Organisational Culture

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Organisational Culture
Leadership Skills
MTL Course Topics
LEADERSHIP SKILLS

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Leadership Skills
MTL Course Topics
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ARE YOU READY?
OK, LET’S START!

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INTRODUCTION
The "old" approaches to management had no place for
concepts such as culture. For them, everything that
happened between people in an organisation was within
the control of management. The accepted limitations of
scientific management have now changed these attitudes.
Instead of seeing people as resources motivated by money
and profit, today's managers recognize the importance of
how people feel, the values that are important to them and
the organisation, the intangible things that make one
organisation different from another. In short, today's
managers need to allow for the existence and crucial
importance of organisational "culture".

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WHAT IS CULTURE?
Culture is sometimes used in a literal sense to mean the way
an organisation's growth and development is ensured and
also in a looser sense to mean "the way we do things
around here." As far as customers are concerned, an
organisation's culture is all the moments of truth added
together.
Trice and Beyer define organisational culture as:
"...the system of publicity and collectively accepted
meanings operating for a given group at a given time."
John Hunt defines it as:
"...the collective of shared values, ideologies and beliefs of
members of an organisation."

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CULTURAL DIMENSIONS
Xerox, the photocopier and digital printer company, uses a
checklist of nine cultural dimensions against which its
managers are assessed in a 360-degree feedback exercise.
The nine dimensions are: market awareness; absolute
results orientation; action orientation; line awareness; team
orientation; empowerment of people; open and honest
communication; organisation reflection and learning;
process re-engineering and simplification.
As an example of the assessment guidelines, the criteria for
"open and honest communication" are:
1. sensitive to the concerns and feelings of others
2. do not treat disagreement as disloyalty
3. foster feedback and dialogue
4. encourage openness through personal behaviour
5. confront conflict openly.

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HOW CULTURE DEVELOPS
The culture of an organisation is a link back to its origins.
This is how it develops...
1. The original founding fathers define what matters -
beliefs, opinions, priorities, assumptions.
2. These are shared and developed as the organisation
grows.
3. They are inculcated into new starters.
4. They are reinforced and re-interpreted by successive
managers.
5. Those who cannot accept them leave; those who try to
change them and fail, leave.
6. Eventually the rational systems and policies dominate
while the culture goes underground.
"Culture isn't "it"; it's "us"." (Jim Clemmer and Art McNeil)

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BELIEFS FROM WITHOUT
Geert Hofstede studied the beliefs of IBM employees in over
forty countries around the world.
Using scales such as a tendency towards individualism or co-
operation, male or female traits, power distance, and
uncertainty avoidance, Hofstede found that each country
had a different effect on the culture of each IBM unit.
So, in Scandinavian countries, there was a low power
distance and very feminine characteristics of caring,
nurturing and support.
In Japan, by contrast, there was a culture favouring co-
operation, high uncertainty avoidance and masculine traits
such as hard work and efficiency.

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BELIEFS FROM WITHIN
The internal beliefs of an organisation are developed as a
result of the social culture within which people operate, the
nature of the organisation's operations and the assumptions
of the original and subsequent leaders.
The internal beliefs can include attitudes about...
1. why people work
2. what amount of work should be done
3. the importance of systems
4. who should be the leaders
5. whether co-operation is more important than
competition
6. how outsiders are viewed
7. how the future is viewed.

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TOYOTA’S PRINCIPLES
The 14 principles of car-maker Toyota reflect their
adherence to Japanese culture and the beliefs of the
founding fathers.
The principles include:
1. decide long-term even if it costs short-term
2. become a learning organisation
3. decide slowly, implement quickly
4. develop exceptional people
5. get quality right first time
6. standardize tasks
7. grow leaders to teach others
8. bring problems to the surface
9. use "pull" systems to avoid over-production
10. work like the tortoise not the hare
11. use visual control so no problems are hidden
12. use only reliable technology
13. respect your supplier network
14. to understand the situation, go and see for yourself.

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ORGANISATIONAL CULTURE
The intangible culture of an organisation can be detected in
many of the tangible features of the organisation.
These tangible features include:
1. organisational rites, ceremonies and rituals
2. symbols and slogans
3. layouts and artefacts
4. climate and atmosphere
5. language, jargon, metaphors, expressions
6. role models
7. stories, myths, legends and folklore.
"A leader has a vision and conviction that a dream can be
achieved. He inspires the power and energy to get it done."
(Ralph Lauren)

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RITES AND RITUALS
Rites, ceremonies and rituals are important events in the life
of an organisation. They re-state in subtle ways the things
that matter and endure, even though their immediate
commercial or practical benefits may be limited.
Some of the main rituals include:
1. the annual pay round (subtly reminding people of the
powers of management)
2. the annual appraisal (subtly reminding employees of the
need to perform)
3. the annual conference (subtly reminding employees of
the importance of working together).
Other ceremonies include: the monthly staff meeting; the
meeting of the Safety Committee; the pub lunch; the
Managing Director's Christmas speech.

