CORPORATE CULTURE AND STRATEGIC MANAGEMENT

Corporate Culture
It is a set of assumptions that members of an organization share in common. The beliefs and behaviors that determine how a company's employees and management interact and handle outside business transactions. A company's culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, treatment of clients, client satisfaction and every other aspect of operations.

 Corporate Culture is often referred to as Organizational DNA or Organizational Soul. It is the fundamental contributor of the success or failure of corporate strategies. Reflected in companys
values, business principles and ethical standards relationships with stakeholders approaches to people management and problem solving

Impact of Culture on Corporate Life

Culture affects not only the way managers behave within an organization but also decisions they make about the organization's relationship with its environment and its strategy. Corporate Culture acts as strength- Facilitate communication, decision making and control and create cooperation and commitment. Corporate Culture is a weakness- employees do not have high sense of commitment, loyalty and sense of identity.

Impact of Culture on two different groups of organizations

Dimensions Multinational subsidiaries Nature of desired Professional managerial skills & Qualifications and rank capabilities
Family businesses & NRIscompanies Demonstrated skills, depth and quality of knowledge

Innovation, thinking Actual performance Seniority ,conformity and upgradation to values and of knowledge or results achieved loyalty

Managerial style of Information gathering, Selective information bureaucratic mode usage and intuitive planning & of functioning, risk and quantitative decision making aversion and nondecision making of entrepreneurial entrepreneurial decision making nature Use of elegant, Reliance on business Management sophisticated and sense and no-frills systems adopted rational systems systems geared to which degenerate quick action due to low usage
Comprehensive, Primary use of verbal formal and written reporting and reporting remedial action

Nature of management control

Strategy Culture Relationship

Strategy drives focus and direction while culture is the emotional, organic habitat in which a companys strategy lives or dies Strategy is just the headline on the companys story culture needs a clearly understood common language to embrace and tell the story that includes mission, vision, values, and clear expectations Strategy lays down the rules for playing the game, and culture fuels the spirit for how the game will be played
Strategy is imperative for differentiation, but a vibrant culture delivers the strategic advantage

Approaches to create strategy-supportive culture To Ignore Corporate Culture To Adapt Strategy Implementation to Suit Corporate Culture To Change the Corporate Culture to Suit Strategic Requirements To Change the Strategy to Fit the Corporate Culture

CORPORATE POWER AND POLITICS

Alliances and coalitions in organizations compete for resources Power impacts organizational life work attitude motivation communication retention Knowing how power functions is important

WHAT IS POWER?
Interpersonal (or intergroup) relationship in which one individual (or group) can cause another individual (or group) to take an action that it would not otherwise take. Involves changing the behavior of another person A has power over person B if B believes A can force B to comply.

POWER/LEADERSHIP/ AUTHORITY RELATIONSHIP

Power is closely related to leadership and authority Leadership Authority Power

TYPES OF POWER
Reward Power- arises from the ability of managers to reward positive outcomes Coercive Power (punishment power)- arises from the ability of managers to penalize negative outcomes Legitimate Power (authority)-arises from the ability of mangers to use position to influence behavior

 Referent Power (charisma)- arises from the ability of managers to create liking among subordinates due to charisma or personality
Expert Power- arises from the managers competence, knowledge and expertise that is acknowledged by others

POLITICS
Those activities taken within organizations to acquire, develop, and use power and other resources to obtain ones preferred outcome in a situation where there is uncertainty of outcome.

POLITICS
The use of power to influence decisions that achieve desired outcomes. 1. Self-interest 2. Decision-making process Uncertainty & disagreement

Why do we have politics?

Different ideas, values, interests and goals Limited resources (money etc.) Outcome is not clearly defined

The Dark Side of Power and Politics

Power and politics often have negative connotations because people associate them with attempts to use organizational resources for personal advantage and to achieve personal goals at the expense of other goals.

The Bright Side

Managers can use power to control people and other resources so that they cooperate and help to achieve an organizations current goals. Managers can use power to engage in politics and influence the decisionmaking process to help promote new, more appropriate organizational goals.

Strategic Use of Power and Politics

Mintzbergs view Corporate politics is neither inherently good nor bad Though most of the times corporate politics leads to divisiveness that is not good for an organization, yet there are times when it needs to be shaken up in order to bring in changes Politics and power have a definite role to play in strategy implementation

 Mintzberg says that the organization must..pull apart before it can pull together again In other words, strategists need to know when to use power and politics to get things done and when to shun politics and use of power to maintain harmony. Politics and power affect the way strategy is implemented and formulated

Tactics to deal with power and politics

First of all, to accept the inevitability of politics being there in the organization Understand how an organizations power structure works, who wields real power and influence and who are the individuals and groups whose opinions carry weight and cannot be disregarded To be sensitive and alert to political signals emanating from different parts of the organization

 To know when to tread softly and rely on coalition management and consensus building and when to push through decisions and actions To lead strategy and not to dictate it, being patient till consensus emerges To let most negative decisions emerge as a group consensus rather than as a directive from the top To gather support for acceptable proposals and let the unacceptable ideas die a natural death

 To reward organizational commitment and penalize negative or indifferent attitude To practice principled politics and use openness and honesty to counter and unprincipled politics