Chapter 6 – Strategy and organisational culture Flashcards
How does Barney and Handy define culture?
Barney defines culture as ‘a complex set of values, beliefs, assumptions and symbols that define the way in which a firm conducts its business’ and ‘the way we do things around here.’
According to Shein, what are the three distinct levels of organisational culture? VAU
- Values
- Artefacts - visible and tangible evidence
- underlying assumptions - held unconsciously by employees
According to Johnson, what are the four distinct phases of a strategic drift (i.e. the time gap between the development of strategy and the changes within the environment)?
- Incremental strategic change: the small changes that occur during long periods of relative stability
- Strategic drift: occurs where external environmental changes take place at a faster pace than within the organisation.
- Flux: occurs when the organisation becomes aware of the situation and attempts to correct performance.
- Transformation or death: at this stage there are three possibilities:
a. Major transformational change to bring organisational into line with the external environment
b. A takeover by another organisation
c. Organisational failure
In understanding culture, what are the three main cultural frames according to Johnson?
- Geographic
- Organisational field
- Organisation
Name the cultural types according to Harrison and Handy. PRTP
- Power orientation: the attempt to dominate the operating environment
- Role orientation: a focus on legality, legitimacy and responsibility
- Task orientation: the highest value always being the achieving of goals
- Person orientation: serving the needs of members
Deal and Kennedy suggest that organisational culture is based around a set of six interlocked elements - SHHCVR
- Stories: the inherited tales of why things happen in the way they do
- History
- Heroic figures: previous and current charismatic leaders
- Cultural network: the communication routes that enable people to find out what they need to know
- Values and beliefs: sharing what is important within the organisation
- Rituals and ceremonies: the everyday habits of the organisation
What were the four types of culture that Deal and Kennedy found to keep re-occuring?
- Macho, tough guy culture - all or nothing approach that has little regard for team work or mutual support
- Process culture - extended period of time to drive organisational change
- Work hard and play hard culture
- Bet your company culture - decisions are high risk but the impact can be slow to materialise
Outline the cultural web outlined by Johnson et al - SCORPS
- Stories: how people, inside and outside, talk about the organisation. The myths and the realities of how the organisation has developed since its origin to today.
- Control systems: the formal and informal methods of monitoring and maintaining people and systems throughout the organisations. E.g. methods of appraisals, remuneration reward and recognition.
- Organisational structures: the formal hierarchical lines as identified on an organisation chart, but also the written lines of communication and human interaction where influence is exerted in an attempt to achieve the desired strategic results
- Rituals and routines: the daily behaviour of people within the organisation to each other and to stakeholders. The expectations of how the organisation operates, the meeting structure, the level of freedom, potential time constraints, the pattern of a normal working day. Herzberg: the ‘hygiene factors’
- Power structures: recognition that significant decisions are made by a defined number of individuals, and it is these people who ultimately hold the power irrespective of any organisational structure e.g. shareholders
- Symbols: the tangible presence of an organisation within its near and far environment. This can include logos, titles, types of car driven by executives, layout of offices, differing privileges for different levels within the hierarchy, etc
What is dominant culture?
This is where it is clear that either a majority of employees, or the core focus of the organisation, is driven by and moulded by an overriding, and often unchallenged, set of values.
According to Goldsmith et al, strong culture can lead to what?
- Sense of identity
- Develop commitment
- Guide and shape behaviour
- Internalise control systems
- Support and sustain decision-making
- Make communication and co-operation easier
- Decrease ambiguity and align strategic purpose
According to Kotter et al, where does weak culture come from?
- Individual entrepreneurship and/or luck
- An over-dominant market position
- Lack of appropriately qualified or experienced managers
- Increasing bureaucracy
- Ignoring external influences and forces
- Management becoming insular or political
- An arrogant approach led by hubris
What did the FRC Guidance on Board Effectiveness state were the indicators of poor culture of an organisation?
- Silo thinking
- Dominant CEO
- Leadership arrogance
- Lack of openness to challenge
- Lack of diversity
- Hierarchical attitude
