Chapter 5: Culture and history
The Chapter 2, 3 and 4 have considered the important influences of the environment, internal capabilities and stakeholder expectations on the development of an organization’s strategic. However, it is danger that mangers only take into account relatively recent phenomena without understanding how those phenomena have come about or how the past influences current and future strategy. Many well-established organizations such as Mitsui Group are strongly influenced by their historical legacies that have become embedded in their cultures (JSW, 2008).
The business environment cannot be understood without considering how it has developed over time. The ...view middle of the document...
Figure 5.1. Culture in four layers (JSW, pg194)
Values may be easy to identify in an organization and are often written down as statements about an organization’s mission, objectives or strategies.
Beliefs are more specific but again they can typically be discerned in how people talk about issues that organization faces.
Behaviors are the day-to-day in which an organization operates and can be seen by people both inside and outside the organization. this includes the work routines, how the organization is structured and controlled and ‘softer’ issues around symbolic behaviors.
iv. Taken-for-granted assumptions (paradigm)
Taken-for-granted assumptions are the core of an organization culture. They are the aspects of organizational life which people find difficult to identify and explain. They are referred to as the organization paradigm, a set of assumptions held relatively in common and taken for granted in an organization. For an organization to operate effectively there is bound to be such a generally accepted set of assumptions. The paradigm can underpin successful strategies by providing a basis of common understanding in an organization, but can also be a major problem when major strategic change is needed.
The taken-for-granted nature of culture is what makes it centrally important in relation to strategy and the management of strategy. In fact, culture is an unintended drive of strategy. Lorsch found that managers in successful companies are emotionally committed to the firm’s culture, but he concluded that culture can inhibit strategic management in two basic ways. (1) managers frequently miss the significance of changing external conditions because they are blinded by strongly held beliefs. (2) when a particular culture has been effective in the past, the natural response is to stick with it in the future, even during times of major strategic change. Often, managers or employees know intellectually that they need to change, indeed know technologically how change but they still find themselves constrained by path-dependent organizational routines and assumptions or political processes. This often happens, for example, when there are attempts to change highly bureaucratic organizations to be a customer oriented. Even if people who accept intellectually the need to change a culture’s emphasis on the importance of conforming to established rules, routines and reporting relationships, they do not readily do so. The Figure 5.2 shows how the culture’s influence on strategy development.
Figure 5.2. Culture’s influence on strategy development (JSW, pg 196)
2. Historical influences
Historical, path-dependent processes play a significant part in the success or failure of an organization and need to be understood by managers. There are some reasons why understanding history can help...