20 Organisational Culture and Climate

20.1 What is Organisational Culture?

Organisational culture is the system of shared meanings held by members of an organisation that distinguishes the organisation from others. The classroom shorthand: “the way we do things around here.” It is how a Tata company is recognisably different from a Reliance company even when both have similar org charts and financials.

Edgar Schein, the discipline’s founder, defines culture as “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (Organizational Culture and Leadership, 1985 / 5th ed. 2017).

Working Definitions of Organisational Culture

Author	Definition	Foregrounds
Edgar Schein	“Pattern of shared basic assumptions learned in solving problems of external adaptation and internal integration.”	Learning, depth
Stephen Robbins	“System of shared meaning held by members that distinguishes the organisation from other organisations.”	Meaning, distinctiveness
Geert Hofstede	“The collective programming of the mind which distinguishes one organisation from another.”	Mental programming
Deal & Kennedy	“The way we do things around here.”	Practice
Pettigrew	“An amalgam of beliefs, ideology, language, ritual, myth.”	Symbolic system

20.1.1 Seven Primary Characteristics — Robbins

Robbins’s seven characteristics of culture

Characteristic	What it captures
Innovation and risk-taking	How much employees are encouraged to be innovative
Attention to detail	How much precision and analysis is expected
Outcome orientation	Focus on results vs the techniques
People orientation	Effect of decisions on people inside the firm
Team orientation	Work organised around teams or individuals
Aggressiveness	Competitive vs easy-going
Stability	Maintaining the status quo vs growth

20.2 Schein’s Three Levels of Culture

Edgar Schein’s iceberg model of culture has three layers — visible at the top, invisible at the base.

Schein’s three levels

Level	What it is	Visibility	Example
1. Artefacts	Visible structures, behaviours, language, dress, office design, rituals, stories	Visible but hard to interpret	Open-plan office, casual Friday, company song
2. Espoused values	Stated strategies, goals, philosophies	Stated by the firm	Mission statement, code of conduct, “values posters”
3. Basic underlying assumptions	Unconscious, taken-for-granted beliefs	Invisible, hardest to change	Unspoken belief that “customers always come first”

flowchart TB
  A[1. Artefacts<br/>Visible · Surface] --> V[2. Espoused Values<br/>Strategy · Goals · Philosophy]
  V --> B[3. Basic Assumptions<br/>Invisible · Unconscious · Taken-for-granted]
    classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;

The deepest level controls behaviour

Basic assumptions are the real determinants of behaviour, even when espoused values say otherwise. Cultural change must reach this level — surface changes (dress code, slogans) are easy; assumption-level change is the hardest.

20.3 Functions and Dysfunctions of Culture

Functions of culture (Robbins)

Boundary-defining — distinguishes one organisation from another.
Identity — provides a sense of identity to members.
Commitment — generates commitment to something larger than self.
Stability — enhances the stability of the social system.
Sense-making + control — guides what employees say and do.

Dysfunctions of culture

Barrier to change — when environment changes, culture lags.
Barrier to diversity — strong culture pressures conformity.
Barrier to acquisitions and mergers — culture clashes derail M&A.
Excludes new entrants — strong subcultures resist newcomers.

20.4 Types of Culture

20.4.1 Dominant Culture and Subcultures

A dominant culture is shared by most members. Subcultures are mini-cultures within departments, geographies, or hierarchies. The core values are usually carried by the dominant culture.

20.4.2 Strong vs Weak Culture

A strong culture has intensely held and widely shared core values; it produces high behavioural consistency. A weak culture has loosely held or contested values. Strong cultures correlate with low turnover but can stifle innovation.

20.4.3 Handy’s Four Cultural Types (1976)

Charles Handy (Understanding Organizations, 1976) — drawing on Roger Harrison — proposed four organisational cultures, each linked to a Greek god:

Handy’s four cultures

Culture	God	Structure	Where used
Power culture	Zeus	Web of personal power around a strong centre	Small entrepreneurial firms
Role culture	Apollo	Bureaucracy of roles and rules; pillars supporting a pediment	Large traditional bureaucracies; government
Task culture	Athena	Project- or task-led; net or matrix	Consultancies, project teams, agencies
Person culture	Dionysus	Cluster of individuals; the firm exists to serve members	Law firms, doctor partnerships, professional collegia

20.4.4 Deal & Kennedy’s Four Cultures (1982)

Terrence Deal and Allan Kennedy in Corporate Cultures (1982) classified culture on two axes — degree of risk and speed of feedback:

