Culture

Culture
• When any group of people live and work together for any
length of time, they form and share certain beliefs about what
is right and proper. They establish behaviour patterns based on
their beliefs, and their actions often become matters of habit
which they follow routinely. These beliefs and ways of behaving
constitute the organization’s culture.

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The Culture!
When the culture is strong, people know what is expected of
them and they understand how to act and decide in particular
circumstances. They appreciate the issues that are important.
When the culture is weak, time can be wasted in trying to
decide what should be done and how.

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Culture
• Culture is reflected in the way in which people in an organization
perform tasks, set objectives and administer resources to achieve
them.
• It affects the way that they make decisions, think, feel and act in
response to opportunities and threats.
• Culture also influences the selection of people for particular jobs,
which in turn affects the way in which tasks are carried out and
decisions are made.
• Culture is so fundamental that it affects behaviour unconsciously.
Managers do things in particular ways because it is implicitly expected
behaviour.

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Culture
• Culture is reflected in the way in which people in an organization
perform tasks, set objectives and administer resources to achieve
them.
• It affects the way that they make decisions, think, feel and act in
response to opportunities and threats.
• Culture also influences the selection of people for particular jobs,
which in turn affects the way in which tasks are carried out and
decisions are made.
• Culture is so fundamental that it affects behaviour unconsciously.
Managers do things in particular ways because it is implicitly
expected behaviour.
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Culture
• The culture of an organization is therefore related to the people, their
behaviour and the operation of the structure. It is encapsulated in
beliefs, customs and values, and manifested in a number of symbolic
ways.
• The formation of, and any changes to, the culture of an organization is
dependent on the leadership and example of particular individuals,
and their ability to control or influence situations.
• This is itself dependent on a person’s ability to obtain and use power.

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The Body Shop – Case Study on Culture

Lets get to the case!

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Cultural Products and Dimensions - defined
Rites Planned sets of activities that consolidate various forms of cultural expressions into one event.
Ceremonial Several rites connected together.
Ritual A standardized set of behaviors used to manage anxieties.
Myth A narrative of imagined events, usually not supported by facts.
Saga A historical narrative describing the unique accomplishments of a group and its leaders.
Legend A handed-down narrative of some wonderful event, usually not supported by facts.
Story A narrative usually based on true events.
Folktale A fictional story.
Symbol Any object, act, event, quality, or relation used to convey meaning.
Language The manner in which members of a group communicate.
Metaphors Shorthand of words used to capture a vision or to reinforce old or new values
Values Life-directing attitudes that serve as behavioral guidelines
Belief An understanding of a particular phenomenon
Heroes Individuals greatly respected.
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The Role of Culture
• Culture wears many different hats, each woven from the fabric of those values that
sustain the organization’s primary source of competitive advantage.
• At Google, the culture is very informal. Employees are encouraged to wander the halls
on employee-sponsored scooters and brainstorm on public whiteboards provided
everywhere.
• At Procter & Gamble (P&G) is so rigid that employees jokingly call themselves
“Proctoids.”
• FedEx and Amazon focus on customer service.
• Lexus (a division of Toyota) and Apple emphasize product quality.
• Google and 3M place a high value on innovation.
• Nucor (steel) and Walmart are concerned, above all, with operational efficiency.

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Aspects of Culture
• Cultural paradigms are formed which determine how
‘organization members perceive, think about, feel
about, and judge situations and relationships’ and
these are based on a number of underlying
assumptions.

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ASPECTS OF CULTURE – THE CULTURE GRID

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Manifestations of Culture
• It is important to consider culture as having a number of levels, some of which
are essentially manifestations of underlying beliefs.
• The first and most visible level terms ‘artefacts’. These include the physical and
social environment and the outputs of the organization. Written
communications, advertisements and the reception that visitors receive are all
included.
• Values are the second level, and they represent a sense of ‘what ought to be’
based on convictions held by certain key people.
• For example if an organization has a problem such as low sales or a high level of
rejections in production, decisions might be made to advertise more
aggressively or to use high-quality but more expensive raw materials. These are
seen initially as the decision-maker’s values, which can be debated or
questioned. Many of the strategies followed by organizations start in this way,
and many will reflect values held by the strategic leader.
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Manifestations of Culture
• If the alternative is successful it may well be tried again and again
until it becomes common practice. In this way the value becomes a
belief and ultimately an assumption about behaviour practiced by the
organization.
• These basic underlying assumptions are third level, and they
represent the taken-for-granted ways of doing things or solutions to
problems.
• Examples of behaviours – fourth level are speedy new product
development, long working hours, formal management meetings and
regular informal meetings or contacts with colleagues, suppliers and
customers.

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People and Culture
• Culture is ‘a pattern of beliefs and expectations shared by the organization’s members, and
which produce norms that powerfully shape the behaviour of individuals and groups in the
organization’.
• Beliefs held by the company are seen as major aspects of corporate policy as they evolve
from interactions with, and in turn form policy towards, the marketplace.
• As a result, rules or norms for internal and external behaviour are developed and eventually
both performance and reward systems will be affected.
• These aspects of the culture are often transmitted through stories of past events, glories
and heroes.
• Success is measured by, and culture therefore becomes based on, past activities.
• Current decisions by managers reflect the values, beliefs and norms that have proved
beneficial in the past and in the development and growth of the organization.
• Moreover, they reinforce the corporate culture and expected behaviour throughout the
organization.

