- 10 Marks
Question
The Management of InvestAfrica, which operates in the investment and risk management industry, has built a strong organisational culture that is now becoming a barrier to realising the company’s future aspirations, particularly since future developments may involve a merger with another company. Management of the company has determined that in order to ‘take the company to the next stage of its growth’ there will need to be significant changes in its internal operations and in the way staff work.
Required:
Explain how the organisational culture might positively and negatively influence its performance. (10 marks)
Answer
Positive Influences of Organisational Culture on Performance:
- Identity and Belonging:
A strong organisational culture provides employees with a sense of identity and belonging, which can be motivational and enhance staff retention. - Communication and Coordination:
Organisational culture can facilitate effective communication and coordination among employees, leading to improved collaboration and efficiency. - Reduced Differences:
A strong culture reduces differences between individuals and groups within the organization, promoting a unified approach to achieving organizational goals. - Regulation of Behavior:
A strong culture reinforces dominant values and attitudes, regulating behavior and ensuring consistency in decision-making and operations. - Corporate Image:
A strong culture reflects the philosophy of the organization, creating a positive image externally, which can be beneficial for branding and competitive positioning.
(5 points for 5 marks)
Negative Influences of Organisational Culture on Performance:
- Inflexibility:
Strong cultures can become deeply ingrained, making it difficult for the organization to adapt to changes or implement new strategies, leading to potential stagnation. - Blinkered View:
A strong culture may create a narrow perspective that prevents the organization from learning new skills or taking on new challenges, limiting innovation and growth. - Inappropriate Values:
If the strong culture is based on values that are not aligned with the current needs of the organization, it could lead to a deterioration in performance. - Conflict with Mergers:
Strong cultures can cause conflict when the organization merges with another, as differing values and practices may clash, reducing the likelihood of a successful integration. - Misalignment with Environment:
If the organizational culture does not align with the external environment or market conditions, it can hinder the organization’s success and adaptability.
- Tags: Corporate Culture, Organisational Change, Organisational Culture, Performance
- Level: Level 1
- Topic: Organisation culture in business
- Series: NOV 2018
- Uploader: Uploader1