2.5 Corporate Culture Analysis

Describe what corporate culture is.

Answer explanation

The norms, values, beliefs and attitudes shared by individuals within an organisation.

These may include the rules and policies or the way that work is done.

The video talks about corporate culture as a “value driver”, it adds value. Describe how corporate culture might add value to an organisation.

Answer explanation

Adding value refers to the generation of sales revenue from the output (product) that is greater than the costs of the input. Culture as a value driver has very little costs of input, but can lead to the generation of large amounts of revenue if done well.

Describe how the relationship between 'norms' and 'values' is similar to the relationship between 'mission' and 'vision'.

Answer explanation

Norms are like the mission. They are lived day-to-day and lead to something greater.

The norms represent the day-to-day actions of people, the mission represents the day-to-day goals. These are very important and are unique to each organisation

Values are like the vision. They are aspirational and achievable if the norms/mission are well developed.

The values represent the aspirations of the organisations culture. The vision represents the aspirational goals. These are less unique from one organisation to another.

Explain why a company would not acquire another business if there was a misalignment of the culture.

Answer explanation

Culture clash can be very damaging to the internal culture of one or both organisation. As stated, culture problems lead to issues with investment risk, ethics and short v long term outlook. These problems, and the time and cost it would take to resolve them, could outweigh the potential financial benefit of acquiring the firm.

What is the term for the difference between a firm's actual culture and its desired culture?

• Culture clash

• Culture misalignment

• Culture gap

• Corporate culture

Explain why autocratic leadership might create a different corporate culture than a laissez faire leadership style.

Answer explanation

Each leadership style provides the subordinate with differing levels of instruction, control and autonomy. Autocratic leadership limits creativity and autonomy, whereas Laissez Faire leadership encourages these things.

Corporate culture is the norms of the organisation for all employees. So the leader will influence these norms of how work is done and how communication happens through their leadership style.

The video mentions the achieving the culture of the firm, the setting of ‘cultural objectives’ as a way to measure the effectiveness of culture. Describe a possible challenge of setting cultural objectives.

Answer explanation

Objectives need a form of measurement. How corporate culture can be measured to determine if an objective of the 'culture' is successful would be challenging. Measuring the culture is not the same as measuring the outcome of the work.

Explain why a healthy corporate culture will likely lead an organisation to adopt a more long-term focus.

Answer explanation

If the culture is healthy, there is stability and security amongst the employees in knowing the work they are doing is good (and if it's not, they will find out). This means that workers and managers are able to consider the long term in the strategising and decision-making without the fear of sudden change