Select your language

Suggested languages for you:
Log In Start studying!
StudySmarter - The all-in-one study app.
4.8 • +11k Ratings
More than 3 Million Downloads
Free
|
|

All-in-one learning app

  • Flashcards
  • NotesNotes
  • ExplanationsExplanations
  • Study Planner
  • Textbook solutions
Start studying

Managing Organisational Culture

Save Save
Print Print
Edit Edit
Sign up to use all features for free. Sign up now
Business Studies

The only thing of real importance that leaders do is to create and manage culture. If you do not manage culture, it manages you, and you may not even be aware of the extent to which this is happening."

- Edgar Schein

Creating and managing organisational culture is essential for all leaders to pursue. Not only does organisational culture help foster a creative and productive environment but it also helps the organisation manage change. Let's find out how!

Organisational culture definition?

Organisational culture is the collection of organisational shared values and practices that guides employees’ actions and behaviours in the organisation.

The organisational leaders are usually the ones that establish and influence organisational culture which includes shared beliefs and values. These shared beliefs and values are then communicated to employees and shape their understanding of the company and influence their behaviours at work, for example, this influences the way employees’ speak during their working hours.

If the organisational culture is strong employees are most likely to be aware of how to behave in most situations at work. On the other hand, if the organisational culture is weak, employees may not have a clear understanding of how to behave in certain situations.

Strong organisational culture can improve unity and teamwork between employees. This, in turn, results in organisational success, as by working well together employees will create more output. Moreover, with clear guidance on how to behave employees can perform a more consistent behaviour which influences better service quality, especially if their duties involve dealing with clients.

What are the organisational culture models?

Organisational cultural models play an important role in the company’s success. As the culture, that company follows influences employees’ motivation and their contribution to organisational success. Organisational cultures are unique cultural models that provide organisations with the foundations and key principles of developing an effective organisational culture.

Handy’s culture

This cultural model involves four different types of organisational culture, which are:

Role culture - This is the formal culture in which employees' tasks and responsibilities have written clear procedures, and employees are aware of their place in the hierarchy. This cultural model is most appropriate for large enterprises or medium-sized businesses in a steady environment.

Managing organizational culture, role culture, StudySmarterFigure 1. Role Culture, StudySmarter

Power culture - This type of culture follows a structure where there are only key decision-makers in the organisation. This usually occurs in small businesses in which the founder is a clear leader and finds it difficult to give authority to other employees to make decisions in the organisation.

Managing Organizational Culture, Power culture, StudySmarterFigure 2. Power Culture, StudySmarter

Task culture - This organisational culture focuses on different projects and tasks rather than the daily working routines of employees. In the task, culture employees may have two main responsibilities: their work roles and roles in the project. Moreover, employees are likely to be part of temporary teams with experts from different departments. This culture usually occurs in organisations that follow matrix structure. An example of an organisation following structure are advertising agencies.

Managing Organizational Culture, Task Culture, StudySmarterFigure 3. Task Culture, StudySmarter

Person culture - In this type of culture, employees have high levels of independence and control of their tasks in the organisation. This type of organisational culture usually occurs in the type of firms that require high expertise such as medical or legal firms and where the number of employees is relatively small.

Managing organizational culture, Person culture, StudySmarterFigure 4. Person Culture, StudySmarter

Hofstede’s national cultures

Professor Geert Hofstede describes the organisational culture like this:

“The collective programming of the mind distinguishing the members of one group or category of people from others”¹

The model focuses on how different national cultures impact the organisational cultures operating in that specific country. The key elements of this model are (see Figure 5 below):

Individualism and collectivism (IDV) - This element considers to what extent individual employees should concentrate on themselves rather than be team players.

Power and distance index (PDI) - This element concentrates on looking at the extent to which society tolerates unequal power distribution. Countries that follow low PDI accepts decentralised and more organic structures whereas if the country implements high PDI that means that this country will be more centralised and structures following rigid hierarchical structures.

Uncertainty and avoidance index (UAI) - This index measures the degree of uncertainty and ambiguity that people have in society. In countries that have high UAI people attempt to live life predictably and follow acceptable national behaviour codes. While countries with a low UAI index have a relaxed idea of acceptable behaviour and allow freedom.

Masculinity (MAS) - This index refers to the values that dominate in the organisation. They can be either masculine which means that organisations main focus is finances and individual employees’ confidence. Or feminine which focuses on being altruistic which means concern for others more than themselves. Additionally, the focus is on developing quality relationships with co-workers.

