SM Lecture Four : Strategic Purpose, Culture and Strategy
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Transcript of SM Lecture Four : Strategic Purpose, Culture and Strategy
Strategic Management BUSM 3200
These Lecture Slides summarize the key points covered in the respective chapters in your
recommended text; these slides do NOT substitute, at all, the required reading of the assigned
chapter from the text. These slides also may contain additional supplementary material extracted
from other texts and sources outside your text book.
4-1 BUSM 3200- Strategic Management (Jan 2013) GDS
This lecture carries two chapters from the book
Chapter 4: Strategic Purpose
Covers issues on purpose of the organization: values, vision, mission, and objectives
Corporate governance
Corporate responsibility and ethical issues
Stakeholder analysis
Chapter 5: Culture and Strategy
How the internal dimensions of culture will impact on the efficacy of strategy implementation
4-2 BUSM 3200- Strategic Management (Jan 2013) GDS
Chapter 4 : STRATEGIC PURPOSE
3
BUSM 3200- Strategic Management (Jan 2013) GDS
Learning outcomes
Consider appropriate ways to express the strategic purpose of
an organisation in terms of statements of purpose, values,
vision, mission or objectives.
Identify the components of the governance chain of an
organisation.
Understand differences in governance structures and the
advantages and disadvantages of these.
Identify differences in the corporate responsibility stances taken
by organisations and how ethical issues relate to strategic
purpose.
Undertake stakeholder analysis as a means of identifying the
influence of different stakeholder groups in terms of their
power and interest.
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Influences on strategic purpose
Figure 4.1 Influences on strategic purpose
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How the direction and objectives are influenced in SM
The figure earlier shows that strategic planning an management is a complex process
It is not a matter of one person driving the plan; rather it is a network of people and constituents who impact the strategies of the firm
There is a key topic on corporate governance- how professionally the firm should be managed (this has became a key issue following the incidences of corporate frauds in the US and beyond)
Another key topic you need to know well is that of “ethics” – this has been set in previous exams.
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Who are the stakeholders?
Stakeholders are those individuals or groups who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends.
- There are both internal and external stakeholder and they could exert significant impact on the way that strategic decisions are made.
- The manager need to factor in the likely impact of strategic decisions on the needs and expectations of stakeholders
- This is where we get ‘political lobbying’ 4-7 BUSM 3200- Strategic
Management (Jan 2013)
GDS
2–8 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
The Strategic Vision, Mission, Values and Objectives
provide the direction for strategic planning
4-8
Mission statements
A mission statement aims to provide employees and stakeholders with clarity about the overriding purpose of the organisation
A mission statement should answer the questions:
‘What business are we in?’
‘How do we make a difference?’
‘Why do we do this?’
4-9 BUSM 3200- Strategic Management (Jan 2013) GDS
2–10 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
The Ideal Mission Statement
♦ Identifies the firm’s product or services.
♦ Specifies the buyer needs it seeks to satisfy.
♦ Identifies the customer groups or markets it is
endeavoring to serve.
♦ Specifies its approach to pleasing customers.
♦ Sets the firm apart from its rivals.
♦ Clarifies the firm’s business to stakeholders.
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Vision statements
A vision statement is concerned with the desired future state of the organisation; an aspiration that will enthuse, gain commitment and stretch performance.
A vision statement should answer the question :
‘What do we want to achieve?’
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2–12 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Purpose of the Strategic Vision
♦ Developing a Strategic Vision:
● Delineates management’s future aspirations
for the business to its stakeholders.
● Provides direction—“where we are going.”
● Sets out the compelling rationale (strategic
soundness) for the firm’s direction.
● Uses distinctive and specific language to set
the firm apart from its rivals.
