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JSMA
12,1
116
Received 25 April 2018
Revised 18 September 2018
29 September 2018
Accepted 29 September 2018
Journal of Strategy and
Management
Vol. 12 No. 1, 2019
pp. 116-136
© Emerald Publishing Limited
1755-425X
DOI 10.1108/JSMA-04-2018-0036
Culture vs strategy: which to
precede, which to align?
Amarjeev Kaul
N. L. Dalmia Institute of Management Studies and Research, Mumbai, India
Abstract
Purpose – Appreciation of the utility of strategy and the vitality of the culture in an organization can realize
the development of a new culture-centric strategic business model (SBM). Culture beats, eats or trumps
strategy is a legitimate and powerful argument often thrown to the air. The purpose of this paper is to un-code
the relevance of this argument and to decode its significance.
Design/methodology/approach – This is a conceptual paper and builds on prior conceptual and empirical
management research related to strategy and organizational culture. The approach is unbiased toward either
strategy or culture.
Findings – The conclusion arrived at is that, in general, strategy must precede culture and culture must be
aligned. In specific instances of governance, inner workings of a military organization, cross-cultural context
of negotiations, creative advertising and management of change culture may predominate in tactics.
Furthermore, with a strategy gone astray, or in the instance of a floundering business or start-up venture,
culture must shift to first gear, lead the requisite goal and path development, and strategy must be aligned in
the transition. A strategy–culture fit supports a sustained competitive advantage by virtue of a firm’s unique
culture proposition (UCP).
Research limitations/implications – The development of a culture-centric SBM will need to be tested by
empirical research. The UCP will also need to be researched further.
Practical implications – The conclusion that strategy should generally precede culture will guide firms
from not letting their organizational culture from undermining the success of major shifts in strategic goals
and business model positioning.
Originality/value – The conceptual arguments will help leaders and managers from marginalizing the
value of strategy. However, managers will also be directed toward paying attention to the damaging
consequences of ignoring culture. Furthermore, managers will be able to appreciate that culture must not
drive strategy, except in specific strategic decision-making contexts.
Keywords Culture, Strategy, Culture strategy alignment
Paper type Conceptual paper
Introduction
It serves to benefit a firm if it knows and understands whether its strategy leads to a
complimentary culture, or whether its culture determines the strategy its executives and
managers formulate and implement. The peculiarities in the link between culture and
strategy is worthy of research and investigation. The reason for this is that it is not easily
discernible whether the strategy being executed was formulated driven by cultural
influences or whether culture was just a major influence for implementation. This becomes
apparent when one looks at how the links between culture and strategy have been
established. The statement “culture determines and limits strategy” is mentioned in a book
by Edgar Schein (1985), who also mentions in quotations “culture constrains strategy,” as a
phrase apparently being in prevalence. The phrase “culture beats strategy” became popular
in the 1980s–1990s. Many acquisitions, mergers, restructuring and business process
reengineering strategies failed during this timeframe (Daft, 2000). The “beats” was later
replaced by “eats.” “Culture eats strategy for breakfast” is a more famous quote attributed to
Peter Drucker, although there is no source reference of him having said it (Anders, 2016;
Anon, 2017). Possibly, it was mentioned in a private conversation. However, the quote has
been made legendary by Mark Fields, President of Ford (Durbin, 2006). To bring home the
need to become competitive again managers hung up a banner with this quote at Ford
(McCracken, 2006).
 Yet, the quotes earliest reference is an article in a paper industry trade journal that Culture vs
attributes it to the Giga Information Group’s March periodical (Moore and Rose, 2000). strategy
The term “breakfast” was replaced with “lunch” (Mason, 2000). Other variants are “dinner,”
with addition of words like “every day, every time.” The phrase “culture trumps strategy”
came out of another quote “the whole team and the culture trumps strategy” by a skin care
products entrepreneur Eli Halliwell (Lehmann, 2006). “Culture eats strategy for lunch”
appears as a quote of Merck CEO Richard Clark (Meehan et al., 2008). The “breakfast” quote 117
once again is referred to as an apparent quote of Peter Drucker (Campbell et al., 2011).
“Culture trumps strategy, every time” appeared in an HBR article with the same name
(Merchant, 2011). The saying with “lunch” in it gets attributed to Peter Drucker by the Head
of Los Angeles Fire Department (Morrison, 2014).
One may hear the combine of “breakfast, lunch and dinner” today in any address or
speech. Many leaders of organizations believe that culture is key to their organizations
success or transformation. IBM’s former CEO Lou Gerstner is one of them.
The world started paying attention to the impact of culture in doing business only after
the success of Japanese companies in the 1970s in industries like consumer electronics,
automobile manufacturing and steel production. This was also the era of the oil embargo
that placed focus on interdependencies of domestic business activities with decisions on
economic activities made in foreign destinations and cultures. Culture is complex and
evolving. Cultural complexity varies from and within geography, industry and company.
One of numerous definitions of culture useful in a business environment suggested is
“patterns of assumptions, premises, values, or beliefs generally adopted by an identifiable
group” (Louis, 1985). Similarly, organizational culture may be defined as, “a pattern of basic
assumptions, invented, discovered, or developed by a given group, as it learns to cope with
its problems of external adaptation and internal investigation” (Schein, 1992).
An organizational structure can be “hierarchical, formal, systematic, rationalist, and
compartmentalised” (Bourdieu and Wacquant, 1992). Less-hierarchical organizations have
the ability to create a more efficient and effective workplace culture. Such a vertically lean
structure can tweak, change and transform an organizational culture more easily than a
vertically dense structure. Strategic managers “need appropriate tools to develop thinking
and learning paradigms that enable attainment of a more holistic and dynamic
perspective” (Fowler, 2003). These can be provided, in part, by the cultural veracity within
the organization.
A good proportion of corporate strategies are not implemented ( Johnson, 2004). It is
suggested that the reason for this is due to a gap between the strategies and the
performance the firm realized (Crittenden and Crittenden, 2008). It is believed that
implementation is the bottleneck where efforts and resources must be concentrated
(Homburg et al., 2003). Strategy execution also constitutes a stepwise process that includes
communication, interpretation, adoption and enactment (Noble, 1999). Empirical evidence
supports the idea that a firm’s culture is associated with strategy implementation (Ahmadi
et al., 2012). Performance is affected by the “knowing-doing gap” in organizations, while
there is no gap if you know by doing; talk, documentation, complex language and planning
become substitutes for action or implementation (Pfeffer and Sutton, 2000).
Unplanned strategies are often executed in real time that originate at the upper- or
middle-management levels in response to a dramatically changed business situation
offering either opportunities or threats (Mintzberg and McGugh, 1985). The ability to
formulate these spontaneously depends on the ability and adaptability of the firm
depending on its culture.
Furthermore, there are external demands on the culture of an organization. Two of these
are global challenges and the competitive environment. Both have become extremely
complex (Raymond, 2003; Lopez et al., 2004; Dimitriades, 2005). Under conditions where
JSMA reward programs become less tenable, organizations can look at coding their cultural
12,1 climate in order to succeed in achieving their strategic objectives through implementing
their strategies (Barger, 2007). Failure in as such can be attributed to the concurrent culture
and the matched reward system of an organization (Kerr and Slocum, 1987). Once the
strategy is set, the policies are aligned (Holbeche, 2009).
Like other determinants of competitive advantage, the organization culture can be a
118 crucial point of differentiation and help cement a sustained competitive advantage. In as far
as longevity of this sustainability is concerned, the internal culture can be assumed to
represent the true identity of a corporation. However, a conditioning cultural transformation
in an organization must be gradual (Kotter, 1996). This would require a strategy, one
formulated with a visionary objective, implemented with viable drivers and plausible
metrics and evaluated within a consultative framework. Culture will not change in and on
itself (Kotter, 1996). In fact, a strategic model for implementing organizational change has
been suggested which progresses through eight interrelated steps (Kotter, 1996).
However, whether it relates to corporate direction, international affairs or national
security strategy is important and a matter of concern (Rumelt, 2011a, b, c). So the
determination still remains inconclusive, does culture precede strategy or does strategy
instead. This conceptual research paper is aimed at resolving this confusion. The paper
essentially seeks such a resolution with respect to corporate-level strategy and strategy
formulation. It looks to see where all strategy precedes or ought to do so. It also explores
situations in which culture may lead strategy. The research path followed is to view both
possibilities unbiased. Unfortunately, this may seem to generate conflicting evidence and
arguments. Furthermore, established constructs and topologies are used to test the
conceptual arguments in order to arrive at a final determination.
In the Introduction section, in proceeding with selection of papers as references and
quotes, the issue of culture being important or supreme is addressed first. The origin of this
primacy is followed. Next, definitions of culture are introduced. These definitions give
legitimacy to the existence of culture. This leads to the nature and characteristics of culture
and its linkage to the structure of the organization. Furthermore, culture can be a
contributing factor to strategists thinking processes are suggested. Next in line are papers
that emphasize that culture can play a critical role during the process of strategy
implementation. Again, unplanned strategies arise from adaptability that a firm’s culture
might offer. Pressures of the external global and competitive business environment on the
success of execution find links to the internal culture through the reward program systems
developed by the organization. Finally, the issue of difficulty in changing the existing
culture so that it is aligned with the strategies is presented.
The primary assertion in the paper is that in general strategy ought to precede culture.
It is suggested that this is true at the start even as culture is just being created in an
organization. Since the role of culture cannot be negated, this being supported by
empirical evidence, and a culture supportive strategic business model (SBM) is suggested.
This support provided by the culture of an organization can accrue to its fullest if the
organization formulates strategies to develop a unique culture proposition (UCP).
Both, the SBM and the UCP would need to be further tested with empirical evidence
and research.
The question whether it is important to work out the strategy first and then get the
culture aligned is an important one. The answer to the question, whether a firm should
precede with strategy and tune the culture with the help of strategies or precede with
culture-creation and leave the culture to encourage the strategists to formulate the
appropriate strategies directed at the business opportunities and the threats, is the “so what
question being answered.”
The conceptual proposition being proposed is built into the Title of the paper.
Impact of organizational structure on culture Culture vs
A flat organizational structure can be more agile and adaptive. Agility can lead to increased strategy
innovation. Such an organization would have better flow and management of ideas.
Accelerated flows can lead to quick decision making. Centralized decision making with
decentralized controls can produce rapid demand assimilation and high customer
responsiveness. A firm’s strategies result in creation or changes in the organizational
structure, organizational culture and organizational behavior of individuals and groups. 119
Structure logically follows strategy (Chandler, 1962; Andrews, 1982a, b, c). However,
“structure and processes in place” will in turn affect strategy in a reciprocal way (Andrews,
1982a, b, c). Furthermore, it is suggested that there exists a “reciprocal relationship” between
strategy formulation and strategy implementation, as in “one foot leads the other foot”
(Andrews, 1982a, b, c; Mintzberg, 1990).

