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2.5 Organizational (corporate) culture

Practice exam-style IB Business and Management questions for Organizational (corporate) culture, aligned with the syllabus and grouped by topic.

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Paper
Difficulty
Status
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Question 1
HL • Paper 1
Easy
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HL • Paper 1
Easy
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Maya founded Luma Bakes, a small bakery chain. New employees are told, “Customers first, waste last,” and staff meetings always begin with a story about helping a customer or reducing food waste. Maya believes these routines explain why employees behave consistently across all five shops.

A

Define the term organizational culture.

[2]
Question 2
HL • Paper 1
Easy
Calculator Permitted
HL • Paper 1
Easy
Calculator Permitted

HarbourFit, a private gym operator, wants to understand why its branches feel different. In one branch, managers wear uniforms and follow strict procedures. In another, employees use informal language, celebrate member birthdays and choose their own work clothes.

A

State two elements of organizational culture at HarbourFit.

[2]
Question 3
HL • Paper 1
Medium
Calculator Permitted
HL • Paper 1
Medium
Calculator Permitted

NovaNest, a furniture design business, encourages employees to suggest new product ideas. Designers can spend one afternoon each week testing materials, and managers praise well-planned experiments even when they fail. The business is trying to launch more sustainable products before larger competitors copy its designs.

A

Explain one way in which NovaNest’s organizational culture could create a competitive advantage.

[4]
Question 4
HL • Paper 1
Medium
Calculator Permitted
HL • Paper 1
Medium
Calculator Permitted

RidgeAid, an outdoor rescue charity, has a very strong culture. Volunteers share the same values of discipline, safety and loyalty. However, after several storms became more severe than expected, younger volunteers argued that RidgeAid should use drones, while senior volunteers said the traditional rescue methods were “part of who we are”.

A

Explain one advantage and one disadvantage to RidgeAid of having a strong organizational culture.

[4]

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Question 5
HL • Paper 1
Medium
Calculator Permitted
HL • Paper 1
Medium
Calculator Permitted

ByteSprout, a software start-up, is led by its founder, Tomas. All spending decisions, recruitment choices and product changes must be approved by Tomas personally. Employees say decisions are quick when Tomas is available, but projects stop when he is travelling.

A

Explain why ByteSprout may be described as having a power culture.

[4]
Question 6
HL • Paper 1
Medium
Calculator Permitted
HL • Paper 1
Medium
Calculator Permitted

MedSure Labs tests medical samples for hospitals. It has detailed job descriptions, strict procedures and several levels of approval before any test result is released. A new competitor is offering faster test results by using small cross-functional teams.

A

Explain one advantage and one disadvantage to MedSure Labs of a role culture.

[4]
Question 7
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

GreenDose, a chain of pharmacies, received a regulatory warning about inconsistent dispensing procedures. The new operations director introduced more formal job descriptions, written rules and manager approvals. Some managers say GreenDose has moved towards a role culture.

Show all your working.

Indicator

Before new procedures

After new procedures

Decisions requiring manager approval (%)

30%

75%

Average time to approve local store decisions (days)

2.4

5.4

Dispensing errors per 10 000 prescriptions

14

7

Employees agreeing with “I can use my professional judgement” (%)

82%

55%

A

Calculate the percentage decrease in dispensing errors per 10 000 prescriptions after the new procedures were introduced.

[2]
B

Comment on one advantage and one disadvantage to GreenDose of moving towards a role culture.

[4]
Question 8
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

BytePeak, a software business, was founded with a power culture in which the founder approved most product ideas. A new CEO introduced more democratic leadership and cross-functional task teams. The following data compare the six months before and after the change.

Show all your working.

Indicator

Six months before change

Six months after change

New project proposals submitted

24

54

New projects launched

6

12

Average monthly software features completed per programmer

18

16

Number of programmers

40

45

Training and coaching cost (US$)

0

36 000

A

Calculate the percentage change in the number of new projects launched after the change.

[2]
B

Calculate the total monthly number of software features completed before and after the change.

[2]
C

Comment on the cultural shift at BytePeak using your calculations and the table.

[2]

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Question 9
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

SustainCo manufactures reusable packaging. To strengthen its ethical and sustainable culture, it introduced values-based recruitment, induction on sustainability and monthly employee forums. The finance director wants to know whether the cultural initiative has reduced labour turnover costs.

Show all your working.

