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Culture and strategy

Culture will inform and drive strategy. This can


underpin success or cause difficulties.
Newspapers are about news
The top management team of a newspaper
business had spent the morning in small groups
analyzing the changes in the business
environment they faced. They concluded that
they faced many major challenges, including
changing demographics, electronic media and
the growth in free newspapers. Also over 70 per
cent of their revenue was from the sale of
advertising space rather than the newspaper
itself. Indeed there seemed to be so many threats
that one group decided that the end of the world
is nigh!" In the afternoon they turned their
attention to the future strategy of the
organization. This #uic$ly became a series of
proposals about how they could improve the
coverage of news and sport and the physical
presentation of the newspaper itself. %ne of the
younger members of the team suggested that
they might consider a more fundamental
#uestion& . . . whether we are really in the news
business or if we are an advertising medium'"
(e was met with astonished silence from his
colleagues. )o, in the morning, these managers
were #uite able to underta$e a rational" analysis
which raised #uestions about the traditional role
of a newspaper. *ut, in the same afternoon,
when it came to what they should do, the
paradigm newspapers are about news" drove
their thin$ing.
IKEA
In the mid+,000s the )wedish company I-.A
was the leader in the .uropean flat+pac$"
householder furniture business. It had a presence
in some /0 countries and was famous for its
good+#uality products mar$eted at low prices.
This had been achieved by the vision of the
founder, Ingvar -amprad, and an almost
obsessive attention to every item that would add
to cost 0 so much so that cost reduction became
ingrained in the company culture. -ampard
himself drove an old 1olvo and bought fruit and
vegetables in the afternoons at mar$ets when
they were cheap. I-.A staff always travelled
economy class and too$ buses not ta2is. There
were wall stic$ers urging staff to turn off lights,
taps and computers. There were prizes for the
store or office that saved most electricity.
Cross-border mergers
3rench and *ritish companies approach business
in different ways 0 strongly shaped by the
different national cultures. This can be an
important impediment to successful mergers
unless managers are aware of these differences
and able to manage their impact within the
merged companies. The impact of national
culture is seen in the day+to+day ways that
companies function. The 3rench are much more
committed to rational, analytical approaches to
decision ma$ing whereas the *ritish tend to get
straight to the point and rely more on gut feel".
4eetings in 3rance are held mainly to rubber
stamp what has already been decided by the
boss". The *ritish e2pect to go to meetings to
influence decisions. The membership of
meetings tends to reflect these different
purposes. The 3rench have more people
involved 0 since it is part of the education and
communication process. In *ritain the
membership is usually confined to those who
have a right" to influence the decision.
Sources& Financial Times, ,5 6ovember ,00/7
A. )enter, 8ross 8hannel culture club",
Management Today, 3ebruary 9:::, pp. 7/0;.y i
n t o a c t i o n
Questions
9. 3or each of the three e2amples ma$e lists of
advantages and disadvantages of the corporate
cultures described.
,. Imagine that you wor$ for a 3rench company
that is considering a merger with a *ritish
company. <rite a short e2ecutive report to your
8.% listing the cultural clashes that might arise
and how they could be handled.