Understanding Organisational Context 2e Janaury 2004 Understanding Organisational Context 2e Slides by Claire Capon Chapter 2 Culture and organisations Organisational culture Cultural web Deal and Kennedy’s cultures Copyright Claire Capon 2004

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

Organisational culture Organisational culture is determined by the values of the organisation Values are the basic concepts and beliefs of an organisation

Weak culture organisations No clear and easily understood values Employees will not know how to respond to particular situations in the workplace

Weak culture organisations External environment is poorly managed Tend to be less successful than strong culture organisations

Strong culture organisations Have a clear and explicit philosophy about how to conduct business Management will shape the values and beliefs

Strong culture organisations Ensure values are: - relevant to the external environment - communicated to and understood by all employees

Strong culture organisations Employees know how their employer wants them to respond in given situations Manage the external environment well Likely to be successful

The cultural web ... … represents the determinants of organisational culture … considers taken-for-granted assumptions about the organisation and physical indicators of organisational culture

Routines ... … are the scheduled and deliberate practices of day-to-day life in an organisation … ensure the smooth running of the organisation

Rituals ... … are used to reinforce routines … include induction and training courses … and routines will be very clear and important in strong culture organisations

Stories... … represent an organisation’s history … highlight significant events and people in the past

Stories ... … are told to new organisational members by existing members … highlight acceptable and unacceptable behaviour in the organisation

Symbols ... … represent the power an individual has in an organisation … indicate the value of an individual to the organisation

Power structures ... … are groups of individuals with power underpinned by a common set of values and beliefs … often based on technical or professional expertise

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

Organisational structure ... … divisional structure - power is spread throughout the organisation … matrix structure - power rests with individuals in the matrix

Control systems ... … monitor what is important to the organisation … can monitor money, budgets, people - rewards systems, work - efficiency and effectiveness

Deal & Kennedy’s cultures The tough-guy macho culture The ‘work hard/play hard’ culture The ‘bet your company’ culture The process culture

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

The tough-guy macho culture Almost impossible in the tough-guy macho culture are: - long-term success - the creation of a strong culture

The ‘work hard/play hard’ culture Decision making is short term, rapid and low risk Often found in customer- oriented organisations

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

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

The process culture Decision making is long term and low risk External environment is predictable and stable Job titles and roles are important

The process culture Employees focus on: - being methodical and punctual - how things are done