Role of organizational culture in strategy implementation

Abstract

Strategy is creation of a unique and valuable position involving different set of activities – Michael Porter. Strategy plays a critical role in leveraging the resources and capabilities of an organization to be a market leader in today’s dynamic environment. Strategy is often the difference between mediocrity and excellence. Strategic management involves analyzing the mission, objectives, internal and external factors, identification of apt strategy and its effective implementation. How can firms implement the strategy adopted in an effective manner? Organization culture is the key towards successful implementation of strategy. Organizational culture is a system of shared assumptions, values, beliefs, norms and attitudes. These collective cognitive structures shared by the people of an organization guide people’s behavior and define the way things work in an organization. Culture has strong influence on interactions, decisions and actions undertaken in an organization. Strategy-Culture should go hand in hand to steer the organization towards achieving the set goals. Strategy-Culture are often intertwined for any incompatibility could hinder the growth of organization. Even an excellent strategy can fail if it’s not aligned with culture. We see many mergers and acquisitions often fail due to lack of this coherence. Culture and Strategy should be suitably modified and aligned based on the contextual demand. Strategy formulation should always be analyzed in light of the culture of organization. Cultural analysis helps to understand the context and validate the underlying assumptions and values; only then the strategic management can be fruitful. Strategy and Culture has significant influence on one another. Strong culture can define what the strategy should be and good strategy can foster suitable culture. Thus strategy and culture of an organization are dependent on each other and alignment of these two components define how organizations perform in today’s competitive business arena.