Organisation Culture / Organisation Structure

An Organisations’ culture encompasses values and behaviors that "contribute to the unique social and psychological environment of an organisation."[ Wikipedia ] 

 Organisation structure refers to the way that an organisation arranges people and jobs so that its work can be performed and its goals can be met. When a work group is very small and face-to-face communication is frequent, formal structure may be unnecessary, but in a larger organisation decisions have to be made about the delegation of various tasks. To do this procedures are established that assign responsibilities for various functions. It is these decisions that determine the organisation structure.

 In an organisation of any size or complexity, employees' responsibilities typically are defined by what they do, who they report to, and for managers, who reports to them. Over time these definitions are assigned to positions in the organisation rather than to specific individuals. The relationships among these positions are illustrated graphically in an organisation chart. The best organisation structure for any organisation depends on many factors including the work it does; its size in terms of employees, revenue, and the geographic dispersion of its facilities; and the range of its businesses (the degree to which it is diversified across markets)

 An organisations’ culture represents;

• the collective values,
• beliefs
• and principles of organisation members

 

Derived from:

• history,
• product,
• market,
• technology,
• and strategy,
• type of employees,
• management style, and
• National culture.

 Culture includes the organisation's vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits.

 It is also the pattern of such collective behaviors and assumptions that are taught to new organisation members as a way of perceiving and, even, thinking and feeling. Thus, organisation culture affects the way people and groups interact with each other, with clients, and with stakeholders.

 In addition, organisation culture may affect how much employees identify with an organisation, in larger organisations’ there may be subcultures coexisting because each subculture is linked to a different management team.

 Organisation culture refers to Culture in any type of Organisation.

As a part of organisation

If it is considered that the organisation culture is a variable, it can be manipulated and altered depending on leadership and members

 The same as the organisation

Culture is created through communication and symbols, or competing metaphors.

 While there is no single "type" of organisation culture and organisation cultures vary widely from one organisation to the next, commonalities do exist.

 Healthy

Organisations should strive for what is considered a "healthy" organisation culture in order to increase productivity, growth, efficiency and reduce counterproductive behaviour and turnover of employees. A variety of characteristics describe a healthy culture, including:

Acceptance and appreciation for diversity

Regard for and fair treatment of each employee as well as respect for each employee’s contribution to the company

Employee pride and enthusiasm for the organisation and the work performed

Equal opportunity for each employee to realize their full potential within the company

Strong communication with all employees regarding policies and company issues

Strong company leaders with a strong sense of direction and purpose

Ability to compete in industry innovation and customer service, as well as price

Lower than average turnover rates (perpetuated by a healthy culture)

Investment in learning, training, and employee knowledge

 Additionally, performance oriented cultures have been shown to possess statistically better financial growth. Such cultures possess high employee involvement, strong internal communications and an acceptance and encouragement of a healthy level of risk-taking in order to achieve innovation. Additionally, organisation cultures that explicitly emphasize factors related to the demands placed on them by industry technology and growth will be better performers in their industries.

 According to Kotter and Heskett (1992), organisations with adaptive cultures perform much better than organisations with unadaptive cultures. An adaptive culture translates into organisation success; it is characterized by managers paying close attention to all of their constituencies, especially customers, initiating change when needed, and taking risks. An unadaptive culture can significantly reduce a firm's effectiveness, disabling the firm from pursuing all its competitive/operational options.

 Hofstede(1980) looked for differences between over 160 000 IBM employees in 50 different countries and three regions of the world, in an attempt to find aspects of culture that might influence business behaviour. He suggested things about cultural differences existing in regions and nations, and the importance of international awareness and multiculturalism for the own cultural introspection. Cultural differences reflect differences in thinking and social action, and even in "mental programs", a term Hofstede uses for predictable behaviour. Hofstede relates culture to ethnic and regional groups, but also organisations, profession, family, to society and subcultural groups, national political systems and legislation, etc. Hofstede suggests the need for changing "mental programs" with changing behaviour first.  This then would lead to value change.

 Hofstede demonstrated that there are national and regional cultural groupings that affect the behaviour of organisations and identified four dimensions of culture (later five) in his study of national cultures:

• Power distance(Mauk Mulder, 1977) - Different societies find different solutions on social inequality. Although invisible, inside organisations power inequality of the "boss-subordinates relationships" is functional and according to Hofstede reflects the way inequality is addressed in the society. "According to Mulder's Power Distance Reduction theory subordinates will try to reduce the power distance between themselves and their bosses and bosses will try to maintain or enlarge it", but there is also a degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.

 Uncertainty avoidanceis the coping with uncertainty about the future. Society copes with it with technology, law and religion (however different societies have different ways of addressing it), and according to Hofstede organisations deal with it with technology, law and rituals or in two ways - rational and non-rational, with rituals being the non-rational. Hofstede listed some of the rituals as the memos and reports, some parts of the accounting system, large part of the planning and control systems, and the nomination of experts.

• Individualism vs. collectivism- disharmony of interests on personal and collective goals (Parsons and Shils, 1951). Hofstede raises the idea that society's expectations of Individualism /Collectivism will be reflected by the employee inside the organisation. Collectivist societies will have more emotional dependence on members in their organisations; when in equilibrium - organisation is expected to show responsibility on members. Hofstede says that a capitalist market economy fosters individualism and competition and depends on it but individualism is also related to the development of the middle class. Research indicates that some people and cultures might have both high individualism and high collectivism. For example, someone who highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-sufficiency.

 Masculinity v’s Feminity- reflects whether a certain society is predominantly male or female in terms of cultural values, gender roles and power relations.

 Long- Versus Short-Term Orientationwhich he describes as "The long-term orientation dimension can be interpreted as dealing with society’s search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute Truth. They are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results. In societies with a long-term orientation, people believe that truth depends very much on situation, context and time. They show an ability to adapt traditions to changed conditions, a strong propensity to save and invest thriftiness, and perseverance in achieving results."

 These dimensions refer to the impact of national cultures on management, and can be used to adapt policies to local needs. In a follow up study, described in another model is suggested for organisation culture.

 

O'Reilly, Chatman, and Caldwell

Two common models and their associated measurement tools have been developed by O’Reilly et al. and Denison

O’Reilly, Chatman & Caldwell (1991) developed a model based on the belief that cultures can be distinguished by values that are reinforced within organisations. Their Organisation Cultural Profile (OCP) is a self-reporting tool which makes distinctions according eight categories

• Innovation,
• Supportiveness,
• Stability,
• Respect for People,
• Outcome Orientation,
• Attention to Detail,
• Team Orientation,
• and Aggressiveness.

 

The model is also suited to measure how organisation culture effects organisation performance, as it measures most efficient persons suited in an organisation and as such organisations can be termed as good organisation culture. Employee values are measured against organisation values to predict employee intentions to stay, and predict turnover.  This is done through instrument like Organisation Culture Profile (OCP) to measure employee commitment

 Daniel Denison

Daniel Denison’s model (1990) asserts that organisation culture can be described by four general dimensions – and by the following three sub-dimensions:

• Mission - Strategic Direction and Intent, Goals and Objectives and Vision
• Adaptability - Creating Change, Customer Focus and Organisation Learning
• Involvement - Empowerment, Team Orientation and Capability Development
• Consistency - Core Values, Agreement, Coordination/Integration

 Denison’s model also allows cultures to be described broadly as externally or internally focused as well as flexible versus stable. The model has been typically used to diagnose cultural problems in organisations.

 

Deal and Kennedy

Deal and Kennedy (1982) defined organisation culture as the way things get done around here.

