CH4- Culture in the entrepreneurial organisation Flashcards
Why is culture important in entrepreneurial organizations?
Culture shapes key behavioral traits related to entrepreneurship, such as innovativeness, risk-taking, proactiveness, competitive aggressiveness, and autonomy. These traits define how entrepreneurial a company can be.
How does culture influence behavior?
Culture influences how people think, act, and make decisions. It shapes their view of the world and forms their mental models, which in turn drive how they approach work, relationships, and innovation.
What are the key components of culture?
- Norms: Unspoken rules about how to act.
- Beliefs: Deeply held values about what is important.
- Assumptions: Unconscious understandings about behavior.
Can culture be changed?
Yes, culture evolves over time and can be influenced or shaped by new experiences and leadership. However, core values tend to change slowly, while peripheral values (less central to the culture) can adapt more quickly.
CoreValues= deep foundational beliefs that’s identity of organisation
What are the characteristics of core values?
- Central to the culture: They are the bedrock of how a group or organization operates.
- Slow to change: Because they are so ingrained, core values remain stable over time. Even when other aspects of the organization or environment change, core values act as a constant guiding force.
- Defining the group’s identity: Core values influence the way individuals view the world and their role within it, shaping decisions, behaviors, and the overall “personality” of the organization.
- Example: In an organization, core values might include a commitment to innovation, integrity, or customer focus. For a society, a core value might be the importance of freedom or gender equality.
Peripheral values are more flexible beliefs that adapts to environment
What are the charecteristics of peripheral values?
- Less central: These values are important, but they do not define the long-term essence of the organization or group.
- Responsive to change: Peripheral values can shift as the organization or its external environment evolves, without disturbing the core values.
- Supportive of adaptability: These values allow the organization to remain flexible and responsive, helping it to quickly adjust to new trends, challenges, or technologies.
- Example: A company might shift its work-from-home policies or customer service approaches (peripheral values) based on external factors like market demands or technological advances, while still holding onto its core commitment to customer satisfaction.
How Core and Peripheral Values Interact:
- Core values provide stability: They give the organization or group its long-term direction, ensuring consistency even as other things change.
- Peripheral values provide flexibility: They allow the organization to remain dynamic, changing the way it operates in response to new challenges or opportunities, while still remaining anchored by its core values.
What is the impact of language on culture?
Language shapes how people in a group think and communicate. In some cultures, messages are straightforward and clear, while in others, communication is more subtle, and meanings are implied rather than stated outright.
How does a strong culture develop within an organization?
Strong cultures are built when there is consistency in the values, norms, and behaviors reinforced throughout the organization. The deeper elements of culture, such as values and beliefs, must align with the company’s entrepreneurial architecture to be effective.
What are cultural models in the context of organizations?
Cultural models are frameworks used to define characteristics of different groups, such as national cultures or organizational cultures. These characteristics help understand differences in communication, behavior, and interaction among groups.
Why do cultural differences matter in organizations?
Cultural differences can create communication and interaction problems when groups from different cultural backgrounds work together. Understanding these differences helps in reducing friction and improving collaboration in a global business environment.
Which cultural models are commonly used to study these differences?
- Hofstede Model (1981, updated 2001)
- Schwartz and Bilsky’s studies (1987)
- Trompenaars Model (1993)
- GLOBE Model (2004)
Why is Hofstede’s model the most frequently applied?
Hofstede’s model is based on extensive cross-cultural research, involving 80,000 IBM employees across 66 countries. Its wide sample size and detailed dimensions make it one of the most respected frameworks in understanding national cultures.
Four dimensions of culture identified.
What are the four dimensions of Hofstede’s model?
- Individualism vs. Collectivism: This measures whether people prefer to act as individuals or as part of a group. Individualistic cultures (like the USA and UK) prioritize personal goals, while collectivist cultures (like many South American countries) value group harmony.
- Power Distance: This describes the degree of inequality that is accepted within a society. Low power-distance cultures (e.g., Scandinavian countries) emphasize equality and open communication, while high power-distance cultures (e.g., Malaysia) accept hierarchical structures and authority.
- Uncertainty Avoidance: This reflects how comfortable a culture is with ambiguity and change. Low uncertainty avoidance cultures (e.g., USA, UK) are more flexible and open to risk, while high uncertainty avoidance cultures (e.g., Greece, Portugal) prefer structure and clear rules.
- Masculinity vs. Femininity: This dimension focuses on values. “Masculine” cultures (e.g., Japan, USA) prioritize achievement, assertiveness, and competition, while “feminine” cultures (e.g., Scandinavian countries) emphasize relationships, cooperation, and quality of life.
What additional dimension did Hofstede later add?
Hofstede added a fifth dimension called Short-term vs. Long-term Orientation:
* Short-term orientation focuses on traditions and respect for the status quo.
* Long-term orientation emphasizes future planning, adaptability, and continuous improvement.
What is the GLOBE Model, and how does it relate to Hofstede’s dimensions?
