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2 5 Exam Practice Question - Organisational Culture

Regal Supermarkets had a culture of loyalty and family-like relationships among staff and suppliers. However, profits were low. The new CEO, Anna Mody, aimed to change the culture to one focused on low prices and shareholder value. She quickly replaced half the directors and managers. Supplier terms and staff contracts were changed to reduce costs. While Anna said this would adapt the culture to a competitive market, it increased staff turnover and received media backlash.

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165 views2 pages

2 5 Exam Practice Question - Organisational Culture

Regal Supermarkets had a culture of loyalty and family-like relationships among staff and suppliers. However, profits were low. The new CEO, Anna Mody, aimed to change the culture to one focused on low prices and shareholder value. She quickly replaced half the directors and managers. Supplier terms and staff contracts were changed to reduce costs. While Anna said this would adapt the culture to a competitive market, it increased staff turnover and received media backlash.

Uploaded by

Loraine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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IB Business Management – Human Resource Management

Exam Practice Questions: 2.5 Organisational Culture

to what extent will the change in culture guarantee the

IB Business Management: http://www.BusinessManagementIB.com

2.5 ORGANISATIONAL CULTURE: EXAM PRACTICE QUESTION

Read the case study below and answer the questions that follow.

REGAL SUPERMARKETS – A CASE STUDY IN CULTURAL CHANGE

As one of the UK’s largest family-


owned chain of supermarket
stores, Regal Supermarkets had
established a culture among it
staff that had contributed to its
success and growth. Loyalty to
the family managers was very
high. Staff often commented on
the whole business being like a
‘big family’. Promotion was
based on long service and
loyalty. Relationships with
suppliers had been built up over
many years and long-term
supply contracts were in place.
Customer service was a priority
and was especially important as
Regal never intended to be the
cheapest shop in the towns it operated in. However, profits were not high, and the younger members of the
owning family lacked the skills to take over.

It was clear to some industry experts that some of these values and attitudes had to change once it was sold by
the family and converted into a public limited company. The new chief executive, Anna Mody, had experience
in the US as Wal-Mart’s chief food buyer. She announced on the first day of her appointment: “This business is like

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IB Business Management – Human Resource Management
Exam Practice Questions: 2.5 Organisational Culture

a sleeping giant. There is so much shareholder value that I can unlock to allow for higher dividends and to
underpin a higher share price.” Within five weeks, 50 per cent of the directors and key managers had been
replaced. Suppliers’ terms were changed, on Anna’s insistence to “5 % below the cheapest or we will drop you”
and the staff salary and pension scheme was replaced for new recruits with flexible pay and conditions contracts.
Staff turnover increased sharply.

Anna had not predicted the adverse media coverage of these changes. She said, “I am onl trying to adapt the
organisational culture of the business to one which allows us to be successful in a highly competitive national
market place where consumers want low prices and fresh goods.

Source: www.BusinessManagementIB.com

QUESTIONS: 25 MARKS, 45 MINUTES

1. Explain one possible reason why Anna thought it was necessary to change the organisational culture of
Regal Supermarkets. [4 marks]

2. Outline the type of culture that Anna seems to be introducing at Regal Supermarkets. [4 marks]

3. Analyse the key steps that Anna should have taken to manage cultural change more effectively.
[8 marks]

4. To what extent will the change in culture guarantee future success for this business? [9 marks]

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