Chapter 6 - Strategy and Organisational Culture Flashcards
Culture and history
What is the significance of understanding an organization’s culture and history?
Knowing an organization’s culture and history helps explain its behaviors, people interactions, and stakeholder relationships.
Culture and history
How do historical cultural drivers impact an organization?
Cultural drivers may stem from founders’ beliefs, impacting current practices. Conflicts can arise if founders’ visions clash with modern directors or dominant shareholder
Culture and history
What is organizational culture according to Schein (1985) and Handy?
Schein defined it as “a pattern of shared basic assumptions,” while Handy described it as “the way we do things around here.”
Culture and history
How can an organization’s history impact its culture?
An organization’s cultural drivers often link back to founder beliefs. Conflicts may arise if these beliefs differ from those of current leaders or dominant shareholders.
Culture and history
What are the three levels of culture identified by Schein?
- Artefacts (visible aspects), 2. Values (publicly stated beliefs), 3. Underlying assumptions (unquestioned, guiding principles).
Culture and history
How does Barney (1986) view the role of culture in an organization?
He believes that culture can be a source of competitive advantage for organizations.
Culture and history
Define “Strategic Drift.”
It is the failure of an organization’s strategy to keep up with external environmental changes, leading to reduced performance and market share.
Culture and history
What are the phases of strategic drift?
- Incremental Change, 2. Strategic Drift, 3. Flux, 4. Transformational Change or Organizational Failure.
Culture and history
Why is it important to recognize historical influence and bias in organizational culture?
Bias can affect decision-making, such as in recruitment, leading to a lack of diversity and reinforcing existing cultural assumptions.
Understanding culture
What are Johnson et al.’s three cultural frames of reference?
- Geographic (regional and national influences), 2. Organizational field (industry-specific influences), 3. Organization (subcultures within the organization).
Understanding culture
What are subcultures, and why do they exist within organizations?
Subcultures are groups within an organization with distinct beliefs or interests. They often form due to departmental roles, e.g., finance vs. marketing cultures.
Models of culture
List the four types of organizational culture by Harrison and Handy (1972).
- Power Culture (centralized power), 2. Role Culture (bureaucratic), 3. Task Culture (project-oriented), 4. Person Culture (serving individual autonomy).
Models of culture
Describe Deal and Kennedy’s four cultural types based on risk and feedback speed.
- Tough-guy/Macho (high risk, fast feedback),
- Work Hard/Play Hard (low risk, fast feedback),
- Bet-Your-Company (high risk, slow feedback),
- Process Culture (low risk, slow feedback).
Models of culture
What elements form the “Cultural Web” by Johnson et al. (2017)?
- Control systems,
- Rituals and routines,
- Organization structure,
- Symbols,
- Power structures,
- Stories, and
- Paradigm (shared assumptions).
The Importance of Culture
What are the benefits of a strong culture, according to Goldsmith and Clutterbuck (1997)?
It can give identity, develop commitment, guide behavior, internalize controls, support decision-making, ease communication, and align strategic goals.
Importance of culture
How is a healthy culture beneficial to an organization?
A healthy culture can be a source of competitive advantage, contributing to long-term value creation and employee engagement.
Importance of culture
What factors can contribute to weak or unhealthy corporate cultures?
Factors include individualism, market dominance, unqualified managers, bureaucracy, ignoring external influences, political management, and arrogance.
Importance of culture
In what ways can a strong culture be a barrier to diversity?
Strong cultures can reinforce institutional biases, potentially hindering diversity within the organization.
Importance of culture
How can culture affect mergers and acquisitions?
Differing organizational cultures can clash, complicating integration and potentially leading to failed mergers, as seen with Hewlett Packard’s acquisition of Autonomy.
Importance of culture
What is the Financial Reporting Council’s (FRC) stance on organizational culture?
FRC emphasizes that a healthy culture is crucial for value creation and protection, advocating continuous focus on culture rather than waiting for crises.
Creating, sustaining and changing culture
What are the primary forces that shape organizational culture?
Culture evolves through the influence of past traditions, present circumstances, and future ambitions.
Creating, sustaining and changing culture
What three key areas must managers consider when changing culture?
They must address beliefs (mindsets), behaviors (habits), and focus (strategic direction).
Organisational culture and national culture
How does Hofstede (1980) describe national culture’s impact on organizational behavior?
National culture acts as “collective programming,” affecting individual behaviors based on societal values.
Organisational culture and national culture
Describe Hofstede’s dimension of “Power Distance.”
It reflects the accepted inequality between people in power and others, influencing management styles and subordinates’ responses.
Organisational culture and national culture
What is “Uncertainty Avoidance” in Hofstede’s cultural dimensions?
It measures tolerance for uncertainty and ambiguity, where high scores indicate a preference for predictability and low scores for flexibility.
Organisational culture and national culture
Explain “Individualism vs. Collectivism” in national culture.
Individualism emphasizes personal responsibility and independence, while collectivism values loyalty to the group and shared responsibility.
Organisational culture and national culture
What does Hofstede’s “Masculinity vs. Femininity” dimension refer to?
It relates to societal roles, where masculinity values assertiveness and success, and femininity emphasizes cooperation, quality of life, and balance.
Organisational culture and national culture
Define “Confucian Dynamism” (long-term vs. short-term orientation) in Hofstede’s model.
Long-term orientation values pragmatism and thrift, while short-term orientation values consistency, tradition, and nationalism.
Organisational culture and national culture
What are Trompenaars’ seven dimensions of culture?
- Universalism vs. Particularism,
- Individualism vs. Communitarianism, 3. Specific vs. Diffuse,
- Neutral vs. Emotional,
- Achievement vs. Ascription,
- Sequential vs. Synchronous Time,
- Internal vs. External Control.