Deal and Kennedy created a model of culture that is based on 4 different types of organisations. They each focus on how quickly the organisation receives feedback, the way members are rewarded, and the level of risks taken:

1. Work-hard, play-hard culture: This has rapid feedback/reward and low risk resulting in: Stress coming from quantity of work rather than uncertainty. High-speed action leading to high-speed recreation. Examples: Restaurants, software companies.
2. Tough-guy macho culture: This has rapid feedback/reward and high risk, resulting in the following: Stress coming from high risk and potential loss/gain of reward. Focus on the present rather than the longer-term future. Examples: police, surgeons, sports.
3. Process culture: This has slow feedback/reward and low risk, resulting in the following: Low stress, plodding work, comfort and security. Stress that comes 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. Examples: banks, insurance companies.
4. Bet-the-company culture: This has slow feedback/reward and high risk, resulting in the following: Stress coming from high risk and delay before knowing if actions have paid off. The long view is taken, but then much work is put into making sure things happen as planned. Examples: aircraft manufacturers, oil companies.

 

Edgar Schein

According to Scheim (1992), culture is the most difficult organisation attribute to change, outlasting organisation products, services, founders and leadership and all other physical attributes of the organisation. His organisation model illuminates culture from the standpoint of the observer, described at three levels: artifacts, espoused values and basic underlying assumptions.

 At the first and most cursory level of Schein's model is organisation attributes that can be seen, felt and heard by the uninitiated observer - collectively known as artefacts. Included are the facilities, offices, furnishings, visible awards and recognition, the way that its members dress, how each person visibly interacts with each other and with organisation outsiders, and even company slogans, mission statements and other operational creeds.

 Artefacts comprise the physical components of the organisation that relay cultural meaning. Daniel Denison (1990) describes artefacts as the tangible aspects of culture shared by members of an organisation. Verbal, behavioural and physical artefacts are the surface manifestations of organisation culture.

 Rituals, the collective interpersonal behaviour and values as demonstrated by that behaviour, constitute the fabric of an organisation's culture the contents of myths, stories, and sagas reveal the history of an organisation this influences how people understand what their organisation values and believes. Language, stories, and myths are examples of verbal artefacts and are represented in rituals and ceremonies. Technology and art exhibited by members or an organisation are examples of physical artefacts.

 The next level deals with the professed culture of an organisation's members - the values. Shared values are individuals’ preferences regarding certain aspects of the organisation’s culture (e.g. loyalty, customer service). At this level, local and personal values are widely expressed within the organisation. Basic beliefs and assumptions include individuals' impressions about the trustworthiness and supportiveness of an organisation, and are often deeply ingrained within the organisation’s culture. Organisation behaviour at this level usually can be studied by interviewing the organisation's membership and using questionnaires to gather attitudes about organisation membership.

 At the third and deepest level, the organisation's tacit assumptions are found. These are the elements of culture that are unseen and not cognitively identified in everyday interactions between organisation members. Additionally, these are the elements of culture which are often taboo to discuss inside the organisation. Many of these ‘unspoken rules’' exist without the conscious knowledge of the membership. Those with sufficient experience to understand this deepest level of organisation culture usually become acclimatized to its attributes over time, thus reinforcing the invisibility of their existence. Surveys and casual interviews with organisation members cannot draw out these attributes—rather much more in-depth means is required to first identify then understand organisation culture at this level. Notably, culture at this level is the underlying and driving element often missed by organisation behaviourists.

 Using Schein's model, understanding paradoxical organisation behaviours becomes more apparent. For instance, an organisation can profess highly aesthetic and moral standards at the second level of Schein's model while simultaneously displaying curiously opposing behaviour at the third and deepest level of culture. Superficially, organisation rewards can imply one organisation norm but at the deepest level imply something completely different. This insight offers an understanding of the difficulty that organisation newcomers have in assimilating organisation culture and why it takes time to become acclimatized. It also explains why organisation change agents usually fail to achieve their goals: underlying tacit cultural norms are generally not understood before would-be change agents begin their actions. Merely understanding culture at the deepest level may be insufficient to institute cultural change because the dynamics of interpersonal relationships (often under threatening conditions) are added to the dynamics of organisation culture while attempts are made to institute desired change.

 Factors and elements

Gerry Johnson (1988) described a cultural web, identifying a number of elements that can be used to describe or influence organisation culture:

• The paradigm: What the organisation is about, what it does, its mission, its values.
• Control systems: The processes in place to monitor what is going on. Role cultures would have vast rulebooks. There would be more reliance on individualism in a power culture.
• Organisation structures: Reporting lines, hierarchies, and the way that work flows through the business.
• Power structures: Who makes the decisions, how widely spread is power, and on what is power based?
• Symbols: These include organisation logos and designs, but also extend to symbols of power such as parking spaces and executive washrooms.
• Rituals and routines: Management meetings, board reports and so on may become more habitual than necessary.
• Stories and myths: build up about people and events, and convey a message about what is valued within the organisation.

 These elements may overlap. Power structures may depend on control systems, which may exploit the very rituals that generate stories which may not be true.

 According to Schein (1992), the two main reasons why cultures develop in organisations is due to external adaptation and internal integration. External adaptation reflects an evolutionary approach to organisation culture and suggests that cultures develop and persist because they help an organisation to survive and flourish. If the culture is valuable, then it holds the potential for generating sustained competitive advantages. Additionally, internal integration is an important function since social structures are required for organisations to exist. Organisation practices are learned through socialization at the workplace. Work environments reinforce culture on a daily basis by encouraging employees to exercise cultural values. Organisation culture is shaped by multiple factors, including the following:

• External environment
• Industry
• Size and nature of the organisation’s workforce
• Technologies the organisation uses
• The organisation’s history and ownership

 

 Communicative Indicators

There are many different types of communication that contribute in creating an organisation culture:

• Metaphors such as comparing an organisation to a machine or a family reveal employees’ shared meanings of experiences at the organisation.
• Stories can provide examples for employees of how to or not to act in certain situations.
• Rites and ceremonies combine stories, metaphors, and symbols into one. Several different kinds of rites that affect organisation culture:
  • Rites of passage: employees move into new roles
  • Rites of degradation: employees have power taken away from them
  • Rites of enhancement: public recognition for an employee’s accomplishments
  • Rites of renewal: improve existing social structures
  • Rites of conflict reduction: resolve arguments between certain members or groups
  • Rites of integration: reawaken feelings of membership in the organisation
  • Reflexive comments are explanations, justifications, and criticisms of our own actions.

This includes:

• Plans: comments about anticipated actions
• Commentaries: comments about action in the present
• Accounts: comments about an action or event that has already occurred

 

Such comments reveal interpretive meanings held by the speaker as well as the social rules they follow.

• Fantasy Themes are common creative interpretations of events that reflect beliefs, values, and goals of the organisation. They lead to rhetorical visions, or views of the organisation and its environment held by organisation members.

 Schemata

Schemata (plural of schema) are knowledge structures a person forms from past experiences, allowing the person to respond to similar events more efficiently in the future by guiding the processing of information. A person's schemata are created through interaction with others, and thus inherently involve communication.

Stanley G. Harris (1994) argues that five categories of in-organisation schemata are necessary for organisation culture:

1. Self-in-organisation schemata: a person's concept of oneself within the context of the organisation, including her/his personality, roles, and behaviour.
2. Person-in-organisation schemata: a person's memories, impressions, and expectations of other individuals within the organisation.
3. Organisation schemata: a subset of person schemata, a person's generalized perspective on others as a whole in the organisation.
4. Object/concept-in-organisation schemata: knowledge an individual has of organisation aspects other than of other persons.
5. Event-in-organisation schemata: a person's knowledge of social events within an organisation.

 All of these categories together represent a person's knowledge of an organisation. Organisation culture is created when the schemata’s (schematic structures) of differing individuals across and within an organisation come to resemble each other (when any one person's schemata come to resemble another person's schemata because of mutual organisation involvement), primarily done through organisation communication, as individuals directly or indirectly share knowledge and meanings.

