L9: Cultural School Flashcards
What is the key uniqueness of the cultural school?
Everyone has a part to play; it shows the collectivists dimension of the soial process of strategy formulation.
Strategy cannot change just as one change clothes
What is organizational culture?
Culture represents the life force of the organization. It is about collectively shared interpretations of thw world in a social process. . is about; Collective cognition organizations' mind shared beliefs
What are the premises of the cultural school?
- Strategy formation is a process of social interaction, based on the beliefs and understandings shared by the members (employees) of an organization
- Individual acquires these beliefs by a process of acculturaion/socialization (which is largely tacit and nonverbal) Sometimes it requires formal indoctrination such as onboarding program
- Beliefs are difficult to describe and origins of culture are obscure
- Strategy constitutes nit a position, but the way the organization dies things, rooted in collective intentions. Strategy is deliberately formed, although not fully conscious
- Culture does not encourage strategic change but reinforces existing strategy
How are culture and strategy linked?
- Culture ifnluences the style of decision-making and its use of analysis in an organization and therefore influences strategy-formation process
- Culture acts as a perceptual filter/lens (affects which issues are more important)
- Culture dictates the dominant logic of doing business (do they focus on innovation or wait and see what happens)
- A shared commitment to beliefs encourages consistency in an organization’s behavior and thereeby discourages changes in strategy
What is the dark side of culture?
Strategic change
The cukture is shared by its employees and therefore persistent, culture can be a strong resistance when the organization wants to hange its strategy; but we’ve always done it this way
(an organoization in decline will even be more strongly inclined to stick with culture)
Radical changes in strategy must be based on fundamental change in culture. What are the 4 phases of overcoming the resistance to strateguc change?
- Strategic drift
It takes a while before the change necessary becomes large enough to necessite a change in culture, this leads to a drift; A misfit between culture and environment, - Unfreezing of current belief system
Financial decline occurs because of misfit, people begin to question the taken-for-granted assumptions - Experimentation and re-formulation
A period of confusioj with the development of a new strategic vision (old and new ideas combined). Gaining fit will lead to greater commitment to the new culture - Stabilization
Positive feedback will help increase employees’commitment to new belief systems/culture which seems to work
What are the 4 mechanisms of the Swedisch idea’Organizations fit culturally into the context?
- Mapping -> reflecting environment
- Matching -> complementing the environment
- Joint consultation -> supporting and cooperating with the neighboring system with a view to a joint exploration of the common environment
- Dominance -> systems’ availability to project a mapping of itself into the environment
What is meant with strategy-as-practice as managerial anthropologist?
T understand strategy, we need to venture among managers and study in close proximity, in reality and in detail.
- Strategy is something the members do, not something the organizations do
- Strategy does not constitute a position, but the way the organization does things
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What is resource based theory?
A theory posed by Wernerfelt (1984)
He argues the following;
- Looking at firms in terms of resources gives a different insight than the product perspective
- Identifying types of resources may lead to high profits. These are associated with resource position barriers
- Strategy for a bigger firm involves striking a balance between the exploitation of existing resources and the development of new ones
- An org. can be seen as a purchase of a bundle of resources in a highly imperfect market (tangible and intangible)
When csn resources be used strategically?
When it contains the 4 criteria;
- Valuability
- Rarity
- Initimibilty (difficult to intimate)
- Substitutability (little substitues)
What is critique on the resource based view?
Tends to produce circular reasoning
What are the 4 conditions neccesary to transformm VRIS resources into sustainable competitve advantage?
- Heterogenity
- Ex ante limits to competition
- Ex post limits to competition
- Resource immobility
What are the two things Barney (1986) argues to make culture the most effective and durable barrier to imitation?
- Culture encourages production of unique outcomes
- Culture is loaded with causal ambiquity which makes it difficult to understand, let alone reproduce
BUT cultures are difficult to make hut easy to destroy
What is the knowledge based view?
This theory explains why organizations exists;
- It is easier to share knowledge if you have shared beliefs
- Boundaries of organization are thus determined by the extent to which the creation and delivery pf organization’s value proposition require shared knowledge
- views organization as a community
What are limitations/critique on cultural school?
- Culture remains a vague term
- It can discourage necesary change
- Rather easy to destroy culture
- It equates strategic advantage with organizational unqiueness
- explains to easy what already exists, rather than tackling the tougher questions
