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Nature (Strategy (Culture-strategy fit is easy in theory but difficult in…

- - - - Product leadership
      - Disruptive innovation
      - Operational excellence
      - Customer intimacy
  - - - In many instances, firms have to respond to changes in the environment which are beyond their control and the response may radically after existing 'fit'
      - After strategic change, achieving 'fit' is an ongoing process during which the firm may be required to pursue 'alternative' strategies to enable them maintain market dominance, thereby distorting the 'fit' they have so far sought to achieve
      - Firms are urged to create a 'fit' between their HR and strategies and betwee their strategy and culture (lack of fit often results in failure)
    - - Consistency is desired, particularly in the way that policies and practices support each
      - Notions of internal consistency may also be undermined by the way new leadership is usually associated with changes
    - - Assumption: organizational culture can be managed. However, whether 'deeper' levels of culture can be sysceptible to conscious manipulation remains unanswered
  - - - Good fit when:
        
        Structural conditions are attractive and the organizatio has the resources and capabilities to build a distinctive position
        
        structural conditions are less than attractive but the rganization has the resources and capabilities to ourperform competitors
        
        when structural conditions and resources and capabilities do not dinctively indicate one approach but there is a bias toward defending current strategic position and a reluctance to venture into unfamiliar territory
    - - Good fit when:
        
        Structural conditions are attractive but players are well-entrenched and the organization lacks resources and capabilities to ourperform them
        
        structural conditions are less than attractive and they work against an organization irrespective of its resources and capabilities
        
        when structural conditions and resources and capabilities do not distinctively indicate one approach but there is a orientation toward innovation and a willingness to pursue new opportunities
  - - - Decide how to deliver the message
      - Develop the right message
      - Verify what was actually communicated
      - Understanding your audience
        
        Target audience
        
        Strategy formulation level
        
        Internal: BoD, TMT, senior management
        
        External: shareholders. analysists
        
        Strategy execution level
        
        Internal: middle management, line management, frontline staff
        
        External: customers, suppliers, regulators, communities, families of the employees
    - - Rich media: involves personal interaction -> most likely to stick
        
        Strategy formulation level: quarterly business unit reiews, quarterly committee meetings, annual management reviews, executive forums, president's strategy view, BoD meetings, executive development program
        
        Strategy execution level:
      - Lean media: impersonal and passive -> cost effective
        
        Strategy formulation level: local intranet reports, newsletters, webinars, best-practice sharing
    - - Goal: messure whether the message was received, understood, and acted on by the target audience
      - Objective: Assess whether and how the message and/or channels must be modified to ensure the audience(s) get the message
      - Examples: e-mail surveys, electronic intranet suggestion box, observe nature and quality of dialogue with employees and their decisions
      - Important aspects
        
        Probe to check if message wasn't misconstrued
        
        Seek feedback from all targeted organizational levels
        
        Convey that the performance is measured against the strategy to make employees nderstand why it is important to understand the strategy and their role in executing it
      - Overview of communication strategies
        
        Dialogue about most important points: high effectiveness, moderate info, active management, active employees
        
        Dialogue about problem solution: informatiom is moderate, moderate information, passive management, active employees
        
        Sell most important points: effectiveness is moderate, information is much, active management, passive employees
        
        Concealment: low effectiveness, little information, passive management, passive employees
        
        Everyone knows everything: low effectiveness, much information, active management, passive employees
- - - - Control
        
        Important for companies in mature commodity businesses, mature service industries, where profit margins are small and reliably producing standard outputs with consistely low costs is the key to success.
        
        Cherishes: order and security
        Celebrates: making the plan
        Prioritizes: the system
        Aks: what?
        Leads by: authority
        Organizes as: hierarchy
        Recruits for: loyalty
      - Collaboration
        
        Places great value on understanding the unique needs of each customer. They prefer their product offerings and features to be pulled by customer requirements,
        
        Cherishes: affiliation
        Celebrates: teamwork
        Prioritizes: the people
        Aks: who?
        Leads by: process
        Organizes as: persistent teams
        Recruits for: trustworthiness
      - Cultivation
        
        Places a high value on recruiting, retaining, and nurturing highly creative employees to produce unique products. Media companies, advertising agencies, and boutique consultants. They often seek to develop technological breakthroughs that may result in disruptive innovations
        
        Cherishes: self-actualization
        Celebrates: creativity
        Prioritizes: the idea
        Aks: why?
        Leads by: charisma
        Organizes as: little as possible
        Recruits for: brilliance
      - Competence
        
        Believes in the "Field of Dreams"principle: make great products and people will flock to buy them. Itvalues technical excellence above all else. Typically headed by engineers and scientists. Many tecnology start-ups.
        
