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The Importance Of Organizational Culture In Strategic Management Business Essay

Culture plays an of import portion in our society. It refers to beliefs and codifications of pattern that makes a community what it is. It besides plays the same function in organisations. A strong organisational civilization will supply stableness to an organisation as it has important influence on the attitudes and behaviors of organisation ‘s members. Most of company ‘s top directors have a strong consciousness that the civilization of a company is important to everything they do and plays unreplaceable portion in their success. However, non many companies can acknowledge that they can depict their civilization and to the full understand how of import it is in the success of their concerns. Therefore, this paper will give a deeper penetration about how an organisation ‘s civilization can hold a great influence on its strategic direction procedures.

What is Organization Culture?

There are assorted accounts and elements to specify organisational civilization. For some, it means top direction beliefs and values about how they should pull off the organisation and carry on the concern ( Lorsch 1986 ) . For some, it is an evolutionary procedure associating to people that creates alone characters for the organisation ( Hatch 1993 ) . However, in general, organisational civilization has been defined as the form of cardinal premises or beliefs that a specific group has developed through larning to cover with its jobs of internal assimilation and external version, and that have been approved to work efficaciously, and therefore it can be taught to new members as the right manner to comprehend, experience and act in relation to those jobs ( Schein 2009 ) .

The Importance of Organizational Culture in Strategic Management:

Sing the importance of organisational civilization and its impacts in strategic direction is really indispensable. As organisational civilization and schemes are both societal procedures, many strategians argue that civilization and schemes are connected. Harmonizing to Alvesson ( 2002 ) , cultural dimension plays a critical function in all facets of an organisation. It is so impacting that it can find the success and failure of an organisation. In leading construct, organisational civilization has been identified as one the of import constituents that strategic leaders can utilize to develop dynamic organisation. Culture reflects the manner in which people in an organisation set aims, pull off their resources and execute their undertakings. Culture besides affects people behaviour unconsciously. Even in those organisations where the ideal of organisational civilization do non have much expressed attending, how people think, feel, value, believe and behave in a company are by and large influenced by thoughts, beliefs and perceptual experience of a cultural nature. Harmonizing to Schein ( 2010 ) , organisational leaders achieve success by invariably directing clear signals about their precedences, beliefs and values. Once civilization is established and accepted, they become a strong direction tool for leaders to pass on and stimulate their members with beliefs and values to make their occupations in a scheme supportive mode. When leaders win in publicity ethical civilization in the organisation, they will besides go successful in organisational growing and accordingly are competitory to their challengers. Therefore, it is really of import to develop a strong civilization in the organisation every bit good as schemes that are suited to the civilization in order to be strengthened by it. If a peculiar scheme does non fit with the organisation civilization, it could be about impossible to carry through expected result from the planned scheme.

Organizational Culture, Vision and Mission in Strategic Management:

One of the position to look at how organisational civilization supports strategic direction is through its influence on organisation ‘s missions and visions. Missions and visions play an of import portion in company ‘s strategic direction. Harmonizing to Harrison and John ( 2010 ) , a written mission statement is one of the most common manner that directions use to pass on with their staffs about strategic way. By and large, missions and visions province the company ‘s intent and values which provides ideals and way for the company as it interacts with the market place. This will non merely give a sense of intent to internal and external stakeholders but besides assist them in resource allotment determinations which is really for transporting out company ‘s scheme direction. However, in order to hold an effectual missions and visions, directions need to link them to organisational civilization. In fact, one of the manner to see an organisation ‘s civilization through its contemplation in nucleus values ( Schein 2010 ) . Harmonizing to Tocquigny and Butcher ( 2012 ) , nucleus values are the set of belief or political orientation by which an organisation operates. They are the foundation of organisational civilization. In this fast paced epoch when everything is altering, nucleus values are still changeless. The organisation may develop new schemes, policies or even significantly restructure ; nevertheless, the cardinal individuality of the company still remains integral. These values are the indispensable, foundational rules that will steer the organisation ‘s vision, mission and schemes every bit good as define and distinguishing the organisation from its rivals ( Senske 2003 ) . They create a foundation of attitudes and patterns that every members have to hold to follow in order to back up the vision and long term success of the organisation. They besides provide mention points and ends which allows organisation to determine and beef up its concern. As internalized perceptual experience and beliefs can actuate staff ‘s public presentation to exceeding degrees, an effectual strategic leaders need to understand and develop their intended implemented schemes that are suited to organisational civilization in order to prosecute the vision of organisation ‘s leaders. Until organisation decides what those cultural values are, and how they will interact with each other, itaa‚¬a„?s really hard to make anything else, whether puting ends, set uping measurings, work outing jobs or even doing determination efficaciously.

