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Corporate Culture and Strategy
Organisational culture in an organisation’s personality. It is the way of thinking and doing things in it which is shared by most or all of its members and which must be learned by new members if they are to survive and progress in the organisation.
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Org Culture ctd Thus organisational culture 1) Is learned 2)Is shared
3)Is transmitted It is cultivated by management, learned by employees and passed on to new employees.
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Org Culture ctd Organisational culture spells:
1) How people behave with each other. 2) How people treat customers. 3) How people view their relationship with stakeholders 4) People’s reponse to energy use, community involvement, absence, work etc 5) Attitude towards employee training, professional development etc
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Org Culture ctd Where a well developed organisational culture exists, there is much less distinction between formal and informal norms, activities, sentiments and interactions. However not all organisations have a single strong culture. Others have several strong differing subcultures leading to political power struggles.
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Org Culture Organisational culture may be driven by:
Vision – Where the organisation wants to go in the future. Mission statement – summary of the beliefs of the organisation and where it is now. Organisational culture may be reflected in the 1) Attitude and behaviour of the leadership
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Org Culture 2) Attitude to the role of individuals in the workplace eg open plan offices 3) Logo of the organisation 4)The image it presents to the outside world 5)Its attitude to change
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Corporate Culture and Strategy
Getting corporate culture right is important, which is why organisations invest heavily in shaping their cultures and influencing the behaviours of their workforces. Organisations need to create cultures aligned with their business strategy. There must be a right mix of strategy and culture in order to have business success.
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Corporate Culture and Strategy
For example:1) Pursuing a strategy of Differentiation in a dynamic market. 2) Pursuing a strategy of high volume, low cost processes.
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Corporate Culture and Strategy
Culture may fail to shift with strategy resulting in a culture lag. Performance risk arises. Given that cultures cannot change immediately, keeping cultures aligned with strategy is a significant challenge due to the constantly changing dynamics of markets.
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Corporate Culture and Strategy
Cultures must be adjusted to help realise new strategies. The triggers that make strategic change and therefore cultural change necessary can be external or internal. External- price controls, competition, change of consumer needs etc Internal – Mergers, new product development, new market entries etc
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The Evolution of Strategic Management
The word strategy has its origin in the army. Strategy comes from the greek verb stratego, which means to “plan the destruction of one’s enemies through effective use of resources”. The need for a concept of strategy related to business became greater after world war II as business moved from a relatively stable environment into a more rapidly changing and competitive environment.
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Evolution ctd Ansoff has attributed this change in the environment to two significant factors: The marked acceleration in the rate of change within firms. The accelerated application of science and technology to the process of management. Modern writers to relate the concept of strategy to business were Von Neumann and Morgenstern.
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Evolution ctd The evolution of strategic management is believed to be in four stages which are: 1)Financial Planning 2) Forecast Based Planning 3)Externally oriented Planning and 4) Strategic Management
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Evolution ctd Financial Planning This is the most basic stage.
It is the process of setting annual budgets and using them to monitor progress. Forecast Based Planning Similar to the above stage but it covers a longer period. As financila planners extend their time horizons beyond the current year, they often cross into forecast based planning.
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Evolution ctd Externally Oriented Planning
It derives many of its advantages from more thorough and creative analysis of market trends, customers and the competition.
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Evolution ctd Strategic Management
This is a systematic, company-wide embodiment of externally oriented planning. It appears not possible to skip a step in the process because at each phase a company adopts attitudes and gains capabilities needed in the phase to come.
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