3.4 Flashcards
Handy’s organisation of culture
Power culture: Autocratic leadership
- Control radiates from centre
- Concentrates power among few people
- Few rules
- Swift decisions
Role culture: Autocratic/Paternalistic leadership
- People in the business have clear delegation
- Highly defined structure
- Power derived from person’s decision
- Little scope exists for persons position
Task culture: Paternalistic/Democratic leadership
- Team formed to solve particular problems
- Power within business derives from expertise
- No single power force
- Teams may develop their own objectives
Person culture: Democratic leadership
- Person believes they are superior to the business
- Full of people with similar training/background
- Common culture in firms of professionals
- Power lies in each group of individuals
Shortermism/Longtermism
Where a business prioritises shot term rather than long term performance
(opposite = longtermism)
Emphasises certain measures:
- Share price
- Revenue growth
- Gross/operating profit
- Unit costs/productivity
- Return on capital employed
Effects of shortermism
- Inadequate money/time spent on research and development
- Staff aren’t performing meaning high staff turnover
- Ignoring one term risks
- Shortage of investment for advertising in the future
- Lack of experience/skills that may be needed in the future
Stakeholder vs shareholder
Stakeholder:
- Interact with but don’t own the business
- May work for/transact with the business in a way
Shareholder:
- An owner of shares in a company
Stakeholder and shareholder influences
Stakeholder: That the business considers all of its stakeholders in its business decisions/objectives
Shareholder: That the business should focus purely on shareholder returns (increasing share price and dividends) in its business decisions/objectives
Factors influencing business culture
- Organisation’s structure
- System and processes by which work is carried out
- Behaviour and attitudes of employees
- Organisation’s values and traditions
- Management and leadership styles adopted
Business culture
Shared values of a business. The beliefs and norms that affect every aspect of work life
Ethics
Moral guidelines which govern good behaviou
Corporate social responsibility (CRS)
Extent to which businesses address concerns to wider stakeholders
Society needs business:
- Employment/wages
- Investment/innovation
- Profits/taxes
Business needs society:
- Public assets/infrastructure
- Create demand
- Legal protection
Free market and CRS view
Free market:
Job of a business to create wealth for it’s shareholders
CSR view:
Businesses should be concerned with social issues
Corporate strategy
Choices business make about how to achieve objectives
- Strategic analysis
- Strategic implementation
- Strategic choice
Strong culture
- Responds positively to org values
- Shared sense of responsibility
- Motivated and loyal workforce
- Higher efficiency
- Roles and responsibility
Weak culture
- Little alignment with org values
- Employees are forced to perform certain duties
- High management control and supervision
- Source of income
Aspects of CSR
- Economic responsibility - bus have obligations to survive
- Legal responsibility - acts that the business is law-abiding
- Ethical responsibility - seen as morally correct
- Philanthropic responsibility - to do good via charitable acts
Internal stakeholders
Within the business
- Employees
- Managers
- Owner