Long-term orientation (LTO) - This refers to employees’ long-term thinking. Meaning that if the organisation follows this cultural perspective employees will be focusing on long-term gains and always work in the way that will assist them in the long-term success instead of focusing on the short-term present gains. Short-term orientation is the opposite as organisations following this cultural element puts main focus towards present gains and put aside the long-term fulfilment.

Managing organizational culture, Hofstede's national cultures model, StudySmarterFigure 5. Hofstede's National Cultures Model, StudySmarter

What is organisational culture in strategic management?

This section will address the impact that the organisational culture has on Strategic management.

Strategic management is the process of developing organisational goals, objectives, missions and visions that will lead to organisational success.

The strategy helps employees understand their roles and responsibilities dedicated towards the goal achievement. To put it simply, the organisational strategy gives direction to employees.

Organisational culture influences employees’ behaviours, practices and opinions.

Organisational culture contributes towards goal achievements as the shared values, acceptable practises and behaviours are established so that they assist employees in achieving organisational goals. To put it simply organisational culture sets the way on how employees are going to achieve set organisational goals.

Organisations should seek to achieve alignment. Figure 6 shows how organisations should aim to align their strategic management and organisational culture. This means that a strategic plan should be constantly in line with the organisational culture so that these elements work together and contribute to organisational success.

Managing organizational culture, alignment between strategic management and organisational culture, StudySmarterFigure 6. Alignment between strategic management and organisational culture, StudySmarter

What is the importance of organisational culture in Strategic management?

There are many reasons why organisational culture plays a highly important role in the organisation’s strategy. The key important reasons are:

Unified goals - The strong organisational culture establishes unified behaviours practised by employees. These behaviours may assist organisations in achieving their set strategic goals.

The organisational culture may establish employees’ primary focus of always putting customers first. This can encourage positive outcomes such as an increase customers satisfaction. This can be a contribution to the achieved strategy of increasing positive consumers’ reviews by 25%.

Culture influences employees’ behaviours - Culture affects employees’ behaviours unconsciously. This means that the strong culture will automatically encourage the acceptable attitude of employees on how to perform and approach certain tasks. That will save managers time and effort in regards to managing and controlling employees.

Creates competitive advantage - The organisational culture can assist the organisation in increasing its performance and getting ahead of competitors. This starts with a strong organisational culture which will encourage employees to work as a team. While working as a team employees will be aware of what to expect from each other and will work towards the common goal. This will help the company to get ahead of competitors as employees will achieve more while working as a group and working in an organisation-specific cultural way which will also help the company to differentiate itself from competitors.

Culture replaces written rules and regulations - in Strategic management when setting strategic goals managers need to put elements such as rules and regulations guiding employees on how to approach tasks and achieve set goals. However, the strict rules and regulations can be seen as undesirable, controlling and demotivating for employees. Instead, culture can be seen as ‘the way of working in the organisation’ shaping employees' behaviours and guiding them on how to approach tasks and complete them. This will increase employee motivation as it is seen less as controlling.

What is the impact of organisational culture on change management?

Firstly, before explaining the impact of organisanisational culture to change management we will first define change management.

Change management

Change management is the process of guiding organisations to achieve desired outcomes by making changes in the organisation.

The change management follows a process of taking the organisation from its current state to undergo the transition and achieve its desired future state.

Organisational culture impact on change management

The organisational culture has an impact on change management as when an organisation is planning on implementing any changes in its practices organisation will have to ensure that these changes align with the organisational culture. Otherwise, the organisation will need to change its culture.

However, some organisational cultures set barriers for organisations to go through changes and respond to the external environment. This is because the proposed changes may not align with cultural beliefs or leaders are afraid of facing failure due to made changes. That said, the organisation should make a few changes in its culture to go through successful change and respond to the external environment successfully.

Last but not least, change management and organisational culture should be aligned and changed when needed as it will result in success in the organisation’s performance.

Figure 7 shows how proposed changes in organisational structure and design can be aligned with changes in the organisational culture. Organisational strategic and cultural changes should always be made together because without adjusting changes in culture, the change management process will not be effective.

Managing organizational culture, organisational culture and change management, StudySmarterFigure 7. Organisational Culture and Change Management, StudySmarter

Understanding and managing organisational culture

Organisational is a culture made up of shared values and beliefs that guide employees on how to behave in the company. The understanding of the organisational culture is crucial to any leader or manager as their organisational cultural knowledge will help them to make better strategic decisions. The strategic decisions that are not aligned with the organisational culture may not work well in the organisation and face some resistance. If the management has a good understanding of culture and makes strategies aligned with it, strategies are more likely to be effective.

