ACCA BT Syllabus B. Organisational Structure, Culture, Governance and Sustainability - Contribution on Culture - Notes ^{3 / 3}

Edgar Schein – Determinants of organisational culture

Schein argues that there exists a strong influence on organisational culture by who leads the organisation.  

He further commented that if leaders are to lead then it is essential that they understand the levels of organisational culture.  

Schein's Cultural theory is sometimes represented as the Iceberg Concept

Schein divided organisation culture into 3 levels:

1. Artefacts 

   are the aspects of culture that can easily be seen like for example the way that people dress.

2. Expoused values 

   are the strategies and goals of an organisation, including company slogans.

3. Basic assumptions and values

   are difficult to identify as they are unseen and exist mainly at the unconscious level.

Handy – Four Cultural Types

In 1972, Harrison classified an organisation into four different types only for Charles Handy to popularise them by using Greek Gods!

1. ZUES – Power Culture

   Zeus (Power Culture) the all-powerful head of the gods, an organisation dominated by the personality and power of one person, often the founder or owner.

2. APOLLO – Role Culture

   Then there was the Apollo (Role Culture) organisation, dominated by rules and procedures, after Apollo the God of harmony and order. In this version of culture, people describe their job by its duties, not by its purpose.  

   It is a bureaucratic organisation, where the structure determines the authority and responsibility of individuals and there is a strong emphasis on hierarchy and status.

3. ATHENA – Task Culture

   Athena (Task Culture), the warrior goddess, was the symbol of the project organization, the culture that dominates consultancies, advertising agencies and, increasingly, all innovative businesses. 

   In this type of culture, people describe their position in terms of the results that they are achieving.  It is after accomplishing a task.

4. DIONYSUS – Person Culture or Existential Culture

   Lastly there was the Dionysian (Person) culture, one in which the individual has the freedom to develop his or her own ideas in the way they want - an artists' studio, perhaps, or a university. 

   They are hard to manage, these Dionysian places, but increasingly necessary if you want to employ really creative people.

Does that mean that any organisation has only four options to choose from for its style of management?

No. The world is not that simple. In fact every organisation, just like every individual, is different from every other one, but what they are includes a different mix of the same four basic cultures.

The trouble is that some get stuck in one of them instead of mixing all four.

Handy matched its cultural models to Robert Anthony’s classification of Managerial activity.

1. Strategic management

   is concerned with direction-setting, policy making and crisis handling. Therefore it suits power culture.

2. Tactical management

   is concerned with establishing means to corporate ends therefore suits a task culture.

3. Operational management

   is concerned with routine activities therefore it suits role culture.

Hofstede – International perspectives of Culture

Hofstede looked for national differences between over 100,000 of IBM's employees in different parts of the world, in an attempt to find aspects of culture that might influence business behaviour.

Power distance

Power distance measures how subordinates respond to power and authority.

• In high-power distance countries (Latin America, France, Spain, most Asian and African countries), subordinates tend to be afraid of their bosses, and bosses tend to be paternalistic and autocratic.

• In low-power distance countries (the US, Britain, most of the rest of Europe), subordinates are more likely to challenge bosses and bosses tend to use a consultative management style.

• It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. 

  Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'.

Collectivism versus Individualism

• In individualistic countries (France, Germany, South Africa, Canada, etc.), people are expected to look out for themselves.

  Solidarity is organic (all contribute to a common goal, but with little mutual pressure) rather than mechanical. 

  Typical values are personal time, freedom, and challenge.

• In collectivist cultures (Japan, Mexico, Korea, Greece) individuals are bounded through strong personal and protective ties based on loyalty to the group during one's lifetime and often beyond (mirrored on family ties).

Masculinity versus Femininity

Masculinity versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found.

• The IBM studies revealed that 

  (a) women's values differ less among societies than men's values; 

  (b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values on the one side, to modest and caring and similar to women's values on the other.

• The assertive pole has been called 'masculine' and the modest, caring pole 'feminine'. 

  The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men, so that these countries show a gap between men's values and women's values.

Uncertainty avoidance

• Uncertainty avoidance deals with a society's tolerance for uncertainty and ambiguity; 

  it ultimately refers to man's search for Truth.

  It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations.

• Unstructured situations are novel, unknown, surprising and different from usual.

  Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth; 

  'there can only be one Truth and we have it'.

• People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. 

  The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. 

  People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions.

Confucianism versus Dynamism (Long term versus Short term)

Long-term orientation versus short-term orientation deals with Virtue regardless of Truth.

• Values associated with Long Term Orientation are thrift and perseverance;

• Values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. 

  Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius, the most influential Chinese philosopher who lived around 500 B.C.; however, the dimension also applies to countries without a Confucian heritage.