 Strong/weak

Strong culture is said to exist where staff respond to stimulus because of their alignment to organisation values. In such environments, strong cultures help firms operate like well-oiled machines, engaging in outstanding execution with only minor adjustments to existing procedures as needed.

 Conversely, there is weak culture where there is little alignment with organisation values, and control must be exercised through extensive procedures and bureaucracy.

 Research shows that organisations that foster strong cultures have clear values that give employees a reason to embrace the culture. A "strong" culture may be especially beneficial to firms operating in the service sector since members of these organisations are responsible for delivering the service and for evaluations important constituents make about firms. Research indicates that organisations may derive the following benefits from developing strong and productive cultures:

• Better aligning the company towards achieving its vision, mission, and goals
• High employee motivation and loyalty
• Increased team cohesiveness among the company's various departments and divisions
• Promoting consistency and encouraging coordination and control within the company
• Shaping employee behaviour at work, enabling the organisation to be more efficient

 Where culture is strong, people do things because they believe it is the right thing to do, and there is a risk of another phenomenon, groupthink.  "Groupthink" was described by Irving Janis. He defined it as "a quick and easy way to refer to a mode of thinking that people engage when they are deeply involved in a cohesive in-group, when the members' strivings for unanimity override their motivation to realistically appraise alternatives of action." (Irving Janis, 1972) This is a state in which even if they have different ideas, do not challenge organisation thinking, and therefore there is a reduced capacity for innovative thoughts. This could occur, for example, where there is heavy reliance on a central charismatic figure in the organisation, or in the organisation' values, or also in groups where a friendly climate is at the base of their identity (avoidance of conflict). In fact, groupthink is very common and happens all the time, in almost every group. Members that are defiant are often turned down or seen as a negative influence by the rest of the group because they bring conflict.

 Charles Handy

Charles Handy (1976), popularized Roger Harrison (1972) with linking organisation structure to organisation culture. The described four types of culture are;

1. Power culture: concentrates power among a small group or a central figure and its control is radiating from its centre like a web. Power cultures need only a few rules and little bureaucracy but swift in decisions can ensue.
2. Role culture: authorities are delegated as such within a highly defined structure. These organisations form hierarchical bureaucracies, where power derives from the personal position and rarely from an expert power. Control is made by procedures (which are highly valued), strict roles descriptions and authority definitions. These organisations have consistent systems and are very predictable. This culture is often represented by a "Roman Building" having pillars. These pillars represent the functional departments.
3. Task culture: teams are formed to solve particular problems. Power is derived from the team with the expertise to execute against a task. This culture uses a small team approach, where people are highly skilled and specialized in their own area of expertise. Additionally, these cultures often feature the multiple reporting lines seen in a matrix structure.
4. Person culture: formed where all individuals believe themselves superior to the organisation. It can become difficult for such organisations to continue to operate, since the concept of an organisation suggests that a group of like-minded individuals pursue organisation goals. However some professional partnerships operate well as person cultures, because each partner brings a particular expertise and clientele to the firm.

 

Kim Cameron and Robert Quinn

Kim Cameron and Robert Quinn (1999) conducted research on organisation effectiveness and success. Based on the Competing Values Framework, they developed the Organisation Culture Assessment Instrument that distinguishes four culture types.

Competing values produce polarities like flexibility vs. stability and internal vs. external focus - these two polarities were found to be most important in defining organisation success. The polarities construct a quadrant with four types of culture:

• Clanculture (internal focus and flexible) - A friendly workplace where leaders act like father figures.
• Adhocracyculture (external focus and flexible) - A dynamic workplace with leaders that stimulate innovation.
• Market culture (external focus and controlled) - A competitive workplace with leaders like hard drivers
• Hierarchyculture (internal focus and controlled) - A structured and formalized workplace where leaders act like coordinators.

 

Cameron and Quinn designated six characteristics of organisation culture that can be assessed with the Organisation Culture Assessment Instrument (OCAI).

 Clan cultures are most strongly associated with positive employee attitudes and product and service quality.  Market cultures are most strongly related with innovation and financial effectiveness criteria. The primary belief in market cultures that clear goals and contingent rewards motivate employees to aggressively perform and meet stakeholders' expectations; a core belief in clan cultures is that the organisation’s trust in and commitment to employees facilitates open communication and employee involvement. These differing results suggest that it is important for executive leaders to consider the match between strategic initiatives and organisation culture when determining how to embed a culture that produces competitive advantage. By assessing the current organisation culture as well as the preferred situation, the gap and direction to change can be made visible as a first step to changing organisation culture.

 Robert A. Cooke

Robert A. Cooke defines culture as the behaviours that members believe are required to fit in and meet expectations within their organisation. The Organisation Culture Inventory measures twelve behavioural norms that are grouped into three general types of cultures:

• Constructive cultures, in which members are encouraged to interact with people and approach tasks in ways that help them, meet their higher-order satisfaction needs.
• Passive/defensive cultures, in which members believe they must interact with people in ways that will not threaten their own security.
• Aggressive/defensive cultures, in which members are expected to approach tasks in forceful ways to protect their status and security.

Constructive cultures

In constructive cultures people are encouraged to be in communication with their co-workers, and work as teams, rather than only as individuals. In positions where people do a complex job, rather than something simple like a mechanic one, this culture is efficient.

1. Achievement: completing a task successfully, typically by effort, courage, or skill (pursue a standard of excellence) (explore alternatives before acting) - Based on the need to attain high-quality results on challenging projects, the belief that outcomes are linked to one's effort rather than chance and the tendency to personally set challenging yet realistic goals. People high in this style think ahead and plan, explore alternatives before acting and learn from their mistakes.
2. Self-actualizing: realization or fulfilment of one's talents and potentialities - considered as a drive or need present in everyone (think in unique and independent ways) (do even simple tasks well) - Based on needs for personal growth, self-fulfilment and the realisation of one's potential. People with this style demonstrate a strong desire to learn and experience things, creative yet realistic thinking and a balanced concern for people and tasks.
3. Humanistic-encouraging: help others to grow and develop (resolve conflicts constructively) - Reflects an interest in the growth and development of people, a high positive regard for them and sensitivity to their needs. People high in this style devote energy to coaching and counselling others, are thoughtful and considerate and provide people with support and encouragement.
4. Affiliative: treat people as more valuable than things (cooperate with others) - Reflects an interest in developing and sustaining pleasant relationships. People high in this style share their thoughts and feelings, are friendly and cooperative and make others feel a part of things.

 

Organisations with constructive cultures encourage members to work to their full potential, resulting in high levels of motivation, satisfaction, teamwork, service quality, and sales growth. Constructive norms are evident in environments where quality is valued over quantity, creativity is valued over conformity, cooperation is believed to lead to better results than competition, and effectiveness is judged at the system level rather than the component level. These types of cultural norms are consistent with (and supportive of) the objectives behind empowerment, total quality management, transformational leadership, continuous improvement, re-engineering, and learning organisations.

 Passive/defensive cultures

Norms that reflect expectations for members to interact with people in ways that will not threaten their own security are in the Passive/Defensive Cluster.

The four Passive/Defensive cultural norms are:

• Approval
• Conventional
• Dependent
• Avoidance

In organisations with Passive/Defensive cultures, members feel pressured to think and behave in ways that are inconsistent with the way they believe they should in order to be effective. People are expected to please others (particularly superiors) and avoid interpersonal conflict. Rules, procedures, and orders are more important than personal beliefs, ideas, and judgment. Passive/Defensive cultures experience a lot of unresolved conflict and turnover, and organisation members report lower levels of motivation and satisfaction.

 Aggressive/defensive cultures

This style is characterized with more emphasis on task than people. Because of the very nature of this style, people tend to focus on their own individual needs at the expense of the success of the group. The aggressive/defensive style is very stressful, and people using this style tend to make decisions based on status as opposed to expertise.

