3.4.2 Corporate culture

Question 1

Organisational culture

Answer 1

the norms and values of a business that are seen throughout the business

Question 2

Charles Hardy’s corporate culture definition

Answer 2

the way we do things round here

Question 3

How is corporate culture formed?

Answer 3

• artefacts - uniforms
• company song
• heroes/founders
• rituals
• language
• mottos
• norms
• symbols

Question 4

Factors that influence culture of an organisation

Answer 4

• influence of the founder
• size and development stage of the business (start up, multisite, multinational)
• leadership and management style
• organisational structure, policies and practices
• employee and management reward structures (pay, bonuses, individual v team rewards)
• market/industries in which it operates
• working environment and nature of tasks (physical, office, remote working, flexible working)
• attitude of an organisation to risk taking and innovation

Question 5

Strong culture

Answer 5

strong values and beliefs that are widely shared and significantly influences people’s behaviour

Question 6

Weak culture

Answer 6

weak values and beliefs either don’t exist or are not widely shared so do not significantly influence people’s behaviour

Question 7

Features of a strong culture

Answer 7

• good internal communication with their employees
• clear, core values, missions and goals
• the culture is usually based around the history, tradition and founders of the business
• encourages risk taking and innovation
• engaged and loyal staff
• not easily copied
• strong networks elf departments and divisions - good communication between departments

Question 8

Features of a weak culture

Answer 8

• can often read to business failure
• it will exhibit a demotivated workforce
• little alignment with values
• inconsistent behaviours
• it may be poorly managed
• it will be very bureaucratic and lack of flexibility to respond to dynamic markets

Question 9

Handy’s 4 classes of culture

Answer 9

• power
• role
• task
• person

Question 10

Handy’s 4 classes of culture - power culture

Answer 10

• power concentrated at the centre with just a few people
• only a few people have decision making power
• authoritarian leadership
• few rules and little bureaucracy
• quick decisions are possible

Question 11

Handy’s 4 classes of culture - role culture

Answer 11

• employees have clearly defined roles within a formal structure and high control
• power derives from someones role in the business
• links to a tall structure with long chains of command
• decision making can be slow
• autocratic leadership

Question 12

Handy’s 4 classes of culture - task culture

Answer 12

• matrix organisation where teams are formed to solve problems/work on projects
• power comes from expertise within a project team
• dynamic culture - organisation structure changes depending on the project
• democratic leadership style
• flat structure - short chain of command

Question 13

Handy’s 4 classes of culture - person culture

Answer 13

• individual employees believe themselves to be superior to the business
• employees are highly skilled, professional qualifications, training and experience
• e.g. solicitors, management consultants
• lassiez fair leadership style

Question 14

barriers to cultural change - tradition and set in ways

Answer 14

• loyalty to existing products
• failure to accept the need for change
• insecurity
• preference for the existing arrangements
• different personal ambitions

Question 15

barriers to cultural change - fear of

Answer 15

• loss of power
• loss of skills
• loss of income
• the unknown
• inability to perform as well in the new situation
• break up of work groups

Question 16

Strategies to manage cultural change

Answer 16

• start with the vision - ensure it is dear and consistent
• communicated at every layer of hierarchy
• get staff to buy in - involve them in the change
• requires a clear business strategy
• takes time