Importance of Organisational Culture

Various ways of identifying culture:

• How decisions are made

• Methods and style of communication

• How customers are treated

Handy’s 4 Classes of Culture:

• Power

• Role

• Task

• Persons

Role Culture:

• People have clearly delegated authorities within a highly defined structure

• Hierarchal bureaucracy

• Power derives from a person’s position

Schien’s 4 Layers:

• Values:

  • Often formally stated/communicated (e.g. our ‘core values’)

• Beliefs:

  • More specific than values

  • How people talk about issues facing the organisation

• Behaviours

  • Day-to-day ways in which an organisation operates

  • E.g. work routines, org structure

• Paradigm

  • The set of assumptions held in common that are taken for granted

  • Usually not talked about - they are just generally accepted

Strong Culture:

• Staff understand and responds to culture

• Little need for policies and procedures

• Consistent behaviour

• Culture is embedded

Weak Culture:

• Little alignment with business values

• Inconsistent behaviour

• A need for extensive bureaucracy & procedures

Examples of a business built on a strong positive culture:

• Customers are "guests"

• A job is a "part"

• A uniform is a "costume"

• Being on duty is "onstage"

• Being off duty is "backstage"

Examples of Positive Culture:

• Zappos (Online Shoe Retailer)

• South West Airlines (World’s Largest Low-Cost Airline)

Examples of Competitive Advantage:

• Ikea

4 Factors that Shape Managerial Behaviours:

• Organisational Culture

• Organisation Structure, Systems, Policies and Plans

• Leadership

• External Environment (PESTLE)

  • The Behaviour of a Firm’s Managers and Leaders

Shadow of the Leader:

• A phenomenon where the organisational culture is the reflection of the founder or senior team

Toxic Culture:

• "A toxic culture in an organisation creates an environment that can damage the emotional, physical or financial wellbeing of employees, customers and those associated with that organisation"

Possible signs of toxic culture:

• Weak leadership

• Authoritarian or bullying leadership

• Lack of transparency & morality

• Dishonesty & corruption

• Reluctance to embrace change

• Lack of openness and honesty

Why might culture need changing?

• Improved business performance

  • Declining profits and sales

  • Low quality or standards of customer service

  • Loss of market share or leadership

• To respond to significant change

  • Respond to issues around ethics & illegality

  • Change of ownership (e.g. acquisition)

  • Change of leadership (e.g. a new CEO)

  • Economic conditions (e.g. downturn)