How does culture shape strategy?

Culture is one important type of informal institution.

Geert Hofstede (1980) defines culture as the collective programming of the mind, which distinguishes the members of one group or category of people from another. Hofstede proposes five dimensions of culture, namely:

  • Power distance refers to the extent to which less powerful members would accept the power is distributed unequally.

  • Individualism refers to the identity of an individual is fundamentally his or her own, whereas collectivism means that the identity of an individual is based on the collective group.

  • Masculinity and femininity concern the gender role differences in society.

  • Uncertainty avoidance refers to the extent an individual would tolerate uncertainty.

  • Long-term orientation emphasises perseverance and saving for future betterment.

Your task

Read the following Deloitte article titled: ‘Shape Culture, Drive Strategy’ (Kaplan and Dollar 2016).

Discuss in the comments area how each element of the five cultural dimensions would influence strategic choices.


References

Hofstede, G. (1980) ‘Culture and Organizations’. International Studies of Management & Organization 10 (4), 15-41

Kaplan, M., Dollar, B. (2016) Shape culture, drive strategy. [online]. available from https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2016/impact-of-culture-on-business-strategy.html [8 April 2019]

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Macro Environmental Analysis and Business Strategy: An Introduction

Coventry University