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2–13 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Vision Statement for UBS
We are determined to be the best global financial services company. We
focus on wealth and asset management, and on investment banking and
securities businesses. We continually earn recognition and trust from
clients, shareholders, and staff through our ability to anticipate, learn and
shape our future. We share a common ambition to succeed by delivering
quality in what we do. Our purpose is to help our clients make financial
decisions with confidence. We use our resources to develop effective
solutions and services for our clients. We foster a distinctive, meritocratic
culture of ambition, performance and learning as this attracts, retains and
develops the best talent for our company. By growing both our client and
our talent franchises, we add sustainable value for our shareholders.
Effective Elements Shortcomings
• Focused
• Feasible
• Desirable
• Not forward-looking
• Bland or uninspiring
• Hard to communicate
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Statement of corporate values
A statement of corporate values should communicate the underlying and enduring core ‘principles’ that guide an organisation’s strategy and define the way that the organisation should operate.
Such core values should remain intact whatever the circumstances and constraints faced by the organisation.
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2–15 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Linking Vision and Mission with Core Values
♦ Core Values
● Are the beliefs, traits, and behavioral norms that
employees are expected to display in conducting
the firm’s business and in pursuing its strategic
vision and mission.
● Become an integral part of the firm’s culture and
what makes it tick when strongly espoused and
supported by top management.
● Matched with the firm’s vision, mission, and
strategy contribute to the firm’s business success.
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Objectives
Objectives are statements of specific outcomes that are to be achieved.
Objectives are frequently expressed in: financial terms (e.g. desired profit levels)
market terms (e.g. desired market share)
and increasingly
social terms (e.g. corporate social
responsibility targets)
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2–17 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
SETTING OBJECTIVES
♦ The Purposes of Setting Objectives:
● To convert the vision and mission into specific,
measurable, timely performance targets.
● To focus efforts and align actions throughout
the organization.
● To serve as yardsticks for tracking a firm’s
performance and progress.
● To provide motivation and inspire employees
to greater levels of effort.
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Issues in setting objectives
Do objectives need to be specific and quantified targets?
The need to identify core objectives that are crucial for survival.
The need for a hierarchy of objectives that cascade down the organisation and define specific objectives at each level.
Objective and control: objectives become the basis for establishing controls at the end of the planning cycle.
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Hierarchy of Objectives
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Hierarchy of objectives: the objectives set at a higher level will cascade to
objectives to be set at divisional and business function levels
Corporate level
objective: ROCE
SBU level
objective: ROCE
and Sales/Market
Share
Functional Objective:
example Productivity
or Quality Targets
2–20 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
THE TWO ESSENTIAL KINDS OF OBJECTIVES TO SET
♦ Financial Objectives
● Communicate top
management’s targets for
financial performance.
● Are focused internally on
the firm’s operations and
activities.
♦ Strategic Objectives
● Are related to a firm’s
marketing standing and
competitive vitality.
● Are focused externally
on competition vis-à-
vis the firm’s rivals.
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2–21 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
SETTING FINANCIAL OBJECTIVES
Examples of Financial Objectives
♦ An x percent increase in annual revenues
♦ Annual increases in after-tax profits of x percent
♦ Annual increases in earnings per share of x percent
♦ Annual dividend increases of x percent
♦ Profit margins of x percent
♦ An x percent return on capital employed (ROCE) or return on
shareholders‘ equity investment (ROE)
♦ Increased shareholder value—in the form of an upward-trending stock
price
♦ Bond and credit ratings of x
♦ Internal cash flows of x dollars to fund new capital investment
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2–22 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
SETTING STRATEGIC OBJECTIVES
Examples of Strategic Objectives
♦ Winning an x percent market share
♦ Achieving lower overall costs than rivals
♦ Overtaking key competitors on product performance or quality
or customer service
♦ Deriving x percent of revenues from the sale of new products introduced
within the next five years
♦ Having broader or deeper technological capabilities than rivals
♦ Having a wider product line than rivals
♦ Having a better-known or more powerful brand name than rivals
♦ Having stronger national or global sales and distribution capabilities
than rivals
♦ Consistently getting new or improved products and services to market
ahead of rivals
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Corporate governance
Corporate governance is concerned with the structures and systems of control by which managers are held accountable to those who have a legitimate stake in an organisation.
