Culture & Strategy

By: Sharan, Sayan, Rohan, Rajeev, Mayuri, Prajakta

Business Strategy

BUSINESS STRATEGY REPRESENTS CLEARLY IDENTIFIED FEASIBLE ROUTE FOR STEERING

ACTIVITIES ONTO ATTAINMENT OF GOALS AND OBJECTIVES.

Three Levels of

Strategy

1. Corporate Level Strategy

2. Business Unit Level Strategy

3. Functional/Operational Level

Strategy

Corporate Level

Strategy

Managing Activities and Business

Interrelationships.

Corporate Responsibilities.

Management Practices.

Competitive Contact.

Business Unit Level

Strategy

Influencing the layout of competition

by means of action such as vertical

integration.

Positioning the firm’s business

against competitors.

Modifying actions to cope with

changes in demand, supply,

regulations and technology.

Developing useful partnerships with

customers and other business units.

Functional/Operational

Level Strategy

Business development

Production

Finance

Human resource and materials

management

Generic Range of

Strategies

Differentiation Strategy

Cost Leadership Strategy

Focus Strategy

CULTURE

Corporate Culture

“Corporate culture is a system of

shared values, assumptions, beliefs,

and norms that unite the members of

an organization.”- Kathryn Bartol, Management

Interactivity of Culture

and Strategy

Strategy

Culture

Cultural Thrust

Impacting Strategy

Functions of culture

Organisational

Culture

Organisational

Identity

Collective

Commitment

Social System

Stability

Sense-Making

Device

Cultural Analysis

Cultural Analysis focus on identification of the key components of an organisation’s culture and ascertainment of resultant

alignment with strategic intent, strategies, policies and business development

imperatives.

Two Levels of

Cultural Analysis

• Analysis of Elements of Culture

• Analysis of Cultural Expressions

The Impact of Corporate

Culture on Business Strategy

•Risk

•Employee Retention

•Incentive Pay

•Focus

Aligning Business Strategy

with Corporate Culture

In effect, the whole goal for aligning business strategy with corporate culture is

to ensure the components of active culture within the organisation would facilitate

seamless operability for established strategies.

Forces of Corporate

Culture

• Leadership

Stream

• Teamwork

Dynamics

• Workplace

Communicatio

n

• Paradigms

• Rituals and

Routines

• Power

Structures

• Symbols

• Exploratory

Engagement

• Social

Connectivity

• Organisational

Structures

- Peter Drucker

12 Reasons Why Culture

Eats Strategy for Lunch

Southwest Airlines didn’t earn the highest loyalty in the industry with its bags fly free and fuel price hedging strategies

Reason #1People are loyal to culture, not to

strategy

A resilient culture was more important than new strategies in saving Starbucks

Reason #2Culture provides resilience in tough

times

During the fuel price crisis of 1991, Southwest Airlines didn’t have to execute a strategy of pay cuts – employees

volunteered for it.

Reason #3Culture is more efficient than strategy

Les Schwab sells the same tires you can buy

anywhere else – but no one can compete

with their culture

Reason #4Culture creates competitive

differentiation

Toms Shoes has become a cultural icon – creating a level of success that could never be attained by strategy alone.

Reason #5Culture can spark a contrarian business

strategy

Reason #6A brittle culture can doom even a great

organization (or product)

Robert Nardelli’s strong-fisted GE strategies increased sales,

profits, and stock price…

Reason #7When strategy and culture collide,

culture will win

Not fixing Dave Carroll’s guitar cost United $millions

Reason #8Cultural miscues are more damaging

than strategic ones

• Hundreds of people tour Zappos every week but no one can copy the Zappos culture

• Getting a job at the Zappos call centre is more competitive than gaining admission to Harvard

Reason #9Strategies can be copied but no one can

copy your culture

We don’t need to tell people they can’t smoke in our buildings or discipline them when they do – co-workers will take care of that

Reason #10Culture provides greater discipline than

disciplinary action does

• Wal-Mart’s culture of low price at any cost has come at a huge cost to the company.

• Wal-Mart has spent over $100 million on the investigation of these ethical scandals.

Reason #11Culture provides a level of risk prevention

that cannot be attained with strategy alone.

Your bottom line next year will largely be determined by your current strategies; your bottom line in the following years will be more influenced by your current culture.

Reason #12Culture will have a significant impact on your

future bottom line.