One illustration about how organisational civilization can back up company ‘s vision and mission is Facebook. Facebook is described as ‘a cutting border engineering that invariably taking on new challenges in the universes of msecs and TB. Their vision for the company is to make a fast changing and advanced company. They do non take for flawlessness that requires a long clip in order to establish the merchandise but they weigh to a great extent on being able to do and transport merchandises rapidly, acquire client ‘s feedback and go on to introduce it. In order to promote creativeness and invention within the company, Facebook ‘s civilization created by Zuckerberg is a relaxed, unstructured and unfastened civilization. Employees can come and travel as they please, with no standard work agendas which consequences in more employee freedom. If employees need to chill out, they can play picture or table-top games. Collaboration and teamwork are encouraged to be in an informal communicating and atmosphere. They besides invariably promote people to maintaining things fresh, advanced and interesting, to be bold in experimenting new thoughts, without any tampering from above. All of these have fostered for a fun-loving, insouciant and originative working environment which makes their staffs satisfied while accomplishing their end to be a rapid advanced engineering company ( Robbins and Judge 2011 ) .

Organizational Culture as Competitive Advantage in Strategic Management:

Another ground that makes civilization go a determiner of concern success or failure is due to its part in organisation ‘s competitory advantage. Creating and prolonging competitory advantage in a peculiar industry is ever the major concern in organisation ‘s strategic direction. This is because competitory advantage will assist the organisation to distinguish itself from its rivals while beef uping its place in the market topographic point. Harmonizing to McDonald and Gandz ( 1992 ) , civilization can lend positively to the competitory advantage of companies. It can be a great tool for organisation to increase their degree of public presentation which makes it go more competitory in market topographic point. Fernandez and Hogan ( 2003 ) have stated that civilization is the underlying attitudes and beliefs that can strongly act upon single and group behavior. When members in an organisation portion the same beliefs and values, they can understand what sort of attitudes they expect themselves and other people to demo in working topographic point every bit good as how they need to act and respond in peculiar state of affairs in order cooperate good with each other. As they understand what the company is seeking to carry through, it will actuate them to work for a higher intent which in bend helps to put an organisation apart from the competition ( Gilmartin 1999 ) . Managements can besides utilize organisational civilization as an effectual tool to order, control and manage employee behaviors in their strategic direction ( Sinha 2008 ) . In fact, this is a more powerful manner of pull offing employee than company ‘s regulations and ordinances. Leaderships in the company can utilize civilization to influence, educate and determine their staff ‘s mentality and attitude to derive their support in following the company ‘s program and process while cut downing opposition in the organisation. Having a strong, positive and strategy-supportive civilization will impact the energy, enthusiasm, working wonts and runing patterns of employees which will non merely booster the efficiency and effectivity in the section but besides pull many people to work in the organisation while cut downing their staff turnover, engaging and developing cost which consequences in giving a competitory advantage.

Not merely lend to company ‘s competitory advantage, organisational civilization besides sustains the company ‘s competitory advantage. As a company starts to see the superior fiscal public presentation, its rivals will besides get down to seek to copy what they believe is the beginning of competitory advantage that generates the success of the company. After analyzing the relationship between civilization and superior fiscal public presentation, Barney ( 1986 ) concluded that civilization is the factor that can assist companies to bring forth sustained competitory advantage. He strongly believes that a strong and valuable organisational civilization is one of the most sustainable competitory advantages a company can hold. This is because a valuable and rare civilizations is really hard to copy. Giving adequate clip and money, rivals can double about everything what an has done. They can engage away some of the company ‘s best people. They can change by reversal engineer the company ‘s procedures. However, when it comes to organisational civilization, they canaa‚¬a„?t double the organisation ‘s civilization. It is really difficult for people to specify civilization clearly, particularly in regard of its part to value of company ‘s merchandise and service. Another ground for this is that civilization is normally related to historical facets of company development every bit good as to the vision, beliefs and inspiration from peculiar strategic leaders. Organizational civilization is the uniqueness and the individuality of an organisation that will distinguish the company from its rivals. If companies know how to do usage of civilization in their strategic direction, it will be a powerful tool for them to prolong their fight and consistency in the market while assisting them to accomplish success in their scheme execution. Even when challengers try to use the house ‘s cultural properties, there will be no warrant that they can bring forth the same civilization or obtain superior fiscal public presentation merely like what the company has achieved.