Aligning culture with strategy

The culture of an organization needs to be aligned with the newly formulated strategy.
A strategy must have three elements: a diagnosis of the challenge that a firm is trying to
overcome, a guiding policy in the shadow of which the strategy is formulated and
implemented and a predicted intent of coherent action that is followed through during
execution (Rumelt, 2011a, b, c). Both policy and coherence draw upon the culture. Although
policies can help to achieve this alignment and to control the behavior of the reward
recipients, it only marginally influences the culture (Bushardt et al., 2011). However, a strong
culture is insufficient on its own, since the culture must be matched with the reward
structure for better strategy implementation (Bushardt et al., 2011). Defined cognitively as
shared values, beliefs, ideologies and norms, culture influences organizational behavior
(McKenna, 1992). Behavior, on the other hand, can be related to the organization’s culture
through the application of common knowledge (Skinner, 1971). Strength of the culture can
be judged by the nature and similarity of the response to an environmental or organizational
stimulus. The more consistent the response, the stronger is the culture (Bushardt et al.,
2011). Alignment requires that positive reinforcement be used over negative ones. Weak
cultures are affected to a greater extent by reward programs (Paunova, 2007). Therefore,
strategic alignment of culture with the new directions and goals is difficult due to
inconsistencies in a strong culture and the need for extrinsic rewards in a weak culture.
Misalignment predisposes strategy failure during implementation. Current misalignment
also hinders the ability of the organization to formulate future strategies that entail risk of
investment and reputation.