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2–24 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Achieving Effective Corporate Governance
♦ A strong, independent board of directors:
● Is well informed about the firm’s performance.
● Guides and judges the CEO and other executives.
● Can curb management actions the board believes
are inappropriate or unduly risky.
● Can certify to shareholders that the CEO is doing
what the board expects.
● Provides insight and advice to top management.
● Is actively involved in debating the pros and cons
of key strategic decisions and actions.
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The growing importance of governance: Reasons
1. The separation of ownership and management control – defining different roles in governance.
2. Corporate failures and scandals (e.g. Enron) – focussing attention on governance issues.
3. Increased accountability to wider stakeholder interests and the need for corporate social responsibility (e.g. green issues).
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The governance chain
Figure 4.2 The chain of corporate governance: typical reporting structures Source: Adapted from David Pitt-Watson, Hermes Fund Management
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The chain shows the roles and relationships between different groups involved in the governance of the organization
BUSM 3200- Strategic Management (Jan 2013) GDS
The principal-agent model
Governance can be seen in terms of the principal-agent model
Principals pay agents to act on their behalf (e.g. beneficiaries/trustees pay investment managers to manage funds, Boards of Directors pay executives to run a company).
Agents may act in their own self interest.
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Issues in governance (1)
The key challenge is to align the interests of agents with those of the principals.
Misalignment of incentives and control – e.g. beneficiaries may require long term growth but executives may be seeking short term profit.
Responsibility to whom – should executives pursue solely shareholder aims or serve a wider constituency of stakeholders?
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Key issue in debate on who the managers are really accountable to. There are too many stakeholders to please!
BUSM 3200- Strategic Management (Jan 2013) GDS
Issues in governance (2)
Who are the shareholders – should boards respond to the demands of institutional investment managers or the needs of the ultimate beneficiaries?
The role of institutional investors – should they actively intervene in strategy?
Establishing the specific role of the board – in particular the role of non-executive directors.
Scrutiny and control – statutory requirements and voluntary codes to regulate boards.
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Different governance systems
Table 4.1 Benefits and disadvantages of governance systems
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The role of boards (pg 133)
Operate ‘independently’ of the
management – the role of non-executives is crucial.
Be competent to scrutinise the activities of managers.
Have time to do their job properly.
Behave appropriately given expectations for trust, role fluidity, collective responsibility, and performance.
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Corporate social responsibility
Corporate social responsibility (CSR) is the commitment by organisations to ‘behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large’.1
1 World Business Council for Sustainable Development.
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Corporate social responsibility stances
Table 4.2 Corporate social responsibility stances
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Questions of corporate social responsibility – internal aspects (1)
Table 4.3 Some questions of corporate social responsibility
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Questions of corporate social responsibility – external aspects (2)
35
Table 4.3 Some questions of corporate social responsibility (Continued)
BUSM 3200- Strategic Management (Jan 2013) GDS
The ethics of individuals and managers
Ethical issues have to be faced at the individual level :
The responsibility of an individual who believes that the strategy of the organisation is unethical – resign, ignore it or take action.
‘Whistle-blowing’ - divulging information to the authorities or media about an organisation if wrong doing is suspected.
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Texas instruments’ guidelines
Is the action legal? . . . If no, stop immediately.
Does it comply with our values? . . . If it does not, stop.
If you do it would you feel bad? . . . Ask your own conscience if you can live with it.
How would this look in the newspaper? . . . Ask if this goes public tomorrow would you do it today?
If you know it’s wrong . . . don’t do it.
If you are not sure . . . ask; and keep asking until you get an answer.
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Stakeholders of a large organisation
Figure 4.3 Stakeholders of a large organization Source: Adapted from R.E. Freeman, Strategic Management: A Stakeholder Approach, Pitman, 1984. Copyright 1984 by R. Edward Freeman.
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Stakeholder conflicts of expectations
Table 4.4 Some common conflicts of expectations
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Stakeholder mapping
Stakeholder mapping identifies stakeholder expectations and power and helps in understanding political priorities.
