HL
2.6 Organizational and
Corporate Cultures
Chapter 15
HL-Organization Culture
 The
values, attitudes, and beliefs of the
people working in an organization that
control the way they interact with each
other and with external stakeholder
groups.
How can management influence
corporate culture?

Mission and vision statements
 Who is appointed to senior staff .
(They are likely to share the same values and beliefs as the directors.)
The organization’s ethical code of conduct
 Established strategies on social and
environmental issues.
 The example upper management sets in how they
treat employees and make decisions.

Types of Organizational Culture
(As identified by Charles Handy)
 Power
Culture
 Role Culture
 Task Culture
 Person Culture
 Entrepreneurial Culture
Power Culture
 Concentrating
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power among a few people
Usually is associated with
autocratic leadership.
Decisions are made quickly
Managers are judged on
of spider web:
results rather than how they Analogy
there is no purpose
obtain them.
without the spider.
Usually a hierarchical organization structure
Motivation is likely to focus on financial
rewards like bonuses.
Role Culture

Each member of staff has a clearly defined job
title and role

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Usually associated with bureaucratic
organizations like government.
The structure of the organization is
clearly defined with clear delegated
Analogy big building:
Solid and dependable –
authority.
not going anywhere fast
Power comes from a person’s position
Decision-making and risk taking are frowned upon.
Tall hierarchical organization structures
Task Culture
 Based



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on cooperation and team work
Groups are formed to
solve problems
Communication may follow
a matrix structure
Analogy of a NET:
strength is derived
Creative & problem-solving spirit the
from the many strands
Very motivating environment
that meets worker’s intrinsic needs
Person Culture
 Individuals
are given the freedom to
express themselves and make decisions
Analogy of a STARS:
each person is different
and operates alone

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Most creative type of culture
No emphasis on teamwork
People who thrive here may find it difficult to
work in a structured environment
Entrepreneurial Culture
 Encourages
management and workers to
take risks and encourage new ideas and
business ventures.

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Success is rewarded but failure is not
automatically criticized
Motivation can be high among people who
like a challenge and risk taking
Culture Clash

Corporate culture may clash with the needs of
the organization hindering growth.

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A traditional family company converts to a public
limited company
A product-led business needs to change based upon
desires of the market
A private company may not be responding to
customer needs
A merger may occur with a other firm with a different
culture
Declining market share may be the consequence of
an unmotivated staff
Changing Culture

NOT EASY

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Concentrate on the positive aspects of change
Obtain the full commitment of all levels of the
business: managers to lowest level employees
Establish new objectives and communicate them
Encourage bottom-up participation
Train staff on the new value system
Change the staff reward system; quit rewarding “the
old way”
Impact of Culture
 Values
of business: what is and what is
NOT acceptable
 Determines managers and employees
treat each other
 A distinctive culture can support a brand –
think GOOGLE
 Positive organizational culture has been
clearly linked to long-term business
success.
Best Companies to Work For
 Whole
Foods Video Clip
Whole Foods