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CULTURE IN BUSINESS
LOGO
1. What is culture?
In western philosophy, the term “culture”
originates from the Latin word “cultura or
culturus” as in “agri cultura”, the cultivation
of soil. Later, other meanings were attached
to the word.
From its root meaning of an “activity”,
culture became transformed into a condition,
a state of being cultivated (Freilich, 1989)
1. What is culture?
In eastern philosophy, culture means
cultivation of wisdom and virtue by
nourishing the soul on truth, goodness, and
beauty.
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1. What is culture?
The term “culture” was first
used by the pioneer English
Anthropologist Edward B. Tylor in
his book, Primitive Culture,
published in 1871.
Tylor said that culture is "that complex whole
which includes knowledge, belief, art, law,
morals, custom, and any other capabilities and
habits acquired by man as a member of society“.
1. What is culture?
1.1. Definitions
v "Culture: learned and shared human
patterns or models for living; day- to-day living
patterns. these patterns and models pervade all
aspects of human social interaction.“ (Damen
L., 1987)
v "Culture is the collective programming of the
mind which distinguishes the members of one
category of people from another.” (Hofstede G.,
1984)
1. What is culture?
1.1. Definitions
v “Culture should be regarded as the set of
distinctive spiritual, material, intellectual
and emotional features of society or a social
group, and that it encompasses, in addition
to art and literature, lifestyles, ways of
living together, value systems, traditions
and beliefs”. (UNESCO, 2002)
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1. What is culture?
1.2. Characteristics of culture
v Culture is learned – It is acquired
through education, training and experience.
1. What is culture?
1.2. Characteristics of culture
v Culture is socially transmitted
through language
It is transmitted from one generation to
another through the medium of language,
verbal or non-verbal through the gestures
or signs, orally or in writing.
1. What is culture?
1.2. Characteristics of culture
v Culture is a social product
Many person interact with one another to
develop culture. Culture is a product of
social interaction through the mutual inter-
stimulation and response of people with one
another.
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1. What is culture?
1.2. Characteristics of culture
v Culture is the distinctive way of life
of a group of people.
v Culture has sanctions and controls -
these sanctions could be formal or informal.
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1. What is culture?
1.2. Characteristics of culture
v Culture is material and non-material
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1. What is culture?
1.2. Characteristics of culture
v Culture is stable yet dynamic.
v Culture is symbolic.
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2. What is organizational culture?
2.1. Definition
“Organizational or corporate culture is the
system of shared actions, values, and
beliefs that develops within an organization
and guides the behavior of its members.”
(Edgar Schein, “Organizational Culture”, American
Psychologist, Vol. 45 (1990), pp. 109–119)
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2. What is organizational culture?
2.2. Five basic functions
v Defines the boundary.
v Conveys a sense of identity for its members.
v Facilitates the generation of commitment to
something larger than self-interest.
v Enhances the stability of the social system.
v Serves as a sense-making and control
mechanism.
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2. What is organizational culture?
2.3. Organizational culture as a liability
v Barrier to change
Occurs when culture’s values are not aligned with the
values necessary for rapid change.
v Barrier to diversity
Strong cultures put considerable pressure on employees to
conform, which may lead to institutionalized bias.
v Barrier to acquisitions and mergers
Incompatible cultures can destroy an otherwise successful
merger.
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2. What is organizational culture?
2.4. Cultures in organizations
v Dominant culture is a unitary set of shared
actions, values, and beliefs.
v Subcultures are unique patterns of values
and philosophies within a group that are
consistent with the dominant culture of the
larger organization or social system.
v Countercultures are the patterns of values
and philosophies that outwardly reject those of
the larger organization or social system.
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3. Models of organizational culture
3.1. Schein’s model
Visible, but not always
Artifacts obvious, recognized initially,
or associated with values
Generally a higher level of
Values awareness of what is valued
in the organization
Basic Invisible, not usually stated,
Edgar H. Schein
Assumptions taken for granted
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3. Models of organizational culture
3.2. Johnson and Scholes’ model
Stories Symbols
Rituals Paradigm Power
Control Structures
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Elements of strong organizational culture
v A widely shared real understanding of what
the firm stands for, often embodied in slogans.
v A concern for individuals over rules, policies,
procedures, and adherence to job duties.
v A recognition of heroes whose actions
illustrate the company’s shared philosophy and
concerns.
v A belief in ritual and ceremony as important
to members and to building a common identity.
