C H A P T E R 5
CULTURE AND STRATEGY
Illustration 5.1
History and strategy at Unilever
Although formally Unilever came into existence in the late 1920s, the companies that comprise
Unilever have a still longer history. Arguably the cultural legacy from those companies has long
influenced Unilever. So, for example, as Paragraph 1 points out, the Dutch desire to achieve
consensus has been a long influence on the company, not least in terms of its governance
1. What symptoms of path dependency are evident in the Unilever story?
2. Extend the examples of organisations given on page 145 that have deliberately employed
their history to legitimise their strategies.
Nonetheless for decades Unilever sought to claim benefits for its historical diversification. It
Illustration 5.2
Project management: Chinese and UK perspectives
1. In what other aspects of managing strategy might the differences identified here be important?
2. If you are seeking to operate in a country with a very different culture, how would you set
about trying to understand that culture and its underlying assumptions?
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Illustration 5.3
Strategy debate in an accounting firm
1. What are the underlying assumptions of the arguments being advanced by the three partners?
2. What may be the origins of these assumptions?
3. How do the different views correspond to the discussions of strategic capabilities (Chapter 3)
and competitive strategy (Chapter 6)?
This illustration is, in effect, a debate about global and competitive strategy in a accounting
firm. The questions are designed to tease out different institutional influences on strategic
thinking. In particular, there are marked differences between Clark and Jones. Clark has spent
Ask students how these different approaches relate to:
Strategic capabilities: arguably, Clark is saying that QDG have developed historic
capabilities and it is these that they should build on. Such capabilities include working with
governments, networking with other firms, providing high level of accountancy standards
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Illustration 5.4
Cultural webs of Barclays Retail
1. How might the webs help those seeking to address the problems of the banking culture?
2. How do the various elements of the web interrelate?
3. Draw up a cultural web for an organisation of your choice.
The need to understand banking culture was highlighted following the banking crises at the
end of the last decade. The problem was that there was little in the way of specificity as to just
what such a culture was. The cultural web is a useful analytic framework and students should be
Closer examination of the webs at the different times will show that there were interlinking
aspects of those webs that reinforced these different organisational cultures. In the 1990s,
virtually all cash and cheque handling was dealt with at the branch level. This was regarded as a
serious matter with professional training for those who worked in the branches, and a symbolic
emphasis on the security of such moneys (e.g. the layout of the branch itself and the offices; as
well as more formal systems such as audits and training). Propriety was reflected in the
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Illustration 5.5
Kodak: The decline and fall of a market leader
1. Which of the reasons for strategic drift are evident in the Kodak story?
This question provides the opportunity for students to consider the reasons for strategic drift
explained in the chapter. Many are evident in the Kodak story. Kodaks inability to change
Key Debate
Understanding organisational culture
An underlying problem with the notion of organisational culture is how people (including
students) conceive of it. There have been many learned articles written about this; but at the risk
In relation to this key debate the following points are important:
The website of Denison Consulting acknowledges the complexity of organisational culture.
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Question 2 asks how Alvessons critique relates to the notion of culture as presented in the
text and embodied in the cultural web? The cultural web, whilst in sympathy with the view
that culture is what an organisation is, suggests that the dimensions of the web can be used
to understand the nature of a culture. Moreover, the text argues that it can be the
responsibility of managers to build on or to change that culture. If so, which of Alvessons
warnings need to be taken especially seriously in using the web? Arguably it helps avoid
essentialising culture, but to what extent does it avoid the others?
Video assignment
Corporate culture
The video features four executives discussing aspects of corporate culture in their organisations.
Organisational culture is essentially to do with that which is taken for granted in organisations
both in terms of assumptions (the paradigm) and ways of doing things. There are several
explanations in the clips about what the interviewees see as cultural dimensions of their
organisations. The question is to what extent can what they describe be thought of as aspects of
culture?
1. So when David Hammond of Metapraxis explains that they are really passionate about
solving customers problems it might be that there are assumptions about customer
centrality and routines about how to deal with them that are indeed so embedded in the
business that they are taken for granted.
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2. If the descriptions provided do, indeed, explain something of the culture of these
organisations, some consequences for strategy implementation seem apparent.
At Metapraxis and Cisco, there is likely to be a focus on meeting customer needs and the
flexibility needed to cope with changes in this regard. This must surely be an asset in
implementing strategy.
Assignment 5.1
Does history matter?
The most basic historical analysis would be a simple time line that shows the most significant
events and decisions over a long period of time for an organisation. One of the illustrations here
might be used as a basis (e.g. Unilever or Kodak: see Illustrations 5.1 and 5.5). As indicated in
the notes to that illustration, the purpose of undertaking such an analysis might be to understand:
Assignment 5.2
An organisational field
The map of an organisational field is, essentially, a map representing the relationships that exist
between an organisation and the community of other organisations with whom it interacts
Johnson, Whittington, Scholes, Angwin and Regnér, Exploring Strategy, 10th edition,
Instructors Manual on the Web
frequently and, importantly, shares a common meaning system. For example, for an
accountancy firm this would include a very wide range of organisations: not only its clients but
also government agencies, organisations within the legal system, universities (from which it not
only recruits but also influences in terms of course design), other accountancy firms,
professional bodies and so on.
