Strategy and culture u6 p57

Previous study already pointed out that Mintzberg stresses the importance of ideology. Simons control levers talk about beliefs and boundary systems as bases of control mechanisms. The structure and systems of an organisation undoubtedly affect the morale and behaviour of its people. Whittington said that structures are primarily about people, and that structures can "work only so well as their constituents are capable". (2003, p343).

In effect culture is another system. A social system, shaped by the formal and informal interactions of your staff, as they perform productive activities. Those people establish norms, beliefs, behaviours, relationships and social groupings irrespective of those defined by management.

Being successful, then, depends not only on having a strategy consisting of the right systems and organisational structures, but also on the willing participation and commitment of people. This shapes the personality and practices of the whole organisation. Culture affects in particular the implementation part of the strategy circular process.

There are links between organisational culture and the study of anthropology and sociology.

Schein's two challenges:

integrating individuals into an effective whole
adapting effectively to the external environment

The collective learning that goes on while you're meeting those challenges creates a set of shared values and beliefs - culture.

Ogbonna and Harris define culture as "a dynamic set of assumptions, values and artefacts whose meanings are collectively shared in  a given social unit at a particular point in time"

There is a distinction between corporate and organisational cultures. To clarify, there are two questions to be asked.

1. Who owns culture?
2. Is culture something that an organisation is, or something it has?

If culture is something that an organisation has, then it can be treated as another contingency which has an impact on structures, people and processes, and can be seen to be owned by the management of the organisation and is capable of being manipulated in some way, eg to improve efficiency. It may even be a resource, a source of competitive advantage.

If culture is something that an organisation is, then it is the product of negotiated and shared meanings that emerge from social and personal interactions. In this case culture is created and re-created by its participants in a process that is continuous and not imposed. It's possible to imagine links between organisational culture and emergent strategy. Corporate culture is more akin to deliberate strategy, but what you end up with is an emergent strategy and an organisational culture that have been moulded from the deliberate strategy and corporate culture by your people. Emergent strategy may also be a byproduct of your organisational culture, even if your deliberate strategy took corporate culture into account.

Corporate culture refers to and reflects managers' values, interpretations and preferred way of doing things. Organisational culture may embrace many sub-cultures and is more intangible. Managers often assume that their understanding of the corporate culture is fully reflected in the organisational culture, whereas in effect it is only part of it. They also confuse compliance to corporate culture with the existence of a homogeneous organisational culture.

Culture normally reflects organisational purpose:-

this is what we are about
this is what we do
and even this is how we do it - which becomes "the way things are done around here".

It shapes the behaviour and attitude of people. Your culture will be distinct in intensity (depth) and integration (breadth) to any other organisation (Wheelen and Hunger, 2002, p89(.

To clarify those terms:-
Cultural Intensity:
The degree to which members of a unit accept the norms, values or other cultural content associated with the unit - depth.
Tends to be stronger in mature orgs, eg service at SIA. In intensive cultures, employees are expected to behave more consistently than employees in less intensive cultures.

Cultural Integration:
The extent to which units throughout an organisation share a common culture - breadth. In a hierarchical structure (eg military), culture is highly integrated.

Culture fulfills the following functions:
Internal and external identity can be reflected and reinforced
Your staff's values and norms can be aligned to those of the organisation
It enables the organisation to work as a social system
It provides a frame of reference for employees to draw upon when undertaking productive activities and serves as a guide for appropriate behaviour.

As previously mentioned, culture can heavily influence the strategy process. A culture that fosters strategic flexibility and renewal can help the organisation adapt better in dynamic environments. Where resources and capabilities are embedded in culture, they will form a tacit feature of your operational effectiveness which is difficult for your competitors to copy.

"...culture is what determines how people behave when they are not being watched" - Tom Tierney, Bain Consultancy.

AOL and Time Warner - attempt to merge a sharp e-culture with a traditional controlled media culture - disastrous.

The ways managers interact can help to set the tone.

GE under Jack Welch had a well-forged culture, tough q&a sessions with managers.

Wal-Mart's money saving culture is reinforced by the company's weekly Saturday Morning meetings for managers and families, and low spending habits by which their chief executive sets an example.

Cultures are influenced by the sort of people who are recruited. Enron's MBA talent recruitment resulted in a poorly controlled, self-absorbed management hierarchy.

The biggest single influence on a culture is the boss. Employees set their behaviour by the leader at the top.

Many recent large corporate failures (tyco, Global Crossing, Worldcom) resulted from hastily bundled together mergers of organisations that lost their distinctive cultural norms and found nothing to replace them.

Consistency can lead to a healthy culture, and one aid to this is for key messages to be repeated over and over. Richard Branson repeatedly tells his Virgin staff that 'common sense counts more than pure intellect'.

Culture can therefore influence the success of failure of your organisation because

Culture has a direct influence over how your employees and managers interact within their given structures. It is embedded over time by big events (mergers) as well as small (cakes on birthdays).

It affects the selection and type of people the organisation recruits, and can provide a way to retain the right people.

Cultural consistency leads to greater coherence in the development of your capabilities. This can help explain how belief systems work in the Simons control levers model.  It can lead to ways of doing things and organisational learning that can underpin operational effectiveness and become a source of competitive advantage in its own right.

The right culture can be used to reinforce staff commitment to strategic goals. Leadership personalities can really help here. If leaders are committed to the culture then employees perception of that culture is improved and they are more likely to adopt it too.

Culture can be a "sticky" factor (as previously covered) which can lock the organisation into particular commitments of resource and strategic trajectories (and lock others out).