Strategy and organisational culture Flashcards
CULTURE AND HISTORY
The textbook’s definition of what is happening ‘today’ is summed up in the what, where people are either doing what 3 things?
How does this link to culture?
What 3 things do the parameters of the operational circle represent?
Summed up in the operational circle where people are either (1) IMPLEMENTing the previously defined strategic tactics, (2) MONITORing the results of that implementation, or (3) making permitted ADJUSTments within the currently permitted parameters of the operation of the organisation
All 3 of these aspects (implement, monitor, adjust) are constantly happening within the culture of every organisation
Represent (1) the working everyday culture of the organisation, (2) the accumulated history of strategic thought, and (3) the decisions that have been taken
CULTURE AND HISTORY
To be able to understand the culture of an organisation requires consideration of its history.
Many organisations have long histories and their cultural drivers can stem back many years. Often these cultural drivers are intrinsically linked with what?
What is a negative aspect of this?
Name an example or an organisation where the name and the culture associated with that name continue to this day.
linked with the beliefs of the founders, which have remained as a core part of the organisational ethos and are immediately recognised by a wide group of stakeholders
= there can be conflicting visions between founders and directors = some organisations have had issues when they have a dominant shareholder e.g., Rupert Murdoch and News International
John Lewis
CULTURE AND HISTORY
Barney (1986) suggests that each organisation has a unique culture that has developed over the life of that organisation and is embedded in the history and heritage of the organisation and its employees.
The effective development of strategy requires an understanding of what?
How can this be achieved? (2)
Understanding of how an organisation behaves, and why it behaves in that way
by:
1. considering the historical development of the organisation, the different forces that have impacted upon its behaviours, and
2. by considering how it aligns with
the stereotypical models of culture (based on other organisations)
CULTURE AND HISTORY - ORGANISATIONAL CULTURE
How does Barney (1986) describe culture? (A complex set of what, that defines what?)
What 2 advantages does he suggest a good culture can do for an organisation?
What is a frequently occurring definition of the word ‘culture’?
= a complex set of values, beliefs, assumptions and symbols that define how a firm conducts its business
- deliver competitive advantage
- improve efficiency through enabling appropriate focus on areas such as customers or innovation
= ‘the way we do things around here’
CULTURE AND HISTORY - ORGANISATIONAL CULTURE
What are the 3 levels of organisational culture that Schein (2004) suggests exist?
- Underlying assumptions = held unconsciously by employees = implicitly guide the behaviour and opinions of employees for most day-to-day operational activities
- Values = promoted within an organisation, to epitomise what that organisation stands for = values allow an individual to decide how to tackle situation/decision that is not resolved automatically through the underlying assumptions
Tone from the top important! - Artefacts = the visible and tangible evidence of organisational culture e.g., structure/layout of workspace, written and spoken language within the organisation
CULTURE AND HISTORY - STRATEGIC DRIFT
Much of emergent strategy is based upon incremental change which develops from cultural influences within an organisation.
What is meant by strategic drift as referred to by Johnson (2017)?
What are the 4 phases in the drift process?
Strategic drift = there is often a time gap between the development of the strategy and the changes within the environment
- Incremental strategic change = small changes that occur during long periods of relative stability = external environment changing slowly so organisational strategy can adapt gradually without the need for radical change
- Strategic drift = occurs where micro and macro environmental changes restrict the ability of an organisation to amend its strategy = organisation will continue on an incremental change path with an increasing gap developing between the planned strategic path and the surrounding environment
- Flux = caused by the gaps that have developed during the strategic drift stage = can often cause significant periods of disagreement and complexity = different factions will try to find alternative methods to either change strategy or implement a radical environmental adaptation
- Transformation or death = the result that naturally emanates from the stage of flux = either there is an agreed resolution to realign the strategy with its external environment, or the strategy ceases to exist
CULTURE AND HISTORY - THE INFLUENCE OF THE PAST
To fully understand the culture of an organisation, it is essential to understand and be able to identify what?
