Corporate Culture and the Effective Execution of Strategy Essay

What is corporate culture? Corporate culture refers to the character of a company’s internal work climate – as shaped by a system of shared values, beliefs, ethical standards, and traditions that define behavioral norms, ingrained attitudes, accepted work practices, and styles of operating. Every company has its own unique culture. The character of a company’s culture or work climate is a product of the core values and business principles that executives espouse, the standards of what is ethically acceptable and what is not, the work practices and behaviors that define â€Å"how we do thing around here,† its approach to people management and the â€Å"chemistry† and the â€Å"personality† that permeates its work environment. The chief things to look for include the following: 1. The values, business principles, and ethical standards that management preaches and practices. 2. The company’s approach to people management and the official policies, procedures and operating practices that paint the white lines for the behaviour of company personnel 3. The atmosphere and spirit that pervades the work climate. 4. The way managers and employees interact and relate to each other 5. The strength of peer pressure to do things in particular ways and conform to expended norms. 6. The actions and behaviours that are explicitly encouraged and rewarded by management in the form of compensation and promotion. 7. The company’s revered traditions and oft-repeated stories about â€Å"heroic act† and â€Å"how we do things around here†. 8. The manner in which the company deals with external stakeholders Discuss the ways in which corporate culture can either help or hinder effective execution of strategy. Strong culture can help a powerful effect on the strategy execution process. This effect may be positive or negative since a company’s present culture and work climate may or not be compatible with what in needed for effective implementation and execution of the chosen strategy. A culture that is grounded in actions, behaviours, and work practices that are conducive to good strategy implementation assists the strategy execution effort in three ways: 1. A culture that is well matched to the requirements of the strategy execution effort focuses the attention of employees on what is most important to this effort. Moreover, it directs their behaviour and serves as a guide to their decision making. In this manner, it can align the efforts and decisions of employees throughout the firm and minimize the need for direct supervision. 2. Culture-induced peer pressure further induces company personnel to do things in a manner that aids the cause of good strategy execution. The stronger the culture, the more effective peer pressure is in shaping and supporting the strategy execution effort. Research has shown that strong group norms can shape employee behaviour even more powerfully than can financial incentives. 3. A company culture that is consistent with the requirements for good strategy execution can energize employees, deepen their commitment to execute the strategy clearly, and enhance worker productivity in the process. When a company’s culture is grounded in many of the needed strategy –executing work for, and the merits of what the company is trying to accomplish. As a consequence, greater numbers of company personnel exhibit passion in their work and exert their best efforts to execute the strategy and achieve performance targets. In sharp contrast, when a culture is in conflict with what is required to execute the company’s strategy well, a strong culture becomes a hindrance to the success of the implementation effort. Some of the very behaviors needed to execute the strategy successfully run contrary the attitudes, behaviors and operating practices in the culture. Such a real dilemma for company personnel. Culture-bred resistance to the actions and behaviors needed for good strategy execution, particularly if strong and widespread, make a difficult problem that must be cleared for a strategy’s execution to get very far.