It is often said that in order to understand the culture of an organization, you need to observe its employees carefully. During the initial years of an organization, the founding members work to establish its culture. Sustaining and nurturing the culture of an organization requires active participation from the founders as well as the top management. With time, the organization evolves and starts adopting some elements that it considers important for its culture while discarding others that it deems undesirable or harmful to its culture.
Table of Content
- 1 Types of Organisational Culture
- 1.1 Strong Culture Vs Weak Culture
- 1.2 Soft Culture Vs Hard Culture
- 1.3 Formal Culture Vs Informal Culture
- 2 Other Types of Organisational Cultures According to Different Authors
- 2.1 Types of Cultures according to Quinn and Rorbaugh
- 2.2 Deal and Kennedy Model of Organisational Culture
- 2.3 Charles Handy Model of Organization Culture
When an organization grows in size, it witnesses changes in its structure and functions. These changes influence the existing culture, as a result of which the culture evolves. Apart from this, every organization has its own principles, core values, goals, and targets, which are unique to it.
These elements shape the culture of the organization. Thus, generally, no two organizations can have exactly the same type of culture.
Types of Organisational Culture
On a broad level, organizational cultures can be categorized into the following types:
Strong Culture Vs Weak Culture
An organization that has a strong culture will demonstrate the following characteristics:
- Awareness of its strengths and weaknesses
- Awareness of the existing opportunities and potential threats
- Strong leadership and team culture
- Committed and loyal employees
- Few policies and procedures
- Low attrition rate
- Employees who can relate to the mission, vision, and other larger goals of the organization
- Employees who are aware of the stories and legends related to the organization
In management studies, a strong culture has been compared to a strong adhesive or social glue that keeps all the members of the organization together. An organization that has a weak culture will demonstrate the following characteristics:
Lack of Awareness of Strengths and Weaknesses
An organization with a weak culture might not be aware of its strengths and weaknesses. Even if it is aware of them, no concrete steps are taken to exploit the advantages and take care of the weaknesses.
Lack of Awareness of Opportunities and Threats
An organization with a weak culture might also not be aware of the existing opportunities and potential threats or take any steps to deal with them.
A weak culture demonstrates inefficient leadership.
Focus on Individual Goals
The focus of the employees in a weak culture is on individual goals rather than organizational goals. The employees do not relate completely with the mission, vision, and other larger goals of the organization.
Multiplicity of Policies and Procedures
In a weak culture, there are too many policies, procedures, and processes for getting work done. However, they might not be followed strictly. Such organizations almost always have a bureaucratic culture in which any piece of work has to go through a lot of stages.
High Attrition Rate
Organizations with a weak culture generally have high attrition rates.
Failure to Identify With Stories and Legends
The employees of weak cultures are not aware of the stories and legends about the organization; and even if they are, they might not relate to them.
From the discussion so far, it is clear that a strong organizational culture is better than a weak one. This is because weak organizational culture can be changed more easily than a strong one. On the other hand, changes in a strong culture have to be implemented carefully.
Soft Culture Vs Hard Culture
An organization with a soft culture has the following characteristics:
Multiple and Conflicting Goals
Organizations with soft cultures do not have a clearly defined set of objectives or goals. For example, assume that an organization has been set up in a rural area. The organization was established despite its high costs as the management wanted to pursue the twin goals of profit generation (through cheap labor) and corporate social responsibility (by providing employment to the locals). However, after ten years of operation, the organization incurs a large debt.
The situation is so serious that, if not handled properly; the organization may have to be shut down. The organization had taken more labor than was required, did not introduce new technology, or take other important decisions in a timely manner.
However, in addition to all these issues, there was one major point that the founders of the organization failed to realize: corporate social responsibility can be fulfilled only after the organization attains a certain size and shows profits. Therefore, the organization should have only made use of the labor as per its requirement and introduced new technology for the development of the organization.
Lack of Discipline
Employees often lack discipline, and the management often uses power and authority to get the work done.
No Collective Decision Making
The decisions in the organization are taken by the top management. Employees are not included in the decision-making process.No collective decision-making: The decisions in the organization are taken by the top management. Employees are not included in the decision-making process.
Employees are clearly told that they are responsible and accountable for their performance.
