Organisational Culture

Organisational culture describes the values, beliefs and behaviours which provide norms for the environment of an organisation (Anon., 2012). The culture of an organisation sets out to provide structure for employees within a business and often culture shows to be a strong factor in certain organisations. Edgar Schein, a culture theorist explains that the definition of organizational culture must be general otherwise factors may be eliminated which may contribute to culture within a business. (Anon., 2007). Culture impacts on the working procedures in which a business performs and effects the way in which the organisation is run on a daily basis.

The organisational iceberg theory proposed by French and Bell (1990) explains that there are both visible and invisible aspects that make up a business culture showing that visible aspects are known to customers however invisible aspects are hidden within the organisation. Examples of visible aspects are the structure and aims of a business including their views on how they wish to progress in the market. Using the Body Shop as an example of an organisation with a strong culture, the visible aspect shown to customers to have a big impact on their culture is their view on using fair trade products which are responsibly sourced. The Body Shop launched community fair trade in 1987 to benefit their suppliers helping to ensure they will obtain a fair price from the products they sell and benefiting consumers due to buying products containing natural ingredients. This programme has resulted in over 25,000 people in 22 countries worldwide benefiting from products sold by Body Shop. (Anon., 2012) This visible aspect of Body Shop has adapted their culture into showing their strong views in helping fair trade farmers across the globe to earn a fair price for their stock selling to the store, which may result in an increase in customer spending due to following their beliefs of the company. They promote this visible aspect in store by the layout of their shops using wood panelling on their shelves to create a rustic view for customers following their value of selling fair trade products. Another visible aspect of the Body Shop is there view on abolishing animal testing on products. They pride themselves in being a company which does not use animal tested products and ingredients in which their suppliers use to make the goods. The Body Shop campaign globally against cosmetic animal testing and this is shown heavily on their website enabling people to obtain information about their values and views on the concept of animal testing. (Anon., 2012)

Handy is another theorist in the explanation of organisational culture within a business. Handy explains that there are four types of culture within a business, each of which has different ways of monitoring and managing their employees.

Power culture is used by firms who have a centralised team of management and where all decisions are made by a central figure of the company. Other employee’s views and opinions are usually dismissed and the ultimate decision is made from the centralised management. This culture is usually incorporated into businesses with a primary leader and with strict management processes. Virgin Company is a business which is an example of incorporating power culture by being led by Sir Richard Branson, the founder of the company. Branson makes many corporate decisions of the company and deals with many of the crucial problems the business may face. ‘Your people need to be led well. A good leader must know the team, its strengths and weaknesses; socializing and listening to the team is key.’ (Branson, 2010)This quote is told by Richard Branson when explaining how he created a beneficial culture within his business. This quote helps to illustrate how he leads the company and the employees within it showing a prominent power culture.

A role culture explains a type of culture in which power of each employee is determined by the roles in which they undertake within the organisation and within the hierarchical state of each job position. Employees follow specific job descriptions and their aim is to complete individual tasks set, role culture also displays bureaucracy within a company (Sherwin, 2009). John Lewis has implemented a role culture within their organisation allowing staff to have individual roles to complete advantageously giving them a sense of job identity within the culture of the business. (Potter, 2010) explains that John Lewis encourage respect, fairness, dialogue and collaboration between all staff (shareholders or partners) to work from a leadership base of high credibility and trust. Therefore this shows they value importance on their employees and ensure they have a positive reputation of culture. By issuing yearly bonuses to employees, they show importance of their staff to the company and communication of this is shown in the public eye.

Task culture is an explanation of businesses which value high importance of the tasks in hand and make every effort of the company to complete tasks set. There is less control and influence from sub ordinates as employees work in team based groups to ensure completion of work. An example of this culture would be seen in more research based businesses where more team working is required with different skills to implement within the business surroundings.

A person culture reflects a culture in which the business surrounds the importance of employees and key job roles are led by staff decision making where in which there is no hierarchy. The individual employees are the centralisation of how the business is run and therefore would reflect smaller businesses such as sole traders or self-employed workers.

A problem with classifying culture of a business into one of four types of culture in which Handy suggests is that cultures of organisations may overlap within different types as they may contain different characteristics. Therefore it would be difficult to classify certain businesses into one specific type of culture as this may not be a true reflection of how their employees operate. Another issue of culture classification is that Handy’s four types of culture are specifically defined and therefore businesses may have some of the characteristics however not others and therefore certain organisations culture may not have a true likeness of a specific type.

In conclusion, it is beneficial to show through visible aspects an organisations culture to customers as a positive corporate culture is beneficial when gaining consumer demand and customer loyalty. It is difficult to place a certain culture within one of Handy’s types of culture and therefore it may be difficult to group business cultures as many organisations differ. Also many organisations promote culture which is less visible to the public eye creating difficulty when defining a specified type of culture and this may have an effect on the businesses reputation. Culture can be generalised within organisations however businesses have an individualistic culture in which they pursue within the company’s operations and which employees follow. Although corporate culture is generalised to all organisations, individualistic cultures will define and outline businesses in the long term.

References

Anon. (2007) Definition of organizational culture [online]. Organizational culture. Available from: http://www.organizationalculture101.com/definition-of-organizational-culture.html [Accessed: 5 February 2012].

Anon. (2012) Organizational culture [online]. BusinessDictionary.com. Available from: http://www.businessdictionary.com/definition/organizational-culture.html [Accessed: 5 February 2012].

Anon. (2012) Values and Campaigns [online]. The Body Shop. Available from: http://www.thebodyshop.com/_en/_ww/values-campaigns/community-trade.aspx [Accessed: 5 February 2012].

Branson, R. (2010) Richard Branson: People Power -- the Engine of Any Business [online]. Entrepreneur. Available from: http://www.entrepreneur.com/article/217350 [Accessed: 5 February 2012].

Potter, D. (2010) My Cultural Reflections : Doing Business The John Lewis Way [online]. Cultural change. Available from: http://www.culturalchange.co.uk/?p=923 [Accessed: 5 February 2012].

Sherwin, L. (2009) Managing change toolkit [online]. Lindsay Sherwin. Available from: http://www.lindsay-sherwin.co.uk/guide_managing_change/html_overview/05_culture_handy.htm [Accessed: 5 February 2012].