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Business Strategy
BUSINESS STRATEGY REPRESENTS CLEARLY IDENTIFIED FEASIBLE ROUTE FOR STEERING
ACTIVITIES ONTO ATTAINMENT OF GOALS AND OBJECTIVES.
Three Levels of
Strategy
1. Corporate Level Strategy
2. Business Unit Level Strategy
3. Functional/Operational Level
Strategy
Corporate Level
Strategy
Managing Activities and Business
Interrelationships.
Corporate Responsibilities.
Management Practices.
Competitive Contact.
Business Unit Level
Strategy
Influencing the layout of competition
by means of action such as vertical
integration.
Positioning the firm’s business
against competitors.
Modifying actions to cope with
changes in demand, supply,
regulations and technology.
Developing useful partnerships with
customers and other business units.
Functional/Operational
Level Strategy
Business development
Production
Finance
Human resource and materials
management
Corporate Culture
“Corporate culture is a system of
shared values, assumptions, beliefs,
and norms that unite the members of
an organization.”- Kathryn Bartol, Management
Functions of culture
Organisational
Culture
Organisational
Identity
Collective
Commitment
Social System
Stability
Sense-Making
Device
Cultural Analysis
Cultural Analysis focus on identification of the key components of an organisation’s culture and ascertainment of resultant
alignment with strategic intent, strategies, policies and business development
imperatives.
Two Levels of
Cultural Analysis
• Analysis of Elements of Culture
• Analysis of Cultural Expressions
The Impact of Corporate
Culture on Business Strategy
•Risk
•Employee Retention
•Incentive Pay
•Focus
Aligning Business Strategy
with Corporate Culture
In effect, the whole goal for aligning business strategy with corporate culture is
to ensure the components of active culture within the organisation would facilitate
seamless operability for established strategies.
Forces of Corporate
Culture
• Leadership
Stream
• Teamwork
Dynamics
• Workplace
Communicatio
n
• Paradigms
• Rituals and
Routines
• Power
Structures
• Symbols
• Exploratory
Engagement
• Social
Connectivity
• Organisational
Structures
Southwest Airlines didn’t earn the highest loyalty in the industry with its bags fly free and fuel price hedging strategies
Reason #1People are loyal to culture, not to
strategy
A resilient culture was more important than new strategies in saving Starbucks
Reason #2Culture provides resilience in tough
times
During the fuel price crisis of 1991, Southwest Airlines didn’t have to execute a strategy of pay cuts – employees
volunteered for it.
Reason #3Culture is more efficient than strategy
Les Schwab sells the same tires you can buy
anywhere else – but no one can compete
with their culture
Reason #4Culture creates competitive
differentiation
Toms Shoes has become a cultural icon – creating a level of success that could never be attained by strategy alone.
Reason #5Culture can spark a contrarian business
strategy
Robert Nardelli’s strong-fisted GE strategies increased sales,
profits, and stock price…
Reason #7When strategy and culture collide,
culture will win
Not fixing Dave Carroll’s guitar cost United $millions
Reason #8Cultural miscues are more damaging
than strategic ones
• Hundreds of people tour Zappos every week but no one can copy the Zappos culture
• Getting a job at the Zappos call centre is more competitive than gaining admission to Harvard
Reason #9Strategies can be copied but no one can
copy your culture
We don’t need to tell people they can’t smoke in our buildings or discipline them when they do – co-workers will take care of that
Reason #10Culture provides greater discipline than
disciplinary action does
• Wal-Mart’s culture of low price at any cost has come at a huge cost to the company.
• Wal-Mart has spent over $100 million on the investigation of these ethical scandals.
Reason #11Culture provides a level of risk prevention
that cannot be attained with strategy alone.
Your bottom line next year will largely be determined by your current strategies; your bottom line in the following years will be more influenced by your current culture.
Reason #12Culture will have a significant impact on your
future bottom line.