2.5 — Organisational Culture

Question 1

What is organisational (corporate) culture?

Answer 1

the shared values, beliefs, and norms that influence how people within an organisation behave & interact. → It represents “the way things are done around here”

Question 2

What does organisational culture determine?

Answer 2

What is considered normal in the workplace. The guiding principles behind decisions, attitudes, & behaviours The collective personality of the organisation.

Question 3

Why is corporate culture important?

Answer 3

✅ Creates a sense of unity and purpose among employees. ✅ Reduces conflicts and misunderstandings, improving communication. ✅ Enhances motivation, loyalty, and productivity, leading to higher staff retention. ✅ Aligns staff behaviour with the firm’s mission, vision, and values.

Question 4

How does the size of an organisation influence organisational culture?

Answer 4

Larger firms → more formal policies and bureaucratic processes. Smaller firms → more informal, flexible culture.

Question 5

How do traditions and values influence organisational culture?

Answer 5

Rooted in the firm’s history, founders, or purpose. Example: A charity’s culture differs from a multinational fast-food chain.

Question 6

How do senior managers influence organisational culture?

Answer 6

Leadership styles, risk tolerance, and personality strongly shape culture. As Bill Marklein said: “Culture is how employees’ hearts and stomachs feel about Monday morning on Sunday night.”

Question 7

How do societal and regional norms influence organisational culture?

Answer 7

National culture influences business behaviour, ethics, and gender roles. Example: Scandinavian countries’ culture of equality affects leadership and teamwork expectations.

Question 8

What is vision as an element of organisational culture?

Answer 8

Vision – The organisation’s long-term purpose that guides strategy and inspires employees.

Question 9

What are values in organisational culture?

Answer 9

Values – Core moral principles or beliefs that direct decisions and behaviour.

Question 10

What are practices in organisational culture?

Answer 10

Practices – Day-to-day operations and routines that put values into action (e.g., sustainability policies, flexible working).

Question 11

What does people refer to in organisational culture?

Answer 11

People – The organisation’s approach to recruitment, teamwork, and development.

Question 12

What are traditions in organisational culture?

Answer 12

Traditions – Customs, rituals, or celebrations that reflect the organisation’s history and identity.

Question 13

What is leadership style in organisational culture?

Answer 13

Leadership style – The tone set by managers and how authority is exercised (autocratic vs. democratic, etc.).

Question 14

What are the characteristics of a strong organisational culture?

Answer 14

Shared values understood by all employees. High motivation, cooperation, and morale. Consistent decision-making and behaviour. Increased productivity and staff retention.

Question 15

What are the characteristics of a weak organisational culture?

Answer 15

Lack of clarity about expectations. Miscommunication and internal conflict. Confusion and inconsistent practices. Low productivity and higher labour turnover.

Question 16

What is a culture gap?

Answer 16

→ The difference between the desired and actual culture of an organisation. A wide culture gap can cause disharmony, reduced motivation, and lower productivity.

Question 17

What is power culture (Zeus)?

Answer 17

Centralised decision-making by one dominant leader or small group. Few formal rules; communication is direct and informal. Results-oriented and fast-moving. ✅ Quick decision-making. ✅ Low bureaucracy and operating costs. ❌ Low morale, poor communication. ❌ Risk of dependency on one individual. Examples: Small entrepreneurial firms, family businesses, Apple under Steve Jobs.

Question 18

What is role culture (Apollo)?

Answer 18

Based on rules, roles, and hierarchical structure. Job descriptions and responsibilities are clearly defined. ✅ Stability, clarity, predictability. ✅ Suitable for large organisations. ❌ Inflexible, resistant to change. ❌ Low innovation and initiative. Examples: Public sector, universities, hospitals, government agencies.

Question 19

What is task culture (Athena)?

Answer 19

Teams formed to solve problems or complete projects. Flexible, innovative, and expertise-based. Uses matrix structures. ✅ Encourages teamwork and creativity. ✅ Dynamic and adaptable. ❌ High costs (specialist staff). ❌ Risk of power struggles or role confusion. Examples: Consulting firms, ICT companies, R&D departments.

Question 20

What is person culture (Dionysus)?

Answer 20

Individuals see themselves as more important than the organisation. The organisation exists to support personal goals. ✅ Autonomy, creativity, independence. ✅ High expertise & professionalism ❌ Expensive to maintain. ❌ Conflicts of ego and limited teamwork. Examples: Law firms, medical practices, consultancy firms.

Question 21

What is the mnemonic for Handy’s cultures?

Answer 21

Zeus (Power), Apollo (Rules), Athena (Teams), Dionysus (Individuals).

Question 22

What are cultural clashes?

Answer 22

occurs when there are significant differences in values, attitudes, or beliefs between groups or individuals in an organisation, leading to conflict, low morale, and inefficiency

Question 23

How can organic growth cause cultural clashes?

Answer 23

As organisations expand, employees may feel detached from management New visions, missions, or locations (especially international growth) may conflict with existing norms Example: Expanding into countries with different cultural expectations.

Question 24

How can mergers and acquisitions cause cultural clashes?

Answer 24

When 2 companies with different cultures merge, one culture often dominates Misalignment of values, management styles, or communication norms causes tension Example: The failed $35 billion merger between Omnicom and Publicis (2014) — abandoned due to leadership and cultural incompatibility. Around 70–90% of mergers fail due to culture clashes (The Huffington Post).

Question 25

How can changes in leadership styles cause cultural clashes?

Answer 25

A new CEO or management team introduces new values or strategies, which may conflict with existing culture. Long-serving staff may resist change. Example: Steve Jobs (autocratic) vs. Tim Cook (collaborative) at Apple — leadership shift changed the firm’s internal culture.

Question 26

What are the consequences of cultural clashes?

Answer 26

❌ Reduced staff morale and self-esteem ❌ Lower motivation and productivity ❌ Increased absenteeism and labour turnover ❌ More conflict and resistance to change ❌ Decline in profitability

Question 27

How can organisations manage and prevent cultural clashes?

Answer 27

✅ Understand and respect national and regional cultures (Hofstede’s dimensions). ✅ Communicate new visions clearly during change management. ✅ Encourage cross-cultural training and team integration. ✅ Involve employees in the change process to build ownership. ✅ Recruit and promote individuals who align with the organization’s core values.

Question 28

What happened at the Taj Mahal Palace Hotel (Mumbai, 2008)?

Answer 28

Employees risked their lives during a terrorist attack to protect guests. “Leadership from below” – strong national and organisational culture emphasizing respect, duty, and hospitality. Recruitment focused on attitude and values, not grades.

Question 29

How did Indra Nooyi influence PepsiCo’s culture?

Answer 29

Developed the “5 Cs of leadership”: Competence, Courage, Confidence, Communication, and Compassion. Transformed PepsiCo’s culture towards innovation, inclusion, and purpose-driven leadership. Demonstrates how a leader’s vision can reshape corporate culture globally.

Question 30

What evaluation points apply to corporate culture?

Answer 30

A strong and positive corporate culture can enhance competitive advantage, but can also become rigid and resistant to change Cultural alignment is vital during growth or mergers — ignoring it can lead to failure or demotivation Leadership style strongly determines whether cultural change is embraced or resisted The ideal corporate culture balances clarity (structure) and flexibility (innovation) to adapt to a changing environment.