factors that are necessary for, or will facilitate, cultural change are:

a dramatic crisis

leadership turnover

life-cycle stage

age of the organisation

strength of the organisation

absence of subcultures

Cultural change is expected to match the challenges set by the external environment and to aid in integrating the internal environment of the organisatrion to meet those challenges.