Businesses Shape and Are Shaped by People
- Organizational culture is often unwritten but deeply influential.
- It shapes how employees behave and how the company is perceived internally and externally.
How Organizational Culture Forms and Evolves
- Leadership Influence: Business leaders set the tone by establishing values and expectations.
- Employee Behavior: Over time, employees reinforce or challenge these values through their daily actions.
- Company Policies and Traditions: Formal policies, rituals, and social norms shape the overall work environment.
- External Factors: Industry trends, customer expectations, and societal norms also play a role in shaping culture.
The Role of Individuals in Organizational Culture
- Adapting to Culture: New employees often adjust their behavior to align with existing norms.
- Challenging the Status Quo: Some employees push for cultural change, whether through innovation or questioning outdated practices.
- Reinforcing Norms: Long-standing employees and managers help sustain the company's traditions and values.
Employees don’t just follow culture, they shape it through daily interactions and decisions.
Hofstede’s Cultural Dimensions: Understanding Business Across Borders
- Dutch social psychologist Geert Hofstede studied how national cultures impact workplaces.
- He identified six key dimensions that shape how people communicate, work, and make decisions in different cultures.
Hofstede’s Six Cultural Dimensions
| Dimension | Key Question | Cultural Impact |
|---|---|---|
| Individualism vs. Collectivism | Do people prioritize personal goals or group harmony? | Impacts teamwork, communication, and leadership. |
| Power Distance | Are hierarchies rigid or flexible? | Affects authority, management styles, and employee expectations. |
| Short-Term vs. Long-Term Orientation | Do people focus on immediate results or future planning? | Influences investment decisions and business strategy. |
| Masculinity vs. Femininity | Is competition valued over collaboration? | Shapes leadership styles and workplace priorities. |
| Uncertainty Avoidance | Do people prefer clear rules or flexibility? | Impacts risk-taking and innovation. |
| Indulgence vs. Restraint | Do people prioritize enjoyment or duty? | Affects work-life balance and employee motivation. |
1. Individualism vs. Collectivism
- Some cultures emphasize personal achievement (individualism), while others prioritize group success (collectivism).
- Individualistic cultures (e.g., USA, UK) value independence, personal rewards, and competition.
- Employees expect clear responsibilities and merit-based promotions.
- Collectivist cultures (e.g., Japan, China) prioritize teamwork, loyalty, and consensus.
- Employees may expect shared responsibilities and group-based rewards.
A US-based company expanding to Japan might struggle if it rewards employees solely based on individual performance, rather than team contributions.
2. Power Distance: Hierarchies in the Workplace
- Power distance measures how much hierarchy is accepted in a society.
- High power distance cultures (e.g., India, Mexico) expect clear authority and top-down decision-making.
- Employees rarely challenge superiors.
- Low power distance cultures (e.g., Sweden, Denmark) encourage flat structures and open discussions between all levels.
- In Germany, employees might challenge a CEO’s decision in a meeting.
- In Saudi Arabia, questioning leadership publicly may be seen as disrespectful.
