Organisational Culture | A-Level, IB & BTEC Business

The Nugget

Organizational culture is the distinctive way a business operates that can either serve as a competitive advantage or a significant liability. Understanding and managing this culture is crucial, as it often stems from leadership and can be difficult to change.

Make it stick

💼 Culture is the organization's DNA—it influences every aspect of operation from employee behavior to customer interaction.
🌟 Strong culture leads to consistency, while weak culture results in inconsistent experiences for customers and employees.
🧩 Shin's model of culture highlights four layers: values, beliefs, behaviors, and paradigm, emphasizing culture's complexity.
🐟 "A fish rots from the head first"—toxic cultures often reflect the failures or ethical lapses of top leadership.

Organizational culture is defined as "the way we do things around here," encapsulating the unique practices of an organization.
It is seen as the DNA of a business, essential to its identity and operations; distinct across different companies.
Charles Handy's four types of culture provide a framework to categorize organizations, highlighting the differences in how culture affects power dynamics and decision-making.

Culture as Strength:
- A strong culture can lead to consistent performances and exceptional customer service, as seen in companies like Disney with its service-centric approach.
- Zappos and Southwest Airlines also exemplify cultures that empower employees and enhance customer experience.
Culture as Weakness:
- A weak culture can lead to inconsistencies and failures, often masked by extensive bureaucratic procedures.
- Notable cases of toxic cultures include Enron and RBS, where strong cultural traits turned destructive leading to scandals and bankruptcies.

Cultural change is essential, especially when responding to poor business performance or mergers.
Historical examples like Kodak demonstrate how complacent cultures can lead to failure in adapting to market changes.
Change is difficult; cultural shifts require sustained efforts and patience rather than quickly announced alterations.

"Culture is the way that we do things around here." — Charles Handy
"The one thing that leaders need to focus on is creating and managing culture." — Ed Shine
"A fish rots from the head first." — Unknown
"Culture is unique, it's the DNA of an organization." — Business Guru reference
"Forget it, it’s really hard to change organizational culture.” — Peter Drucker

This summary contains AI-generated information and may have important inaccuracies or omissions.