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Corporate culture

Edexcel IAL Business · WBS13 Business decisions and strategy

Corporate culture is 'the way we do things around here': the shared values, beliefs and norms that shape how people in a business behave. It affects motivation, decisions and how well a business copes with change.

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Strong and weak cultures

A strong culture is one where values are clear, widely shared and acted on by staff at every level. It can give a sense of identity and loyalty, speed up decisions (people know what is expected) and support the brand. Its risk: it can resist change and encourage 'groupthink'.
A weak culture has values that are unclear or not shared; staff follow rules rather than shared beliefs. It may lead to inconsistent behaviour and low commitment, though it can be easier to change.

Classifying cultures

Culture	Features	Suits
Power	Control is concentrated in one person or a small group at the centre; few rules; fast decisions; depends on the leader	Small or owner-run firms needing quick decisions
Role	Bureaucratic; clear job descriptions, rules and procedures; power comes from position in the hierarchy; stable but slow to change	Large, stable organisations such as banks or public bodies
Task	Teams formed to complete projects; expertise matters more than rank; flexible and creative	Consultancies, product development, advertising
Person	The organisation exists to serve the individuals in it, who are often professionals of similar status	Partnerships of lawyers, doctors or architects

The four cultures named in the specification.

How culture is formed

The founder or leader: their values and behaviour set the tone, especially in a power culture.
History and past success: what has worked becomes 'how we do things'.
Recruitment and induction: hiring people who fit, and teaching newcomers the norms.
Reward systems: what is rewarded (sales targets, teamwork, safety) is what people do.
Organisational structure, the nature of the industry and the national culture.
Symbols and routines: office layout, dress codes, stories told about the business.

Why culture is hard to change

It is built over many years and held deeply by staff; people resist losing familiar ways of working.
Staff may fear for their jobs, status or skills.
Existing managers may have succeeded under the old culture and defend it.
Change needs consistent leadership, new rewards and recruitment, and time; announcing new values is not enough.
After a merger, two cultures may clash.

In the October 2024 WBS13 paper, Question 1(e) asked candidates to assess the benefits of changing a company's office culture (12 marks).

Worked example

A family-owned engineering firm, where the founder makes every important decision, has grown to 400 employees. Identify the culture and explain one problem it may cause now.

Decisions are concentrated in the founder: a power culture.
With 400 staff the founder cannot know every situation, so decisions slow down and bottleneck at the top.
Managers may lack the authority and confidence to act, which can demotivate them.
Moving to a role or task culture with delegated authority may be needed, but the founder may resist.

Answer: Power culture; it becomes a bottleneck and demotivates managers as the firm grows.

Key idea: Culture: shared values and norms. Strong cultures give identity but can resist change. Power, role, task and person cultures. Culture is formed by leaders, history, recruitment and rewards, and is slow and hard to change.

Check yourself

In which culture is control concentrated in one person or a small group at the centre?
- Role culture
- Task culture
- Person culture
- Power culture
Show answer
Power culture. Power radiates from the centre.
A large bank with detailed procedures, clear job descriptions and a strict hierarchy is most likely to have a
- task culture
- role culture
- power culture
- person culture
Show answer
role culture. Rules and positions define a role culture.
An advertising agency forms a new team of experts for each client campaign. This is typical of a
- role culture
- power culture
- person culture
- task culture
Show answer
task culture. Teams formed around projects, expertise valued.
Which organisation is most likely to have a person culture?
- A partnership of architects of similar status
- A multinational car manufacturer
- A government tax office
- A start-up run by its founder
Show answer
A partnership of architects of similar status. The organisation exists to serve the professionals in it.
Which is a possible drawback of a strong culture?
- Staff do not know what is expected of them
- Behaviour is inconsistent across the business
- Staff may resist changes that conflict with established values
- There is no shared identity
Show answer
Staff may resist changes that conflict with established values. Deeply held values can block change.
Which is the most direct way that a business forms and keeps its culture?
- Recruiting people who share its values and rewarding the behaviour it wants
- Publishing its accounts
- Choosing a legal structure
- Setting the price of its products
Show answer
Recruiting people who share its values and rewarding the behaviour it wants. Recruitment and rewards shape behaviour.
Explain why it can be difficult to change an established corporate culture.
Show answer
Values and habits have been built over many years and are deeply held, so employees may resist change because they fear losing their jobs, status or familiar ways of working.. Why culture is entrenched, and how people react.

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Last updated 8 November 2026. Spotted a mistake? Tell us.