Page 332 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 16: Organisational Culture

2. Hierarchy Culture: This type of culture is visible in those organisations which are much Notes
formalized structured place to work. Procedures govern what people do.

3. Adhocracy Culture: This type of culture is visible in those organisations which are dynamic
entrepreneurial and creative places to work. People stick their necks out and take risks.

4. Market Culture: This type of culture is visible in those organisations which are results
oriented organisations whose major concern is with getting the job done. People are
competitive and goal-oriented.

As already said, most companies will fall into one of these categories. Knowing these
organisational types will help in analyzing each company and the organisational culture
appropriate for each one.

Task Explain which type of organisational culture is your favourite and why?
How do you think it will help in advancement of your career?

16.2 Effects of Organisational Culture

The organisations world over require a strong organisational culture. This happens because a
strong organisational culture:
1. could help an organisation adapt to the environment

2. can also be an anchor around the neck of change.
Three features that determine a culture's strength can be identified.
The first is thickness of culture which is measured by the number of important shared
assumptions.
The second dimension is extent of sharing. In strong cultures, layers and layers of beliefs are
shared.

The third determinant of the cultural strength of an organisation is clarity of ordering.
Strength of culture is significant because strong cultures, that is, thick cultures in which the
sharing of clearly ordered beliefs and values is pervasive are more resistant to change than are
weak cultures.
One of the most important factors that affect the strength of an organisational culture are:
1. Number of employees, and
2. Geographic dispersion.
Small work forces and more localized operations contribute to the development of strong
cultures because beliefs and values are easily developed and shared. However, these
characteristics are not essential for a strong culture. With 10,000 restaurants spread around the
world, McDonald's clearly employs a large number of people and is very dispersed. Yet, it has
a very strong organisational culture.

Strong cultures though are not always desirable. There appear to be organisational conditions
that do not necessarily warrant them. If one looks at organisations as mechanisms for governing
transaction costs (the organisation requires something of the employee, who in turn benefits
from the organisation), there are three ways to manage those transaction costs. Whichever
method is used to mediate costs, it must be viewed as equitable to everyone.

LOVELY PROFESSIONAL UNIVERSITY 327