3.4.2 Corporate culture

Question 1

Corporate culture

Answer 1

The way people do things in a firm and the way things are expected to be done
Reflects the firms values
The culture will become stronger the more the business’s core values are reflected in everything it does
Culture can be identified by looking at the history of the business and who founded it

Question 2

Strong corporate culture

Answer 2

When the employees agree with corporate values
Employees need less supervision
Staff are more loyal so staff turnover is lower

Question 3

Weak culture

Answer 3

Employees don’t share the firms values
Forced to comply with them

Question 4

Four main types of corporate culture

Answer 4

1. Power Culture
2. Role Culture
3. Person Culture
4. Task culture

Question 5

What is power culture

Answer 5

Have a centralised structure
Decision-making is limited to a small group
May struggle if the business grows
Employees are out of touch with activities so are resistant to any changes in the business

Question 6

What is role culture

Answer 6

Common in bureaucratic firms
Authority is defined by job title
Employees aren’t involved in decision making
Poor communication between departments
Respond slowly to change
Change is rare
Staff are resistant to change

Question 7

What is person culture

Answer 7

Common in loose organisations of individual workers
Eg; Accountants, doctors…
Objectives defined by personal objectives
Decisions are made jointly so employees are comfortable
Change is difficult to make

Question 8

What is task culture

Answer 8

Get specific tasks done
Small teams work on projects
May be conflict between groups for resources and finance
Objectives based around products
Department objectives
Used to change

Question 9

Factors affecting how corporate culture is formed

Answer 9

1. Its founders
2. History
3. Nature of the business and products
4. Business environment
5. Recruitment and promotion of staff
6. Working conditions and rewards
7. Attitude to customer service

Question 10

Why might a business want to change the corporate culture

Answer 10

-Preferences of its leaders= if the manager changes the may make it more similar to the previous business they worked for
-Become more competitive

Question 11

Why might changing corporate culture be difficult

Answer 11

• Employees tend to resist any change
• Involves changing attitudes and behaviour of staff
• Difficult to make changes if the culture is strong
• Expensive as it requires extra training
• HR department will need to make changes