Culture essentially consists of people's interpretations of the world and the human activities and artifacts that reflect these interpretations. Furthermore, after recognition, these interpretations are collectively shared in social processes and there is no private culture. Perhaps some activities are on an individual level, but their connotations are still collective. What keeps companies together is culture. Culture can also be said to be a community, which is the result of people's interconnectedness.
Sociology divides communities into two different types of interpersonal relationships: sociability and solidarity. Sociability is a measure of the degree of sincere friendliness among group members, while solidarity is a measure of the group's ability to pursue shared goals quickly and effectively, regardless of the joint role of individuals in the group.
In business communities, the benefits of high sociability are obvious and huge.
Most employees find it enjoyable to work in a highly social environment, which helps improve morale and team spirit. Social networking also helps increase creativity because it promotes teamwork, information sharing, openness to new ideas, and creates an environment in which individuals are more willing to work overtime.
Also, unity creates strategic focus, rapid response to strategic threats, and maintenance of tolerance for poor performance, but it can also lead to impersonality. This focused intention and action can be very effective if the organization's strategy is right.
First, the premise of the cultural school strategy.
Below we introduce the main assumptions of the cultural school:
(1) Strategy formation is a process of social interaction, which is based on the common beliefs and understandings of organizational members.
(2) Individuals perceive these common beliefs through the accumulation or socialization process. Although this process can sometimes be strengthened through formal teaching, it is more subtle and non-verbal.
(3) Most organizational members can only partially describe the beliefs that underpin organizational culture, and the origins and interpretations of culture remain very vague to them. The
(4) strategy adopts the above-mentioned ideology , which is rooted in the collective will and reflected in various models that are used to protect and utilize the organization's internal resources or capabilities to bring benefits to the organization. Competitive advantage. Therefore, the best description of a strategy should be thoughtful.
(5) Culture, especially ideology, does not encourage strategic change, but rather the maintenance of existing strategies; at most they make some positioning shifts within the organization's overall strategic view.
Second, the decision-making style of the cultural school.
Culture not only affects the thinking style and analytical methods used within the organization, but also affects the process of forming the organization's strategy. For example, after the early restructuring of General Motors by Alfred Sloan, the laissez-faire management approach to different businesses was eliminated and replaced by a new culture that emphasized careful analysis and thoughtful decision-making.
Culture acts as a perceptual filter or lens, and in turn, these two roles establish people's decision-making assumptions. In other words, the cultural school applies the interpretivist branch of the cognitive school to the collective life of organizations. The result is that organizations with different organizational cultures operating in the same social environment will interpret the social environment in completely different ways.
Third, culture can hinder organizational strategic changes and responses.
Shared commitment to beliefs within an organization promotes stability in organizational behavior, thereby working against organizational strategic change. "...Before strategic learning can occur...the original dominant logic must be abandoned by the organization in a sense...For example, IBM At the beginning of establishing a new strategy, the original main framework logic within the organization needs to be partially abandoned or Forget”. It is the beliefs and unspoken assumptions embedded in the deepest layers of culture that are powerful internal barriers to fundamental change in organizations.
So how to overcome cultural barriers to strategic change?
Bjorkman said that radical changes in strategy must be based on fundamental changes in culture.He divided this process into four stages:
(1) Strategic drift. In most cases, radical reforms are preceded by a growing gap between the organization's belief system and environmental characteristics, and strategic drift occurs.
(2) Unfreezing of existing belief systems. Strategic drift often ultimately leads to a deterioration in financial conditions and a sense of organizational crisis. In this situation, previously unproblematic organizational beliefs are exposed and challenged from within and outside the organization. As a result, an atmosphere of tension and disunity develops within the organization, ultimately leading to the collapse of the shared belief system.
(3) Experimentation and reconstruction. When the original organizational belief system is abandoned, the organization usually goes through a period of confusion. A new strategic vision may emerge during this period. This strategic vision is often a combination of old and new ideas accumulated through experimentation. The organization then makes strategic decisions based on this vision, and once good results are achieved, the organization becomes more committed to this new way of acting.
