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Defining Organizational Culture

Types of Organizational Culture

While there is no single "type" of organizational culture, some common models provide a useful framework for managers.


Learning Objectives

Differentiate between varying organizational culture tendencies, specifically within the context of Hofstede's cultural dimensions theory


Key Takeaways

Key Points

  • While there are many ways to divide and define culture into "types," Geert Hofstede, Edgar Schein, and Charles Handy provide three basic theoretical frameworks.
  • Hofstede postulates six dimensions of culture based on a study conducted at IBM offices in 50 different countries. These include power distance, uncertainty avoidance, individualism (vs. collectivism), masculinity (v.s femininity), long-term orientation, and restraint.
  • Edgar Schein organizes culture into three types: artifacts (tangible cultural displays), values, and assumptions.
  • Charles Handy identifies four types of organizational culture: power, role, task, and person. Each type of culture has strong implications on types of organizational structure.

Key Terms

  • cultural: Of or pertaining to culture.
  • normative: Of, pertaining to, or using a norm or standard.

Several methods have been used to classify organizational culture. While there is no single "type" of organizational culture, and cultures can vary widely from one organization to the next, commonalities do exist, and some researchers have developed models to describe different indicators of organizational cultures. We will briefly discuss the details of three influential models on organizational cultures.


Hofstede's Cultural Dimensions

While there are several types of cultural and organizational theory models, Hofstede's cultural dimensions theory is one of the most cited and referenced. Hofstede looked for global differences in culture across 100,000 IBM employees in 50 countries in an effort to determine the defining characteristics of global cultures in the workplace. With the rise of globalization, this is particularly relevant to organizational culture.

Through this process, he underlined observations that relate to six different cultural dimensions (originally there were five, but they have been updated in response to further research):

  • Power distance: Power distance is simply the degree to which an authority figure can exert power and how difficult it is for a subordinate to contradict them.
  • Uncertainty avoidance: Uncertainty avoidance describes an organization's comfort level with risk-taking. As risk and return are largely correlative in the business environment, it is particularly important for organizations to instill a consistent level of comfort with taking risks.
  • Individualism vs. collectivism: This could best be described as the degree to which an organization integrates a group mentality and promotes a strong sense of community (as opposed to independence) within the organization.
  • Masculinity vs. femininity: This refers to the ways that behavior is characterized as "masculine" or "feminine" within an organization. For example, an aggressive and hyper-competitive culture is likely to be defined as masculine.
  • Long-Term Orientation: This is the degree to which an organization or culture plans pragmatically for the future or attempts to create short-term gains. How far out is strategy considered, and to what degree are longer-term goal incorporated into company strategy?
  • Indulgence vs. Restraint: This pertains to the amount (and ease) of spending and fulfillment of needs. For example, a restrained culture may have strict rules and regulations for tapping company resources.


Edgar Schein's Cultural Model

Edgar Schein's model underlines three types of culture within an organization, which, as a simpler model than Hofstede's, is somewhat more generalized. Schein focuses on artifacts, values, and assumptions:

Schein’s model

Schein's model: Diagram of Schein's organizational behavior model, which depicts the three central components of an organization's culture: artifacts (visual symbols such as office dress code), values (company goals and standards), and assumptions (implicit, unacknowledged standards or biases).

  • Artifacts: The simplest perspective on culture is provided by the tangible artifacts that reveal specific cultural predispositions. How desks are situated, how people dress, how offices are decorated, etc., are examples of organizational artifacts.
  • Values: Values pertain largely to the ethics embedded in an organization. What does the organization stand for? This is usually openly communicated with the public and demonstrated internally by employees. An example might be a non-profit organization trying to mitigate poverty. The values of charity, understanding, empowerment, and empathy would be deeply ingrained within the organization.
  • Assumptions: The final type of culture, according to Schein, is much more difficult to deduce through observation alone. These are tacit assumptions that infect the way in which communication occurs and individuals behave. They are often unconscious, yet hugely important. In many ways, this correlates with Hofstede's cultural dimensions. For example, a culture of avoiding risk wherever possible may be an assumption which employees act upon without realizing it, and without receiving any directives to do so. High power distance could be another, where employees intuit that they should show a high degree of deference to their superiors without being specifically told to do so.


Charles Handy's Four Types of Culture

Charles Handy put forward a framework of four different types of culture that remains relevant today. His four types include:

  • Power culture: In this type of culture, there is usually a head honcho who makes rapid decisions and controls the organizational direction. This is most appropriate in smaller organizations, and require a strong sense of deference to the leader.
  • Role culture: Structure is defined and operations are predictable. Usually this creates a functional structure, where individuals know their job, report to their superiors (who have a similar skill set), and value efficiency and accuracy above all.
  • Task culture: Teams are formed to solve particular problems. Power is derived from membership in teams that have the expertise to execute a task. Due to the importance of given tasks, and the number of small teams in play, a matrix structure is common.
  • Person culture: In this type of culture, horizontal structures are most applicable. Each individual is seen as valuable and more important than the organization itself. This can be difficult to sustain, as the organization may suffer due to competing people and priorities.

While there are many other ways to divide and define culture, these three offer a good window into the literature surrounding cultural types.