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Elements of strong organizational culture
v A well-understood sense of the informal
rules and expectations so that employees and
managers understand what is expected of
them.
v A belief that what employees and managers
do is important and that it is important to
share information and ideas.
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4. Sources of organizational culture
National culture
Industry demand
Organizational
Values of founders & culture
succeeding leaders
Learned values
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4.1. National culture
4.1.1. Hofstede & Bond’s 5 Dimensions
INDIVIDUALISM The interests of the individuals vs. the COLLECTIVISM
The interests of the individual interests of the group The interests of the group take
take precedence precedence
POWER TOLERANCE
POWER RESPECT
The appropriateness of power/ Individuals assess authority in
Authority is inherent in one’s authority within organization view of its perceived rightness
position within a hierarchy
or their own personal interests
UNCERTAINTY UNCERTAINTY AVOIDANCE
ACCEPTANCE An emotional response to Prefer structure and a
uncertainty and change
Positive response to change consistence routine
and new opportunities
MASCULINITY FERMENITY
assertiveness and What motivates people to A stress upon the quality of life &
achieve different goals
competitiveness concern with environment
LONG –TERM OUTLOOK Members of a culture adopt an
SHORT–TERM OUTLOOK
Value dedication, hard work, outlook on work and life Value traditions, social
and thrift obligations
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Power distance
Countries PDI Countries PDI
China 80 Malaysia 104
Japan 54 UK 35
Thailand 64 France 68
Indonesia 78 USA 40
Vietnam 70 Denmark 18
Korea 60 Russia 93
Philippines 94 Poland 68
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Individualism
Countries IDV Countries IDV
China 20 Malaysia 26
Japan 46 UK 89
Thailand 20 France 71
Indonesia 14 USA 91
Vietnam 20 Denmark 74
Korea 18 Russia 39
Philippines 32 Poland 60
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Masculinity
Countries MAS Countries MAS
China 66 Malaysia 56
Japan 95 UK 66
Thailand 34 France 43
Indonesia 48 USA 62
Vietnam 40 Denmark 16
Korea 39 Russia 66
Philippines 64 Poland 36
www.themegallery.com
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Long-term outlook
Countries LTO Countries LTO
China 118 USA 29
Japan 80 UK 25
Thailand 56 Germany 31
Indonesia 80
Vietnam 75
Korea 19
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Cultural Stereotyping
In Heaven:
the cooks are French,
the policemen are English,
the mechanics are German,
the lovers are Italian
and the bankers are Swiss.
In Hell:
the cooks are English,
the policemen are German,
the mechanics are French,
the lovers are Swiss
and the bankers are Italian.
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4.1.1. Hofstede & Bond’s 5 Dimensions
a. Power Distance
This refers to the degree of inequality that exists and
is accepted among people with and without power.
Characteristics Tips
• Centralized companies. • Acknowledge a leader's
• Strong hierarchies. power.
High PD
• Large gaps in compensation, • Be aware that you may need
authority, and respect. to go to the top for answers
• Flatter organizations. • Use teamwork
Low PD • Supervisors and employees are • Involve as many people as
considered almost as equals. possible in decision making.
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4.1.1. Hofstede & Bond’s 5 Dimensions
b. Individualism
This refers to the strength of the ties people have to
others within the community.
Characteristics Tips
• High valuation on people's time • Acknowledge accomplishments.
and their need for freedom. • Don't ask for too much personal
High IDV • An enjoyment of challenges. information.
• Respect for privacy. • Encourage debate and
expression of own ideas.
Emphasis on building skills and
• • Respect age and wisdom.
becoming masters of something. • Suppress feelings and emotions
Low IDV • Work for intrinsic rewards. to work in harmony.
• Harmony more important than • Respect traditions and introduce
honesty. change slowly.