In contrast to a soft work culture, a hard work culture has the following characteristics:
Clearly Defined Goals
The organization has a clearly defined set of objectives, and the employees are also aware of these objectives. The employees consider the goals of the organization as important and work hard for them.
Disciplined work environment
The employees maintain discipline in their work environment. The management has to use disciplinary action only in extreme cases.
Collective Decision Making
The decisions in such an organization are taken by the top management and the employees together.
Great Working Environment
A hard organizational culture is usually warm and friendly. The employees are well looked after as their interests are important to the organization.
Formal Culture Vs Informal Culture
A culture is usually categorized as informal or formal. However, it must be noted that both formal and informal components exist within the culture of an organization. The formal components of an organization include roles, responsibilities, accountability, and rules and regulations.
The informal components include informal communication, flat organizational structure, etc. The degree of formal/informal components may vary. Depending on the number and degree of the formal/informal components, the culture may be categorized as being largely formal or largely informal.
If an organization has a culture that contains more formal components than informal components, then that culture will be predominantly formal. On the other hand, if an organization’s culture contains more informal components than formal components, then its culture will be predominantly informal.
In a formal culture, there are clearly defined rules and regulations for each work that has to be done by the members of the organization. Each employee is held responsible for his/her work. The expectations from each employee in terms of work that has to be done are stated, as are the consequences of not achieving those goals.
The components of a formal organizational culture are as follows:
Clearly Defined Mission and Vision
They refer to the milestones that are to be achieved by the organization as a whole.
These refer to the written rules that serve as guidelines for organizational decision-making. Formal cultures contain a large number of policies to ensure that work is done properly. There is a possibility for loopholes to creep in if these policies are not drafted carefully.
These refer to written instructions for carrying out a particular activity. Procedures can facilitate the smooth functioning of an organization if they are drafted carefully.
These refer to instructions that are followed by the employees in an organization. They may be related to some aspect of their daily routine such as the time for coming to and leaving the office premises.
Life Stage of Organisation
The culture of an organization depends on the stage of the life cycle that an organization is in. An organization may be at the early stage of its development, the growth stage, the stage of maturity, or the stage of decline. Organizations in their early development phase, for example, generally strive to create a formal and quality culture.
A culture that is predominantly informal demonstrates the following characteristics:
- The power and status of the employees at different levels vary but the differences are few. There is a lot more openness and friendliness. In addition, these organizations tend to achieve status equality
- Informal cultures mostly follow flat structures or very few levels of hierarchy
- Decisions are made in a collaborative manner, where the manager involves his/her colleagues and employees in the decision-making process.
- Feedback is taken from employees directly by the managers without the use of complex feedback mechanisms.
- A relaxed and friendly environment exists in informal cultures.
Apart from the types of organizational cultures discussed in the previous section, various researchers and authors have identified different types of organizational cultures. For instance, in 1982, Deal and Kennedy developed a model for categorizing organizational culture.
In 1983, Quinn and Rorbaugh introduced Competing Values Framework (CVF) for assessing organizational culture. In 1999, Charles Handy in his book “Understanding Organisations”, discussed the different categories of organizational cultures. In the sections that follow, you will study these categorizations of culture in some detail.
- Types of Cultures according to Quinn and Rorbaugh
- Deal and Kennedy Model of Organisational Culture
- Charles Handy Model of Organization Culture
Types of Cultures according to Quinn and Rorbaugh
In 1983, Quinn and Rorbaugh introduced the Competing Values Framework (CVF) for the assessment of organizational culture. This model was based on two dimensions, internal/external orientation and flexibility/control.
The first dimension deals with orientation. Here, orientation refers to the focus areas of an organization. Internal orientation includes a focus on values such as integration, unity, and collaboration while external orientation focuses on values such as differentiation, competition, and rivalry.
Organizations that are internally oriented focus on themselves and their employees while those that are externally oriented focus on customers, suppliers, and the external environment. For example, you may notice that organizations reward employees who maintain good interrelationships and also follow processes.
On the other hand, some organizations reward those employees who compete internally within the organization and create a niche market for it. In an environment where customers and external stakeholders are of prime importance, emphasis is laid on external orientation. On the other hand, in organizations where customers and external stakeholders are not very important, emphasis is laid on internal orientation. Internal orientation can be seen in monopoly organizations.
The second dimension deals with flexibility and control. Flexibility is a trait of those organizations where the employees make use of their discretionary power or power to take decisions according to the situation. Such employees are rewarded if their decisions are fruitful.
