1MANAGEMENT (12)MANAGEMENT (12)Organizational CultureOrganizational Culture

CCtlinatlina RADU, MBA, PhD.RADU, MBA, PhD.BucharestBucharest UniversityUniversity of of EconomicEconomic StudiesStudies

Organizational Culture Organizational Culture Proposed QuotesProposed Quotes

917 & 920:917 & 920: Organizational culture is the sum ofOrganizational culture is the sum of 917 & 920: 917 & 920: Organizational culture is the sum of Organizational culture is the sum of values and rituals, which serve as glue to integrate values and rituals, which serve as glue to integrate the members of the organization.the members of the organization. -- Richard PerrinRichard Perrin

918: 918: "Organizational culture eats strategy for "Organizational culture eats strategy for breakfast" breakfast" -- Peter Peter DruckerDrucker

922: 922: "By bringing together people who share "By bringing together people who share interests, no matter their location or time zone, interests, no matter their location or time zone, social media has the potential to transform the social media has the potential to transform the workplace into an environment where learning is as workplace into an environment where learning is as natural as it is powerful."natural as it is powerful."

2What is Organizational What is Organizational Culture?Culture?

OrganizatiionalOrganizatiional cultureculture can be described ascan be described as OrganizatiionalOrganizatiional cultureculture can be described as can be described as the shared values, principles, traditions, and the shared values, principles, traditions, and ways of doing things that influence the way ways of doing things that influence the way organization members act.organization members act.

Three aspectsThree aspects:: Three aspectsThree aspects:: Culture is a perception;Culture is a perception; Culture is descriptive (not about liking);Culture is descriptive (not about liking); Similar terms (shared aspect).Similar terms (shared aspect).

3Dimensions of Dimensions of Organizational CultureOrganizational Culture (1)(1)

Seven dimensionsSeven dimensions rated from low (notrated from low (notSeven dimensions Seven dimensions rated from low (not rated from low (not typical to the culture) to hightypical to the culture) to high::

1. 1. Innovation and risk takingInnovation and risk taking degree to degree to which employees are encouraged to be which employees are encouraged to be innovative and to take risks;innovative and to take risks;innovative and to take risks;innovative and to take risks;

2. 2. Attention to detailAttention to detail degree to which degree to which employees are expected to exhibit precision, employees are expected to exhibit precision, analysis, and attention detail;analysis, and attention detail;

Dimensions of Dimensions of Organizational CultureOrganizational Culture (2)(2)

3. 3. Outcome orientationOutcome orientation degree to which degree to which managers focus on results or outcomes rather managers focus on results or outcomes rather than on how these outcomes are achieved;than on how these outcomes are achieved;

44 People orientationPeople orientation degree to whichdegree to which4. 4. People orientationPeople orientation degree to which degree to which management decisions take into account the management decisions take into account the effects on people in the organization;effects on people in the organization;

4Dimensions of Dimensions of Organizational CultureOrganizational Culture (3)(3)

55 Team orientationTeam orientation degree to which work isdegree to which work is5. 5. Team orientationTeam orientation degree to which work is degree to which work is organized around teams rather than individuals;organized around teams rather than individuals;

6. 6. AgressivenessAgressiveness degree to which employees degree to which employees are aggressive and competitive rather than are aggressive and competitive rather than cooperative;cooperative;cooperative;cooperative;

7. 7. StabilityStability degree to which organizational degree to which organizational decisions and actions emphasize maintaining the decisions and actions emphasize maintaining the status quo.status quo.

Organizational CultureOrganizational Culture Norms versus ValuesNorms versus Values

NormsNorms this is how I normally should this is how I normally should behavebehave

ValuesValues this is how I aspire or desire to this is how I aspire or desire to behavebehavebehavebehave

5The National CultureThe National Culture

A more general layer of culture;A more general layer of culture;

Strong implications for companies operating Strong implications for companies operating in more than one country;in more than one country;

Many studies: i.e. Many studies: i.e. HofstedeHofstede, , TrompenaarsTrompenaars..

Dimensions of National Dimensions of National Cultures Cultures HofstedeHofstede

Power distance (PDI)Power distance (PDI) Individualism vs. collectivism (IDV)Individualism vs. collectivism (IDV) Masculinity vs. femininity (MAS)Masculinity vs. femininity (MAS) Uncertainty avoidance (UAI)Uncertainty avoidance (UAI) LongLong--term orientation (LTO)term orientation (LTO) Indulgence vs. Restraint (IVR)Indulgence vs. Restraint (IVR)

6Power distancePower distance

The extent to which the less powerful The extent to which the less powerful members of organizations and institutions members of organizations and institutions (like the family) accept and expect that (like the family) accept and expect that power is distributed unequallypower is distributed unequallypower is distributed unequally.power is distributed unequally.

