Idea of Business Cultures - Essay Example

“Culture is a pattern of beliefs and expectations shared by the organizational members. These beliefs and expectations produce norms that powerfully shape the behavior of individuals and groups within the organization” (Schwartz and Davis, 33). From an employee’s standpoint it would simply be “the way we see and do things around here”.

In 1985, noted writer Charles Handy, in his book Understanding Organizations, drew inspiration from Roger Harrison’s (1972) work to link organizational structure to business culture and elucidated Harrison’s four types of business cultures.

This culture is centered around a strong leader, who wields all the power and influences the company culture with his personality. For example, Jack Welch (former CEO of General Electric) and Rupert Murdoch (News Corporation). At times businesses are dominated by the owner/founder, for example, Michael O’Leary (Ryanair) and Richard Branson (Virgin). Its structure is usually represented by a web.

Dramatic changes can be made to make the business successful as the leader has no opposition. Fair and firm leaders distribute resources equally and are generous to loyalists. As there is no need for consultation and few rules, quick decision-making is possible helping businesses react fast to fluid market situations.

Fear rules, and there is abuse of power and political intrigue. As only one individual is making decisions, he could make an error in judgment affecting the organization’s success. There is low motivation, high turnover, and poor loyalty among staff, who feel undervalued because of the prevalent inequality. Subordinates work to patronize their managers to get rewarded. The second level of management is underdeveloped since powers are not delegated. The web can break if the organization becomes too complex and big.

In role culture (previously termed “bureaucracy”), businesses are split into various functions, and every individual has predetermined roles, with a clear reward system. Usually found in large hierarchical organizations with one or more managers, at the top of the structure. The structure can be depicted as a Greek temple with the pillars representing functional departments. Examples are the civil services, large banks, and insurance companies.

Delegated roles and a highly defined structure help the company benefit from specialization, and provide stability, justice, and efficiency. The management has only to ensure efficiency in the defined roles, unlike the changing management briefs under power culture. Productivity improves as employees focus only on their particular role.

In these hierarchical bureaucracies, authority derives from a person’s position (not his expertise or power). Roles are inflexible and become more important than the individual; hence, there is no creativity and innovation. Logic and reason and impersonal operating systems rule behavior. This culture can succeed only when roles and responsibilities are appropriately allocated and the environment is stable (Greek temples tremble and collapse when the ground shakes).