What will this require consideration of?
understand how an organisation has evolved and be able to identify internal, micro, and macro forces that have resulted in the current structure, personnel, and culture
consideration of the people who have been, and continue to be, involved with the organisation and the way they have chosen to shape and influence the culture of the business, both top-down and bottom-up
CULTURE AND HISTORY - THE IMPORTANCE OF RECOGNISING BIAS
How does culture relate to Argyris (1990) ladder of inference? How does it inform and develop culture?
The use of the ‘inference’ model suggests what?
What can this process be described as?
At the outset of each process in the ladder, the brain will be influenced by the surrounding culture at that point and therefore inform and develop the culture further by the decision made or action taken
suggests that the penultimate stage before action or decision, combined with the result of the action or decision, will inform the earlier stage of ‘data filtration’
= the basis of prejudice or bias within the brain
CULTURE AND HISTORY - THE IMPORTANCE OF RECOGNISING BIAS
An Association of Chartered Certified Accountants (ACCA) publication, ‘Banishing Bias’ (2017), recognises 12 frequent types of bias.
Name 6 of them that are most relevant to EZH.
Why is this important for a company secretary?
- Outcome = results rather than origination (Eddy focused on profits)
- Conjunction = predefined linkage in our minds (Eddy been successful with other projects prior to EZH and sees AI as a profit exploiting opportunity in healthcare)
- Availability / Selectivity = not looking beyond the obvious (Eddy only seeing money potential)
- Recency = not looking far enough back (Eddy not appreciating EZH history and what made EZH so successful under Niamh)
- Overconfidence = ‘we know better’ (Eddy believes he knows better due to his previous success as a technological visionary)
- Blindspot = lack of 360 vision (Eddy failing to see vision of AI industry and specifically its application to healthcare)
Given the objectivity required in the consideration of strategy, it is important to be aware of the range of different cognitive biases, including their own, which will be affecting the development of strategy
UNDERSTANDING CULTURE
To understand the cultural conflict and cultural alignment that exists within an organisation it is important to consider what?
CULTURAL FRAMES OF REFERENCE
What are the 3 main cultural frames that need to be taken into consideration to understand how and why an individual behaves in a particular way as suggested by Johnson (2017)?
the different frames of reference for those cultures, where they originate, and their differing impacts
to understand how and why an individual behaves in a particular way, need to consider:
1. geographic = mixture of national and regional influences
2. organisational field = the sector of the industry with its differing professional influencers
3. organisation = the intermix of subcultures and divisions within the organisation itself
UNDERSTANDING CULTURE - CULTURAL FRAMES OF REFERENCE - GEOGRAPHIC
It is recognised by many writers that people originating from different countries and regions may have significantly differing attitudes to work and authority.
Hofstede (1980) suggested that there are at least 4 key dimensions to take into consideration with regard to national culture. What are they?
Why has his work been criticised?
- The relationship with authority and the acceptance of inequality = democratic approach or dictatorship?
- The relationship between an individual and groups of people = individualism (US) or collectivism (South America)
- The longevity of the vision = shorter-term perspective (North America) or longer-term orientation (Asian cultures)
- The tolerance of uncertainty and ambiguity = Hofstede suggested that Japanese culture is associated with a high intolerance of uncertainty
some say his ‘whole country’ approach fails to recognise the significant cultural differences that exist between different regions within 1 individual country
UNDERSTANDING CULTURE - CULTURAL FRAMES OF REFERENCE - ORGANISATIONAL FIELD
What does the concept of an ‘organisational field’ describe?
What are the 3 different types of concept that Johnson (2017) suggests are useful to consider with regard to cultural impact of an organisational field?
Describes any group of organisations that have frequent contact and relationships with each other and therefore developed a shared cultural approach e.g., accountancy/law/finance (cross-sectoral influencers)
- Categorisation = the labelling of activities, products or services to identify societal impact e.g., in technology - differentiate marketing and use of computers, tablets, mobile phones
- Recipes = a set of assumptions, norms and routines that are held in common, sometimes referred to as ‘best practice’ for that field e.g., UK Corporate Governance Code
- Legitimacy = the institutionalisation of categories and recipes over time will lead to an assumption that people operating within the field should always follow these particular strategic routes e.g., UK universities adapt and reflect their mutual approach to a diversity of degree courses
UNDERSTANDING CULTURE - CULTURAL FRAMES OF REFERENCE - ORGANISATION
What are the 4 constituent parts of the culture of an organisation?