Elements of PDI (in general)Elements of PDI (in general)

Small distance toSmall distance to Great distance toGreat distance toSmall distance to Small distance to powerpower

Inequalities among Inequalities among people must be people must be minimizedminimized

Great distance to Great distance to powerpower

Inequalities among Inequalities among people are expected people are expected and normaland normal

Equality in family Equality in family relationsrelations

At school, teachers At school, teachers expect initiative expect initiative from their studentsfrom their students

ObedienceObedience--respect respect in family relationsin family relations

At school, all At school, all initiatives come initiatives come from the teacherfrom the teacher

7Elements of PDI (in Elements of PDI (in business)business)

Small distance to Small distance to Great distance to Great distance to powerpower

Decentralized Decentralized organizations are organizations are typicaltypical

Small salary gapSmall salary gap

powerpower

Centralized Centralized organizations are organizations are typicaltypical

Great differences inGreat differences in Small salary gap Small salary gap between superior between superior and inferior levels and inferior levels of the organizationof the organization

Employees expect Employees expect to be consultedto be consulted

Great differences in Great differences in incomeincome

Employees expect Employees expect to be told what to to be told what to dodo

Values of PDIValues of PDI

Country/regionCountry/region ScoreScore RankRankMalaysiaMalaysia 104104 11 22MalaysiaMalaysia 104104 11--22SlovakiaSlovakia 104104 11--22Guatemala/PanamaGuatemala/Panama 9595 33--44PhilippinesPhilippines 9494 55RussiaRussia 9393 66RomaniaRomania 9090 77SerbiaSerbia 8787 88Bulgaria/ Morocco Bulgaria/ Morocco 7070 2222--2323FranceFrance 6868 2727--2929Greece Greece 6060 4141--4242Czech Rep.Czech Rep. 5757 4545--4646HungaryHungary 4646 5555United StatesUnited States 4040 5757--5959Great BritainGreat Britain 3535 6363--6565

8Individualism versus Individualism versus CollectivismCollectivism

The degree to which individuals areThe degree to which individuals are The degree to which individuals are The degree to which individuals are integrated into groups. integrated into groups.

Individualist: societies in which the ties Individualist: societies in which the ties between individuals are loose. between individuals are loose.

Collectivist: societies in which people are Collectivist: societies in which people are integrated into strong, cohesive inintegrated into strong, cohesive in--groups, groups, g gg g g pg poften extended families (with uncles, aunts often extended families (with uncles, aunts and grandparents) which continue and grandparents) which continue protecting them in exchange for protecting them in exchange for unquestioning loyalty. unquestioning loyalty.

Elements of IDV (in general)Elements of IDV (in general)

IndividualismIndividualism CollectivismCollectivismIndividualismIndividualism Each individual Each individual

takes care of takes care of him/herself and him/herself and their own familytheir own family

Children are taughtChildren are taught

CollectivismCollectivism Families or groups Families or groups

of common of common interest/loyaltyinterest/loyalty

Children are taught Children are taught to think as weto think as we Children are taught Children are taught

to think as I" and to think as I" and meme

To speak straight To speak straight shows honestyshows honesty

to think as we , to think as we , usus

Harmony, no direct Harmony, no direct confrontationconfrontation

9Elements of IDV (in Elements of IDV (in business)business)

IndividualismIndividualism CollectivismCollectivismIndividualismIndividualism The work contract The work contract

is based on mutual is based on mutual advantageadvantage

Decisions of Decisions of employment / firing employment / firing / promotion are / promotion are

CollectivismCollectivism Employer / Employer /

employee: seen in employee: seen in moral terms, as in a moral terms, as in a familyfamily

Decisions of Decisions of employment / firing employment / firing pp

taken according to taken according to individual skills and individual skills and rules of the rules of the organizationorganization

p y gp y g/ promotion are / promotion are taken according to taken according to the benefit of the the benefit of the whole groupwhole group

Values of IDVValues of IDV

Country/RegionCountry/Region ScoreScore RankRankUnited StatesUnited States 9191 11AustraliaAustralia 9090 22Great BritainGreat Britain 8989 33Canada/Hungary/NetherlandsCanada/Hungary/Netherlands 8080 44--66New ZeelandNew Zeeland 7979 77ItalyItaly 7676 99DenmarkDenmark 7474 1010France/SwedenFrance/Sweden 7171 1313--1414France/SwedenFrance/Sweden 7171 1313 1414GermanyGermany 6767 1818GreeceGreece 3535 4343RomaniaRomania/Mexico/Bulgaria/Mexico/Bulgaria 3030 4747--4848ChinaChina 2020 5656--6161GuatemalaGuatemala 66 7474

10

Masculinity versus Masculinity versus FemininityFemininity

The distribution of roles between the The distribution of roles between the genders. genders.

