Several methods have been used to classify organizational culture. While there is no single "type" of organizational culture, and organizational cultures vary widely from one organization to the next, commonalities do exist and some researchers have developed models to describe different indicators of organizational cultures. While there are several types of cultural and organizational theory models, Hofstede's cultural dimensions theory is one of the most cited and referenced.
Hofstede's cultural dimensions theory: Hofstede looked for global differences between 100,000 of IBM's employees in 50 countries, in an attempt to find aspects of culture that might influence business behavior. He suggested that cultural differences existed in regions and nations, and that international awareness and multiculturalism were important for their own cultural introspection.
Cultural differences reflect differences in thinking, social action, and even in "mental programs," a term Hofstede uses for predictable behavior. Hofstede relates culture to ethnic and regional groups, but also to organizations, professions, family, society, sub-cultural groups, national political systems, and legislation.
Hofstede demonstrated that there are national and regional cultural groupings that affect the behavior of organizations. He identified four dimensions of culture (later five) in his study of national cultures:
- Power distance: Different societies find different solutions for social inequality. Although invisible, the "boss-subordinate relationship" is functional and reflects the way inequality is addressed in society. According to Mulder's Power Distance Reduction theory, subordinates will try to reduce the power distance between themselves and their bosses, and bosses will try to maintain or enlarge it. But there is a degree to which a society expects there to be differences in the levels of power. A high score suggests that there is an expectation that some individuals wield larger amounts of power than others. A low score reflects the view that all people should have equal rights.
- Uncertainty avoidance: In order to cope with uncertainty about the future, organizations deal with technology, law, and rituals in two ways - rational and non-rational - with rituals being the non-rational.
- Individualism vs. collectivism: Society's expectations of individualism and collectivism are reflected by the employee inside the organization. Capitalist market economy fosters individualism and competition. Research indicates that someone who highly values duty to his or her group does not necessarily give a low priority to personal freedom and self-sufficiency.
- Masculinity vs. femininity: Societies may be predominantly male or female in terms of cultural values, gender roles, and power relations.
- Long- vs. Short-Term Orientation: Long-term orientation can be interpreted as dealing with society’s search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute truth. They are normative in their thinking, exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results. In societies with a long-term orientation, people believe that truth depends very much on situation, context, and time. They show an ability to adapt traditions to changed conditions, a strong propensity to save and invest, thriftiness, and perseverance in achieving results. (Figure 1)