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Organisational Culture: "The Way We Do Things Around Here"

Organisational culture is the set of shared values, beliefs, attitudes and habits that shape how people in a business behave. Like an iceberg, some parts are visible (dress, office layout, logos, stories, rituals) and most are hidden (values and assumptions). A strong culture is widely shared and guides behaviour; a weak culture is not. Charles Handy described four cultures: power culture (a web with one powerful centre), role culture (a temple of departments ruled by procedures), task culture (a net of project teams where expertise matters) and person culture (a cluster of equal experts serving themselves). Culture affects motivation, decision speed, customer service, risk-taking and the success of mergers. Changing culture is slow and hard because values are deep and people resist; it needs leaders to model new behaviour, changes to structure, rewards, recruitment and training, and new symbols and stories.

🎬 Step-by-step story

  1. Culture is 'the way we do things here'. Like an iceberg, a little shows. Most of it is hidden.
  2. In a power culture, one strong person sits at the centre of a web. Everyone links to them.
  3. In a role culture, the firm is like a temple. Departments are pillars. Rules hold it up.
  4. In a task culture, teams form for a project. In a person culture, each expert is a star.
  5. Changing a culture is like climbing stairs. It takes many steps and a lot of time.
  6. Free play: pick each culture. Decide which kind of business it suits.

Tip: drag the 3D scene to turn it. Use two fingers to zoom.

🤔 Common doubts, cleared

Isn't culture just the company's rules?

No. Rules are written down; culture is the shared values and habits, much of it unwritten. Step 1's iceberg shows the hidden part.

Is a power culture bad?

Not always: it is fast and clear in small firms. Problems come when the firm grows or the leader leaves. Step 2 shows everything linked to one person.

Why are role cultures slow if they are efficient?

They are efficient for routine work, but every change must pass through rules and layers. Step 3 shows the rigid pillars.

Can a firm have more than one culture?

Yes. Head office may be a role culture while research works as a task culture. Step 4 lets you compare.

Why can't a new boss just announce a new culture?

Values change only when people see new behaviour, rewards and stories again and again. Step 5 shows the many steps.

Which culture is the best?

None is best for all. The right culture depends on size, task and environment. Try matching businesses in free play.

What is organisational culture?

Organisational culture is the shared values, beliefs, attitudes and habits of people in a business. A simple way to say it: "the way we do things around here".

The culture iceberg

Strong and weak cultures

What shapes culture?

The founder and leaders, history, the industry, the size of the firm, national culture, recruitment and the reward system.

Handy's four types of culture

Management writer Charles Handy described four cultures, each with a picture.

Power culture (spider's web)

Power sits with one person or a small group at the centre. Few rules, quick decisions, loyalty to the leader. Found in small owner-run firms and some family businesses. Risks: depends on one person; staff may feel powerless; can be ruthless.

Role culture (Greek temple)

Departments are pillars and top managers the roof. Power comes from your position; jobs, rules and procedures are clearly set. Stable, efficient, fair; found in large firms, banks and government. Risks: slow, bureaucratic, poor at change.

Task culture (net / matrix)

Teams are formed from different departments to complete a project, then dissolve. Power comes from expertise. Flexible, creative, motivating; found in consulting, design, research and tech. Risks: costly, hard to control, staff may have two bosses.

Person culture (cluster / galaxy)

The organisation exists to serve individual experts who are roughly equal, e.g. partnerships of lawyers, doctors, architects. Risks: hard to manage; each person follows their own goals.

Real firms often mix cultures: a role culture at head office, task culture in the research team.

Why culture matters and how to change it

Why it matters

Why change it?

New owners or leaders, a merger or takeover, poor performance, a scandal, or a changing market (e.g. needing to become more innovative).

Steps to change culture

  1. Diagnose the current culture (surveys, interviews, observation).
  2. Leaders model the new behaviour; they must "walk the talk".
  3. Change the structure, rewards and appraisal to reward the new values.
  4. Recruit and train people who fit the new values; sometimes replace key resisters.
  5. Use new symbols, stories and rituals (office layout, awards, how success is celebrated).

Why it is hard

Values are hidden and deep; people feel safe with old habits; it can take years; and a strong old culture resists most of all. Managers use the same tools as for any change: communication, involvement, support and, as a last resort, coercion.

Try it at home

Look at your school or a shop you know. List three visible signs of its culture and guess the hidden value behind each one.

Key formulas and definitions

Worked examples

1. A 40-year-old government-owned postal service has detailed rule books, clear job titles and many layers of managers. Identify its culture and one problem it could face when competing with private courier firms.

It is a role culture (temple): power comes from position and procedures. Problem: decisions are slow and staff stick to rules, so it may react too slowly to new services such as same-day delivery or app tracking offered by private rivals.

2. A small software company wins a big contract and sets up a team of a designer, two coders and a tester from different departments for six months. Which culture is this and why does it suit the work?

Task culture (net). Experts from different areas join to solve one project, and power comes from expertise. It suits creative, changing work where problems are solved together and quickly. After the project, the team breaks up and people join new teams.

3. Two firms merge. Firm A has a power culture with a founder who decides everything; Firm B has a task culture with self-managing teams. Explain one problem and suggest two steps to build a shared culture.

Problem: Firm B's staff, used to freedom, may feel controlled and leave; Firm A's staff may be confused by team decisions. Steps: 1) Diagnose both cultures and agree the values the new firm needs (e.g. customer focus, innovation). 2) Leaders from both sides model these values, and rewards and structure are changed to support them (e.g. team bonuses). Clear communication and training help staff adjust.

Common mistakes

Practice quiz

1. Organisational culture is best described as:
2. Handy's culture pictured as a spider's web is:
3. In a role culture, power comes mainly from:
4. A project team made of experts from several departments shows:
5. Which is a hidden part of the culture iceberg?

Practice: answer these yourself

Type or choose your answer, then press Check. Use a hint if you are stuck; the full solution appears after you answer.

Frequently asked questions

What is organisational culture?

The shared values, beliefs, attitudes and habits of people in a business: "the way we do things around here".

What are Handy's four types of culture?

Power culture (web), role culture (temple), task culture (net) and person culture (cluster).

How can a business change its culture?

By diagnosing the current culture, having leaders model new behaviour, changing structure and rewards, recruiting and training for new values, and using new symbols and stories, over a long period.

Where this is taught

England (GCSE, A level)Year 133.10 Managing strategic change

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