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SYMBOLS AND SLOGANS
Symbols and slogans are the visual signs of an organisation's
culture. They have a huge impact on how an organisation is
seen and sees itself.
When British Telecom changed its name to BT, phased out
their old red phone booths and spent £2 million on a new
logo, people condemned it as a waste of money. What these
symbols and slogans did, however, was to update BT's
culture into that of a modern technology-aware
organisation.
Symbols include letterheads and uniforms; colours and
flags; advertising or internal slogans, such as IBM's "I think,
therefore IBM"; awareness campaigns; gimmicks such as
Proctor and Gamble's one-page memorandum campaign.

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LAYOUTS AND ARTEFACTS
What people see every day in their workplace, and what
visitors see when they visit, reveal and reflect the cultural
values of an organisation.
In Japanese offices, for example, private rooms are a rarity;
people of whatever rank, work close together. In Western
companies, offices are laid out according to rank and status
with bigger and better equipment and furniture according
to level and responsibility.
The power of cultural values can be simply expressed in
office furniture. IBM, for example, claim that every one of
its offices has a flipchart, thus making the subtle point that
the office is a meeting place, a place for discussion and a
place for creative ideas.

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SIGNALS
Culture is present everywhere you look in an organisation,
sometimes sending the signals you want to send, sometimes
not.
Signals that can send negative messages:
Executive car parks = we count, you don't.
Ignoring colleagues = I'm more important than you.
Discipline = I'm more powerful than you.
Slow response to customers = we don't care.
Signals that can send positive messages:
Leaving people to work on their own = we trust you.
Asking staff what they think = you're the real experts.
Visiting customers regularly = we exist for you.
Consulting people about changes = we work together.
Recognizing small acts of excellence = Thanks, let's have
more.

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CLIMATE & ATMOSPHERE
The climate and atmosphere of an organisation can be felt
as tangibly as the climate of the day's weather. Writer
Vincent Nolan says he can sense the climate of an
organisation the moment he walks in the front door.
For example, in a customer-oriented culture...
1. the people you meet smile at you naturally and
genuinely
2. there are sounds of belly-laughs
3. colleagues aren't denigrated in public
4. people are interested in the world around them
5. they listen and don't interrupt
6. there is a "can-do" not "can't-do" feel about the place
7. everyone is energetic and lively.
Compare this with the culture of the organisation of the
badly-typed invoice, the staff smoking at the doorway and
the late-answered phone.

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CLIMATE AND PERFORMANCE
In studies of service companies that Daniel Goleman,
Richard Boyatzis and Annie McKee carried out for their book
"Primal Leadership", the climate created by the CEO's made
a big difference to the performance of the companies.
Here's what they found...
1. a 1% improvement in climate correlated with a 2%
improvement in revenue
2. in 75% of cases, climate alone accurately sorted
companies into low or high profits and growth
3. how people felt about their workplace accounted for 20
to 30% of business performance.
When people feel good, they work at their best. Feeling
good lubricates mental efficiency, making people better at
understanding information and using decision rules in
complex judgments, as well as more flexible in their
thinking.

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LANGUAGE AND JARGON
Cultural values are reinforced by the words people use each
day.
1. On trains, people who were once referred to as
"passengers" are now called "customers"
2. In Disneyworld, customers are called "guests" (with a
capital G); the operation is a "show"; staff are "hosts"
and everyone is part of the "cast".
3. In fast-food chain McDonald's staff are "crew
members".
4. In the Brazilian engineering company Semco, directors
are called "counsellors" and managers "co-ordinators".

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ROLE MODELS
Role models are those people who embody the values of
the organisation's culture and about whom stories and
myths are woven.
Role models are particularly found amongst...
1. the original founding fathers of the organisation,
(perhaps emphasising a spirit of risk-taking or thrift)
2. pioneers who built the organisation in its early days
3. heroes and champions, such as the 3M employee
whose persistence in re-cycling reject sandpaper
resulted in, first, dismissal then re-instatement and,
finally, advancement to the top
4. people around whom stories and legends, whether true
or anecdotal, are woven
5. the personal history of the current leader figures.

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THOMAS WATSON
Thomas Watson is regarded as one of the greatest business
leaders of the 20th century. He turned a small company
producing weighing machines, International Business
Machines, into the giant of the computer industry, IBM.
Watson achieved this extraordinary success by an
evangelical belief in what the company stood for and how
everyone in it should behave. In short, he created a culture
and became its role model. Like himself, all IBM managers
were required to wear suits; they could not even remove
them in the hottest of weather. Sales reps stayed at the best
hotels, because "people have to believe they're dealing with
the very best"; a corporate hymn was written and everyone
was implored to "think, think, think".
Employees became millionaires with IBM, but it is the
vision, the culture and Watson's image that live on.

