Strategic Position:

Strategy and Culture

•Strategic Management (5 ECTS)

•Ismo Vuorinen

•Principal Lecturer

•Autumn 2010

The Implications of Culture

Strategic

drift

Historical

influencesCultural

influences

Cultural

web

Management

implications

What is Strategic Drift?

Strategic drift is the tendency for

strategies to develop incrementally on

the basis of historical and cultural

influences but fail to keep pace with a

changing environment.

Strategic Drift

Reasons for Relative Continuity

in Successful Businesses

Alignment with environmental change

Success of the past

Experimentation around a theme

Why History is Important

Managers’ organisational experience

Avoiding recency bias

Misattribution of success

What if questions

Detecting and avoiding strategic drift

What is Path Dependency?

Path dependency is where early

events and decisions establish policy

paths that have lasting effects on

subsequent events and decisions.

Path Dependency and Lock-In

What is

Organisational Culture?

Organisational culture is the basic

assumptions and beliefs that are shared by

members of an organisation, that operate

unconsciously and define in a basic taken-for-

granted fashion an organisation’s view of

itself and its environment.

Cultural Frames of Reference

The

Individual

NationalOrganisational

field

Functional/

divisional Organisational

What is an Organisational Field?

An organisational field is a

community of organisations that interact

more frequently with one another than

with those outside the field and that

have developed a shared meaning

system.

Culture in Four Layers

Culture’s Influence on Strategy

Development

The Cultural Web of an Organisation

Stories Symbols

Structures

Power

structures

Control

systems

Rituals/

routinesParadigm

Assessing Stories

What core beliefs do the stories reflect?

How pervasive are the beliefs?

Do stories relate to corporate success or

failures?

Who are the heroes and villains?

Assessing Symbols

Are there particular symbols of the organisation?

What status symbols exist?

What does the language and jargon signify?

What aspects of strategy are highlighted publicly?

Assessing Structures

How mechanical/organic are the structures?

How flat/hierarchical are structures?

How formal/informal?

Do structures encourage collaboration?

What types of power structures do they

support?

Assessing Control Systems

What is most closely monitored?

Is emphasis on reward or punishment?

Are controls related to history or current

strategies?

Are there many/few controls?

Assessing Routines and Rituals

Which routines are emphasised?

Which are embedded in history?

What behaviour do routines encourage?

What are the key rituals?

What do core beliefs reflect?

What do training programmes emphasise?