Deal & Kennedy four cultures

Culture	Risk	Feedback	Example
Tough-Guy / Macho	High	Fast	Police, surgeons, advertising, venture capital
Work-Hard, Play-Hard	Low	Fast	Sales, retail, fast food
Bet-the-Company	High	Slow	Aerospace, pharma, oil exploration
Process	Low	Slow	Banking, insurance, government

20.4.5 Cameron & Quinn’s Competing Values Framework (1999)

Kim Cameron and Robert Quinn proposed the Competing Values Framework (CVF) — two axes (flexibility-vs-stability and internal-vs-external focus) yielding four culture types:

Cameron-Quinn — four culture types

Quadrant	Orientation	Focus	Style
Clan (Collaborate)	Flexibility	Internal	Family-like, mentoring, loyalty
Adhocracy (Create)	Flexibility	External	Entrepreneurial, innovative, risk-taking
Hierarchy (Control)	Stability	Internal	Structured, coordinated, formal
Market (Compete)	Stability	External	Goal-oriented, competitive, results

The companion instrument — Organizational Culture Assessment Instrument (OCAI) — is the most-cited culture diagnostic.

20.4.6 Other Typologies

Other useful culture typologies

Author	Typology
Harrison-Handy	Power · Role · Task · Person
Cameron-Quinn	Clan · Adhocracy · Market · Hierarchy
Deal-Kennedy	Tough-Guy · Work-Hard-Play-Hard · Bet-the-Company · Process
Robert Quinn	Apollo · Athena · Dionysus · Zeus (corresponds to Handy)
William Ouchi (1981)	Theory Z — Japanese-American hybrid culture
Pumpin (Swiss)	Goals · Customer · Employee · Performance · Innovation · Communication · Cost
Trompenaars-Hampden-Turner	Family · Eiffel Tower · Guided Missile · Incubator

20.5 Hofstede’s Six Cultural Dimensions

Geert Hofstede’s classic IBM study (Culture’s Consequences, 1980) identified four dimensions of national culture; LTO and IVR were added later, taking the total to six. Although about national (not organisational) culture, Hofstede is heavily examined in OB.

Hofstede’s six dimensions — recap

Dimension	What it captures	India
Power Distance (PDI)	Acceptance of unequal power	High (77)
Individualism vs Collectivism (IDV)	“I” vs “We”	Moderate (48)
Masculinity vs Femininity (MAS)	Achievement vs caring	Moderate-high (56)
Uncertainty Avoidance (UAI)	Discomfort with ambiguity	Low (40)
Long-Term Orientation (LTO) added 1991	Pragmatism vs tradition	Moderate-high (51)
Indulgence vs Restraint (IVR) added 2010	Free gratification vs strict norms	Restraint side (26)

20.5.1 Trompenaars-Hampden-Turner’s Seven Dimensions

Riding the Waves of Culture (1997) added seven complementary dimensions: Universalism vs Particularism · Individualism vs Communitarianism · Specific vs Diffuse · Neutral vs Affective · Achievement vs Ascription · Sequential vs Synchronous time · Internal vs External direction.

20.5.2 GLOBE Project (2004)

The GLOBE (Global Leadership and Organizational Behavior Effectiveness) study under Robert House surveyed 17 000 managers in 62 countries and identified nine cultural dimensions (extending Hofstede): Power Distance · Uncertainty Avoidance · Humane Orientation · Institutional Collectivism · In-Group Collectivism · Assertiveness · Gender Egalitarianism · Future Orientation · Performance Orientation.

20.6 How Culture is Created and Sustained

Culture creation (Robbins)

Founders hire and keep only employees who think and feel the same way.
They indoctrinate and socialise these employees in their way of thinking.
The founders’ own behaviour acts as a role model that employees identify with.

20.6.1 Schein’s Embedding Mechanisms (6 + 6)

Schein identified twelve mechanisms by which leaders embed culture — six primary and six secondary:

Schein’s primary embedding mechanisms

What leaders pay attention to, measure and control regularly.
How leaders react to critical incidents and crises.
Observed criteria by which leaders allocate resources.
Deliberate role modelling, teaching, coaching.
Observed criteria by which leaders reward and confer status.
Observed criteria by which leaders recruit, select, promote, retire and excommunicate.

Schein’s secondary mechanisms

Organisational design and structure.
Systems and procedures.
Rituals and rites.
Design of physical space, facades, buildings.
Stories, legends and myths about people and events.
Formal statements of philosophy, creeds, charters.

