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IB Business Management HUMAN RESOURCE MANAGEMENT 2.5 Organisational Culture

Terms in this set (14)

Organizational culture

The values, attitudes and beliefs of the people working in an organization that control the way they interact with each other and with external stakeholder groups

Power culture

Concentrating power among a few people

Task culture

Based on cooperation and team work

Role culture

Each member of staff has a clearly defined job title and role

Person culture

When individuals are given the freedom to express themselves and make decisions

Entrepreneurial culture

Encourages management and workers to take risks, to come up with new ideas and test out new business ventures

Influences on organizational culture:

1. Mission and vision statements
2. The appointment of senior staff
3. The organization's ethical code of conduct
4. Strategies on social and environmental issues
5. The example the organization sets (treatment of subordinates, decision-making, etc.)

Common elements in effective organizational change:

1. Concentrate on the positive aspects of the business and enlarge these.
2. Obtain the full commitment of people at the top and all key personnel.
3. Establish new objectives and a mission statement that accurately reflect the new values and attitudes.
4. Encourage 'bottom-up' participation of workers when defining existing problems and devising solutions.
5. Train staff in new procedures and ways of working that reflect the changed value system of the business.
6. Change the staff reward system to avoid rewarding success in the 'old ways' and promote success in the 'new ways'.

The importance of organizational culture:

1. The values of a business establish the norms of behavior of staff.
2. Culture determines the way in which company managers and workers treat each other.
3. A distinctive organizational culture can support a business's brand image and relationships with customers.
4. Culture determines not just how decisions are made but also the type of strategic decisions that are taken.
5. Organizational culture has been clearly linked to the economic performance and long-term success of organizations.

Advantages of having a strong corporate culture:

1. It creates a sense of belonging and security for staff because they feel as if they are part of the business. This can help improve team work and to raise and increase motivation.
2. Mistakes and misunderstandings can be minimized since staff are familiar with the processes at work.
3. It promotes team cohesiveness whereby people do things because they simply feel that it is the right thing to do.
4. Problems associated with a culture gap, such as conflict between different groups are minimized.

Charles Handy's five types of organizational culture:

1. Role culture
2. Power culture
3. Task culture
4. Person culture
5. Entrepreneurial culture

Culture clash

Occurs when there is conflict between two or more cultures within an organization. This may exist when there is a merger or acquisition and two firms are required to integrate, each with their own unique corporate culture.

Culture gap

The difference between the existing culture of an organization and its desired culture. Management will use different strategies to reduce this gap.

Constraints to changing corporate culture

1. Costs
2. Resistance to change
3. Public opinion
4. National cultures

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What is the purpose of culture in an organization?

An organization's culture defines the proper way to behave within the organization. This culture consists of shared beliefs and values established by leaders and then communicated and reinforced through various methods, ultimately shaping employee perceptions, behaviors and understanding.

What is a purpose of culture?

In addition to its intrinsic value, culture provides important social and economic benefits. With improved learning and health, increased tolerance, and opportunities to come together with others, culture enhances our quality of life and increases overall well-being for both individuals and communities.