Culture and Strategy

Chapter 5Managing Across Cultures

Schneider & Barsoux

RBC p 428

Similarities Culture as solutions to problems of

External adaptation and Internal integration

Strategy in devising and implementing organizations need to assess their External environments as well as their Internal capabilities (SWOT)

Strategic Planning SWOT Boston Consulting Group (BCG matrices) Ansoff Porters Five Forces Competitive Advantage

Two approaches to Strategy The rational / economic view

”Assumes that the environment and the organization are objective realities that are similarly perceived and analyzed by intelligent managers” p 429

A dynamic view ”Strategy is a dynamic process which is

energized through feelings. It is not a bundle of facts, figures assembled in order by the logical mind” p 430

Analysis of national competitiveness (Porter diamond)

Firm strategy, structure, and rivalry

Chance

Factor conditions

Related andsupporting industries

Demandconditions

Govern-ment

Porter’s five forces model

Market Competitors

Intensity of rivalry

New entrants

Suppliers Buyers

Substitutes

Market levelIndustry level

Value chain analysis

R&D Production Marketing Sales

& servicesR&D Production Marketing

Sales & services

Customer

Perceived value/ price A

Perceived value/ price B

Relative costFirm A Firm B

The dynamic view Japaneese view:

”Reality cannot be boxed into two-by-two matrices and that thruth cannot be determined by simplistic theories of cause and effect” p 431

Mintzbergs view: ”Rather than planned, strategy is considered

as emergent, or as evolutionary” p 431

Ressource-based view Developing organizational resources and

capabilities Building core competencies and corporate

character Provides the capabilities and flexibility to

respond to environmental events Assumptions based on what the company

is more than what the company does

Summing up: Strategic view:

Rational economic view SWOT, Porter, Boston etc.

Cultural model: Controlling Model (next slide)

Versus Strategic view:

The dynamic view Ressource-based view

Cultural model: Adapting Model (next slide)

Cultural models of Strategy Controlling Model

Centralized Formalized Monochronic

Adapting model Decentralized Informal Polychronic

P 433-435

Cultural Determinants of Strategy External adaptation

i.e. Human Activity Doing versus being Achievement vs. ascription

Internal integration i.e. Nature of Relationships

Individual vs collective Task vs social

See figure 5.2 p 437

Strategic Contentconservative vs innovative

cost-cutting vs market expansion

Strategic Process ContollingVs. adapting

Strategic Profile DefenderVs. Prospector