CHAPTER TEN – ALIGNING STRATEGY AND ORGANISATIONAL CULTURE

Learning outcomes for this chapter:

1. Describe what organisational culture encompasses

2. Explain how organisational culture is shaped
3. Evaluate whether am organisational culture would support a chosen strategy
4. Understand organisational cultural assumptions and practices
5. Explain the relationship between strategic leadership and organisational culture
6. Explain the seven principles of strategic leadership
7. Explain how strategic leaders should lead change to implement a chosen strategy

 Culture is often considered to be ‘the way we do things around here’

 It is also assumptions that people or groups have that determine how they responds and behave
in different situations
 Formally it is defined as ‘a pattern of shared basic assumptions learned by a group as it solved its
problems of external adaptation and internal integration, which has worked well enough to be
considered valid and therefore to be taught to new members as the correct way to perceive,
think and feel in relation to those problems’
 In an organisation context culture refers to a collection of values and norms shared by people
and groups who work together (ie: the organisation values)
 When people share the same beliefs and values, they share a common language and instinctively
know what behaviour is acceptable and what is not
 When organisational members buy into cultural norms and values it facilitates coordination
between people in the organisational (in particular management)

Culture is made up of different layers:

1. Values – beliefs, traits and behaviour norms

2. Beliefs – reflect people’s sense of what ought to be and how things should be
3. Behaviours – how an organisation is structured and controlled and how people behave or
act on a daily basis
4. Taken-for-granted assumptions – when a specific solution for a problem always works thus is
repeated again and again

Example of organisational culture:

Unilever – always work with integrity, make a positive impact, continuous commitment, setting out
aspirations, working closely with similar organisations.

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INSTILLING ORGANISATIONAL CULTURE

 Cultures vary in strength and influence

 Some companies have deeply rooted values, norms and operating approaches that leaders all
adopt as well whereas weak-culture companies lack values and principles, traditions, values,
norms or commitment to achieving strategy and cohesion.

Key considerations of culture that are grounded in action, agreed behaviours and work practices that
are beneficial to strategy implementation include:

a) Matching organisational culture with the requirements of what is required/the effort of

executing the strategy (focus employees on what they need to do to successfully implement
the strategy)
b) Using strong group norms to create culture-induced peer pressure which shapes employee
behaviour to do things in a manner that aids strategy implementation
c) Accepting an organisational culture that is consistent with requirements for good strategy
can inspire and energise employees

CULTURAL ASSESSMENT

A cultural web = the behavioural, physical and symbolic manifestations of a culture that inform and
are informed by taken for granted assumptions, or paradigm, of an organisation.

A cultural web consists of 7 elements:

1) Paradigm – the core of the cultural web, represents all assumptions taken for granted in the
organisation or the way of doing business
2) Routines – the way things are done on a daily basis in the organisation and rituals refer to
activities or special events that reinforce what is important in the company culture
3) Stories – centre on important events and personalities (heroes, mavericks, successes,
disasters, etc)
4) Symbols – symbols refer to objects, metaphors, events, act or people that convey meaning
for the organisation
5) Power – the ability of individuals or groups to persuade, induce or coerce others into
following a certain course of actions
6) organisational structures – formal roles and reporting structures
7) control systems – formal and informal ways of monitoring and supporting people in the
organisation

STRATEGIC LEADERSHIP

 Organisational culture is closely aligned to the leader and top management of the
organisation
 The organisations founder is of particular importance as they set much of the culture in
place
 The founder’s leadership style is also transmitted to other managers in the organisation

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Key characteristics associated with good strategic leaders that lead to high performance include:

1. Vision, eloquence and consistency

2. Articulation of the business model
3. Commitment
4. Being well informed
5. Willingness to delegate and empower
6. Astute use of power
7. Emotional intelligence

What skills and principles do strategic leaders need to be able to lead well?

 Strategic leaders are future orientated and anticipate change (they think beyond the
present)
 Strategic leaders get things done (they implement and make a difference)
 Strategic leaders open new horizons (take the organisation in new directions by obtaining
complex and often conflicting info)
 Strategic leaders reach out to stakeholders (they value input of stakeholders)
 Strategic leaders are fit to lead (they need to be mentally and physically fit)
 Strategic leaders do the ‘next’ right thing and learn from past experiences (this leans
towards ethical leadership)

LEADING CHANGE TO IMPLEMENT A CHOSEN STRATEGY

Management and leadership is about coping with complexity and is often chaotic, this leads to
changes being made in organisations. Effective strategic leaders recognise when change is needed.
Change strategies are often different from strategies that have been implemented in the past.

There are 4 types of strategic change:

a) Adaptation can be accommodated in the current business model

b) Reconstruction does not necessary change organisational culture but involves a good deal of
disruption in the organisation
c) Revolution occurs when rapid and major strategic and cultural transformation occurs in the
organisation
d) Evolution is a change in strategy that requires cultural change and takes a long time to
execute as there is often no pressing need

What is the context in which change occurs?

 Time – how quickly is the change needed

 Scope – how much change is needed
 Preservation – what organisational resources and characteristics need to be maintained
 Diversity – how homogenous are staff groups and divisions within the organisation
 Capability – what is the managerial and personal capability to implement change
 Capacity – what change resources are available
 Readiness – how ready is the workforce for changes
 Power – what power does the change leader have to impose the necessary changes

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Managing strategic change

Two broad skill categories are needed to lead change:

 Task-oriented skills (how things are done and how the organisation is structured)
 Person-oriented skills (softer skills that promote rapport and support amongst team
members)

There are 3 key activities involved in change implementation:

A. Communicating the need for organisational change

B. Mobilising others to accept the change
C. Evaluating change project info

Why do many changes programmes fail?

1) Death by planning = too much planning takes place, too many meetings, too many discussions,
too many documents and not enough actual delivery of change
2) There is a loss of focus = change takes time and is incremental and these small changes
sometimes become insignificant
3) Reinterpretation = the existing paradigm of the organisation may be so strong that change
activities are reinterpreted according to the old paradigm to fit within the expected norms of
behaviour and conduct which makes change very difficult
4) Disconnectedness = staff may not see the change as relevant to them
5) Behaviour compliance = staff may buy into the change on a superficial level only
6) Misreading scrutiny and resistance = resistance to change is often regarded as negative or
destructive behaviour however if concerns are ignored and not addressed it could lead to the
change not taking place
7) Broken agreements and violations of trust = if managers don’t honour agreements with staff
they will lose respect and trust of employees