On the other hand, control refers to the trait of organizations where the employees are expected to follow procedures and are not allowed to make any discretionary decisions. For example, some organizations reward stable, predictable, and consistent performers while others reward versatility and flexibility. Four types of cultures are created as a result of the combination of the two dimensions described above.
Now, let us describe each type of culture as described by Quinn and Rorbaugh in detail.
If an organization is focused internally, has few controls, and lays emphasis on flexibility, then it can be said to have a clan culture. Such organizations typically have a flat organizational structure, and the employees and teams enjoy a fair degree of autonomy.
The vision, mission and shared goals are the guiding principles that lead the organization to success. Generally, a clan refers to a society comprising various families that live together in a humble and amicable way. In the context of organizations, a clan refers to employees who work together and are loyal.
Leadership is strong and leaders nurture and develop the skills and talent of new employees. There are no stringent rules and procedures. The organization has unwritten rules that are communicated by the word of mouth. For example, Zappos, an online shoe and clothing organization, follows a clan culture. The company’s CEO Tony Hsieh always strives to make employees and customers happy.
They are treated as an important part of the business. Zappos’ core values include:
- Deliver WOW through service
- Embrace and drive change
- Create fun and a little weirdness
- Be adventurous, creative, and open-minded
- Pursue growth and learning
- Build open and honest relationships with communication
- Build a positive team and family spirit
- Do more with less
- Be passionate and determined
- Be humble
If an organization is focused externally, has few controls, and lays emphasis on flexibility, then it can be categorized as having a culture of adhocracy. In such organizations, employees enjoy a lot of flexibility. The leadership is strong and only takes calculated risks.
Such organizations have a clear vision about where they want to go. These organizations can form teams quickly in order to take up any new challenges and get the work done. For example, Google, a multinational technology organization, follows an adhocracy culture. It has strong leadership in the market. Google develops innovative solutions and processes, which has made it a leader in the market.
If an organization is focused internally, has more controls, and lays emphasis on stability, then it can be categorized as a hierarchical culture. In such organizations, there is a strict and formal chain of command. Power and position play a significant role in hierarchical cultures.
The major task of leaders in such organizations is to monitor the activities of employees and coordinate among different departments to ensure that the tasks are carried out in a planned and efficient manner.
An example of an organization following a hierarchical culture is McDonald’s, which values standardization, and has a well-defined structure for authority and decision-making. Every line manager of a branch is responsible for maintaining positive leadership. McDonald’s owes its success to teamwork and not the efforts of one individual.
If an organization is focused externally, has more controls, and lays emphasis on stability, then it can be categorized as a market culture organization. In such an organization, all transactions, whether internal or external, are viewed in terms of the market.
Transactions between the organization and external stakeholders are carried out with the minimum cost and in the fastest possible way. Such organizations are result oriented and competitive. The leaders in these organizations believe in delivering results.
General Electric (GE), an American multinational conglomerate corporation, is a good example of market culture. It has a competitive and result-oriented work environment. GE’s employees are productive and leaders are demanding.
Deal and Kennedy Model of Organisational Culture
Deal and Kennedy developed a model of organizational culture that was based on two dimensions. The first dimension is about the risk associated with the activities of the organization, and the second dimension is associated with the speed of response or feedback concerning the strategies adopted by the organization.
These strategies are implemented after due deliberations and appropriate decisions. The feedback regarding these decisions is received by both the employees and the organization. The feedback determines whether the strategic decisions taken by the organizations are successful or not.
Each of these dimensions is divided as high and low, as a result of which we have four main categories, as shown in Table:
Tough guy, macho
Bet your company culture
Work hard/play hard
Cell 1: Tough Guy, Macho Culture
This type of culture is characterized by employees who take high risks. These employees also get quick feedback on the decisions taken by them. In such organizations, feedback usually comes in the form of financial rewards.
Such a culture exists in sales-oriented organizations. In addition, such cultures generally have fierce internal competition. There is a lot of internal politics and conflict in organizations with these cultures. Such cultures acknowledge and reward success and punish failure. The managers in such organizations take a lot of risks and take full responsibility for the results, whether positive or negative.