Assignment 5.3
Espoused and realised values
The purpose of this assignment is to ask students to consider whether the values espoused by
different organisations are carried through to being realised. Obvious examples where this is not
the case would include businesses that espouse high levels of customer service but do not
Assignment 5.4
The cultural web
This assignment is designed to help students map and understand organisational culture in a
systematic way using the cultural web as a framework. You will, however, need to bear in mind
that whilst Figure 5.6 should assist in identifying factors under each element of the cultural web,
Assignment 5.5
A strategic drift
The four phases of strategic drift in Figure 5.8 are as follows:
Phase 1: Incremental change. This is described in terms of an organisation being successful
over a long period of time through incremental adjustment in which it keeps in line with the
Phase 2: Strategic drift. This is the situation where an organisation has almost imperceptibly
lost touch with its environment. It might be useful to raise two issues here:
Phase 3: Flux. This is where an organisation is in a state of turmoil following its decline in
performance; perhaps Hewlett Packard (see Illustration 12.4) is here. Again, can students
identify firms showing such manifestations of decline?
Phase 4: Embraces different situations. Can students identify, for example:
Assignment 5.6
The symptoms of culture
This assignment will require further reading by students. The primary purpose is for students to
question whether a symptoms-based analysis based on the cultural web is an adequate way of
understanding culture from a strategic perspective. For example, Schein pays particular
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Integrative assignment 5.7
An example of a major change in strategy might be that from a business shifting from a national
focus to a multinational strategy. This would raise a series of issues such as:
A domestic business may have enjoyed competitive advantage, perhaps, in terms of a
national focus, but there would be no such advantage on entry into other countries. So
In turn this relates to organisational culture. It could be that the strategic capabilities are
embedded in the organisational culture of the national firm. It cannot be assumed that
cultural characteristics will readily shift or be capable of being built in the same ways.
How has the strategy that is successful in one country developed? It may be that this has
grown incrementally based on years of management experience. Again, how is this to be
Case Example
Bonuses and gaming at Barclays Bank
This case example enables students to explore the relationship between organisational culture
and an organisations strategy. The role of organisational history can also be explored.
1. Undertake a cultural web analysis of Barclays Banks investment arm.
This question invites students to use the cultural web to understand the culture of the
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Liars Poker) but also a Barclays specific set of cultural traits that seemed to grow under
Bob Diamond. Their web analysis should highlight the following:
Power structures: low corporate control over the investment bank; influence of Bob
Diamond; top rollers have a lot of power and are difficult to get rid of; devolution of
authority to traders.
Organisational structure: individualistic every man for himself, tribal.
This raises the question of what students would see as the paradigm; what are the few
underlying core assumptions here? They might suggest that they are to do with personal
ambition and wealth making, but that this is linked to the thrill or fear of high levels of
risk taking. It might be that the Financial Services Authoritys view that this culture of
gaming is appropriate.
It is important to point out that this paradigm is linked to and reinforced by many
2. How might your cultural web from 1 above and the cultural webs for Barclays retail
(Illustration 5.4) be of help to Antony Jenkins?
This question asks how this cultural web analysis together with the cultural webs for
Barclays retail (Illustration 5.4) might be of help to Antony Jenkins. Students should see
that the cultures are different. In the 1990s, the retail bank may have been paternalistic but
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3. If you were Antony Jenkins, how might you draw on Barclays history in order to redefine
the companys strategy and culture?
This question raises the question of whether Barclays history might be drawn upon by
Antony Jenkins in redefining the companys strategy and culture. His 2013 review accepted
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Strategy lenses1
Introduction
The strategy lenses are introduced in Chapter 1. They are then used in the Commentaries at the
ends of Parts I, II and III. The first Commentary provides a thorough discussion, the second and
third are in tabular form. The first Commentary now has a short Nokia case to illustrate each of
the four lenses.
In this edition, we bring the main discussion of the lenses from after Chapter 1 to the end of Part
I. By the end of Part I, students will be gaining confidence in the fundamental concepts of
strategy and have some concrete material to refer to. The lenses may not be suitable for all
Ways to teach with the lenses
Instructors can use the lenses in seven different basic ways, as outlined below.
1. Building theoretical underpinning
Feedback from instructors typically highlights the importance of a sound academic
underpinning to the subject of strategy. The strategy lenses draw on four different bodies of
2. As a commentary on chapter contents
The Commentaries at the end of each Part refer back to the constituent chapters. In this way, the
lenses can provide a means and a series of insights whereby students can reflect upon what they
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3. As a critical perspective
The lenses can also be used as a basis for a more critical approach to the field of strategy.
4. As a tool for case analysis
When analysing cases, students are naturally inclined to use rational analytical techniques.
However, they can be invited to approach the cases through alternative lenses in order to
generate additional insights. In the public and not-for-profit sectors, the politics and legitimacy
lend themselves to multi-lens analysis.
5. To structure the course
One way of employing the lenses, probably for more experienced students such as part-
time/executive MBAs, is to provide the lenses at the beginning of the course, as a way of
6. For making sense of strategys complexity
Often students find that strategy is highly complex and involves huge amounts of data which is
difficult to make sense (especially where they are involved in real-world projects). Students
7. As an invitation to reflective practice
Once students appreciate that different lenses are present in all organisations strategy making
and strategy making that is done by managers, the facilitating role can move on to suggest that
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Nokia through the lenses
This short case aims to illustrate each of the theoretical lenses with real-world examples.
1. How could you use the design lens, the experience lens and the variety lens to account for
the development of the mobile phone business within Nokia?
The design lens is evident in Nokias inclusion of mobile phones as a star for investment in its
2. How could you use the design lens and the experience lens to explain Stephen Elops
adoption of the Microsoft operating system?
Elops rationale for using the Microsoft operating system rather than Android may appear to
3. Comment on Stephen Elops changing language from a discourse lens perspective.
The burning platform language is of course a vivid appeal for urgent and radical action. On the
Alternatives to the lenses
There are, of course, other perspectives on the strategy field too. For example, there is Richard
Whittingtons What is Strategy and Does it Matter? (2nd edition, International Thomson,