20.7 Socialisation — Joining the Culture

Organisational socialisation is the process by which new employees learn the organisation’s culture.

Three stages of socialisation (Robbins)

Stage	When	Activity
Pre-arrival	Before joining	Recruiting selects culture-compatible candidates; candidate forms expectations
Encounter	Soon after joining	Reality test; surprises; induction
Metamorphosis	After settling in	Internalised values, accepted norms; comfort and competence

20.7.1 Rites of Passage

Harrison Trice and Janice Beyer (1984) — six organisational rites:

Trice-Beyer six organisational rites

Rites of passage — facilitate transition (orientation programmes).
Rites of enhancement — boost status (awards).
Rites of renewal — refresh structures (re-organisation).
Rites of integration — restore common feeling (offsites, parties).
Rites of conflict reduction — reduce conflict (collective bargaining).
Rites of degradation — dissolve status (firing, public censure).

20.8 Organisational Climate

Organisational climate is the perceived properties of the work environment, directly or indirectly perceived by employees, that influence their motivation and behaviour. It is the immediate, measurable expression of culture — the weather to culture’s climate-system.

20.8.1 Culture vs Climate

Culture vs Climate

Dimension	Culture	Climate
Anchor concept	Shared assumptions and values	Shared perceptions
Time horizon	Long-term (years)	Short-term (months)
Depth	Deep	Surface
Discipline	Anthropology / Sociology	Industrial / Organisational psychology
Measurement	Qualitative + quantitative	Mostly quantitative (surveys)
Stability	Stable	Changeable
Question	“Why do we do things this way?”	“What is it like to work here right now?”

20.8.2 Litwin & Stringer Climate Dimensions (1968)

George Litwin and Robert Stringer (Harvard, 1968) — six dimensions of organisational climate:

Litwin-Stringer six climate dimensions

Structure — felt rules and constraints.
Responsibility — felt autonomy.
Reward — felt fairness of rewards.
Risk — felt challenge.
Warmth and support — felt social atmosphere.
Conflict — felt willingness to disagree openly.

Pareek and Rao later added: Affiliation, Standards, Identity, Achievement orientation.

20.8.3 Pareek’s MAO-C Climate Tool

Udai Pareek’s MAO-C (Motivational Analysis of Organisational Climate) — Indian instrument measuring climate on McClelland’s motives (achievement, affiliation, extension, control, dependency, expert influence).

20.9 Cultural Change

Schein and Cummings-Worley identify the difficulty of cultural change. Levers that work:

Levers of cultural change

Crisis as catalyst — culture changes most when survival is threatened.
New leadership — fresh top team brings new assumptions.
Generation turnover — new hires with different values.
Change in size, structure, technology — disrupts existing assumptions.
External-event shock — regulatory change, market collapse.
Reward/incentive realignment.
Symbolic actions and rituals.
Storytelling and communication.

20.10 Practice Questions

Q 01 Schein Easy

Edgar Schein's three levels of culture, from most visible to deepest, are:

AArtefacts → Espoused values → Basic underlying assumptions
BBasic assumptions → Artefacts → Espoused values
CEspoused values → Artefacts → Basic assumptions
DSymbols → Heroes → Rituals

View solution

Correct Option: A

Schein (1985): Artefacts (visible) → Espoused values → Basic assumptions (deepest, invisible).

Q 02 Handy Medium

In Charles Handy's typology, a "Role culture" is symbolised by which Greek god?

AZeus
BApollo
CAthena
DDionysus

View solution

Correct Option: B

Handy: Power = Zeus, Role = Apollo, Task = Athena, Person = Dionysus.

Q 03 Deal-Kennedy Medium

In Deal and Kennedy's framework, an *aerospace* company belongs to which culture?

ATough-Guy / Macho
BWork-Hard, Play-Hard
CBet-the-Company
DProcess

View solution

Correct Option: C

High risk + slow feedback → Bet-the-Company. Surgeons / advertising = Tough-Guy (high risk + fast); Sales/retail = Work-Hard-Play-Hard (low risk + fast); Banking = Process (low risk + slow).

Q 04 Cameron-Quinn Medium

The Competing Values Framework's four culture types are:

AClan · Adhocracy · Market · Hierarchy
BPower · Role · Task · Person
CTough · Work-Hard · Bet · Process
DFamily · Eiffel Tower · Missile · Incubator

View solution

Correct Option: A

Cameron & Quinn (1999): Clan · Adhocracy · Market · Hierarchy. (D) is Trompenaars-Hampden-Turner.