        Cherishes: achievement
        Celebrates: top performers
        Prioritizes: the work
        Aks: how?
        Leads by: expertise
        Organizes as: work projects
        Recruits for: competitiveness
    - - Strong culture helps employees make sense of their environment
      - Culture is difficult to change; thus, can be the most powerful help or hindrance for strategic alignment
      - Organizational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in firms
      - Start-ups: cultural values of the founding team become deeply ambedded after just a few years
    - - Basic assumptions: ideas behind it (unconsious, taken for granted beliefs, perceptions, thoughts, feelings)
      - Values/beliefs: justification (ideals, aspirations, goals, ideologies, rationalization, strategies, philosophies)
      - Artifacts: visual organization structures and processes (behavior, language, physical layout)
    - - Individualism
      - Masculinity
      - Power distance
      - Uncertainty avoidance
      - Long-term orientation
- - - - The reward system defines the relationship between the organization and the individual member by specifying the terms of exchange: it specifies the contributions expected from members and expresses values and norms to which those in an organization must comform, as well as the responsible individuals can expect to receive as a result of their performance
      - Reward systems are a powerful means to influence an organizations culture: much of the substance of culture is concerned with controlling the behaviors and attitudes of organization members, and the reward system is a primary method of achieving control
    - - Corporate hierarchy - clan culture
        
        Corporate hierarchy
        
        salary increases are determined through a formal salary plan
        
        perquisites communicated the importance of a rank, tenure, and commitment, as well as a sense of ritual and tradition
        
        bonuses are based on corporate performance. The system rewards the team, not the individual
        
        A high level of interaction exists between superiors and subordenates (formal and informal feedback)
        
        evaluation cmmunicated the importance of the hierarchy
        
        superiors are free to define aspects of a manager's role that are consired important; performance criteria vary according to who is reporting
        
        superiors define and evaluate the performance of subordinates based on subjective (kwalitative and quantitative) criteria; non-qualifiable aspects are sometimes considered to be more importat than quantifiable ones
        
        Clan culture
        
        Acculturation process: long throrough process, syperiors are mentors/role models/agents of specialization, "rich" normative structure governs wide range of behaviors
        
        Relationship among organizational members: pride in membership, sense of interdepence/identification with peers, extensive collegial network, pressure from peers to confirm, stresses collective rather than individual initiative/ownership
        
        Relationship individual-organization: fraternal relationship, mutual long-term commitment, rests on mutual interests/a shared fate, sense of tradition/history/company/style, hierarchy structures relationship
      - Performance-based system - market culture
        
        Performance-based system
        
        Performance is objectively defines and measured and explicitly linked to rewards; qualitative aspects of performance are generally ignored
        
        Evaluations based on a formula in which the manager's financial results serve as inputs. Non-quantifiable aspects of performance are generally not evaluated
        
        Evaluation approach communicates to managers their indepence from subjective judgement of superiors
        
        The system clearly tells managers t focus on those performance elements that can be quantified
        
        Bonuses - almost exclusively based on performance - are a very significant partof compensation
        
        Salary increases are often affected by the external labor market, the cost of living, and the manager's overall performance
        
        Market culture
        
        Acculturation process: little socialization, superiors are distant, superiors are negotiators/resource allocators, lean normative structure governing few behaviors
        
        Relationship individual-organization: contractual relationships, mutual short-term commitment, rests on self-interest, terms of exchange structure relationship
        
        Relationship among organizational members: independence from peers, limited interaction, little pressure from peers to comform, stresses individual
    - - "Unless structure follows strategy, inefficiency results" (Chandler)
    - - Centralization: degree to which decision maing is concentrated in a single point in the organization
        
        Why decentralization?
        
        Input of different people is required
        
        Employee motivation by participation in decidion making
        
        Lower level employees are closer to customers
        
        Training opportunity for lower level managers
        
        Respond rapidly to changing environments
        
        Limited managerial information processing abilities -> delegation to avoid information overload
        
        When is (de)centralization favorable? Strategy will determine the right amount of centralization
        
        LODE/HICE
        
        Eliminates the additional responsibility not desired by people performaning routine jobs
        
        Permits crucial decisions to be made by individuals who have the 'big picture'
        
        HIDE/LOCE
        
        Can eliminate levels of management, making a leaner organization
        
        Promotes greater opportunities for decisions to be made by people closest to problems
      - Specialization: degree to which tasks and activities are divided in the organization
        
        High: higher proportion of specialists who direct their efforts to a well-defined set of activities
        
        Low: less knowledge about specific market segments or functions, lower costs dure to reduced expense of hiring specialists
      - Formalization: degree to which jobs are standardized in an organization
        
        High: clear job descriptions, many organizational rules, procedures covering work processes
        
        Low: non-programmed employee behaviors, great discretion in one's own work
      - Organizational structure types
        
        Customer-centric innovators: informal environments and are populated with a proportionally high number of specialists whose primary behavioral foci is on understanding customers and developing innovative solutions to address their needs
        
        Formalization low, centralization low, specialization high, customer high, competitor moderate, innovation high, internal/cost moderate
        
        Competitor-centric controllers: place the highest emphasis on monitoring compeitor's actions and making sure that costs are kept under control. Their consistent position with regard to structural issues of formalization, centralization and specialization suggests a balances approach between senior and middle management with regard to cricial task decisions
        
        Formalization moderate, Centralization moderate, specialization moderate, customer moderate, competitor high, innovation moderate, internal/cost high
        
        Management dominant: rely on senior managers to make most decisions and to determine specific action workers undertake. These firms have taken most decision-making processes out of the hand of the individual. Senior managers exert an unusually high level of authority and influence
        
        Formalization high, centralization high, specialization low, all strategy types low
        
        Middle ground: no single behavior norm holds more importance than the other. They seem to take a balances approach to behavioral issues
        
        Formalization low, centralization moderate, specialization low, customer moderate, competitor moderate, innovation moderate, internal/cost moderate