Business Strategy and Corporate Culture

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Alignment of Business Strategy and Corporate Culture, without which the resultant disconnect will cause chaos, failure and corporate catastrophe.

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Business Strategy and Corporate Culture

  1. 1. Business Strategy & Corporate Culture Dr. Elijah Ezendu FIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM, PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr
  2. 2. Business Strategy Business strategy represents clearly identified feasible route for steering activities onto attainment of goals and objectives.
  3. 3. “Strategy is the process of deciding how to best position the organisation in its competitive environment in order to achieve and sustain competitive advantage.” -Paul Elkin, Mastering Business Planning and Strategy
  4. 4. “The direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.” - Johnson and Scholes, Exploring Corporate Strategy
  5. 5. Three Levels of Strategy 1. Corporate Level Strategy 2. Business Unit Level Strategy 3. Functional/Operational Level Strategy
  6. 6. Corporate Level Strategy This comprises overall strategy elements for the firm. Resolving issues pertaining to mix of businesses and means for coordination and integration of individual unit strategies. It’s concerned with the following: Managing Activities and Business Interrelationships. Corporate Responsibilities. Management Practices. Competitive Contact.
  7. 7. Business Unit Level Strategy This involves translation of the corporate level strategy into suitable strategies for individual business divisions or portfolios, required to develop and sustain competitive advantage for products or services of the firm. This is concerned with the following:  Influencing the layout of competition by means of action such as vertical integration.  Positioning the firm’s business against competitors.  Modifying actions to cope with changes in demand, supply, regulations and technology.  Developing useful partnerships with customers and other business units.
  8. 8. Functional/ Operational Level Strategy This involves development of strategies for functional catchments such as business development, production, finance, human resource and materials management. This is concerned with implementation of the strategic plans established at corporate and business unit levels.
  9. 9. Special Strategy Silos • Strategic Business Unit (SBU) Strategy • International Strategy
  10. 10. Features of Strategic Decisions
  11. 11. Porter’s Range of Strategy
  12. 12. Geoffrey Moore’s Range of Strategy
  13. 13. Generic Range of Strategies
  14. 14. Developing Strategic Options A strategy portfolio consists of strategic options which enable a firm to take advantage of distinctive leveraging points in order to ensure appropriate alignment to objectives while reacting to competitors or exploring opportunities. Examples of leveraging points are as follows:  Talent  Alliances  Financial Linkage  Intellectual Property  Organizational Culture  Processes  Channels  Cost Efficiency  Technology  Economies of Scale  Assets  Innovation
  15. 15. Classes of Strategy Attack Strategy Defense Strategy 1. Guerilla Attack 2. Bypass 3. Flanking Attack 4. Frontal Attack 5. Undifferentiated Circle 6. Differentiated Circle 1. Signaling Defense 2. Creating Entry Barriers 3. Global Service 4. Pre-emptive Strike 5. Blocking Entry 6. Counter-Attack 7. Holding the Ground 8. Withdrawal Adapted from Jorge Vasconcellos, Strategy Moves
  16. 16. “Never follow the crowd” -Bernard Baruch
  17. 17. Growth Strategies Concentration • Vertical Integration • Horizontal Integration Diversification • Related (Concentric) Diversification • Unrelated (Conglomerate) Diversification
  18. 18. Organic and Inorganic Growth Organic Growth This occurs when the growth strategy is executed internally. Inorganic Growth This occurs when a firm opts to implement growth strategy externally through merger, acquisition or alliance.
  19. 19. Motivations for Global Strategies GLOBAL STRATEGIES Access Strategic Markets Access National Incentives Cross- Subsidize Create Global Associations Obtain Scale Economies Access Low-Cost Labour/Materials Dodge Trade Barriers Source: David Aaker, Developing Business Strategies
  20. 20. “Culture eats strategy for breakfast” - Peter Drucker
  21. 21. “The make-or-break issue isn't just what separates you from the competition in the marketplace. It's what holds you together in the workplace. Organizations built around unique strategies are at their best when rank-and-file colleagues share and express genuine emotions. That's the new question facing leaders in all kinds of industries.” - Bill Taylor, How One Company’s Turnaround Came From The Heart
  22. 22. Culture functions like an operating system of computer thereby providing definite process environment for operability of strategy.
  23. 23. Interactivity of Culture and Strategy Source: Elijah Ezendu, Cultural Analysis
  24. 24. Corporate Culture “Corporate culture is a system of shared values, assumptions, beliefs, and norms that unite the members of an organization.” - Kathryn Bartol, Management
  25. 25. Functions of culture Source: Kreitner and Kinicki, Organisational Behaviour
  26. 26. Culture and Goals The components of a corporate culture determines the extent of its dynamism towards specified goals and objectives.
  27. 27. The Importance of Cultural Thrust Without the right cultural thrust, internal activities may be steered by cultural polarizations to transform into a colossal web of disjointed appendages filled with uncertainties.
  28. 28. Cultural Analysis Cultural Analysis focus on identification of the key components of an organisation’s culture and ascertainment of resultant alignment with strategic intent, strategies, policies and business development imperatives.
  29. 29. Two Levels of Cultural Analysis • Analysis of Elements of Culture • Analysis of Cultural Expressions
  30. 30. 14 Forces of Corporate Culture by Elijah Ezendu
  31. 31. Leadership Stream This highlights flow, pattern, strength and ambit of active leadership across the whole organisation moving from top to bottom.
  32. 32. Teamwork Dynamics It’s the characteristic motion of members of an organisation operating as a team for achievement of specified objectives.
  33. 33. Workplace Communication This focus on prevailing standard of communication, conventional workplace language and existing processes for exchanging information in an organisation.
  34. 34. Paradigms The mentality of employees and other workers pertaining to stated values, mission, vision, policies, strategies, procedures and action plans of the organisation. Examples: •Biggest organisation in sector of operation •Unconquerable •Industry Leader
