Culture can be defined as a set of values and beliefs that are shared within a particular group. What individual managers believe in and value will influence their decisions.
There can be many kinds of cultural influences: geographical, sectoral or organisational.
Geographically-based cultures
Across different geographical locations we can distinguish different behaviours towards authority, power, work and equality. Famous researcher Hofstede suggests that many Asian countries are found to have high power distance, for example. Where Australia, lower power-distance thus tend to be more democratic in style.
Additionally, some cultures are highly individualistic - USA or differ to the extend to which people look at the future. Hofstede suggests that many Asian cultures tend to be long-term oriented, where North American and African cultures are supposedly short term.
Different cultures also have different approach to the tolerance of uncertainty and ambiguity.
However, Hofstede research was criticised for stereotyping, but in the context of business strategy it is important to remember that not everyone will have the same tolerance towards uncertainty, use of authority to make final decision or projecting far into a long-term future.
Different cultures, however, can greatly influence how people work and interact within a professional environment. Culture can affect work through different communication styles. Some cultures value direct communication, where issues are addressed straightforwardly, while others may prefer more indirect, subtle approach to avoid confrontation. In some cultures, there is a strong respect for hierarchy and people in position of authority. In contract, other cultures value more egalitarian approach, where everyones input is considered equally.
Western cultures often emphasise individual achievement and autonomy, while Eastern cultures tend to value the group over the individuals. This can influence team dynamics and decision-making processes. In some cultures, business is strictly about the task at hand and personal relationships are secondary. In others, building strong relationships is considered an integral part of doing business.
Cultures can also vary in their approach to time. Some cultures are more 'monochromic' viewing time linearly and prioritising punctuality and schedules. Others are 'polychronic', where multiple tasks are handled simultaneously, and relationships and interactions can take precedence over strict adherence to schedules.
Organisational fields
An organisational field is a community of organisations that interact more frequently with one another. Fields can extend beyond the firms and include professional bodies, researches or specialists. They involve in shared assumptions and beliefs about how the field works. The field cultural coherence may be visible for example in justice, accounting, medicine, software development of journalism.
It can be visible, for example, through how the communities categorise themselves. They also tend to cohere around standard ways of doing things. It works as a recipe of 'share wisdom' on what works best. Legitimacy is then seen as meeting these norms and expectations in terms of behaviours, assumptions and strategies. Therefore, often organisations tend to mimic each other's strategies as they are limited to the bound of legitimacy. They tend to follow similar strategies, employ similar people and promote similar products.
Organisational field culture refers to shared social and cultural norms, beliefs and values operating in the same domain or industry. These norms and values often arise from common practices, industry standards, regulations, and shared challenges and opportunities. Organisations within the same field often develop common understandings about what actions are appropriate or valuable. This could be due to similar goals, challenges or resources. For instance, organisations in a healthcare field may all emphasise patient safety and compliance with health regulations.
Laws, regulations and standards can shape field culture by setting common rules and expectations. In highly regulated industries like finance or pharmaceuticals, the field culture may be heavily influenced by compliance and risk management. Organisations within the same field can develop a sense of collective identity, influenced by common mission, goals and challenges. This can foster collaboration and information sharing, but also competition.
Field culture can shape the behaviours and strategies of individual organisations. For example, a start-up entering a well-established field may adopt certain practices or norms that gain legitimacy.
Understanding organisations field culture can help a company to navigate within the industry, make strategic decisions and identify opportunities for innovation or differentiation. However it is important for organisations to also consider their unique circumstances and values and not only conform to field culture uncritically.
For example, working within the UV industry we can identify some aspects based on the nature of the industry. These include safety and compliance, for example. Given that UV emits radiation that can be harmful if improperly used, a significant focused is based on safety standards and compliance. UV is also used in variety of applications, from water purification to medical sterilisation and indoor gardening. Therefore innovation and technology is likely valued as well as the continual improvement of product efficacy and effectiveness. With the increasing global emphasis on environmental sustainability, companies in the UV industry might prioritise eco-friendly alternatives, energy efficacy and responsible disposal methods. Given the critical applications of UV in many sectors, the industry also value product quality, reliability and durability. Because the technology and applications may not be widely understood, companies may place significant emphasis on customer education and clear communication about product usage and safety.
Organisational culture
Organisational culture is often characterised by "the ways we do things around here" that accumulate over time. It is conceived around values, beliefs, behaviours and assumptions.
Values are often explicit and generally stated by an organisation, however often the values that drive strategy may be different from formal statements, therefore often these are taken for granted. Beliefs are, however, more specific and can be shown by how people talk about issues the organisation faces. Behaviours are seen through day-to-day actions of the people, including on how the organisation is structured.
There are often also subcultures in organisations, for example different field groups such as finance, marketing and operations. For strategic management it is important to recognise these different divisions as managers may bring the different assumptions to the decisions. Managers often ty to manipulate the organisational identity because it is important for recruitment and guiding and engaging of employees. It shapes on how they interact with customers and adhere to regulations.
Culture influence on strategy
Many believe that culture should be the source of competitive advantage and something that can be adjusted. Culture is the stimulus for action, such as reducing costs, improve efficacy and control the ways things are done. Changes in strategy would require a fundamental change to organisational culture.
It is important, therefore to analyse existing business culture. A cultural web can be used to understand existing business culture.
The Paradigm is at the core of the web. It is the set of assumptions held in common and taken for granted in the organisation. For example a common problem in technology and engineering is the focus on technical excellence rather then consumer-perceived needs. It is unlikely to be talked about and outside observers may find it easier to identify by listening to what people say. Rituals and routines lubricate the day-to-day operations and provide basis for distinctive business capabilities. Often in engineering industry, there are assumptions and people tend to tell customers what they need rather what customer says they need. Training programs, procedures and promotions indicate what is important to the organisations. Additionally, the stories that people tell about business history, but it also flag up important personalities. Symbols also maintain identify, often associated with status and hierarchy. Power relates to the ability to persuade, induce or coerce. Structures, roles and responsibilities also reflect the reporting relationships. Control systems also indicate what is important for the organisation. They includes measurements and reward systems.
There are certain questions that can be asked for analysing organisational culture using cultural web.
We need, however add the statements of cultural values developed. Organisations may often make the statements published online. However, there is a risk that these can be highly misleading. Often it does not suggests that there is an organisational deception, but should be treated as aspirations of a particular stakeholder rather then the organisation as a whole.
The information pulled from the culture web and statements can be reach in information that characterise the business culture. This may help to drive the business strategy. If we are to change the strategy, we need to be able to challenge and question current practices that can inform wide aspects of strategic management.
This includes informing the business strategic capabilities, strategy development, management of change, leadership style and future culture.
Business capabilities shall be derived from the culture of the organisation, especially in terms of routines and the control systems. It provides the basis for management of strategic change.
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