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STORIES AND MYTHS
Stories, myths, legends and folklore will always be
recounted where people are organised together. They can
also transmit important values of the culture.
Stories appeal to us because...
1. they help get us closer to distant figures: we begin to
think we know them
2. they explain the unexplainable
3. they are universal in their appeal; everyone can
understand a story
4. they catch our imagination and sense of the dramatic
5. they link us to the past culture
6. they block off further search for meaning
7. they bind us together in ways that are special and
unique to us.

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THE COST OF EDUCATION
Stories have a place in the cultures of all the great
organisations.
The following story is told about Tom Watson, founder of
IBM. Watson placed great store by learning.
One day, Tom Watson called a senior executive who had just
made a big mistake to his office. The cost of the mistake
could be reckoned at $10,000.
Watson and the executive discussed the case for some time
until Watson finally got up to leave.
Looking apprehensive, the executive asked:
"So does that mean I'm fired, sir?"
"Fired?" said Watson with a genuine look of disbelief on his
face. "Heck, no! How can I fire you when I've just spent
$10,000 educating you?"

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LEADERS AND CULTURE
Leaders are the guardians of the inherited values of the
organisation. If they fail to understand the culture, they will
lose credibility with their followers.
What leaders can do with culture:
They can note it, articulate it, re-inforce it, update it,
influence it, develop it, re-interpret it, and in exceptional
circumstances, change it
What leaders can't do with culture:
They can't manipulate it, control it, pretend it doesn't exist,
change it by written edict, change it at will, change it
overnight or replace it willy-nilly with their own.

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SOCIAL ARCHITECTURE
Gareth Jones, professor of organisational development at
Henley Management Centre, suggests that an organisation's
culture is built around two kinds of relationships: people-
centred ones which he calls "sociability" and task-centred
ones which he calls "solidarity".
This model produces four types of culture:
1. high sociability, low solidarity: the networked culture
2. low sociability, high solidarity: the mercenary culture
3. low sociability, low solidarity: the fragmented culture
4. high sociability, high solidarity: the communal culture.
Jones calls this model "social architecture". Whether an
organisation is successful or not depends on whether the
culture fits the business environment and the critical
business processes.

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THE NETWORKED CULTURE
The features of a networked culture are:
Culture Model: high sociability, low solidarity
Features: employees report that working in networked
cultures is enjoyable. There is teamwork, social activities
and a feeling of clubbiness. Some people spend their whole
working lives in a networked organisation.
Advantages: information sharing is high, people work well
with and for each other. Creativity is stimulated; there is
high emotional security.
Disadvantages: as the tenure of some employees gets
shorter and shorter, it is more difficult to promote the
values of sociability.
Examples: Unilever; Heineken; Philips

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THE MERCENARY CULTURE
The features of a mercenary culture are:
Culture Model: low sociability, high solidarity
Features: this culture is summed up as "get to work on
Sundays, or else". There is a high degree of strategic focus,
an intolerance of poor performance and a quick response to
competition. Talent is poached from rivals. Everyone has
targets; everything is measured.
Advantages: everyone shares the same goal: winning.
Things get done right now. The feel is competitive.
Disadvantages: co-operation only occurs when the
advantages to individuals are clear. People first ask: what's
in it for me? People leave when it suits them or they get a
better offer.
Examples: Pepsico; Mars; Campbells Soups; Citicorp.

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THE FRAGMENTED CULTURE
The features of a fragmented culture are:
Culture Model: low sociability, low solidarity
Features: there are low levels of interdependence in this
culture. People work for themselves and there is not much
need for close working or teamwork.
Advantages: there are unique talents based on personal
ability. The culture stimulates individual stars to shine.
Disadvantages: people don't want to manage or be
managed. They are their own free agents.
Examples: business schools; law firms; consultancies;
planning departments of local authorities.

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THE COMMUNAL CULTURE
The features of a communal culture are:
Culture Model: high sociability, high solidarity
Features: this culture is both sociable and focused on a
single goal. Often goals are written down in statements.
Leaders are visionaries.
Advantages: there is a great attachment to the team; a high
feel-good factor: people play hard and work hard, enjoy
what they do and get results.
Disadvantages: individual talent is discouraged; a danger of
groupthink, complacency and lack of contentious conflict.
Examples: Island records; Hewlett-Packard; Johnson and
Johnson; Electronic Arts.

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THAT’S
IT!
WELL DONE!

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THANK YOU
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Organisational Culture

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