Culture as a force for strategy implementation

Cultural values, cultural uniqueness and cultural ethics can be a tremendous force for
strategy implementation. The three together constitute a UCP for realizing definitive and
deterministic positive outcomes from strategy. It can be reasonably assumed that “the four
building blocks of a competitive advantage are superior efficiency, superior quality,
superior innovation, and superior customer responsiveness” (Hill and Jones, 2010).
An organizational culture, or lack thereof, can play a significant role in its ability to produce
a realistic impact in each of these building blocks. In fact, the distinctive competencies that
give rise to such a competitive advantage can be best nurtured in a cultural climate that
delivers on the UCP. There is a direct relationship between an organization’s culture and the
efficiency of all its processes, the sense of quality it builds in its products and services, the
pursuit of innovation that its workforce exhibits and the level and nature of response it
affords its customers. The means that specific strategies must be formulated in order to
create the organization’s UCP. Once created, the UCP can be deployed by an organization as
a fundamental strategy to execute its mission and realize its vision, since the guiding policy
JSMA and coherence of action draw upon the culture of the organization and because
12,1 implementation strategies are designed with a view of the mission constituents and a
requirement that time-delivered objectives be fulfilled. Under dynamic business conditions,
with changing strategic direction, the culture of a firm is a big determinant of eventual
successful or failed strategy execution. Creating a UCP means that strategy must precede.

120 Changing culture using strategy

Inertia of culture is predominantly related to work norms and mind-sets (Rumelt, 2011a, b, c).
Culture represents meaningful social behavior that is stable and results in intense resistance to
change (Rumelt, 2011a, b, c). However, the culture of an organization is more amenable to
change than that related to nations, communities or ethnic groups (Rumelt, 2011a, b, c).
Organizational culture is difficult to change because it tends to become entrenched
(Robbins, 1990). Resistance to change can be used as an asset since it points the way toward
unresolved issues, and using this as guidance strategies can be formulated to produce the
desired shift in direction of the entire system (Davis et al., 1992).
Depending on the implications of the new strategies, a revolutionary or transformational
change may be required to align the culture of the organization, in order, to proceed toward
successful implementation. Formal reward programs are useful and part of the culture.
However, extrinsic rewards are less motivational compared to intrinsic rewards.
Of importance is for a leader to create and manage culture (Schein, 1992). Managers
ought to use rewards to manage the culture rather than the individual singularly, since the
nature of the rewards are part of the culture and constant adjustment is necessary to align
the culture (Bushardt et al., 2011). The strength of a culture is relative to the uniform
response of its members to an external stimulus (Bushardt et al., 2011). Strong cultures have
much influence over individual behavior in connection with the reward structure, negating
one not in harmony and supporting one that is; while weak cultures have minimal influence,
rather are more affected by the reward structure (Paunova, 2007).
The need to change the culture must be assessed as part of the strategy formulation step.
Strategies must then be put in place in order to bring about this change. Change is
inevitable. As markets change, as global flows of funds, technology and capabilities change,
a firm’s strategy must change and drawn into this change must be a change in the culture of
the firm. The appropriate strategy must be deployed to tweak, change or transform the
culture as appropriate. A strong culture is more likely to reject a transformational
revolutionary change, if it is deemed as disruptive and not in sync with entrenched
expectations by the members, compared to a weak culture. An evolutionary
transformational change is more likely to be more sustainable than a revolutionary one,
given that demands for change will never be extinct. Management created an open, caring
and productive environment at one of Chevron’s El Segundo Refinery Laboratory by
evolving its culture in little aggregated steps (Hartshon and Burg, 1998). The evolution of a
safety culture by way of strengthening of the organizational culture at the International
Maritime Organization has significantly affected the global perception of marine safety
(Mitroussi, 2003). Both societal culture and the economy evolve (Brinkman, 1992). Although
difficult, the development, evolution and management of corporate culture are important
phases in the growth process of the organization (Flamholtz and Randle, 2012). Shifting
goals and objectives with shifting strategies requires shifting strategies for shifting the
culture of the firm.

Core-culture in relation to competitive advantage

Core-culture keeps the culture of the organization vibrant and resilient. Empirical research
shows that business success is related to the preservation and nurturing of a core ideology
(Collins and Porras, 1994). A culture that exhibits high cognitive-intelligence and high
emotional-intelligence would tend to preserve resilience and be able to better adapt to Culture vs
strategy implementation rigors. Cohesive cultures are quick to accept the strategic goals, strategy
work toward delivering the goals, generating a feeling of belonging, and perform better
(Beai et al., 2003). It would also be difficult to implement serendipitous strategies if the
culture is unsupportive.

Co-creation of culture 121

Culture can be co-created in an organization, by top-management, with full consent and
participation of the employees. Research has been conducted on co-creating brand identities
by combining managerial decision making with participation from customers in terms of
converging motivations (Kennedy and Guzman, 2016). Consumer participation in creating
superior value-added offerings has been in vogue for some time (Mustak et al., 2013).
The notion of combining firm value co-creation with customer value co-creation has been
espoused so that a firm can grapple with and identify the full range of opportunities that
may be available (Saarijarvi et al., 2013). Co-creation of value with the customer in supply
chain logistics in a B2B context has also been examined Rouquet et al. (2017). Is culture the
privileged basket of just the employees as it may have evolved since the founding of the
organization; or of the subculture, micro-culture, or silo-culture groups; or a power plank of
middle managers; or the clay and putty of the firm’s leadership? In the same way as value is
created by a firm and customers, culture can be co-created by the firm and employees. It can
easily be imagined that culture may and could have been co-created by the aegis of the
founding owners and the initial streams of new employees. But even so, the co-creation
ethos may have currently seized. The co-creation of culture becomes paramount when a firm
embarks on new or changed strategies and business models in order for their
implementation to succeed. Co-creation can be useful in mergers and acquisitions.
With co-creation the culture will be auto-aligned.

