Behavioural

Implementation of
Strategy

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

 Two major actions
 Creating a strategy supportive organizational culture.
 Strategic leadership- leading the change

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 Organizational culture is a system of shared
assumptions, values, and beliefs, which governs how
people behave in organizations. These shared values
have a strong influence on the people in the
organization and dictate how they dress, act, and
perform their jobs. Every organization develops and
maintains a unique culture, which provides guidelines
and boundaries for the behavior of the members of
the organization.

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 The Defining Characteristics
of a Company’s Culture
 Its core values, beliefs, and business principles

 Patterns of “how we do things around here”—its style of

operating and ingrained behaviors of company personnel
 Oft-told stories illustrating company’s values

 Its approach to people management

 Ethical standards

 Internal politics

 Traditions
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 Seven Characteristics of Organizational Culture

(Source: Adapted from information in O’Reilly, C. A.,

III, Chatman, J. A., & Caldwell, D. F. (1991). People
and organizational culture: A profile comparison
approach to assessing person-organization fit.
Academy of Management Journal, 34, 487–516.)

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 1. Innovation (Risk Orientation) - Companies with cultures that
place a high value on innovation encourage their employees
to take risks and innovate in the performance of their jobs.
Companies with cultures that place a low value on innovation
expect their employees to do their jobs the same way that
they have been trained to do them, without looking for ways to
improve their performance.

2. Attention to Detail (Precision Orientation) - This

characteristic of organizational culture dictates the degree to
which employees are expected to be accurate in their work. A
culture that places a high value on attention to detail expects
their employees to perform their work with precision. A culture
that places a low value on this characteristic does not.1
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 3. Emphasis on Outcome (Achievement Orientation) -
Companies that focus on results, but not on how the results are
achieved, place a high emphasis on this value of organizational
culture. A company that instructs its sales force to do whatever
it takes to get sales orders has a culture that places a high value
on the emphasis on outcome characteristic.

4. Emphasis on People (Fairness Orientation) - Companies that

place a high value on this characteristic of organizational culture
place a great deal of importance on how their decisions will
affect the people in their organizations. For these companies, it
is important to treat their employees with respect and dignity.

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 5. Teamwork (Collaboration Orientation) - Companies that
organize work activities around teams instead of individuals
place a high value on this characteristic of organizational
culture. People who work for these types of companies tend to
have a positive relationship with their coworkers and
managers.

6. Aggressiveness (Competitive Orientation) - This

characteristic of organizational culture dictates whether group
members are expected to be assertive or easygoing when
dealing with companies they compete with in the marketplace.
Companies with an aggressive culture place a high value on
competitiveness and outperforming the competition at all costs.

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 7. Stability (Rule Orientation) - A company whose culture
places a high value on stability are rule-oriented, predictable,
and bureaucratic in nature. These types of companies typically
provide consistent and predictable levels of output and operate
best in non-changing market conditions.

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 Culture: Ally or Obstacle
to Strategy Execution?
 A company’s culture can contribute to – or hinder –
successful strategy execution
 A culture that promotes attitudes and
behaviors that are well-suited to
first-rate strategy execution is a
valuable ally in the strategy
execution process
 A culture that embraces attitudes and
behaviors which impede good
strategy execution is a huge obstacle
to be overcome
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 Why Culture Matters: Benefits
of a Tight Culture-Strategy Fit
 A culture that encourages actions and behaviors
supportive of good strategy execution
 Provides employees with clear guidance regarding what
behaviors and results constitute good job performance
 Creates significant peer pressure among coworkers to
conform to culturally acceptable norms
 A culture imbedded with values and behaviors
that facilitate strategy execution promotes
strong employee commitment to the company’s
 Vision
 Performance targets
 Strategy
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 Features of the Corporate
Culture at Wal-Mart
 Dedication to customer satisfaction
 Zealous pursuit of low costs
 Frugal operating practices
 Strong work ethic
 Ritualistic Saturday morning meetings
 Executive commitment to
 Visit stores
 Listen to customers
 Solicit employees’ suggestions
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 Features of the Corporate
Culture at General Electric
 Hard-driving, results-oriented atmosphere prevails
 All businesses are held to a standard
of being #1 or #2 in their industries as
well as achieving good business results
 Cross-business sharing of ideas, best practices, and
learning
 Reliance on “workout sessions” to identify, debate, and
resolve “burning issues”
 Commitment to Six Sigma Quality

 Globalization of the company

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 What to Look for in
Identifying Corporate Culture
A company’s culture is manifested in . . .
 Values, beliefs, and business principles
management preaches and practices
 Official policies and procedures
 Its revered traditions and oft-repeated stories
 Attitudes and behaviors of employees
 Peer pressures that exist to display core values
 Its politics
 Approaches to people management and problem solving
 Its relationships with external stakeholders
 “Chemistry” and “personality” permeating work environment
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 Edgar Schein : categories of Organizational Culture
(Edgar Schein is Sloan Professor of Management Emeritus
at the Sloan School of Management at the MIT)

According to Schein, there are 4 categories of culture :

1.Macro cultures (nations that exists globally)
2.Organizational Cultures
3.Subcultures (groups within organizations)
4.Micro cultures (microsystems with or within
organizations/groups).

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 Schein’s levels of culture
Schein identifies 3 levels of culture:
1. artifacts (visible)
2.espoused beliefs and values (may appear through
surveys) and 
3.basic underlying assumptions (unconscious taken for
granted beliefs and values: these are not visible).

