Culture

1 Introduction

Charles Handy defined organisational culture, memorably, as “the way we do things around here”. Every organisation has one, whether or not anyone designed it. You will have felt its effect yourself: whenever you join a new organisation – a school, a college, an employer – you tread carefully for the first few days or weeks, watching how people behave, and then you try to fit in. How do people dress? Are first names used, or titles? Official hours may be 9 to 5, but when do people actually leave? None of this is written in the contract of employment, yet everyone learns it quickly – because culture is a powerful, largely invisible control on behaviour.

That is why culture appears in this part of the syllabus, under managing the workplace environment: culture shapes performance at least as strongly as the formal controls of Chapter 4. This chapter looks at how to analyse a culture (the cultural web and Schein’s three levels), how to classify cultures (Handy’s four types), and how culture affects – and is used to manage – performance.

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2 The cultural web

Johnson and Scholes developed the cultural web as a way of mapping the elements that make up, and reinforce, an organisation’s culture. At the centre sits the paradigm – the set of assumptions the organisation takes for granted about itself – surrounded by six interlocking elements that both express the culture and hold it in place:

• Symbols and titles. Is this an organisation with many presidents and vice-presidents, where everyone’s title matters? Are there symbols of status – a private dining room for senior managers, reserved parking spaces, perks that arrive only at a certain grade? Some organisations are strongly hierarchical in their symbols; others work hard at being egalitarian.

• Power structures. Where does real power lie? Do top managers keep most decisions to themselves, or is power dispersed? Are you told what to do, or asked what you think should be done?

• Organisational structure. Some organisations are ‘tall and narrow’, with many layers, each closely supervised from above. Others are ‘flat and wide’, with few layers – each manager oversees many people, so people necessarily look after themselves more.

• Control systems. What is measured and how tightly? Some firms – often for billing purposes – require staff to account for their time in units of a few minutes. Others barely track individual activity and care only about overall results.

• Rituals and routines. In some sales organisations, whoever closes a sale rings a bell and everyone applauds; childish to outsiders, morale-boosting (and quietly challenging) to insiders. In some workplaces everyone is expected to socialise together on a Friday evening. Rituals signal what the organisation celebrates.

• Stories and myths. The tales the organisation tells about itself: the famous contract won against the odds, the brilliant presentation, the all-night effort that got the job out on time. Stories carry the culture to each new generation of employees.

At the centre, the paradigm is the set of taken-for-granted assumptions – ‘we are the best’, ‘we are never beaten’, ‘we only produce work of the highest quality’ – that the six outer elements express and constantly reinforce. Because the elements lock together, culture is hard to change: alter one element (say, the control systems) and the other five pull behaviour back towards the old ways. Managing cultural change is examined further at the Strategic Level (E3).

3 Types of culture – Handy’s classification

Handy identified four types of organisational culture, each of which he associated with a Greek god:

• Power culture (Zeus). Power is concentrated in essentially one person – typically the founder, often the person whose name is over the door. Their word is law; there is little delegation or decentralisation, and almost all significant decisions are made centrally. Power cultures move fast and suit small, entrepreneurial organisations, but they depend entirely on the quality (and presence) of the person at the centre.

• Role culture (Apollo). As an organisation grows, one person can no longer know and decide everything, and a power culture typically gives way to a role culture: a formal structure in which each person has a defined role. The danger is that the role becomes more important than the purpose – rigid job descriptions, and people refusing to do anything not on the specification even when a customer suffers. Role cultures are stable and predictable, and suit large organisations in stable environments.

• Task culture (Athena). Here the emphasis is on getting the job done. People contribute expertise to teams and projects rather than standing on their job descriptions or their place in the hierarchy; everyone pulls together for the organisation and its customers. Task cultures are flexible and responsive – and expensive, because talent is deployed to problems rather than to tidy, economical roles.