Q 05 OCAI Hard

The Organizational Culture Assessment Instrument (OCAI) is by:

ASchein
BCameron & Quinn
CHofstede
DLitwin & Stringer

View solution

Correct Option: B

Cameron & Quinn's OCAI — based on the Competing Values Framework.

Q 06 Theory Z Medium

William Ouchi's *Theory Z* (1981) described:

AAn autocratic culture
BA Japanese-American hybrid corporate culture
CIndian ethos in management
DVirtual organisations

View solution

Correct Option: B

William Ouchi's Theory Z (1981) — Japanese-American hybrid: long-term employment, consensus decisions, collective responsibility.

Q 07 Hofstede Medium

Which dimension was added to Hofstede's framework in 2010?

APower Distance
BLong-Term Orientation
CIndulgence vs Restraint
DMasculinity vs Femininity

View solution

Correct Option: C

The original four were in 1980; LTO added 1991 (from Bond's Chinese Value Survey); Indulgence vs Restraint (IVR) added 2010 from Michael Minkov's work.

Q 08 GLOBE Hard

The GLOBE study (2004) of cross-cultural leadership was led by:

AGeert Hofstede
BRobert House
CEdgar Schein
DFons Trompenaars

View solution

Correct Option: B

Robert House led the GLOBE (Global Leadership and Organizational Behavior Effectiveness) project — 9 dimensions across 62 countries.

Q 09 Robbins characteristics Medium

Robbins's seven *primary characteristics* of culture include all of the following EXCEPT:

AInnovation and risk-taking
BAttention to detail
CProfit orientation
DOutcome orientation

View solution

Correct Option: C

Robbins's seven: Innovation/risk · Detail · Outcome · People · Team · Aggressiveness · Stability. Profit is not on the list.

Q 10 Definition Easy

"The way we do things around here" is the popular shorthand definition of organisational culture by:

AEdgar Schein
BDeal & Kennedy
CRobbins
DCharles Handy

View solution

Correct Option: B

Deal & Kennedy, *Corporate Cultures* (1982) — popularised the shorthand.

Q 11 Climate dimensions Medium

Litwin and Stringer (1968) identified how many dimensions of organisational climate?

View solution

Correct Option: C

Litwin & Stringer's six dimensions: Structure · Responsibility · Reward · Risk · Warmth & support · Conflict.

Q 12 Culture vs Climate Medium

Culture differs from climate primarily in that culture is:

ADeeper and longer-lasting; climate is surface and changeable
BMeasurable; climate is intangible
CExternal; climate is internal
DIndividual; climate is collective

View solution

Correct Option: A

Culture = climate-system (deep, slow); Climate = weather (surface, changeable).

Q 13 Socialisation Medium

Robbins's three stages of organisational socialisation are:

APre-arrival · Encounter · Metamorphosis
BHiring · Training · Promoting
CAwareness · Desire · Knowledge
DForming · Storming · Norming

View solution

Correct Option: A

Robbins: Pre-arrival → Encounter → Metamorphosis.

Q 14 Trice-Beyer Hard

Promoting an employee in a public ceremony is a Trice-Beyer:

ARite of passage
BRite of enhancement
CRite of degradation
DRite of renewal

View solution

Correct Option: B

Promotion ceremonies are rites of enhancement — boosting status. Firing is degradation; orientation is passage.

Q 15 Pareek Medium

The MAO-C instrument for measuring organisational climate in India was developed by:

AUdai Pareek
BT.V. Rao
CS.K. Chakraborty
DP.N. Khandwalla

View solution

Correct Option: A

Udai Pareek's MAO-C (Motivational Analysis of Organisational Climate) — based on McClelland's motives.

Q 16 Handy Medium

A law-firm partnership in which the firm exists primarily to serve its members is, in Handy's typology, a:

APower culture
BRole culture
CTask culture
DPerson culture

View solution

Correct Option: D

Person culture (Dionysus) — the firm exists for the members; common in legal and medical partnerships.

Q 17 Trompenaars Hard

Trompenaars and Hampden-Turner's four corporate cultures are:

AFamily · Eiffel Tower · Guided Missile · Incubator
BClan · Adhocracy · Market · Hierarchy
CTough-Guy · Work-Hard · Bet · Process
DPower · Role · Task · Person

View solution

Correct Option: A

Trompenaars-Hampden-Turner (*Riding the Waves of Culture*, 1997): Family · Eiffel Tower · Guided Missile · Incubator.

