Ib business 2.5

• Organizational culture is defined as what is considered "normal" to a firm, including values, attitudes, beliefs, expectations, and assumptions ex. personality or character of a organization
• Organizational culture is considered a hygiene factor in Herzberg's two-factor model
• Strong and positive organizational culture creates conditions for employees to thrive.  It can create more harmony among employees, making work more enjoyable, encouraging teamwork, resulting in lower labor turnover and greater productivity. Benefits of them include creating a sense of belonging and security for staff, promotes cohesion so people do the right things, reduces mistakes and misunderstandings, minimizes problems when conflict occurs, employees will have a clear understanding of the organization and their relationships,expectations.
• Benefits of strong organizational culture include creating harmony among employees, making work enjoyable, encouraging teamwork, reducing labor turnover, and increasing productivity
• Weak organizational culture can lead to confusion, uncertainty, negative gossip, and decreased productivity
• Elements of organizational culture include vision, mission, and values of the organization, practices, history and narrative, and people
• Organizational culture is related to organizational structure, leadership styles, code of conduct, and rituals
• Norms of corporate culture include the nature of the business, organizational structure, rewards, management style, and sanctions
• Handy's Gods of management theory includes Power culture (Zeus), Role culture (Apollo), Task culture (Athena), and Person/existential culture (Dionysian)
• Culture clashes occur when there is conflict between two or more cultures within an organization
• Culture gaps are differences between the desired culture of a business and the culture that actually exists
• Common causes of culture clashes include internal and external growth of firms, mergers and acquisitions, multinational expansion, and changes in leadership
• Organizational culture is also related to organizational structure, leadership styles, code of conduct and rituals. Examples include dress code, workspace layout, formality of communication. 
• 1. Nature of the business- the mission, aims and objectives of a business will shape its culture ex.NGOs will have a very different culture from profit-driven business.(rmb to go review old) 
• • Organizational structureflat structures will encourage a collaborative culture,less hierarchy,wider span of control V.S Tall structure will generally have a culture of working in small independent teams,many levels of hierarchy, narrow span of control. 
• • RewardsAppropriately remunerated employees are more likely to develop a strong and united culture, turnover will be high if employees are not remunerated appropriately-> makes it difficult to build a sense of unity among staff as they have spent little time working together. 
• • Management styledecentralized firms will create a culture of independent problem solving, centralized firms will create a culture of referring problems to management instead of employees driving solutions. Some firms closely monitor their employees driving solutions. 
• 1. Sanctions- firm rigid rules and harsh consequences can create a culture of resentment, however one that has too few consequences can encourage staff to be slack ex. Being late to work/ frequent absenteeism. 
• Culture clashes: exist when there is conflict between two or more cultures within an organization, occur when more than one culture competes for dominance and conflict results. 
• • Culture clashes are likely to be a hygiene factor that can cause employees dissatisfaction, low motivation and higher labor turnover, confusion over expectations and relationships can make it more  difficult for teams of people to work together and can lead to lower productivity and higher costs for the business.
• Power culture(zeus):  An individual or a selected group of people makes decisions for the organization. Communication is highly centralized,top-down,formal,fast paced. Results are the most crucial factor in assessing an employee’s performance. Leaders tend to be autocratic. Centralized decision-making often speeds up business operations but could harm the long-term performance of the organization due to lack of diverse perspectives.
• Power structure also have Fewer rules,little bureaucracy but not much, flat structure with swift decision-making. Organization comes to a standstill without decision-makers. Ex.apple, facebook-> spider's web   
• Role Culture ( Apollo): Ppl have clearly delegated authority within a highly defined structure, tall, bureaucratic structure with slow decision-making, multiple hierarchies and long chains of command.  clear rules and hierarchies for the smooth operation of an organization. People have power in role cultures through their position, rather than because of their own qualities, traditional and stable. focus on following the rules in dealing with everyday situations ex. Hiring and promotion , government?

  ->temple 
• Task Culture (Athena): Emphasize on the achievement of goals, team based organization with no single power source, employees are highly empowered.  supports dynamic, innovative and flexible companies by giving power to experts within a group.
• Task culture: Companies with a matrix structure often exhibit this type of culture. Roles are often flexible; employees are expected to take various positions according to the requirements of the company and their own skill sets. Productive teamwork is valued. Teams of employees work mostly independently and are expected to solve problems. Ex. Information technology (IT) and consultancy companies have this type of culture.

  ->net
• Person/existential culture (dionysian)- exist in firms where staff are in similar positions with similar expertise (ex.accountants or doctors). Only exist for the benefit of the individuals involved.  values every person as an expert and relies on their experiences to operate the business. employee-centric and employees often have a similar level of knowledge and expertise.  a business organization is considered a way for them to carry out their individual work.
• Person culture: generous financial and non-financial rewards to recruit and retain. encourages a free, clutterless two-way communication between employees and managers. Most of the leaders adopt an open-door policy to discuss any suggestions and grievances from the staff. The contribution of each is considered important as it shapes the collective ethos of the company. Ex. Partnerships of highly skilled employees ex. lawyers / medical practitioners 

  ->stars 
• Changes: an act or process through which something becomes different. Businesses operate in a dynamic world with constant change. Both internal factors like human resource management, and external factors like economic and environmental conditions, can cause change in a business.
• Common causes of culture clashes: Internal and external growth of firms(Mergers, acusitions,takeovers), multinational expansion,changes in leadership
• Growth of business brings change:new products, new markets, new stakeholders and new processes.  i
•  internal growth is likely to lead to a more formal, hierarchical org structure. Can lead to more bureaucracy and power oriented culture.  During which a business expands its output, sales or staff with its own resources, is less likely to cause more cultural clashes than external growth, as a business gets larger, relationships and expectations of employees may change.
• Internal growth example: The workaholic culture of a startup may need to give way to a culture that values greater work–life balance of the employees as the business matures. This transition can cause conflict if not managed appropriately.
• Culture clashes can also occur from growth into overseas markets. 
• 1.  External growth almost always involves cultural tensions. Organizational culture is so unique to every business that it is very unlikely that any two businesses have the same culture. involved in a takeover, acquisition or merger, there can be culture clashes, Culture clash is one of the leading reasons why external growth strategies can fail. Ex. whole foods by amazon 
• 1. It is very important that organizations that are considering external growth critically assess and understand culture differences and actively work to resolve them. 
• 1. Mergers and acquisitions:the combining of  2 or more firms can cause culture clashes if there is a large cultural gap. The culture of the more dominant company tends to prevail OR, a new hybrid culture develops. 
• 1. Multinational expansion: being a multinational company has many benefits in terms of sales revenue, diversification and economies of scale for a business to expand internationally. However, it carries a particular risk of culture clash because of differences in language, working habits and hours, relationships between employees, and even ethical norms. Ex.ramadan 
• 1. Changes in leadership: leaders have a huge influence on corporate culture, when leaders change this will also change an org culture.
• Consequences of cultural clash

  • Misunderstandings and miscommunications 
  • Discontented staff
  • Resistance to change 
  • Compromises need to be reached 
  • High costs implementing change 
  • National culture clashes