Moreover, managing organisational culture is extremely important especially when responding to an uncertain environment. Therefore, leaders should be confident in making and managing changes in the organisational culture to achieve the organisational goals. A few steps will assist managers in managing changes in the culture. They are:

  • Measure current organisational cultural values

  • Ensure to align the organisational culture with strategy and structure

  • Ensure that staff and stakeholders are involved in proposing ideas and suggestions regarding the changes in the organisational culture

  • Ensure organisational culture change is demonstrated and communicated to the employees frequently

  • Manage the emotions of employees, emphasise with them and help staff to adapt to recent changes in the organisation.

Managing Organisational Culture - Key takeaways

  • Organisational culture creates a guide for employees on how to behave while working in the business on the daily basis.
  • The organisational leaders are usually the ones that establish and influence organisational culture, this includes creating shared beliefs and values.
  • Strong organisational culture means that employees are aware of how to behave in most situations at work. While in a weak organisational culture employees may not have specific knowledge on how to behave in certain situations.
  • There are two main organisational culture models, which are: 1) Handy’s task culture 2) Hofstede’s national cultures Strategic management is the process of developing organisational goals, objectives, missions and visions that will lead to organisational success.
  • Organisations should aim to align their strategic management and organisational culture. This means that a strategic plan should be constantly in line with the organisational culture so that these elements work together and contribute to organisational success.
  • There are key reasons why organisational culture plays an important role in the organisation’s strategy, they are: Unified goals, Culture affects people’s behaviour, competitive environment, culture replaces rules and regulations.
  • Change management is the process of guiding organisations to achieve desired outcomes by making changes in the organisation.
  • The organisational culture has an impact on change management as any proposed changes in the organisation’s practices will have to align with the organisational culture to be effective.
  • The understanding of organisational culture is crucial to any leader as an understanding of the culture will lead to better decision making and only the strategic decisions that are aligned with the organisational will work effectively.
  • The ability to manage changes correctly is extremely important to any manager. Effective management of changes in organisational culture will help to motivate employees to go through the change and reach desired organisational goals.

SOURCES:

1. Hofstede Insights, https://hi.hofstede-insights.com/national-culture

Managing Organisational Culture

Organisational culture should be managed by leaders in a way that all the workforce in the organisation is aware of the organisational culture. As well as workforce should always be informed and correctly managed when an organisation is going through cultural change. Moreover, An organisation’s strategic decision making should be constantly in line with the organisational culture so that these elements work together and contribute to organisational success. 

Handy’s task culture model includes four different types of organisational culture. The four types are:

Role culturePower cultureTask culture Person culture

Organisational culture is the collection of organisational shared values and practices that guides employees’ actions and behaviours in the organisation. 

An example of organisational culture is the power culture. This type of culture is very centralised and there is usually only a single leader that has authority over others. This type of organisational culture usually occurs in startups where the founder wants to remain in the leader’s position as they find it difficult to give another workforce a responsibility to make strategic decisions. 

Yes, organisational culture can be managed by leaders when creating shared values and beliefs and aligning them with when making strategic decisions and when making changes to organisational structure to respond to the external environment or achieve organisational goals. 

Final Managing Organisational Culture Quiz

Question

What is organization structure?

Show answer

Answer

Organisation structure is a system that outlines how activities are managed in order to achieve the objectives of a business.

Show question

Question

What does the organization structure determine? 


Show answer

Answer

  • Responsibilities and authorities of employees

  • Job roles and titles

  • Way of communication flows

Show question

Question

What is organization breakdown structure?


Show answer

Answer

Organization breakdown structure (OBS) describes an organization framework for project planning, resource management, time and expense tracking, cost allocation, revenue/profit reporting and work management.

Show question

Question

How to make an organization breakdown structure? 


Show answer

Answer

  • Make a hierarchy of the entire firm

  • Recognize all departments and teams within the firm

  • Specify functional groups

Show question

Question

What are the types of organization structure?


Show answer

Answer

There are centralized and decentralised organization structures, flat and tall organisation structures, and functional, product-based and matrix structures.

Show question

Question

What is a centralized organization structure?


Show answer

Answer

Centralized organisation structure is where decisions are made at the top of an enterprise or in a head office and then passed on to the rest of the employees.

Show question

Question

What are the advantages of the centralized organisation structure?


Show answer

Answer

Companies using this structure characterize consistency and clear direction. Moreover, their activities are carefully controlled and managed.

Show question

Question

Give an example of an enterprise using a centralised organization structure.

Show answer

Answer

For example, Apple.

Show question

Question

What is a decentralized organisation structure?