Indicator

Year before initiative

Year after initiative

Average number of employees

260

280

Voluntary leavers during the year

52

28

Recruitment and induction cost per leaver (US$)

3,600

3,900

Annual cost of sustainability workshops (US$)

0

42,000

A

Calculate the net annual financial saving or cost after the initiative, taking into account recruitment and induction costs and the annual cost of sustainability workshops.

[3]
B

Comment on whether the ethical and sustainable culture initiative appears to be financially justified.

[3]
Question 10
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

CasaCafes, a regional cafe chain, was originally controlled by its founder, who made fast decisions personally. After the founder retired, a new operations director introduced standard operating procedures, checklists and regional managers. Some employees say CasaCafes has shifted from a power culture towards a role culture.

Show all your working.

Indicator

Founder-led culture

After new procedures

Number of cafes

12

18

Average customer service rating (out of 100)

91

84

Average order waiting time (minutes)

4.5

3.2

Monthly food waste cost (US dollars)

18 000

12 600

Employee suggestions implemented per quarter

30

8

A

Calculate the percentage decrease in monthly food waste cost after the new procedures were introduced.

[2]
B

Comment on the likely effects on stakeholders of CasaCafes’ shift from a power culture to a role culture.

[4]
Question 11
HL • Paper 1
Medium
Calculator Permitted
HL • Paper 1
Medium
Calculator Permitted

EcoRide, a formal bicycle manufacturer, merged with ZipWheels, an informal e-scooter start-up. EcoRide employees are used to written procedures and long approval chains. ZipWheels employees are used to rapid decisions in project teams. Since the merger, several product launches have been delayed and two experienced engineers have resigned.

A

Analyse the likely impact on the merged business of a cultural clash between EcoRide and ZipWheels.

[6]
Question 12
HL • Paper 1
Medium
Calculator Permitted
HL • Paper 1
Medium
Calculator Permitted

GreenMug, a reusable cup manufacturer, grew from 20 to 160 employees in three years. The founder previously made all decisions informally. A new operations director has introduced written procedures, middle managers and performance targets. Long-serving employees feel the business has lost its “family feel”, while new employees say the old informal approach was confusing.

A

Examine two ways in which GreenMug’s managers could reduce cultural clashes caused by growth and the change in leadership style.

[6]

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Question 13
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
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NovaTech Ltd, a software platform business, acquired CraftHub, a smaller creative design business. NovaTech has a formal role culture, while CraftHub had an informal task culture. Twelve months after the merger, the HR director collected the following data for the CraftHub division.

Show all your working.

Indicator

2023 (before merger)

2024 (after merger)

Average number of employees

180

160

Number of employees leaving during the year

18

40

Output per employee per month (completed design units)

420

355

Customer complaints during the year

360

520

A

Calculate the labour turnover rate for the CraftHub division in 2024.

[2]
B

Comment on whether the data suggest that NovaTech and CraftHub have experienced a cultural clash after the merger.

[4]
Question 14
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

Orion Design, a product design agency, claims to have a strong task culture based on teamwork, creativity and learning from mistakes. The managing director asked employees to rate five cultural values on a scale from 1 to 5, where 5 is the strongest agreement. Each value was given a weighting to reflect its importance to Orion.

Show all your working.

Cultural value

Weighting (%)

Average employee rating out of 5

Teamwork

30

4.2

Creativity

25

3.8

Respecting project deadlines

20

3.0

Customer focus

15

4.6

Openness about mistakes

10

2.4

A

Calculate Orion’s weighted culture alignment index as a percentage. The maximum possible index is 100.

[3]
B

Comment on what the calculated index and the table suggest about the strength of Orion’s culture.

[3]
Question 15
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

Bella’s Bakes began as a family bakery with an informal, founder-led culture. Rapid growth led to new departments, middle managers and written procedures. Some long-serving employees claim that the “family culture” has been lost.

Show all your working.

Indicator

2022 (before formal departments)

2024 (after formal departments)

Average number of employees

48

120

Total employee absence days

216

960

Voluntary leavers during the year

3

18

Sales revenue (US$)

1,920,000

4,320,000

A

Calculate the percentage increase in absence days per employee from 2022 to 2024.

[3]
B

Comment on the possible cultural impact of Bella’s Bakes’ growth.

[3]
Question 16
HL • Paper 2
Medium
Calculator Permitted
HL • Paper 2
Medium
Calculator Permitted

MediLabs, a large medical testing company with a role culture, merged with GenSpark, a start-up with a task culture. To reduce cultural clashes, senior managers created mixed project teams from both businesses.

Show all your working.