1. Oppositional- This cultural norm is based on the idea that a need for security that takes the form of being very critical and cynical at times. People who use this style are more likely to question others work; however, asking those tough question often leads to a better product. Nonetheless, those who use this style may be overly-critical toward others, using irrelevant or trivial flaws to put others down.
2. Power - This cultural norm is based on the idea that there is a need for prestige and influence. Those who use this style often equate their own self-worthwith controlling others. Those who use this style have a tendency to dictate others opposing to guiding others’ actions.
3. Competitive- This cultural norm is based on the idea of a need to protect one’s status. Those who use this style protect their own status by comparing themselves to other individuals and outperforming them. Those who use this style are seekers of appraisal and recognition from others.
4. Perfectionistic- This cultural norm is based on the need to attain flawless results. Those who often use this style equate their self-worth with the attainment of extremely high standards. Those who often use this style are always focused on details and place excessive demands on themselves and others.

 Organisations with aggressive/defensive cultures encourage or require members to appear competent, controlled, and superior. Members who seek assistance, admit shortcomings, or concede their position are viewed as incompetent or weak. These organisations emphasize finding errors, weeding out "mistakes" and encouraging members to compete against each other rather than competitors. The short-term gains associated with these strategies are often at the expense of long-term growth.

 Entrepreneurial

Stephen McGuire (2003) defined and validated a model of organisation culture that predicts revenue from new sources. An Entrepreneurial Organisation Culture (EOC) is a system of shared values, beliefs and norms of members of an organisation, including valuing creativity and tolerance of creative people, believing that innovating and seizing market opportunities are appropriate behaviours to deal with problems of survival and prosperity, environmental uncertainty, and competitors' threats, and expecting organisation members to behave accordingly.

Elements

• People and empowerment focused
• Value creation through innovation and change
• Attention to the basics
• Hands-on management
• Doing the right thing
• Freedom to grow and to fail
• Commitment and personal responsibility
• Emphasis on the future

 

 Bullying Culture

Main articles: Bullying Culture and Workplace Bullying

Bullying is seen to be prevalent in organisations where employees and managers feel that they have the support, or at least implicitly the blessing, of senior managers to carry on their abusive and bullying behaviour. Furthermore, new managers will quickly come to view this form of behaviour as acceptable and normal if they see others get away with it and are even rewarded for the behaviour.

 When bullying happens at the highest levels, the effects may be far reaching. That people may be bullied irrespective of their organisation status or rank, including senior managers, indicates the possibility of a negative ripple effect, where bullying may be cascaded downwards as the targeted supervisors might offload their own aggression on their subordinates. In such situations, a bullying scenario in the boardroom may actually threaten the productivity of the entire organisation

 Culture of Fear

Ashforth discussed potentially destructive sides of leadership and identified what he referred to as petty tyrants, i.e. leaders who exercise a tyrannical style of management, resulting in a climate of fear in the workplace.   Partial or intermittent negative reinforcement can create an effective climate of fear and doubt.  When employees get the sense that bullies “get away with it”, a climate of fear may be the result. Several studies have confirmed a relationship between bullying, on the one hand, and an autocratic leadership and an authoritarian way of settling conflicts or dealing with disagreements, on the other. An authoritarian style of leadership may create a climate of fear, where there is little or no room for dialogue and where complaining may be considered futile.

 Personal Culture

Personality Psychology, Identity (Social Science) Organisation culture is taught to the person as culture is taught by his/her parents thus changing and modelling his/her personal culture.  Indeed, employees and people applying for a job are advised to match their "personality to a company’s culture" and fit to it. 

 National Culture

Corporate culture is used to control, coordinate, and integrate company subsidiaries. However differences in national cultures exist contributing to differences in the views on the management.   Differences between national cultures are deep rooted values and can shape how people expect companies to be run, and how relationships between leaders and followers should be, this in turn can manifest in differences between the employer and the employee on expectations. (Geert Hofstede, 1991) Perhaps equally foundational; observing the vast differences in national copyright (and taxation, etc.) laws suggests deep rooted differing cultural attitudes and assumptions on property rights and sometimes; the desired root function, place, or purpose of corporations relative to the population.

 

Multiplicity / Biculturalism

Xibao Zhang (2009) carried out an empirical study of culture emergence in the Sino-Western international cross-cultural management (SW-ICCM) context in China. The outcome was to formulate theme-based substantive theories and a formal theory.

 The major finding of this study is that human cognition contains three components, or three broad types of "cultural rules of behaviour", namely, Values, Expectations, and Ad Hoc Rules, each of which has a mutually conditioning relationship with behaviour. The three cognitive components are different in terms of the scope and duration of their mutual shaping with behaviour. Values are universal and enduring rules of behaviour; Expectations, on the other hand, are context-specific behavioural rules; while Ad Hoc Rules are improvised rules of behaviour that the human mind devises contingent upon a particular occasion. Furthermore, they need not be consistent, and frequently are not, among themselves.

 Impacts

Research suggests that numerous outcomes have been associated either directly or indirectly with organisation culture. A healthy and robust organisation culture may provide various benefits, including the following:

• Competitive edge derived from innovation and customer service
• Consistent, efficient employee performance
• Team cohesiveness
• High employee morale
• Strong company alignment towards goal achievement

Although little empirical research exists to support the link between organisation culture and organisation performance, there is little doubt among experts that this relationship exists. Organisation culture can be a factor in the survival or failure of an organisation - although this is difficult to prove considering the necessary longitudinal analyses are hardly feasible.

 A 2003 Harvard Business School study reported that culture has a significant impact on an organisation’s long-term economic performance. The study examined the management practices at 160 organisations over ten years and found that culture can enhance performance or alternately prove detrimental to performance. Organisations with strong performance-oriented cultures experienced far better financial growth. Additionally, a 2002 Corporate Leadership Council study found that cultural traits such as risk taking, internal communications, and flexibility were some of the most important drivers of performance, and may impact individual performance. Furthermore, innovativeness, productivity through people, and the other cultural factors cited by Peters and Waterman (1982) also have positive economic consequences.

 Denison, Haaland, and Goelzer (2004) found that culture contributes to the success of the organisation, but not all dimensions contribute the same. It was found that the impacts of these dimensions differ by global regions, which suggests that organisation culture is impacted by national culture. Additionally, Clarke (2006) found that a safety climate is related to an organisation’s safety record.

 Organisation culture is reflected in the way people perform tasks, set objectives, and administer the necessary resources to achieve objectives. Culture affects the way individuals make decisions, feel, and act in response to the opportunities and threats affecting the organisation.

 Adkins and Caldwell (2004) found that job satisfaction was positively linked with the degree to which employees fit into both the overall culture and subculture in which they worked. A perceived mismatch  is related to a number of negative consequences including lower job satisfaction, higher job strain, general stress, and turnover intent.

 It has been proposed that organisation culture may impact the level of employee creativity, the strength of employee motivation, and the reporting of unethical behaviour, but more research is needed to support these conclusions.

 Organisation culture also has an impact on recruitment and retention. Individuals tend to be attracted to and remain engaged in organisations that they perceive to be compatible. Additionally, high turnover may be a mediating factor in the relationship between culture and organisation performance. Deteriorating company performance and an unhealthy work environment are a cause for concern the cause should be identified and should be addressed on an ongoing basis.

 Change

When an organisation does not possess a healthy culture or requires some kind of organisation culture change, the change process can be daunting. One major reason why such change is difficult is that organisation cultures, and the organisation structures in which they are embedded, often reflect the "imprint" of earlier periods in a persistent way and exhibit remarkable levels of inertia.  

