Business Management [IB] 2.5 Organization Culture
Represents the character and personality of an organization.
Example: How workers behave within the business.
– Nature of the Business: Culture is shaped by the purpose and direction of the organization.
– Organizational structure: Tall firm structures tend to have lots of small teams that work well independently. Flatter structures may benefit from collaborative teamwork.
– Rewards: Employees remunerated for their efforts, are more likely to develop a strong and united culture.
– Management styles: Culture in decentralized organizations tends to benefit from works able to deal with their problems themselves.
– Sanctions: Organization with few sanctions can encourage staff to be slack.
– Promoting cohesiveness so people do things as they feels that it is the right thing to do.
– Reducing mistakes and misunderstandings as staff are familiar with the processes at work.
– Minimizing problem with a culture gap so that conflict between different groups are curtailed.
– Role cultures: Exist in highly structured organization with formal rules and procedures.
– Task cultures: Exist in organizations where the focus is on getting results from the work done.
– Person cultures: Exist in organizations when staff in similar positions with similar expertise form groups to share their knowledge and skills.
Mergers and acquisitions – Organizational cultures can clash or change when there is external growth. For example, a merger or takeover. In theory, mergers should help the organizations to gain from economies of scale.
Change in leadership – Leadership style is a factor affecting corporate culture: a change in leadership can easily result in a change in the organizational culture.
Unhappy staff – Cultural clashes and the potential conflict that results will tend to make people unhappy.
Resistance to change – This happens because staff are likely to resent changes to the culture that they are used to, perhaps due to fear of the unknown or due to a lack of understanding the benefits of change.
High costs of training staff and implementing change – Training costs may be necessary for businesses that adopt teleworking or diversify their operations.
National culture clashes/disputes – National culture may be so strong that any attempts to change the way things are done can cause conflict and resentment.
Compromises must be reached – In order for the business to move forward, conflict needs to be resolved.
Mentor – Leaders act as mentors by sharing knowledge and expertise, and supporting their people to mould a healthy organizational culture.
Outreach – Communicating the vision (and desired culture) to all members of the organization, so everyone moves in the same direction and stands for the same values.
Vision – Without knowing where the business wants to be, it is impossible and pointless trying to guide and motivate staff.
Engaging – The desired corporate culture must engage and excite the workers; perhaps by the leader nurturing a sense of self-worth and commitment to the strategic goals of the organization.
Role modelling – By being a role model to others in the organization, the leader can drive and develop the desired culture.
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