The need for strategic alignment

Strategic management involves strategy formulation, strategy implementation and strategy
evaluation and control. Strategic alignment is essential to fulfill the goals and objectives
in the long term. Strategic alignment involves the relating of strategy formulation and
planning, tactical execution and implementation and evaluation and control with
leadership and management, corporate resources and capabilities and organizational culture
and cultural-intelligence. In this direction, the McKinsey 7S model was widely used to study
Japanese management techniques in the 1980s and is a purposeful attempt of strategic
alignment ( Waterman et al., 1980; Peters and Waterman, 1982; Pascale and Altos, 1981). The
balanced scorecard is also a tool that suffices in aligning the strategic perspectives with strategic
activities ( Kaplan and Norton, 1992; Kaplan and Norton, 2006). Successful leadership requires
the ability to simultaneously create a culture that supports the leadership in its focus on
activities that are aligned to the corporate vision, mission and strategies (Moore et al., 2011).

Does strategy follow from culture or vice versa?

The question arises, how are strategy and culture related? Is their interrelationship direct or
indirect? Should strategy be aligned with culture or should culture be aligned with strategy?
Does strategy precede culture? Does this occur as a special case in a start-up? In an ongoing
concern, is the success of a corporation impacted more by strategy or culture? In the long
run, does strategy dictate the culture or does culture do it? Does strategy deliver a
market-centric customer-responsive organization or does culture?
Four possibilities arise. Figure 1 is indicative of strategy preceding culture while culture
is aligned to it. Figure 2 supposes that culture precedes strategy and strategy is aligned to it.
JSMA Figure 3 suggest that strategy ought to precede culture, yet culture must be aligned with it.
12,1 But the well-aligned culture, then, provides a fertile ground for evolving new strategies.
To begin with, Figure 4 proceeds as in Figure 3. But the new strategies demand that the
culture be realignment with it. Figure 4, therefore, represents the reality of the dynamics of
strategic decision making of any firm or organization with respect to its culture.
It is useful to test the conceptual propositions advanced in Figures 1–4 with respect to
122 known constructs and topologies. One classification of types of strategies used by firms is
as defender, prospectors, analyzer and reactor (Miles and Snow, 1978). A firm’s culture must
support one of these classes succinctly more than others for the strategies to succeed (Gupta
et al., 1997). This follows the depiction in Figure 1. Defenders primarily are centralized in
structure. Prospectors are decentralized. Analyzers operate with both a static and flexible
structure. Reactors do not leverage their organizational structure in any consistent pattern.
Strategies affect organizational structure which in turn influences the culture of a firm.
As shown in Figure 5, defender firms use strategies to consistently protect their position
in the market and sustain their growth pattern. Their strategies are mostly defensive in
nature. Prospector firms have the ability to innovate for rapid growth. Their strategies are
offensive in nature. The skills of analyzers are in maintaining their growth trajectory with
incremental innovation. They would tend to use intensive strategies. Reactor firms’
strategies are based on responses to changes in the market. Their strategy choices would

Figure 1.
Strategy precedes
culture; culture is to be
aligned with strategy Strategy Culture

Figure 2.
Culture precedes
strategy; strategy is to
be aligned with culture Culture Strategy

Figure 3.
Strategy precedes
culture; culture is
aligned with strategy;
culture promotes
new strategy Strategy Culture Strategy

Figure 4.
Strategy precedes
culture; culture is
aligned with strategy;
culture promotes new
strategy; culture is
realigned with strategy
Strategy Culture Strategy Culture
match appropriately the opportunities and threats perceived, and would tend to be either Culture vs
defensive, offensive or intensive with a measured resource compatible execution. strategy
Culture supports both short- and long-term performance (Kotter and Heskett, 1992).
Culture on-boards employees toward the firm’s goals and objectives (Deal and Kennedy,
1982). Culture was found to be crucial in implementing the firm’s objectives related to
supply chain (Mello and Stank, 2005). Culture also plays a critical role in mergers and
acquisitions (Balthazard et al., 2006). Culture supports adoption of new realities in an 123
organization from management to technology. Culture has been considered as
organizational capital (Barney, 1986). Culture has been a valuable asset for Starbucks’
business model and one that turned to a liability for Toyota after the accelerator problems
(Flamholtz and Randle, 2012).
Culture can be classified by the competing values framework (CVF) into four types as
hierarchy, clan, market and adhocracy (Cameron and Quinn, 1999). Hierarchy cultures
exhibit control and internal focus. Clan type is more flexible and empowered in comparison.
Market cultures are external looking and objective oriented against competitors. Adhocracy
cultures are external driven with a dimension of innovation. Thus, cultural patterns of firms
may be viewed as stable and predictable, empowered and participatory, productive and goal
oriented and flexible and innovative, respectively, as depicted in Figure 6. Also as shown in
Figure 5 earlier, in general, hierarchy culture would be supportive of defender strategies,

Prospector Defender
Innovates for rapid Protects with sustained
Growth growth
(Adhocracy and Clan Culture) (Hierarchy Culture)

Analyzer Reactor
Maintains with slow Reacts with adaptation to
innovation changes
(Hierarchy and Clan Culture) (Market Culture) Figure 5.
Classification of
types of strategies
used by firms
Source: Adapted from miles and snow topology

