Chapter 3: Organisational Culture in Business

- In this chapter, we'll learn about 3 main subtopic which is the general understanding of organisational culture, factors that form up the culture of a organisation, and then we'll study more specifically about the research made by scholars and writers on culture.

- Firstly, culture can be understands as the collective programming of mind, a fixed and unique way of thinking. It is an unseen habit, shared by a group of people.

- As for organisational culture, it is the shared beliefs, habits, ways of doing certain task, and attitudes that shape the norms of a organisation.

- So what forms up the culture of a organisation? The few determinants of culture includes history, size(big size firm usually do things in a very formal way, and vice versa), purpose(profit-oriented firm will focus on more results, and vice versa), technology, leaders and owners(founder will run the business based on his habit, which will becomes the culture of the company afterward), operating environment, and location.

- Edgar Schein agrees that the leaders of a company or firm plays an important role in forming a organisation's culture, but he describes these determinants in a detailed way by dividing it into 3 levels that exist within an organisation's culture.

- The first level: The observable. Which divides into behavior(norms of personal), artefacts(interior design and architecture), and attitude(patterns of collective behavior).

- Another aspect that we must understand is the espoused value/express value, it is basically known as choose-to-follow value, which is also the values that follow the artefacts. It generally describe the meaning to the artefacts(the reason behind the interior design/pattern of the firm).

-Next, we came to the second level, the values and beliefs, which decides the behaviors and attitudes, or rather, the culture of the firm.

- The third level, assumptions, that lies beneath the second level, values and beliefs. It is the foundation ideas(unspoken rules) that is recognised and accepted by the culture, which controls the ways of thinking and behaving of a organisation.

-According to Schein, the easy way to distinguish the first and the two other level is that the first level is the 'explicit' element of the culture while both second and third level cannot be seen and exist at an unconscious level.

- Charles Handy in his book "Gods on Management" suggested that organisations could be categorized into four types, each differentiated by their structures, processes and management methods.

- Power Culture, which represented by the Greek god Zeus. For this type of culture, their source of power is from one individual, either the founder or the owner himself. Organisations that adopt this culture usually do not do things in a very formal way, and the decision making of the company are usually centralised. Power culture are also known as club culture.- Zeus, the head of all gods, or rather known by the god of thunder.


- Apollo is the god of the Role Culture. These organisations are dominated by rules and procedures and they do things in very formal way. And another important thing that we must know is that, the role culture organisations are always efficient in stable and predictable environments. Generally, Role Culture and bureaucracy are alike.- Apollo, the god of harmony and order, also the god of music and light.


- Athena is the goddess of the Task Culture. Similar to the concept of matrix structure in a organisation, Task Culture is a project based culture and their performance is often judge by results.- Athena the warrior goddess.


- Person Culture, or Existential is shaped by the interests of individuals. Unlike the three other culture, this culture serve the interests of the individuals within it and put them as the top priority. The Greek God of Person Culture is Dionysus.


- Dionysus, the god of fertility and wine.


- Hofstede came up with five cultural dimensions of international perspectives on organisation culture based on his study of IBM employees across the world.

- Individualism vs. Collectivism. Individualism are also known as high individualism and it focus on doing work individually(alone, without the necessary of cooperation with others), vice versa, the collectivism, which also can be called low individualism are more cohesive compared to high individualism.

- Masculinity vs. Femininity. Masculine values of assertiveness, decisiveness and material success are dominant. While Feminine values of modesty, tenderness, consensus, focus on relationships and quality of working life are less highly regarded, and confined to women. Femininity or low masculinity minimise gender roles.

- Confucianism vs. Dynamism. Confucianism culture emphasize the harmony and tolerance that exist within the organisation while dynamism are a kind of result-oriented culture.

- Power Distance refers to the equality of power in society. High power distance accepts greater centralisation and vice versa.

- Uncertainty Avoidance is the extent which security, order and control are preferred to uncertainty and change. High Uncertainty Avoidance respects control, certainty and ritual, they have greater tolerance for ambiguity and uncertainty. While low Uncertainty Avoidance have respect flexibility and creativity.

- There goes the understanding of H&P of ACCA F1 Chapter 3. Thx for reading n hope u enjoy it. =)