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
- Visible: dress code, office layout (open-plan or private offices), logos, how people speak, stories about the founder, rituals such as awards.
- Hidden: values (what matters most: profit, customers, safety, innovation) and deep assumptions people do not even notice.
Strong and weak cultures
- Strong culture: most staff share and act on the same values. Clear identity, loyalty, less need for rules; but can resist change and become "group-think".
- Weak culture: values are not shared; staff behave differently and need more control.
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
- Motivation and staff turnover.
- Speed of decisions and how risky the firm is.
- Customer service and reputation.
- Mergers: many fail because two cultures clash.
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
- Diagnose the current culture (surveys, interviews, observation).
- Leaders model the new behaviour; they must "walk the talk".
- Change the structure, rewards and appraisal to reward the new values.
- Recruit and train people who fit the new values; sometimes replace key resisters.
- 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
- Organisational culture = shared values, beliefs, attitudes and habits: "the way we do things around here".
- Iceberg: visible (dress, layout, logos, rituals) + hidden (values, assumptions).
- Strong culture: widely shared; weak culture: not shared.
- Power culture = web; power from the centre person.
- Role culture = temple; power from position, rules and procedures.
- Task culture = net; power from expertise, project teams.
- Person culture = cluster; organisation serves equal experts.
- Changing culture: diagnose → leaders model → structure & rewards → recruit & train → symbols & stories.
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
- Confusing culture with structure. Structure is the formal chart; culture is the shared values and habits.
- Mixing up role culture (power from position and rules) with power culture (power from one central person).
- Saying a strong culture is always good. It can block change and new ideas.
- Thinking culture can be changed quickly by a memo. It usually takes years and needs leaders to act differently.