What Factors Influence Business Culture?
Explore the factors that influence business culture in A Level Business, including leadership, ownership, employees, structure, history and market pressures.
Business culture is influenced by leaders, employees, ownership, organisational structure, the business’s history and its external environment. Culture means the shared values, attitudes and usual ways of working within a business: in other words, “how things are done here”.
Internal influences
Founders and leaders can have a strong influence because their decisions show employees what matters. A leader who encourages staff to suggest improvements may develop a culture of innovation. A leader who closely checks every decision may create a more cautious culture.
Ownership and objectives matter too. For example, owners focused on rapid growth may encourage risk-taking, while a business prioritising reliability may emphasise following procedures.
Employees and structure shape everyday behaviour. Staff bring their own skills and expectations, and an established workforce may pass on its habits to new recruits. A decentralised structure, where decisions are delegated to staff, can support independence. A centralised structure, where senior managers make most decisions, may encourage employees to seek approval before acting. As a business grows, it may also introduce more formal rules and layers of management.
Other influences
A business’s history can make certain practices hard to change, even when new leaders want a different culture. Industry demands and external pressures, such as customer expectations, competition or changes in technology, can also influence the behaviours a business rewards.
For example, a small retailer might encourage staff to resolve customer complaints themselves. If it expands into many branches, managers may introduce standard procedures to keep service consistent. This could shift the culture towards following agreed processes, although existing staff habits may take time to change.
Exam tip: Do not just list influences. Explain how a factor affects behaviour in the business in the question, and avoid assuming that a change in leadership changes the culture immediately.
