2.5 Organizational culture

what is organisational culture

what is organisational culture

the set of values, attitudes, beliefs, expectations and assumptions of an organisation

Handy’s God of Management theory - types of culture

power culture, role culture, task culture, person culture (existential)

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 (existential 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.

internal growth

when a business expands its output, sales or staff with its own resources, is less likely to cause more cultural clashes than external growth, where another business is involved.

external growth

almost always involves cultural tensions. Organisational culture is so unique to every business that it is very unlikely that any two businesses have the same culture. So when a business is involved in a takeover, acquisition or merger, there can be culture clashes between the two organisations

change in leadership style

f the change in style is significant, employees may find it particularly difficult to cope with the changed expectations in relationships, chain of command and decision-making

multinational expansion

There are many benefits in terms of sales revenue, diversification and economies of scale for a business to expand internationally.  However, expanding operations to other countries carries a particular risk of culture clash because of differences in language, working habits and hours, relationships between employees, and even ethical norms.