Culture School (Strategy) - Explained
What is the Culture School of Strategy?
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What is the Cultural School of Strategy?
The Culture School of strategy focuses on the collective benefit to all stakeholders - rather than individual benefit. Strategy formation is based on social culture shaped by individuals. Culture is ubiquitous but unique such that it affects everything related to the organization.
Back to: STRATEGY & PLANNING
What are the Premises of the Cultural School of Strategy?
In general, the premises of the Culture School suggest that:
- Strategy formation is a process of social interaction based on the belief and perceptions shared by the members of an organization
- Individuals acquire such beliefs through a process of socialization that commonly is tacit and non-verbal, and sometimes is directly influenced by doctrines.
- The members of the organization are able to only describe part of the belief shaping their culture
- Therefore, strategies take the form of perspectives rather than of positions. The perspectives are rooted in the collective purpose and reflected in the way resources and capabilities are protected or used for competitive advantage. Strategy here is always deliberate, even not being fully conscious
- Culture – and particularly ideology – does not encourage strategic change, but the continuation of existing strategies. In the best of scenarios, culture will promote a shift of positions within the organization‘s overall strategic perspective.
Culture can influence the organization‘s style of thinking and analyzing things; hence, culture influences the decision-making style.
When a new strategy is formed, old culture must be be totally replaced. As, culture can resist change.
When Can Organizational Change Take Place?
Bjorkman (1989) suggests that such a change occurs in just four phases:
- Strategic drift - A gap between organizations principles and the environmental characteristics.
- Braking-down of the current culture - Firm culture cannot match external changes.
- Trial and re-formulation - Embedded beliefs begin to change. There is experimentation and a view for positive results.
- Stabilization - Positive feedback on strategic implementations leads to acceptance and commitment.
How to Recognize Strategically Valuable Resources?
An analysis of four basic criteria can determine whether resources have strategic value:
- Valuability: a resource must be valuable to be strategic since it must increase the efficiency and effectiveness of the firm
- Rarity: a resource is strategic if it is rare and in high demand
- Inimitability: a resource not only should be valuable, rare, and in demand, but also difficult to imitate (it takes to much money, time and effort to replicate)
- Substitutability: a resource may be rare and imitable, but with no strategic value if competitors can find a substitute for it.
Then, culture can be considered as a key resource since:
- Culture encourages the production of unique results, and
- Culture is ambiguous and therefore difficult to understand and imitate
- How Strategies Arise
- Intended, Deliberate, Realized, and Emergent Strategies
- Management and Strategic Planning
- Mintzberg's Schools of Strategic Development
- Design School
- Planning School
- Positioning School
- Entrepreneurial School
- Cognitive School
- Learning School
- Power School
- Culture School
- Environmental School
- Configuration School
- Mintzberg's 5Ps of Strategy
- McKinseys 7s Model
- ***Industry Analysis to Build a Strategy***
- Strategic Analysis
- SWOT Analysis
- SPACE Analysis
- Situational Analysis - 7C
- Competition Profile Matrix
- Stakeholder Analysis
- Stakeholder Mapping
- Resources and Capabilities
- Core Competency
- VRIO Analysis
- Value Chain Analysis
- Internal Factor Analysis
- Value Creation Index
- Minimum Efficient Scale
- PEST(LE) Analysis
- Industry Lifecycle Analysis
- Company Lifecycle - Definition
- Porter's Five Forces
- Modes of Management
- External Factor Evaluation
- Business Performance Measurement
- Balanced Scorecard
- Economic Value Added
- Activity-Based Management
- Quality Management
- Action Profit Linkage Model
- Business Activity Monitoring
- Gap Analysis
- Strategy Diamond
- BCG Growth-Share Matrix
- GE McKinsey Matrix
- Value Reporting Framework
- Pyrrhic Victory