Page 98 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Introduction

In the previous unit, we discussed about SWOT analysis which is a very important tool of
carrying out internal analysis. In this unit we are going to learn the other tools that help a
company conduct their internal analysis. The corporate level internal analysis is about identifying
your businesses value proposition or core competencies. These are sometimes referred to as
your core capabilities; strategic competitive advantages or competitive advantage these terms
all represent essentially the same thing. The reason for completing an internal analysis is to
allow you to create an exclusive market position.

6.1 Strategy and Culture

An organisation’s culture can exert a powerful influence on the behaviour of all employees. It
can, therefore, strongly affect a company’s ability to adopt new strategies. A problem for a
strong culture is that a change in mission, objectives, strategies or policies is not likely to be
successful if it is in opposition to the culture of the company. Corporate culture has a strong
tendency to resist change because its very existence often rests on preserving stable relationships
and patterns of behaviour. For example, the male-dominated Japanese centered corporate culture
of the giant Mitsubishi Corporation created problems for the company when it implemented its
growth strategy in North America. The alleged sexual harassment of its female employees by
male supervisors resulted in lawsuits and a boycott of the company’s automobiles by women
activists.
There is no one best corporate culture. An optimal culture is one that best supports the mission
and strategy of the company. This means that, like structure and leadership, corporate culture
should support the strategy. Unless strategy is in complete agreement with the culture, any
significant change in strategy should be followed by a change in the organisation’s culture.
Although corporate cultures can be changed, it may often take long time and requires much
effort. A key job of management therefore involves “managing corporate culture”. In doing so,
management must evaluate what a particular change in strategy means to the corporate culture,
assess if a change in culture is needed and decide if an attempt to change culture is worth the
likely costs.

‘FIT’ between Strategy and Culture

A culture grounded in values, practices and behavioural norms that match what is needed for
good strategy implementation, helps energize people throughout the company to do their jobs
in a strategy supportive manner. But when the culture is in conflict with some aspects of the
company’s direction, performance targets, or strategy, the culture becomes a stumbling block.
Thus, an important part of managing the strategy implementation process is establishing and
nurturing a good ‘fit’ between culture and strategy.

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