Capitulo 6 History and Culture (Sin Lentes)

Exploring Strategy
11th edition
Text and Cases
Chapter 6
History and
culture
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved
Learning outcomes
• Analyse how history influences the strategic
position of an organisation, especially via path
dependence.
• Distinguish different kinds of cultures, national-
geographical, field-level and organisational.
• Analyse the influence of an organisation’s
culture on its strategy using the cultural web.
• Identify organisations which may be
experiencing the symptoms of strategic drift.
The influence of history and culture
Path dependency
Path dependency is where early events

and decisions establish ‘policy paths’ that
have lasting effects on subsequent
events and decisions.
Path dependency and lock-in
The impact of path dependency
Path dependency tends to reinforce the importance of
three aspects of strategy:
• Comprehensive change – Because of the system of
reinforcing elements, trying to change one aspect
without changing others is likely to fail.
• Conservatism – it is often not worth the costs of
changing everything to gain a small improvement in
the performance of one particular element.
• Path creation – what managers choose to do at the
start of an initiative or enterprise may lock them in on
long-term path.
Why history is important
• Learning from the past. Will trends be repeated?
How were problems dealt with in the past? Asking
‘what if’ questions.
• Building capabilities. The lessons of the past can give
rise to new ideas and innovation. Can capabilities built
in the past be adapted or transfered to the current
situation?
• Legitimising strategy and change. Past success can be
used as evidence to support current strategies.
Methods of historical analysis
Chronological Cyclical
analysis influences
Key events Historical

and decisions story-telling
Organisational culture
Organisational culture is the taken-for-

granted assumptions and behaviours that
are shared within a particular group and
help to make sense of the organisational
context.
Figure 6.3
Cultural frames of reference
Geographically-based cultures
• Different countries may have different cultures.
• Such cultures may mean attitudes to work,
authority, equality, ethics and behaviours differ
between countries/regions.
• Subnational cultures may also differ within a
country, e.g. Northern and Southern Italy.
Geographically based cultures
Hofstede suggests that there are at least four key
dimensions upon which national cultures tend to
differ:
• Power distance.
• Individualism-collectivism.
• Long-term orientation.
• Uncertainty avoidance.
The organisational field
An organisational field is a community of
organisations that interact more frequently
with one another than with those outside the
field and that have developed a shared culture.
Examples might include:
• Justice – law firms, police forces, courts, prisons and
probation services.
• Accountancy – accountants, auditors and tax
inspectors.
Categorisation
• The ways in which members of an organisational
field categorise (or label) themselves and their
activities has significant implications for what
they do.
• Over time, members of an organisational field
tend to converge on dominant categorisation
schemes.
• Example – the use of the ‘tablet’ as a category in
the computing industry.
Recipes
A recipe is a set of assumptions, norms

and routines held in common within an
organisational field about the appropriate
purposes and strategies of field members.
For example, the shared understanding and

behaviours of health professionals – doctors,
nurses, pharmacists, ambulance service.
Legitimacy
Legitimacy is concerned with meeting the
expectations within an organisational field in
terms of assumptions, behaviours and strategies.
Strategies can be shaped by the need for legitimacy
in several ways:
• Regulation.
• Normative expectations.
• The recipe.
Culture in four layers
The paradigm
The paradigm is the set of assumptions held in
common and taken for granted in an organisation.
The paradigm:
• is likely to be about basic but fundamental
assumptions about the organisation (e.g. Policing
is about ‘thief taking’).
• informs what people in the organisation do.
• influences how organisations respond to
change.
Organisational subcultures
There are often subcultures in organisations:
• Differences between geographical divisions in a
multinational company.
• Differences between functional groups such as
finance, marketing and operations.
• Different nature of work in different functions –e.g.
in an oil company differences between those
functions engaged in ‘upstream’ exploration and
those concerned with ‘downstream’ retailing.
Organisational identity
Organisational identity refers to what members
believe and understand about who they
specifically are as an organisation.
Managers and entrepreneurs often try to
manipulate organisational identity because it is
important for recruiting and guiding employees,
interacting with customers and dealing with
regulators. (e.g. Carslberg wanted to redefine
itself as a fast-moving consumer goods business
rather than a brewer).
Culture’s influence on strategy
Culture may have a major influence on strategy:
• ‘Cultural glue’ – employees often cohere around
the founding principles and values of an
organisation (e.g. IKEA).
• Captured by culture – faced with changes in the
environment, people may cling to solutions
within the existing culture.
• Managing culture – culture change is difficult to
manage.
Culture’s influence on strategy
Source: Adapted from P. Gringer and J.-C. Spender, Turnaround: Managerial Recipes for Strategic Success, Associated Business Press, 1979, p. 203
The cultural web (1 of 7)
The cultural web shows the behavioural,

