So what is organizational culture. According to Schein, organizational culture has been defined as the pattern of fundamental assumptions or beliefs that a specific group has developed through learning to deal with its problems of external adaptation and internal assimilation, and that have worked well enough to be considered effective and therefore to be taught to new members as the correct way to perceive, feel and behave in relation to those problems.
The way that organizational members behave and the values or beliefs that are important to them and it determine the way they make decision, the objectives of the organization, the type of competitive advantage sought, etc
Considering the importance of organizational culture and its impacts in strategic management is very essential. As organizational culture and strategies are both social processes, many strategists argue that culture and strategies are connected. According to Alvesson (2002), The cultural dimension plays a vital role in all aspects of an organization. It is so impacting that it can determine the success and failure of an organization. Culture reflects the way in which people in an organization set objectives, manage their resources and perform their tasks. Culture also affects people behavior unconsciously. Even in those organizations where the ideal of organizational culture do not receive much explicit attention, how people think, feel, value, believe and behave in a company are generally influenced by ideas, beliefs and perception of a cultural nature. Therefore, if a particular strategy does not match with the organization culture, it could be almost impossible to accomplish expected outcome from the planned strategy.
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Organization culture could be a great resource for company and could help company easily achieve its strategies and developing itself as a strategic capability
When culture is strong, people know what us expected of them and they understand how to decide and act in particular situations. They appreciate the issues that are important. When it is weak, company may have to spend lots of time trying to figure what should be done and how
strong and weak culture
The importance of organizational culture in vision and mission in strategic management
One of the perspective to look at how organizational culture supports strategic management is through its influence on organization's missions and visions. Missions and visions play an important part in company's strategic management. According to Harrison and John ( 2010), a written mission statement is one of the most common way that managements use to communicate with their staffs about strategic direction. Generally, missions and visions state the company's purpose and values which provides ideals and direction for the company as it interacts with the marketplace. This will not only give a sense of purpose to internal and external stakeholders but also help them in resource allocation decisions which is very for carrying out company's strategy management. However, in order to have an effective missions and visions, managements need to connect them to organizational culture. In fact, one of the way to see an organization's culture through its reflection in core values (Schein 2010). According to Tocquigny and Butcher (2012), core values are the set of belief or ideology by which an organization operates. They are the foundation of organizational culture. In this fast paced era when everything is changing, core values are still constant. The organization may develop new strategies, policies or even significantly restructure; however, the fundamental identity of the company still remains intact. These values are the essential, foundational principles that will guide the organization's vision, mission and strategies as well as define and differentiating the organization from its competitors (Senske, 2003). They create a foundation of attitudes and practices that every members have to agree to follow in order to support the vision and long term success of the organization. They also provide reference points and goals which allows organization to shape and strengthen its business. As internalized perception and beliefs can motivate staff's performance to exceptional levels, an effective strategic leaders need to understand and develop their intended implemented strategies that are suitable to organizational culture in order to pursue the vision of organization's leaders. Until organization decides what those cultural values are, and how they will interact with each other, itââ‚¬â„¢s very difficult to do anything else, whether setting goals, establishing measurements, solving problems or even making decision effectively.
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These values are the underlying, foundational principles that guide our mission, vision and strategies, and define who we are as an
organization. Enduring companies preserve their core values and purpose, while their business
strategies and operating practices continue to adapt to a changing world
They illustrate the way that an organization should function, behave and act in order to achieve its goals and visions.
Strong cultures are an important strategic asset. Internalized beliefs can motivate people to exceptional levels of performance. An effective strategic leader will understand and mould the culture in order that a vision can be pursued and intended strategies implemented (book 8)
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.
Culture affects strategic decision making
Culture is at the heart of all strategy creation and implementation (book 8)
(book 8) The culture will influence the ability of a strategic visionary to sell his or her ideal to other members of the organization as well as gaining their support and commitment to change
In a situation of competitive environment, Where opportunities and threats arise continuously arise, organization must be able to deal with it. It is the culture, with its amalgam of attitudes, values, perceptions and experience which determines the outcomes and relative success.
Berry (1983) believes that if a strategic leader really understands the company culture, they will be better equipped to make wise decision. He concludes that managers should select a business or strategy that will fit their company's organizational culture well in order to shift the firm toward a new strategy instead of accomplishing cultural change, which can be very difficult to achieve
Moreover, if business strategies and culture are interlinked, the ability to analyze and construct strategies and the ability to influence and manage people are also connected. Therefore, developing and implementing strategy is a process that involves not only market analysis but also the norms and core organizational values of a company inspired by the visions and hopes of the company's leaders
Culture and competitive advantage
As a company starts to experience the superior financial performance, its competitors will also starts to seek to copy what they believe is the source of competitive advantage that generates the success of the company. After examining the relationship between culture and superior financial performance, Barney (1986) concluded that culture is the factor that can help companies to generate sustained competitive advantage. He strongly believes that a strong and valuable organizational culture is one of the most sustainable competitive advantages a company can have. This is because a valuable and rare cultures is very difficult to imitate. It is also very hard for people to define culture clearly, especially in respect of its contribution to value of company's product and service. Another reason for this is that culture is usually related to historical aspects of company development as well as to the vision, beliefs and inspiration from particular strategic leaders.
Culture is the unique factor that will differentiate a particular company from its competitors. Even when rival firms succeed in copying their cultural attributes, there will be no guarantee that they can obtain superior financial performance just like what your company has achieved
Organization culture 's impact in working environment and employee's satisfaction
Organizational culture motivate employees to work for a higher purpose and give the, a sense of satisfaction about their jobs which in turn helps to set an organization apart from the competition ( Gilmartin, 1999)
Strong culture build trust, cement relationships and create stability within an organization ( Miller 2003)
Culture become the underlying attitudes and beliefs that strongly influence individual and group behavior (Fernandez and Hogan, 2003) .
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One of the example about how affects organization's effectiveness is Woolworth. In the late 1980s, Woolworth which is the high street retailer had indentified that their customer service was very weak compared to other competitors and this leaded to poor performance in sale. Knowing that people are the main strategic resource and they reflect the values of the organization, Woolworth started to introduce a customer care training program entitled "excellent" in which they show to their staffs their new core values and how to apply it to the working place. By linking it to the staff reward, the customer's perception of their staff's helpfulness had increased, and there were immediate financial gains
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