The factors that shape the culture of the organisation
The six major influences on the culture of an organisation are as follows:
§ Size – how large is the organisation – in terms of turnover, physical size, employee numbers?
§ Technology – how technologically advanced is the organisation – either in terms of its product, or its productive processes?
§ Diversity – how diverse is the company – either in terms of product range, geographical spread or cultural make-up of its stakeholders?
§ Age – how old is the business or the managers of the business – do its strategic level decision makers have experience to draw upon?
§ History – what worked in the past? Do decision makers have past successes to draw upon; are they willing to learn from their mistakes?
§ Ownership – is the organisation owned by a sole trade? Are there a small number of institutional shareholders or are there large numbers of small shareholders?
Writers on culture
There are three writers you need to have knowledge of: Schein, Handy and Hofstede.
Schein argues that the first leaders of a company create the culture of an organisation. Once the culture exists, the attributes/criteria for the later leaders are determined by the culture. Thus the link between culture and leadership is very strong.
Schein further commented that it if leaders are to lead, it is essential that they understand the culture of the organisation. In order to try and define culture, Schein described three levels:
§ Artefacts – these are the aspects of culture that can be easily seen, e.g. the way that people dress.
§ Espoused values – these are the strategies and goals of an organisation, including company slogans etc.
§ Basic assumptions and values – these are difficult to identify as they are unseen, and exist mainly at the unconscious level.
New employees find the last level of culture the most difficult to understand, and lack of understanding of the basic value is one of the main contributors to failure when trying to implement change.
Test your understanding 1
Schein said that leadership and culture were totally divorced from one another. True or false?
Test your understanding 2
State three aspects of culture that could be classified as artifacts.