We've summarised below some key points that students should consider when revising the the factors influencing the culture of an organisation and cultural differences within an organisation:

Definitions

• Culture: “The way we do things around here"
• Sub-culture: group of people within a culture (whether distinct or hidden) which differentiates them from the larger culture to which they belong
• Mission: a formal statement of an organisation's fundamental purpose (similar to vision, purpose)
• Core values: the essential and enduring guiding principles of an organisation.
• Vision statement: a picture of an organisation in the future (aspiration, inspiration) which sets the framework for strategic planning.
• Paradigm: the set of assumptions held in common & taken for granted in an organisation. Often unspoken.

Key Theories / Concepts

• Charles Handy: four types of culture
• Power : focus on personal charisma & risk-taking
• Role: focus on position, bureaucracy, hierarchy
• Task: focus on problem-solving, teamwork, creativity
• Person: focus on individual needs, independence
• Edgar Schein: 4 layers of organisational structure: Values | Beliefs | Behaviours | Paradigm
• Johnson & Scholes: Cultural Web (Symbols, Power Structures, Organisational Structures, Control Systems, Rituals & Routines, Stories)

Factors Influencing Culture of an Organisation

• Influence of the founder (“shadow of the leader")
• Size & development stage of the business (e.g. start-up, multisite, multinational)
• Leadership & management style
• Organisational structure, policies & practices
• Employee & management reward structures (e.g. pay, bonuses, individual v team rewards)
• Market /industries in which it operates
• Working environment & nature of tasks (e.g. physical, office, remote working, flexible working)
• External environment (e.g. legal, economic, social)
• Attitude of organisation to risk-taking & innovation
• Sector: e.g. service, manufacturing

Cultural Differences Within an Organisation

• Subcultures develop within an organisation based on occupations, product lines, functions, geographies and echelons in the hierarchy.
• Some firms: sub-cultures are stronger than overall organisational culture
• Managing Sub-cultures has become more important & challenging:
• Mergers, takeovers, joint ventures more common
• Globalisation: many firms now multi-cultural based on nationality, language
• Technological complexity: depts. more specialised; more remote & flexible working

Key Examples / Evidence

• Barclays: impact of powerful sub-culture at investment banking division (came to dominate retail bank)
• Apple / Disney: role of culture of innovation & secrecy; shadow of the leader – Steve Jobs, Walt Disney
• HP (“HP Way"), Toyota (“Toyota Way") – long-established cultural programmes, including induction
• NHS: public sector organisation with complex cultural challenges – combination of role & task culture?
• Walmart: a common approach to employee (“shareholder") engagement across the globe
• Google: has deliberately maintained existing culture of acquisitions (e.g. YouTube & Zappos)
• Ikea: has developed a consistent culture among employees around the world who “love the values"

Depends on Factors

• Organisations will vary significantly in terms of the strength and depth of their culture: this will depend on:
• Strength & clarity of the organisation founder
• Amount and intensity of shared experiences that organisation members have had
• How much success the organisation has enjoyed
• The history/heritage of the business

Further Evaluation Opportunities

• Much academic research on what organisational culture is – but little agreement, so theoretical models can only be a guide.
• Culture is a complex concept which is difficult to understand = a challenge for business leaders!
• There is no absolute criterion for a “better" or a “worse" culture – it depends on what is “right" for the organisation