 Culture change may be necessary to reduce employee turnover, influence employee behaviour, make improvements to the company, refocus the company objectives and/or rescale the organisation, provide better customer service, and/or achieve specific company goals and results. Culture change is impacted by a number of elements, including the external environment and industry competitors, change in industry standards, technology changes, the size and nature of the workforce, and the organisation’s history and management.

 There are a number of methodologies specifically dedicated to organisation culture change such as Peter Senge’s Fifth Discipline. These are also a variety of psychological approaches that have been developed into a system for specific outcomes such as the Fifth Discipline’s "learning organisation" or Directive Communication’s "corporate culture evolution." Ideas and strategies, on the other hand, seem to vary according to particular influences that affect culture.

 Burman and Evans (2008) argue that it is ‘leadership’' that affects culture rather than ‘management’', and describe the difference. When one wants to change an aspect of the culture of an organisation one has to keep in consideration that this is a long term project. Corporate culture is something that is very hard to change and employees need time to get used to the new way of organizing. For companies with a very strong and specific culture it will be even harder to change.

 Prior to a cultural change initiative, a needs assessment is needed to identify and understand the current organisation culture. This can be done through employee surveys, interviews, focus groups, observation, customer surveys where appropriate, and other internal research, to further identify areas that require change. The company must then assess and clearly identify the new, desired culture, and then design a change process.

Cummings & Worley (2004) give the following six guidelines for cultural change, these changes are in line with the eight distinct stages mentioned by Kotter (1995):

1. Formulate a clear strategic vision (stage 1, 2, and 3). In order to make a cultural change effective a clear vision of the firm’s new strategy, shared values and behaviours is needed. This vision provides the intention and direction for the culture change (Cummings & Worley, 2004).
2. Display top-management commitment (stage 4). It is very important to keep in mind that culture change must be managed from the top of the organisation, as willingness to change of the senior management is an important indicator (Cummings & Worley, 2004). The top of the organisation should be very much in favour of the change in order to actually implement the change in the rest of the organisation. De Caluwé & Vermaak (2004) provide a framework with five different ways of thinking about change.
3. Model culture change at the highest level (stage 5). In order to show that the management team is in favour of the change, the change has to be notable at first at this level. The behaviour of the management needs to symbolize the kinds of values and behaviours that should be realized in the rest of the company. It is important that the management shows the strengths of the current culture as well; it must be made clear that the current organisation does not need radical changes, but just a few adjustments. (See for more: Deal & Kennedy, 1982;Sathe, 1983; Schall; 1983; Weick, 1985; DiTomaso, 1987). This process may also include creating committee, employee task forces, value managers, or similar. Change agents are key in the process and key communicators of the new values. They should possess courage, flexibility, excellent interpersonal skills, knowledge of the company, and patience. As McCune (May 1999) puts it, these individual should be catalysts, not dictators.
4. Modify the organisation to support organisation change. The fourth step is to modify the organisation to support organisation change. This includes identifying what current systems, policies, procedures and rules need to be changed in order to align with the new values and desired culture. This may include a change to accountability systems, compensation, benefits and reward structures, and recruitment and retention programs to better align with the new values and to send a clear message to employees that the old system and culture are in the past.
5. Select and socialize newcomers and terminate deviants (stage 7 & 8 of Kotter, 1995). A way to implement a culture is to connect it to organisation membership, people can be selected and terminate in terms of their fit with the new culture (Cummings & Worley, 2004). Encouraging employee motivation and loyalty to the company is key and will also result in a healthy culture. The company and change managers should be able to articulate the connections between the desired behaviour and how it will impact and improve the company’s success, to further encourage buy-in in the change process. Training should be provided to all employees to understand the new processes, expectations and systems.
6. Develop ethical and legal sensitivity. Changes in culture can lead to tensions between organisation and individual interests, which can result in ethical and legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security (Cummings & Worley, 2004). It is also beneficial, as part of the change process, to include an evaluation process, conducted periodically to monitor the change progress and identify areas that need further development. This step will also identify obstacles of change and resistant employees and to acknowledge and reward employee improvement, which will also encourage continued change and evolvement. It may also be helpful and necessary to incorporate new change managers to refresh the process. Outside consultants may also be useful in facilitating the change process and providing employee training. Change of culture in the organisations is very important and inevitable. Culture innovations is bound to be because it entails introducing something new and substantially different from what prevails in existing cultures. Cultural innovation  is bound to be more difficult than cultural maintenance. People often resist changes hence it is the duty of the management to convince people that likely gain will outweigh the losses. Besides institutionalization, deification is another process that tends to occur in strongly developed organisation cultures. The organisation itself may come to be regarded as precious in itself, as a source of pride, and in some sense unique. Organisation members begin to feel a strong bond with it that transcends material returns given by the organisation, and they begin to identify with it. The organisation turns into a sort of clan.

 

Mergers and cultural leadership

One of the biggest obstacles in the way of the merging of two organisations is organisation culture. Each organisation has its own unique culture and most often, when brought together, these cultures clash. When mergers fail employees point to issues such as identity, communication problems, human resources problems, ego clashes, and inter-group conflicts, which all fall under the category of "cultural differences".

 One way to combat such difficulties is through cultural leadership. Organisation leaders must also be cultural leaders and help facilitate the change from the two old cultures into the one new culture. This is done through cultural innovation followed by cultural maintenance.

• Cultural innovation includes
• Cultural maintenance includes:
  • Integrating the new culture: reconciling the differences between the old cultures and the new one
  • Embodying the new culture: Establishing, affirming, and keeping the new culture

 Corporate Subcultures

Corporate culture is the total sum of the values, customs, traditions, and meanings that make a company unique. Corporate culture is often called "the character of an organisation", since it embodies the vision of the company's founders. The values of a corporate culture influence the ethical standards within a corporation, as well as managerial behaviour.

 Senior Management may try to determine a corporate culture. They may wish to impose corporate values and standards of behaviour that specifically reflect the objectives of the organisation. In addition, there will also be an extant internal culture within the workforce. Work-groups within the organisation have their own behavioural quirks and interactions which, to an extent, affect the whole system. Roger Harrison's four-culture typology, and adapted by Charles Handy, suggests that unlike organisation culture, corporate culture can be 'imported'. For example, computer technicians will have expertise, language and behaviours gained independently of the organisation, but their presence can influence the culture of the organisation as a whole.

 Language

Language is one of the greatest barriers to building a team of members from various cultures. Not only can there be a situation in which members speak different languages, but not understanding culturally-specific idioms and terms can cause problems within the team. For example, Americans tend to use sports and military metaphors in business that are meaningless to people from other parts of the world. Even among those who speak English, though, the same phrase can mean different things depending on whether a team member is from the U.S., Canada, the United Kingdom or Australia. For example, when something "bombs" in the U.S., it's a bad thing, but to those from the U.K., a bomb is a phenomenal success. Keeping these language issues in mind can help you build stronger multicultural teams.

 When people who are working together speak different languages, it can present a major obstacle to success. Learning a new language is a major undertaking and is more difficult as an adult than as a child. Solutions to this problem may include ongoing workplace language classes, multilingual translators incorporated into a team and technological solutions such as translation software. When team members see a diversity of languages as an opportunity to learn something new rather than an insurmountable problem, they will all benefit from the interaction.

 Parker (2000) has suggested that many of the assumptions of those putting forward theories of organisation culture are not new. They reflect a long-standing tension between cultural and structural (or informal and formal) versions of what organisations are. Further, it is reasonable to suggest that complex organisations might have many cultures, and that such sub-cultures might overlap and contradict each other. The neat typologies of cultural forms found in textbooks rarely acknowledge such complexities, or the various economic contradictions that exist in capitalist organisations.

