The Cultural Problems of Strategy - Essay Example

? The Cultural Problems of Strategy BY YOU YOUR SCHOOL INFO HERE HERE The Cultural Problems of Strategy Introduction Many stakeholders may believe that the conceptions of strategic management are solely related to planning processes and long-term business positioning; however, strategic management is much more complex and involved. Strategic leaders in an organization must analyze external market conditions, review competitor activities, establish budgets, and also determine how to differentiate the business from competition. Further activities include setting control systems that will lead to higher productivity and compliance where required in the business model. One of the most fundamental elements of strategic management is the development of an appropriate culture that is dedicated and motivated to achieve strategic objectives. Since many strategic changes cannot occur without the actions and motivation of employees and mid-tier managers, it tends to give these employees more power and control within the organization to influence resistance to change or slow productivity. This is why the study of groups and the social environment as part of the strategic management process is so important as cultural development is highly important in the organization to ensure goals are achieved. There is a concept in strategic management known as closure, which is defined as “the degree to which all members of a social network have ties with other group members” (Dess, Lumpkin, & Eisner, 2010, p.137). Though this might sound like a rather simplistic concept of maintaining group harmony, there are negative phenomena that can occur when connections are too close. This makes it a fundamental responsibility for the strategic leader to ensure that social capital production is balanced and does not pose problems to strategic goal attainment. Potential Problems with Social Capital Development Strategic development and focus requires considerable resources, both capital-based and labor-based, in order to attain long-term goals. Whether the business is attempting to reposition the company on the market as an innovator with a totally new sales model or simply attempting to be more flexible to consumer needs, it is necessary that employees do not resist the changes. There are many psycho-social characteristics that are unique in a very diverse organizational environment, such as values, principles, ethical and moral perceptions, or even inherent motivations that will predict whether the employee will act upon or resist the change imperative. Therefore, many organizations will try to develop culture through human resources practices, attempting to strengthen the bonds of socialization so that the organization maintains competitive advantage through human capital development. However, these actions are not always successful, requiring the strategic manager to become more integral in attempting to balance out overt socialization in groups. For example, when groups have a great deal of closure, their social ties become stronger. There is a phenomenon in the organization referred to as groupthink, where members of a group begin to fear questioning the shared beliefs of the group (Dess, et al., 2010). Why does this happen? Social psychology theory reminds that when people consider an organizational employee or manager as being credible, attractive and trustworthy, they will tend to role model behaviors they observe within in-group members. Groups with very strong social connections look toward other group members as reference groups, those by which individuals measure themselves, their identities and behaviors. Therefore, it would be socially improper for a group member to openly and publicly discount the opinion of group members, leading to unproductive groupthink. This is highly important when studying strategic management and its many complicated responsibilities. In the decentralized organization, as one example, decision-making no longer occurs top-down but moves horizontally in a way that allows employees to be active in decision-making. Organizations fitting this decentralized profile require much interaction between expert group members or special project leaders in order to brainstorm ideas and solutions for improving the business’ market position or competitive advantage. In a situation where individuals have very close interpersonal connections and will not speak against the majority of the group, a smaller basket of ideas is created and innovations are stifled. In this case, the strategic manager might have considerable problems gaining employee commitment to achieving strategic goals. Why is this? According to Grieves (2010), change actually occurs through conflict creation and not through consensus when creativity and volition are outcomes of group interactions. The main question, it would seem, would be to determine how strategic leaders can strike the appropriate balance between overt socialization and social connection with peers and also minimize groupthink that can occur in tight-knit group memberships. Fairholm (2009) describes the concept of transformational leadership design as it relates to strategy development, which involves establishing lines of communications with all members of the organization. Transformational design will further impart the mission and vision regularly, serve as teachers, and assist in developing individual employee competencies. This is highly related to the strategic management function as cultural capital is an important factor to attaining the mission and vision of the organization. Poorman (2002) suggests using an experiential learning design in order to gain employee commitment to a learning objective, using role playing exercises to improve interest in the learners. The experiential design has been shown by research to improve comprehension and interest in the course materials (Poorman, 2002). So, the research evidence tends to point toward the need to create a training design that incorporates elements of cultural connectivity, without over-emphasizing blatant closure. Role playing allows individuals in the organization to perceive potential or real-life scenarios occurring throughout the internal and external environment through the eyes of another. This, however, builds empathy and other factors of emotional intelligence in a very structured group environment mediated by the strategic leader or supporting human resources. Having an authority to control