HLHL2.6 Organizational and 2.6 Organizational and

Corporate CulturesCorporate Cultures

Chapter 15Chapter 15

HL-Organization CultureHL-Organization Culture

The values, attitudes, and beliefs of the The values, attitudes, and beliefs of the people working in an organization that people working in an organization that control the way they interact with each control the way they interact with each other and with external stakeholder other and with external stakeholder groups.groups.

How can management influence How can management influence corporate culture?corporate culture?

Mission and vision statementsMission and vision statements Who is appointed to senior staff .Who is appointed to senior staff .

(They are likely to share the same values and beliefs as the directors.)(They are likely to share the same values and beliefs as the directors.)

The organization’s ethical code of conductThe organization’s ethical code of conduct Established strategies on social and Established strategies on social and

environmental issues.environmental issues. The example upper management sets in how they The example upper management sets in how they

treat employees and make decisions.treat employees and make decisions.

Types of Organizational CultureTypes of Organizational Culture(As identified by Charles Handy)(As identified by Charles Handy)

Power CulturePower Culture Role CultureRole Culture Task CultureTask Culture Person CulturePerson Culture Entrepreneurial CultureEntrepreneurial Culture

Power CulturePower Culture

Concentrating power among a few peopleConcentrating power among a few people

Usually is associated withUsually is associated with autocratic leadership. autocratic leadership.

Decisions are made quicklyDecisions are made quickly Managers are judged on Managers are judged on

results rather than how they results rather than how they obtain them.obtain them.

Usually a hierarchical organization structureUsually a hierarchical organization structure Motivation is likely to focus on financial Motivation is likely to focus on financial

rewards like bonuses.rewards like bonuses.

Analogy of spider web: there is no purpose without the spider.

Role CultureRole Culture

Each member of staff has a clearly defined job Each member of staff has a clearly defined job title and roletitle and role

Usually associated with bureaucratic Usually associated with bureaucratic organizations like government.organizations like government.

The structure of the organization is The structure of the organization is clearly defined with clear delegated clearly defined with clear delegated authority.authority.

Power comes from a person’s positionPower comes from a person’s position Decision-making and risk taking are frowned upon.Decision-making and risk taking are frowned upon. Tall hierarchical organization structuresTall hierarchical organization structures

Analogy big building: Solid and dependable – not going anywhere fast

Task CultureTask Culture

Based on cooperation and team workBased on cooperation and team work

Groups are formed to Groups are formed to solve problemssolve problems

Communication may followCommunication may follow a matrix structure a matrix structure

Creative & problem-solving spiritCreative & problem-solving spirit Very motivating environment Very motivating environment

that meets worker’s intrinsic needsthat meets worker’s intrinsic needs

Analogy of a NET: the strength is derived from the many strands

Person CulturePerson Culture

Individuals are given the freedom to Individuals are given the freedom to express themselves and make decisionsexpress themselves and make decisions

Most creative type of cultureMost creative type of culture No emphasis on teamworkNo emphasis on teamwork People who thrive here may find it difficult to People who thrive here may find it difficult to

work in a structured environmentwork in a structured environment

Analogy of a STARS: each person is different and operates alone

Entrepreneurial CultureEntrepreneurial Culture

Encourages management and workers to Encourages management and workers to take risks and encourage new ideas and take risks and encourage new ideas and business ventures.business ventures.

Success is rewarded but failure is not Success is rewarded but failure is not automatically criticizedautomatically criticized

Motivation can be high among people who like Motivation can be high among people who like a challenge and risk takinga challenge and risk taking

Culture ClashCulture Clash

Corporate culture may clash with the needs of Corporate culture may clash with the needs of the organization hindering growth.the organization hindering growth. A traditional family company converts to a public A traditional family company converts to a public

limited companylimited company A product-led business needs to change based upon A product-led business needs to change based upon

desires of the marketdesires of the market A private company may not be responding to A private company may not be responding to

customer needscustomer needs A merger may occur with a other firm with a different A merger may occur with a other firm with a different

cultureculture Declining market share may be the consequence of Declining market share may be the consequence of

an unmotivated staffan unmotivated staff

Changing CultureChanging Culture

NOT EASYNOT EASY Concentrate on the positive aspects of changeConcentrate on the positive aspects of change Obtain the full commitment of all levels of the Obtain the full commitment of all levels of the

business: managers to lowest level employeesbusiness: managers to lowest level employees Establish new objectives and communicate themEstablish new objectives and communicate them Encourage bottom-up participationEncourage bottom-up participation Train staff on the new value systemTrain staff on the new value system Change the staff reward system; quit rewarding “the Change the staff reward system; quit rewarding “the

old way”old way”

Impact of CultureImpact of Culture

Values of business: what is and what is Values of business: what is and what is NOT acceptableNOT acceptable

Determines managers and employees Determines managers and employees treat each othertreat each other

A distinctive culture can support a brand – A distinctive culture can support a brand – think GOOGLEthink GOOGLE

Positive organizational culture has been Positive organizational culture has been clearly linked to long-term business clearly linked to long-term business success.success.

Best Companies to Work ForBest Companies to Work For

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