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5CO01 Organisational Performance and Culture in Practice (Updated)

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The CIPD Level 5 Unit 5CO01 Organisational Performance and Culture in Practice is a pivotal module for individuals seeking to deepen their understanding of how organisational structures, strategies, and cultures impact overall performance. This unit equips learners with the knowledge to analyse organisational practices critically and implement strategies that enhance efficiency, employee engagement, and adaptability in a dynamic work environment.

This unit focuses on key aspects such as:

  • Organisational Structures: Understanding the pros and cons of structures like divisional and matrix models, and how these frameworks influence communication and decision-making.
  • Strategic Alignment: Exploring how organisational strategies align with products, services, and customer expectations to achieve business goals.
  • External Factors: Evaluating the impact of trends like economic shifts, technology, and globalisation on organisational priorities.
  • Technological Integration: Assessing the role of AI and other technologies in transforming workplace processes and decision-making.

Additionally, the module delves into organisational culture through theories such as Charles Handy’s cultural model and David Rock’s SCARF framework, providing insights into how employee behaviour is shaped. It also addresses the importance of employee wellbeing, effective change management approaches, and the role of HR in facilitating transitions like hybrid working and innovative practices like a four-day working week.

Learners completing this unit will gain practical skills to:

  1. Critically evaluate organisational frameworks and their implications.
  2. Develop strategies that align people practices with business objectives.
  3. Support organisational change through robust models and employee-focused approaches.
  4. Enhance employee engagement and foster a culture of inclusion and wellbeing.

This unit is ideal for HR professionals, managers, and those aspiring to drive meaningful organisational change. With its blend of theoretical concepts and real-world applications, the 5CO01 Unit offers a comprehensive foundation for advancing your career in people management and organisational development.

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Example Answer of 5CO01 Organisational Performance and Culture in Practice

Evaluate the advantages and disadvantages of both a divisional structure and a matrix structure. Within the evaluation, you should include the reasons underpinning each structure. (AC 1.1)

Organisational structures determine the framework within which an organisation operates, affecting decision-making, communication, and resource allocation.

Divisional Structure
A divisional structure organises operations based on product lines, geographical locations, or customer groups.

  • Advantages:
    Divisions operate as semi-autonomous units, enabling greater focus on specific markets or products. This structure promotes accountability as performance can be measured against divisional goals. Additionally, decision-making is faster and more tailored, as divisional managers are closer to the market or customers.
  • Disadvantages:
    However, this structure often results in duplication of resources, such as HR or finance, across divisions, increasing operational costs. It can also create silos, reducing collaboration between divisions and potentially leading to internal competition.

Matrix Structure
A matrix structure combines functional and project-based reporting lines, encouraging collaboration across departments.

  • Advantages:
    This structure facilitates efficient resource allocation, as employees can contribute to multiple projects. It enhances communication and problem-solving by integrating diverse perspectives. Additionally, it is highly adaptable, allowing organisations to respond swiftly to market changes.
  • Disadvantages:
    Dual reporting lines can cause confusion and conflict, as employees may receive conflicting instructions from functional and project managers. This complexity can slow decision-making and increase stress among staff.

Analyse the extent to which the organisational strategy in your organisation (or an organisation with which you are familiar) helps to ensure products or services meet customers’ needs. (AC 1.2)

Organisational strategy is the blueprint for aligning resources and operations with market demands. For example, a customer-centric strategy in a retail company ensures that product design, pricing, and service delivery prioritise customer preferences. Strategies like leveraging digital platforms for online shopping enhance accessibility, meeting customer expectations for convenience and speed.

An organisation focused on sustainability might develop eco-friendly products and implement practices that appeal to environmentally conscious consumers. These strategic decisions foster customer loyalty and align the organisation’s goals with market trends.


Analyse the current impact of interest rates, inflation and one other external factor on your organisation (or one with which you are familiar). Identify organisational priorities arising from your analysis. (AC 1.3)

External factors significantly influence organisational priorities.

  • Interest Rates: Fluctuations in interest rates impact borrowing costs, affecting decisions related to expansion or investment. Higher rates discourage borrowing, compelling organisations to optimise existing resources.
  • Inflation: Rising inflation increases operational costs, particularly in wages and raw materials, necessitating adjustments to pricing strategies. For instance, a manufacturing company might raise product prices to maintain profit margins.
  • Technological Advancements: Rapid technological change requires organisations to innovate to remain competitive. For example, adopting automation can improve efficiency but may require significant upfront investment and reskilling of the workforce.

Organisations must continuously monitor these factors to prioritise resilience and adaptability.


In February 2024, Peter Cheese, current CEO of CIPD stated, “AI is transforming jobs, careers and workplaces. People professionals have a key role to play in encouraging safe experimentation and rapid learning, so that we can reap the benefits and mitigate the risks.” Assess the extent that AI is, or could be, used in your organisation (or an organisation with which you are familiar) and assess how AI impacts work. (AC 1.4)

Artificial Intelligence (AI) is transforming organisational operations, particularly in data analysis, customer service, and decision-making. AI-powered tools enable predictive analytics, allowing organisations to anticipate market trends and optimise supply chains.

In customer service, chatbots provide 24/7 support, enhancing customer satisfaction while reducing operational costs. However, the adoption of AI poses challenges, such as ethical considerations and workforce displacement. Organisations must implement strategies to upskill employees, ensuring they can collaborate effectively with AI systems.

AI also fosters innovation, enabling organisations to experiment with new business models. For example, an e-commerce platform can use AI to personalise recommendations, improving the customer experience and driving sales.