physical and symbolic manifestations of a
culture that inform and are informed by
the taken-for-granted assumptions, or
paradigm, of an organisation.
Figure 6.6
The Cultural web of an organisation
Rituals and routines
• Which are embedded in history?
• What behaviour do routines encourage?
• What are the key rituals?
• What assumptions and core beliefs do rituals
reflect?
• What do training programmes
emphasise?
• How easy are routines/rituals Rituals/ Paradigm
to change? routines
Stories
• Tend to be about heroes, villains, mavericks,
successes and disasters.
• What core beliefs do the stories reflect?
• What stories are commonly told, e.g. to
newcomers?
• How do stories reflect core assumptions and
beliefs?
• What norms do mavericks
deviate from?
Stories Paradigm
Symbols
• Symbols are objects, events, acts or people that
convey meaning over and above their functional
purpose.
• What objects, people or events do people in the
organisation particularly identify with?
• What are these symbols related to in
the history of the organisation? Symbols
• What aspects of strategy are

Paradigm
highlighted in publicity?
Power structures
• Where does power reside?
• Who makes things happen?
• Who stops things happening?
• Indicators include:
– Status. Power
Paradigm
– Claim on resources. structures
– Symbols of power.
Organisational structures
• What are the formal but also informal
organisational structures?
• Do structures encourage collaboration or
competition?
• What types of power structure
do they support?
Paradigm
Organisation
Structure
Control systems
• What is closely monitored/controlled?
– Formally.
– Informally (e.g. social control).
• Is emphasis on reward or punishment?
• Are controls rooted in history or
current strategies?
• Are there many/few controls? Paradigm
Control
Systems
Undertaking cultural analysis
When conducting cultural analysis:
• The cultural web – can help build an
understanding of a culture.
• Statements of cultural values – be aware that
statements in company reports (e.g. values
statements) can be misleading about the actual
culture.
• Pulling it together – a cultural web can be quite
detailed so it can be useful to summarise the
essence of a culture in a few brief statements.
Strategic drift (1 of 2)
Strategic drift is the tendency for strategies

to develop incrementally on the basis of
historical and cultural influences, but fail to
keep pace with a changing environment.
Strategic drift (2 of 2)
Incremental strategic change
• Gradual change in alignment with
environmental change.
• Building on successful strategies used in the
past.
• In successful businesses, there are usually quite
long periods of continuity where strategies are
largely unchanged or change incrementally.
The tendency towards
strategic drift (1 of 2)
Strategies fail to keep pace with environmental change
because:
• Steady as you go – reluctance to accept that change
may require moving away from strategies that have
been successful.
• Building on the familiar – uncertainty of change
is met with a tendency to stick to the familiar.
• Core rigidities – capabilities that are taken for
granted and deeply embedded are difficult to change.
The tendency towards
strategic drift (2 of 2)
• Relationships become shackles – organisations be
reluctant to disturb relationships with customers,
suppliers or the workforce.
• Lagged performance effects – the financial
performance of the organisation may hold up
initially (e.g. due to loyal customers or cost cutting)
masking the need for change.
A period of flux
As performance declines and the organisation
becomes out of touch with its environment,
a period of flux may occur typified by:
• Strategic change, but in no clear direction.
• Top management conflict and managerial
changes.
• Internal disagreement on the ‘right’ strategies.
• Declining performance and morale.
• Customers becoming alienated.
Transformational change or death
As performance continues to deteriorate the outcome
is likely to be:
• The organisation dies (e.g. goes bankrupt or into
receivership).
• The organisation is taken over (and perhaps
radically changed by new owners).
• The organisation implements transformational
change – multiple, rapid and fundamental
changes.
Summary (1 of 2)
• Historical, path-dependent processes may play a
significant part in the success or failure of an
organisation and need to be understood by managers.
There are historical analyses that can be conducted to
help uncover these influences.
• Cultural and institutional influences both inform and
constrain the strategic development of organisations.
• Organisational culture is the basic taken-for-granted
assumptions, beliefs and behaviours shared by
members of an organisation.
Summary (2 of 2)
• The seven elements of the cultural web are useful for
analysing organisational cultures and their relationships
to strategy.
• Historic and cultural influences may give rise to
strategic drift as strategy develops incrementally on
the basis of such influences and fails to keep pace with
a changing environment.

Capitulo 6 History and Culture (Sin Lentes)

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Capitulo 6 History and Culture (Sin Lentes)

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Exploring Strategy

Path dependency is where early events

Key events Historical

Organisational culture is the taken-for-

A recipe is a set of assumptions, norms

For example, the shared understanding and

The cultural web shows the behavioural,

• What aspects of strategy are

Strategic drift is the tendency for strategies

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