Cultural Aspects of Strategy Analysis and Choice

As defined in Chapter 4, organizational culture includes the set of shared values, beliefs, atti­tudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm. Culture is the unique way an organization does business. It is the human dimension that creates solidarity and meaning, and it inspires commitment and productivity in an organization when strategy changes are made. All human beings have a basic need to make sense of the world, to feel in control, and to make meaning. When events threaten meaning, individuals react defen­sively. Managers and employees may even sabotage new strategies in an effort to recapture the status quo. For these reasons, it is beneficial to view strategy analysis and choice from a cultural perspective, because success often rests on the degree of support that strategies receive from a firm’s culture. If a firm’s strategies are supported by an organization’s culture, then managers often can implement changes swiftly and easily. However, if a supportive culture does not exist and is not cultivated, then strategy changes may be ineffective or even counterproductive. A firm’s culture can become antagonistic to new strategies, and the result of that antagonism may be confusion and disarray.

Strategies that require fewer cultural changes may be more attractive because extensive changes can take considerable time and effort. Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategy linkages. Organizational culture can be the primary reason for difficulties a firm encounters when it attempts to shift its strategic direction, as the following statement explains:

Not only has the “right” corporate culture become the essence and foundation of corporate excellence, but success or failure of needed corporate reforms hinges on management’s sagacity and ability to change the firm’s driving culture in time and in tune with required changes in strategies.8

Source: David Fred, David Forest (2016), Strategic Management: A Competitive Advantage Approach, Concepts and Cases, Pearson (16th Edition).

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