Flexible

Clan Adhocracy
Culture Culture
Empowered Flexible
and Participatory and Innovative
Internal External
Hierarchy Market
Culture Culture
Productivity
Stable
and Goal Oriented
Figure 6.
and Predictable
Classification of
Control culture according to
the competing values
Source: Adapted from Cameron and Quinn CVF framework (CVF)
model
JSMA adhocracy and clan culture would be especially suitable to prospector strategies,
12,1 both hierarchy and clan cultures would find synergy with analyzer strategies and a
market-culture would be ideal for reactor strategies. The strategy types pursued are
innately different and the culture that coexists within the firm is different or mixed.
In an empirical study with 217 respondents from manufacturing and service firms in
20 industries, the link between marketing strategy and organizational culture fit was found
124 to affect performance (Slater et al., 2011). It is also suggested that the four culture types,
shown in Figure 6, provide a set of behavioral norms that in each culture type are necessary
for the success of strategies (Slater et al., 2011). Furthermore, a study on Japanese
firms revealed that market culture results in better performance in the order
market Wadhocracy Wclan Whierarchy (Deshpande et al., 1993). It has been suggested
that strategy, structure, systems, capabilities and culture are responsible for high
performance (Galbraith and Kazanjian, 1986).
Behavior of managers down the hierarchy must help realize strategic business objectives
along the implementation path. This can be influenced positively or negatively by the firm’s
culture (Semler, 1997). Culture may be the vital link between strategy and outcomes (Vestal
et al., 1997). Culture is impactful on a firm’s ability to fulfill planned objectives (Schwartz and
Davis, 1981). Culture is one of several factors that play a role in strategy implementation
(Wu et al., 2004). Group and team culture is prevalent and useful in a manufacturing setup
(Bates et al., 1995). Culture is also a determinant of quality (Weber and Pliskin, 1996).
Hewlett-Packard has been known for quality. Its strategy for quality and innovation has
encouraged an innovation-culture. Emerson-Electric is inclined to compete with low-cost
strategy and accordingly has created a cost-cutting-culture. Apple’s strategy for competency
in technology and design has nurtured a design-thinking-culture. Start-up strategies have
fermented an entrepreneurial-culture in Silicon Valley that has led to rapid innovation.
The merger of Air India with Indian Airlines has been thwart with cultural issues that
have played a role in making Air India a financially defunct and bankrupt ridden airline for
several decades. The current culture of Air India is such that its leadership is incapable of
executing a retrenchment, divestiture or a turnaround strategy. Concurrent CEOs, to the
present, have been happy to run a bankrupt airline supported by tax-payers monies.
The Indian Government, as owner, has had no clue or desire to put a management team that
would have the capability to formulate a strategy that could put Air India on the path of
even a breakeven financial performance. Could or can the culture drive strategy in this case?
Or does strategy need to drive culture, tweak it, change it and then completely transform it.
Lately, the Indian Government seems to have decided to privatize the airline, under woes of
fiscal and election pressures. Corporate strategy must lead in this case, in line with Figure 1.
In 2006, Dell went through a retrenchment strategy which did not produce results.
In 2007, Michael Dell came out of retirement and changed the business model from direct
selling to selling at retail. Did the culture of Dell drive the strategy of change in the business
model or did the market conditions of stiff competition? Can shareholders of companies that
go bankrupt blame the culture and the employees or should they blame the strategies and
the executive and board management teams? Is the success of a single-person business
dependent on strategy or a single-person culture, that is, values system? Does the owner of
such a business draw upon culture, personal or business, to make the business successful or
on strategy? If not strategy, then, does cultural goodwill of business associates or customers
play a role in this success or does business goodwill?
Tata Motors, the flagship company of the Tata Group, has been losing market share in
India in the past four to five years and has currently posted a huge loss in 2016–2017, over
40 times the previous year. Certain corporate-level strategies are to be blamed, including
persistent leadership issues, which have apparently hampered employee morale and
motivation. The “spirit” at Tata Motors as Ratan Tata, Chairman Emeritus and previous CEO,
put it in a town-hall style employee meeting can come back. The culture suffers from lack of Culture vs
galvanic action around strategic decisions in this case, although culture can lead to lack strategy
of action in other cases.
The struggle between the founding influence and the running executive management is
best depicted by the events played out in the case of Infosys, the IT consulting firm in India.
The growth strategy being implemented by the new CEO ran aground due to a clash of
value systems between the ex-CEO of the founder group and the new board and executive 125
team. Culture forced a reconstitution of the top team, even though the company was
showing double digit growth compared to its two major competitors who were in single
digits. The new entrant CEO, one of the founder group, began the undoing of the strategies
that were put in place by the outsider CEO.
Lou Gerstner transformed IBM form a hardware manufacturing firm to a software
solutions company, leveraging its integrated knowledge base in the fragmenting
computer industry to rise as a software consulting services firm. It was paramount that
the culture supports and aligns with this new strategy. At Xerox, success brought about
complacency which may be attributed in large measure to its prevailing organizational
culture. The effects of “culture-inertia” have been visible in GM’s persistent immersion in
bureaucracy, Digital Equipment Corporation’s focus on technology against the changing
computer landscape, Mercedes’ long-time inability to serve segments other than the high
end and IBM’s frustration in taking the leap away from its “blue-chip” brand image to
reinventing itself.
When a firm’s executives engage in unethical decisions, to support unworkable
strategies aimed at growth, as was the case with Enron, culture pushes strategy into a
corner, marginalizes it; does not trump but tramples over strategy.
The culture in a previously high-performing international cricket association may need
to be looked at, not only because strategies and decision making may have failed,
precipitated by a ball tampering incident, but because the cause of the failure may have been
the culture of the organization.
A study of 32 Indian corporations from seven industries, namely IT, steel, banking,
pharmaceutical, telecom, construction and power found that companies in different
industries use different types of strategies and adopt their organizational culture
accordingly (Gupta, 2011). Defender strategies mostly used in the construction industry
were sustained with a clan culture, followed by hierarchy culture. Prospector strategies
mostly used in the telecom industry were supported by an adhocracy culture. Analyzer
strategies mostly used in the IT industry were braced with a clan culture, followed by
adhocracy culture. For corporations using reactor strategies no hypothesis was suggested,
but were predominantly using clan culture.
Strategy can result from culture (Saffold, 1988). Culture may put limits on strategic
options available to a firm (Schein, 2004). On the reverse, strategies can influence culture
( Joyce and Slocum, 1990). Nevertheless, to succeed strategy and culture must be aligned
(Gupta, 2011), (Bate, 1984; Lado and Wilson, 1994). The above arguments are in consonance
with Figure 3, which depicts that organizational culture is to be aligned with corporate or
organizational strategy formulation, with a further play on the aligned culture resulting in
fresh strategies for implementation and organizational success.