(remember we mentioned earlier on that strategic decision
making is often a ‘political process’. Go back to Chapter One Appendix and review the Strategy Lenses. This will be related to the view that ‘Strategy is a Discourse’ –see Table C.ii)
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Stakeholder mapping: the power/interest matrix
Figure 4.4 Stakeholder mapping: the power/interest matrix Source: Adapted from A. Mendelow, Proceedings of the Second International Conference on Information Systems, Cambridge, MA, 1986
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Inside each cell we will indicate which stakeholder group will be placed in terms of their interest and power (see figure 4.3)
Suppliers
Employees
Customers
Financial Community
BUSM 3200- Strategic Management (Jan 2013) GDS
Stakeholder mapping issues (pg 143)
Determining purpose and strategy – whose expectations need to be prioritised?
Do the actual levels of interest and power reflect the corporate governance framework?
Who are the key blockers and facilitators of strategy?
Is it desirable to try to reposition certain stakeholders?
Can the level of interest or power of key stakeholders be maintained?
Will stakeholder positions shift according to the issue/strategy being considered.
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Power
Power is the ability of individuals or groups to persuade, induce or coerce others into following certain courses of action.
(you have covered the topic of power when you studied OB. How do you think power impacts the internal process of strategic decision making?)
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Sources of power
Table 4.5 Sources and indicators of power
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Indicators of power
Table 4.5 Sources and indicators of power (Continued)
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Key debate
Read page 147
Three different views on the purpose of a business:
1. Professor Milton Friedman and profit maximization
2. Professor Charles Handy stakeholder view
3. New capitalists’ argument : “Society and share owners are becoming one and the same.”
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Summary (1)
An important managerial task is to decide how the organisation should express its strategic purpose through statements of mission, vision, values or objectives.
The purpose of an organisation will be influenced by the expectations of its stakeholders.
The influence of some key stakeholders is represented formally within the governance structure of an organisation. This can be represented in terms of a governance chain, showing the links between ultimate beneficiaries and the managers of an organisation.
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Summary (2)
There are two generic governance structures systems: the shareholder model and the stakeholder model though there are variations of these internationally.
Organisations adopt different stances on corporate social responsibility depending on how they perceive their role in society. Individual managers may face ethical dilemmas relating to the purpose of their organisation or actions it takes.
Different stakeholders exercise different influence on organisational purpose and strategy, dependent on the extent of their power and interest. Managers can assess the influence of different stakeholder groups through stakeholder analysis.
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Chapter 5 : CULTURE AND STRATEGY
4-49
BUSM 3200- Strategic Management (Jan 2013) GDS 49
Learning outcomes
Identify organizations that have
experienced strategic drift and the
symptoms of strategic drift.
Analyze how history influences the
strategic position of organizations.
Analyse the influence of an organisation‘s
culture on its strategy using the cultural
web.
Recognise the importance of strategists
questioning the taken–for–granted aspects
of a culture.
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Culture and strategy – key issues
Figure 5.1 The influence of history and culture
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Strategic drift
Strategic drift is the tendency for
strategies to develop incrementally on the
basis of historical and cultural influences
but fail to keep pace with a changing
environment.
More will be covered in Chapter 11 later.
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Strategic drift
Figure 5.2 Strategic drift
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Phase 1: Incremental change
strategic drift
Three reasons:
1. Gradual change in alignment with
environmental change.
2. Building on successful strategies used in the
past (built around core competences)
3. Making changes based on experimentation
around a theme (incremental change built on
a successful formula).This approach is called
Logical Incrementalism
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During this phase there is a tendency for strategies to develop on the basis of what the organization has done in the past- especially if they have been successful. Strategy remains relatively unchanged.
BUSM 3200- Strategic Management (Jan 2013) GDS
Phase 2: The tendency towards strategic drift
Strategies fail to keep pace with environmental change
because :
1. Steady as you go – reluctance to accept that
change requires moving away from strategies that
have been successful.
