MANAGING CORPORATE CULTURE FOR COMPETITIVE ADVANTAGE

APPLICATIONS AND IMPLICATIONS

By Bolaji Okusaga

OUTLINE OF PRESENTATION
Objective of presentation Corporate Culture defined Relevance of corporate culture in management Managing corporate culture in a change process Implications for managers Model of discourse and conclusion

OBJECTIVES OF PRESENTATION
To understand what corporate culture is To determine and understand the significance of corporate culture for organisational performance and the achievement of corporate objectives To understand how corporate culture can be best managed to effectively support strategic business objectives

WHAT IS CORPORATE CULTURE

Ideal corporate culture is a pattern of basic assumptions that has worked well enough to be considered valuable, and therefore taught to new members as the correct way to perceive, think and act in relation to official matters and corporate issues Corporate culture is the personality and identity of the organisation It is the sum total of the shared values and ethos which govern decision making and actions within an organisation

JUSTIFICATION
Corporate entities tend to have distinct or specific shared characteristics or organizational behaviour which makes for differentiation and identity. Given the fact that organisations in the same sector are likely to have similar process, however the salient factor which makes for attitudinal differentiation is corporate culture This can be observed in the values, norms, traditions and service orientation of organisations

ELEMENTS / CHARACTERISTICS OF CORPORATE CULTURE

BELIEFS: These are the consistent or integrated values and expectations that provide a framework for shaping what people hold to be true or false, relevant or irrelevant, good or bad BEHAVIOUR : These are observable actions that constitute the way people operate on day to day basis

ELEMENTS
ASSUMPTIONS: These refer to the unconscious rationale for continuing to apply certain beliefs or specific behaviours PHILOSPHY: This refers to policies set forth by organisations to guide behaviour, whether expressly stated (mission statement) or not RULES: These refers to strict guidelines on how to get along in an organisation ORGANISATIONAL CLIMATE: This represents the general environment and sociopsychological atmosphere within which organisational members interact

MANIFESTATION
DOMINANT CULTURE: This is a set of core values shared by a majority of organisational members. This could include concerns for quality, customer service, loyalty etc. SUB-CULTURE: This is a set of values shared by a small minority. Sub- cultures can weaken and undermine organisational goals if they conflict with the dominant culture

INDICES OF THE STRENGHT OF CORPORATE CULTURE

The indices of the strength of corporate culture are:
SHAREDNESS: The degree to which organizational members have the same core values INTENSITY: The degree of the commitment of members to the core values

Two major factors that determine the strengths of corporate culture are:
The orientation of members to group goals Reward structure prevailing in the system

RELEVANCE OF CORPORATE CULTURE IN MANAGEMENT

Peters et. al.(1984), in their study of excellent companies in the U.S.A, discovered that outstanding performers, over a long time, exhibit a strong corporate culture These business leaders adopt value disciplines which will be suited to their work process and corporate culture. Successful business leaders are increasingly recognising that one of their competitive weapons is their corporate culture They recognise that corporate culture is a critical factor in long term economic success. For these business leaders, the name of the game is competitive differentiation via the vehicle of corporate culture

CORPORATE CULTURE AND BUSINESS SUCCESS

A positive corporate culture binds, directs and reinforces positive action The stronger the corporate culture and the more directed and focused it is towards the organisations strategic and market requirements, the less would be the need for policy manuals, charts or documented procedures and values This because members of the group are more likely to align their actions to the share values and goals of the organisation

CORPORATE CULTURE AND BUSINESS FAILURES

Poor performing companies do not have strong culture, such companies are usually dysfunctional An organisations culture will invariably determine the nature and direction of management practices A weak culture is not likely to engender the desired sense of belonging which causes an immersion into the corporate goal

INFLUENCE OF CORPORATE CULTURE ON MANAGEMENT PRACTICES

The relationship between corporate culture and management practices are evident in:
Motivation Decision-making Performance and reward management Communication Leadership Teamwork

 Todays business environment is described as turbulent, unpredictable and rapidly changing. This type of business environment has established a compelling need for cultural change The challenge which corporate culture poses for organisations is to manage it effectively, create change or adapt to change and do so quickly or lose ground Studies have shown that many business organisations have failed in their bid to introduce strategic changes dictated by economic realities. The causes of such failure in effectively managing corporate culture for long term business goals

MANAGING CORPORATE CULTURE IN A CHANGE PROCESS

EFFECTS OF CORPORATE CULTURE MISMANAGEMENT

Inadequate understanding of organisation's underlying culture Basic differences in the values which the existing corporate culture stresses and the values required to drive the new strategic change Insufficient commitment of time and resources to cultural change effort perceived to be desirable

CORPORATE CULTURE AND STRATEGIC CHANGE IMPERATIVES

Given that strong corporate culture can affect the ability of a business organisation to adopt strategic changes, the following options for managing a strong culture in a change management process are:
Ignore the culture Manage round it Attempt to change dysfunctional elements of culture to fit strategy Change the strategy

WEIGHING THE CORPORATE CULTURE OPTIONS IN CHANGE MANAGEMENT1& 2

OPTION 1 IGNORE THE CULTURE
The inextricable link we have established between corporate culture and organisational performance makes this an unenviable and unattractive option

OPTION 2 MANAGE ROUND IT

Organisations make no attempt to change culture but selects only those strategic changes which have the least possibility of being resisted by the existing culture This option might force organisations to compromise what is strategically desirable for what is convenient This might work where -Dysfunctional aspect of culture is weak -There is a considerable area of congruence between current culture and strategic needs

WEIGHING THE CORPORATE CULTURE OPTIONS IN CHANGE MANAGEMENT 3

OPTION 3 CHANGE DYSFUNCTIONAL ELEMENTS OF CULTURE -This is the option which is strategically desirable and attractive because this ensures that culture effectively supports corporate strategy

DEMANDS OF EMPLOYING THE THIRD OPTION

Employing this option involves the following steps: - Conduct environmental analysis - Conduct internal analysis - Decide on strategic focus - Understand character of current culture and consolidate its strength - Determine aspects of culture that would be dysfunctional to achievement of strategic objectives - Initiate and implement a culture change programme

WEIGHING THE CORPORATE CULTURE OPTIONS IN CHANGE MANAGEMENT 4

OPTION 4 CHANGE THE STRATEGY Similar to option 2, except that the change to be effected in strategy is fundamental Again, desirable strategic choice might be compromised

IMPLICATIONS FOR MANAGERS

Understand your culture and implications for business strategy Merge your organisations value discipline with the corporate culture Articulate desirable cultural values Persistently communicate your ideal cultural values Continuously improve cultural values through socialisation

MODEL OF DISCOURSE
CORPORATE CULTURE

CHANGE MANAGEMENT PROCESS

ORGANISATIONAL GOALS

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