Notesale: Turn your study into money

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To what extent do you think that the culture of an organisation
determines its financial success in a changing external environment?
Culture can be described as the DNA of an organisation
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Every organization develops and
maintains a unique culture, which provides guidelines and boundaries for the behaviour of the
members of the organization
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Handy believes the culture of an organisation can be dissected into 4 parts
including Task, Role, Person and Power culture
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The culture of an organisation does largely
determine its financial success i
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a firm’s prospect of reaching its financial targets set out by
the firm such as expenditure budgets or revenue targets, however with a changing external
environment in context does it still?
The culture of an organisation does determine its financial success but this is determinant on
the type of culture
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The revenue may be disproportionate to the revenue received when there was a constant
environment however on contrast to significant competitors in the market it’s likely to be
substantial
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Each group is formed for the purpose of a single undertaking and is then
disbanded
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As such task culture can be effective in dealing with rapidly
changing competitive environments because it’s flexible
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The John Lewes Partnership or the Waitrose division is a prime
indication of how their culture (fundamentally task) was determinant of its financial success
when the British economy occurred a recession in 2008
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Its employees are its partners and it has therefore never
had to contend with the accusation that employees are expenses of the business to be used
and discarded
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Waitrose was and is to an extent today labelled as an upmarket
supermarket
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As a consequence in 2008 when the British recession hit
Waitrose faced losing large amounts of customers predominantly to Income elasticity
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e
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Subsequently Waitrose having the culture it does, acclimatized to
the new situation
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This inferior good range of 1,400 products consisted of
staple grocery lines, such as basic cuts of meat, tinned tuna, eggs, jam, fruit juice, biscuits,
milk, pasta as well as household cleaning products
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Waitrose soon saw sales
grow 10
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6%
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Additionally Waitrose were able to capitalise on its rival’s loss of sales as it grew its market
share to 3
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7 per cent
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Their
stagnant approach saw sales growth halved as Britain's biggest retailer lost customers to
budget rivals
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Nonetheless it is obligatory to say that in fact there are far more realistic factors that
contribute to financial success to a much greater extent in a changing external environment
than organisational culture
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Should there be a change in an external environment and the business
is required to act then it’s the leader’s responsibility to construct a clear vision about what the
new future looks like and a narrative that explains the steps in getting from here to there
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He has to be the presence that
keeps going, even during the difficult short-term period in which the disruptions caused by
change seem to outweigh any possible long-term gains
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The Chief Executive Officer since May
1996 is generally renowned for his autocratic leadership style known to provoke fear and
instant action, he considers himself to be always right often shaming ideas that he does not
like
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Jeff Bezos says that "My job is to encourage people to be
bold
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" And he wanted to
make reading more accessible for consumers
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Amazon was
particularly buoyed by the success of its Kindle electronic book reader, which founder Jeff
Bezos said was now a mainstay of the Seattle-based company's strategy
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com
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Sales, meanwhile, rose by more than a quarter to
$5
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27bn)
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This was due to Bezos’s
leadership practises and style showing that the culture of an organisation doesn’t determine
the financial success in a changing environment unconditionally
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When businesses are subject to an
changing external environment to increase efficiency and to stay competitive they may altar
their corporate structure
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Changes in
technology, changes in competitors behaviour, changes in government policies and changes
in tastes and fashion can all act as a catalyst for a change in an organisational structure
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Reducing the size of the workforce

and adapting its structure may be one way to achieve this
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e
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British Airways were subject to unsuccessfully reaching their financial
targets as the airline faced low-cost competition from EasyJet, Ryanair and Norwegian,
which is attempting to undercut fares
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Hundreds of cabin crew at British Airways at
Gatwick were told to choose hefty pay cuts or redundancy, BA said the changes were
intended to create a “sustainable and competitive” operation and that it was trying to
minimise the financial impact of crew
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BA employs about 1,450 crew at Gatwick, and around 360 were
affected
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6 billion this year
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The additional
resources increased BA’s competitiveness and provided one of the determinants to them
achieving financial success this year as the money may of been invested back into the
company in hope to increase efficiency or something somewhat similar, indicating once more
that the culture of an organisation doesn’t determine financial success to a large extent
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The CEO wouldn't be
responsible for each level of subordinates on a hierarchy to be positioned into which
structure is best unless the company was very small
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This is due to the fact that I envisage that there are far greater
variables which contribute to financial success to a higher extent such as the leader or the
corporate culture
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For example a group
of strong wall street firms such as Solomon bailing out Long Term Capital Management
when the hedge fund lost its entire funds
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Instead a decision is to be made by a leader or a subordinate should the
business implement a waste disposal system at a high investment or find another lake and
face another downturn or a knock on their reputation towards the public
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To conclude the culture of an organisation does
contribute to financial success but to a small extent

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