2. Building on the familiar – uncertainty of change
is met with a tendency to stick to the familiar.
3. Core rigidities – capabilities that are taken for
granted and deeply ingrained in routines are
difficult to change even when they are no longer
suitable.
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The tendency towards strategic drift (2)
4. Relationships become shackles –
organisations become reluctant to disturb
relationships with customers, suppliers or
the workforce even if they need to change.
5. Lagged performance effects – the financial
performance of the organisation may hold
up initially (e.g. due to loyal customers or
cost cutting) masking the need for change.
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Phase 3: A period of flux
As performance declines and the organisation loses track of the environment then a period of Flux occurs typified by:
1. Strategies that change, but in no clear direction.
2. Top management conflict and managerial changes.
3. Internal disagreement on the ‗right‘ strategies.
4. Declining performance and morale.
5. Customers becoming alienated.
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Phase 4: Transformational change or death
As performance continues to deteriorate the outcome is likely to be :
The organisation dies (e.g. goes bankrupt or into receivership).
The organisation is taken over (and perhaps radically changed by new owners).
The organisation implements transformational change – multiple, rapid and fundamental changes.
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Why history is important?
Recognizing that organizational experience
becomes deeply embedded in behavior. Taking
cognizance of the history of the company has 4
main benefits:
1. Avoiding recency bias – learning from the past.
2. Asking ‗what if‘ questions based on past
experience.
3. History as legitimisation – past success can be
used as evidence to support specific
strategies.
4. Innovation based on historic capabilities which
can be adapted and transferred.
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Path dependency
Path dependency is where early events
and decisions establish ‗policy paths‘ that
have lasting effects on subsequent events
and decisions.
It is a way of thinking about how historical
events and decisions, within and around
the organization, have an effect on that
organization – either positive or in
negative ways
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Path dependency and lock-in
Figure 5.3 Path dependency and lock-in
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The impact of path dependency
Building strategy around the path-
dependent capabilities that have been
successful in the past.
Path creation – changing strategies in a
way that is built on the past and
acceptable to key players.
Management style may be rooted in and
evolved from the early style adopted by
the founder(s).
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Methods of historical analysis
Chronological
analysis
Cyclical
influence
Anchor
points
Historical
narratives
63
Read page 167-8
BUSM 3200- Strategic
Management (Jan 2013)
GDS
Organisational culture
Organisational culture is the taken-for-
granted assumptions and behaviours that
make sense of people‘s organisational
context
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12–65 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Key Features of a Firm’s Corporate Culture
Strength of peer
pressure to
conform and
observe norms
Actions and
behaviors
encouraged
and rewarded
Traditions and
stories and ―how
we do things
around here‖
How the firm
treats its
stakeholders
Features of a Corporate Culture
Values, principles,
and ethical
standards
in actual use
Management
practices and
organizational
polices
Atmosphere and
spirit embodied
in the firm‘s work
climate
How managers and
employees interact
and relate to one
another
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Cultural frames of reference
Figure 5.4 Cultural frames of reference
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National and regional cultures
Work of Hofstede (you will remember him if you studied International Business or Global Marketing – cultural dimensions)
Also read up Illustration 5.3 : differences in management between Chinese and Western managers
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The organisational field
An organisational field is a community of
organisations that interact more frequently
with one another than with those outside
the field and that have developed a shared
meaning system.
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Recipes
A recipe is a set of assumptions, norms and routines held in common within an organisational field about the appropriate purposes and strategies of field members.
In effect it is ‘shared wisdom’.
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Legitimacy
Legitimacy is concerned with meeting the
expectations within an organisational field
in terms of assumptions, behaviours and
strategies.
Strategies can be shaped by the need for
legitimacy in several ways:
Regulation
Normative expectations
The recipe
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Organizational Culture in four layers
Figure 5.5 Culture in four layers
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The paradigm
The paradigm is the set of assumptions
held in common and taken for granted in an
organisation.