- Mission = the underlying causes of the heartbeat of an organisation
e.g., those areas of strategic direction that are held closely and often with deep conviction - Methods = the habits of the organisation, why certain tasks are carried out in certain ways
= the communication infrastructure (or lack thereof) and the means of transforming inputs into outputs - Principles = the hierarchical structure within the organisation and the flow of information to enable the fulfilment of tasks
E.g., the structure of interactions and communication with differing stakeholders - Values = the fundamental beliefs about humanity that pervade the organisation (individualism vs. collectivism, authority vs. democracy)
E.g., the ethical standards that employees are expected to adhere to
UNDERSTANDING CULTURE - SUB-CULTURES
In anything other than a single-person organisation there will be an interplay of the main cultural drivers with a range of differing subcultures.
What might these be based around? (3)
These might be based around
(1) the behaviour and expectations of different individuals
(2) different local, national and regional cultures in a large multi-national, and/or
(3) different internal departments and operational functions within the same office (e.g. there is often a different cultural approach between a sales team and a finance team)
UNDERSTANDING CULTURE - MODELS OF CULTURE
Culture will vary from and between what?
Should models be used as a fixed framework?
What are the 3 different models?
Culture will vary from organisation to organisation and between timeframes within the same organisation
No, only ever as a benchmark
- Harrison and Handy: cultural types
- Deal and Kennedy: organisational cultures
- Johnson: the cultural web
UNDERSTANDING CULTURE - MODELS OF CULTURE - HARRISON & HANDY
What did Harrison (1972) discuss?
What 4 things did he identify and differentiate between?
How did Handy (1993) expand on these aspects of organisational culture?
Discussed the different aspects of character that exist within organisations
identifying and differentiating between:
- POWER orientation = the attempt to dominate the operating environment.
Handy = the culture and behaviour is controlled from the centre by the leader (E.g. political organisations) - ROLE orientation = a focus on legality, legitimacy and responsibility.
Handy = the culture relies upon the interaction of a number of key roles or pillars = change difficult (E.g. traditional manufacturing businesses) - TASK orientation = the highest value always being the achieving of goals.
Handy = the culture works through the network of people and their roles and goals (E.g. technology and marketing firms) - PERSON orientation = serving the needs of members.
Handy = people are allowed freedom of expression within organisational boundaries (E.g. law firms)
UNDERSTANDING CULTURE - MODELS OF CULTURE - DEAL & KENNEDY
Deal and Kennedy (1982) suggested that organisational culture was based around what 6 interlocked elements?
- History = sharing the narrative of the past.
- Values and beliefs = sharing what is important within the organisation.
- Rituals and ceremonies = the everyday habits of the organisation.
- Stories = the inherited tales of why things happen in the way they do.
- Heroic figures = previous and current charismatic leaders.
- Cultural network = the communication routes that enable people to find out what they need to know.
UNDERSTANDING CULTURE - MODELS OF CULTURE - DEAL & KENNEDY
Deal and Kennedy’s suggested structure of culture identification focuses on what? (2)
What were the 4 distinct types of culture that Deal and Kennedy found?
the interaction between (1) the speed of feedback communication and (2) the level of strategic risk to the organisation and the individuals involved
- Macho, tough-guy culture = high risk, fast feedback = people work hard to become organisational stars, little regard for teamwork or mutual support. If fail, then out.
