The Importance Of Organizational Culture Of Strategic Management Business Essay

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Culture is an integral part of every society. It is a learned pattern of behavior and ways in which a person lives his or her life. Culture is essential for the existence of a society, because it binds people together. In the explicit sense of the term, culture constitutes the music, food, arts and literature of a society. However, these are only the products of culture followed by the society and cannot be defined as culture. Albert Camus said, without culture, and the relative freedom it implies, society, even when perfect, is but a jungle. This is why any authentic creation is a gift to the future.

Organizational culture is a concept developed by researchers to explain the values, psychology, attitudes, beliefs and experiences of an organization. Generally speaking, it is viewed as the shared norms and values of individuals and groups within an organization. Through this set of mutual understandings, organizational culture controls the way individuals interact with each other within the organization as well as with customers, suppliers and other stakeholders existing outside the boundaries of the organization.

The topic of organizational culture has been studied by researchers from diverse fields. Purely academic fields such as sociology and anthropology as well as applied disciples such as management science and organizational behavior have offered their perspectives on what it is. Although it might not be possible for one definition to suit all fields, there is general agreement among researchers on various aspects of organizational culture.

The managers and executives within an organization have a significant impact on the culture because of their role in making decisions, but they are not the only members of the work community. In reality, all employees contribute to the culture. Culture, in the environment of the workplace, is the result of the weaknesses, strengths, life experiences and education of everyone who is part of the organization¿½¿½s workforce.

The culture of an organization also is molded by its mission. For example, a university¿½¿½s culture is different from that of the military, a hospital or a for-profit company. Understanding the culture of a specific enterprise is made more difficult by the fact that there is no single culture. Instead, complex organizations also reflect the culture of the sub-groups within them. Individuals might adhere to the core values and beliefs of the organization, but they also belong to sub-groups or cultures that form along the lines of occupational duties, professional skills, age, union membership, etc.

Organizational culture is both formal and informal. A flow chart indicating authority lines or a human resources manual might define the formal culture. Informal culture, though, is revealed in such things as bulletin board content, decorations in individual work areas, the arrangement of furniture, newsletters, clothing worn, how employees interact in meetings or collaborate and the workplace stories that are repeated.

The hiring of new employees is another area in which the culture of the organization plays a role. In the interviewing process, questions often are directed to explore whether or not the candidate would be a good fit in the organization's culture. Organizational culture is a powerful element that shapes all facets of work.

Then, why it is so important? Considering the impact and importance of organizational culture in strategic management is critical. It is so vital that international company Third Rock Management Consulting advises its clients to contemplate the possibility of changing their organization's culture when developing and implementing a new strategy. Without cultural alignment with strategy, the new strategy would likely fail.

Organizational culture is so impacting it can result in the success or failure of a company. A strong organizational culture is one of the most sustainable competitive advantages a company can have because it is difficult to copy. Culture is simply a collection of shared norms or values within a workplace, or what is generally referred to as a company's way of doing things. Fun, family-friendly, positive, negative, upbeat, demoralizing and stressful are some common adjectives used in describing work cultures. Some of these have positive influences in production and performance, while others are symptomatic or contribute to organizational problems.

Because organizational cultures are unique and offer strategic advantages, it makes complete sense that companies would consider culture in strategic management. Consider a high-performing company that has a corporate strategy of providing a fun and friendly customer-centered environment. This would not align well with a stagnant culture or one with very traditional and stoic employees. Instead, it is necessary for the company to hire fun, friendly and customer-oriented workers and provide an environment that is fun and rewards great customer-friendly behavior.

Another way of looking at strategic management that supports the influence of culture is its balance between external and internal strategic elements. Generally, strategy management aids in carrying out corporate missions and visions. Missions and visions state the company's purpose and values. They are intended to offer direction for the company as it interacts with the marketplace, but they also typically connect to internal strategies and culture. For instance, a company that markets itself as a green-friendly organization to get business would likely also promote environmental responsibility internally and make it part of the organizational culture.

The Impact of organization culture on Strategic Management

The organizational culture is a culture of managers and employees together they created. Staff culture is an integral and important part of the corporate culture. The staff cultural formation, change and development are closely related to the management of the enterprise. Only when the corporate culture and employee culture value orientation is the harmonious labor relations, otherwise it will be discordant. Build the culture of talented employees, its integration into the corporate culture, the spiritual level, the institutional level and material aspects must be strong efforts to build a harmonious management, to create a full of energy, high-spirited, competitive ability. It can win the battles. Lay a human resource base for the successful implementation of the Strategic Management.

