Leadership for SMEs

Session Six
 Think about a place you have worked, what do you like about the
organisation and what do you dislike.

For example

Do you think there are too many rules ?

Do you like the environment because it is relaxed ?
Do you hate wearing a uniform ?
Do you like the fact they always offer promotion to existing
members of staff.
Do you like the way everyone works as a team ?
Do you like the fact they celebrate with cakes on your birthday ?

Do these facts make you work less or harder ?

 All of these activities make up an organisations culture

A leader must identify which type of culture will develop a

more productive, motivated and stable workforce.

Elements of the existing organisation which are leading

to dissatisfied staff, high levels of absence and turnover
are parts of the culture which must be changed.
 Organisational Culture
So lets consider what we mean by culture:

The Culture of an organisation is one of the intangible

aspects of a company which affect how employees
behave and carry out their daily activities.

A leader must design an appropriate culture.

 Organisational Culture - Defined
The word Culture has been used by many different
people to explain a variety of phenomena. In business
terms, key definitions include:

the customary and traditional way of doing things, which

is shared to a greater or lesser degree by all members,
and which the new members must learn and at least
partially accept, in order to be accepted into the services
of the firm (Jacques, 1952)

the ideologies, beliefs and deep set values which occur

in all firmsand are prescriptions for the ways in which
people should work in these organisations (Harrison,
1972)
 Organisational Culture - Defined
a dominant and coherent set of shared values conveyed
by such symbolic means as stories, myths, legends,
slogans, anecdotes and fairy tales (Peters and
Waterman, 1982)

the way we do things around here (Deal and

Kennedy, 1982)
 Organisational Culture - Defined
One of the most widely accepted definition of
organisational culture is that given by Edgar Schein.

a pattern of basic assumptions invented, discovered

or developed by a given group as it learns to cope with
its problems of external adaption and internal integration
that has worked well enough to be considered valuable
and, therefore, to be taught to new members as the
correct way to percieve, think and feel in relation to these
problems (Schein, 1985)

A leader will shape each element of the culture

 Organisational Culture - Defined
Lundberg (1990) has developed these definitions further
and provides a practical overview of the term.

1. Culture refers to a common frame of reference, largely

taken for granted and widely shared by a high proportion
of the members of the group or organisation

2. Culture is something acquired by these people that

governs their behaviour; is taught to newcomers and,
when learned, consists of a code or set of rules that
regulate certain aspects of behaviour.
 Organisational Culture - Defined
3. Culture gives people something in common and serves to
emphasise what is unique about a particular group or
organisation.

4. Culture has an enduring quality and is not easily changed.

5. Culture has symbolic significances and is observable in

traits such as language that everyone understands.

6. Culture is invisible and deeply engrained in people

conscious.

7. Culture is modifiable, but only with some difficulty

 Schein suggests
the following
elements shape an
organisations
culture:

The leader will

shape each of
these elements
starting with an
organisations basic
assumptions.

These basic
assumptions are
often based on the
leaders style and
values.
 Schein Elements of Culture
Basic Assumptions

In Scheins view, basic assumptions lie at the very core of

an organisations culture.

They are often so fundamental they are taken for granted.

Typical basic assumptions include:

The basis on which individuals are respected
The management philosophy of the owner or senior team
How and whom makes decisions
 Schein Elements of Culture
Values and Beliefs

At the next level of visibility, Schein discusses the importance

of Values and Beliefs as a characteristic of culture.

These are the moral and ethical codes which shape an

organisation.

For example: Equality in Promotion, Environmental Policy.

Such values and beliefs must be followed through to create a

culture.
 Schein Elements of Culture
Artefacts and Creations

As the most visible indicators of culture,

these include elements such as:

Physical layout of the building

Communication methods
Dress code
Social interplay and informal structure
 Schein Elements of Culture
Artefacts and Creations

Artefacts and Creations can be split into six elements:

Norms
These are the assumptions made by employees following
historical evidence as to the normal ways of achieving
things in the organisation. For example, it may be a norm
to work 60 hours per week to gain promotion.
 Schein Elements of Culture
Artefacts and Creations

Language
The way managers speak to subordinates and vice versa is
a clear indicator of culture

Symbols
Used as a way of communicating, these is include the way
an office is set out.
 Schein Elements of Culture
Artefacts and Creations

Rites
These are both formal and informal identifiers of culture.
For example, the importance played on staff birthdays,
retirements, induction all indicators of the caring nature of
the organisation
 Schein Elements of Culture
Artefacts and Creations

Myths
Used as a method of communicating core values, they are
used to convey the history/feel of the organisation.

Taboos
These are the indicators of what should not be done in an
organisation, eg through formal and informal rules. For
example, how do you address senior management
 Key Elements which make up an organisations
culture
So what contributes to an organisations culture ?

Structure and Hierarchy

Layout
Rules and Regulations
Uniform
Power and Status
Symbols
Language
Norms
History
Communication
 Harrisons Model of Culture
A simple way to identify different cultures within an
organisation is by adopting Harrisons (1972) model.

Harrison splits culture into four classifications:

Role Culture
Task Culture
Power Culture
Person Culture

Much of these aspects are based on the leaders style.

Introduction to Management
 Harrisons Model of Culture
The Role Culture typifies a bureaucratic or functional
structure with everyone having tightly controlled,
interconnected roles with clear levels of authority and
specific activities attached to them.

There are many rules and procedures in place.

What characteristics would a typical role culture have ?

 Harrisons Model of Culture
The Task Culture is a complete opposite to the role culture,
and the emphasis is solely on getting a specific task
completed, whatever methods are used.

There are typically few rules and procedures and status

comes from experience and past results.

What characteristics would a typical task culture have ?

 Harrisons Model of Culture
The Power Culture also lacks formal rules but tends to be
an organisation where one powerful individual or a small
group of individuals have complete control. This elite co-
ordinate everything and often change the rules as they go
along.

What characteristics would a typical power culture have ?

 Harrisons Model of Culture
The Person Culture is often associated with the voluntary
sector and exists to serve its members. Individuals within
the organisation are allowed to pursue there own destiny
and get on with their roles within considerable interference.

Can you think of any private sector roles which may adopt
this culture ?

What characteristics would a typical person culture have ?

 Common Characteristics of a Forward Thinking
Culture
Staying close to the customer to guide a companies actions,
eg environmentalism

Autonomy dividing the company into management units, eg

empowerment.

Productivity through people treat employees with dignity

and consider the whole employee via work life balance

Hands on Management senior managers should walk the

floor and implement effective communication eg open plan
offices, open door policy and involvement/participation.
Introduction to Management
 Characteristics of a Forward Thinknig Culture
Lean Staff flat structures with few levels of management.

Career Structure offer clear opportunities for progression

Unity ensure everyone is aware of the common purpose, via

mission statement, corporate goals, functional goals and
individual goals.

Evaluation of employees adopt performance appraisal and

feedback systems

Training and Development ensure everyone in the organisation

is trained and understands the philosophy of the company

Introduction to Management
 Backward Looking Cultures

A company with a backward looking culture is likely to be:

Product or Procedure led

Controlled by traditional managers who have worked their
way up the organisation
Conservative in attitude
Resistant to change
Inward looking
A risk avoider

Introduction to Management
 Forward Looking Cultures
A company with a forward looking culture is likely to be:

Market led
Inclined to trust employees to make decisions
Keen to introduce new talent to bring in bright new ideas
Seek change
Monitor the external environment and be proactive
Be prepared to take risks.

Introduction to Management