IB Business Management HL 2.5 Organizational Corporate Culture Questions

With reference to an organization of your choice, discuss the ways in which culture and change can influence human resource management.

General Pierce delegated the responsibility for investigating the feasibility of the two projects down the chain of command to Colonel Michael Donovan, Head of the Civil Engineering Group. Colonel Donovan identified a suitable piece of land for the construction site: Beral's only botanical gardens, ideally located and owned by the local government. He calculated that both projects would cost the same (Appendix 3). As a result, the decision about whether to build a university or a hospital would not be based upon cost, but upon other factors.

In further discussions with local officials, Colonel Donovan found that Kos' concerns were shared by others. After completing a critical path analysis, he reported to General Pierce that constructing either a university campus or a hospital was feasible within 25 to 30 weeks. He added that the officers in the Civil Engineering Group were excited by the opportunity to lead the project. The project also had the support of the troops, who would feel empowered and would welcome working in new flexible matrix structures. It would, however, require careful workforce planning and training: some peacekeeping troops would need extra training in construction skills and safety procedures. Colonel Donovan concluded that both types of facilities were greatly needed in Loyka and would offer important benefits. The issue was which one to choose.

Given her experience of previous UWP Missions, General Pierce ordered Colonel Donovan to conduct a formal social and environmental audit of the construction of both facilities and to carry out additional primary research. She asked him to prepare and distribute a survey to 2000 local residents for a more valid and reliable indication of the local community's opinion of which was needed more, a university or a hospital. She also wanted focus groups to discuss the two options. Some of the focus groups were to consist of men only, some of women only, and some of both men and women.

After spending weeks gathering data, Colonel Donovan had few doubts. He recommended that the hospital should be built as soon as possible. He still needed to decide what method of production to use. He was considering cell production, where each cell would be responsible for the construction of a separate section of the hospital. On completion, the hospital would provide immediate important benefits to the local population. If the main objection of the local population was the concern that most of the doctors would be male, the $U W P$, he argued, should do everything it could to recruit female doctors, even if only for the short term. However, the local governor who agreed to contribute the piece of land for the construction site preferred the new university campus rather than a hospital. A new university would be prestigious and contribute to the long-term development of Loyka by training future professionals. It could also attract private capital for future public-private partnerships in research and development (R&D).

Comparison of the two construction projects

Results from the survey

Explain one advantage and one disadvantage of the organizational culture of military organizations such as the UWP Mission.

Recruiting a new CEO
A company can spend a large amount of money to recruit a well-known and successful Chief Executive Officer (CEO) from outside the organization. However, recently published research suggests that recruiting externally is not only costly, but it is also risky, disruptive and demotivating.
Two long-term studies of 36 large public limited American companies found the following:
- The companies that promoted CEOs internally performed better than those that recruited externally.
- "Outsider" CEOs (recruited externally) have a significantly higher failure rate than "insider" CEOs (recruited internally). 40 % of "outsider" CEOs stayed for two years or less.
- The average financial reward package for "outsider" CEOs, including salary, bonuses and profit-related incentives, was 65 % higher than for those appointed internally.
- "Outsider" CEOs feel empowered to impose rapid change and to assert their authority on the company, even before they really understand the organizational culture. The arrival of an "outsider" CEO is often quickly followed by the departure of senior managers.
- "Outsider" CEOs are very good at rapid cost-cutting and eliminating unprofitable products/ activities, a skill that is very valuable when a competitive advantage needs to be gained or restored in a competitive environment.
Apple, Dell ${ }^{\mathrm{TM}}$, Microsoft ${ }^{\circledR}$, Intel ${ }^{\circledR}$, McDonalds ${ }^{\circledR}$ and Nike ${ }^{\circledR}$ are successful American companies that appointed CEOs internally between 1998 and 2007.
A comparison of average performance indicators between 1998 and 2007 is shown below:

Some critics of the two American studies argue that companies promoting CEOs internally usually have a strong corporate culture and are already efficient and profitable. These critics also argue that the performance indicators in the table do not measure the exact contribution of individual CEOs.
(C) The Times 04 2013]