A good illustration to exemplify this point is Zappos company. Knowing that clients today non merely concentrate on good merchandises but they besides demand first-class service from the mercantile establishments, Zappos ‘s strategic program is to construct a long term trade name that non merely about places, vesture or on-line retailing but to be about the best client service and the best client experience. To be able to accomplish this end, Zappos believes that organisational civilization is the lone reply. They believe that if they can acquire the civilization right, most of other materials such as great client service, or passionate employees, or edifice great long term trade name will of course go on on its ain. In order to do employees to present an first-class service, alternatively of merely utilizing regulations and processs like other companies to educate staffs, the directions in here have shaped their staff ‘s mentality and attitude by utilizing civilization to convey their message to their staffs. Zappos have created a civilization that encourages employees to “ wow ” each other by being yourself, as loony or Wyrd as possible, demoing your attention and love for other people, and merely holding fun in the workplace. As the employees start to be wowed by their co-workers, they will automatically desire to make the same thing for other people, particularly for their clients. This civilization non merely makes employees to be happy in their workplace but it besides encourages staffs to be originative and enthusiastic in wowing their clients which consequences in addition in their perennial clients and their sale public presentation. This civilization is something alone that people normally do non happen in other companies which makes it attractive to their staffs every bit good as to other people to work in Zappos. It becomes a competitory advantage of Zappos which can non be copied by other rivals. It makes Zappos go more competitory and differentiate themselves from their challengers in the market topographic point ( Hsieh 2010 ) .

Organizational Culture and Strategic Decision Making:

Another position for directions to see about the importance of their organisational civilization in strategic direction is its impact on their strategic determination devising. As it has been mentioned above, civilization is the organisation ‘s individuality, values, beliefs that influences how people, from directions to employees, behave in the organisation. Therefore, Thompson and Martin ( 2005 ) have concluded that organisational civilization is the bosom of all scheme creative activity and execution. Organizational civilization provides the model for the organisation, which affects about all the organisational activities, from the executing of scheme to the credence and execution of new procedures ( Soyer, kabak and Asan 2007 ; Hill 2009 ; Cumming and Worley 2009 ) . For directions, civilization affects their behavior unconsciously. It affects the pick, incidence and application of the manners of scheme creative activity, which reflects the values and penchants of the strategic leader. Managements do thing in peculiar ways because it is implicitly expected behavior influenced by organisational civilization. Culture besides influences the choice of people for peculiar occupations, which consequences in impacting the manner in which undertakings are carried out and determinations are made. In add-on, it influences the ability of a leader to present his or her ideal and vision to other members of the organisation every bit good as deriving their support and committedness when it comes to using new scheme in the organisation. In order to hold a successful scheme execution, it requires the right attitude, attack and committedness from employees which can merely be influenced by civilization. When a scheme lucifer with company ‘s civilization, the civilization will go a valuable ally in scheme execution and executing. When it is non a portion of the alteration scheme, direction will normally happen it hard to implement the scheme successfully every bit good as accomplishing their mark ( Lawson and Ventriss 1992 ) . Berry ( 1983 ) besides believes that it may be a wiser pick for directions to choose a concern or scheme that will suit their company ‘s organisational civilization good in order to switch the house toward a new scheme alternatively of carry throughing cultural alteration, which can be really hard to accomplish. Therefore, it is really of import to place the bing cultural dimensions of the organisation in order to accomplish successful scheme execution. Organizational civilization can be a powerful beginning to back up company ‘s scheme but at the same clip, it can besides go a great barrier to leaders if they do non see it carefully. By understanding the elements of organisational civilization and its impact on people ‘s behavior, I believes that strategic leaders will be better equipped to do wise determination in doing and implementing schemes to their organisation.

One illustration about how civilization influences strategic determination is Walmart. In Walmart, their doctrine is to offer clients a lower monetary value than they can acquire in anyplace else. Its civilization is based on low cost terminal of every dealing in order to do net income, non from the pricing terminal. With the rule of salvaging is of import as pricing, the program has ever been to drive costs out of the system in the shops, from the makers ‘ net income borders, and from ware agents and other jobbers, all in the service of driving down monetary values at the retail degree, in order for Walmart to sell more, increasing the sum of concern with the seller. In order to maintain their disbursal depression, Walmart limits its shop locations to rural communities with a maximal population of 10,000. This will non merely keep down existent estate costs but besides protect the company from heavy competition in metropolitan countries. They besides try to happen healthy providers that can supply timely bringings at low monetary values. Managements in here besides invariably look into their rivals monetary value to do certain that Walmart offer the best thrust. All of these strategic determinations support the chief rule and mark which is salvaging costs every bit much as possible in order to offer lowest monetary values in the market ( Refrigerated Transporter 2002 ) .


In decision, I steadfastly believe that there is a strong connexion between organisational civilization and strategic direction. Every organisation has its ain alone civilization. It is non merely the organisation ‘s individuality but besides the doctrine, rules that every member in organisation believe and value, which affects non merely people ‘s attitude in the organisation but besides the strategic determination devising and direction in the company. If vision and mission of organisation ‘s leaders is the end that the company is taking, so I believe that civilization will be the compass that leads company to accomplish that end. Without the support from organisational civilization, it may be impossible for companies to accomplish their intended consequence. Culture besides plays an of import function in company ‘s competitory advantage. It is a critical component that will assist organisation to protect and prolong their competitory advantage from their rivals. As organisation supports edifice, prizing their civilization every bit good as carefully sing and using it to their strategic direction, I believe that the company will be able to carry through their end and their leader ‘s vision.

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