2.5 Organisational (corporate) culture

Organisational culture

The beliefs, values, assumptions and practices of an organisation; differs from business to business, but will often reflect some cultural norms of the host country.

Handy’s Gods of Management theory

A theory of organisational culture claiming that there are four dominant cultures in business: power culture, role culture, task culture, and person culture.

Power culture

An organisational culture where an individual or a selected group of people makes decisions for the organisation and communication is highly centralised.

Role culture

An organisational culture that is defined by clear rules and hierarchies for the smooth operation of an organisation; people have power through their position, rather than their own qualities.

Task culture

An organisational culture that supports dynamic, innovative and flexible companies by giving power to experts within a group.

Person culture

An organisational culture that values every person as an expert and relies on their experiences to operate the business; employee-centric and employees have a similar level of knowledge and expertise.

Frederic Laloux: Reinventing Organizations

five types of organisational culture, associated with levels and colours. Each organisational culture was linked to a leadership style or management philosophy. 

Red organisations

Organisations with highly centralised power controlled by one leader, often using fear, effective in unstable or crisis situations.

Amber organisations

Highly hierarchical organisations with clear roles and strict chains of command, suited to stable and predictable environments.

Orange organisations

Results-driven and competitive organisations focused on performance, efficiency, and growth, often using targets and rewards.

Green organisations

People-focused organisations that emphasise shared values, employee engagement, and stakeholder satisfaction, while still maintaining some hierarchy.

Teal organisations

Decentralised and flexible organisations where employees are self-managed, power is distributed, and teams operate with autonomy and trust.

Cultural clashes

When more than one culture competes for dominance, and conflict results.

Circumstances that can lead to cultural clashes

Internal and external growth
Change in leadership
Multinational expansion