Organisational culture

Question 1

Importance

Answer 1

Financial success
- should improve lower unit costs as staff are more productive and consumers appreciate the customer culture

Emoloyee satisfaction
- maslow’s hierarchy, staff feel valued so are motivated to provide better customer service or improve productivity

Staff retention
- employees feel they have a purpose so less likely to leave

Recruitment
- less recruitment as hugh retention
- easy recruitment as people want to work for a firm that has clear values

Question 2

Impacts

Answer 2

Motivation
- communication, retention, performance infidelity

Affects decision making
- speed (employees suggest things for localised issues)
- high level of involvement

Competitiveness
- employees know local issues but will only innovate if they feel comfortable

Brand image
- changes consumer perception and stakeholder opinions

Question 3

What is culture

Answer 3

Traditions, rituals, attitudes and values that change how a business is run

Can determine the success of a strategy

IKEA
- strong customer culture (sern as experience, day trip)
- strong employee culture (encourage innovation, provided with a lot of holiday which lowers turnover)

Multinational company
- different countries have different cultures

Question 4

Influences

Answer 4

Mission statement and corporate objectives

Attitudes, beliefs and priorities of a leader (what happens when you get a new leader)

Ownerships and size of organisation
- if at different locations, then too many employees to all be involved

Geographical area

Competitive environment

Question 5

Strong vs Weak

Answer 5

Strong culture
- sense of togetherness and committed to the vision
- employees believe in the corporate values
- increases motivation
- employees need less supervision
- staff are more loyal, less turnover

Weak culture
- employess don’t share the company’s values and are forced to comply
- they need more supervision and many policies to force them to comply

Question 6

Handy’s model

Answer 6

Power culture
- power is concentrated at the centre for few people
- employees resist change
- small organisations
- autocratic leadership

Person culture
- people with similar training and expertise
- decisions made together so likely to agree to change
- democratic leadership
- decision making is slow

Task culture
- based on co-operation and teamwork
- similar to matrix strxuture, used to change
- can be democratic if teams are allowed to make their own decisions, if no then paternalistic

Role culture
- bureaucratic (hierarchy) firms
- authority decided by job
- decisions made by senior managers
- poor communication, slow response and little creativity
- autocratic or paternalistic, slowest change (bad communication means don’t have the information to make decision and takes long time for employees to be informed of change)

Question 7

How is culture demonstrated

Answer 7

How employees are recruited

The way guests are treated

Degree of delegation and individual responsibility

Responsiveness and methods of communication

How staff speak to each other