Business culture

What is culture?

1- Culture is predominantly implicit in people's minds neither is it directly observed.

2- Culture is that it is shared – it refers to the ideas, meanings and values people hold in common and to which they subscribe collectively.

3- Culture is that it is transmitted by process of socialisation.

Definitions of organisational culture:

”Culture is a pattern of beliefs and expectations shared by the organisational members. These beliefs and expectations produce norms that powerfully shape the behaviour of individuals and groups within the organisation” (Schwartz and Davis, 1981, p. 33).

Dimensions of national culture (Hofstede, 1980):

            In the mid 1970's, the Dutch academic, Geert Hofstede, based his five dimensions of culture on an extensive survey at IBM in which he investigated the influence of national culture. His methodology was both unique in size as well in structure. He defined organisational culture is an idea system that is largely shared between organisational members. By filtering out IBM's dominant corporate culture from his data on IBM's national subsidiaries, Hofstede was able to statistically distinguish cultural differences between countries.

Hofstede classified a country's cultural attitudes as five dimensions:

1- Power Distance: the extent to which power is distributed equally within a society and the degree that society accepts this distribution. A high power distance culture prefers hierarchical bureaucracies, strong leaders and a high regard for authority. A low power distance culture tends to favour personal responsibility and autonomy.

2- Individualism versus Collectivism: the degree to which individuals base their actions on self-interest versus the interests of the group. In an individual culture, free will is highly valued. In a collective culture, personal needs are less important than the group's needs. This dimension influences the role government is expected to play in markets.

3- Masculinity versus Femininity: a measure of a society's goal orientation. A masculine culture emphasises status derived from wages and position; a feminine culture emphasises human relations and quality of life.

4- Uncertainty Avoidance: the degree to which individuals require set boundaries and clear structures. A high uncertainty culture allows individuals to cope better with risk and innovation; a low uncertainty culture emphasises a higher level of standardisation and greater job security.

5- Confucian versus Dynamism: the degree to which a society does or does not value long-term commitments and respect for tradition. Long-term traditions and commitments hamper institutional change.