 The Definition of Multicultural in the Workplace

A multicultural workforce is one in which a wide range of cultural differences exist among the employees in the organisation. While a number of major and minor traits are used to describe cultural differences, the most common traits used to identify the level of multiculturalism evident in a given workforce often boils down to "age, sex, ethnicity, physical ability, race and sexual orientation, according to the "Encyclopaedia of Business." Multicultural Basics

 

In general, a multicultural workforce is one in which employees are heterogeneous, many dissimilar in certain traits. Practically speaking, any workforce with two or more employees has some level of multiculturalism based on the basic assumption that no two people are exactly the same. Companies vary in level of multiculturalism. Those that have easily detectible and wide-ranging cultural differences within their workforces are more often described as multicultural companies or workforces.

 

Multicultural vs. Diversity

Over time, a subtle but important transition has taken place in the way workforces are described related to employee differences. More often, early 21st-century organisations are described as diverse when employees are heterogeneous. Diversity is become increasingly used to depict the importance of managing diverse workers versus simply recognizing their existing. Diversity management is a well-recognized process of proactively and strategically managing the unique needs of a diverse workplace with multicultural traits.

 

Diversity Management

In essence, diversity is viewed more as the way a company responds to its workforce than multicultural, which is more of a workforce trait. Diversity management includes cultural awareness education and sensitivity training as core elements. Company leaders typically recognize that to get the benefits of a diverse workforce and to avoid common challenges, they must teach employees to accept and tolerate their differences.

 

Multicultural Benefits

People with differences have natural barriers in communication and relationships. "Opposites attract" is a 1popular relationship adage, but people with differences also tend to find more conflict in communication than people with shared backgrounds and life paradigms. However, diversity management can draw out strong benefits of a multicultural workforce, including a broader and deeper pool of ideas and creative development, stronger connections to a global marketplace and better ability to adapt to marketplace changes.

 

Advantages and Disadvantages of a Multicultural Workforce

More organisation leaders are trying to overcome the challenges of managing a multicultural workforce so that they can reap the benefits. A multicultural workforce consists of employees with a wide range of backgrounds. Age, race, national origin, gender and marital status are just some of the traits that distinguish employees culturally.

 

Different Perspectives

A common advantage of a multicultural workforce is a broader range of perspectives on issues or challenges. A 1999 "Fortune" study supported the notion that more diverse companies were performing better. People from different backgrounds bring their own unique cultural experiences to the situations they face in their companies and this broader perspective of viewpoints tends to allow for a better ultimate resolution.

 

Broader Coverage

Employees with diverse backgrounds can also provide the company broader coverage in a global marketplace. For instance, a company that operates in 10 countries can better serve the needs of those markets if it has employees familiar with them. The ability to accurately speak and write the language, overcome cultural barriers and communication filters and know what consumers want are advantages of employees that can relate to global customers.

 Enhanced Risk of Discrimination

A diverse workforce presents increased potential for discrimination. It is natural that if you put people together with obvious distinguishing traits, employees with prejudices could use them against others. This increased risk is why diversity management is so critical with multicultural workforces. Companies need to provide cultural awareness and sensitivity training to help create a company culture of tolerance and acceptance of differences.

 Internal Communication

Though global communication is usually a benefit, internal communication is typically more challenging when you have language and cultural barriers. Again, diversity management can help. However, companies with a multicultural workforce have more obstacles to overcome. In his article "Diversity in the Workplace: Benefits, Challenges and Solutions," Josh Greenberg notes that miscommunication about major objectives can lead to problems and cause low employee morale that can ultimately add to the potential conflicts of diversity.

 Multicultural Workforce, Teamwork & Communication

Although the multicultural work force provides a breadth of experiences and ideas, it can also create communication challenges that must be understood before they can be addressed. Understanding the differences among the cultures in those areas will increase the value of your team.

 Basic Cultural Preferences

Differences in cultural personality types and communication styles can wreak havoc in the workplace if not addressed. For example, while American and northern European communication styles are often very direct, timeline-oriented and results-focused, Latino and other minority cultures often prefer a relationship and teamwork based approach. How team members share information and view time varies tremendously among cultures. Other minority cultures often make excellent team members because their backgrounds encourage them to see the greater good as more important than individual achievement.

 The Approach

Many minority cultures place such emphasis on the importance of the professional relationship that issues relating to timeliness are automatically placed lower in importance. For example, an employee might be reluctant to end a productive conversation simply to be on time for the next meeting or task. Kenig recommends allowing team members to interact before the project begins so they can understand and learn to relate to others' work styles. The key element for these team members is trust.

 Trust is an important part of any successful team, but for some cultures, trust takes time to build, hindering the effectiveness of the team in the short term. For example, in China, Latin American or Arab countries, people often need to build trust on a personal level -- discussing family, sports, politics and the like -- before they are willing to conduct business. Americans, on the other hand, often tend to trust their work colleagues, or are at least willing to discuss business matters, as soon as they are introduced. These cultural differences create a disconnect and impede the team building efforts.

 Sharing Information

Some minority employees might feel uncomfortable stating problems or issues directly. Instead, the employee may choose to indirectly state the problem to spare the relationship. This can be exacerbated if the minority team members are paired with others who grew up in cultures that value directness. 

 Time, Time, Time

Western cultures tend to view time in a linear and sequential fashion, according to Kenig. As a result, these employees rely on the clock to keep them on task and productive. However, other relationship-based cultures don't worry as much about timeliness, and they don't let the clock interfere with an important relationship. While Americans and other Western cultures may view lateness as rude, some employees consider walking away from an important meeting or conversation as rude and might assume that the next meeting's attendees would understand. As a result, bridging the divide by understanding the differences in business styles will go a long way toward improving the effectiveness of the multicultural team.

 People from different backgrounds sometimes have misunderstandings.

In an increasingly globalized economy, people from different cultures and backgrounds find themselves working together more and more frequently. Even when people are willing and eager to work together and cooperate, they may unintentionally confuse or even offend each other because of their different ways of doing things. Remaining aware of differences and being patient with each other can help minimize problems.

 Communication Styles

Methods of communication that are normal for one group of people may appear ineffective or inappropriate to another group. For example, Americans tend to be informal compared to many other cultures and may come across as excessively friendly to someone, particularly an older person, from Europe or Japan. A person from a culture where loud voices and interrupting are not intended to be aggressive may intimidate someone from a culture that teaches a more reserved manner of expression. Learning in advance about the cultures of co-workers before you work on a team with them can help you understand their methods of communication.

 Hierarchy

The importance of authority varies greatly between cultures. Some groups pay great respect to people in positions of authority, while people from other cultures are perfectly willing to question an authority figure if they see him doing something wrong. Authority is based on different criteria in different cultures. Some cultures venerate older people, while others confer authority based entirely on a person's accomplishments. The nature of a team should be made clear to all participants at its inception. Some teams are purely cooperative, with a horizontal structure and no leaders, while others have clearly defined chains of command.

 

Conflict

When conflict does occur within a team, members from different backgrounds may react to it in dramatically different ways. Some people will repress their reactions to an insult or slight, while others will fight back. These reactions are based on individual personality to some extent but are also conditioned by a person's background. Resolving conflict between co-workers effectively requires an understanding of everyone's view of what caused the conflict. Reconciling warring parties is difficult enough when dealing with people of similar backgrounds; when working with multiple cultures and national traditions, maintaining smooth relations between everyone on a team can become a major challenge.

 

What Practices Could You Implement to Increase Cultural Sensitivity & Acceptance in the Workplace?

You can build your workforce's cultural awareness through a staff dinner with dishes from multiple cultures.

Improving the cultural sensitivity of your workforce is crucial in today's multicultural environment. This will help prevent conflicts between your employees and make your company better adapted to dealing with clients from different cultures. You can build cultural awareness in your workforce through formal education classes and the informal recognition of other cultures at your company. Building an environment that encourages discussion and teamwork also reduces cultural issues.