E.g., entertainment and sporting industries - Process culture = low risk, slow feedback = no individual or individual action is likely to have a recognised personal significant impact upon success of org. = take long time to drive organisational change
E.g., large retailers and banks - Work-hard and play-hard culture = low risk, fast feedback = individuals required to maintain a high-energy performance, but also play a role in team
E.g., sales departments and fast-food outlets - Bet-your-company culture = high risk, slow feedback = will require people to believe in the eventual outcome and build a team awareness and knowledge bank
E.g., oil companies and pharmaceutical businesses
UNDERSTANDING CULTURE - MODELS OF CULTURE - DEAL & KENNEDY
How can Deal and Kennedy’s approach to the 4 types of culture be used?
used to analyse and challenge culture within an organisation through developing appropriate questions alongside each of the 4 dimensions:
- Is the future of the organisation safe in the hands of high-profile, tough-guy individuals?
- Is the process too slow to enable the correction of errors?
- Is the high energy involved in the work and play masking underlying poor performance by one or more individuals?
- Is the organisation able to react swiftly enough when the operating parameters of the original ‘bet’ change significantly?
UNDERSTANDING CULTURE - MODELS OF CULTURE - JOHNSON: THE CULTURAL WEB
What is Johnson’s cultural web?
Johnson suggests that the recognition and understanding of the different drivers of the current paradigm will expose what?
What are the 6 elements of the cultural web?
offered as an alternative way of considering the current cultural paradigm of an organisation
expose the rationale for the current culture and thus enable identification of aspects that might need to be changed as part of a strategic change programme
- Organisational structures
- Power structures
- Symbols
- Stories
- Rituals and routines
- Control systems
UNDERSTANDING CULTURE - MODELS OF CULTURE - JOHNSON: THE CULTURAL WEB
Expand on the 6 elements of the cultural web.
- Organisational structures = the formal hierarchical lines and written lines of communication and human interaction
- Power structures = the recognition that significant decisions are made by a defined number of individuals who ultimately hold the power
- Symbols = the tangible visual presence of an organisation within its near and far environment. I.e., logos, layout of offices, differing privileges for different levels within the hierarchy, etc.
- Stories = how people, inside and outside the infrastructure, talk about the organisation
- Rituals and routines = the daily behaviour of people within the organisation to each other and to stakeholders
- Control systems = the formal and informal methods of monitoring and maintaining people and systems throughout the organisation
E.g., financial systems and methods of appraisals, remuneration reward, and recognition.
THE IMPORTANCE OF CULTURE - DOMINANT CULTURE
What is a dominant culture?
Name an example of an organisation that has a dominant culture.
Mullins (2016) suggested that there are differing reasons why an understanding and recognition of corporate culture is
important.
What are the 5 aspects he argued build upon a consideration of behaviour within the workplace?
= either a majority of employees, or the core focus of the organisation, is driven by and moulded by an overriding, and often unchallenged, set of values
Netflix
- Work ethic = how people behave and how people are treated.
- Parameters of control = how inappropriate behaviour, views and practices are controlled and corrected.
- Performance and results = how success is measured and how people are rewarded.
- The evolution of leadership = how momentum is maintained and who follows whom.
- Differing beliefs = how reality will always come to the foreground, even if organisational values are imposed,
people’s own beliefs will drive behaviour
THE IMPORTANCE OF CULTURE - STRONG CULTURE
How is a strong culture defined?
Goldsmith and Clutterbuck (1997) suggested that through such values the culture might do what 7 things?
defined by the core values being widely shared and held by a majority of the people, and that these shared beliefs will drive the organisation forward
- give people a sense of identity
- develop commitment
- guide and shape behaviour
- internalise control systems
- support and sustain decision-making
- make communication and co-operation easier
- decrease ambiguity and align strategic purpose
THE IMPORTANCE OF CULTURE - WEAK CULTURE
What happens in a weak culture?
What does this mean?
Kotter and Heskett (1992) suggested that weak and unhealthy corporate cultures are derived from what 7 things?
In a weak culture the minority will always be striving to get their views and values heard
They tend to follow their own personal goals rather than those of the organisation.
- individual entrepreneurship and/or luck
- an over-dominant market position
- a lack of appropriately qualified or experienced managers
- increasing bureaucracy
- ignoring of external influences and forces
- management becoming political
- an arrogant approach led by hubris