Staff and cultural quality of one organization reflect the overall quality of a corporation. Corporate culture is a reflection of the degree of civilization of a business. The development of its own staff and cultural qualities directly decide the future and fate of the corporate culture, the higher quality of the staff culture to create a corporate culture more competitive products, and vice versa.

Because of that, corporate culture can make corporate values to be reflected through employee behavior, thus shaping the behavior of employees and constantly motivate itself on the cultural values of self-development. Enterprises to implement the strategic management process, the role of the staff to maximize the development of the employees' own cultural values need to advance with the times, as an important part of corporate culture largely affect corporate strategy Implementation of the management.

Therefore, the concept of employee personal culture has a significant impact on the realization of the strategic management, corporate strategic management objectives on which to generate, strengthen its role to play. Commence with the implementation of the operation, development and management of the entire enterprise must always adhere to the employees personal cultural values constantly optimized and constantly upgrading as the leading. Thus commenced, all-round, multi-angle, multi-level to promote the building of enterprise culture, to pave the way for the smooth progress to achieve the corporate strategy.

Effective managers recognize employees at companies that have been in business for decades have perceptions, beliefs and feelings about how to conduct business including how to treat customers, how to handle employee disputes and how to weather tough economic times. For example, when the Malden Mills factory burned down in December of 1995 in Lawrence, Massachusetts, the CEO, Aaron Feuerstein chose to use the insurance money to rebuild the factory and pay the salaries of the employees while it was being built. His commitment to his employees reflected his personal convictions and the culture of the company. As company executive make strategic decisions, there's more at stake than short-term goals. By considering the long-term impact on employees and their families, managers make decisions that impact not just the company but society at large.

Only through strategic commitment to social responsibility, the biggest positive impact on the enterprise can be imposed on society. At the same time reap the most commercial interests. More and more multinational companies began to develop the annual report on corporate social responsibility, as the company's culture. It's a way to influence the government, investors, customers and various social groups. Nevertheless, many companies or corporate social responsibility as a means to enhance the company's image, not as a corporate strategy or culture, and the resulting effect is often not sustainable.

Strategic social responsibility is to find the opportunity to create shared value for business and society. This strategic social responsibility, including the innovation value chain, such as the Toyota Prius, a kind of oil and electricity mix cars; investment environment for competition, such as the cooperation of Microsoft and the American Association of Community Colleges; or consider the interests of the community in the core value of the enterprise, such as vegan food, supermarket emphasis on natural, organic and healthy food.

Commitment to social responsibility as the opportunity to create shared value, but not mere hazard control or public relations activities. People need to have a whole new way of thinking. However, people believe that the future of corporate social responsibility for the success of the enterprise will play an increasingly important role. Is based on one of the main strategic corporate social responsibility throughout the operating activities of the enterprise, and the business activities, corporate social responsibility is a relevant and corporate interesting continues to interact with the process.

Such as Web2.0, this corporate social responsibility changes like change from CSR1.0 to CSR2.0, that is, plus it¿½¿½s interactive. The new Corporate Social Responsibility is not like before, mostly like a unilateral behavior but is a process in business and social interaction. Corporate social responsibility, corporation must first analyze the entire country's macroeconomic policy and social requirements, and then go back and look: what can they do? What is competitive? What are competitors and industry doing? Then to explore some of its corporate social responsibility field can go after, this is the true meaning of CSR2.0.

In overseas, many multinational corporations, in addition to doing annual financial reports, are still a corporate social responsibility report. Such as Hewlett-Packard, Intel and Motorola have done CSR Annual Report several years ago. This kind of CSR report can communicate with all objects clearly, and inform their audience enterprises how to fulfill corporate social responsibility. CSR Annual Report for enterprises and stakeholders is also a good communication tool. Investors, media reporters, financial analysts and the partners will see, and even the government will look, too.

Policy on corporate social responsibility, not only the enterprises themselves need to perform, but also staffs need to understand. The entire enterprise supplier, and the whole supply chain, must be in accordance with the standards of the enterprise to perform.

