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Cultural differences in organizations

Peter Drucker once said, “Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.” Understanding culture is vital in understanding organizations. Without knowing what an organization’s culture is, one cannot get to its heart. Thus, many studies focus on ways to comprehend culture.

In 2005, Dr. Aliza Racelis did a study on organization culture. In her research, she wanted to form a topology that will characterize Filipino organizations, using the Deshpandé, Farley and Webster Model of Organizational Culture types. The first type, labeled as clannish, comprises organizations that are strongly cohesive, treat each employee as family, emphasize teamwork, and where leaders are viewed as mentors or parent-figures.

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The second describes organizations as an adhocracy (i.e. flexible and adaptable). Entrepreneurship, creativity and adaptability are strong facets of these organizations. Their leaders are said to be entrepreneurs, innovators and risk-takers.

The third type includes hierarchical organization. There are rules, order and preference for uniformity. Leaders are seen as administrators or coordinators. The fourth type of organization is described as market-driven: There is a strong sense of competitiveness and goal achievement, where the leader is decisive and achievement-focused.

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Racelis administered a 16-item questionnaire adapted from the Organizational Culture Scale of Deshpandé, Farley and Webster to 136 graduate students in the fields of business and technology. These students were managers in Philippine companies from various industries. Results were able to show common characteristics of firms belonging to similar industries that in turn share the same culture.

Architectural firms, healthcare, pharmaceuticals, social welfare, and Philippine retail organizations were found to have clannish cultures. This group adheres to social expectations being familial themselves. For instance, healthcare follows demands of people for products and services (such as addressing specific medical needs required by the populace).

Those in the field of computer software and hardware, consulting, education, engineering, print and publishing settle into adhocracy, as their need for creativity, entrepreneurship and adaptability makes them very dynamic and sensitive to external competition.

Those in the hierarchical group include those from banking and finance, the government sector, social welfare and transport industries. This group is highly regulated, which therefore requires these organizations to be rule-oriented and administrative—albeit bureaucratic—in structure.

The last group includes market-driven Philippine organizations dealing with architecture, chemicals or oils, distribution, food and beverage, manufacturing, property development and utility firms. For this group, customer needs is a priority thus making them market-driven and goal oriented. This group emphasizes targets and achievements.

The results of the survey across industries showed that there are commonalities in organizational culture characteristics among organizations within the same industry. This shows how culture is shaped by the competitive environment, customer requirements, and societal expectations within which the organization operates. As such, culture changes in these organizations must work with these various factors so that effective improvements may work.

(Emerald Jay Ilac is working with the Ateneo Center for Organization Research and Development, and is a Ph.D. Leadership Studies student in the Ateneo de Manila University. The article is based on Dr. A. Racelis’ research entitled “An Exploratory Study of Organizational Culture in Philippine Firms” published in 2005 in the Philippine Management Review. For comments and feedback, send e-mail to ateneocord@ateneo.edu.)

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