Impact of organisational culture

The organisational culture represents another key determinant of the success of strategy implementation. Organisational culture is:

The collectively shared values and norms of an organisation's members; a key building block of organisational design. Rothaermel (2013)

It consists of a complex set of common values and symbols, shared by all members of the organisation, which are capable of influencing the way in which members of the corporation or organisation behave. White (2004)

Four layers of the organisational culture can be identified as follows (Johnson, Scholes and Whittington, 2011):

1. Values
2. Beliefs
3. Behaviours
4. Paradigms (or taken-for-granted assumptions)

Any strategy implementation process implies corporate change. The organisational culture can be a major driver of such change, or it can be a major impediment to it. So, any change can only occur as long as the boundaries of an existing culture (in terms of the above four layers) are not crossed. If the change requires management to go beyond these boundaries, the strategy implementation can only be carried out in an incremental fashion, allowing the organisational culture to adapt to the change gradually. Organisational cultures that are flexible and conducive to strategic changes thus represent a key form of competitive advantage.

The cultural web is a tool for studying the organisational culture and its impact on strategy through the:

analysis of behavioural, physical and symbolic manifestations of a culture that inform and are informed by the taken-for-granted assumptions, or paradigm, of an organisation. Johnson (1992); Johnson and McCann (2007)

Watch this video in which Dr Fons Trompenaars talks about organisational culture from an international perspective.

Trompenaars and Woolliams (2004) argue that as business becomes more global and the workforce becomes more diverse, the issue of culture becomes increasingly important for leaders, managers and their organisations.

Activity 6.1

Organisational culture from an international perspective Consider your own organisation or one that you know well. How do you think diversity impacted this organisation's culture?