Strategy and organisational culture Flashcards
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 - 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 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 - 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 - 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 - 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 - 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
THE IMPORTANCE OF CULTURE - CULTURE AS A LIABILITY
Can a weak culture become a liability?
When there is are internal differences and disconnect between the presumed values of the organisation and those of the people involved, it is likely that what will happen? (2)
Name 2 examples of organisations that failed to respond to external changes in the environment.
Can a strong culture become a liability?
Name an example.
Yes = a weak culture can become a liability to the strategic progress of an organisation and provide a barrier to change = may ultimately lead to failure of a business
(1) likely the prevailing culture will have a destructive effect on present and future effectiveness
(2) likely the organisation fails to respond appropriately to changing external environment = culture prevent appropriate change
(1) Kodak (technological changes), (2) HMV (rapid growth of online trading)
Yes = an insistence on maintaining core cultural values, while failing to recognise that such values are out of step with a changing macro environment, can lead to organisational destruction
E.g., the failure of many organisations to promote a wider diversity at all levels within the hierarchy = organisations forced to react to external pressures from the FRC
THE IMPORTANCE OF CULTURE - THE POSITIVE INFLUENCE OF CULTURE ON STRATEGY
What did Grinyer and Spender (1979) illustrate?
What are the 3 steps when corporate performance is unsatisfactory?
What did they recognise and suggest?
illustrated the influence that culture has upon strategy and corporate performance =
When corporate performance is unsatisfactory:
Step 1 = tighter control of implementation
Step 2 = change of strategy or new strategy
Step 3 = change of culture
Recognised that the need for cultural change (step 3) will often be required to successfully deliver sustainable strategic change, but cultural change can be demanding
Therefore, suggested that the improvement of immediate corporate performance should be achievable through either step 1 (tighter control) or step 2 (change of strategy/new strategy)
CREATING, SUSTAINING, & CHANGING CULTURE - THE FORCES THAT CREATE CULTURE
Can culture ever be something solid, fixed and unchangeable?
What is the culture today the result of?
What are the 3 cultural forces?
Name an example for the past, present, and future of each.
No = specific culture is unique to each organisation at any specific point in its lifecycle
the result of the continuing forces of the past, the real forces of today, and the perceived forces of the future
- Purpose
past = vision and goals
present = sense-check of reality
future = longevity of vision - People
past = original drivers
present = key driving players - action and knowledge
future = succession planning - Product
past = market impact
present = market strength
future = macro and micro environmental impact
CREATING, SUSTAINING, & CHANGING CULTURE - THE CHALLENGE OF CHANGING CULTURE
Much strategic change is linked with the changing of culture within an organisation.
What are 2 common starting points for the consideration of strategic change and 3 examples for each?
Thaler and Sunstein (2008) suggest that change will often happen most effectively if started with what?
What is it that we might be trying to change?
(1) Beliefs = the changing of the mind of another person.
(2) Behaviour = the changing of the habits and practices of one or more people.
(3) Focus = the changing of strategic direction and drive.
How might we try to effect such change?
(1) Direction = the use of power to demand change.
(2) Conformity = human need reasons to comply.
(3) Understanding = this brings us back to the changing of beliefs.
started with a ‘nudge’ = a small amount of pressure to help to move another person in a different direction
