Page 108 - (DK) The Business Book

106 ORGANIZATIONAL CULTURE

IN CONTEXT
Culture is “the way we do things
FOCUS
around here.”
Organizational structure
KEY DATES
1980 Geert Hofstede draws
attention to the importance of
organizational culture in his
book Culture’s Consequences.
Culture is
1982 US business consultants Organizations exemplified by a Culture is
Terrence Deal and Allan are collections company’s subject to
of different language,
Kennedy argue that culture is variation.
cultures. routines,
the single most important
and rituals.
factor in determining success.
1992 Harvard professor John
Kotter claims that in an 11-year
period, organizations with rich
cultures see net income growth
of 756 per cent, compared to
Culture impacts every aspect
one per cent in those with
of business behavior.
less-defined cultures.
2002 Watson Wyatt develops
the Human Capital Index,
demonstrating the economic
value of business cultures
that maintain good practice
in human resources. Culture is a significant determinant
of organizational success or failure.

rganizations build a 1940s, human relations experts overlaps with societal culture. He
sense of identity through began to consider organizations from identified five dimensions of culture
O tradition, history, and a cultural point of view, drawing that influence business behavior:
structure. This identity is kept alive inspiration from earlier sociological power distance, individualism vs.
through the organization’s culture: and anthropological work associated collectivism, uncertainty avoidance,
its rituals, beliefs, legends, values, with groups and societies. However, masculinity vs. femininity, and long-
meanings, norms, and language. the term “organizational culture” vs. short-term orientation.
Corporate culture determines how only became part of the business
“things are done around here.” lexicon in the early 1980s, following Five cultural dimensions
Culture provides a shared view the publication of Culture’s The first of Hofstede’s dimensions—
of what an organization is (the Consequences by the Dutch cultural power distance—refers to the
intangibles) and what it has (the psychologist and management distance in authority between
tangibles). It is the “story” of the expert Geert Hofstede. manager and subordinates. Business
organization: a narrative reinforced Looking closely at organizational cultures that have a high power
through idiosyncratic languages and structure for the first time, Hofstede distance tend to be rule-driven and
business-specific symbols. In the observed that it is shaped by and hierarchical (everyone “knows their