Effects of organizational culture
Organisational culture affects business in wide variety of ways. Three of these ways are motivation, organisational structures and change, for example, new management and mergers and takeovers
- Motivation: Organisational culture affect the motivation of staff. It can have a direct effect because the way in which staff treat each other impact on motivation. For example, motivation is likely to be greater if the culture of the organisation respect individual workers and their achievements. A highly competitive culture might motivate some workers indeed motivate others. Organisational culture can also indirectly affect motivation. An organisational culture which leads to successful business is likely in itself to motivate staff because they feel part the successful business
- Organisational structure: organisational culture can affect the organisational structure of a business. In a person culture, for example, the hierarchy is likely to be fairly flat. Say in a doctor’s practice, for instance, there are unlikely to be many layers of management. This is because a number of key workers share the senior management roles. In contrast there are likely to be more layers of management in a large multinational business that might require regional and divisional managers and multiple product teams. The larger of the business, the more layers the more likely specialist roles are assigned.
- New management: one way for a business to change its for new management to be appointed. The greater the change needed the most likely it is that the new management will have to confront the existing organisational culture. The organisational culture is likely to be part of the problem that needs dressing if the business is to be turned around
- Mergers and takeovers: when two businesses merge or one takes over another, each business is likely to have a different organisational culture. The process of creating a single business out of the two organisations were therefore involve changing organisational culture. In a takeover, one simple way of making the change quickly is for the senior management in the company been taken over to be made redundant. Without powerful advocate at the top of the organisation there’s the rub down will find it difficult to resist the change that would be imposed upon them. However, movie is often low in a company that’s been taken over for the first year or so because they are being forced to change.
- In the same way that you might identify a paint on an invention or an established brand as an asset, culture two can be a distinctive and sustainable competitive advantage. John Kay 1993 refer to architecture as one of the types of distinctive capability that could lead to competitive advantage. Architecture refers the relationships in that work with an organisation and those that develops with its external stakeholders- corporate culture would fall into this category. Whenever discussing corporate culture, it is worth considering it in terms of an asset that can be used to add value and compete in the market. However, it is also worth remembering that culture is very difficult to manipulate and shape in order to meet the changing needs of the business.