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4.1.1. Hofstede & Bond’s 5 Dimensions
c. Masculinity
This refers to how much a society sticks with, and
values, traditional male and female roles.
Characteristics Tips
• Men are masculine and women • Be aware that male and female
are feminine. roles to be distinct.
High MAS There is a well defined
• • Advise men to avoid discussing
distinction between men's work emotions or making emotionally-
and women's work. based decisions or arguments.
• A woman can do anything a man • Avoid an "old boys' club"
can do. mentality.
Low MAS • Powerful and successful women • Job design and practices are not
are admired and respected. discriminatory to either gender.
• Treat men and women equally.
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4.1.1. Hofstede & Bond’s 5 Dimensions
d. Uncertainty/Avoidance
This relates to the degree of anxiety society
members feel when in uncertain or unknown situations.
Characteristics Tips
Very formal business conduct
• Be clear and concise about your
•
with lots of rules and policies. expectations and parameters.
• Need and expect structure. • Plan and prepare, communicate
often and early, provide detailed
High UAI • Sense of nervousness spurns
high levels of emotion and plans and focus on the tactical
expression. aspects of a job or project.
• Express your emotions through
• Differences are avoided.
hands gestures and voices.
• Informal business attitude. • Minimize your emotional response.
Low UAI • Concern with long term strategy. • Express curiosity when you
• Accepting of change and risk. discover differences.
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4.1.1. Hofstede & Bond’s 5 Dimensions
e. Long Term Orientation
This refers to how much society values longstanding
- as opposed to short term - traditions & value.
Characteristics Tips
Family is the basis of society.
• • Show respect for traditions.
• Parents and men have more • Do not display extravagance or act
authority than young people and frivolously.
High LTO women. • Reward perseverance, loyalty, and
• Strong work ethic. commitment.
• High value placed on education • Avoid doing anything that would
and training. cause another to "lose face".
• Promotion of equality. • Expect to live by the same
Low LTO • High creativity, individualism. standards and rules you create.
• Self-actualization is sought. • Be respectful of others.
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4.1. National culture
4.1.2. Vietnamese value system
a. Allegiance to the family
v By virtue of the principle of collective and
mutual responsibility, each individual strives to be
the pride of his family.
v The child is expected to be grateful to his
parents for the debt of birth, rearing and education.
(Filial piety)
v The profound love for and attachment to the
family is extended to the physical setting in which
the family is located: the native village.
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4.1. National culture
4.1.2. Vietnamese value system
b. Concept of "good name"
v To the Vietnamese, a good name is better
than any material possession in this world.
"After death, a tiger leaves behind his skin, a
man his reputation"
v There are three ways by which he can
acquire a good name: either by heroic deeds;
by intellectual achievements; or by moral
virtues.
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4.1. National culture
4.1.2. Vietnamese value system
c. Love of learning
v Vietnamese people have particular respect and
admiration for learned people.
v Learning is considered more valuable than
wealth and material success.
d. Concept of respect
v Vietnamese common man is expected to show
respect to people who are senior to him in age,
status, or position.
v Respect is expressed by specific behaviors and
linguistic devices.
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4.2. Industry Demands
The industry characteristics and demands
act as a force to create similarities among
organizational culture.
v Insurance and banking industries are
stable and rule-oriented.
v Many companies in the high-tech industry
have innovative cultures.
v Those in nonprofit industry may be people-
oriented.
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4.3. Values of founders
and succeeding leaders
4.3.1. Values of founders
v Founders hire and keep only employees who
think and feel the same way they do.
v Founders indoctrinate and socialize these
employees to their way of thinking and feeling.
v The founders’ own behavior acts as a role
model that encourages employees to identify
with them and thereby internalize their beliefs,
values, and assumptions.
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4.3. Values of founders
and succeeding leaders
4.3.2. Values of succeeding leaders
v The founders instill values, and succeeding
leaders foster these values, articulate the
organization’s vision according to these values,
run the company by making all decisions based
on these values, and as stewards safeguard
these value
v Succeeding leaders may also change some
values.