Explain Charles Handy’s model of organisational culture and explain David Rock’s SCARF theory. (AC 2.1)

Charles Handy’s Model of Organisational Culture
Handy identifies four types of organisational culture:

  1. Power Culture: Authority is centralised, with decisions made by a few individuals. This culture is common in small organisations but may lead to inefficiencies as the organisation grows.
  2. Role Culture: Clearly defined roles and responsibilities underpin operations, making this culture prevalent in bureaucratic organisations. While efficient in stable environments, it can stifle creativity.
  3. Task Culture: Teams are formed to address specific tasks or projects. This culture fosters innovation and adaptability but may lead to conflicts over resources.
  4. Person Culture: The organisation exists to serve individuals within it, typically seen in professional practices like law firms. It prioritises individual goals but may lack coordination.

David Rock’s SCARF Theory
SCARF outlines five domains of human experience that influence motivation:

  1. Status: Recognition and respect impact employee self-esteem.
  2. Certainty: Predictability reduces stress and enhances focus.
  3. Autonomy: Control over decisions fosters engagement.
  4. Relatedness: Building trust and connection reduces conflict.
  5. Fairness: Perceived equity promotes job satisfaction.
    Organisations can use SCARF to create environments that align with these motivational factors, improving employee performance.

Assess how employee selection or employee development impacts organisational culture and behaviour in your organisation (or one with which you are familiar). (AC 2.2)

Employee selection processes significantly influence culture. Hiring individuals whose values align with organisational objectives fosters a cohesive work environment. For example, a company prioritising innovation benefits from recruiting creative, proactive individuals.

Similarly, employee development practices, such as training and mentoring, reinforce organisational values. Development programmes promote upskilling and career growth, enhancing morale and productivity. Conversely, neglecting employee development can lead to disengagement and high turnover, eroding organisational culture.


An organisation is planning a change relating to hybrid working. Many employees moved to home working during the Covid-19 pandemic. Whilst this approach worked well at the time, the organisation now wants all employees to work at least two days a week on site. Explain how Kotter’s approach to managing change could be used to successfully implement this change. (AC 2.3)

Kotter’s eight-step model provides a framework for successful change implementation.

  1. Create a sense of urgency: Highlight the need for hybrid working to improve collaboration.
  2. Build a guiding coalition: Form a team to lead the change process.
  3. Develop a vision and strategy: Clearly articulate the benefits of working on-site two days a week.
  4. Communicate the vision: Use meetings and emails to ensure all employees understand the rationale.
  5. Empower employees: Provide resources and address barriers to hybrid working.
  6. Generate short-term wins: Celebrate early successes, such as improved teamwork.
  7. Consolidate gains: Build on initial achievements to sustain momentum.
  8. Anchor change in culture: Align policies with the new hybrid model to make it the norm.

Using the Kubler-Ross change curve, discuss how change is experienced. (AC 2.4)

The Kubler-Ross change curve explains how individuals experience change:

  1. Denial: Employees may resist hybrid working, doubting its benefits.
  2. Anger: Frustration over disrupted routines may arise.
  3. Bargaining: Employees may seek compromises, such as fewer on-site days.
  4. Depression: Some may feel demotivated or overwhelmed by the change.
  5. Acceptance: Over time, employees adapt to and embrace the new model.

Managers can support employees through these stages by providing clear communication, resources, and empathy.


The CIPD’s Health and wellbeing at work survey 2023 found the percentage of organisations that have a standalone wellbeing strategy has risen from 40% in 2018 to 53% in 2023. Although the percentage has increased, this means that 47% of organisations do not have a standalone wellbeing strategy.  Assess the importance of wellbeing at work and assess how good work could impact wellbeing. (AC 2.5)

Wellbeing at work enhances employee engagement and productivity. Organisations with wellbeing strategies, such as mental health support and flexible working policies, report higher morale and retention rates.

Good work practices, including fair pay, manageable workloads, and positive relationships, further contribute to wellbeing. Employees in supportive environments are more likely to perform effectively, reducing absenteeism and turnover.


Provide a brief overview of the employee lifecycle and discuss people practice roles at the recruitment, development and separation stages of the lifecycle. (AC 3.1)

The employee lifecycle encompasses recruitment, development, and separation:

  1. Recruitment: HR ensures job descriptions attract suitable candidates and oversees fair hiring practices.
  2. Development: People practices include onboarding, training, and performance management, ensuring employees reach their potential.
  3. Separation: Managing resignations or retirements respectfully protects employer branding and maintains morale among remaining staff.

Analyse how people practice supports organisational strategy through vertical integration and how people practice supports wider people strategies through horizontal integration. (AC 3.2)

Vertical Integration: People practices align with organisational goals by ensuring that talent strategies support broader objectives. For example, leadership development programmes may prepare managers for future roles.

Horizontal Integration: Collaboration between HR and other functions, such as marketing and operations, ensures cohesion. For instance, workforce planning aligns recruitment with production demands, preventing skill shortages.


An organisation is planning to introduce a four-day working week. Discuss the processes the people function could use to consult and engage with managers and employees to understand their needs when moving from a five-day to four-day working week. (AC 3.3)

Transitioning to a four-day working week requires consultation with managers and employees. The people function can:

  • Conduct surveys to understand preferences and concerns.
  • Facilitate focus groups to discuss potential challenges and solutions.
  • Use pilot programmes to gather feedback before full implementation.

This collaborative approach ensures the transition meets organisational and employee needs.

Continued...

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Kotter’s model and the Kubler-Ross Change Curve are critical components of this unit. Our team excels at breaking down these frameworks, ensuring your understanding of how to implement change effectively in a professional setting.

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