3.4.2 Corporate culture Flashcards
what is culture?
the norms and values of a business
(aka ‘the way we do things around here’ Charles Handy)
what factors influence culture?
-influence of a founder (leader)
-size and development stage of the business
(start up/PLC)
-leadership and management style
-organisational structure, policies and practices
-external environment
what are features of weak culture?
-little alignment with business values
-inconsistent behaviour
-a need for extensive bureaucracy and procedures
-demotivated workforce
-poorly managed
what are features of strong culture?
-source of competitive advantage
-clear set of values, missions and goals
-performance oriented
-encourages suitable risk taking & innovation
-strong internal communication
-engaged employees
-better connections between departments & divisions
what are Hendy’s 4 classes of culture?
-power
-role
-task
-person
the features of power culture are…?
-control radiates from the centre (centralised structure)
-power is concentrated among a few
-few rules and little bureaucracy
-swift decisions are possible
-can turn toxic
-flat hierarchy
the features of role culture are…?
-delegated authorities within a defined structure
-hierarchical bureaucracy
-power derives from a person’s position
-little scope exists for expert power
-tall hierarchy
-can’t take many risks -> many roles and layers of leadership
the features of task culture are…?
-teams are formed to solve similar problems
-power derives from expertise -> as long as a team requires expertise -> no single power source (shifts depending on needs)
-matrix organisation
-team may develop their own objectives
(risky as it may clash with other teams/business objectives)
-team dynamic is important
(right mix of skills, personalities and leadership needed)
(can be productive and creative)
the features of person culture are…?
-people believe themselves to be superior to the business
-business full of people with similar training, background and expertise
-power lies in each group of individuals
-people are an asset to the business
(bring in the money and reputation)
-individuals working at the same firm
what leadership styles match with each culture?
-power -> autocratic
-role -> autocratic/paternalistic
-task -> paternalistic/democratic
-person -> democratic
what are examples of jobs with each culture?
-power -> Apple under Steve Jobs
-role -> NHS
-task -> police
-person -> lawyers
why change culture?
-to improve business performance
-to respond to significant change
why would business performance need to be improved?
-declining sales & profits
-inadequate returns on investment
-low quality/standards of customer service
what would be a significant change?
-change of ownership (takeover)
-change of management/leadership (new CEO)
-market changes (competitors/growth)
-change in societal views (protests)
what are signs that organisational culture may need changing?
-greater absenteeism
-declining customer service
-communication becomes more closed and restricted
-high levels of voluntary staff turnover & hard to retain top talent
why is an established culture hard to change?
a strong culture consists of interlocking and each component reinforces the other
what are the difficulties of changing an established culture?
-set of goals
-roles
-processes
-values
-attitudes
-communication practices
