Corporate culture — Edexcel A-Level Business
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Corporate culture explained
Corporate culture covers 4 specification points, including a) Strong and weak cultures and Power; role; task; person.
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Open a point below for its explanation and revision guidance.
a) Strong and weak cultures
Culture is strong when values are shared deeply enough that staff act on them without being told, and weak when they live on a poster while departments and sites run their own unwritten rules. The business case for strength is cost and consistency: less supervision, fewer written procedures, faster decisions, a customer experience that is the same in every branch, and lower labour turnover, calculated as leavers divided by the average number employed multiplied by one hundred. The cost is rigidity. Shared assumptions harden into groupthink, the outsider who disagrees is pushed out, and change becomes slow and expensive. Strength also says nothing about whether the values themselves are healthy, which is why some of the most cohesive organisations have also been the most reckless.
b) Classification of company cultures: power; role; task; person
Charles Handy sorted organisations into four working types, and the point of sorting is prediction rather than labelling. The power type is a web with a founder at its centre, so decisions are fast and cheap but depend entirely on one person's judgement. The role type is built of pillars, job descriptions and procedures, giving reliability and fair treatment but responding slowly to a new rival. The task type assembles project teams around a job, flexing quickly and costing more because resources are duplicated. The person type appears where skilled professionals such as barristers, doctors or architects hold the expertise, so the organisation serves them and central direction rarely sticks. The model is descriptive, most firms run several types at once, and it ignores the national differences Hofstede measures.
c) How corporate culture is formed
It is not installed by a values statement; it accumulates from what a business rewards, promotes and quietly tolerates. The founder sets the first pattern, stories about past successes harden it, and then recruitment, induction, appraisal, promotion and the bonus scheme teach every new arrival what really matters here. Structure reinforces it, because narrow spans of control and centralised authority breed procedure while genuine delegation breeds initiative. Outside forces work on it too, including the national setting Hofstede describes, industry and regulatory norms, and the ownership form, since a family firm answering to itself and a listed company answering to institutional investors each quarter do not develop the same habits. Because it forms slowly through incentives, it is a lagging variable managers can steer but not switch.
d) Difficulties in changing an established culture
Beliefs, habits and informal networks do the resisting, and none of them appear on an organisation chart, so a restructure can be completed while behaviour stays exactly as it was. Kotter and Schlesinger explain resistance as self interest, misunderstanding and lack of trust, a genuinely different assessment of the situation, and a low tolerance for disruption, and offer methods running from education and participation through negotiation to outright coercion. Lewin frames the sequence as unfreezing, moving and refreezing, where refreezing means changing who is recruited, rewarded and promoted. The practical obstacles are time, consultancy and retraining costs, lost output while systems change, the loss of experienced staff, and the awkward fact that the old ways usually produced the firm's past success.
Your focus
- a) Strong and weak cultures
- b) Classification of company cultures: power; role; task; person
- c) How corporate culture is formed
Show all 4 objectives
- d) Difficulties in changing an established culture
Corporate culture exam tips
Marking Points
- Say what makes a culture strong in a clause, values shared deeply enough to guide behaviour without supervision, and contrast it with one held together only by rules and local subcultures.
- Develop the cost chain, that shared values cut labour turnover, measured as leavers divided by the average number employed multiplied by one hundred, which lowers recruitment and induction spending and protects service quality.
- Develop the risk chain, that the same shared assumptions produce groupthink, silence dissent and make a necessary change far harder, which is where Kotter and Schlesinger becomes relevant.
- Make the evaluative point that strength is neutral about whether the values are good ones, using a firm whose cohesive sales culture drove mis-selling.
- Apply to the extract using hard evidence such as turnover figures, staff survey results or the founder's quoted values rather than generalities.
- Name Handy and place the business in one of his four types, justifying the choice with a quoted detail from the extract, such as one founder signing off every spending decision.
- Explain what each type does to decision speed and control, that the web is fast but fragile, the pillars are consistent but slow, project teams are flexible but costly, and professional autonomy resists head office.
- Use the classification to predict behaviour, for example a procedure-driven firm losing share to an online entrant because approval outruns initiative.
