Aligning

Culture and
Strategy at
A.P.Nichols
By Mounika Lakkakula & Nidhi
Dangi
 1.Challenges facing Nichol's
strategy to become one of the top
Business Environment
10 distributors?
Company situation
❏ Entry of new suppliers-30% increase in ❏ Requirement of larger CSR team to serve customers
number of suppliers (internal processes and cost savings have improved)
❏ ❏ Lack of communication and coordination between
Entry of new distributors-small players,
ISA and CSR- no referrals, compensation to ISA for
competing aggressively on price
loss
❏ Pressure on distributors to deliver better ❏ CSRs working for their own benefit - 70% net
service at lower cost revenue and independent operations
❏ High demand for talented and proven ❏ Alignment of CSR team to strategy
CSRs; CSRs generated 70% of business ❏ Uplifting the CSR team to best in class
❏ Poor economic situation and dried up
capital markets did not offer any merger
opportunities
 2.How could Klein build a CSR team
that was strategically aligned and
culturally congruent with its strategy
for building out its integrated
This would require a long term vision and consistent implementation of strategy.

 operations?
The company needs to start fostering congruence of culture with reward structure.

 The change in the reward structure needs to be offset with cultural change to ensure that the company does not
fall into the quadrant of very low effectiveness of strategy implementation

 The CSR team needs to be developed to incorporate newer members who are groomed in the organization
culture and can ensure strategy continuity.
 3. Which of its 'Options for
Change' should it focus on and
why?
 The company can focus on multiple options for change. Currently, the company is at a low level of effectiveness of
strategy implementation given the monetary attitude of the CSAs and the misalignment of the communication between
ISAs and CSAs. At this stage, the organization must focus on fostering the congruence of the culture with the
organization's reward structure to facilitate a movement to increase the congruence, thereby resulting in a slight increase in
the effectiveness of strategy implementation.

 To reach this point, the organization must first communicate to the employees about its vision and strategic goal and what
it is expecting from the employees. Also, it needs to encourage the partnering with ISAs mentality. This would ensure that
the clients are served at the company's best, employees develop a good culture, and the clients can stay loyal to the
company.

 Also, the company needs to cull those who don't fit as the strategy implementation shouldn't have any ifs and buts. Lastly,
the rookie program must also be exercised. This would ensure that the right profile talent is brought from inside the
company, that the employee attrition rate lowers, and that the company can carve the employees in its way.
 4. Discuss the extent of congruence of
organizational culture and the
organization's formal reward system
using learning from reading?
 At Nichols', the employees don't seem to be working in coordination with each other, given that the ISA's are reluctant to
refer the CSAs to the clients. Also, the CSAs are more focused on their compensation without having an idea of what is
happening overall on the company level. Most of the employees are said to be joining the company purely based on
monetary benefits, and if the monetary benefits are reduced, there is a chance that the employees might flock to other
companies. So, we can say that currently, the strength of organizational culture is low.

 Also, the employees are not mainly in line with the company's strategy of becoming one of the top 10 distributors of US.
The CSAs work with the clients with whom they are comfortable without focusing on the new clients. And the ISAs are
least bothered to cater to the clients' complex needs by referring them to render the service of the CSAs. So, currently, the
organization is solely running with the reward structure.
 Since the employees are working for their own monetary benefit instead of working towards a common strategic goal, we
can say that the organization has a weak