  35. 35. Rituals and Routines These are practices such as repetitive tasks and meetings that overindulge employees thereby calibrating them into inertia and influencing their focus and drive. Examples: •Clique driven activities •Committee meetings •Formal induction
  36. 36. Stories This highlights tales about achievements, ownership, future opportunities, as well as past events that generated either negative or positive impact on people, profit, products, policies, strategies, size, structures and systems. Examples: •No future for non-indigenes at top management level •It’s a family business
  37. 37. Control Systems The compliance level of employees to established standards is usually influenced by control systems existing in that organisation. Attributes of control systems used for classification include effectiveness, efficiency, scope, scale, elements and type. Examples of Control Systems: •Technology Driven Reports •Complaints •Annual Budget
  38. 38. Organisational Structures Organisational structures show hierarchical levels, reporting relationships, span of positional responsibilities, work-flow system, authority and control. It reveals operational philosophy of the organisation. Examples: •Flat Structure •Lean System
  39. 39. Power Structures This essentially affects employee’s perception about command forces and pressures relating to decision-making in the workplace, the basis of power and spread of power. It provides room for mutual understanding concerning reasons for inclination, action, submissiveness, abandonment and detachment. Examples: •Decentralised decision-making •Power is driven through position •Strong team power
  40. 40. Symbols Symbols are inventories of clarified components of organisational identity, and serve as communication channels to employees and other people connected to the organisation. Examples: •Logo •Salary Structure •Workspace
  41. 41. Exploratory Engagement What are beliefs, values and assumptions?
  42. 42. Social Connectivity This points out the features put in place for promoting and advancing interaction, collaboration, sense of belonging, teamwork and connectedness. Examples: •Intra-organisational wiki •Employee-centric social media •Social Programmes such as periodic novelty matches
  43. 43. Cultural Expressions 1 • Length of Work-Day • Internal Communication • External Communication • Style of Dress • Reputation of CEO • Rate of Staff Turnover • Work-Life Balance
  44. 44. Cultural Expressions 2 • Professionalism • Physical Facilities • Value for Employees • Employee Morale • Risk Evaluation for Decision-Making • Ethical Compliance • Intrapreneurship • Learning Standard
  45. 45. Cultural Expressions 3 • Innovation • Inclination to Organisational Goals • Plainness of Structure • Employee Evaluation Practices • Employee-Employee Relationships • Employee- Employer Relationships • Standard of Organisational Values • Esprit de Corps • Gender Philosophy
  46. 46. Cultural Expressions 4 • Cooperation • Work Environment Standard • Compensation Competitiveness • Career Advancement • Employee Perception of Corporate Image • Educational Level of Employees • Diversity • Employee Motivation • Adaptability and Flexibility • Empowerment
  47. 47. Aligning Business Strategy with Corporate Culture In effect, the whole goal for aligning business strategy with corporate culture is to ensure the components of active culture within the organisation would facilitate seamless operability for established strategies.
  48. 48. Assessing Strategy-Culture Compatibility No Yes No Yes Yes No No Is the planned strategy compatible with the current culture? Can the culture be modified to make it more compatible with the new strategy? Is management willing and able to make major organizational changes and accept probable delays Manage around the culture by establishing a new structural unit to implement the new strategy. Find a joint-venture partner or contract with another company to carry out the strategy. Is management still committed to implementing the strategy? Yes Formulate a different strategy Tie changes into the culture. Source: Anthony Chelte, Strategy Implementation
  49. 49. “Corporate culture provides the human glue that can rally the collective energy of your company toward improvements and accomplishments, or it can be the glue that fastens your organization to the way things have always been." - Kevin Craine, Corporate Culture & Document Design Strategy
  50. 50. Exploratory Engagement Using the 14 elements of corporate culture, conduct a basic cultural analysis of your organisation and try to identify any disconnect between a known strategy being used therein and the culture.
  51. 51. Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise in Interim Management, Strategy, Competitive Intelligence, Transformation, Restructuring, Turnaround Management, Business Development, Marketing, Project & Cost Management, Leadership, HR, CSR, e- Business & Software Architecture. He had functioned as Founder, Initiative for Sustainable Business Equity; Chairman of Board, Charisma Broadcast Film Academy; Group Chief Operating Officer, Idova Group; CEO, Rubiini (UAE); Special Advisor, RTEAN; Director, MMNA Investments; Chair, Int’l Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training), Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead Consultant/ Partner, JK Michaels; Turnaround Project Director, Consolidated Business Holdings Limited; Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles), Fortuna, Gambia & Malta; Chief Advisor/ Partner, D & E; Vice Chairman of Board, Refined Shipping; Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria; Country Manager (Nigeria) & Adjunct Faculty (MBA Programme), Regent Business School, South Africa; Adjunct Faculty (MBA Programme), Ladoke Akintola University of Technology; Editor-in-Chief, Cost Management Journal; Council Member, Institute of Internal Auditors of Nigeria; Member, Board of Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business Administration and Fellow of Professional Institutes in North America, UK & Nigeria. He is Innovator of Corporate Investment Structure Based on Financials and Intangibles, for valuation highlighting intangible contributions of host communities and ecological environment: A model celebrated globally as remedy for unmitigated depreciation of ecological capital and developmental deprivation of host communities. He had served as Examiner to Professional Institutes and Universities. He had been a member of Guild of Soundtrack Producers of Nigeria. He's an author and extensively featured speaker.
  52. 52. Thank You

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