Organisational (Corporate) Culture (DP IB Business Management: HL): Exam Questions

Elite Fashion Retail is a high-end clothing chain with stores across several major cities. The company is known for its sleek, uniform branding and strong corporate identity. Employees are referred to as “style advisors” and are trained extensively in customer service and fashion trends. However, recent expansion into international markets has revealed cultural clashes, particularly in countries where Elite Fashion’s practices are perceived as rigid and not aligned with local customs.

The leadership team is considering adjustments to its organisational culture to reduce employee turnover and improve adaptability in diverse markets. They are also evaluating how to retain the strong brand identity that has contributed to their success.

Elite Fashion Retail is a high-end clothing chain with stores across several major cities. The company is known for its sleek, uniform branding and strong corporate identity. Employees are referred to as “style advisors” and are trained extensively in customer service and fashion trends. However, recent expansion into international markets has revealed cultural clashes, particularly in countries where Elite Fashion’s practices are perceived as rigid and not aligned with local customs.

The leadership team is considering adjustments to its organisational culture to reduce employee turnover and improve adaptability in diverse markets. They are also evaluating how to retain the strong brand identity that has contributed to their success.

PureFlow Bottling is a beverage manufacturer specialising in environmentally friendly water bottles. The company’s task-orientated culture emphasises teamwork and adaptability. Employees are frequently organised into cross-functional teams to develop new eco-friendly products and streamline production processes. However, as the company has expanded, clashes have arisen between employees from different regional offices due to differences in communication styles and work habits.

Management is now considering ways to mitigate these cultural clashes while maintaining the task-orientated culture that drives innovation. They are also exploring how Handy’s organisational culture framework can help refine their approach.

PureFlow Bottling is a beverage manufacturer specialising in environmentally friendly water bottles. The company’s task-orientated culture emphasises teamwork and adaptability. Employees are frequently organised into cross-functional teams to develop new eco-friendly products and streamline production processes. However, as the company has expanded, clashes have arisen between employees from different regional offices due to differences in communication styles and work habits.

Management is now considering ways to mitigate these cultural clashes while maintaining the task-orientated culture that drives innovation. They are also exploring how Handy’s organisational culture framework can help refine their approach.

Urban Edge Construction is a medium-sized company specialising in eco-friendly residential projects. The company’s role culture is defined by a clear hierarchy, with power concentrated in specific job roles such as project managers and department heads. This structure ensures that employees adhere to strict guidelines, which has been critical for maintaining safety standards and meeting project deadlines.

However, as Urban Edge expands into more diverse projects and larger teams, there are signs of inefficiencies, such as delays in decision-making and frustration among lower-level staff who feel excluded from key decisions. Management is considering how to balance the benefits of role culture with elements of other cultural types to improve flexibility and morale.

Urban Edge Construction is a medium-sized company specialising in eco-friendly residential projects. The company’s role culture is defined by a clear hierarchy, with power concentrated in specific job roles such as project managers and department heads. This structure ensures that employees adhere to strict guidelines, which has been critical for maintaining safety standards and meeting project deadlines.

However, as Urban Edge expands into more diverse projects and larger teams, there are signs of inefficiencies, such as delays in decision-making and frustration among lower-level staff who feel excluded from key decisions. Management is considering how to balance the benefits of role culture with elements of other cultural types to improve flexibility and morale.

TechNova Electronics is a multinational corporation based in Germany. The company makes popular consumer electronics such as smartphones, wearable devices and smart home products. Founded 20 years ago, TechNova has become a global leader in its industry, known for its innovative designs and reliable products. In the last ten years, the company has expanded quickly into developing markets such as Brazil, South Africa and Vietnam, where it has opened factories and shops

TechNova’s strategy is to produce its products in countries where costs are lower and sell them at competitive prices. This approach has helped the company significantly grow its market share in developing markets. In 2020, TechNova held 15% of the market share in these regions, which increased steadily to 30% by 2023. However, some people have criticised TechNova for its practices. In Brazil, workers at TechNova factories say they are paid low wages and that working conditions are not always safe. In South Africa, small businesses say they cannot compete with TechNova’s low prices, which is harming local industries

Despite these challenges, TechNova believes it has brought benefits to the countries where it operates. The company has created thousands of jobs, introduced new technology and invested in local infrastructure. However, a recent employee survey revealed differences in motivation levels between regions. In Germany, 80% of employees feel motivated and supported, but this drops to 55% in Brazil and 60% in South Africa. Workers in these regions have cited low pay, unclear career paths and limited training as barriers to engagement

TechNova’s management is also thinking about how to keep its strong organisational culture as it grows. The company values innovation and teamwork, but these principles are harder to maintain across international operations. To address this, the company is looking at improving its training and support programmes for workers in developing countries

TechNova’s expansion and new projects are funded through profits, loans and corporate bonds. Now, the company is considering raising money by selling shares. This would help fund a new range of budget smartphones designed for customers in developing countries. The management is also discussing how to balance the company's rapid growth with maintaining good relationships with its employees and communities

Table 1: Financial overview (2023)

Table 2: Employee survey results (2023)

FitLife Gyms is a chain of mid-sized fitness centres operating across Europe, catering to a diverse clientele. The company currently uses a tall organisational structure, with multiple layers of management overseeing operations in each gym. Managers at each location report to regional directors, who then report to senior executives at headquarters. This structure ensures consistency in branding, service quality and adherence to company policies

Recently, gym managers have raised concerns about the inefficiency of decision-making. For example, one branch’s proposal to introduce locally popular equipment took weeks to gain approval, causing frustration among staff and members. The delays highlight the challenges of a rigid organisational structure where major decisions pass through multiple layers of approval

In response to these concerns, the HR department conducted an assessment of FitLife’s organisational culture. The assessment revealed strengths in team collaboration but highlighted moderate levels of communication effectiveness and employee morale. Adaptability to change and manager autonomy were also identified as areas requiring improvement (see Table 2 for a summary of the assessment findings)

Senior management is now considering transitioning to a flatter organisational structure to improve decision-making and empower gym managers with more authority. However, concerns remain about whether gym managers can handle increased responsibilities effectively, particularly in areas such as financial management and team leadership. Additionally, FitLife’s strong organisational culture, focused on consistency and control, may clash with the flexibility required in a flatter structure

Table 1: FitLife Gyms – Organisational metrics (2023 vs 2024)

Table 2: FitLife Gyms – Organisational culture assessment