Organisational Culture | A-Level, IB & BTEC Business

Summary

This webinar offers an insightful exploration of organizational culture in the context of A2 Business Studies. It delves into the concept of culture as a business's DNA, challenging to alter yet pivotal for success. Key theories by Charles Handy and Ed Schein are discussed, highlighting the layers of culture from visible values to deep-seated paradigms. The session contrasts culture as both a potential competitive advantage and a liability, exemplified by cases like Disney's service culture and the toxic practices at Enron. It underscores the impact of leadership on culture and the complexities of cultural change, offering a comprehensive view of culture's role in business ethics, innovation, and performance.

Takeaways

• 😀 Organizational culture is a core topic in A2 business studies, often described as 'the way we do things around here', reflecting a company's distinctive practices.
• 🧬 Culture can be viewed as the 'DNA' of a business, implying it's unique, complex, and not easily changed.
• 💡 Charles Handy's model categorizes organizational culture into four types: Power, Role, Task, and Person, providing a framework to compare and contrast different corporate cultures.
• 🌟 Ed Schein's model suggests understanding culture involves examining four layers: Artifacts, Espoused Values, Basic Assumptions, and Paradigm.
• 🛡️ A strong organizational culture can be a source of competitive advantage, as seen in companies like Disney, Zappos, and Southwest Airlines, where culture is deeply embedded and drives customer experience.
• ⚠️ Conversely, a toxic culture can be a significant liability, harming business performance and ethical standards, as evidenced by cases like Enron and the News of the World.
• 🔝 Leadership plays a crucial role in shaping and managing organizational culture, with the founder's values often setting the cultural tone.
• 🔄 Changing organizational culture is challenging and typically requires patience and incremental adjustments rather than radical shifts.
• 🔍 Organizational culture can be a relevant topic in various business studies areas, including leadership, ethics, innovation, and change management.
• ✍️ Exam questions often link organizational culture with broader business issues, such as ethics and competitive advantage, prompting students to analyze its impact.

Q & A

What is organizational culture?

Organizational culture refers to the distinctive way in which an organization operates, including its environment, office layout, communication styles, recruitment, training, and customer interactions. It can also be thought of as the 'DNA' of a business, indicating its individuality and complexity, making it difficult to change.

How can organizational culture be a source of competitive advantage?

A strong, positive organizational culture can lead to consistent, high-quality customer experiences, as seen with Disney theme parks, Zappos, and Southwest Airlines. When employees buy into the culture, it can empower them to enhance customer service and drive business success.

What is the concept of organizational culture as the 'DNA' of a business?

The 'DNA' concept suggests that culture is unique and deeply embedded within an organization, influencing its operations and decision-making. It is complex and individual to each organization, making it challenging to replicate or change.

What are the four layers of culture as described by Ed Schein?

Ed Schein's model describes four layers of culture: 1) Artifacts (observable practices and rituals), 2) Espoused Values (publicly stated principles), 3) Basic Beliefs (underlying assumptions guiding behavior), and 4) Paradigm (the core, often unspoken, beliefs and perceptions that are deeply ingrained).

How does leadership influence organizational culture?

Leadership plays a crucial role in shaping and maintaining organizational culture. It is often said that culture is formed in the 'shadow' of leaders, especially founders or senior leadership teams. Their values, behaviors, and decisions significantly impact the culture and can lead to either success or failure.

What is a toxic culture and how can it harm a business?

A toxic culture is one that damages the organization and its stakeholders, including employees and customers, through unethical practices, poor morale, and destructive behaviors. It can lead to financial losses, legal issues, and reputational damage, as seen in cases like Enron and the News of the World.

Why is changing organizational culture difficult?

Changing organizational culture is challenging because it is deeply ingrained and complex. It is part of the organization's identity and operations, and altering it requires patience, sustained effort, and a clear vision for the desired change.

Can you provide examples of where organizational culture has led to business failure?

Kodak is a notable example of a company where a complacent culture, resistant to digital innovation, led to its downfall. Other examples include Nokia and BlackBerry, which failed to adapt to the smartphone revolution quickly enough.

How can organizational culture be relevant in business ethics discussions?

Organizational culture is closely linked to business ethics, as a culture that encourages dishonesty or unethical practices can lead to scandals and legal issues. Conversely, a culture that promotes transparency and integrity can prevent such problems.

What are some strategies for effectively changing organizational culture?

Effective strategies for changing organizational culture include clear communication of the desired culture, leadership that models the change, employee involvement in the process, and patience for gradual shifts rather than abrupt overhauls.

How is organizational culture examined in A2 Business Studies?

In A2 Business Studies, organizational culture is a core topic that can be examined directly or integrated into discussions on leadership, ethics, innovation, and change management. Past exam questions have explored the impact of culture on business performance and ethics.