• Person culture (Dionysus). A relatively rare type, in which the organisation exists to serve the individuals within it, each essentially pursuing a private professional ambition. A hospital consultant may draw enormous satisfaction from surgery itself and treat the rest of the organisation almost as a necessary inconvenience; barristers’ chambers and some partnerships work the same way. Not very common in business.

As competitive environments and technology change ever faster, there has been a broad shift from role cultures towards task cultures: defined roles quickly become out of date, and organisations need cultures that respond to change rather than resist it.

4 Schein: three levels of culture

Schein analysed culture as three levels, running from the immediately visible to the deeply buried:

• Artefacts – the topmost, most superficial level: what you can see and hear. How people dress and behave, the office layout, the organisation chart, how hard it is to get expenses approved. These are the first things a newcomer notices – and in some ways the least important.

• Espoused values – a level deeper: the stated goals, strategies and philosophies. The mission statement setting out the organisation’s purpose, how it says it values employees, its commitment to customers or the environment. These take a newcomer longer to discover, and they may or may not match reality.

• Basic underlying assumptions – the deepest and most important level: the unstated beliefs that actually drive behaviour. Assumptions about quality, about never missing a deadline, about working unpaid overtime to hit one, about ‘what we are really here for’. They are rarely written down anywhere, and it can take a newcomer a long time to work them out – yet they are what makes the organisation tick.

Notice how Schein’s levels line up with the cultural web: artefacts correspond to the outer elements you can observe, and the basic underlying assumptions are the paradigm at the centre.

5 Culture and performance

Why does culture belong in a paper about managing performance? Because culture is itself a control system – often a stronger one than the formal controls:

• Culture fills the gaps in the rule book. No procedure manual can anticipate everything. What people do when no rule applies – and when nobody is watching – is decided by culture. A culture whose assumptions match the organisation’s objectives makes formal controls almost self-enforcing; a culture that opposes them will defeat any control system (as the saying goes, culture eats strategy for breakfast).

• Strong cultures cut both ways. A strong, widely shared culture co-ordinates behaviour, speeds decisions and builds identity and commitment. But strength is only a virtue when the content is right: a strong culture can also entrench complacency, suppress dissent and resist necessary change – and a culture of aggressive target-chasing can normalise the gaming and mis-reporting described in Chapter 4.

• Leaders shape culture – whether they mean to or not. What leaders pay attention to and measure, what they reward and punish, how they react in a crisis, and what they themselves model tells everyone what really matters, far more loudly than the espoused values on the website. This is ‘tone from the top’, and it is the bridge between culture and the ethics of leadership (Chapter 2).

• An inclusive culture supports performance. The case for diversity, equity and inclusion is developed in Chapter 3, but it is culture that determines whether diverse people can actually contribute: a culture of inclusion and belonging – where people feel safe to speak up, question and admit mistakes – is what turns a diverse workforce into better decisions and ideas. Exclusive cultures drive engagement (Chapter 4) down and staff turnover up.

6 National culture: organisations across borders

Organisational cultures do not exist in a vacuum: they sit inside national cultures, and a management style that feels natural in one country can misfire in another. Hofstede’s research identified dimensions along which national cultures differ, including:

• Power distance – how far people accept unequal power. In high power-distance cultures, employees expect the boss to decide and may find being asked their opinion uncomfortable; in low power-distance cultures, imposed decisions breed resentment.

• Individualism versus collectivism – whether people identify primarily as individuals or as members of a group; individual bonuses and public praise motivate in one setting and embarrass in another.

• Uncertainty avoidance – tolerance of ambiguity; high uncertainty-avoidance cultures want rules, structure and clear plans.

For a manager of a global or virtual team (Chapter 6), the message is not to stereotype individuals but to be aware: assumptions about targets, participation, feedback and hierarchy that this chapter and Chapter 4 treat as good practice are themselves culturally loaded, and may need adapting across borders.

7 Test your knowledge

Two quick checks before you move on: run the flashcards to fix this chapter’s definitions and frameworks in mind, then attempt the ten objective questions to see whether you can apply them.