The GLOBE Model (2004) built upon Hofstede’s work by studying over 17,000 middle managers across 951 organizations. It expanded Hofstede’s five dimensions into nine, adding concepts like Institutional Collectivism and Performance Orientation.
Why is Hofstede’s model still important?
Hofstede’s framework is widely respected due to the scale and thoroughness of its data. It remains relevant for organizations looking to understand cultural differences and how they affect management, communication, and organizational behavior.
What is meant by the USA’s national enterprise culture?
The USA’s national enterprise culture encourages entrepreneurship through its focus on individual initiative, risk-taking, and flexibility. It creates an environment where individuals are more likely to become entrepreneurs rather than relying on being born with entrepreneurial traits.
What characteristics of American culture promote entrepreneurship?
- Individualism: Strong emphasis on personal freedom and initiative.
- Masculinity: Competitiveness and assertiveness are valued.
- Low Power Distance: There’s a sense of equality, where people can rise through merit.
- Low Uncertainty Avoidance: Tolerance for risk, ambiguity, and flexibility in decision-making.
- Achievement: Success is measured by personal achievement, which is rewarded with financial gain.
What challenge do multinationals face in creating a unified organizational culture?
Multinational companies operate in various countries with different cultural profiles, making it difficult to establish a homogenous organizational culture across all branches. This diversity might even be undesirable, as cultural differences can sometimes offer a competitive advantage.
How do national cultures overpower organizational cultures?
Research suggests that strong national cultures can dominate weaker organizational cultures. For example, Hofstede’s studies at IBM showed that even within the same company, cultural differences were apparent across national boundaries, making it hard for a unified culture to emerge.
Can national cultures provide competitive advantages?
Yes. Hofstede argued that different national cultures might provide strengths in certain areas. For example, more “feminine” cultures like the Netherlands might excel in consultancy and services, while more competitive, “masculine” cultures like the USA might focus on achievement-oriented activities.
How does cultural diversity benefit organizations, particularly in innovation?
Cultural diversity brings different perspectives, which can drive innovation. For example, combining technological expertise from various fields and cultures (as seen in companies like Waymo) can lead to breakthrough products and services. This “cognitive diversity” is key to problem-solving and innovation.
What is the purpose of Meyer’s eight dimensions of culture?
Meyer’s eight dimensions help measure and explain differences in how people from various cultures communicate, lead, trust, and make decisions. These dimensions are especially useful in multinational organizations where cultural differences can impact communication and decision-making.
Meyer’s 8 dimensions
What are the 8 dimensions?
1. Communicating: Measures the preference for low-context (direct, clear communication) vs. high-context (nuanced, layered communication where much is implied) styles.
2. Evaluating: Assesses how direct or indirect cultures are with giving feedback, especially criticism. Cultures can be high-context but still prefer direct criticism (e.g., France).
3. Persuading: Looks at whether people prefer principles-first (theory-driven) or applications-first (practical, example-driven) approaches to persuasion.
4. Leading: Gauges the degree of power distance in a culture, indicating whether it favors hierarchical (authority-driven) or egalitarian (equal) leadership styles.
5. Deciding: Measures whether decision-making is consensual (group-based) or reliant on one person (leader-driven), which may not always correlate with power distance.
6. Trusting: Balances task-based trust (built through work competence) vs. relationship-based trust (built through personal networks and relationships).
7. Disagreeing: Assesses how comfortable cultures are with confrontation and open disagreement, which can either strengthen or harm relationships.
8. Scheduling: Measures whether time is seen as rigid (punctuality and deadlines are strict) or flexible (time and deadlines are adaptable).
How do these dimensions affect interactions in multinational organizations?
These cultural dimensions act as filters, shaping how individuals communicate, trust, and make decisions. In multinational organizations, understanding these differences is key to avoiding misunderstandings, improving collaboration, and making better decisions.
What is organizational culture?
Organizational culture refers to the set of shared values, beliefs, and ways of thinking within a company. It shapes how employees interact with each other and how they perceive their roles. Bratton and Gold (2017) define it as “the set of values, understandings, and ways of thinking that is shared by the majority of members of a work organization.”
How does organizational culture form?
According to Schein (1983), organizational culture develops over time as groups learn to solve problems of internal integration (how people work together) and external adaptation (how the organization reacts to the outside world). These lessons become ingrained and are passed down to new employees as “the correct way to think, feel, and act.”
How does culture influence behavior in an organization?
Culture not only influences how people behave but also how the organization presents itself both internally and externally. For example, how employees interact, make decisions, and solve problems reflects the organization’s culture. Even its digital presence (like websites or social media) can reflect its cultural values.
How does organizational culture balance individualism and collectivism?
Entrepreneurial organizations need a balance between individualism (personal initiative) and collectivism (working as a team). Too much individualism can harm cooperation, while too much collectivism can stifle creativity. A well-designed entrepreneurial architecture encourages both personal autonomy and a strong sense of “in-group” (employees united in competing against external competitors).