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People and Culture
• Organizations need a cohesive blend of the philosophies introduced earlier.
• A cohesive culture would exhibit strong leadership, whereby the strategic
leader is sensitive to the degrees of decentralization and informality necessary
for satisfying customer needs efficiently, and managing change pressures, in
order to keep the business strong and profitable.
• At the same time a centralized information network will ensure that
communications are effective and that managers are both kept aware and
rewarded properly for their contributions.
• A fragmented culture, in contrast, would suggest that the needs of certain
stakeholders were perhaps not being satisfied adequately, or that strategies
and changes were not being coordinated, or that managers or business units
were in conflict and working against each other, or that the most deserving
people were not being rewarded.

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People and Culture
• Communication is an essential aspect of culture. The organization might be seen
as open or closed, formal or informal.
• Ideally, employees from different parts of the business, and at different levels in
the hierarchy, will feel willing and able to talk openly with each other, sharing
problems, ideas and learning. ‘Doors should be left open.’
• Employees should also be trusted and empowered to the appropriate degree.
• Good communications can stop nasty surprises.
• It is helpful if employees know how well competitors are performing, where they
are particularly strong, so they can commit themselves to high levels of
achievement in order to outperform their rivals.
• Communication is clearly essential for creating effective internal and external
architecture.

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Power and Culture
• Power is reflected in the ownership of the business. It may be a family company
with strong, concentrated power.
• A small group of institutional shareholders could control the business, in which
case it is conceivable that short-term financial targets will dictate strategies.
• Structural issues include the extent to which the organization is centralized or
decentralized, the role and contribution of corporate headquarters, and control
and reward systems.
• Personal power depends on individual characteristics (personality) and physical
characteristics.
• Charm, charisma and flair are terms used to describe people with personality-
based power. Physical attributes such as height, size, weight and strength also
affect personal power.
• Politics refers to the ways in which managers use power and influence to affect
decisions and actions.
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IKEA’S Culture Case!

Lets get to the case!

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Determinants of Culture
• Strategic management researchers argue that employees
must be rewarded for compliance with the essential cultural
aspects if these values are to be developed and retained over
time; and they conclude that people who build, develop and
run successful companies invariably work hard to create
strong cultures within their organizations.

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Determinants of Culture
Researchers highlighted five key elements or determinants of culture.
1. The environment and key success factors: what the organization must do well if it is to be an
effective competitor. Innovation and fast delivery are examples quoted.
2. The values that the strategic leader considers important and wishes to see adopted and
followed in the organization. These should relate to the key success factors, and to employee
reward systems.
3. The cultural network: the communications system around which the culture revolves and
which determines just how aware employees are about the essential issues.
4. Heroes: the visionaries who create the culture. They can come from any background and
could be, for example, product or service innovators, engineers who build the appropriate
quality into the product, or creative marketing people who provide the slogans which make
the product or brand name a household word.
5. Rites and rituals: the behaviour patterns in which the culture is manifest. Again there are any
number of ways in which this can happen, including employees helping each other out when
there are difficulties, the way in which sales people deal with customers, and the care and
attention that go into production.

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Implications of Culture
Seven aspects comprise the culture of an organization, and that the relative significance of each
of these will vary from industry to industry.
1. The extent to which the organization is marketing orientated, giving customers high priority.
2. The relationships between management and staff, manifested through communication and
participation systems.
3. The extent to which people are target orientated and committed to achieving agreed levels
of performance.
4. Attitudes towards innovation.
5. Attitudes towards costs and cost reduction.
6. The commitment and loyalty to the organization felt, and shown, by staff.
7. The impact of, and reaction to, technology and technological change and development.

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Culture needs to be …
• Every apparent virtue also has a ‘flip side’, and consequently something
which is positive at one point may suddenly prove disadvantageous.
• There can never be one best or ideal culture. The culture needs to be
flexible and adaptive as circumstances change.
• The cultural factors that bring initial success may need to be changed if
success is to be sustained.
• Similarly, it is not enough simply to look at what other successful
organizations are doing and copy them.
• Benchmarking and teasing out good practices is both important and
beneficial, but these practices again need customizing and adapting to
the unique circumstances facing an individual organization.

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Every Coin, Every Virtue has a Flip side!
Team players May be indecisive and avoid risks

Customer focus Can lead to reactivity and lack of innovation

Action orientation Can become reckless and dictatorial

Analytical thinking Can result in paralysis

Innovation Which is impractical, unrealistic, ill thought-through, wastes

time and money
A global vision May mean valuable local opportunities are missed

Being a good ‘people May allow someone to become soft and walk away from
manager’ tough decisions
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The Imperfect World of Organizations
A market-driven business is likely to be:
Resourceful
Entrepreneurial
Risk oriented
Pragmatic in terms of getting things done
But it may not be:
Consistent
Disciplined in what it does
Adhering to systems and procedures
Strong on teamworking
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The Imperfect World of Organizations
An efficient operations - driven business is likely to be:
Efficient
Strong on teamworking
Good at executing plans
Sophisticated with its systems and procedures
But it may not be:
Responsive to customers
Good at managing change
Able to see ‘the big picture’
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The Imperfect World of Organizations
A growth-orientated business is likely to be:
Competitive
Strong on targets and achieving results
Full of hard-working people
Flexible
Changing quickly
But it may not be:
Taking a long-term perspective
Offering a balanced lifestyle for its employees
Sensitive to people’s needs
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