An overview of the role of business culture in strategy

1. Business
Culture

2. What is business culture?
“The way we do
things around
here!

3. Three ways of identifying culture
How Methods & How
decisions style of customers
are made communication are treated

4. Culture is determined by human beings!
Applying for a job at IKEA

5. Culture consists of…
• The shared values of a business
• The beliefs and norms that affect every
aspect of work life
• The behaviours that are typical of day-
to-day behaviour
• The strength of a culture determines
how difficult or easy it is to know how
to behave in the business

6. How culture might be demonstrated
• How employees are • How contracts are
recruited negotiated and agreed
• The way that visitors • The personality and
and guests are looked style of the sales force
after • The responsiveness of
• How the working space communication
is organised • The methods used for
• The degree of communication
delegation & individual • How staff call each
responsibility other

7. Strong or weak culture?
Strong Weak
Staff understand and Little alignment with
respond to culture business values
Little need for policies Inconsistent behaviour
and procedures A need for extensive
Consistent behaviour bureaucracy &
Culture is embedded procedures

8. Handy’s Four Classes of Culture
Power Role
Task Person

9. Power culture
ontrol radiates from the
centre
oncentrates power
among a few
ew rules and little
bureaucracy
wift decisions are

10. Role culture
eople have clearly
delegated authorities
within a highly defined Power
structure
ierarchical bureaucracy
ower derives from a
person's position
ittle scope exists for

11. Task culture
eams are formed to solve
particular problems
Functional Depts
ower derives from expertise
Project Teams
as long as a team requires
expertise
o single power source
atrix organisation

12. Person culture
eople believe themselves to
be superior to the business
usiness full of people with
similar training, background
& expertise
ommon in firms of
professionals – e.g.
accountants & lawyers
ower lies in each group of

13. Culture types and leadership style
Cultural Type Suitable Leadership Style?
Power Autocratic
Role Autocratic or paternalistic
Task Paternalistic / democratic
Person Democratic

14. Why might a culture need changing?
• Improved business performance
– Declining profits and sales
– Inadequate returns on investment
– Low quality or standards of customer service
• To respond to significant change
– Market changes (growth, competitors)
– Political & legal environment
– Change of ownership (e.g. acquisition)
– Change of management or leadership (e.g. a new
CEO)
– Economic conditions (e.g. downturn)

15. Barriers to cultural change
Tradition and set ways: Fear of:
• Loyalty to existing • Loss of power
relationships • Loss of skills
• Failure to accept the • Loss of income
need for change • The unknown
• Insecurity • Inability to perform as
• Preference for the well in the new
existing arrangements situation
• Different person • Break up of work
ambitions groups

16. Assessing the importance of culture
• Major organisational change often fails
because the culture is not addressed
appropriately
• There is much doubt about whether
new leaders can change a well-
established corporate culture
• There is no ideal or appropriate culture
– any culture can be effective

17. Culture quotes (1)
“Company cultures are
like country cultures.
Never try to change one.
Try, instead, to work with
what you’ve got."
Peter Drucker

18. Culture quotes (2)
"I believe in God, family,
and McDonald’s and, in
the office, that order is
reversed."
Ray Kroc (Founder of McDonalds)

19. Google Culture
“You can be
serious
without a
suit”
Google Philosophy – “Ten things we know to be true”

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