Revised chapter 9 (9) culture and corporate strategy

Strategy and corporate culture• The relationship between company culture and strategy: – Is strategy a product of culture?. – Is culture a product of strategy?... Cultural factors of st

Chapter 9

Culture and corporate

strategy

Strategy and corporate culture

• The relationship between company culture and strategy:

– Is strategy a product of culture?

– Is culture a product of strategy?

Cultural factors of strategy

In what way is the formulation of strategy affected

by cultural differences? (Fatehi, 1996):

•Relationship with the environment

– Mental framework of two types of persons:

• ‘engineering-oriented’

• ‘symbiotic-oriented’.

•Relationship among people

– Interpersonal relationships within a company:

Effect of national culture on strategy

In what way can national culture affect strategy?

• Leadership and decision-making

– the choice of strategy

– the way it is realised.

• Impact of national structure on strategy

– sector of products and services

• Multinational and its local subsidiaries

– culture differences in foreign markets.

National culture and corporate strategy

• Importance of the country manager because

he/she:

– Defends the company’s market decisions

– Satisfies the demands of the local subsidiary

– Assumes the role of ‘cultural interpreter’:

• gives information about the national situation;

• understands the corporate goals and values.

Global market strategy

• Global assignments can be very important

strategically for the company.

• The international manager has to:

– Gain insight into the attitudes of those involved in a cross-cultural situation

– Modify his/her management strategy.

• This means:

– N ot having the same strategy whatever the

circumstances – Applying skills in one context to another.

Culture shock

• Culture shock refers to unpleasant experiences with other cultures.

• International managers experience culture shock at three levels:

– Emotions

– Thinking

– Social skills and identity.

• Culture shock phase is an integral part of the

adaptation phase (Marx,1999).

International company strategy

• Kinds of co-operation: from mergers and

takeovers to joint ventures, alliances and

partnerships.

• A merger of two companies:

– Presupposes a change of ‘culture’ in the new

organisation.

• From different countries:

– Increasing complexity of exchanges of interaction between cultures

– Other organisational problems arise due to

inevitable change of culture(s) involved.

• National culture influences a company’s strategy.

• Organisational culture is a part of the strategy

• In the process of strategy development lie the

same levels as in culture.

• Not only does the organisational culture change but also the company’s strategy.

• Difficulties with all kinds of co-operation on the

cultural front, particularly in cross-border M&As