Candidate Number: 55729

In what ways does organizational culture shape or constrain the exercise of power in different kinds of organization?

What a wonderful place the world would be,' cry the devotees of each way of life, 'if only everyone were like us.' We can now see the fallacy in this frequently expressed lament: it is only the presence in the world of people who are different from them that enables adherents of each way of life to be the way they are. Thompson, Ellis, and Wildavsky (1990: 96)

When considering how organizations come about, it is usually thought that an organization structure comes first and culture second. But, organizational culture also conditions organizational structure. And given that power is exerted within an organizational structure, it would be safe to say that organizational culture does have an influence over the exercise of power. With this train of thought, the paper will answer the following question: In what ways does organizational culture shape or constrain the exercise of power in different kinds of organization? The paper will begin to address the question by defining organizational culture. Based on this definition, it will analyze the impact of organization culture on power through the six dimensions of organization culture forwarded by Hofstede. Finally, it will evaluate Hood s cultural theory and four grid-group arrangements, which offer another perspective on the relationship between organizational culture and power.

What really is organizational culture? As noted by Professor Dunleavy, Organizational culture is the software to the hardware of organizational structure . Organizational culture is something that is shared and is intergenerational between people in an organization. Furthermore, it is long lasting and has a framework to which new people entering the organization are inducted i.e. they are introduced to a whole set of beliefs, attitudes, values, tips, guidance, customs, morals and etc. And, it is this framework that provides cues for how new entrants should behave. In addition to this, organizational culture are dynamic and ever changing however, it changes relatively less slowly than people themselves. And, due to this organizational culture influence people s behavior. However, sometimes people take organizational and national culture to be the same concept. On this Hofstede points out, A nation is not an

organization, and the two types of culture are of a different nature (1997, p. 284). He argues that national cultures are basically values that are acquired during the early years of one s life in the family and at school. Whereas, organizational culture are practices which are acquired when one enters a workplace with already having his/her values intact. Based on this, Hofstede considers organizational culture/practices to be more artificial in nature than national culture/values. In light of this, Hofstede clarifies another misconception in regard to what comprises the core of an organizational culture. Peters and Waterman in their book, In Search for Excellence, consider that values are at the core of an organizational culture. However through an Institute for Research on International Cooperation (IRIC) project, Hofstede shows that, shared

perceptions of daily practices should be considered the core of an organization s culture (1997, p. 286). Hence in the true sense of the word, an organizational culture is a shared perceptions of daily practices that are superficial in nature.

Hofstede s six dimensions of organizational culture In 1980s, Hofstede carried out a cross-national IBM study in order to better understand the differences and similarities between national cultures (1997, p.286). As a result he identified four dimensions of national cultures: power distance, individualism-collectivism, masculinity-femininity, and

uncertainty avoidance. However, this study only illustrated the differing national culture/values amongst IBM employees in various countries. To complement this cross-nation study, Hofstede undertook a cross organizational study which examined organizational culture/practices in a number of different organizations (twenty organization units) in particularly two countries, Denmark and Netherlands. Through this cross-organizational study, six dimensions of organizational culture emerged: process oriented vs. result oriented, employee oriented vs. job oriented, parochial vs. professional, open system vs. closed system, loose control vs. tight control and, normative vs. pragmatic. These six dimensions of organizational culture illustrated that people working in the twenty organizational units didn t vary much in cultural value however; they differed significantly in their organizational practices. More importantly, these dimensions provide an understanding of how these different organizational practices can shape the exercise of power within different organizations.

In dimension 1, Hofstede compares process-oriented culture versus result-oriented culture. As per Hofstede, process-oriented culture is

characterized by means i.e. people are perceived to work within their comfort zone and put in limited effort in their jobs while each working day is usually the same. Whereas, result-oriented culture is concerned with goals i.e. people are perceived to have no issues with working outside their comfort zone and give more than a 100% to their work, while each day presents itself with new challenges (Hofstede, 1997). In light of this, process-oriented organizations will exercise power to maintain the standardization of the work process and resultoriented organizations will exercise power to correct deviations from set goals. In dimension 2, employee oriented culture is compared with job oriented. Employee oriented culture is people focused i.e. organizations are perceived to factor in the welfare of their employees when making important decisions and all decisions are made as a group. On the other hand, job oriented culture is only concerned about the completion of tasks i.e. organizations are perceived to exert pressure on people to complete the assigned tasks and, important decisions taken by only key individuals who don t take other people s interest into account (Hofstede, 1997). Hence, employee oriented organizations exercise power in order to promote people s interests whereas, job oriented organizations exercise power in order to promote the organization s goals and objectives In dimension 3, parochial culture is compared against professional culture. A parochial culture is where people identify themselves with their organization s identity i.e. the organization s code of conduct also governs the personal lives of its people, they are hired not only due to their job competence but, also based on their social background and, they don t tend to think far ahead

in the future.