 Encourage Discussion

The earlier you address any cultural conflicts among your staff, the less damage that will be done to your productivity. Encourage your employees to come to you if they are having any problems. If conflicts arise, make sure to be non-judgmental and allow all employees to voice their concerns equally. If your employees know they can come to you with a problem, cultural issues will be addressed sooner. This will prevent employees from hiding conflicts that can grow into bigger problems.

 Celebrate Diversity

Anything you can do to celebrate the diversity of your workforce will help increase cultural acceptance. Make an effort to recognize the holidays of other cultures to show your workers their cultures are being recognized. This can be as simple as a companywide email or a notice in your company's news bulletin. Consider hosting a staff dinner with the theme of cultural awareness. Encourage your employees to bring a dish that represents their culture. Introducing your staff to the traditions of others will make them more sensitive to cultural differences.

 

Strengthen Company’s Teamwork

Cultural conflicts between your employees may be a manifestation of other problems. If your workers have a strong sense of teamwork and are driven to meet your company's goals, cultural conflicts should be minimized. Your employees will be too focused on getting their work done to dwell on cultural differences between each other. Building teamwork and a sense of company pride in your employees indirectly will reduce any cultural conflict.

 

The Importance of Cultural Sensitivity in Business Dealings

Companies often employ foreign workers and court foreign parties as their operations go global and they take advantage of new markets in other countries. This makes cultural sensitivity in business more important than ever. An ignorance of a country's cultural norms can offend important clients, alienate employees in other countries and even lead to a reduction of product or service sales.

 One –on-One Cultural Sensivity

Cultural sensitivity can play an important role on the personal level. Companies courting employees or executives from countries with other social norms or beliefs would do well to respect those beliefs. A failure to do so can lead to everything from personal offense taken to certain cultural insensitive moves (such as not taking into account a person's cultural dietary restrictions during a business lunch) to the failure to do business entirely if a company consistently offends the culture of a potential business partner.

 Cultural Sensitivity and Products

Being sensitive to cultural considerations is also essential to selling products in other countries. Many firms have lost money when selling their products in other countries based on their failure to understand the culture.

 Cultural Sensitivity and Language

When businesses need to sell products or produce advertisements in foreign countries, often these use the host country's own language. Being insensitive to the nuances of a foreign language can create real cultural relations problems for companies. Marketing efforts for an alcoholic beverage called "Irish Mist" ran astray in Germany because the company behind the product failed to notice that the word "Mist" in German means "manure."

 

Cultural Sensitivity and Employees

As globalization has companies frequently outsourcing work or recruiting global professionals from a range of countries, many firms have instituted cultural sensitivity training and expanded the range of languages into which their sales aids and brochures are translated. A failure to appreciate cultural differences like language and traditions can alienate foreign employees and, in the case of materials not translated into their language, actually prevent them from doing their jobs.

 Importance of Team Selection in Cross-Cultural Negotiations

Cross-cultural negotiations present even the most experienced business owners with hefty challenges because of the cultural nuances businesses must navigate. Different cultures prefer different communication and negotiation styles. Choosing team members who can work according to cultural preferences can give you a strong advantage over the competition.

 Communication Style

It's hard to turn an aggressive, in-your-face negotiator into a mild-mannered introvert. You'll need to choose team members whose natural communication styles work well within the local culture, thus gaining the trust of your negotiating partners. For example, some Eastern cultures dislike open, direct conflict, so negotiations should take a more indirect, friendly and respectful route.

 Linguistic and Cultural Competence

Cultural knowledge can be a significant advantage, particularly if you've never visited a particular country or negotiated with a specific company before. Select team members who speak the language and who are from the same culture as your negotiating partner. They can provide insight into what will and won't work and may be able to offer feedback about how your proposal will be received. If you don't have a person familiar with the culture available, you may want to hire a cultural guide or encourage one of your employees to become familiar with the culture.

 If you've previously negotiated with a group or individual, consider what went well last time. If there was a particular employee your negotiating partner liked, bring her again and choose team members with a similar style. Business negotiations can thrive when they're built in a climate of mutual trust and admiration, so encourage team members to build strong, respectful relationships with business partners.

 Competently Representing the Company

Even if someone speaks the local language and is familiar with local customs, he won't be an effective negotiator if s/he can't competently represent your company. For example, if you're engaged in negotiations with a large law firm, an intern might not have the legal knowledge necessary to contribute. Make sure your team members have sufficient experience, skills and training, and that you provide them with sufficient preparation to understand the goals of the meeting.

 Cultural Barriers and Team Building

Take time to understand the cultural differences on your team to prevent misunderstandings.

 These days, rarely will you work alone on a major project at work. Team environments, in which each person in a department or representatives from different functions in the company work together, have become the norm. As a result, employees are expected to build strong teams. As workplaces become more diverse, though, sometimes the differences between cultures can cause conflicts or misunderstandings and prevent teams from achieving maximum performance. Several common cultural barriers can affect teams.

 Traditional Organisation Structure

The structure of every organisation is unique in some respects, but all organisation structures develop or are consciously designed to enable the organisation to accomplish its work. Typically, the structure of an organisation evolves as the organisation grows and changes over time.

 Researchers generally identify four basic decisions that managers have to make as they develop an organisation structure.

 

First           the organisation's work must be divided into specific jobs. This is referred to as the division of labour.

Second       unless the organisation is very small, the jobs must be grouped in some way, which is called departmentalization.

Third          the number of people and jobs that are to be grouped together must be decided. This is related to the number of people that are to be managed by one person, or the span of control—the number of employees reporting to a single manager.

Fourth        the way decision-making authority is to be distributed must be determined.

 In making each of these design decisions, a range of choices are possible. At one end of the spectrum, jobs are highly specialized with employees performing a narrow range of activities; while at the other end of the spectrum employees perform a variety of tasks. In traditional bureaucratic structures, there is a tendency to increase task specialization as the organisation grows larger. In grouping jobs into departments, the manager must decide the basis on which to group them. The most common basis, at least until the last few decades, was by function. For example, all accounting jobs in the organisation can be grouped into an accounting department; all engineers can be grouped into an engineering department, and so on.

 The size of the groupings also can range from small to large depending on the number of people the managers supervise. The degree to which authority is distributed throughout the organisation can vary as well, but traditionally structured organisations typically vest final decision-making authority by those highest in the vertically structured hierarchy. Even as pressures to include employees in decision-making increased during the 1950s and 1960s, final decisions usually were made by top management. The traditional model of organisation structure is thus characterized by high job specialization, functional departments, narrow spans of control, and centralized authority. Such a structure has been referred to as traditional, classical, bureaucratic, formal, mechanistic, or command and control. A structure formed by choices at the opposite end of the spectrum for each design decision is called unstructured, informal, or organic.

 The traditional model of organisation structure is easily represented in a graphical form by an organisation chart. It is a hierarchical or pyramidal structure with a president or other executive at the top, a small number of vice presidents or senior managers under the president, and several layers of management below this, with the majority of employees at the bottom of the pyramid. The number of management layers depends largely on the size of the organisation. The jobs in the traditional organisation structure usually are grouped by function into departments such as accounting, sales, human resources, operations, and marketing

 Basis for Departmentalisation

As noted in the previous section, many organisations group jobs in various ways in different parts of the organisation, but the basis that is used at the highest level plays a fundamental role in shaping the organisation. There are four commonly used bases.

 Functional Departmentalisation

Every organisation of a given type must perform certain jobs in order do its work. For example, key functions of a manufacturing company include production, purchasing, marketing, accounting, and personnel. Using such functions as the basis for structuring the organisation may, in some instances, have the advantage of efficiency. Grouping jobs that require the same knowledge, skills, and resources allows them to be done efficiently and promotes the development of greater expertise. A disadvantage of functional groupings is that people with the same skills and knowledge may develop a narrow departmental focus and have difficulty appreciating any other view of what is important to the organisation; in this case, organisation goals may be sacrificed in favour of departmental goals. In addition, coordination of work across functional boundaries can become a difficult management challenge, especially as the organisation grows in size and spreads to multiple geographical locations.