Cell 2: Bet Your Company Culture
This type of culture is characterized by high risk and slow feedback. In this type of culture, the organization takes certain critical decisions. The result or impact of those decisions on the organization is known after a long interval of time.
Betting involves risks, and the results of betting can be positive or negative. For example, oil drilling companies generally exhibit this type of culture. Assume that certain reports of an oil drilling company say that certain areas say, A and B, probably have large reservoirs of oil.
Based on the reports, the oil company starts two projects, Project A and Project B, to explore the presence of oil in the two areas (A and B). Now, suppose Project A is successful as the oil company finds oil in area A.
Therefore, the company can set up its plant to extract oil from there. However, Project B is unsuccessful because the oil company does not find any oil in area B. As a result, the company suffers a loss because the cost it had to bear in setting up Project B was not recovered. In this example, you can compare the results of Projects A and B and easily come to the conclusion that Project A is a successful bet while Project B is an unsuccessful bet.
Cell 3: Work Hard/Play Hard Culture
Organizations with this type of culture encourage their employees not to take high risks, and the feedback is obtained quickly. The atmosphere in such organizations is fun and active. Each employee takes a few risks, but the level of activity is high.
In such cultures, persistence and effort are the keys to success. The key elements of the culture are meetings, conventions, teamwork, office parties, etc. Organizations that aim to provide quality products to their customers come under this category. The employees also display a lot of enthusiasm in their work and ensure that their tasks are completed on time.
Cell 4: Process Culture
This type of culture is characterized by low risk and slow feedback. The employees do not get feedback on their performance, and they have no way of measuring the work they do. The employees just concentrate on how the work is done.
This type of culture exists in bureaucratic organizations. The employees are concerned with the way or process through which work is done rather than concentrating on the work itself. In such cultures, artificial environments develop and the employees often become defensive.
The employees also assume that they can be put on task if they do not do things through the prescribed procedures. The focus is on processes rather than the end result. Employees tend to avoid taking responsibility for their actions for fear of being singled out in case there is a problem.
Charles Handy Model of Organization Culture
In 1999, Charles Handy proposed the classification of organizational culture into four categories. The four cultures were power culture, role culture, task culture, and person culture.
Handy defined the different types of culture as well as described the organizational structures associated with those cultures. Let us now understand the four types of culture as given by Handy.
Let us now understand the four types of culture as given by Handy.
Organizations with a power culture are those where all the power and control lie with one person or a few people. Such a culture is found in small organizations or the departments or units of a larger organization.
The employees are not involved in the decision-making process, and only a small group of people identified as the power center of the organization take decisions. In such organizations, the skills, knowledge, and experience of the employees are not valued.
Hence, the employees feel demotivated, and the rate of turnover is usually high. As already mentioned, the power center of the organization comprises a few individuals and all the decisions are made by these individuals.
In such a scenario, it becomes very important for the power center to ensure that the decisions are taken after considering all important aspects into account. If the decisions taken by the power center go wrong or are not fruitful, then the organization may suffer.
In his work, Charles Handy compared the organizational structure and organizational culture to a spider web. In this web, the decision makers are the spiders that sit at the center of the web. The closer the other spiders are to these spiders at the center, the more power and influence they will wield. In such organizations, succession is a big issue. Therefore, in the case of succession, power culture organizations hire only those individuals who seek power and are manipulative by nature.
The key characteristics of the power culture are as follows:
- Importance is given to a few individuals on whom the entire power of the organization rests. These individuals are responsible for taking all important decisions in the organization.
- Power culture organizations are result-oriented. They want to achieve their goals at any cost. In such a scenario, the skills, knowledge, and experience of the employees take a back seat.
- Employees working in a power culture usually have low morale as they are not involved in the decision-making process. Employees don’t stay too long in such organizations because of a lack of job satisfaction and low morale.
- Power cultures are committed to organizational goals
- A power culture can turn into a culture of dictatorship if proper controls are not put into place.
In organizations where role culture exists, the employees are clearly told the job assigned to them. The job description and the various tasks that have to be done by them are clearly mentioned. The effort is made to ensure that no work is duplicated.
This culture generally exists where there are specialized jobs, such as a bank teller, bank cashier, financial analyst or legal advisor of a company, etc. All these jobs are specialized in the sense that the work of one is not done by another person, except in the case of an emergency.
