IB Business Management 2.5.1 Organizational Culture Notes

What is Organizational Culture?

It acts as the "personality", of a business, influencing everything from decision-making to employee behavior.

Why is Organizational Culture Important?

1. Influences Employee Behavior
   1. Culture shapes how employees interact, solve problems, and make decisions.
   2. A culture that values innovation encourages employees to take risks and think creatively.
2. Guides Decision-Making
   1. Culture acts as an unwritten guide for employees, helping them understand what is acceptable and expected.
   2. For example, a company prioritizing customer satisfaction will make decisions that enhance the customer experience.
3. Drives Organizational Performance
   1. A strong culture aligns employees with the organization's goals, improving efficiency and productivity.
   2. Conversely, a weak or toxic culture can lead to poor performance and high turnover.

How is Organizational Culture Demonstrated?

1. Stories
   1. Stories about past employees or events highlight what the organization values.
   2. For example, stories of employees going above and beyond for customers show a focus on customer service.
2. Rituals
   1. Regular events or practices reveal what is important to the organization.
   2. A company that holds weekly brainstorming sessions likely values collaboration and creativity.
3. Rewards System
   1. The way employees are rewarded reflects the organization's priorities.
   2. Bonuses for teamwork suggest a focus on collaboration, while individual sales targets highlight competition.
4. Physical Environment
   1. The layout and design of the workspace can indicate cultural values.
   2. Open-plan offices with casual meeting spaces suggest a culture of openness and communication.

Charles Handy's Gods Of Management

1. Charles Handy, a management scholar and theorist used greek gods to categorize four facets of culture.
2. Organizations can have more than these four facets, but each god is meant to represent specific values.

1. Power Culture

1. Characteristics:
   1. Centralized decision-making by a few key individuals.
   2. Quick decisions and strong leadership.
2. Drawbacks: