2.5 Organizational (Corporate) Culture [HL]

ORGANIZATIONAL CULTURE (AO1)
The values and beliefs of the people within an organization that determine the way they interact with each other an external stakeholders.

ELEMENTS OF ORGANIZATIONAL CULTURE (AO2)

• Power distance
• Individualism vs collectivism
• Masculinity vs femininity
• Uncertainty avoidance
• Long-term vs short-term

TYPES OF ORGANIZATIONAL CULTURE - CHARLES HANDY (AO2)

• Power culture - power is concentrated among few in an autocratic leadership organization. Results are judged rather than process.
• Person culture - individuals are given the ability to freely express themselves and make decisions in a creative type of culture.
• Role culture - each staff member has a specific role and title which is clearly identified, common in government and public sector organizations. Risk-taking is frowned upon.
• Task culture - groups are formed and is based on cooperation and teamwork to complete projects.
• Entrepreneurial culture - encourages employees to become innovative and take risks with new ideas and business ventures.

CULTURE CLASHES

The needs of the organization may hinder the growth of an organization due to corporate culture clashing with it.

Changing culture

• Concentrate on positive aspects of change
• Obtain full commitment from all levels of business – managers to lower levels.
• Establish and communicate new objectives
• Encourage bottom-up participation: get the lower level workers involved in implementing the change
• New reward systems with staffs trained.
• Change the staff reward system.

Impact of Culture

• Values of business – what is acceptable and not.
• How employees and managers treat each other
• Distinctive cultures can support brands
• Long-term business success is linked to a positive organizational culture.

All departments in a business may have different culture. This could be different jargon, behavior patterns, values or beliefs

There is no right or wrong culture for a business in terms of leadership styles.

BPS is like role culture

Each member of staff has a clear job and role.

Effects

·         Structure

·         Motivation

·         Selection and training

These factors will also affect corporate culture.

Change

Cultures will change over time

·         Markets become more global and competitive

·         New workers with new ideas and ways of doing things

·         Legal (law) and social changes

·         Merges and takeover