Culture and business practices
We recognise that diversity, which is a product of cultural difference, will affect business and management. Which aspects or functional activities do you think will be affected by diversity?
Walker et al. (1992) may provide the answer. Their book, Doing Business Internationally: The Cross-cultural Challenges, examines five business activities:
In this step, we will focus on the first stage (planning) which is interpreted as corporate strategy. We will discuss the other activities later in the course.
Culture and corporate strategy
When examining the relationship between culture and strategy, we first need to ask ourselves: is strategy a product of culture or is culture a product of strategy?
Gringer and Spender (1979) thought that culture affects the development of strategy (see figure below):
Adapted from Gringer and Spender (1979, p. 203)
Fatehi (1996) explains that culture affects the formulation of strategy in two ways:
- Relationship with the environment
- Relationship between people
In the first dimension, a corporate entity builds a mental framework of two types of person: engineering-oriented or symbiotic-oriented. Engineering-oriented means that people will change the environment for the benefit of organisations. Whereas symbiotic-oriented means that organisations will adapt their strategy to the environment.
Culture also impacts on the interactions and interpersonal relationships within a company. For example, employees from US or employees from Japan may exhibit considerable differences when working together, such as in communication styles and approaches to group work.
What is your opinion about the relationship between culture and strategy? Do you think that strategy is a product of culture or the other way around?
Share your opinions with your fellow learners.
Fatehi, K. (1996). International management: A cross-culture and functional perspective. Prentice Hall.
Gringer, P. H., & Spender, J. C. (1979). Turnaround: Managerial recipes for strategic success: The fall and rise of the Newton Chambers group. Associated Business Press.
Walker, D. M., Brake, T., & Sullivan, K. (1992). Doing business internationally: The cross-cultural challenges. Princeton Training Press.
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