Indicator

Before mixed project teams

After mixed project teams

Duplicated tests per month

220

90

Cost per duplicated test (US$)

85

85

Monthly cost of mixed project teams (US$)

0

7,500

Average decision time (days)

3.0

4.2

Formal conflict reports per month

8

19

A

Calculate the monthly net saving from reduced duplicated tests after paying the monthly cost of the mixed project teams.

[3]
B

Comment on whether the mixed project teams have reduced the cultural clash between MediLabs and GenSpark.

[3]

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Question 17
HL • Paper 1
Hard
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HL • Paper 1
Hard
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Arden Outdoor Learning (AOL) is a private business that provides residential outdoor education courses for schools. AOL was founded by Nia, who believes that “safety, trust and learning from mistakes” are the values that make AOL different from larger competitors. Staff share accommodation during courses, eat meals with students and end each day with a short reflection meeting. New instructors learn the company’s stories, including how Nia once cancelled a profitable course because weather conditions were unsafe.

AOL has grown quickly from 18 to 95 employees. To win contracts with national school groups, AOL must now show consistent procedures, written risk assessments and evidence of instructor performance. The operations director wants to introduce stricter reporting systems and performance targets. Some long-serving instructors argue that AOL’s strong culture already protects safety and customer service. Newer employees say that informal expectations are unclear and depend too much on “what Nia would do”.

A

Discuss whether AOL’s strong organizational culture is likely to help or hinder its future growth.

[10]
Question 18
HL • Paper 2
Hard
Calculator Permitted
HL • Paper 2
Hard
Calculator Permitted

RiverWear Ltd manufactures outdoor clothing. Its founder promoted an informal culture based on sustainability, employee trust and pride in product quality. As RiverWear grew, employees in different factories began to behave inconsistently. Some managers focused mainly on output targets, while others allowed employees to stop production if they found wasteful or unethical practices.

The new chief people officer introduced a programme to strengthen RiverWear’s organizational culture. It included values-based recruitment, induction sessions on sustainability, recognition awards for reducing waste and senior managers spending one day each month on the factory floor. The finance director is concerned about the cost of the programme and argues that culture is difficult to measure.

Indicator

Before programme

After programme

Annual programme cost

£0

£250,000 per year

Labour turnover rate

17%

11%

Average production defects (per 1,000 garments)

38

23

Fabric waste

9.2%

6.3%

Employee engagement score (/100)

63

79

On-time delivery rate

84%

91%

Operating profit margin

12.4%

11.9%

A

Using the stimulus and the quantitative data, evaluate the impact on RiverWear of attempting to strengthen its organizational culture.

[10]
Question 19
HL • Paper 1
Hard
Calculator Permitted
HL • Paper 1
Hard
Calculator Permitted

HelioHome, a manufacturer of smart heating systems, has recently moved from selling standard products to designing customized energy-saving systems for large property developers. Until now, HelioHome has had a role culture. Engineers, sales staff and production employees work in separate departments, follow detailed job descriptions and need approval from senior managers before making changes.

Several developers have complained that HelioHome is slow to respond when building designs change. The new chief executive officer, Ravi, wants to create cross-functional project teams for each major customer. Each team would include engineers, sales staff, production planners and after-sales service employees. Ravi believes this would move HelioHome towards a task culture, where authority comes from expertise and teams solve customer problems quickly. Some middle managers oppose the proposal because they fear losing control over their departments and budgets.

A

Evaluate Ravi’s proposal to move HelioHome from a role culture towards a task culture.

[10]
Question 20
HL • Paper 1
Hard
Calculator Permitted
HL • Paper 1
Hard
Calculator Permitted

Solace Clinics, a chain of private physiotherapy clinics, has acquired MotionLab, a small digital health business that develops exercise apps for patients. Solace Clinics has a formal culture: clinical standards, written procedures and senior approval are expected before any change to patient treatment. MotionLab has an informal culture: app developers work in flexible teams, test new features quickly and communicate through online chat rather than meetings.

Since the acquisition, cultural clashes have appeared. Solace clinicians complain that MotionLab’s developers “experiment too much” with patient data and do not understand medical risk. MotionLab employees complain that Solace’s approval process delays software updates and reduces creativity. Two key developers have left, and a planned app for post-surgery patients is three months behind schedule. The board wants one shared culture across the enlarged business but is unsure how quickly this should be introduced.

A

Recommend how Solace Clinics should manage the cultural clash with MotionLab after the acquisition.

