Organizational Culture Eats Strategy for Breakfast

Introduction

“Culture eats strategy for breakfast” was coined by Peter Drucker, who is the architect, and father of modern day management. The phrase is used to show the essential part culture plays within an organization, and it also shows that implementing strategy is important for the success of an organization. Having a strategy in an organization is one aspect while proper and correct implementation of the strategy is another thing. Therefore, good management within an organization is important in order to align these two aspects. It also shows why there is resistance to change in organizational strategy, even when the strategy is supported by well spell out vision and mission.

Organizational culture

Organization culture has been defined in a number of ways as it is an integral part of any organization. Culture is the building blocks in the organization, and it dictates how a business is conducted, how a business presents itself in public and the culture the business wants to show to its employees. According to Aquinas, she describes organizational culture as “the set of beliefs, values, and norms, together with symbols like dramatized events and personalities representing the unique character of the organization, and provides a context for action in it and by it” (34). Other scholars have given different definitions of culture.

Culture is the deep and subconscious code that defines the organization and gives it a good feeling and states what is right or wrong based on the set standards and morals within the organization. It shows what works or does not work in an organization and how an organization responds to unexpected external or internal forces. Culture encompasses the dress code of employees, how they relate with their colleagues and what is expected of them. It stretches to include fair marketing and promotional practices, correct production methods, good pricing strategy and having quality products.

Types of organizational culture

  1. Hierarchy culture –there is a formal chain of command where orders follow a specific chain.
  2. Market culture –The organization aligns itself more on the external factors than internal affairs. It concentrates more on suppliers, competition, customers and regulators. Schein states that “under this culture the organization follows the market dynamics of demand and supply and monetary exchange. For example, Philips Electronics lost a major market niche in Europe in 1990s” (60). It led to a strong campaign to change the competitive edge of the firm. Under a new C.E.O, the global firm developed a process called Centurion that aimed at changing the firm’s culture from a hierarchical and complacent culture to a customer driven and competitive culture.
  3. Adhocracy Culture – It assumes that in the 21st century businesses need to be innovative. Pennings observed that the business should develop new products, foster entrepreneurship and improve on the management by use of modern technology (116). The rise and fall of Apollo 13 mission is a clear example of how sudden change of management and team members can be costly. There lacked a clear communication between the astronauts and the control room.
  4. Clan culture. It is a culture derived from the family set-up. It aims at growing and nurturing the organization together by use of shared values, individuality and participation of members. Instead of having a hierarchy or profit centered firm, the firm becomes one of teamwork, commitment to workers and employee participation in programs. It is based on reward to employees, promotion and having quality circles. An example of an organization with clan culture is Pixar. Pixar is a manufacturer of animated movies. It is a highly successful firm due to its clan culture. Schein states that “most film companies gather together highly talented people, provide them resources and flexibility, let them do their creative work, and then turn them loose. Pixar has instead developed a tightly knit culture, full of collaborators who stick together, learn from one another, and strive to improve with every production” (78).

Organization strategy

Many searches are done to establish the reason behind the success of some managers and failure of other managers that ultimately lead to success or failure of the organization. Scholars try to establish why organizations in the same industry post different results. Some organizations are market leaders while others follow. The variation in the performance of organizations is attributed to the strategy employed by the respective organization. Piers defined strategy as “setting objectives for the organization and providing a path for it to progress. The strategy process is the initial stage in achieving success. A strategy is a set of rules that guides and reports the actions and decisions of managers” (93).

Types of organizational strategy

  1. Price reduction is a strategy that can be used to position a company, to get a market share and penetrate the market. Cost dropping strategy involves outsourcing, reducing staff costs and controlling efficiency.
  2. Change strategy is a change in the ways of doing business. It involves embracing new technology, mechanization, mergers and acquisition, downsizing and restructuring.
  3. Improved customer service is a strategy of ensuring that customer is the boss. It involves giving exemplary service and making follow-ups.
  4. Faster turnaround time delights the customer.

Relevance of Organizational culture and strategy

These two aspects form a focal point in an organization. It enables all the players to work towards a common goal by use of the appropriate strategy and culture. Culture leads to an efficient and effective firm. A positive cultural attitude in the place of work connects to employee’s level of job satisfaction and loyalty towards the organization. This increases efficiency and profitability. There is a direct correlation between employee turnover and absenteeism, and organization culture. The culture dictates the level of employee satisfaction and the willingness of the employee to take up new roles and responsibilities.

It is very difficult to copy an organization culture. This gives a company competitive advantage among its competitors. Culture helps to balance the internal and external strategies of the organization. Strategy helps in the attainment of the vision and mission of the firm. They offer direction in the firm and how the company interacts in the market. They also interlink with the organization culture to bring a successful firm. For example, Apple’s strategy is anchored on production, delivery function and innovation which have been aligned to its culture of employee motivation and maximum benefit to its performing staff. Wal-Mart is a performing company with fun-filled employees who are customer friendly. Its strategy is to have robust systems, customer oriented environment and value for money. This is aligned to its culture of employing staff who are customer oriented and friendly, and they provide clean working environment.

Managers have understood that, to be effective and relevant, one needs to have a healthy workforce improves the efficiency of the company. Saxena states that “Organizations that rely on customer service to win in the marketplace often have other needed-to-play strategies. For example, Nordstrom, Four Seasons Hotels and Emirates Air win on providing top-rate customer experience, but to play, they also need quality and efficiency” (94).

A case study – Virgin Atlantic

Virgin Atlantic is a perfect example of an organization whose culture has benefited a lot from its strategy. It is an inspiring story that has made authors refers it as an “unusual organization” due to its structure and culture and ease of conducting business. Richard Branson developed new business skills to get his venture operational. The organization structure of Virgin is less formal which makes the employees to be hard working, they find fun in doing business, and they have the interest of the company at heart. Virgin is a success story due to the culture employed by Branson. He encouraged his employees to embrace the culture of risk taking and entrepreneurship. The company has used Porters strategies to remain relevant in the market.

Supporting the rationale that culture eats strategy as breakfast.

In an organization, staffs are loyal to the culture. A company that has a culture of ensuring tenure of employment to its employees gains a loyalty and employees are able to implement the company strategy. During the hard times in an organization, culture provides comfort and resilience. A company with a strong culture is more important than one with a strong strategy. Starbucks was saved by its strong culture. In most organization, culture stands out strongly than strategy. For example, Raymond states that “during the fuel price crisis of 1991, Southwest Airlines did not have to execute a strategy of pay cuts – employees volunteered for it” (128). Therefore, it is evident that when strategy and culture collide, culture wins, and this concludes that indeed culture eats strategy for breakfast.

Works Cited

Aquinas, Peter. Organisation Behaviour. New Delhi: Excel Books India, 2009. Print.

Pennings, Johannes. Organizational strategy and change. New York: Routledge, 2009. Print.

Piers, Sally. Organizational Change: Perspectives on Theory and Practice. New York: Oxford University Press, 2012. Print.

Raymond, Miles. Organizational Strategy, Structure, and Process. California: Stanford University Press, 2003. Print.

Saxena, Patrick. Principles of Management: A Modern Approach. New Delhi: Global India Publications, 2010. Print.

Schein, Edgar. Organizational Culture and Leadership. Miami: John Wiley & Sons, 2009. Print.