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 Where Does Corporate
Culture Come From?
 Founder or early leader
 Influential individual or work group
 Policies, vision, or strategies
 Traditions, supervisory practices,
employee attitudes
 The peer pressures that exist
 Organizational politics
 Relationships with stakeholders
 Company’s approach to people management
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 How Is a Company’s
Culture Perpetuated?
 Selecting new employees who will “fit” in

 Systematic indoctrination of new employees

 Senior management efforts to reinforce core values,

beliefs, principles, key operating practices
 Story-telling of company legends

 Ceremonies honoring employees

who display cultural ideals
 Visibly rewarding those
who follow cultural norms
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 Forces and Factors
Causing Culture to Evolve
 New challenges in marketplace
 Revolutionary technologies
 Shifting internal conditions
 Internal crisis
 Turnover of top executives
 Arrival of a new CEO
 Diversification into new businesses
 Expansion into foreign countries
 Rapid growth involving adding new employees
 Merger with or acquisition of another company
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 Charles Handy Model of Organization Culture
(Charles Handy born in 1932 in Ireland is a well-known
philosopher who has specialized in organization
culture.)

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 Every organization has certain values and follows some policies
and guidelines which differentiate it from others. The principles
and beliefs of any organization form its culture. The organization
culture decides the way employees interact amongst themselves
as well as external parties. No two organizations can have the
same culture and it is essential for the employees to adjust well
in their organization’s culture to enjoy their work and stay stress-
free.

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 According to Charles Handy’s model, there are four types
of culture which the organizations follow:

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 Power Culture
There are some organizations where the power remains in the
hands of only few people and only they are authorized to take
decisions. They are the ones who enjoy special privileges at the
workplace. They are the most important people at the workplace
and are the major decision makers. These individuals further
delegate responsibilities to the other employees. In such a culture
the subordinates have no option but to strictly follow their
superior’s instructions. The employees do not have the liberty to
express their views or share their ideas on an open forum and have
to follow what their superior says. The managers in such a type of
culture sometimes can be partial to someone or the other leading to
major unrest among others.
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13-26 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
 Role culture
Role culture is a culture where every employee is delegated roles and
responsibilities according to his specialization, educational qualification and interest
to extract the best out of him. In such a culture employees decide what best they
can do and willingly accept the challenge. Every individual is accountable for
something or the other and has to take ownership of the work assigned to him.
Power comes with responsibility in such a work culture. Organisations with a role
culture are based on rules. They are highly controlled, with everyone in the
organisation knowing what their roles and responsibilities are. Power in a role
culture is determined by a person's position (role) in the organisational structure.
Role cultures are built on detailed organisational structures which are typically tall
(not flat) with a long chain of command. A consequence is that decision-making in
role cultures can often be painfully-slow and the organisation is less likely to take
risks. In short, organisations with role cultures tend to be very bureaucratic.

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 Task Culture
Organizations where teams are formed to achieve the targets or solve
critical problems follow the task culture. In such organizations individuals
with common interests and specializations come together to form a team.
There are generally four to five members in each team. In such a culture
every team member has to contribute equally and accomplish tasks in the
most innovative way. The task is the important thing, so power within the
team will often shift depending on the mix of the team members and the
status of the problem or project.
Whether the task culture proves effective will largely be determined by
the team dynamic. With the right mix of skills, personalities and
leadership, working in teams can be incredibly productive and creative

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13-30 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.
 Person Culture
There are certain organizations where the employees feel that they are more
important than their organization. Such organizations follow a culture known
as person culture. In a person culture, individuals are more concerned about
their own self rather than the organization. The organization in such a culture
takes a back seat and eventually suffers. Employees just come to the office
for the sake of money and never get attached to it. They are seldom loyal
towards the management and never decide in favour of the organization. One
should always remember that organization comes first and everything else
later.
In organisations with person cultures, individuals very much see themselves
as unique and superior to the organisation. The organisation simply exists in
order for people to work. An organisation with a person culture is really just a
collection of individuals who happen to be working for the same organisation.

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 Changing
a Problem Culture

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 Menu of Culture-
Changing Actions
 Make a compelling case why a new cultural atmosphere
is in best interests of both company and employees
 Challenge status quo
 Create events where employees
must listen to angry key stakeholders

 Continuously repeat messages of why

cultural change is good for stakeholders
 Visibly praise and reward people
who display new cultural norms
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 Menu of Culture-
Changing Actions (continued)
 Alter incentive compensation to
reward desired cultural behavior

 Hire new managers and employees who have

desired cultural traits and can serve as role models

 Replace key executives strongly

associated with old culture

 Revise policies and procedures

to help drive cultural change

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 Symbolic Culture-
Changing Actions
 Emphasize frugality

 Eliminate executive perks

 Require executives to spend

time talking with customers
 Ceremonial events to praise people and
teams who “get with the program”
 Alter practices identified as cultural hindrances

 Visible awards to honor heroes

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 Substantive Culture-
Changing Actions
 Engineer quick successes to highlight
benefits of proposed cultural changes
 Bring in new blood, replacing
traditional managers
 Change dysfunctional policies
 Change reward structure
 Reallocate budget, downsizing and upsizing
 Reinforce culture through both word and deed
 Enlist support of cultural norms from frontline
supervisors and employee opinion leaders
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