Strategy-Culture theory

Strategy:
– Course of action used to achieve objectives.
– Relates resources of organization to opportunities
in environment.
Culture:
– Set of values for setting priorities.
– Critical factor in implementation of strategy.
 Definition of Culture
System of shared values held by members
that distinguishes one organization from
another.
 Figure 15.3
Relative Strength of Cultures
 Strong Versus Weak Cultures
Strong culture characterized by basic values
intensely held and widely shared.
Weak culture may be seen in young
company or one with high turnover.
Culture product of key components:
structure, systems, people, and style.
 Figure 15.4
Strategy-Culture Matrix
Strategy-Culture Matrix (part 1 of
3)
Four basic alternatives in determining
strategy changes:
1. Manage change (manageable risk)
• Change important and compatible with culture.
• Use cultural reinforcement as strategies.
 Strategy-Culture Matrix (part 2 of
3)
2. Reinforce culture (negligible risk)
• Forge vision that emphasizes shared values.
• Reinforce existing culture.
3. Manage around culture (manageable
risk)
• Change important and incompatible with present
culture.
• Reinforce value system, reshuffle power, use
leverage in the organization.
Strategy-Culture Matrix (part 3 of
3)
4. Change strategy to fit culture
(unacceptable risk)
• Change important but incompatible with culture.
• Changing culture is explosive, long-term process
that may be impossible.
• Determine if strategic change is viable alternative
or if strategy should be modified to fit more
closely with existing culture.