An Analysis of Corporate Culture with Special Reference to the Hotel Restaurant Erbprinz, Germany - Case Study Example

Langevoort noticed corporate culture can be construed as a means of interaction as well as harmonization in the organizations which assist in reducing uncertainties and resolve ambiguities, thereby, offsetting the agency costs (Langevoort, 2006: 83). Moreover, the corporate structure is apprehended as a device for the coordination of perceptions of the individual organization members where there is a call for collective activity, and to neglect the uncertainties which are caused as a result of the in cognizance of the reactions of fellow organization members. Also, the corporate structure is an accessory for inducing the aligned motivation as well as emotions which are often interpreted by corporate identity or firm allegiance. According to Koch and Godden, a number of advocates of management’s termination have suggested that the organizations are evolving from an outmoded bureaucratic appearance (Koch and Godden, 1996).

Like Tajfeel suggested, Hold-ups for the corporate culture hypothesis appears to be facilitated by the experimentations that implement a minimal group paradigm (Tajfeel, 1970: 98). Despite this, there are some artificial ways of unscrambling one commune of participants from another to be sufficient enough of inducing in-group preferences and extrinsic prejudices. The emotional, as well as recognized associations and knots of corporate culture, appear to be much authoritative than those which are entirely a result of the labels. As a consequence of such bonding, the members of other organizations would generally do what they construe as the agreed-upon job of the corporation. As a matter of fact, this pays no attention to the requirement of coordinating behavior to some restraints, however, can bestow formal rules unnecessarily.

With appropriate consideration to the Corporate Identity of a particular firm, one comes across the agency's intricacies. In Holmstrom and Tirole’s viewpoint, even though the principal-agent hypothesis presumes without the payment of incentives, many scholars prove the contrary, although, there is enough space for opportunists (Holmstrom and Tirole, 1989). In point of fact, the principal-agent investigations delineate that the trust of principals, as well as the cooperation of the agents by working and not neglecting, can prove to be as efficacious as or even more efficacious than the schemes in association with the incentives. Nevertheless, it transforms with experience. With appropriate significance, the principal-agent hypothesis aches from a critical drawback in the negligence of hiring competition for its silhouette.