Exceptions to strategy’s precedence on culture

Government decision making, in some cases, may be an example for culture
preceding strategy. It is known that governments the world over legislate some
programs that either fail in their promise or do not benefit in totality the targeted population.
This is because of diverging and multiple vested stakes and stakeholders that may have a
cultural breeding and the misconception in governments that goals and objectives by
JSMA themselves constitute strategy. Governance does require sensitivity to the predominant
12,1 culture, norms and beliefs in a particular region or with respect to a particular ethnic group.
Culture may dictate a strategy in this context. Another context wherein culture may play
a central role is with respect to military establishments, its different branches having
evolved their own culture of operations and training. These situations follow the depiction in
Figure 2. Even so, combat strategies are not dictated by the culture of the armed forces but
126 by the intent to win. Culture must support the action required and desired in this instance.
Figure 1 is descriptive of this. It would be apt as a reminder to say that organizational
strategy as a concept had its origin in war strategies, not in militaristic culture.
A crisis situation demands a transitory change in strategy and decision-making
structure for which a strong leadership style and a flexible hierarchical culture were found
to be most suitable in its ability to match the strategy with operational response (Deverell
and Olsson, 2010). A democratic leadership style was able to change the decision-making
structure but unable to make this match satisfactorily (Deverell and Olsson, 2010).
A decentralized organization was unable to make proper strategic or structural changes and
fell short of effectively adapting to the crisis conditions (Deverell and Olsson, 2010). Once the
corporate-level strategic decision is made, subsequently culture leads strategy in the event
of a crisis, as in a firm attempting to turnaround to avoid bankruptcy and liquidation.
This is in match with Figure 3.

Strategy–culture fit
The Shewhart cycle or Deming cycle referred to as plan, do, check, act (PDCA cycle)
effectively is a corporate-level directed strategy for continuous improvement of products,
services and processes. The Shewhart (1939) cycle used a three-step process of
“specification, production, and inspection.” The Deming (1950) cycle used a four-step
process of “design, produce, sell, and redesign.” Both used manufacturing terminology.
The Japanese called it the Deming Wheel. Japanese executives replaced the Deming terms
with the PDCA terms (Imai, 1986). Firms engaging their strategy, beginning with strategy
formulation, to execute this model are effectively controlling and empowering their
corporate culture to build quality into their products and services. This is a strategic model,
as shown in Figure 7, which can be executed only with a changed culture that adopts a total
quality management approach in its organization. In this case, the plan as strategy precedes
culture. The cycle is perennial. Thus, the strategy–culture analysis efforts must be
persistently recurrent and perpetual so that as strategy precedes, culture is aligned and

Act Plan
Reconstitute Strategy
Strategies with Formulation
Plan Corrections

Check Do
Strategy Strategy
Evaluation Implementation
and Control
Figure 7.
The strategic
management process
for continuous quality
improvement Source: Adapted from the PDCA or
Shewhart–Deming cycle
when and wherein culture precedes strategy must be aligned, in the latter of the two stages Culture vs
of the three-stage strategic management process of formulation, implementation and strategy
evaluation and control. This follows the pathway suggested in Figure 4.
The Shewhart–Deming cycle is a good way to view the ultimate transformation of a
firm’s culture by the process of evolution, modification and synthesis based on a willful
corporate-level strategy to build superior quality. Behavior is the deliverance of culture,
governed and supported by progressive market-centric internal processes, procedures and 127
policies that can help positively generate strategy implementation outcomes. In the do
and check sequences of the PDCA cycle, corresponding to strategy implementation and
evaluation and control, culture has potency for influence and precedence. In the act sequence
of the PDCA cycle, culture can influence functional and operational strategic decision
making helping to build on the improvements achieved as the iterations proceed, or make
the gains ineffective or to fizzle.

Silo-culture
Subcultures are thriving pools of alternate cultures that co-exist in an organization. They
are referred to as “micro-cultures” with culture at the corporate level being “macro-culture”
and the culture leveraged network connections as “bridge-culture” (Coffman and Sorensen,
2013). What strategy presupposes, culture must dispose. People are the culture (Coffman
and Sorensen, 2013). People are the add-on to the mosaic that is culture, and where it
fundamentally resides. “People are the DNA carriers of culture; culture exists on its own”
(Reviewer, 2018). People are also where the strategic thinking resides. People, or leaders, can
bring their singular-culture to the fore in their strategy, whence it would be difficult to say
whether the strategic thinking was produced by the singular-culture or the singular-culture
is only one of the inputs to the strategic thinking. Nevertheless, a silo-culture is different
from the so-called subculture or the micro-culture. Subcultures and micro-cultures are
interactive. Manifested through people, they respond to, collude or even confront with the
macro-culture or with each other. Silo-cultures do neither. They seek their own disposition
and prefer isolation in competition with both. Their behavior is embedded in empowered
secret competition. To the extent that people behave, or are encouraged to behave, as
singular-silos for immediate- or short-term tactical benefits to the organization there is high
risk that strategic decisions may go astray, resulting in a miscalculation by the leader.
Sony fell behind in the consumer electronics business due to silo-cultures that got created by
corporate strategies for internal competition in research and development, which failed to
deliver timely innovation.
Positive subcultures, micro-cultures or silo-cultures are beneficial for strategy
implementation, where they can even be critical. In many cases, for example, Arthur
Andersen, Circuit City, Hostess, these businesses failed not on account of strategy but due to
their organizational cultures (Coffman and Sorensen, 2013). Culture is a synergetic lever to
strategy and strategic performance. It can magnify strategic outcomes and performance by
enabling strategy implementation. A superior culture infuses energy and, therefore, has the
onus of ownership by the team at all hierarchical levels. A well-aligned culture enables
execution actions during strategy implementation. Culture must be aligned to the business
imperatives (Coffman and Sorensen, 2013).

