Corporate Culture

What is corporate culture?

Corporate culture- These are the values, beliefs, norms and behaviour shared by groups within the
organization.

For example: Some companies might have strict rules and workers would be closely controlled. They
might not be allowed to make decisions by themselves. Whereas in other companies the rules would be
relaxed.

1. Strong corporate cultures- A strong organizational culture has huge impact on the behaviour of
firms. Here are few advantages of it:


2. Weak corporate culture- This is when rules and traditions of the firms are not easily adapted by
the employees. Firms with weak culture tend to struggle.

For example workers might be reluctant to change and there could be bureaucracy.

Although strong corporate culture is preferred over weak ones, it does not guarantee success. For
example if a culture is too strict then it might be difficult for firms to respond the changing market.

Taybah Azeez
Business Studies Unit 3
 Classification of company cultures

 Power culture

In an organization with a power culture, power is held by just a few individuals whose influence
spreads throughout the organization.

There are few rules and regulations in a power culture. What those with power decide is what
happens. Employees are generally judged by what they achieve rather than how they do things
or how they act. A consequence of this can be quick decision-making, even if those decisions
aren't in the best long-term interests of the organization.
Taybah Azeez
Business Studies Unit 3
  Role Culture-

Task Culture- Task culture forms when teams in an organization are formed to address specific problems
or progress projects. The task is the important thing, so power within the team will often shift
depending on the mix of the team members and the status of the problem or project.

Whether the task culture proves effective will largely be determined by the team dynamic. With the
right mix of skills, personalities and leadership, working in teams can be incredibly productive and
creative.

Taybah Azeez
Business Studies Unit 3
Dx

 Person culture-

Cultural dimensions

These are 5 dimensions that affect organizations all over the world.

Taybah Azeez
Business Studies Unit 3
  Power distance- This is the distance between managers and subordinates. A high-power
distance culture suggests that managers have more power than the employees. Due to
this there will not be much top-to-down communication. Whereas a lower power
distance indicates that there would be greater communication among employees of
different rank.
 Individualism-

 Masculinity versus femininity- This is when the organization has different rules for men
and women. For example men are given more challenging task.
 Uncertainty avoidance- This is level at which organization will accept risk. If a business
has high level of uncertainty avoidance it means they will take longer to make decisions
and will require proof and careful thought process before investing on a project.
 Long-term versus short- term orientation-

Effects of organizational culture:

1. Motivation- Organizational structure affects the motivation of the staff. For example if the
culture respects each other then individuals will be motivated to achieve more. A competitive
environment might motivate some while demotivate others.
2. Organizational structures-

3. Change- A business could change in variety of ways:

 New management- A business could change the way they choose their new
management. The greater the change the more new management will challenge the
existing organizational structure.
 Mergers and takeovers- When two businesses merge or one takes over another, there
is likely to be change of organizational culture. Therefore,

Taybah Azeez
Business Studies Unit 3
How corporate culture is formed?

1. Leadership style- An organization is likely to be molded to the personality of the founder. For
example an autocratic leader will have strict rules which have to be followed.
2. Type of product-

Difficulties in changing an established culture

 Certain aspects of organizational culture is easy to change such as policies and rules. However, it
is difficult to manipulate people’s beliefs and attitudes.


Overall, culture can be changed if the right factors are influenced and the leaders within the
organization are strong. However, changing the culture is a long process.

Taybah Azeez
Business Studies Unit 3