Table of Contents

1. Introduction
2. Definition
3. Types of organizational culture
4. Importance of organizational culture
5. Issues in managing culture
6. Conclusion
7. References
 1. INTRODUCTION
Organizational culture encompasses values and behaviors that contribute to the unique social
and psychological environment of a business. The organizational culture influences the way
people interact, the context within which knowledge is created, the resistance they will have
towards certain changes, and ultimately the way they share knowledge. Organizational culture
represents the collective values, beliefs and principles of organizational members. It may also
be influenced by factors such as history, type of product, market, technology, strategy, type of
employees, management style, and national culture. Culture includes the organization's vision,
values, norms, systems, symbols, language, assumptions, environment, location, beliefs and
habits. Culture within the organization, may be related to increased performance. Researchers
found a relationship between organizational cultures and company performance, with respect
to success indicators such as revenues, sales volume, market share, and stock prices. At the
same time, it is important to have a culture that fits with the demands of the company’s
environment.
Ravasi and Schultz (2006) characterize organizational culture as a set of shared assumptions
that guide behaviors. It is also the pattern of such collective behaviors and assumptions that are
taught to new organizational members as a way of perceiving and, even thinking and feeling.
Thus organizational culture affects the way people and groups interact with each other, with
clients, and with stakeholders. In addition, organizational culture may affect how much
employees identify with an organization.

2. DEFINITION
Organizational culture refers to a system of shared assumptions, values, and beliefs that show
people what is appropriate and inappropriate behavior. These values have a strong influence
on employee behavior as well as organizational performance. In fact, the term organizational
culture was made popular in the 1980s when Peters and Waterman’s best-selling book In
Search of Excellence made the argument that company success could be attributed to an
organizational culture that was decisive, customer-oriented, empowering, and people-oriented.
Since then, organizational culture has become the subject of numerous research studies, books,
and articles. Organizational culture is still a relatively new concept. In contrast to a topic such
as leadership, which has a history spanning several centuries, organizational culture is a young
but fast-growing area within management. Culture is largely invisible to individuals just as the
sea is invisible to the fish swimming in it. Even though it affects all employee behaviors,
thinking, and behavioral patterns, individuals tend to become more aware of their
organization’s culture when they have the opportunity to compare it to other organizations. It
is related to the second of the three facets that compose the P-O-L-C function of organizing.
The organizing function involves creating and implementing organizational design decisions.
The culture of the organization is closely linked to organizational design. For instance, a culture
that empowers employees to make decisions could prove extremely resistant to a centralized
organizational design, hampering the manager’s ability to enact such a design. However, a
culture that supports the organizational structure can be very powerful. An organization’s
culture may be one of its strongest assets or its biggest liability. In fact, it has been argued that
organizations that have a rare and hard-to-imitate culture enjoy a competitive advantage.
 3. TYPES OF ORGANIZATIONAL CULTURE
Hendy’s culture types
Handy (1996) suggested that organizational cultures could be divided into four broad types:
power cultures, role cultures, task cultures and person cultures.
a. Power cultures
This type of organization is dominated by either a very powerful individual or a dominant small
group. It is typified by an organization that has grown as a result of entrepreneurial flair.
Strategic decisions and many operational ones are made by the centre and few decisions are
devolved to other managers. As the organization is dependent on the abilities and personality
of the powerful individual, the ability of the organization to change in response to changes in
the environment are sometimes limited by the centre.
Power cultures are common in small entrepreneurial (owner-managed) companies and in some
notable larger organizations with a charismatic leader.
b. Role cultures
This type of culture is found in many long-established organizations that have traditionally
operated in stable environments. They tend to be very hierarchical and rely on established
procedures, systems and precedent. They often respond slowly to change as it takes time for
change to be recognized through the reporting mechanisms. Delays are also encountered in the
slow and considered decision-making process.
Role cultures are common in traditional bureaucracies such as the civil service. The task of
management in a role culture is to manage procedure. There is usually a high degree of
decentralization and the organization is run by rules and laid down procedures.
c. Task cultures
Task cultures are found in organizations engaged in activities of a non-repetitive nature, often
high value and one-off tasks. Activities are normally based around flexible multidisciplinary
teams containing expertise in the major disciplines required to complete the project. Teams
tend to be small but flexible and find change easy to identify and adjust to. Strategic planning
tends to concentrate on the task in-hand.
As their name suggests, task cultures can be found in organizations that are dedicated to a
particular task. Consortia that work on large civil engineering projects may demonstrate task
culture, as might missionary teams that work together on a medical project in the developing
world.
d. Person cultures
Person cultures are those that exist primarily for the benefit of the members of the organization
itself and hence they tend to be rare in commercial businesses. They can have the travel and
tourism organization – the human context a very different ‘feel’ to the other cultures as all
members of the organizations work for the benefit of themselves and the other members.
 Prescriptive or Delivery of Ability to cope with
emergent strategy competitive strategic change
advantage

Power culture Prescriptive Enhanced but Depends on individual

individuals may miss or group at centre
competitive moves

Role culture Prescriptive Solid, slow and Slow, will resist

substantive change

Task culture Emergent Good where flexibility Accepted and

is important welcomed

Personal culture Possibly emergent Depends on individual Depends on individual

4. IMPORTANCE OF ORGANIZATIONAL CULTURE

Culture is important because it can and does affect all aspects of an organization’s activities.
The metaphor of human personality may help us to understand this. Some people’s personality
means they are motivated, sharp, exciting to be with, etc. Others are dull, tedious and apathetic.
These personality features will affect all aspects of their lives. The same is true of an
organization’s ‘personality’. Culture is important because of the following reasons. Culture can
have an influence on:
 It defines company’s internal and external identity
 Organizational culture is about living company’s core values
 culture can transform employees into advocates
 A strong organizational culture helps to keep your best people
 A well-functioning culture assists with onboarding
 culture transforms company into a team
 Culture impacts performance and employee wellbeing
 the attractiveness of the organization as an employer and hence the rate of staff turnover
 the attitude of employees in the workplace
 innovation and creativity
 5. ISSUES IN MANAGING CULTURE
If culture is important, is it possible to manage culture change? Culture change involves moving
an organization on from one form of culture to another, often through a culture change
programme. Managing this cultural change programme requires that attention be paid to a
range of issues.
 creating a receptive climate for change
 top leadership drive - coherent and cohesive
 requiring an articulate and precise vision from the top
 discrepant action to increase tension
 use of deviants and heretics
 new avenues for articulating problems
 reinforcing structural change and rewards
 use of role models
 deep socialization, training and development
 new communication mechanisms to transmit new values and beliefs
 integrated selection criteria and removal of deviants
 luck, persistence and patience

6. CONCLUSION
Organizational culture is an important concept and a pervasive one in terms of its impact on
organizational change programmes. An organization’s culture is shaped as the organization
faces external and internal challenges and learns how to deal with them. When the
organization’s way of doing business provides a successful adaptation to environmental
challenges and ensures success, those values are retained. These values and ways of doing
business are taught to new members as the way to do business. Organizations culture requires
focus and attentions from leadership and should be consciously embedded in the organizational
structure.
7. REFERENCES

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