Chapter 6 - Strategy and Organisational Culture

Question 1

Culture and history

What is the significance of understanding an organization’s culture and history?

Answer 1

Knowing an organization’s culture and history helps explain its behaviors, people interactions, and stakeholder relationships.

Question 2

Culture and history

How do historical cultural drivers impact an organization?

Answer 2

Cultural drivers may stem from founders’ beliefs, impacting current practices. Conflicts can arise if founders’ visions clash with modern directors or dominant shareholder

Question 3

Culture and history

What is organizational culture according to Schein (1985) and Handy?

Answer 3

Schein defined it as “a pattern of shared basic assumptions,” while Handy described it as “the way we do things around here.”

Question 4

Culture and history

How can an organization’s history impact its culture?

Answer 4

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.

Question 5

Culture and history

What are the three levels of culture identified by Schein?

Answer 5

1. Artefacts (visible aspects), 2. Values (publicly stated beliefs), 3. Underlying assumptions (unquestioned, guiding principles).

Question 6

Culture and history

How does Barney (1986) view the role of culture in an organization?

Answer 6

He believes that culture can be a source of competitive advantage for organizations.

Question 7

Culture and history

Define “Strategic Drift.”

Answer 7

It is the failure of an organization’s strategy to keep up with external environmental changes, leading to reduced performance and market share.

Question 8

Culture and history

What are the phases of strategic drift?

Answer 8

1. Incremental Change, 2. Strategic Drift, 3. Flux, 4. Transformational Change or Organizational Failure.

Question 9

Culture and history

Why is it important to recognize historical influence and bias in organizational culture?

Answer 9

Bias can affect decision-making, such as in recruitment, leading to a lack of diversity and reinforcing existing cultural assumptions.

Question 10

Understanding culture

What are Johnson et al.’s three cultural frames of reference?

Answer 10

1. Geographic (regional and national influences), 2. Organizational field (industry-specific influences), 3. Organization (subcultures within the organization).

Question 11

Understanding culture

What are subcultures, and why do they exist within organizations?

Answer 11

Subcultures are groups within an organization with distinct beliefs or interests. They often form due to departmental roles, e.g., finance vs. marketing cultures.

Question 12

Models of culture

List the four types of organizational culture by Harrison and Handy (1972).

Answer 12

1. Power Culture (centralized power), 2. Role Culture (bureaucratic), 3. Task Culture (project-oriented), 4. Person Culture (serving individual autonomy).

Question 13

Models of culture

Describe Deal and Kennedy’s four cultural types based on risk and feedback speed.

Answer 13

1. Tough-guy/Macho (high risk, fast feedback),
2. Work Hard/Play Hard (low risk, fast feedback),
3. Bet-Your-Company (high risk, slow feedback),
4. Process Culture (low risk, slow feedback).

Question 14

Models of culture

What elements form the “Cultural Web” by Johnson et al. (2017)?

Answer 14

1. Control systems,
2. Rituals and routines,
3. Organization structure,
4. Symbols,
5. Power structures,
6. Stories, and
7. Paradigm (shared assumptions).

Question 15

The Importance of Culture

What are the benefits of a strong culture, according to Goldsmith and Clutterbuck (1997)?

Answer 15

It can give identity, develop commitment, guide behavior, internalize controls, support decision-making, ease communication, and align strategic goals.

Question 16

Importance of culture

How is a healthy culture beneficial to an organization?

Answer 16

A healthy culture can be a source of competitive advantage, contributing to long-term value creation and employee engagement.

Question 17

Importance of culture

What factors can contribute to weak or unhealthy corporate cultures?

Answer 17

Factors include individualism, market dominance, unqualified managers, bureaucracy, ignoring external influences, political management, and arrogance.

Question 18

Importance of culture

In what ways can a strong culture be a barrier to diversity?

Answer 18

Strong cultures can reinforce institutional biases, potentially hindering diversity within the organization.

Question 19

Importance of culture

How can culture affect mergers and acquisitions?

Answer 19

Differing organizational cultures can clash, complicating integration and potentially leading to failed mergers, as seen with Hewlett Packard’s acquisition of Autonomy.

Question 20

Importance of culture

What is the Financial Reporting Council’s (FRC) stance on organizational culture?

Answer 20

FRC emphasizes that a healthy culture is crucial for value creation and protection, advocating continuous focus on culture rather than waiting for crises.

Question 21

Creating, sustaining and changing culture

What are the primary forces that shape organizational culture?

Answer 21

Culture evolves through the influence of past traditions, present circumstances, and future ambitions.

Question 22

Creating, sustaining and changing culture

What three key areas must managers consider when changing culture?

Answer 22

They must address beliefs (mindsets), behaviors (habits), and focus (strategic direction).

Question 23

Organisational culture and national culture

How does Hofstede (1980) describe national culture’s impact on organizational behavior?

Answer 23

National culture acts as “collective programming,” affecting individual behaviors based on societal values.

Question 24

Organisational culture and national culture

Describe Hofstede’s dimension of “Power Distance.”

Answer 24

It reflects the accepted inequality between people in power and others, influencing management styles and subordinates’ responses.

Question 25

Organisational culture and national culture

What is “Uncertainty Avoidance” in Hofstede’s cultural dimensions?

Answer 25

It measures tolerance for uncertainty and ambiguity, where high scores indicate a preference for predictability and low scores for flexibility.

Question 26

Organisational culture and national culture

Explain “Individualism vs. Collectivism” in national culture.

Answer 26

Individualism emphasizes personal responsibility and independence, while collectivism values loyalty to the group and shared responsibility.

Question 27

Organisational culture and national culture

What does Hofstede’s “Masculinity vs. Femininity” dimension refer to?

Answer 27

It relates to societal roles, where masculinity values assertiveness and success, and femininity emphasizes cooperation, quality of life, and balance.

Question 28

Organisational culture and national culture

Define “Confucian Dynamism” (long-term vs. short-term orientation) in Hofstede’s model.

Answer 28

Long-term orientation values pragmatism and thrift, while short-term orientation values consistency, tradition, and nationalism.

Question 29

Organisational culture and national culture
What are Trompenaars’ seven dimensions of culture?

Answer 29

1. Universalism vs. Particularism,
2. Individualism vs. Communitarianism, 3. Specific vs. Diffuse,
3. Neutral vs. Emotional,
4. Achievement vs. Ascription,
5. Sequential vs. Synchronous Time,
6. Internal vs. External Control.