This type of culture exists in large organizations where there are specialized units for each business function. It is not possible to have a role culture in small organizations as the number of employees is limited; and with the limited budget, the employees have to deliver results with regard to various types of tasks.
In his work, Handy compared the role culture with a building that is supported by pillars. Each pillar can be compared to a specific role that is allocated to the employees. He compared the pillars to the individuals that occupy a specific position. If one individual goes, he/she can be replaced by another. The source of power lies in the position that an individual holds. The source of influence lies in the rules and procedures.
The other characteristics of the role culture are as follows:
- Specialized roles
- A limited number of senior-level managers
- The high degree of formalization and standardization
- Strict rules and procedures that guide the communication among the different roles
- Strict rules and procedures for handling disputes
- Works well under a predictable and stable atmosphere
- Low adaptability to change
- The reward for appropriate performance (reward may be a salary hike or promotion or any other depending upon organization)
- There are standardized methods to do the tasks. These tasks are usually routine and change very little with time.
In organizations where task culture exists, the employees are made to work under a team. Project teams are formed for completing a particular project. Each team is formed under a supervisor or a project head or a project manager.
The manager is the reporting authority for the employees of the team. The project team and the project manager are entrusted with a project that they have to complete within a fixed period of time and within the available budget.
Task culture is a type of culture where teams are formed; the teams are given their respective managers along with a set of objectives that are to be achieved by the team. In a power culture, there is only one power center.
However, in a task culture, various smaller power centers exist. These power centers can use their position to influence the decisions of the organization. Such a culture exists in matrix organizations. Here, it should be noted that an organization may not fall into only one category of culture. It may be a combination of two or more organizational cultures.
The various benefits of the task culture over the other cultures are as follows:
- Employees in a task culture usually have high morale and are highly motivated
- Employees are empowered to take decisions regarding their own projects.
- There is a sense of belongingness among the employees
- All work is done by creating specialized teams.
- Employees of the organization have a sense of responsibility and regard organizational goals as their own.
- In a task culture, the employees find solutions to problems by applying creative techniques.
- Employees get a sense of achievement after accomplishing the various milestones in a project as well as on completion of the project.
- Task-oriented cultures are both job-oriented and result oriented. It is task-oriented as specialized teams are created for each job and it is result oriented as achieving the desired results is a priority for the project managers as well as the members of the team.
- There is greater autonomy in the way teams function.
- Easy working relationships exist among the teams and their members.
- There is mutual trust and understanding among the members of the teams.
- The teams are quite flexible in their style of working.
Once a project is completed, the project teams are dissolved and new teams are formed for new projects. It may also be possible that the same team is allocated new projects. Therefore, the teams may be reformed, abandoned, or may continue to exist. This type of culture usually exists in large organizations.
Organizations sometimes face situations of limited resources and budget. These limited resources have to be distributed among the various teams. The project managers have to compete for the budgets allocated to them. If such circumstances continue for a long, there is a possibility that the morale of the teams may go down. Under such circumstances, the personal objectives of the employee take precedence over the goals of the organization. A major risk here is that the culture may ultimately get converted into a role culture or a power culture.
In organizations where personal culture exists, the individuals are important and considered the focal point. These individuals are considered important as they have specialized knowledge. Such a culture can be found in organizations whose core function revolves around some specialized knowledge or skills. For example, law firms usually have this kind of culture; here, a group of lawyers is the focal point of the organization. Other positions in the organization such as receptionist, accountant, etc. are comparatively less important than lawyers.
Person culture is not common because, in this type of culture, the objectives of the individuals become a priority. In addition, it is difficult to exercise control in such organizations as all the individuals are experts and do not have any fear of losing their jobs.
They are quite aware that they can practice their profession individually also. The employees may leave the organization or even ask for further hikes in salary but the organization would never retrench its employees in an ideal scenario. Let us understand this better with the help of an example.
Assume that a hospital has been set up recently, and it provides specialty medical services for heart care. The hospital has contracted with Dr. Rashmi Kumar, who is one of the top heart surgeons in the country. Now, put yourself in the place of hospital management. Would you ever let Dr. Rashmi go elsewhere and leave your hospital? The answer is a clear ‘NO’. This is because the hospital knows that it would be very tough for it to hire another doctor with the same expertise as Dr. Rashmi.
Other examples of personal culture include IT organizations, hospital consultants, architects, interior decorators, fashion designers, and university professors.