Installing and uninstalling culture

There are major instances when strategy must be given primacy over culture. These
situations occur when a firm’s culture needs to be installed anew or uninstalled in order to
reposition or to reinvent its competitive proposition in the market.
Culture in a firm manifests itself in three ways (Schein, 2010). The first dimension is
related to artifacts and visible behavior, the second explicit tangible values and the third
JSMA implicit behavior. Changing culture and decision-making processes is a difficult and
12,1 elaborate effort that requires many tools at the hands of the managers (Denning, 2011).
These tools are vision, mission and corporate-level strategies. Accordingly, the task of
change in culture must begin at the top (Atkinson, 2012).
Corporate-level strategies can install an innovation-culture, a competitive-driven
culture, a customer-oriented culture, a learning-culture or a suitable combination.
128 A learning-culture impinges on each of the first three of these culture constructs. Strategy
will precede culture in these orientations. An innovation-culture is product and technology
driven. The strategies are focused internally as well as externally. A competitive-driven
culture is pre-empted by the industry competitors. The strategies are focused externally.
The customer-oriented culture is market directed. The strategies are focused externally.
Strategies can install such cultures in a firm. These focuses tend to produce formulated
strategies that provide new and better offerings, more effective and better tactics and
higher satisfaction and better value in the market. Installed cultures are in-built and
supportive of corporate strategies. Evolved cultures may be obstructive to the changing
vision and mission of the firm, especially to the newly formulated strategies planned to
give the firm an impetus to be able to generate sustained superior profitability and
growth, or just to survive.
When there is a major change in strategic direction, the prevalent organizational culture
needs to be uninstalled. This is especially true in a firm undergoing a strategic turnaround.
Turnaround strategies cannot survive in a business-as-usual culture, whether it is
centralized, or not, hierarchical or not. The failure in implementing lean manufacturing has
been attributed to organizational culture (Worley and Doolen, 2006; Emiliani, 1998). Since
the lean process is driven by technology and behavior, it comprises a unique socio-technical
system that requires changes in the culture, which can be brought about only in strategic
steps (Mirdad and Eseonu, 2017).

Learning organization culture

A learning-culture can produce excellence in formulating distinctive strategies, in
implementation and in being effective in culture alignment. Learning, quality and teamwork
can develop through strategies (Ulrich, 1998). It provides a positive force against
competition (Sadri and Lees, 2001). Corporate culture is also found to be related to corporate
performance (Rashid et al., 2003). Furthermore, knowledge management strategies can
provide a firm with a competitive advantage (Schulz and Jobe, 2001). In fact, every aspect of
human capital must be aligned with corporate vision, mission and strategy, the culture it
precipitates and the human resource strategies it formulates (Surijah, 2016). Corporate
strategies gain pre-eminence over culture for continual learning to ensure adaptability in a
rapidly changing, that is, VUCA or volatile, uncertain, complex and ambiguous business
environment. A firm would also benefit from a learning-culture while developing and
executing functional-level strategies.

Strategy for environmental sustainability

Additionally, strategies to demonstrate environmental consciousness, as business prudence
necessitates, requires the firm to co-create a culture of sustainability in the organization.
A firm will be unable to create an eco-sustainability culture, by virtue of just its culture,
without strategic intent clearly delivered in its vision, mission and formulated strategies.
A mission can play a powerful role in clearly stating such a direction and setting up the
expectations for such action (Dermol, 2012). Strategies for environmental sustainability has
dual benefits for a firm which range from value to society to differentiation from
competitors (Castello and Lozano, 2009; Siegel, 2009).
National culture and business Culture vs
National culture is unique (Hofstede, 2001). Managing cross-cultural ethics has become strategy
challenging in the global business environment (Ma, 2010; Volkeman and Fleury, 2002).
Culture gives rise to ethics of standards of business (Lam and Shi, 2008). Thus, national
norms of business practices lead to strategies for business negotiations (Volkeman, 2004).
In this regard, culture precedes business negotiation strategy in many cultures. National
culture was found to be a determinant of creative advertising strategies, as defined and 129
associated with theories of global marketing strategy and global consumer culture, in a
comparative study of advertising in the USA and China ( Jiang and Wei, 2012). It has also
been ascertained that national culture affects organizational change strategies
( Janicijevic, 2014).

Unique culture proposition (UCP)