the level of conversation involved in role playing or other training activities that involve group communications might limit the level of closure or groupthink phenomenon that occurs in some organizations. Starnes, Truhon & McCarthy (2010) suggest that legitimate and authentic relationships take time to develop. Such relationships begin with a series of reciprocal acts, leading to trust and respect that endures. It was previously identified that individuals in diverse organizations have very unique and segregated values and principles that will determine the level by which a strategic leader can predict change resistance. Strategic leaders that become more involved in the organizational environment will be able to develop these authentic relationships and witness, first hand, the psycho-social dimensions of employee behavior that could lead to problems with meeting a change goal. Therefore, rather than simply allowing employees to develop connections with peer group members that could lead to dangerous consensus (groupthink), the strategic leader can be transformational and build competencies individually rather than in groups. If there are legitimate reciprocal acts occurring (appropriate for the organization), there will be more role modeling occurring from a trusted and respected cultural leader, which will replace the practice of looking toward in-group reference group members to model behaviors. This assessment is, in many ways, just a subjective viewpoint based on human behavior characteristics and knowledge of psychological theory. However, since so much of a business competitive advantage and profitability relies on the efforts and attitudes of employees, the strategic manager or leader must determine how to effectively remove the barriers to explicit social capital development. It might very well be a justified solution that the manager should, him or herself, become a barrier to high closure between group members, becoming role models of coaching and development to alter employee focus from existing reference group mentality. Groupthink, by setting some type of controls related to team-working and overdone group learning, might be significantly reduced simply by having strategic managers take a more visible and active role in the human resources system. Infusing a blend of new ideas into the group environment, stemming in this case from the strategic manager, could avoid the insular characteristics of tight-knit groups, something identified as a potential strategy by Dess, et al. (2010). Chaudron (2010) describes the potential benefits of using a 360 degree feedback system in order to gain valuable information about employee attitudes or performance. This involves using feedback from multi-sources familiar with individuals or groups being assessed to determine their perceptions about total job competency. This process does, however, raise some speculation about whether such feedback sources could be considered credible or reliable in a situation where groups experience significant closure. Again, the potential difficulties associated with groupthink in such assessments might be better served by having strategic leaders become the trusted role model and rejecting scenarios that involve too much group-related feedback. Since it is critical for the strategic manager to understand the potential risks of individual employee change resistance, an interactive and observational stance involving mentoring, coaching and authentic relationship development would seem to have much better outcomes to strategic goal attainment. It would seem that limiting some varieties of peer interaction and peer assessment would limit the probability or risks that employees would begin adopting unproductive majority opinion with in-group members. Conclusion It is clear that the role of social capital in obtaining strategic momentum can be complicated and lead to groupthink. Striking a balance between effective socialization and group social capital development is critical to ensure that creativity is explored, ideas are generated, and the organization can achieve its strategic intentions without change resistance. An interactive strategic manager in the HR process as well as establishing control barriers between excess socialization within the organizational environment would seem to have the most effective outcomes based on sociological and psychological theory. No research materials are available that describe specific, effective methods to prevent overt closure problems and groupthink; therefore, these suggestions could be piloted in a strategic management model to determine whether it has effective balancing results and effective productive outcomes from employee groups. Change resistance is a considerable barrier to attaining strategic goals and maintaining market competitiveness. If the majority of the group believe that a change is not valuable, it is likely when there are strong group bonds that members will adopt an immediate desire to resist the change. It is clear that striking a balance in social capital development is necessary for effective strategy implementation. Though many of the recommendations or suggestions for improvements provided in this paper are based on theoretical premises, there is enough research evidence available on human behavior and transformational strategic leadership to justify attempting its inclusion into a relevant organizational model. This can be accomplished through experiential learning in training practices and adding interactivity to the multitude of responsibilities of strategic management. If these steps are piloted, it is likely that social capital will have its balances and provide a better path to strategic goal attainment. References Chaudron, D. (2010). 360 Degree Feedback, Leadership, Management Styles, and Performance Improvement. Retrieved November 17, 2012 from: http://www.organizedchange.com/Excite/360degreefeedback.htm Dess, G.G., Lumpkin, G.T. & Eisner, A.B. (2010). Strategic Management (5th ed.). McGraw- Hill/Irwin. Fairholm, M. (2009). Leadership and Organizational Strategy, The Public Sector Innovation Journal, 14(1), 26-27. Poorman, P.B. (2002). Biography and Role-Playing: Fostering Empathy in Abnormal Psychology, Teaching of Psychology, 29(1), 32-36. Starnes, B.J., Truhon, S.A. and McCarthy, V. (2010). A Primer on Organizational Trust, ASQ Human Development and Leadership. Retrieved November 18, 2012 from: http://rube.asq.org/hdl/2010/06/a-primer-on-organizational-trust.pdf Read More