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4.4. Learned values
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5. Maintenance of organizational culture
Attraction-Selection-Attrition
New Employee Onboarding Maintenance of
organizational
Leadership culture
Rewards
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6. Organizational culture change
Creating a Sense of Urgency
Changing Leaders & Key players
Role Modeling
Training
Changing the Reward System
Creating New Symbols and Stories
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6. Organizational culture change
6.1. Creating a Sense of Urgency
Reasons to change: Failure to achieve some
goals or conflicts arising.
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6. Organizational culture change
6.2. Changing Leaders & Key players
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6. Organizational culture change
6.3. Role Modeling
Role modeling is the process by which
employees modify their own beliefs and
behaviors to reflect those of the leader.
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6. Organizational culture change
6.4. Training
Well-crafted training programs may be
instrumental in bringing about culture change
by teaching employees the new norms and
behavioral styles.
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6. Organizational culture change
6.5. Changing the Reward System
v Switching from a commission-based incentive
structure to a straight salary system?
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6. Organizational culture change
6.6. Creating New Symbols and Stories
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7. Types of organizational culture
7.1. Roger Harrison (1972) and Charles
Handy (1985)
Power culture Role culture
Task culture Person culture
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7.1. Roger Harrison (1972) and Charles
Handy (1985)
7.1.1. Power culture
v Control is exercised from the center by the
selection of key individuals.
v There are few rules and procedures, and
little bureaucracy.
v Frequently found in small entrepreneurial
organizations.
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7.1. Roger Harrison (1972) and Charles
Handy (1985)
7.1.2. Role culture
v Position power is the main source of power.
v Role or job description is often more
important than the individual.
v Role culture rests on the strength of strong
organizational ‘pillars’ – the functions of
specialists in, for example, finance, purchasing
and production.
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7.1. Roger Harrison (1972) and Charles
Handy (1985)
7.1.3. Task culture
v Influence is widely spread and based more
on expert power than on position or personal
power.
v Task culture seeks to bring together the right
resources and people, and utilises the unifying
power of the group.
v Found in projects.
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7.1. Roger Harrison (1972) and Charles
Handy (1985)
7.1.4. Person culture
v Management hierarchies and control
mechanisms are possible only by mutual
consent.
v Found in only a few organizations many
individuals have a preference for person
culture, for example university professors and
specialists..
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7. Types of organizational culture
7.2. Quinn (1988)
Flexibility & Descretion
External focus & Differentiation
Internal focus & Intergration
Clan Adhocracy
Hierarchy Market
Stability & Control
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Attributes of a Clan Culture
v Members understand that contributions to
the organization exceed any contractual
agreements.
v A clan culture achieves unity with a long and
thorough socialization process.
v Members share feelings of pride in
membership, as well as feelings of personal
ownership of a business, a product, or an idea.
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Attributes of a Clan Culture
v Peer pressure to adhere to important norms
is strong.
v Success is assumed to depend substantially
on sensitivity to customers and concern for
people.
v Teamwork, participation, and consensus
decision making are believed to lead to success.
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Attributes of a Hierarchy Culture
v Long-term concerns are predictability,
efficiency, and stability.
v Members value standardized goods and
services.
v Managers view their roles as being good
coordinators, organizers, and enforcers of
written rules and standards.
v Tasks, responsibilities, authority, rules, and
processes are clearly defined.
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Attributes of an Adhocracy Culture
v There is a commitment to experimentation,
innovation, and being on the leading edge.
v This culture does not just quickly react to
changes in the environment - it creates change.
v Effectiveness depends on providing new and
unique products and rapid growth.
v Individual initiative, flexibility, and freedom
foster growth and are encouraged and well
rewarded.
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Attributes of a Market Culture
v Contractual relationship between individual
and organization.
v Independence and individuality are valued
and members are encouraged to pursue their
own financial goals.
v Does not exert much social pressure on an
organization’s members, but when it does,
members are expected to conform.
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Attributes of a Market Culture
v Superiors’ interactions with subordinates
largely consist of negotiating performance –
reward agreements and/or evaluating requests
for resource allocations.
v Has a weak socialization process.
v Few economic incentives are tied directly to
cooperating with peers.
v Often tied to monthly, quarterly, and annual
performance goals based on profits.
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LOGO
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