 Geographic Departmentalisation

Organisations that are spread over a wide area may find advantages in organizing along geographic lines so that all the activities performed in a region are managed together. In a large organisation, simple physical separation makes centralized coordination more difficult. Also, important characteristics of a region may make it advantageous to promote a local focus. For example, marketing a product in Western Europe may have different requirements than marketing the same product in Southeast Asia. Companies that market products globally sometimes adopt a geographic structure. In addition, experience gained in a regional division is often excellent training for management at higher levels.

 

Product Departmentalisation

Large, diversified companies are often organized according to product. All the activities necessary to produce and market a product or group of similar products are grouped together. In such an arrangement, the top manager of the product group typically has considerable autonomy over the operation. The advantage of this type of structure is that the personnel in the group can focus on the particular needs of their product line and become experts in its development, production, and distribution. A disadvantage, at least in terms of larger organisations, is the duplication of resources. Each product group requires most of the functional areas such as finance, marketing, production, and other functions. The top leadership of the organisation must decide how much redundancy it can afford.

 

Customer / Market Departmentalisation

An organisation may find it advantageous to organize according to the types of customers it serves. For example, a distribution company that sells to consumers, government clients, large businesses, and small businesses may decide to base its primary divisions on these different markets. Its personnel can then become proficient in meeting the needs of these different customers. In the same way, an organisation that provides services such as accounting or consulting may group its personnel according to these types of customers. An organisation grouped by customers and markets.

 Matrix Organisation Structure

Some organisations find that none of the afore-mentioned structures meet their needs. One approach that attempts to overcome the inadequacies is the matrix structure, which is the combination of two or more different structures. Functional departmentalization commonly is combined with product groups on a project basis. For example, a product group wants to develop a new addition to its line; for this project, it obtains personnel from functional departments such as research, engineering, production, and marketing. These personnel then work under the manager of the product group for the duration of the project, which can vary greatly.

 One advantage of a matrix structure is that it facilitates the use of highly specialized staff and equipment. Rather than duplicating functions as would be done in a simple product department structure, resources are shared as needed. In some cases, highly specialized staff may divide their time among more than one project. In addition, maintaining functional departments promotes functional expertise, while at the same time working in project groups with experts from other functions fosters cross-fertilization of ideas.

 

The disadvantages of a matrix organisation arise from the dual reporting structure. The organisation's top management must take particular care to establish proper procedures for the development of projects and to keep communication channels clear so that potential conflicts do not arise and hinder organisation functioning. In theory at least, top management is responsible for arbitrating such conflicts, but in practice power struggles between the functional and product manager can prevent successful implementation of matrix structural arrangements. Besides the product/function matrix, other bases can be related in a matrix. Large multinational corporations that use a matrix structure most commonly combine product groups with geographic units. Product managers have global responsibility for the development, manufacturing, and distribution of their own product or service line, while managers of geographic regions have responsibility for the success of the business in their regions.

 

Strategic Business Units

As corporations become very large they often restructure as a means of revitalizing the organisation. Growth of a business often is accompanied by a growth in bureaucracy, as positions are created to facilitate developing needs or opportunities. Continued changes in the organisation or in the external business environment may make this bureaucracy a hindrance rather than a help, not simply because of the size or complexity of the organisation but also because of a sluggish bureaucratic way of thinking. One approach to encourage new ways of thinking and acting is to reorganize parts of the company into largely autonomous groups, called strategic business units (SBUs). Such units generally are set up like separate companies, with full profit and loss responsibility invested in the top management of the unit—often the president of the unit and/or a senior vice president of the larger corporation. This manager is responsible to the top management of the corporation. This arrangement can be seen as taking any of the aforementioned departmentalization schemes one step further. The SBUs might be based on product lines, geographic markets, or other differentiating factors.

 Emerging Trends in Organisation Structure

Except for the matrix organisation, all the structures described above focus on the vertical organisation; that is, who reports to whom, who has responsibility and authority for what parts of the organisation, and so on. Such vertical integration is sometimes necessary, but may be a hindrance in rapidly changing environments. A detailed organisation chart of a large corporation structured on the traditional model would show many layers of managers; decision making flows vertically up and down the layers, but mostly downward. In general terms, this is an issue of interdependence.

 

In any organisation, the different people and functions do not operate completely independently. To a greater or lesser degree, all parts of the organisation need each other.

 An important development in organisation design is to flatten the organisation, to develop the horizontal connections and de-emphasize vertical reporting relationships. At times, this involves simply eliminating layers of middle management not just to reduce salary expense, but also to streamline the organisation in order to improve communication and decision making.

 In a virtual sense, technology is another means of flattening the organisation. The use of computer networks and software designed to facilitate group work within an organisation can speed communications and decision making. Even more effective is the use of intranets to make company information readily accessible throughout the organisation. The rapid rise of such technology has made virtual organisations and organisations without boundaries possible, where managers, technicians, suppliers, distributors, and customers connect digitally rather than physically.

 A different perspective on the issue of interdependence can be seen by comparing the organic model of organisation with the mechanistic model. The traditional, mechanistic structure is characterized as highly complex because of its emphasis on job specialization, highly formalized emphasis on definite procedures and protocols, and centralized authority and accountability. Yet, despite the advantages of coordination that these structures present, they may hinder tasks that are interdependent. In contrast, the organic model of organisation is relatively simple because it de-emphasizes job specialization, is relatively informal, and decentralizes authority. Decision-making and goal-setting processes are shared at all levels, and communication ideally flows more freely throughout the organisation.

 

A common way that modern business organisations move toward the organic model is by the implementation of various kinds of teams. Some organisations establish self-directed work teams as the basic production group. Examples include production cells in a manufacturing firm or customer service teams in an insurance company. At other organisation levels, cross-functional teams may be established, either on an ad hoc basis (e.g., for problem solving) or on a permanent basis as the regular means of conducting the organisation's work. Part of the impetus toward the organic model is the belief that this kind of structure is more effective for employee motivation. Various studies have suggested that steps such as expanding the scope of jobs, involving workers in problem solving and planning, and fostering open communications bring greater job satisfaction and better performance.

 

Saturn Corporation, a subsidiary of General Motors (GM), emphasizes horizontal organisation adopted an organisation structure described as a set of nested circles, rather than a pyramid. At the center is the self-directed production cell, called a Work Unit. These teams make most, if not all, decisions that affect only team members. Several such teams make up a wider circle called a Work Unit Module. Representatives from each team form the decision circle of the module, which makes decisions affecting more than one team or other modules. A number of modules form a Business Team, of which there are three in manufacturing. Leaders from the modules form the decision circle of the Business Team. Representatives of each Business Team form the Manufacturing Action Council, which oversees manufacturing. At all levels, decision making is done on a consensus basis, at least in theory. The president of Saturn, finally, reports to GM headquarters.

 

The Future

Industry consolidation—creating huge global corporations through joint ventures, mergers, alliances, and other kinds of inter-organisation cooperative efforts—has become increasingly important in the twenty-first century. Among organisations of all sizes, concepts such as agile manufacturing, just-in-time inventory management, and ambidextrous organisations are impacting managers' thinking about their organisation structure. Indeed, few leaders were likely to blindly implement the traditional hierarchical structure common in the first half of the century. The first half of the twentieth century was dominated by the one-size-fits-all traditional structure. The early twenty-first century has been dominated by the thinking that changing organisation structures, while still a monumental managerial challenge, can be a necessary condition for competitive success.