Men's values contain a dimension Men's values contain a dimension -- very very assertive and competitive and women's assertive and competitive and women's valuesvalues -- modest and caring The assertivemodest and caring The assertivevalues values -- modest and caring. The assertive modest and caring. The assertive pole has been called masculine and the pole has been called masculine and the modest, caring pole feminine. modest, caring pole feminine.

Elements of MASElements of MAS(in general)(in general)

MasculineMasculine Performance society Performance society

ideal: support for ideal: support for the strongthe strong

The economyThe economy

FeminineFeminine Welfare society Welfare society

ideal: help for the ideal: help for the needyneedy

The greatestThe greatest The economy The economy should continue should continue growinggrowing

The greatest The greatest priority: priority: environment environment protectionprotection

11

Elements of MASElements of MAS(in business)(in business)

MasculineMasculine FeminineFeminineMasculineMasculine Womens liberation Womens liberation

means that women means that women will be accepted in will be accepted in positions until now positions until now exclusively male exclusively male Y th d i tY th d i t

FeminineFeminine Womens liberation Womens liberation

means that both means that both men and women men and women must assume equal must assume equal roles both at home roles both at home as at the workas at the work Youth dominatesYouth dominates as at the work as at the work placeplace

Old age is protectedOld age is protected

Values of MASValues of MAS

Country/RegionCountry/Region ScoreScore RankRanky/ gy/ gSlovakiaSlovakia 110110 11JapanJapan 9595 22HungaryHungary 8888 33AustriaAustria 7979 44VenezuelaVenezuela 7373 55ItalyItaly 7070 77Germany/Great Britain/ChinaGermany/Great Britain/China 6666 1111--1313United StatesUnited States 6262 1919United StatesUnited States 6262 1919AustraliaAustralia 6161 2020FranceFrance 4343 4747--5050RomaniaRomania/Spain/Peru/Spain/Peru 4242 5151--5353SwedenSweden 55 7474

12

Uncertainty AvoidanceUncertainty Avoidance

Deals with a society's tolerance for Deals with a society's tolerance for uncertainty and ambiguity; uncertainty and ambiguity;

It indicates to what extent a culture It indicates to what extent a culture programs its members to feel either programs its members to feel either uncomfortable or comfortable inuncomfortable or comfortable inuncomfortable or comfortable in uncomfortable or comfortable in unstructured situations. unstructured situations.

Elements of UAI (in general)Elements of UAI (in general)

Reduced uncertainty Reduced uncertainty avoidanceavoidance

Uncertainty is Uncertainty is considered a normal considered a normal aspect of life and is aspect of life and is

t d tt d t

Intense uncertainty Intense uncertainty avoidanceavoidance

Uncertainty is Uncertainty is considered a danger considered a danger which must be which must be f htf htexpected to appear expected to appear

every dayevery day What is different is What is different is

curiouscurious

fought fought What is different is What is different is

dangerousdangerous

13

Elements of UAI Elements of UAI (in business)(in business)

Reduced Reduced Intense uncertainty Intense uncertainty uncertainty uncertainty avoidance avoidance

No more rules No more rules than absolutely than absolutely necessarynecessary

avoidance avoidance There is an emotional There is an emotional

need for rulesneed for rules Time is moneyTime is money Resistance to new Resistance to new

Time is flexibleTime is flexible Top managers are Top managers are

concerned with concerned with strategystrategy

ideas and processesideas and processes Top managers are Top managers are

involved in daily involved in daily operationsoperations

Values of UAIValues of UAI

Country/RegionCountry/Region ScoreScore RankRanky/ gy/ gGreeceGreece 112112 11PortugalPortugal 104104 22GuatemalaGuatemala 101101 33UruguayUruguay 100100 44RussiaRussia 9595 77RomaniaRomania 9090 1414BulgariaBulgaria 8585 2323--2525BulgariaBulgaria 8585 2323 2525Hungary/MexicoHungary/Mexico 8282 2626--2727GermanyGermany 6565 4343NetherlandsNetherlands 5353 5353United StatesUnited States 4646 6262Great Britain/IrelandGreat Britain/Ireland 3535 6666--6767

14

LongLong--term versus Shortterm versus Short--term orientationterm orientation

Values associated with Long Term Values associated with Long Term Orientation are thrift and perseverance; Orientation are thrift and perseverance;

Values associated with Short Term Values associated with Short Term Orientation are respect for tradition, fulfilling Orientation are respect for tradition, fulfilling social obligations and protecting one'ssocial obligations and protecting one'ssocial obligations, and protecting one s social obligations, and protecting one s face. face.

