ACCA Applied Knowledge · Business and Technology · Organisational culture
Harlow plc, a long-established manufacturer, has a strong culture that worked well in a stable market. The market is now changing rapidly through new technology. Which is the most likely risk of its strong existing culture?
The main risk is that the strong culture resists adaptation, because established assumptions and habits, 'the way we do things', become barriers when the environment changes. A strong culture suited to stable conditions does not guarantee flexibility, strategy or higher profit.
- AIt may resist adapting, as 'the way we do things' becomes a barrier to changeCorrect
- BIt will automatically adapt faster than competitors
- CIt removes the need for strategy
- DIt guarantees higher profit
Explanation
A strong culture that suited past conditions can reduce flexibility, as people defend established assumptions and methods. It does not automatically give adaptability, replace strategy or guarantee profit.
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