[10]

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Question 21
HL • Paper 2
Hard
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HL • Paper 2
Hard
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AsterCare is a private healthcare business operating diagnostic clinics in three cities. For many years it had a role culture: employees followed detailed job descriptions, clinical procedures and approval systems. This reduced mistakes and helped AsterCare meet strict healthcare regulations.

A new competitor has entered the market offering faster digital appointments and same-day results. AsterCare’s marketing director wants to replace the existing role culture with a task culture by creating cross-functional teams of doctors, software specialists and customer service employees. The operations director argues that healthcare requires clear rules and accountability.

Metric

Current clinics (role culture)

Pilot clinic (task culture)

Average approval time for service changes (days)

14

4

New digital services launched (per year)

1

6

Patient satisfaction rating (%)

81

89

Clinical error rate (%)

0.7

1.3

Employee absence rate (%)

3.0

4.4

Training cost per clinic (US$)

12,000

31,000

Revenue per clinic per year (US$ m)

1.8

2.2

A

Using the stimulus and the quantitative data, discuss whether AsterCare should move from a role culture towards a task culture.

[10]
Question 22
HL • Paper 3
Hard
Calculator Permitted
HL • Paper 3
Hard
Calculator Permitted

Refill Roots (RR)

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

Refill Roots (RR) is a social enterprise founded by Imani Cole in 2021. RR sells low-cost refillable soap, shampoo and cleaning products through small kiosks in low-income urban areas. Its social objectives are to reduce plastic waste and make basic hygiene products more affordable. RR reinvests 70% of its annual surplus into installing water-refill stations near schools.

RR’s culture is strongly influenced by Imani’s founding story. Employees begin each week with a short “impact circle” in which they share customer stories and ideas for reducing waste. Recruitment focuses on environmental values and community service. Employees describe RR’s culture as “trusting, informal and mission-first”. However, RR has grown from 18 to 96 employees in two years and now operates in four cities.

A national supermarket chain has offered RR shelf space in 60 stores. This could increase sales and public awareness, but RR would need more formal quality-control procedures, packaging standards and regional managers. Some long-serving employees fear RR will become “just another consumer goods brand”.

Resource 2 – Table 1: Selected indicators before and after RR’s recent growth, including employee retention, average decision time, product-return rate and percentage of employees who strongly agree that RR’s values guide daily decisions.

Resource 3 — Social-media statistic

RR has 310 000 followers across social-media platforms. Its most-shared post last year showed a school water-refill station funded from RR’s surplus and received high engagement from customers aged 18–30.

Resource 4 — Quotation from RR’s founder

“We cannot protect our mission by staying small forever. But if our culture becomes only slogans and packaging, we will have failed.”

Resource 5 — Notes from a staff consultation

New employees want clearer procedures and training. Long-serving employees want to keep informal decision-making, direct access to Imani and the weekly impact circles.

Indicator

Before growth

After growth

Employee retention (%)

93

86

Average decision time (hours)

6

24

Product-return rate (%)

1.0

3.5

Employees who strongly agree RR's values guide daily decisions (%)

91

70

1

Define the term organizational culture.

[2]
2

Explain one advantage and one disadvantage to RR of having a strong organizational culture.

[6]
3

Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for RR to manage its organizational culture while expanding over the next three years.

[17]
Question 23
HL • Paper 3
Hard
Calculator Permitted
HL • Paper 3
Hard
Calculator Permitted

SolarSteps (SS)

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

SolarSteps (SS) is a social enterprise that installs low-cost solar lighting systems in rural communities without reliable electricity. SS also trains unemployed young adults as solar technicians. Its social objectives are to reduce energy poverty and improve employment skills. SS reinvests all surpluses into training scholarships and maintenance visits for low-income households.

SS began with project teams made up of engineers, trainers and local community workers. These teams had authority to solve problems on-site and adapt installations to local conditions. Employees describe SS as having a task culture: expertise and teamwork are more important than job titles.

A government development agency has offered SS a five-year contract to install solar lighting in 400 villages. The contract would significantly increase SS’s social impact, but it requires standardized reporting, written safety procedures, formal budgets and monthly audits. The operations director argues that SS must move towards a role culture to meet these requirements. Several project leaders argue that excessive rules will reduce innovation and community responsiveness.

Resource 2 – Table 1: Selected operational indicators for SS’s project-team approach and a pilot region using more formal procedures, including installation defects, average time to approve local changes, employee satisfaction and audit compliance.

Resource 3 — Social-media statistic

A short video of SS trainees installing lights in a remote health clinic has been viewed 2.8 million times. Donors’ comments frequently mention trust in SS’s “practical, community-led approach”.