Elements of LTO (in general)Elements of LTO (in general)

ShortShort termterm LongLong termtermShortShort--term term orientationorientation

Respect for Respect for traditionstraditionsSocial pressure forSocial pressure for

LongLong--term term orientationorientation

Adapting traditions Adapting traditions to a material contextto a material contextRespect for old ageRespect for old age Social pressure for Social pressure for

youthyouth Respect for old ageRespect for old age

15

Elements of LTO Elements of LTO (in business)(in business)

ShortShort--termterm Long termLong termShortShort term term

Little saving, little Little saving, little money for money for investmentinvestment

Quick resultsQuick results

Long termLong term

Emphasis on Emphasis on savings and savings and investmentinvestment

LongLong--term resultsterm results Quick results Quick results Preoccupation for Preoccupation for

faceface

LongLong term resultsterm results Preoccupation for Preoccupation for

virtuevirtue

LTO ValuesLTO Values

C t /R iC t /R i SS R kR kCountry/RegionCountry/Region Score Score RankRank S Korea S Korea 100100 11 TaiwanTaiwan 9393 22 JapanJapan 8888 33 ChinaChina 8787 44 UkraineUkraine 8686 55 GermanyGermany 8383 7/97/9 RussiaRussia 8181 10/1110/11 NetherlandsNetherlands 6767 2222 NetherlandsNetherlands 6767 2222 RomaniaRomania/Serbia/Serbia 5252 3838--3939 US/UruguayUS/Uruguay 2626 69/7169/71 India/Great BritainIndia/Great Britain 5151 40/4140/41 EgyptEgypt 77 9191 Puerto RicoPuerto Rico 00 9393

16

Indulgence versus RestrainIndulgence versus Restraintt(IVR)(IVR)

Indulgence: tendency to allow relatively free Indulgence: tendency to allow relatively free gratification of basic and natural human gratification of basic and natural human desires related to enjoying life and having desires related to enjoying life and having funfun

Restraint: a conviction that such Restraint: a conviction that such gratification needs to be curbed and gratification needs to be curbed and regulated by strict social normsregulated by strict social norms

Indulgent versus RestrainIndulgent versus Restraineded(1)(1)

IndulgentIndulgent RestrainedRestrainedIndulgentIndulgent Higher percentage Higher percentage

of very happy of very happy peoplepeople

Perception of Perception of personal life controlpersonal life control

RestrainedRestrained Lower percentage Lower percentage

of very happy of very happy peoplepeople

Perception of Perception of helplessnesshelplessnesspersonal life controlpersonal life control

Higher importance Higher importance of leisure and of leisure and having friendshaving friends

helplessnesshelplessness Lower importance Lower importance

to leisure and to leisure and having friends having friends

17

Indulgent versus Restrained Indulgent versus Restrained (2)(2)

IndulgentIndulgent RestrainedRestrainedIndulgentIndulgent

Less moral Less moral disciplinediscipline

Positive attitudePositive attitudeHigher optimismHigher optimism

RestrainedRestrained

Moral disciplineMoral discipline CynicismCynicism More pessimismMore pessimism

i fi d i hi fi d i h Higher optimismHigher optimism More satisfying More satisfying

family lifefamily life

Less satisfied with Less satisfied with family lifefamily life

IVR ValuesIVR Values

Country/RegionCountry/Region Score Score RankRanky/ gy/ gVenezuelaVenezuela 100100 11MexicoMexico 9797 22Puerto RicoPuerto Rico 9090 33AustraliaAustralia 7171 1111Great BritainGreat Britain 7070 1414Canada/Netherlands/USCanada/Netherlands/US 6868 15/1715/17GreeceGreece 5050 3131HungaryHungary 3131 6565Russia/Montenegro/Russia/Montenegro/RomaniaRomania/Bangladesh/Bangladesh2020 77/8077/80EgyptEgypt 44 9292PakistanPakistan 00 93 93

18

Organizational Culture Organizational Culture Proposed QuotesProposed Quotes

917 & 920:917 & 920: Organizational culture is the sum ofOrganizational culture is the sum of 917 & 920: 917 & 920: Organizational culture is the sum of Organizational culture is the sum of values and rituals, which serve as glue to integrate values and rituals, which serve as glue to integrate the members of the organization.the members of the organization. -- Richard PerrinRichard Perrin

918: 918: "Organizational culture eats strategy for "Organizational culture eats strategy for breakfast" breakfast" -- Peter Peter DruckerDrucker

922: 922: "By bringing together people who share "By bringing together people who share interests, no matter their location or time zone, interests, no matter their location or time zone, social media has the potential to transform the social media has the potential to transform the workplace into an environment where learning is as workplace into an environment where learning is as natural as it is powerful."natural as it is powerful."

THANK YOU.THANK YOU.andandandand

????