The paradigm:
is built on collective experience
informs what people in the
organisation do
influences how organisations respond
to change.
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Values
A key aspect of culture relates to the values that the organization upholds
In chapter 4 , we considered issues of ethical standards
Ethics is often impacted by the organization culture and the values it subscribes to.
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12–74 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
The Two Culture-Building Roles of a Company‘s Core Values
and Ethical Standards
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12–75 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Transforming Core Values and Ethical Standards into Cultural Norms
♦ Recruit and hire applicants with values and
ethics compatible to those of the firm.
♦ Incorporate the values statement and the code
of ethics into orientation and training programs.
♦ Have senior executives frequently reiterate and
stress the firm’s values and ethical principles.
♦ Use values statements and codes of ethics as
benchmarks for the firm’s polices and practices.
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12–76 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Transforming Core Values and Ethical Standards into Cultural Norms (cont’d)
♦ Use core values and ethical principles when
evaluating each person’s job performance.
♦ Encourage all employees to help enforce the
observance of core values and ethical
standards.
♦ Periodically have ceremonial occasions to
recognize individuals and groups who display
the firm’s values and ethical principles.
♦ Institute strict ethics enforcement procedures.
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Culture‘s influence on strategy development
Figure 5.6 Culture’s influence on strategy development Source: Adapted from P. Gringer and J.-C. Spender, Turnaround: Managerial Recipes for Strategic Success, Associated Business Press, 1979, p. 203
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The cultural web
The cultural web shows the behavioural,
physical and symbolic manifestations of a
culture that inform and are informed by
the taken-for-granted assumptions, or
paradigm, of an organisation
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The cultural web of an organisation (1)
Figure 5.7 The cultural web of an organization
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The cultural web of an
organisation (2) – stories
What core beliefs do the stories reflect?
What stories are commonly told e.g. to newcomers
How do these stories reflect core assumptions and beliefs?
What norms do the mavericks
deviate from?
Tend to be about heroes, villains
mavericks, successes and
disasters.
Paradigm
Stories
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The cultural web of an
organisation (3) – symbols
Symbols are objects, events, acts or people
that convey, maintain or create meaning
over and above their functional purpose.
What objects, people or events do people in
the organization particularly identify with?
What are these related to in the
history of the organization?
What aspects of strategy are
highlighted in publicity?
Symbols
Paradigm
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The cultural web of an
organisation (4) – power structures
Where does power reside?
Who makes things happen?
Indicators include:
status
claim on resources
symbols of power Paradigm Power
structures
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The cultural web of an organisation
(5) – organisation structure
How formal/informal are the structures?
Do structures encourage collaboration or
competition?
What types of power structure do they
support?
Paradigm
Organization
Structure
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The cultural web of an organisation
(6) – control systems
What is most closely monitored/controlled?
Is emphasis on reward or punishment?
Are controls rooted in history or current
strategies?
Are there many/few controls?
Paradigm
Control
systems
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The cultural web of an organisation
(7) – routines and rituals
Which routines are emphasized?
Which are embedded in history?
What behavior do routines encourage?
What are the key rituals?
What assumptions and core beliefs do they reflect?
What do training programmed
emphasize?
How easy are routines/rituals
to change? Paradigm
Rituals/
routines
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Illustration 5.5: cultural web of a law firm (page 179)
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Figure 5.8 : The cultural web- some useful questions
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Impact of culture on strategic management
Read page 181
Strategic capabilities (Chap 3) – culture of the organization is considered a capability (or constraint)
Strategy development- culture affects the manner in which future strategy is crafted
Managing strategic change- would culture facilitate or hinder desired change?
Leadership and management style
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12–89 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Company Cultures Can Be Strongly or Weakly Embedded
♦ Strong-Culture Firm
● Has deeply rooted
widely-shared values,
behavioral norms, and
operating approaches.
● Insists that its values
and principles be
reflected in the decisions
and actions taken by all
company personnel.