Show answer

Answer

Decentralized organisation structure is when lower levels in a business have the decision power.

Show question

Question

When is the decentralized organization structure usually used?


Show answer

Answer

It is usually where the business has many locations and therefore the head office is reasonably unable to control or make decisions for all the locations.​​​​

Show question

Question

What are the advantages of decentralized organization structure?


Show answer

Answer

Employees in companies using this type of organization structure are typically more motivated since they have a sense of responsibility. Additionally, managers are able to make decisions suitable to their local area and customers.

Show question

Question

Which of these companies is the more likely to use the decentralized organization structure?


Show answer

Answer

Pret

Show question

Question

What is the difference between flat and tall organisation structures?


Show answer

Answer

The flat organization structure has few or even no levels of management between management and staff level employees whereas the tall organisation structure has many.

Show question

Question

What is a different name for a flat organisation structure?


Show answer

Answer

Horizontal organisation structure

Show question

Question

What is a different name for a tall organisation structure?


Show answer

Answer

Hierarchical structure

Show question

Question

What is the definition of organisational culture?

Show answer

Answer

 Organisational culture is the collection of organisational shared values and practices that guides employees’ actions and behaviours in the organisation.

Show question

Question

Who in the organisation usually creates or shapes organisational culture?

Show answer

Answer

Organisational leaders

Show question

Question

What is the difference between strong and weak organisational culture?

Show answer

Answer

If the organisational culture is strong employees are most likely to be aware of how to behave in most situations at work. On the other hand, if the organisational culture is weak, employees may not have a clear understanding of how to behave in certain situations.



Show question

Question

What are the benefits of a strong organisational culture?

Show answer

Answer

The benefits of a strong organisational culture are:

  • Improvement of unity and teamwork between employees, by working well together employees will create more output. 
  • The establishment of clear guidance on how to behave will lead employees to perform a more consistent behaviour that will assist them in performing a better service quality, especially if employees’ duties involve dealing with clients.

Show question

Question

Why the organisational cultural models are important?

Show answer

Answer

Organisational cultural models are important because they provide organisations with foundations and key principles regarding the development of an effective organisational culture.

Show question

Question

What are the key organisational cultural models?

Show answer

Answer

The key models are: 

  • Handy’s task culture
  • Hofstede’s national cultures model

Show question

Question

What types of organisational culture are suggested in Handy’s task culture model?

Show answer

Answer

The four types are:

  1. Role culture

  2. Power culture

  3. Task culture 

  4. Person culture

Show question

Question

What is meant by the role culture?

Show answer

Answer

The Role culture is a formal culture in which employees tasks and responsibilities have written clear procedures, and employees are aware of their place in the hierarchy. This cultural model is most appropriate for large enterprises or medium-sized businesses in a steady environment.

Show question

Question

What are the key elements of Hofstede’s national cultures model?

Show answer

Answer

The key elements are:

  • Individualism and collectivism (IDV) 

  • Power and distance index (PDI) 

  • Uncertainty and avoidance index (UAI)

  • Masculinity (MAS)

  • Long-term orientation (LTO)

Show question

Question

 What is meant by the masculinity index?

Show answer

Answer

Masculinity index refers to the values that dominate in the organisation. They can be either masculine which means that organisations main focus is finances and individual employees’ confidence. Or feminine which focuses on being altruistic which means to be more concerned for others than themselves. Additionally, the focus is on developing quality relationships with co-workers.

Show question

Question

 What is meant by strategic management?

Show answer

Answer

Strategic management is the process of developing organisational goals, objectives, missions and visions that will lead to organisational success. The strategy helps employees to understand their roles and responsibilities dedicated towards the goal achievement.  To put it simply organisational strategy gives direction to employees.

Show question

Question

How can the organisational culture and strategic management work together effectively?

Show answer

Answer

 Organisations should aim to align their strategic management and organisational culture. This means that a strategic plan should be constantly in line with the organisational culture so that these elements work together and contribute to organisational success.

Show question

Question

What should organisations aim to achieve regarding organisational culture and strategic management?

Show answer

Answer

​ Organisations should aim to achieve alignment. That means that organisations should aim to align their strategic management and organisational culture with each other.

Show question

Question

What are the important reasons regarding the organisational culture in strategic management?

Show answer

Answer

 The important reasons are:

  • Creates unified goals

  • Culture positively influences people’s behaviours

  • Assists in gaining a competitive advantage

  • Culture replaces written rules and regulations



Show question

Question

What is change management?

Show answer

Answer

Change management is the process of guiding organisations to achieve desired outcomes by making changes in the organisation. The change management follows a process of taking the organisation from its current state to undergo the transition and achieve its desired future state.

