Strategic Management: Formulation and Implementation

Strategy And Culture

Many organizational theorists write of importance of corporate culture in implementation and argue that culture needs to be considered in the implementation of strategy.

The correct relationships between cultural values and beliefs, organizational strategy, and the business environment can enhance organizational performance. Dan Denison argues that the fit among strategy, environment, and culture is associated with four categories of culture: adaptability, mission, involvement, and consistency. These four concepts are integrated in the framework presented in Figure 410.

The adaptability culture is characterized by strategic focus on the external environment through flexibility and change to meet customer needs. The culture encourages norms and beliefs that support the capacity of the organization to detect, interpret, and translate signals from the environment into new behavior responses.

The mission culture places major importance on a shared vision of organization purpose. Organizational leaders shape behavior by envisioning a desired future state that is important to everyone. One example is Medtronic, the premier manufacturer of cardiac pacemakers.

Over the years the environment has changed with respect to government regulation, competition, and healthcare reimbursement, but the organization's mission remains essentially the same. The involvement culture has a primary focus on the involvement and participation of the organization's members and on rapidly changing expectations from the external environment. Involvement and participation create a sense of responsibility and grater commitment to the organization.

The consistency culture has an internal focus and a consistency for a stable environment. Symbols, heros, and ceremonies would support cooperation, tradition, and following established policies and practices as w way to achieve goals.

These categories are based on two factors: (1) the extent to which the competitive environment requires change or stability and (2) the extent to which the strategic focus and strength is internal or external.

According to Arthur Thompson Jr., and A. Strickland III creating an organizational culture which is fully harmonized with the strategic plan usually involves five steps:

Step 1
is to diagnose which facets of the present culture are in line with strategy and which are not.
Step 2
is to develop ways to make the needed changes in culture and to recognize how long it will take for the new culture.
Step 3
is to use the available opportunities to make incremental changes that improve the alignment of culture and strategy.
Step 4
is to insist that subordinate managers take actions of their own to set an example and to do things which will further instill organizational values and reinforce the culture.
Step 5
is to proactively build and nurture the emotional commitment that managers and employees have to the strategy to produce a temperamental fit between culture and overall strategic plan.

Normally, managerial actions taken to modify corporate culture need to be both symbolic and substantive.