Question

(essay) One of the determinants for corporate success is corporate (organizational) culture. There are many factors influencing the establishment of corporate culture.

1. Discuss the relation between corporate culture and leadership of the organization.
2. Describe the relation between corporate culture and corporate strategy.
3. Why is it difficult to change organizational culture?
4. Explain why in merger and acquisition corporate culture is a big issue?

Answer 1

A. Discuss the relation between corporate culture and leadership of the organization.

The culture within an organization is critical, playing a large role in whether it is a happy and healthy environment in which to work. In communicating and promoting the organizational ethos to employees, their acknowledgement and acceptance of it can influence their work behavior and attitudes. When the interaction between the leadership and employees is fruitful, the latter will make larger contribution to team communication and collaboration, and will also be encouraged to accomplish the mission and objectives assigned by the organization, thereby enhancing job satisfaction.

B. Describe the relation between corporate culture and corporate strategy.

Culture as a concept is difficult to define and veries from firm to firm. The crafting of a strategy represents a managerial commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, participating successfully, and improving the company´s financial and market performance. Even companies with same strategic and business concepts and comparable success differ in their approaches regarding the corporate culture. What becomes clear is that there is a correlation between culture and strategy.

C. Why is it difficult to change organizational culture?

Resistance to change is a phenomenon which is frequently talked about in project management circles; it’s often quoted as a primary reason why projects and change programs don’t deliver the results they set out to.When the organizational change goes wrong it’s often because it’s being treated purely as an implementation of a new process. The manager uses a logical approach to deal with the practical elements of the change but ignores the emotional side of the equation. Main issues are as follow - 1. Executive subulture, 2. Engineering subculture & 3. Executive subculture.

D. Explain why in merger and acquisition corporate culture is a big issue?

Cultural integration can be challenging when the merging firms either fail to recognise each other’s cultures or take inadequate steps to allow their cultures to complement. Cultural clash may arise due to communication breakdowns and/or misunderstandings. Cultural due diligence is the answer of this riddle. In addition to cultural due diligence, companies should have a clear merger integration plan. Developing a clear integration agenda early on, often in parallel with early-stage due diligence, allows the acquirer to comprehend the culture of the other organisation and plan accordingly.