How does culture impact the practices of making strategy?

How does culture impact the practices of making strategy?

Culture is one of the major topics in business since 2016. Culture in business accurately describes how the thing works. It includes artifacts, values, behaviors, reward systems, and beliefs that influence individuals’ behavior on a day-to-day basis in the industry and is vital in making the strategy. People’s values, practices, and ideas make up a company culture.  Human resource (HR) leaders and the chief executive officers (CEOs) have recognized that culture drives people innovation and customer services. A survey shows that’s culture is potentially a competitive advantage when a business knows that reward systems and leadership behaviors directly impact employee engagement, organizational performance, retention, and customer services. Leading firms and companies are now using behavioral information and data to influence and manage their culture. Culture is more not just an HR issue but as a business issue. The executive team and the CEOs must take responsibility for an organization’s culture. Also, human resource leaders should support that responsibility through the infrastructure and measuring process.

Most businesses view culture as an essential aspect. However, most businesses don’t fully understand the culture. Many organizations find it hard to measure and even manage culture. According to a survey conducted by The Research Network, only 28% of survey respondents believe they know about the culture. While 28% believe in having the right culture (Cristian 2013: 1695). Culture can determine both the failure and success of a business when the business is changing in growth, mergers, and acquisition. Also, the product cycle can fail or succeed; it all depends on the orientation of culture based on the direction of the business. This year the Global Human Capital Trends, unlike other past reports, their reports revealed that almost 90% of respondents say that culture is essential in business, while 54% said it is necessary.

Culture combines the explicit and implicit reward system that defines how a business works in practice, no matter the business strategy, organizational chart, or what mission statement states. Several companies this year are changing their culture due to the increased competition and shifting markets. Companies need to change the culture, so they adapt to shifting talents market and counter stiff competition from other competing firms. In an organization, culture is transparent and is tied directly to its employment brand. Businesses consciously manage and cultivate their culture revolving it into a competitive benefit in the open market. Do you ever wonder why certain companies employ great engineers, who deliver endless innovations, generate continuous growth while other businesses get seen to be reinventing themselves? Then a large part of the answer is because of culture. Culture also helps when things go wrong. For instance, last year, two companies merged, and one of the companies its culture was based on low cost while the other company its culture was of quality service. Workers received different signals until a new team of management gets hired to carefully redefine and diagnose the business processes in the company (Zheng Yang and Mclean, 2010: 770).

Coming up with a strategic plan is crucial to the success of an organization. The organization must effectively implement that strategy to fulfill its performance goals. For the execution to be successful, the organization’s culture is the determiner. Culture is essential in determining the development of a strategic plan. The implementing strategy usually depends on several crucial elements. The first elements are sustaining and building a business culture that accelerates, and facilities change. Secondly, encouraging a sense of responsibility for the strategy execution at every agency-level, starting from the administrative assistant to the junior leadership. To explain further, it means constructing a culture that generates flexibility, accepts, and understands the responsibility for a change is essential. Creating an open business culture should start from the top team and should communicate strategic priorities effectively and often. Every person in the agency should contribute to the success of the strategy. Also, everybody should be personally accountable.  Consider a case study involving a telecommunications expert AT&T showed that active alliance among team members and a commitment to one’s action was high. They talked between senior management, which steered an environment in which every worker at every level felt that their ideas get counted in implementing the strategy. During the case study, the participants came up with measurable plans and goals to communicate and gave their feedback to their senior leadership. The level of commitment of the participants led to higher performance and improved strategy execution (Hickman and Silva 2018: np). However, the senior leader must make the strategic plan to be fulfilled and achieve results by making the decisive goal and vision inspirational and clear. Secondly, exploit the existing advantageous behaviors and eliminate undesired behaviors. Also, the senior leaders should make the strategic plan last by changing the business processes to reinforce preferred behaviors and enable them to be alignment with the business culture. However, implementing a strategic plan is not a guarantee for success; progress only happens through reinforcing and creating strategy ownership, accountability, implementation, and culture change.

References

Cristian-Liviu, V., 2013. Organizational culture and strategy: How does it work? Empirical research. Annals of the University of Oradea, Economic Science Series, 22(1), pp.1690-1696.

Hickman, C.R., and Silva, M.A., 2018. Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge.

Zheng, W., Yang, B., and McLean, G.N., 2010. Linking organizational culture, structure, strategy, and organizational effectiveness: Mediating role of knowledge management. Journal of Business Research, 63(7), pp.763-771.