## Organisation Culture

### What Is Organisational Culture?

Every organisation has a unique culture — its own philosophy, principles, history, values, rituals, and ways of solving problems.
Manifested in: values, business principles, ethical standards, policies, stakeholder relationships, employee attitudes, organisational legends, and workplace politics.
Can originate anywhere — top, bottom, a department, or one influential individual.

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### Culture as Ally or Obstacle to Strategy Execution

Compatible (culture and strategy aligned) → culture is a valuable ally.
In conflict → culture becomes a stumbling block impeding strategy implementation.

### Role of Culture in Strategy Execution

Strong culture + good fit → promotes good strategy execution.
Strong culture + poor fit → actively impedes execution.
A culture built around customer focus, employee empowerment, and pride in work → conducive to a superior customer value strategy.

### Perils of Strategy-Culture Conflict

1. When culture is out of sync, it must be changed rapidly.

2. Correcting conflict usually means revamping the culture; occasionally, revamping the strategy.

3. Deeper cultural mismatch = greater difficulty implementing strategy.

4. Prolonged conflict weakens and may defeat managerial efforts.

5. Strategy makers must select strategies compatible with 'sacred' or unchangeable cultural parts.

6. Strategy implementers must change cultural facets that hinder effective execution.

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### Changing a Problem Culture

1. Difficult because of the heavy anchor of deeply held values and habits — people cling emotionally to the old and familiar.

2. Diagnose which cultural facets are strategy-supportive and which are not.

3. Menu of culture-changing actions: revise policies/procedures; alter incentive compensation; visibly praise and recognise desired behaviours.

4. Personally talk to departmental groups about reasons for change.

5. Wait until a big majority of employees share emotional commitment to new values before declaring success.

6. Large companies: cultural change can take 2 to 5 years.

7. Reshaping a deeply ingrained existing culture is harder than instilling a new culture from scratch in a brand-new organisation.

Worked example

### Example 1

A traditional bank acquires a fintech startup. Culture conflict: the bank's hierarchical, risk-averse culture clashes with the startup's agile, experimental culture. Resolution: the bank diagnoses the mismatch, revises its approval procedures to allow faster product launches, ties bonuses to innovation metrics (incentive alteration), and lets the fintech unit operate semi-autonomously — gradually moving toward a shared digital culture.

### Example 2

Amazon's culture of 'customer obsession' (Shared Value) directly supports its strategy of being the 'Earth's most customer-centric company' — a clear culture-strategy fit that makes execution faster and more authentic, as employees internalise the goal.

⚠️ Common exam mistakes

Thinking strategy-culture conflict is always solved by changing the culture — sometimes the strategy itself must be changed to fit 'sacred' or unchangeable cultural elements.
Underestimating the time required — large company cultural change takes 2 to 5 years; it is not achievable through a single initiative or communication campaign.
Confusing a 'strong culture' with a 'good culture' — a strong culture impedes execution just as powerfully as it supports it, depending on fit with the strategy.

Reference:

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Organisation Culture — Role in Strategy Execution and Changing Problem Culture

Worked example

⚠️ Common exam mistakes