Q 18 Strong culture Medium

A *strong* organisational culture is characterised by:

ALoosely held core values
BIntensely held and widely shared core values
CNo explicit code of conduct
DHigh employee turnover

View solution

Correct Option: B

Strong culture = intensely held + widely shared. Produces high behavioural consistency and low turnover; can hurt diversity and innovation.

Q 19 Dysfunctions Medium

Which is *not* commonly listed as a dysfunction of strong organisational culture?

ABarrier to change
BBarrier to diversity
CBarrier to acquisitions and mergers
DBarrier to financial reporting

View solution

Correct Option: D

Standard dysfunctions: change, diversity, M&A, new entrants. Financial reporting is not in the list.

Q 20 Match Author–Concept Hard

Match the author with the framework:

(i)	Schein	(a)	Power · Role · Task · Person
(ii)	Handy	(b)	3 levels of culture
(iii)	Cameron-Quinn	(c)	Tough-Guy · Work-Hard · Bet · Process
(iv)	Deal-Kennedy	(d)	Clan · Adhocracy · Market · Hierarchy

A(i)-(b), (ii)-(a), (iii)-(d), (iv)-(c)
B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
C(i)-(c), (ii)-(d), (iii)-(b), (iv)-(a)
D(i)-(d), (ii)-(c), (iii)-(a), (iv)-(b)

View solution

Correct Option: A

Schein — 3 levels; Handy — Power/Role/Task/Person; Cameron-Quinn — Clan/Adhocracy/Market/Hierarchy; Deal-Kennedy — Tough-Guy/Work-Hard/Bet/Process.

20.10.1 Advanced Format Questions

AR 1Assertion-ReasonHard

A: Hofstede dimensions vary across nations.
R: India is high on power distance and collectivism.

ABoth true; R explains A
BBoth true; R does not explain A
CA true, R false
DA false, R true

View solution

Correct Option: B

AR 2Assertion-ReasonMedium

A: Schein's culture model has 3 levels.
R: Artefacts, values, basic assumptions are the levels.

ABoth true; R explains A
BBoth true; R does not explain A
CA true, R false
DA false, R true

View solution

Correct Option: A

S 1Statement-basedMedium

Hofstede's 6 dimensions include: (i) Power Distance. (ii) Individualism. (iii) Masculinity. (iv) Long-term orientation.

AAll four (plus UAI and IVR)
B(i) and (ii) only
C(iii) and (iv) only
D(i), (ii), (iii) only

View solution

Correct Option: A

S 2Statement-basedHard

OCAI culture types (Cameron-Quinn): (i) Clan. (ii) Adhocracy. (iii) Market. (iv) Hierarchy.

AAll four
B(i), (ii), (iii) only
C(ii) and (iv) only
D(iii) only

View solution

Correct Option: A

20.11 Quick Recall

Quick recall

Culture = shared meanings (“the way we do things around here” — Deal-Kennedy). Schein’s three levels: Artefacts → Espoused values → Basic underlying assumptions.
Robbins’s 7 characteristics: Innovation/risk · Detail · Outcome · People · Team · Aggressiveness · Stability.
Functions: boundary, identity, commitment, stability, sense-making. Dysfunctions: barrier to change, diversity, M&A, new entrants.
Typologies: Handy (Power/Zeus · Role/Apollo · Task/Athena · Person/Dionysus) · Deal-Kennedy (Tough-Guy · Work-Hard · Bet-the-Company · Process — on risk × feedback) · Cameron-Quinn (Clan · Adhocracy · Market · Hierarchy + OCAI) · Trompenaars (Family · Eiffel Tower · Guided Missile · Incubator) · Ouchi Theory Z (1981).
National-culture frameworks: Hofstede 6 dimensions (PDI, IDV, MAS, UAI, LTO 1991, IVR 2010) · GLOBE (Robert House 2004 — 9 dimensions, 62 countries) · Trompenaars 7 dimensions.
Culture creation/sustenance: founders → indoctrination → role modelling. Schein’s 6 primary + 6 secondary embedding mechanisms.
Socialisation: Pre-arrival → Encounter → Metamorphosis. Trice-Beyer 6 rites: Passage · Enhancement · Renewal · Integration · Conflict reduction · Degradation.
Climate (surface, short-term, perception-based) vs Culture (deep, long-term, assumption-based). Litwin-Stringer (1968) 6 climate dimensions: Structure · Responsibility · Reward · Risk · Warmth & support · Conflict. Indian — Pareek’s MAO-C.