Show question

Question

 What is the impact that the organisational culture has on change management?

Show answer

Answer

The organisational culture has an impact on change management as when an organisation is planning on implementing any changes in its practices organisation will have to ensure that these changes align with the organisational culture. 

Show question

Question

Should the organisational culture go through changes to implement the change management process effectively?

Show answer

Answer

Yes, the organisation should make a few changes in its culture to go through successful change and respond to the external environment successfully. Most importantly, change management and organisational culture should be aligned with each other and change when needed as it will result in success in the organisation’s performance.

Show question

Question

 Why it is important to understand the organisational culture?

Show answer

Answer

The understanding of the organisational culture is crucial especially for leaders or managers as their organisational cultural knowledge will help them to make better strategic decisions.

Show question

Question

What are the key steps of managing an organisational culture change effectively?

Show answer

Answer

  • The key steps are:

    • Measure current organisational cultural values
    • Ensure to align the organisational culture with strategy and structure
    • Ensure that staff and stakeholders are involved in proposing ideas and suggestions regarding the changes in the organisational culture 
    • Ensure organisational culture change is demonstrated and communicated to the employees frequently
    • Manage the emotions of employees, emphasise with them and help staff to adapt to recent changes in the organisation.

Show question

Question

What is the functional organisation structure?

Show answer

Answer

Functional organisation structure is when employees are grouped based on their specific skills and knowledge. They are divided into departments such as marketing, finance, IT, R&D etc.

Show question

Question

What are employees based on in a product-based organisation structure?


Show answer

Answer

A particular product they work on, customers they deal with, geographical area they serve.

Show question

Question

What are the three types of the matrix organisation structure?


Show answer

Answer

Functional, product-based and matrix structures.

Show question

Question

A tall organisational structure is where decisions are made at the top of an enterprise or in a head office and then passed on to the rest of the employees.

Show answer

Answer

False

Show question

Question

A flat organisational structure is when lower levels in a business have the decision power.


Show answer

Answer

False

Show question

Question

Companies using this type of organisational structure characterise consistency and clear direction. Moreover, their activities are carefully controlled and managed. However, their employees tend to be demotivated which results in lower productivity. What type of organisational structure is it?


Show answer

Answer

centralised

Show question

Question

A decentralised organisational structure is typically used by businesses that have many locations

Show answer

Answer

True

Show question

Question

A flat organisational structure is also called...

Show answer

Answer

horizontal organisational structure.

Show question

Question

In companies using this organisational structure, managers have a wide span of control with more subordinates and there is usually a short chain of command. What type of organisational structure is it?

Show answer

Answer

flat

Show question

Question

In this organisational structure, there are many leaders and layers of management. What type of organisational structure is it?

Show answer

Answer

tall

Show question

Question

The collection of organisational shared values and practices that guides employees’ actions and behaviours in the organisation is called...

Show answer

Answer

organisational culture.

Show question

Question

___ is the process of developing organisational goals, objectives, missions and visions that will lead to organisational success.

Show answer

Answer

Strategic management

Show question

Question

___ is the process of guiding organisations to achieve desired outcomes by making changes in the organisation.

Show answer

Answer

Change management

Show question

Question

This organisational culture focuses on different projects and tasks rather than the daily working routines of employees. What type of culture is it?


Show answer

Answer

Task culture

Show question

Question

In this type of culture, employees have high levels of independence and control of their tasks in the organisation. What type of culture is it?


Show answer

Answer

Person culture

Show question

Question

This type of culture follows a structure where there are only key decision-makers in the organisation. What type of culture is it?


Show answer

Answer

Power culture

Show question

60%

of the users don't pass the Managing Organisational Culture quiz! Will you pass the quiz?

Start Quiz

Discover the right content for your subjects

No need to cheat if you have everything you need to succeed! Packed into one app!

Study Plan

Be perfectly prepared on time with an individual plan.

Quizzes

Test your knowledge with gamified quizzes.

Flashcards

Create and find flashcards in record time.

Notes

Create beautiful notes faster than ever before.

Study Sets

Have all your study materials in one place.

Documents

Upload unlimited documents and save them online.

Study Analytics

Identify your study strength and weaknesses.

Weekly Goals

Set individual study goals and earn points reaching them.

Smart Reminders

Stop procrastinating with our study reminders.

Rewards

Earn points, unlock badges and level up while studying.

Magic Marker

Create flashcards in notes completely automatically.

Smart Formatting

Create the most beautiful study materials using our templates.

Sign up to highlight and take notes. It’s 100% free.