Resource 4 — Quotation from a project leader

“Our teams do not reject accountability. We reject rules written by people who have never worked in a village during the rainy season.”

Resource 5 — Extract from the government contract conditions

SS must submit standardized monthly performance reports, maintain written safety records and demonstrate that public funds are used only for approved training and installation costs.

Operational indicator

Current project-team approach

Pilot region (formal procedures)

Installation defects (% of installations)

7%

3%

Average time to approve local changes (days)

1

4

Employee satisfaction (% positive responses)

89%

76%

Audit compliance (% of checks passed)

71%

95%

1

Describe one feature of a task culture.

[2]
2

Explain one benefit and one limitation to SS of moving from a task culture towards a role culture.

[6]
3

Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for SS to develop a culture suitable for the five-year government contract.

[17]
Question 24
HL • Paper 2
Hard
Calculator Permitted
HL • Paper 2
Hard
Calculator Permitted

Solara Meals, a large producer of frozen vegetarian food, acquired FreshKart, a fast-growing meal-kit delivery business. Solara Meals has a formal culture with centralized decision-making, detailed procedures and cautious budgeting. FreshKart had an entrepreneurial culture: local teams made rapid decisions, experimented with menus and communicated informally.

Six months after the acquisition, the new chief executive officer must decide how to manage the cultural clash. Option 1 is rapid integration into one Solara Meals culture within three months. Option 2 is to allow FreshKart to keep a separate culture for two years while using mixed project teams to build shared practices gradually.

Measure

Option 1

Option 2

Integration cost (one-time, US$ m)

5.8

3.1

Projected annual cost savings in year 1 (US$ m/yr)

4.6

3.0

Expected labour turnover in year 1 (%)

24

11

Customer complaint rate in year 1 (%)

6.8

3.2

Average time to approve new products (days)

12

5

Forecast revenue growth next year (%)

3.2

7.8

Duplicated management costs in year 1 (US$ m/yr)

0.8

1.9

A

Using the stimulus and the quantitative data, recommend whether Solara Meals should choose Option 1 or Option 2 to manage the cultural clash with FreshKart.

[10]

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Question 25
HL • Paper 3
Hard
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HL • Paper 3
Hard
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BridgeMeals (BM)

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

BridgeMeals (BM) is a social enterprise that cooks and delivers nutritious meals to elderly people living alone. BM also provides paid training for refugees who want to work in catering. Its social objectives are to reduce loneliness, improve nutrition and support refugee employment. BM reinvests 80% of its surplus into subsidized meals.

BM has a warm, informal culture. Delivery drivers and kitchen teams are encouraged to spend time talking to elderly customers. Decisions are usually made through discussion at the end of each shift. Employees value compassion, flexibility and personal relationships.

In 2024, BM merged with RouteRelief (RRf), a smaller social enterprise that specialized in rapid food delivery after floods and fires. RRf had a more disciplined culture, with strict time targets, uniforms, route software and centralized instructions from emergency coordinators. The merged organization has the opportunity to win a city contract to provide both daily elderly-care meals and emergency-response meals. However, cultural clashes have emerged between BM’s relationship-focused employees and RRf’s speed-focused employees.

Resource 2 – Table 1: Selected indicators before and after the merger, including voluntary labour turnover, average delivery-time reliability, customer satisfaction among elderly customers and employee survey agreement with the statement “teams from both original organizations work well together”.

Resource 3 — Social-media statistic

BM’s campaign “No one eats alone” has 420 000 followers and is widely supported by local families. After the merger, several comments praised faster delivery, but others complained that drivers “now seem rushed”.

Resource 4 — Quotation from a former RRf emergency coordinator

“In a flood, five minutes matters. In a loneliness project, five minutes of conversation matters. We need a culture that understands both.”

Resource 5 — Notes from the city contract proposal

The city will award the contract to a provider that can demonstrate reliable delivery, safeguarding of elderly customers, emergency-response capacity and evidence of effective staff integration.

Indicator

Before merger / %

After merger / %

Voluntary labour turnover

7

14

Average delivery-time reliability

85

92

Customer satisfaction among elderly customers

91

87

Employee agreement: teams from both original organizations work well together

—

41

1

State two possible causes of cultural clashes when organizations merge.

[2]
2

Analyse the likely impact on BM of the cultural clash between BM’s relationship-focused employees and RRf’s speed-focused employees.

[6]
3

Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for BM to manage cultural integration and improve its chance of winning the city contract.

[17]

2.4 Motivation and demotivation

2.6 Communication