2.1Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004

Understanding Organisational Context 2e

Slides by Claire Capon

Chapter 2

Culture and organisationsOrganisational culture

Cultural web

Deal and Kennedy’s cultures

2.2Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004

Figure 2.4 The cultural webSource: Johnson, G and Scholes, K (1999) Exploring Corporate Strategy, 5th edn, Prentice Hall Europe.

2.3Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004

Organisational culture

• Organisational culture is determined by the values of the organisation

• Values are the basic concepts and beliefs of an organisation

2.4Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004

Weak culture organisations

• No clear and easily understood values

• Employees will not know how to respond to particular situations in the workplace

2.5Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004

Weak culture organisations

• External environment is poorly managed

• Tend to be less successful than strong culture organisations

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Strong culture organisations

• Have a clear and explicit philosophy about how to conduct business

• Management will shape the values and beliefs

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Strong culture organisations

• Ensure values are:

- relevant to the external environment

- communicated to and understood by all

employees

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Strong culture organisations

• Employees know how their employer wants them to respond in given situations

• Manage the external environment well

• Likely to be successful

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The cultural web ...

• … represents the determinants of organisational culture

• … considers taken-for-granted assumptions about the organisation and physical indicators of organisational culture

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Routines ...

• … are the scheduled and deliberate practices of day-to-day life in an organisation

• … ensure the smooth running of the organisation

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Rituals ...

• … are used to reinforce routines

• … include induction and training courses

• … and routines will be very clear and important in strong culture organisations

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Stories...

• … represent an organisation’s history

• … highlight significant events and people in the past

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Stories ...

• … are told to new organisational members by existing members

• … highlight acceptable and unacceptable behaviour in the organisation

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Symbols ...

• … represent the power an individual has in an organisation

• … indicate the value of an individual to the organisation

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Power structures ...

• … are groups of individuals with power underpinned by a common set of values and beliefs

• … often based on technical or professional expertise

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Organisational structure ...

• … determines where the power will exist in the organisation

• … simple structure - power rests with the owner

• …functional structure - power rests with senior management

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Organisational structure ...

• … divisional structure - power is spread throughout the organisation

• … matrix structure - power rests with individuals in the matrix

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Control systems ...

• … monitor what is important to the organisation

• … can monitor money, budgets, people - rewards systems, work - efficiency and effectiveness

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Deal & Kennedy’s cultures

The tough-guy macho culture

The ‘work hard/play hard’ culture

The ‘bet your company’ culture

The process culture

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The tough-guy macho culture

• Decision making is short term, rapid and risky

• Success is short term for the organisation and individuals

• Failure is condemned, often by dismissal

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The tough-guy macho culture

• Almost impossible in the tough-guy macho culture are:

- long-term success

- the creation of a strong culture

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The ‘work hard/play hard’ culture

• Decision making is short term, rapid and low risk

• Often found in customer- oriented organisations

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The ‘work hard/play hard’ culture

• Feedback is clear - targets have been met, or not met, e.g. in a sales organisation

• Motivation focuses on staff (individually and in teams) to succeed by meeting targets

2.24Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004

The ‘bet your company’ culture

• Decision making is long term and high risk

• Large and long-term investment in R & D and innovation

• Successful employees are mature and respect authority and technical ability

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The process culture

• Decision making is long term and low risk

• External environment is predictable and stable

• Job titles and roles are important

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The process culture

• Employees focus on:

- being methodical and punctual

- how things are done