♦ Weak-Culture Firm
● Lacks values and
principles that are
consistently preached
or widely shared.
● Has few or no
traditions, beliefs,
values, common
bonds, or behavioral
norms.
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12–90 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Why Corporate Cultures Matter to the Strategy Execution Process
♦ A culture well matched to the requirements of the
strategy execution effort focuses the attention of
employees on what is most important to this effort.
♦ Culture-induced peer pressure induces personnel to do
things in a manner that aids good strategy execution.
♦ A culture consistent with the requirements for good
strategy execution can energize employees, deepen
their commitment to execute the strategy, and enhance
worker productivity.
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12–91 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Healthy Cultures That Aid Good Strategy Execution
Good Strategy
Execution
Adaptive
Cultures
High-Performance
Cultures
Commitment to
achieving stretch
objectives and
accountability
Willingness to accept
change and take on
challenges
Performance
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12–92 Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Unhealthy Cultures That Impede Good Strategy Execution
Change-resistant
cultures
Incompatible
Subcultures
Politicized
cultures
Unhealthy
Cultures
Insular, inwardly
focused cultures
Unethical and greed-
driven cultures
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Summary (1)
The history and culture of an organisation
may contribute to its strategic capabilities,
but may also give rise to strategic drift as its
strategy develops incrementally on the basis
of such influences and fails to keep pace
with a changing environment.
Historical, path-dependent processes play a
significant part in the success or failure of an
organisation and need to be understood by
managers. There are historical analyses that
can be conducted to help uncover these
influences.
4-93 BUSM 3200- Strategic Management (Jan 2013) GDS
Summary (2)
Cultural and institutional influences both inform
and constrain the strategic development of
organisations.
Organisational culture is the basic assumptions
and beliefs that are shared by members of an
organisation, that operate unconsciously and
define in a basic taken-for-granted fashion an
organisation‘s view of itself and its environment.
An understanding of the culture of an
organisation and its relationship to
organisational strategy can be gained by using
the cultural web.
4-94 BUSM 3200- Strategic Management (Jan 2013) GDS
PRACTICE ESSAY QUESTIONS
IMPORTANT NOTE: →
These questions are provided for your reference only – they are only INDICATIVE of the standard of questions you might expect in the final exam.
DO NOT use these questions to “spot”
The RMIT examiner will post advise on the exam on the Learning Hub closer to the exam; you are required to pay attention to that advise
The questions here show the range of topics that could be tested from this lecture; they are NOT exhaustive
To score a high grade it is important to LINK the theory to applications and examples. Where from?
You have been assigned specific cases to read from the text. Each case study will show you the kinds of strategic decisions the case company needs to make. You can draw from these examples.
You have selected a case company for your project; you may use examples from there.
You are supposed to read widely from the business press about local, regional and international companies strategies. You can use examples from there as well.
6-95 BUSM 3200- Strategic Management (Jan 2013) GDS
Sample Essay Question
Describe the concept of corporate social responsibility and the four corporate stances on social responsibility. Explain the rationale under each stance and the leadership and stakeholder relationship required for each of these four stances.
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Sample essay question:
Discuss the benefits a firm may gain by formulating and implementing strategic management with an ethical approach.
Use examples from the cases studied in this course or other examples from your reading of this subject to illustrate your answer.
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Sample Essay Question
Stakeholder mapping is a useful technique for stakeholder management. Describe the process of stakeholder mapping and explain how its outcomes can help in understanding the political priorities in managing its relationships with stakeholders.
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Sample Essay Question
Describe the concept of organizational culture. Why organizational culture can be considered an organization’s strategic capability (hint: describe what criteria a resource or competence needs to meet to become a strategic capability)? Provide an example to justify your argument
4-99 BUSM 3200- Strategic Management (Jan 2013) GDS
Sample Essay Question
Describe the concepts of organizational culture and the cultural web. Explain how these concepts can influence the process of strategic management. Give examples to support your argument.
4-100 BUSM 3200- Strategic Management (Jan 2013) GDS