Types of Organizational Culture
While there is no single type of organizational culture, some common models provide a useful framework for managers.
- 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.
- Normative: pertaining to using a norm or standard.
- Cultural: pertaining to culture.
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 (Hofstede updated the original five in response to further research):
- Power distance: refers to the degree to which an authority figure can exert power and how difficult it is for a subordinate to contradict them.
- 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: refers to 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: refers to the ways behavior is characterized as "masculine" or "feminine" within an organization. For example, many define an aggressive, hyper-competitive culture as more masculine.
- Long-Term Orientation: refers to the degree to which an organization or culture plans pragmatically for the future or tries 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: refers 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.
The basic premise behind this model is that artifacts, values, and assumptions integrate into a comprehensive whole that is organizational culture. These three types represent different aspects of an organization's culture, growing less tangible and more complex as it moves from the top-down.
- Artifacts: refers to 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: pertain largely to the ethics embedded in an organization. What does the organization believe and stand for? These values are usually openly communicated with the public and demonstrated internally by employees. For example, a non-profit organization that aims to mitigate poverty has the values of charity, understanding, empowerment, and empathy deeply ingrained within the organization.
- Assumptions: is more difficult to deduce through observation, according to Schein. These describe the tacit assumptions that infect the way communication occurs and individuals behave. They assumptions are often unconscious. In many ways, this area correlates with Hofstede's cultural dimensions. For example, employees may act on a cultural assumption to avoid risk wherever possible without receiving any directives to do so. High power distance is another example, where employees believe they should show a high degree of deference to their superiors, even though they were not told to do so specifically.
Charles Handy's Four Types of Culture
Charles Handy put forward a framework of four different types of culture that remains relevant today.
- Power culture: describes a type of culture where a leader makes rapid decisions and controls the organizational direction. This is most appropriate to smaller organizations that often require a strong sense of deference to the leader.
- Role culture: describes a type of culture where structure is defined and operations are predictable. In this functional structure, individuals know their job, report to their superiors (who have a similar skill set), and value efficiency and accuracy.
- Task culture: describes an environment where teams are created to solve particular problems. Power is derived from membership in teams that have the expertise to execute a task. A matrix structure is common due to the importance of given tasks, and the number of small teams in play.
- Person culture: often results in a horizontal structure. 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.