For example, Accenture will sent a dozen employees to everywhere in the world for those people in need in poor areas annually, usually a period of three months to one year of voluntary service. The volunteer will provide in poverty-stricken areas of education, science and technology, health care, finance, project management, and other professional skills services. It¿½¿½s also happens to be they are good at, and help to establish and develop certain skills in order to achieve the recovery of the local economy and sustainable development. Accenture jobs will reserve for those employees participating in the plan, and will provide basic allowances.

The Olympics may be a great promotion for corporate social responsibility. For example, in the food industry, the Beijing Olympic Games to establish a food safety traceability system for all Olympic food. As long as input of food information, people will not only know the production of food manufacturers, but also can be found in all of the raw material suppliers, also can know these raw materials the suppliers of the origin of raw materials, can be found where. Once get the food problems, people can immediately be traced back to its source.

For any mature enterprises, corporate culture is its soul. In the development of enterprise has the central role that can not be replaced. The purpose of the corporate culture propaganda is forming on the deepening of enterprise aspirations, corporate mission and core values and corporate philosophy to understand and fully agree with the receiver to make the entire staff become a powerful driving force for enterprise development. Like IBM in the United States, Sony in Japan, Haier in China and other enterprises, as well as to establish a complete system of corporate culture. These organizational cultures are influence the public. Thereby they can securing and developing of customer camp. The corporate culture is exerting a profound impact on all aspects of business management and business productivity.

Like art, people might not think they know a lot about it, but people recognize a company¿½¿½s culture when they see it. They see evidence of it every day in the willingness of people to work together on a deadline, the empowerment one can sense in a front-line employee and the dogged commitment of sales people to provide the best overall solution to customers. Even the design and layout of company offices can provide insights into what an organization really values. Signs of unhealthy culture also abound and are manifest in an¿½¿½It¿½¿½s not my job¿½¿½ mentality, poor customer service and ultimately, deteriorating financial performance. The link between culture and performance is discernable and proven. Getting to the bottom of what drives their individual organization is not only a nice to do to promote a harmonious work environment but absolutely necessary in preserving and growing corporate profitability.

Now, Wal-Mart has built a reputation around their Corporate Cultures. Not only Wal-Mart has famous organizational culture, other companies with famous cultures are IBM, Hewlett-Packard, Goldman Sachs, and Starbucks. Consider the case of Wal-Mart, one of the most famous organizational cultures of all time. Wal-Mart created its organizational culture around the image of its founder, Sam Walton, a small town merchant who became an American tycoon. Sam Walton opened his first Walton¿½¿½s 5 & 10 in 1950 in Bentonville, Arkansas, and when he died in 1992 he was running a phenomenally successful empire of retail stores nationwide. At the time, he was the world¿½¿½s second richest man, behind Bill Gates. Today his company has successfully entered such international markets as Mexico, Canada, Argentina, Brazil, South Korea, China, and Puerto Rico.

¿½¿½Genuine, polite, civic-minded, and wholesome,¿½¿½ are characteristics of both Walton and Wal-Mart. Walton was one of the earlier employers to call his employees ¿½¿½associates,¿½¿½ give them stock, and share store data with them. He was ¿½¿½enthusiastic, positive, folksy, and nurturing,¿½¿½ a charismatic leader who did the hula dance down Wall Street when Wal-Mart¿½¿½s net profits exceeded 8 percent. Wal-Mart¿½¿½s employees don¿½¿½t ¿½¿½work for¿½¿½ someone; they ¿½¿½help out.¿½¿½ The Wal-Mart message to them is that the people who work hard and take part in the company¿½¿½s profit sharing program become rich and happy.

Strong cultures can also enhance corporate performance. There is a

positive relationship between strength of corporate culture and companies¿½¿½ long-term economic performance, but the relationship is modest, and some firms with weak cultures also have strong performance. When they are operating in relatively stable environments, firming with strong cultures exhibit superior and more reliable performance than firms with weak cultures. However, when the company¿½¿½s environment becomes more volatile, this advantage is often lost.


The corporate culture has a very important role in the process of corporate strategic management. Correct and effective corporate culture can make the goals of the strategic plan to develop consistent and overall corporate goals. It can allow enterprise development toward higher, farther, more favorable direction. Ultimately, it can achieve corporate vision. An enterprise wants to have a good development; it must have an excellent corporate culture. Corporate culture as an important resource for penetration of the vision for the development of enterprises in the form of a corporate culture to employees. So that the corporate strategy from development to implementation are able to get reliable protection.