Changing the Organisational Culture (AQA A Level Business): Revision Note

Reasons for changing organisational culture

• Sometimes businesses must change their culture to stay competitive, relevant, or efficient

Pressures for cultural change

1. Poor business performance

   • When profits, sales, or overall productivity start declining, businesses may rethink their existing culture

   • If current practices aren't achieving the desired results, changing culture can improve employee motivation, introduce more efficient ways of working, and help regain competitiveness

2. New leadership

   • New leaders often bring their own set of values and ideas, differing from previous management

   • They might introduce new attitudes, beliefs, and working practices

   • Changing the culture allows the business to align with the new leader's vision, ensuring consistent decisions and clear direction for employees

3. Mergers and takeovers

   • When two different businesses combine, they often have separate and potentially conflicting cultures

   • Changing or blending organisational cultures is essential to unite employees, avoid internal conflict, and ensure everyone works effectively towards shared goals

     • Disney’s acquisition of Pixar involved adopting a more creative and open culture to blend effectively

4. Changing market conditions

   • Rapid shifts in technology, customer expectations, or competitor behaviour might require businesses to adapt quickly

   • A new, more flexible culture might be needed so that employees can innovate, respond quickly to customer needs, and keep the business competitive

5. Societal and ethical pressures

   • Businesses must often adjust their cultures in response to changing societal expectations and values, such as environmental sustainability or social responsibility

   • Failing to respond to these pressures can damage reputation, customer loyalty, and profitability

   • Adapting positively can enhance the business’s image and attract new customers

Problems caused by changing the organisational culture

• Changing organisational culture can be crucial for businesses wanting to adapt and improve

• However, many businesses face difficulties during the process, as employees, managers and systems may not easily adapt to new ways of working

Difficulties of changing culture