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ACCA Strategic Professional · Strategic Business Leader · Managing strategic change

Marlow Pharma's new CEO wants staff to adopt a more innovative, risk-tolerant culture. Employees still see promotions going to those who follow procedure, and the reward system pays bonuses only for error-free compliance. Which cultural web analysis best explains why the change is unlikely to succeed?

Control and reward systems reinforce the old paradigm. Bonuses and promotions favour error-free compliance, which contradicts the innovation the CEO wants. Staff follow what is rewarded, so unless these systems change alongside the stated aim, the cultural change is unlikely to take hold.

  1. AThe symbols of the company, such as its logo, have not been redesigned
  2. BControl and reward systems reinforce the existing paradigm and contradict the desired behaviourCorrect
  3. CThe organisational structure has too few management layers
  4. DStories about the founder are too widely told

Explanation

The case describes promotion and bonus practices, which are control systems (including reward) in the cultural web. They reward compliance and so reinforce the existing paradigm, sending a signal opposite to the intended change. Logo, layers and founder stories are not supported by the facts given.

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