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Assess the likely consequences for Sports Direct of its corporate culture - Edexcel - A-Level Business - Question 2 - 2022 - Paper 2
Question 2
Assess the likely consequences for Sports Direct of its corporate culture. Corporate culture is the unwritten code that affects the attitudes and behaviour of emplo... show full transcript
Worked Solution & Example Answer:Assess the likely consequences for Sports Direct of its corporate culture - Edexcel - A-Level Business - Question 2 - 2022 - Paper 2
Step 1
Possible consequences of low morale among workers
Answer
Sports Direct may experience significant low morale due to its corporate culture that pays workers below minimum wage. Employees might feel undervalued, resulting in detrimental outcomes such as increased absenteeism and a lack of enthusiasm for their job roles. This is likely to lead to high labour turnover, where employees may leave the organization in search of better work conditions and pay. Furthermore, poor productivity can be a direct result of low morale as disengaged employees are less likely to put in their best efforts.
Step 2
Impact of bad publicity on brand image
Answer
Bad publicity from media outlets like the Guardian and the BBC can severely damage Sports Direct's image in the eyes of consumers. Negative press coverage regarding working conditions or employee treatment may trigger public outrage, leading consumers to boycott their products. This could significantly affect sales and profitability.
Step 3
Potential counterbalances to negative consequences
Answer
Despite these negative aspects, the company culture may inadvertently motivate employees to work harder due to fear of job loss through Sports Direct's 'six strikes' system. Additionally, customers may still be drawn to Sports Direct due to low prices despite negative publicity, allowing the business to maintain a level of consumer loyalty.
Step 4
Evaluation of current HR strategies
Answer
Sports Direct has acknowledged the need to review its Human Resource strategies, which may help to mitigate some negative consequences. By improving working conditions and employee satisfaction, the organization could enhance productivity and reduce turnover, ultimately contributing to a more positive corporate culture.
Step 5
Judgment about corporate culture contributing to success
Answer
Despite facing challenges, Sports Direct can argue that its corporate culture has allowed it to operate efficiently, achieving low costs that benefit consumers. This efficiency can be viewed as a competitive advantage, even as the company needs to address negative aspects of its workforce treatment.