Strategy Frameworks Influencing Organizational Culture

The objective of this learning module is to: outline the 3 strategy frameworks that influence organizational culture.

You will learn the basics of each strategy, which structures the strategy works in, and an example of each strategy. There will be questions throughout, and at the end of the module there will be a short quiz.

Remember - you can explore the course at your pace!

So if you're interested in learning more about strategy frameworks that organizations use - click "Start Course" to begin!

Innovation Strategy

Innovation Strategy

What is an innovation strategy?

It emphasizes the introduction of major new products and services and strives to achieve meaningful and unique innovations

What do innovative firms use?

  • Competitive Pay
  • Benefits
  • These strategies attract top candidates and motivate employees to take risks

What structures assist innovation?

  • Well-developed communication channels
  • Policies for enhancing long-term  commitment
  • Clear channels of authority

Strategy-Structure Relationship:

Organic - loose structure, low specialization, low formalization, decentralized

Why? Innovators need flexibility

Example:

Apple

  • Innovation is a core value for Apple
  • According to PricewaterhouseCooper, Apple is the world's most innovative company, they spent $8.1 Billion on research & development in 2015 (Sharma, 2016)

Want to see an example of Apple's innovation at work?

Click on the video to see why Apple is considered an "innovator"

True or False

  • The innovation strategy emphasizes the introduction of major new products and services.

Cost-Minimization Strategy

Cost-Minimization Strategy

What is the Cost-Minimization Strategy?

  • This strategy emphasizes tight cost controls, avoiding unecessary marketing expenses, and price cutting


What tactics are used?

  • These types of organizations don't focus on policies for developing commitment among their workers
  • The bottom line is saving costs

Strategy-Structure Relationship:

Mechanistic - tight control, work specialization, high formalization, high centralization

Why? The mechanistic structure is efficient and stable.

Example:

Walmart

  • Walmart is famous for its "every day low prices"
  • Minimizing operating costs is a key principle of their business model (Hyde, 2015)

Want to learn more about the effects of Walmart's cost-minimization practices?

Click on the video to watch a trailer for the movie "Walmart: The High Cost of Low Price"

Which 2 structural aspects would work the best for the cost-minimization strategy?

  • Loose Structure
  • High formalization
  • Low formalization
  • High centralization

Imitation Strategy

Imitation Strategy

What is the Imitation Strategy?

  • Organizations with this strategy move into new products or new markets only after their viability has already been proven.

How does the imitation strategy operate?

  • This strategy minimizes risk and maximizes profit opportunity
  • They follow smaller competitors with innovative products, only after competitors have proven that a market for the product exists.

Strategy-Structure Relationship:

Mechanistic AND Organic - A mix of loose and tight properties, tight controls over current activities and loose controls for new activities.

Why? This strategy needs a mechanistic structure to keep costs low and maintain control, but also an organic structure so that new activities can be pursued.

Example:

Forever 21

  • Copying other people's designs has become a part of their business strategy, they can afford to take designs that have been proven to sell well and pay for legal costs when necessary.

Which feature best defines the Imitation Strategy?

  • Only introduce new products once they have been proven to work by competitors.
  • Create unique innovations.
  • Imitate products from smaller companies right way without the market being proven.

Quiz

Quiz

You will now take a short quiz with 5 questions, answer them the best you can. 

Remember you have an unlimited number of attempts, and you can always go back to the previous sections to refresh your memory!

Match the strategy framework to it's structure.

  • Innovation
    Organic
  • Cost Minimization
    Mechanistic
  • Imitation
    Mechanistic AND Organic

Cost-minimizers need the mechanistic structure because:

  • It is efficient and stable.
  • It allows them flexibility to be creative

Guess the strategy:

Organizations that focus on introducing major new ideas or services use the strategy.

Guess the strategy:

An organization that has a strategy controls costs and cuts prices.

Guess the strategy:

Organizations that follow a strategy only move into new products or markets once other innovative companies have proven their viability.

Congratulations!

You have completed your quiz on Organizational Strategies. You now have an understanding of the 3 strategy frameworks that influence organizational culture!

References

References

References