In contrast, a professional culture is where people identify

themselves with the nature of their jobs i.e. people consider their personal lives are not governed by their organization, they are hired based on their professional capabilities and are forward looking (Hofstede, 1997). As a result, parochial organizations can exert their influence in all spheres of their people s lives whereas; professional organizations can only influence their people s work life. In dimension 4, open systems are compared to closed systems. Under an open system, an organization and its people are open and welcoming towards new people entering the firm. As opposed to this, a closed system is where an organization and its people are not very welcoming towards new people and are quite secretive about what they do (Hofstese, 1997). Thus, open system

organizations exercise power so as to keep the channels of communication open between people whereas, closed system organizations exercise power so as to maintain the secrecy of their activities. In dimension 5, loose control culture is compared with tight control culture. Both of these cultures are concerned with the internal structure of the organization. Organizations with a loose control culture are considered to be less worried about costs and don t demand punctuality in regard to meeting times. However, organizations with a tight control culture are considered to be mindful of costs and expect punctuality in regard to meeting times (Hofstede, 1997). Thereby, loosely controlled organizations seem to be less eager on exercising power whereas, tightly controlled organizations seem to prefer micro managing their people s activities and behaviors.

In dimension 6, pragmatic culture is compared to normative culture. Both of these cultures are assessed on the basis of customer orientation. In a pragmatic culture, organizations are perceived to focus more on meeting customer needs than on following the right organizational procedures. On the contrary, normative cultures consider following correct procedures to be more important than meeting customer needs (Hofstede, 1997). Hence, pragmatic organizations exercise power in order to ensure customer satisfaction whereas, normative organizations exert power so as to enforce the right organizational procedures on its people. The above six dimensions of organizational culture show in what ways different types of organizational culture can impact the exercise of power in different organizations. However in the real world, it is not always possible to clearly categorize different types of organizations into different organizational cultures. Sometimes an organization can have opposing cultures at two different levels of the organization.

Hood s grid-group cultural theory Cultural theory finds its beginnings in the works of a world-renowned anthropologist Mary Douglas. Over the years, cultural theory has found its application in the institutional analysis of both corporate and government organizations. As per Hood, It (cultural theory) aims to capture the diversity of human preferences about 'ways of life' and relate those preferences to different possible styles of organization, each of which has its advantages and disadvantages but is in some sense 'viable' (1998, p. 7). For Hood, the number of ways in which organizations exercise power is based on two fundamental

dimensions: grid and group . The grid dimension denotes the extent to which people s life within an organization is dictated by social rules such as specific rituals, taboos, observances, behaviors and ways of conducting oneself through others. High grid societies comprise of highly prescriptive rules whereas; low grid societies comprise of few rules. In contrast, the group dimension denotes the degree to which social code of conduct is subject to collective surveillance and governance. In high group societies most decisions and social conduct is set by the group and monitored whereas; in low group societies individuals have the liberty to choose their own course of life. Hood considers grid-group cultural theory fundamental to understanding how public organizations are structured. For instance, the grid dimension facilitates the ongoing debate on whether public organizations should be constraining in nature or should the people be free to make decisions and be judged on results rather than processes. Furthermore, the group dimension is central to the debate on how should public organizations be structured in today s world should it be collective or individualistic in nature. To better analyze

these debates, Hood combined both the grid and group dimensions to form a simple matrix, which is depicted in figure 1 (Dunleavy).
organizational cultures
Fatalist Organization

High

Hierarchalist organization

Grid dimension Individualist Organization

Low

Egalitarian organization

F B d i w g o U s t

Low

High

Group dimension

As per figure 1, Hood identifies four grid-group dimensions of cultural theory or four styles of public management organizations: hierarchist, individualist, egalitarian and fatalist. Hierarchist organizations are high on both grid and group whereas, individualist organizations are low on both grid and group . Egalitarian organizations are low on grid and high on group however, fatalist organizations are high on grid and low on group . A fatalist style of public management arises in situation where there is no cooperation and distrust is rife. A hieratchist type of public organization will project a socially coherent environment where rules are well defined and understood. An egalitarian approach to public management entails making a group decision on individual issues and cases. An individualist form of public organization will have ideals that are in contrast to collectivism and whose transactions are not subject to strict rules and regulations. The four grid-group arrangements not only explain the internal structure of public organization but also shed light on how these arrangements impact the exercise of power or approach to control in organizations. Oversight and review as an approach to control are prevalent in organizations that are characterized by hierarchialism or bossisim . In this context, control implies, a ladder of authority with conscious oversight and inspection (Hood, 1998). Here control means one person or an organization dominating another in some conspicuous manner. A public organization that exhibited bossism was the Chinese Imperial Censorate, an extremely powerful organization that oversaw and reviewed the functioning of the Chinese imperial bureaucracy for a thousand years. The Censorate s had the power to impeach, inspect, investigate and criticize the

