October 21, 2012

MU0011 [Management and Organizational Development] Set1 Q5

Q5) List the different types of organization culture.

Ans:

There are different types of culture just like there are different types of personality. Researcher Jeffrey Sonnenfeld identified the following four types of cultures. 

1 According to Jeffrey Sonnenfeld
i) Baseball Team Culture
Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as investment banking, advertising, etc. 

ii) Club Culture
The most important requirement for employees in this culture is to fit into the group. Usually employees start at the bottom and stay with the organization. The organization promotes from within and highly values seniority. Examples are the military, some law firms, etc.

iii) Academy Culture
Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The organization provides a stable environment in which employees can develop and exercise their skills. Examples are universities, hospitals, large corporations, etc. 

iv) Fortress Culture
Every organization undergoes massive reorganization. There are many opportunities for those who are timely, organized and have specialized skills. Examples are savings and loans, large car companies, etc. Organizational culture contributes a lot to organizational effectiveness.

2 Four Academic Models
The issue of organizational effectiveness or OE, has been one of the most sought out yet elusive research subject since the early development of organizational theory.  Although it seems intuitively apparent that a measure of organizational performance should be readily available in management literature, but quite the contrary is true. Four key models have been identified in the literature.

One model used production, commitment, leadership, and interpersonal conflict to measure organizational effectiveness.  Production was defined as the flow of output from the organization. 

A second OE model was proposed based on interrelated organizational processes and was developed primarily as a tool for management consultants.  This model uses organizational survival and maximizing return as key variables of effectiveness along with self-regulation, which is responsible for orchestrating a balance between eight other minor variables including internal-external boundary permeability, sensitivity to status and change, contribution to constituents, transformation, promoting advantageous transactions, flexibility, adaptability, and efficiency. 

A third model chose six selected indicators of organizational effectiveness including management experience, organizational structure, political impact, board of directors involvement, volunteer involvement, and internal communications.  

The fourth and final academic model was used to compare for-profit and non-profit organizational effectiveness and is termed the competing value framework.  This model used four quadrants representing (1) human relations, (2) open systems, (3) rational goals, and (4) internal process. 

3 Deal and Kennedy's Model of Culture
Deal and Kennedy's model of culture is based on characterizing four types of organization. The organizations are characterized based on how quickly they provide feedback and reward employees after they have done something and the level of risks that employees take.

Feedback and reward
A major driver of employees in companies (and hence their culture) is the general feedback and specific rewards that tell employees they are doing a good or bad job. If feedback is immediate or frequent, it will quickly correct any ineffective behavior and hence lead to a consistent culture. If the feedback is delayed or infrequent, it leaves mistakes uncorrected, but it also lets people look further out into the future. Either way, there is likely to be some substitute activity (such as process management) to help keep things on track until actual results are known.

Risk
Uncertainty and risk are something that some people hate and some people thrive on. In either case, it is another motivating force that leads people to focus on managing it. Where the risk is low, people may be willing to take risks up to their acceptable limit. Where they are high, the risks need to be managed or accepted. High risk companies are more likely to include people who enjoy the frisson of taking a gamble.

Fig: Deal and Kennedy's model of culture

The Four Cultures

Work-Hard, Play-Hard Culture
Another type of organizational culture is the "work hard/play hard" organizational culture. This type of an organizational culture that doesn't take a lot of risks, but it does take a few, and all receive fast feedback. This is something most likely to be seen in a very large company which is dependent on strong customer service. This type of organizational culture is often characterized by multiple team meetings, specialized jargon, and buzzwords.

Tough-Guy Macho Culture
One type of organizational culture is the "tough-guy culture" or "macho culture." One of the most common aspects of the tough-guy or macho culture is the quick feedback and high rewards. The pace can be break neck at times, but the obvious reward of the action is seen very quickly. From a corporate stand point, this type of organizational culture will be most often associated with really fast financial activities, such as currency trading, and brokerage.

Process culture
A process culture is most often found in organizations where there is actually no feedback. This is rarely a good culture. In this type of an organizational culture people are so obsessed with the process of how things are done that the focus is lost on what the goal is. Process organizational culture is a synonym for bureaucracy. It is good for public sector services.

This has slow feedback/reward and low risk, leading to:
Low stress, plodding work, comfort and security. Stress may come from internal politics and stupidity of the system. 
Development of bureaucracies and other ways of maintaining the status quo. 
Focus on security of the past and of the future. 
E.g. banks, insurance companies. 

Bet-The-Company Culture
"Bet your company culture." This is a type of company where huge decisions are made over high stakes endeavors. In this type of culture, the end results of these decisions may not be seen for months or even years. 

4 Culture Classification in Indian Scenario
A study was conducted by J B P Sinha dealing with cases from Indian organizations that concluded. The interplay of different forces in the Indian organizations, has led to the emergence of different patterns of organizational culture in Indian organizations. (Sinha, Jai B.P (2000). Patterns of Work Culture: Cases and Strategies for Culture Building New Delhi, Sage Publications.)

The main patterns are:
Soft Culture: This type of culture is commonly observed in the public sector organizations, there may also be certain exceptions. Such culture may emerge in any organization where the nature of ownership is not necessarily the determining factor. It emerges mostly in organizations which have multiple and conflicting organizational objective.

Technocratic Culture: It is likely to develop in the organization which aims at providing the highest quality of product and services through the use of latest technology.

Work Centric Nurturing Culture (WCNC): The WCNC is more oriented to content and here employee focus is on rewards, hard work, recognizing merit, establishing clear norms of performance and adequate workload. Formal systems are established to make the organization realize its goals. 

When we walk into an organisation and get a certain 'feel' for it, whether it is fast moving and responsive, or whether it feels old and backward looking, this 'feeling' is referred to 'organisational culture'. Culture is about how the organisation organises itself, it's rules, procedures and beliefs make up the culture of the company. In this section we are going to briefly look at six types of organisational cultures.

Power Culture
Within a power culture, control is the key element. Power cultures are usually found within a small or medium size organisation. Decisions in an organisation that display a power culture are centralised around one key individual. That person likes control and the power behind it. As group work is not evident in a power culture, the organisation can react quickly to dangers around it as no consultation is involved. However this culture has its problems, lack of consultation can lead to staff feeling undervalued and de-motivated, which can also lead to high staff turnover.

Role Culture
Common in most organisations today is a role culture. In a role culture, organisations are split into various functions and each individual within the function is assigned a particular role. The role culture has the benefit of specialisation. Employees focus on their particular role as assigned to them by their job description and this should increase productivity for the company. This culture is quite logical to organise in a large organisation.

Task Culture
A task culture refers to a team based approach to complete a particular task. They are popular in today's modern business society where the organisation will establish particular 'project teams' to complete a task to date. A task culture clearly offer some benefits. Staff feel motivated because they are empowered to make decisions within their team, they will also feel valued because they may have been selected within that team and given the responsibility to bring the task to a successful end. NASA organise part of their culture around this concept ie putting together teams to oversee a mission. 

Person culture
Person cultures are commonly found in charities or non profit organisations. The focus of the organisation is the individual or a particular aim

Forward & backward looking culture
Organisations that have an entrepreneurial spirit, always embrace change and listen to staff and customers are said to be forward looking. Forward looking organisations are risk takers and do well because of it. We can argue that Dyson the vacuum cleaner manufacturer embraces this culture. A backward looking culture does not embrace change and is led by systems and procedures. They do not take risk and because of it are usually left with a business not doing so well UK store Marks and Spencers is said to be 'backward looking' ie slow to change. 

Diagram: Forms of organisational culture. 

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