(4) is stable. Positive feedback will continually increase organizational members' acceptance of a new belief system that appears to be valid.
Fourth, the theory of competitive advantage from the perspective of resources.
When a company has a new product that cannot be used in its own market, why does it take the trouble to develop new markets? Why not just sell the product to the highest bidder?
Penrose gave an excellent answer in the article "Why Companies Diversify": market failure.
Simply put, it means that the market cannot evaluate new products, new technologies and new ideas well. The established mousetrap companies just don't believe that your new mousetrap is better, so you have to produce and market the thing yourself to prove the new product's superiority.
Penrose believes that many companies have chosen to do this, so a large number of diversified companies have emerged.
Market failure results in firms gaining advantages from imperfect competition. Uniqueness provides the basis for company development: in the process of creating unique products, companies also develop unique capabilities or resources. The more you invest in research and development, the stronger your production and marketing capabilities will be, and the more you will learn from your customers.
Berger Wernerfield developed Penrose's theory in the field of strategy:
(1) Observing a company in terms of the resources it possesses yields different insights than looking at it from a traditional production perspective. In particular, look at business differences in a new light.
(2) One can identify the types of resources that can generate high profits. Similar to entry barriers, this is related to the resource status barriers we mentioned.
(3) The strategies of large enterprises include breaking the balance between utilizing existing resources and developing new resources.
(4) An acquisition can be viewed as the purchase of a set of resources in a highly imperfectly competitive market. Imperfect competition is maximized by focusing on the purchase of scarce resources, other things being equal. This is a great opportunity to buy a bargain and make a huge profit.
Jay Barney's definition of resources is: all assets, capabilities, organizational processes, information, knowledge, etc. controlled by an enterprise.
Enterprise resources can be divided into:
Material capital resources, including natural technology, factories and equipment, geographical location, raw material channels, etc.;
Human resources, including training, experience, judgment, intelligence, relationships, etc.;
Organizational resources, including formal systems and structure and informal connections between groups.
An enterprise can be regarded as a set of resource bundles, including tangible resources and intangible resources. What organizes this set of resources into a system is a shared cultural network. It maintains, renews and reshapes these resources, closely integrating material culture and social culture.
However, how do companies know which resources are strategic, that is, which resources provide the most lasting benefits when the company faces competition? Barney formulated four criteria for this:
(1) Value. Resources must have strategic value and must have the ability to improve organizational efficiency and effectiveness.
(2) Scarcity.Strategic resources are scarce and in high demand to a certain extent. Therefore, a supermarket chain that connects major locations in a city has the same extraordinary power as a Hollywood star with a unique face.
(3) Difficult to imitate. Not only must resources be valuable and scarce, they must also be difficult to imitate. Difficulty to imitate can arise from established historical facts, causal ambiguity, or simply be complex and difficult to imitate.
(4) Irreplaceability. If competitors can find substitutes for scarce and inimitable resources, then this resource still cannot become a strategic resource, because the scarce resources will become uninterested because of the emergence of substitute products.
If the resources owned by an enterprise possess these characteristics, it will have a higher competitive position than its competitors. But will these resources provide sustained competitive advantage?
In order to answer this question, Margaret pointed out that valuable, scarce, non-imitable and non-substitutable resources must be converted into sustainable competitive advantages of and must meet the following four conditions:
(1) Heterogeneity. If firms have heterogeneous resource bundles in the same industry, sustainable competitive advantage will emerge.
(2) Ex ante restrictions on competition. Competition between different resources of enterprises also needs to prevent or prevent other enterprises from imitating. Such as obtaining a dedicated license.
(3) Post hoc restriction of competition. Build barriers that make it difficult for competitors to imitate, such as obtaining strategic retail locations, thereby forcing competitors to build retail locations where they have less advantage.
