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Business and Technology · Organisational culture

Influences on and Changing Organisational Culture for ACCA

Updated 11 October 2026 · Fact-checked

Organisational culture is the shared values, beliefs and ways of working in an organisation. It is shaped by leaders, history, size, technology, ownership, industry and the national environment. Changing it is hard because people resist and habits are deep. To answer exam questions, name the influence, link it to the scenario, then judge the effect.

Understand Influences on and Changing Organisational Culture

Organisational culture is 'the way we do things here'. It is the set of shared values, beliefs, assumptions and habits that guide how people behave. Nobody writes all of it down. New staff pick it up by watching others.

Culture does not appear by accident. Several factors shape it. Leadership matters most, especially the founder. Founders set the tone through what they reward, ignore and do themselves. History matters too. Past successes and crises leave stories and habits that stay long after the events.

Other influences include size (small firms are often informal and personal; large firms tend to be formal with rules), technology (automated or digital work can create a more data-driven, remote or flexible culture), ownership and purpose (a public sector body, a family firm and a listed company differ), the industry and environment (a bank is cautious; a start-up is risky and fast), and national culture (a global business may find that one head office culture does not fit every country). The type of people employed, and the structure and control systems, also shape what behaviour is normal.

Changing culture is difficult because culture is largely hidden. It sits in assumptions, not only in policies. People have personal comfort in the old ways and may fear losing status, jobs or skills. Informal groups can block change quietly. Managers can change structures and rules quickly, but beliefs change slowly.

Successful change usually needs a clear reason, visible support from senior leaders, and consistent action. Leaders should change what is rewarded and measured, communicate the new values, train people, involve staff and give time. Symbols, stories and role models help. Managers who say one thing and do another will fail.

Key formulas to remember

Main influences on culture
Leadership + history + size + technology + ownership + industry/environment + national culture + people
Use this as a checklist. Pick the ones that fit the scenario rather than listing all of them.
Why change is resisted
Fear of loss + habit + unclear reason + informal group pressure + weak leadership
Link each reason to the facts given in the question.
Ways to change culture
Explain need → leaders model it → change rewards and systems → train and involve staff → reinforce over time
Culture change is slow. Never suggest a quick fix such as a single memo.

How to solve Influences on and Changing Organisational Culture questions

Use this method for any question on what shapes culture or how to change it.

  1. 1Read the scenario and underline clues: who leads, how big the firm is, its age, its technology, its country or sector.
  2. 2Decide what the question asks: identify an influence, explain a difficulty, or recommend a change approach.
  3. 3Match each clue to a named influence, such as leadership, size or technology.
  4. 4Say how that influence shows up in behaviour, for example formal rules, risk-taking or openness.
  5. 5For change questions, state why people resist, then give actions that deal with that resistance.
  6. 6Check the answer fits the scenario and not a generic textbook list.
  7. 7For multiple choice, remove options that say change is quick, easy or only about rules.

Quickest way: Clue-to-influence matching

When to use it: Use this for objective test questions with a short scenario and four options.

  1. Find the key clue in the first read: founder, growth, new system, merger, new country.
  2. Name the matching influence in your head: founder = leadership, long-standing habits = history, new systems = technology.
  3. Pick the option that links that influence to the correct effect.
  4. Reject absolute words such as 'always' and 'immediately' when they describe culture change.

Common mistakes in Influences on and Changing Organisational Culture

  • Treating culture as written policies only.

    Policies are easy to see, so students assume they are the culture.

    Fix: Remember that culture is shared beliefs and habits. Policies can be ignored if behaviour says otherwise.

  • Listing influences without linking them to the scenario.

    Students memorise lists and write them out.

    Fix: Choose two or three factors that match clues and explain the effect in that business.

  • Saying culture can be changed quickly by a new rule or memo.

    Structures can be changed fast, so students assume culture follows.

    Fix: State that culture changes slowly and needs leaders' example, rewards, training and time.

  • Ignoring resistance to change.

    Students focus on what management wants and forget how staff feel.

    Fix: Always name why people resist, such as fear of loss or habit, and give a response such as involvement and communication.

  • Confusing national culture with organisational culture.

    Both use the word culture.

    Fix: Treat national culture as one outside influence on organisational culture, not the same thing.

Worked examples

Example 1

A family-owned clothing company has grown from 10 to 800 staff in 15 years. The founder still makes most decisions, but new managers have introduced formal procedures. Staff say the firm no longer feels friendly. Identify two influences on culture and explain their effect.

Show the solution
  1. Clue: growth from 10 to 800 staff. Influence: size.
  2. Effect of size: as the firm grows, informal personal contact gives way to rules and procedures, so the culture feels more formal and less friendly.
  3. Clue: the founder still makes most decisions. Influence: leadership.
  4. Effect of leadership: the founder's style keeps decision-making centralised, which may clash with the new formal procedures and cause confusion.

Answer: Size has made the culture more formal and impersonal. Leadership by the founder keeps decisions centralised, which conflicts with the new managers' procedures.

Example 2

A bank plans to change from a cautious, rule-following culture to a more innovative one. Explain two reasons staff may resist and two actions management can take.

Show the solution
  1. Reason 1: fear of loss. Staff trained to follow rules may fear mistakes will be punished or that their skills will lose value.
  2. Reason 2: habit and informal group pressure. Long-serving staff are comfortable with current methods and may quietly block new ways.
  3. Action 1: leaders must model the new behaviour and change rewards, so that sensible innovation is recognised, not penalised.
  4. Action 2: communicate the reason for change, involve staff and provide training, so people understand and gain the skills needed.

Answer: Staff may resist through fear of loss and through habit and group pressure. Management should model the behaviour and change rewards, and communicate, involve and train staff. The change will take time.

Exam tips

  • In objective questions, match one scenario clue to one named influence, then pick the option that fits.
  • Be wary of options saying culture change is quick or easy. These are usually wrong.
  • For multiple response questions, count how many answers are required and select exactly that number.
  • In Section B tasks, tie your answer to the scenario facts. A generic list earns few marks.
  • Link this topic to Schein, Handy and Hofstede, since questions often mix culture models with change.

Practice questions from Organisational culture

Influences on and Changing Organisational Culture in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Influences on and Changing Organisational Culture: frequently asked questions

What factors influence organisational culture?

The main ones are leadership, history, size, technology, ownership, industry, national culture and the people employed. In the exam, choose those that match clues in the scenario. Explain how each affects behaviour.

Why is it difficult to change organisational culture?

Culture rests on deep shared beliefs and habits, not just rules. People fear loss, prefer familiar ways and may be backed by informal groups. Changes in belief take far longer than changes in structure.

How do you change organisational culture in a company?

Explain the need for change, and have senior leaders model the new behaviour. Change what is rewarded and measured, train and involve staff, and reinforce the message over time. Expect it to be slow.

Is national culture the same as organisational culture?

No. National culture is the shared values of a country, while organisational culture belongs to one organisation. National culture is one influence on organisational culture, especially in global businesses.