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What Is the Relationship between Organizational Culture and Strategy?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 30 October 2016
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Organizational culture and strategy are linked because organizational strategy can be devised by studying the organizational culture in place. In other words, organizational strategy is influenced by the culture set in the organization. The culture of any company is simply the established pattern of doing things. A company's culture is what determines the attitude and the behavior of any employee in a given situation.

The culture is the company’s definition of its essence. For instance, one facet of corporate culture is the attitude of the employees toward the corporate motto. If a pizza restaurant prizes itself on free delivery of certain items within 30 minutes of ordering within a specific location, it will instill the absolute importance of this in its employees. This may be seen in the franctic manner in which the employees — starting from those who receive the order, then those who prepare the pizza and the pizza delivery person — rush to meet the 30-minute target. This is simply a corporate culture that can be leveraged to strategically position the pizza company to greater prominence amongst its competitors.

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A very sound corporate culture can often be translated to an effective corporate strategy. A company with a weak to nonexistent culture is bound to either meander along or to be stifled by competitors with a dominant culture. In contrast, a company with an established culture often chooses its employees based on the fact that they share the same values, making them a cohesive entity. This link between organizational culture and strategy can be seen in a top financial management company with a strong corporate culture of hiring young, energetic, brilliant committed employees who help drive the company to succeed. These employees are often the top graduates of the most prestigious business schools. As such, the company’s culture and strategy are intertwined; the culture is a young, forward-thinking, result-oriented workforce, and part of the strategy is to recruit the best business graduates from the best schools.

Organizational culture and strategy are often part of the major contributing factors to how far a business will go. They also determine whether a business will last the distance. In a competitive market, an organization shapes its corporate structure in such a manner as to enable it come up with the best competitive strategy. As such, if the company has a culture of strong work ethics, this can lead to increase in productivity that can be leveraged to a corporate strategy. For example, if there are two fast food restaurants in a vicinity, one of them might close by nine in the evening, while the other prides itself on staying open until midnight. This is both an organizational culture and strategy.

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candyquilt
Post 3

@burcinc-- Sometimes strategy is set first and structure follows strategy. It's normal for strategy and culture to go together, they are both decided on by the founders/administrators/share holders of the organization.

burcinc
Post 2

@turquoise-- I think that has to do with organization structure as well. The structure of an organization can determine its culture and strategies.

In bureaucratic structures for example, there are many levels and the highest levels are usually inaccessible for lower level employees. Everyone receives directions from those who are one level higher. It's a very rigid structure and there is almost always an issue with information flow.

I think this has a lot to do with the culture and strategies of bureaucracies. Bureaucracies are formal and rely on order and respect. The strategy is to complete tasks and projects by giving orders and controlling who has access to information. This is reflected in their culture.

turquoise
Post 1

I think that an organization will only be successful and efficient when its culture and strategy matches.

Some organizations make certain claims about their values and goals but they don't reflect that in the way they do things from day to day. For example, let's say an organization claims that it's strategy is to encourage employees to share information and work together to complete projects. If the organization's administrators show favoritism and treat employees unequally, this means that it's values and it's strategies are misaligned. An organization should be able to put its strategy into effect within the organization to be successful.

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