(4) Illiquidity of resources. If the resource bundle depends on external sources, for example, if the resource bundle that provides a sustained competitive advantage requires the hiring of people with highly specialized skills, the competitive advantage may change hands. Because once these individuals realize their value to the business, they will demand higher pay or provide services to competitors.
Fifth, culture is an important resource. The first line of defense for
to become a superior resource is to prevent imitation. Patents and trademarks naturally serve this purpose easily, but in the long run, perhaps the best protection comes from intangible relationships, institutions, skills, and knowledge. This brings us back to culture.
Barney, in his article "Organizational Culture: Can it Become a Resource of Lasting Competitive Advantage", regards culture as the most effective and strongest fortress against imitation. He cited two reasons:
First, culture creates unique products.
Secondly, cultural cultivation has causal ambiguity. Causal ambiguity makes culture difficult to understand, let alone replicate, even by one's own people within the organization.
Connor and Prahalad believe that "the essence of resource view is knowledge view". According to this view, an enterprise cannot be viewed as a collection of various tangible resources, but should be viewed as a hierarchy of intangible knowledge and knowledge-creating processes.
Kogot and Zander believe that the source of difficulty in imitation comes from the organization as a whole as a "social group". Social group refers to the organizational system that establishes a common identity for employees. Here, employees are bound by what they know and value, and the system becomes their moral code.
Sixth, the evaluation of the cultural school, its contribution and applicable environment.
If the shortcoming of the positioning school is artificial precision, then the shortcoming of the cultural school is conceptual ambiguity.
One danger of the cultural school of thought is preventing organizations from making necessary changes. It supports management to always stay on the original track and maintain the current status. In Wang Dongyue's words, culture is shielding.
The cultural school emphasizes tradition and public opinion, emphasizing that change is very difficult and complex, thereby encouraging stagnation and maintaining the status quo.
Culture construction is difficult, and cultural reconstruction is even more difficult.
But it is easy to destroy a strong culture. Here are five steps:
(1) Set the bottom line.
(2) Make a plan for every action: without spontaneous action, there is no learning.
(3) Encourage the managers around you to believe that they have nothing to do with anything other than managing correctly.
(4) Always remain objective, that is, treat people as objects.
(5) Do everything according to the steps mentioned here.
Another danger of using culture as an explanatory framework is that it equates strategic advantage with organizational uniqueness. It is always good for an organization to be different from other organizations, but the difference cannot be intrinsic or intrinsic. Otherwise, the organization will breed a certain degree of arrogance, and who will reason about the reasons behind the status quo? “Not invented here” is not an unfamiliar organizational phenomenon.
The resource view theory has generated insights that are meaningful but cannot easily be translated into strategic management. The problem with
's general discussion of culture and specific discussion of the resource view is that they only provide very simple explanations of existing phenomena, but do not deal with some problems that will occur and are difficult to solve.
The cultural school is an overall consistent ideological system; the cultural school introduces the important collective thinking in the social process, establishes the equal status of organizational style and personal style, and advocates the establishment of an overall concept; the cultural school believes that strategy formation becomes a reflection of collective cognition manage.
The cultural school seems more applicable to special periods in organizational life, including periods of reinforcement. During the period of intensification, companies pursuing rich strategic concepts may eventually stagnate. Typically, this results in periods of change resistance, in which the inertia of the existing culture, including the company's established strategic mindset, prevents necessary strategic adjustments. And the cultural school may also help us understand periods of corporate reinvention, when new ideas are collectively formed, and even periods of cultural change that accompany strategic shifts.
In short, the cultural school believes that strategy formulation is a social interaction process driven by social and cultural forces and based on the common beliefs and understandings of organizational members; the main form of strategy is concepts, rooted in collective will, protecting its resources or capabilities through the organization, and This is reflected in the way resources or capabilities are used to gain competitive advantage; culture plays a role in maintaining strategic stability, and strategic mutations must be based on fundamental changes in culture.
