Page 230 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Step 3: Talk openly about problems of present culture, and how new behaviours will improve
performance.
Step 4: Follow with visible, aggressive actions to modify culture.

Managing Culture Change

As already explained in earlier sections, the culture that an organisation wishes to develop is
conveyed through rites, rituals, myths, legends, actions etc. Only with bold leadership and
concerted action on many fronts can a company succeed in tackling a major cultural change. Top
leadership should play a key role in communicating the need for a cultural change and personally
launching actions to prod the culture into better alignment with strategy.

Changing culture requires both (a) Symbolic actions and (b) Substantive actions. They require
serious commitment on the part of the top management.
The following measures are helpful in building a strategy supportive culture:

1. Emphasise key themes or dominant values: Leaders must emphasise dominant values
through internal company communications. They must repeat at every opportunity the
messages of why cultural change is good for the company.
2. Stories and legends: Leaders must tell stories, anecdotes and legends in support of basic
beliefs. Organisational members must identify with them, and share those beliefs and
values.
3. Rewards: Visibly praising and generously rewarding people who display new cultural
norms will slowly change the culture.
4. Recruiting and hiring: New managers and employees are to be recruited who have the
desired cultural values.

5. Revising policies and procedures in ways that will help the new culture.
6. Leading by example: If the organisation’s strategy involves low-cost leadership, senior
management must display in their own actions and decisions, inexpensive decorations in
the executive suites, conservative expense accounts and entertainment allowances, lean
corporate allowances, few executive perks, and so on.

7. Ceremonial events: In ceremonial functions, companies must honour individuals and groups
who exhibit cultural norms and reward those who achieve strategic milestones.
8. Group gatherings: Top management must participate in employee training programmes
etc. to stress strategic priorities, values, ethical principles and cultural norms.
Every group gathering must be seen as an opportunity to repeat and ingrain values, praise good
deeds, reinforce cultural norms and promote changes that assist strategy implementation. Thus,
best companies and best executives expertly use symbols, role models, and ceremonial occasions
to achieve the strategy-culture fit.

Managing Culture Clash

When merging or acquiring another company, top management must give some consideration
to a potential clash of corporate cultures. Integrating cultures is a top challenge to a majority of
companies. It is dangerous to assume that the firms can simply be integrated into the same
reporting structures. The greater the gap between the cultures of the two firms, the faster
executives in the acquired firm quit their jobs, and valuable talent is lost.

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