Firms can develop a UCP that can be a vital contributing factor to its strategically attained
distinctively established competitive advantage that is difficult for competitors to duplicate
by way of strategy implementation and strategy evaluation and control.
A firm’s culture can be linked to its effective performance, as confirmed in a product
marketing strategy research study with CEOs of 202 businesses in the US trucking
industry (Yarbrough et al., 2011). Firms, both in advanced and emerging markets, like
Google and Apple and Alibaba and Huawei, by virtue of their cultural adaptability and
flexibility to changing market conditions outperform other firms with rigid cultures.
Organic organizations, being less formal, complex and centralized, breed and exhibit such
adaptable cultures that can quickly respond to change (Burns and Stalker, 1961).
Customer responsiveness can be dramatically affected by the nature of the culture
nurtured in the organization. An adhocracy culture was found to be suitable for high-tech
industry in terms of performance related to customer responsiveness in an emerging
market setting, while at the same time a clan culture was found to result in better
performance in the low-tech industry, in a study conducted at 180 manufacturing firms in
a total of nine high-, moderate- and low-growth cities in China (Wei et al., 2014).
This suggests the need for a cultural fit to strategy in a changing marketing environment.
The market is never; otherwise, it is always dynamic.
Yet, another instance in which strategy must precede culture is safe working
conditions. Functional HRM strategies would play a role in achieving this. Appropriate
strategies are required to develop and sustain a culture of safety in a manufacturing
organization (Blair, 2013). Furthermore, there is evidence that a firm’s culture must be
allied with its corporate social responsibility (CSR) initiatives, as demonstrated in a study
involving a total of 115 top- and upper-level managers, and staff, of a firm in the lighting
industry in India (Rishi and Moghe, 2013). This alignment is possible with strategies
formulated to support and buffer both the culture and the CSR activities leading to
substantial benefits that can accrue to the firm. Empirically, business strategy was found
to correlate with organizational structure and other dimensions of the organization like
performance and job satisfaction, a survey-study conducted at top ten travel agencies
with 395 qualified owners, managers and employee respondents in the tourism industry in
China (Lin and Wu, 2013).
Culture can be looked as a valuable resource (Barney, 1986). A resource-based view can
allow for a sustained competitive advantage as explained in the VRIO framework (Barney,
1991). Thus, a firm can sustain itself with the help of a UCP. A UCP is strategic to a firm’s
long-term survival. It can be one additional differentiating element in a firm’s
distinctive competencies arising from the core that lead to a sustainable competitive
advantage. Needless to say, a firm must consciously indulge in corporate-level strategies
that create, nurture and put to full strategic tactical use its UCP.
JSMA Conclusions
12,1 The primary conclusion from this conceptual research is that, in general, strategy
precedes culture and culture must be aligned or is auto-aligned to it. This holds for
corporate-level strategy and strategy formulation. In specific exceptions, although culture
casts an influence, it does not necessarily precede strategy, at the corporate level. Thus,
functional- and operational-level strategic decision making may take cues from culture.
130 However, strategy can thrive on culture. Culture is not marginal in this respect.
In corporate-level strategy formulation, the culture-element is part of the values that are
embedded in the vision and its influence is through the guiding policy and principle for
specific realizable coherent action, accorded to the current business situation linked to an
intelligently formulated corporate-level strategy, but not by way of precedence. Strategy
can help create core competency and develop distinctive competency, while culture can
help refine distinctive competency.
Strategy implementation shows successful compilations when supported by a potent vibrant
culture, a firm’s UCP. A UCP can strategically be developed to be a part of the set of distinctive
competencies that arise from the core competencies of an organization and lead to a competitive
advantage. Whenever necessary, corporate-level strategy must be used to bring about a
strategy–culture fit. Thus, a UCP may be reciprocal to strategy in execution, if there is a fit.
Either can help to generate a competitive advantage. But it is the combined workings of strategy
and UCP that produce a sustained competitive advantage. This advents an SBM that is fully
supported by the firm’s UCP. When a competitive advantage is lost it is often times due to a
firm’s culture that failed to respond to the dynamics of competitive forces. When opportunities
go unpredicted or unrealized, it is often due to poor strategic insight or weak strategic thinking.
Culture evolves in an organization as in society. A one-person entrepreneurship has a
one-person-entrepreneurship-culture. If the owner survives in the market-culture with the
business proposition, a company begins to be founded, private or public. In order to survive,
the owner must formulate, execute and evaluate the outcomes of strategies. There is no
organizational culture to evaluate. As of yet, personal traits, values and ethics of the owner
play a role. These have genetic and environmental influences. To that extent, the social and
business culture in the society have some influence. They only influence the outcome not
determine it. As the business entity grows, by way of entrepreneurship success, a culture
gets created or co-created between the owners and the employees. The owner must initially
impose a desired culture based on personal traits, values and ethics combined with
influences of external environmental social and business factors. This imposition is a
strategy for survival. Strategy creates this culture, thus, in an upstart.
Later, the culture may be co-created. Co-creating culture results in belonging. This
co-creation or belonging is strategy for growth. When the business transits from small to
medium to large, the constituted culture becomes complex. The complexity devolves into
subcultures. These subcultures give birth to silos. Both the complexity and the silo-cultures
need to be managed. This management is a strategy for sustainability. Survival, growth and
sustainability of a business depend on strategy. These strategies have both an external and
an internal focus. These strategies are interrelated to the external and the internal
environment of the business. These strategies are proactive as well as reactive decisions
planned for and against forecasted serendipitous opportunities or threats in the market.
These strategies are also proactive as well as reactive decisions planned for and against the
potential for success or failure of the internally focused business strategies. The latter is
aimed against internal factors one of which is culture.
Since these internal factors have a bearing on business outcomes, they have a relationship
with them. And since the business outcomes have a relationship with the strategic decisions
planned, the internal factors have a relationship with strategies. And since culture is one such
internal factor, culture has a relationship with strategy. A culture that has a strong
relationship with strategy partners in strategy implementation. A culture that has a Culture vs
weak relationship with strategy largely partners in specific functional and operational strategy
strategy decision-making situations. A good strategy can fail due to poor implementation.
A not so good strategy can do well due to good implementation. Culture may play a major or
minor role in either or both scenarios. However, since culture does not create or co-create itself,
it is best if strategy precedes culture and culture follows strategy in alignment. Business
prudence suggests that culture should be elevated to match the strategies being deployed and 131
culture should be aligned to strategy through strategy. This then may define a true SBM,
which entails an invisible component as in culture that provides for the leverage that helps
create a competitive advantage that can be sustained.
Culture can be a stronger driving force for projected strategies at specific hierarchical levels
in certain types of organizations like government, military organizations and other for- or non-
profit organizations. The same is true during a turnaround crisis in a firm when the demand for
cultural alignment is critical under the umbrella of the freshly constituted corporate-level
strategies. The organizational culture may subsequently influence implementation, functional
and operational strategies, in transition, to actually harness the turnaround.
Organizational culture is fuzzy, difficult to perceive or gauge, measure or target
and, therefore, needs to be handled with “fuzzy logic.” The relativity of its presence and
consequential effects need to be understood in the approach to dealing with culture.
Silos are different from subcultures and “micro-cultures” in that they develop their own
UCP character, attitudes and behavioral norms.
Culture may be the super “glue” that binds the organizational constructs of structure,
valuable resources and valuable capabilities and policy, but if the silos are not
accommodating, and deny a sense and feeling of belonging, the constructs may turn out to
be ineffective and unable to deliver the strategic intent, goals and objectives as defined and
projected in the vision and targeted by the mission.
A wrong strategic decision can run the culture thin. Managers can lose their motivation.
The decision may be related to hiring a new CEO, ignoring environment sustainability,
ethics in business dealings or lack or dampening of internal hierarchical upward mobility.
The culture will not be able to reinvent or reconstitute itself. It will take a new freshly
conceived strategy to shake things up and invigorate the disenchanted or dampened
cultural pulse. The energy and vibrancy of action, activities and networked workflows is the
true manifestation of culture. That in disarray, the firm will lose out to competition. And the
stats will show. The bottom line will speak.
When failure looms, or is persistently consistent, the culture of the organization must be
addressed. When culture changes on its own, it chances to deteriorate or degrade or weaken
relative to that of competition. Culture cannot pick itself up and run on its own toward
high performance and achievement since it does not have a physical manifestation.
A strategy is required.

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Corresponding author
Amarjeev Kaul can be contacted at: amarjeevk@gmail.com

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