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2.6 Organizational and Corporate Culture HL

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Deborah Kelly

on 21 January 2015

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Transcript of 2.6 Organizational and Corporate Culture HL

Influences on organizational culture
Senior management
may influence the culture of an organization through:

mission and vision statements - these inform staff about what the business is trying to achieve
the appointment of senior staff - likely will share the same values, attitudes and beliefs as the directors
the organization's ethical code of conduct - this lists the "dos" and "don'ts" that must be observed by staff when dealing with external stakeholders
strategies on social and environmental issues
the example they set - for example, how they treat subordinates and take decisions

the business operates in will also influence the values and beliefs of the organization.

legal constraints, social norms
cultural values
vary widely and these are likely to be reflected in the culture of the different countries organizations.
What is organizational culture?
"The way we do things around here."
2.6 HL - Organizational and corporate culture
Types of organizational cultures
Charles Handy has identified the following culture types:
Power culture
- concentrating power among a few people. This is represented by a spider's web. The spider at the center has all the power
Decisions can be made swiftly as so few people are involved in making them
Managers are judged by results
Autocratic leadership style and hierarchical structures
Motivation methods would focus on financial incentives and bonuses to reward performance
Role culture
- each member of staff has a clearly defined job title and role. The image of a building is used to represent a role culture - solid and dependable but not going anywhere fast.

usually associated with bureaucratic organizations
staff operate within the rules and show little creativity
the structure of the organization is well defined and each individual has clear delegated authority
power and influence come from a person's position
decision-making is fast and risk taking is frowned upon
will use a tall hierarchical structure
Each organization has a unique culture which defines how that organization works.

Organizational culture is defined as the values, attitudes and beliefs of the people working in an organization.

Values, attitudes and beliefs have a very powerful influence on the way staff in a business will act, take decisions and relate to others in the organization.
Task culture
- based on cooperation and teamwork. The image of a net is used to show that the net's strength is derived from many strands.

groups are formed to solve particular problems
teams are empowered to take decisions
teams are encouraged to be creative
a strong team spirit often exists and this can be a very motivating environment
Person culture
- when individuals are given the freedom to express themselves and make decisions. This is depicted as a constellation of

stars each person is different from everyone else and they operate alone.
the most creative type of culture
no emphasis on teamwork as each individual is focused on their own tasks and projects
found in scientific research or professional partnerships like lawyers and architects
individuals will find it hard to work in a more structured environment
As with leadership styles there is no one right or wrong culture for a business, the appropriate culture will depend on the firm's objectives, the type of market it operates in and the values and expectations of managers and employees.
Culture Clashes
These exist when there is a conflict between one or more cultures within an organization. This often happens with mergers, takeovers and expansion overseas. As well it can result when the existing culture of a business becomes inappropriate and clashes with new objectives needed to achieve growth, development and success.
Example: When EuroDisney first opened there were staff protests and they walked out. Why? Management wanted English as the language and had a strict dress code both of which were US based. Eventually, French working practices were adopted and it became Disneyland Paris.
Changing Organizational Culture
Changing the value system of a business and attitudes of all staff who work for it is never going to be an easy task. The process can take several years. In order to have effective cultural change:

concentrate on the positive aspects of the business and enlarge on the.
obtain full commitment of people at the top and all key personnel
establish new objectives and a mission statement that reflects the new values and attitudes
encourage "bottom-up" participation of workers when defining problems and devising solutions
train staff in new procedures and new ways of working - if people believe in the change and understand the benefits of it, then it will become more acceptable to them
change the staff reward system to avoid rewarding the "old ways" - people need to be reassured that if they adjust to the new approach then they will gain from it.
The importance of organizational culture
the values of a business establish the norms of behavior of staff
culture determines the way in which company managers and workers treat each other
a distinctive organizational culture can support a business's brand image and relationship with customers
culture determines not just how decisions are made - with the participation of staff or not - but also the type of strategic decisions that are taken
organizational culture has been clearly linked to the economic performance and long-term success of organizations
influences on organizational and corporate culture
different types of culture and their effects on motivation and organizational structures
consequences of culture clash

Read and respond to the article "Netflix Corporate Culture HR policy".

For the full "deck" please look at the following slideshare - Netflix culture : Freedom and Responsibility.

Case Study Practice:
Serco plc
Apple's Corporate Culture
Google's Corporate Culture
2.6 Worksheet
Ryanair Article -
"Can Ryanair change its corporate
culture with the
same leadership?
Read and respond
Full transcript