policies carried out by top level bureaucrats as well as the Emperor (Hood, 1998). Under such circumstances, hierarchialism or bossism helps to amplify a top-down control system and justify technocratic rationality . In contrast to hierarchialism as an approach to control is individualism or choicism . Under individualism, competition and rivalry is the primary means of control. Organizations that are characterized by individualism believe that

markets will surpass controlled economies in cutting costs and reducing waste. Such was the thinking of public organizations practicing New Public Management in the 1980s. Furthermore like hierarchialism, individualism can be present at every level of the organization. Another important feature of such a control system is inculcating intense competition for public sector jobs. For instance, China s civil service examination was considered by many to be an examination hell (Hood, 1998). The Chinese civil service used this

extraordinarily rigorous examination as a means to use competition as a means to recruit the brightest people. In light of this, individualism strengthens individual leadership and risk taking behavior. As opposed to individualism, mutuality is the approach to control for organizations characterized by egalitarianism or groupism . Under

egalitarianism, public management control systems enforce a group process to keep a check on individual behavior. Like hierarchialism and individualism, egalitarianism is a form of control system that can be found at every level of the public organization. In order to control individual behavior, such organizations hold groups accountable for individual misdeed and threaten people with group punishment. For example, the US community action programmes in the 1960s

attempted to bring about collective accountability in American cities (Hood, 1998). Furthermore, egalitarian organizations also exhibit a group decisionmaking system. The Japanese ringisei system required every public official regardless of rank in the decision making process (Hood, 1998). As a result, egalitarianism amplifies the group thinking process however; it slows implementation and constrains institutional change. Contrary to egalitarianism, contrived randomness is the approach to control under fatalism or chancism . Hood describes such a control system to: Discourage co-operation in the colloquial German sense of the word organisation, which means criminal co-operation or other anti-system networking activity. It brings about this effect by aiming to make organizational operation, and therefore the pay-offs of competition among those who work within it as bureaucrats, contractors, or other

functionaries as unpredictable as possible (Hood, 1998, p. 66) Such a control system is usually found in traditional imperial or tax bureaucracies where organizational structure resembles more like a gaming machine than a machine bureaucracies (Hood, 66). Each of the four grid-group arrangements of cultural theory give a good understanding of how different organizational cultures shape or constrain the exercise of power within different types of organizations. However, these four arrangements do not exhaust all the possibilities of public control systems. As observed with Hofstede s six dimension of organizational culture, there is always a chance that there are hybrid forms of public control systems. For instance,

budgetary processes typically have different types of control systems at different levels. There could be competition at the level where departments are engaged in the bidding process and oversight in the form of the finance ministry. Hence, the structure of a control system at any level of an organization is influenced by the organizational culture present on that level.

Conclusion The paper started out with defining what really is organizational culture. In the process, it differentiated organizational culture from national culture organizational culture refers to corporate practices whereas; national culture refers to personal and family values. Based on this, the paper explored Hofstede s six dimensions of organizational culture. Each dimension presented a different take on how a certain organizational culture can shape the exercise of power within an organization. Another perspective on the relationship between organizational culture and power was presented by Hood s cultural theory and four grid-group arrangements. In contrast to Hofstede, Hood applied his gridgroup arrangements in understanding the impact of cultural theory on different public control systems. Both Hofstede and Hood present compelling theories on how organizational culture can shape or constrain power in different types of organizations. However, they also point out the possibility of having more than one type of organizational culture influencing the power structure of an organization.

Bibliography
Thompson, M., Ellis, R., and Wildavsky, A. (1990), Cultural Theory. Boulder, Colo.: Westview. Dunleavy, Patrick. Power and Organizational Culture. Lecture 4. LSE, London. 1 November 2011. Geert Hofstede, Cultures and Organizations: Software of the Mind. McGraw Hill, 2005 or 1997. LSE CC: HM1211 H71 especially Chs. 2 and 8. Christopher Hood, The Art of the State. Oxford: Oxford University Press, 1998.