Business Culture and Change in Context
- April 7, 2023
- Posted by: Harry King
- Category: CIPD Level 5
The term “business culture” describes the common values, viewpoints, and customs that influence both individual and group behavior inside an organization. It covers a broad spectrum of elements, including organizational structure, leadership style, communication norms, and decision-making procedures. Collaboration, creativity, and employee involvement may all be fostered by a good corporate culture, which will boost output and competitiveness.
Through the perspective of organizational culture theory, one can comprehend the idea of company culture. According to organizational culture theory, an organization’s culture is a set of accepted principles, ideals, and ideas that influence how its members behave (Gorondutse and Hilman, 2019). Within the organization, socialization, communication, and other types of social contact help to spread these common presumptions, values, and ideas. According to organizational culture theory, culture has a significant influence on how people behave both individually and collectively inside an organization and can serve as a source of organizational identity, stability, and continuity.
Contrarily, “change” describes the process of shifting from one state to another. Change can occur in a variety of ways in the business world, including organizational reorganization, the creation of new products, and changes to strategy. Change can be sparked by internal reasons like a change in organizational goals or by external forces like shifts in the market or technological advancements.
One of the key theories for addressing business culture and change is change management theory. According to the notion of change management, understanding and managing the human component of change is essential for a successful transition. One of the most popular change management models, Lewin’s, breaks down change into three phases: unfreezing, changing, and refreezing. Unfreezing entails raising awareness of the need for change and implementing the changes themselves, while changing entails implementing the changes themselves. Refreezing entails consolidating and institutionalizing the changes to make sure they become part of the organization’s culture (Harrison et al., 2021).
General Electric is an illustration of a business that has undergone major development recently (GE). The bureaucratic and hierarchical culture that GE had in the past made it difficult for the company to adjust to changes in the business environment. However, the organization has experienced a dramatic cultural transition under the direction of CEO Jeff Immelt, adopting a more decentralized and agile strategy (Verbeke and Hendijani, 2019). This has made it possible for the business to react to market developments more swiftly and to concentrate on growth in important industries like digital technology and renewable energy.
Netflix marks another illustration of a business that has successfully handled change. The business first provided DVD rentals, but as streaming technology developed, it swiftly shifted to become a top supplier of streaming video content (Snihur, Zott, and Amit, 2021). This prompted the corporation to make significant changes to its economic model, culture, and methods for creating and distributing content. The company’s capacity to establish a culture of experimentation and innovation, which allowed it to adjust to new technology and market trends, should be credited with its success in navigating this transformation.
In summary, business culture and change are intertwined because a solid culture can support the successful implementation of change. Change can, however, also put a strain on an organization’s culture and call for a change in the norms, values, and practices. Organizations can traverse the transformation and emerge stronger as a result with the aid of efficient change management techniques, such as Lewin’s Change Management Model. In order to maintain their competitiveness in a fast-paced business climate, firms can successfully manage and adapt their culture, as shown by the examples of GE and Netflix. In order to meet the changing business environment and maintain long-term competitiveness, it is critical for firms to continuously evaluate and adjust their culture.
Gorondutse, A. H., and Hilman, H. (2019). Does organizational culture matter in the relationship between trust and SMEs performance. Management Decision, 57(7), 1638-1658.
Harrison, R. et al., (2021). Where do models for change management, improvement and implementation meet? A systematic review of the applications of change management models in healthcare. Journal of healthcare leadership, 85-108.
Snihur, Y., Zott, C., and Amit, R. (2021). Managing the value appropriation dilemma in business model innovation. Strategy Science, 6(1), 22-38.
Verbeke, A., and Hendijani, R. (2019). Examining the Behavioral Factors Influencing Strategic Decision Making: A Case Study on General Electric (GE).