- Evaluate the model, that it is descriptive rather than predictive, that large firms run different cultures across sites and departments, and that it offers no route from one type to another.
- Bring in Hofstede where the case is multinational, since dimensions such as power distance and uncertainty avoidance change how each type actually behaves abroad.
- Identify the strongest formative force in the extract, usually the founder's values and the behaviour the business rewards and tolerates, then trace it to how staff behave today.
- Develop the systems chain, that recruitment and selection, induction, appraisal, promotion and the bonus scheme teach people what counts whatever the published values say.
- Link structure to culture, that a tall hierarchy with narrow spans of control and centralised decision making breeds procedure, while delegation and flat structures breed initiative.
- Credit external formation as well, naming national culture in Hofstede's terms, regulation, industry norms and the pressure created by a stock market listing.
- Judge which force dominates for this business and why, rather than listing every possible influence in turn.
- Explain why the change is hard in a clause, that shared beliefs live in habit and informal networks, so an announcement or a new chart changes nothing on its own.
- Use Kotter and Schlesinger by name, giving the causes of resistance and then selecting methods such as education and communication, participation, facilitation, negotiation, or coercion where a crisis leaves no time.
- Use Lewin to structure the process, unfreezing by making the case for change, moving, then refreezing through recruitment, reward and promotion so new behaviour holds.
- Develop the cost chain, naming retraining, consultancy fees, disrupted output, and a rise in labour turnover as experienced staff leave.
- Reach a judgement on a stated criterion, for example that coercion is fast and suits a firm in crisis but destroys trust, while participation is slow and suits a firm with time in hand.
Examiner Tips
- 💡Assess questions usually ask whether a strong culture is a competitive advantage for this firm, so weigh one named advantage against one named risk.
- 💡Expect the follow-up to be about change, so leave yourself a sentence linking cultural strength to resistance.
- 💡Quote measurable evidence from the extract, such as absenteeism, labour turnover or customer ratings, instead of adjectives about atmosphere.
- 💡Expect a short explain or analyse question that identifies the culture, then a longer question about whether that culture is now holding the firm back.
- 💡The examiner marks the evidence, not the label, so every classification needs a quoted fact from the extract attached to it.
- 💡Pair Handy with Kotter and Schlesinger or with Lewin when the question turns to change, because the type predicts which resistance appears.
- 💡This is usually the set-up for a change question, so build your answer around the forces that will later resist change.
- 💡Use the extract's history, the founder's quoted words and any detail about pay or promotion as evidence.
- 💡An analyse question rewards one or two chains developed fully, not six influences named and abandoned.
- 💡This is prime twenty mark evaluate territory, and the strongest answers select two named methods and argue for one rather than listing all six.
- 💡Say how long the change should take and what happens to output and morale meanwhile, because timescale is an easy route to judgement.
- 💡Mine the extract for the specific resistance, such as long serving staff, a founder still on the board, or a bonus scheme that pays for the old behaviour.
Common Mistakes
- Equating a strong culture with a happy workforce, when strength only means shared and enforced values and can mean relentless pressure to hit targets.
- Offering a mission statement or a values page on the website as proof of strength, when that gap between stated and lived values is the definition of a weak culture.
- Drifting into motivation theory, so Herzberg and Maslow crowd out any discussion of shared norms and consistency of behaviour.
- Forcing the whole business into one type when the extract describes a head office running on procedure and a design studio running on project teams.
- Reading the person type as a caring employer, when it means the individual professionals hold the power and the organisation exists to serve them.
- Describing the four types and stopping, which collects the knowledge marks and leaves every application and evaluation mark unclaimed.
- Assuming culture is created by publishing values, redesigning a logo or holding an away day, when it is formed by what gets rewarded and what gets quietly ignored.
- Overlooking the ownership form, so a family business and a listed company are treated as if the same pressures shaped them.
- Treating culture as fixed from birth, which makes the later question about changing an established culture impossible to answer.
- Offering better communication as the answer to every form of resistance, when managers losing status act from self interest and more information will not move them.
- Confusing structural change with cultural change, so a reorganisation chart is presented as proof that beliefs have shifted.
- Ignoring that the old culture produced past success, which is precisely why the people inside it believe in it.