Some of the internal aspects mentioned in the previous blog entry (Entry 9) require a more detailed description in order to be properly understood. These aspects are:
- Management style of top management.
- Organizational culture.
- Internal power or politics.
Management style of top management
The top management style refers to the style shown by top managers in their interrelationship with their subordinates.
The following is a description of the two types of extreme and opposing management styles between which are usually found the management styles that can actually be observed in companies: the participative management style and the autocratic management style.
The management style of a company’s top management influences the typology of the strategic processes that are developed in the company, fundamentally influencing who will be the protagonists of these processes. Thus, it can be seen that:
– The autocratic management style, by restricting the participation of subordinates, will minimize the appearance and development of bottom-up and democratic type [1] emergent strategic actions, encouraging only the development of top-down strategic processes (both deliberate and emergent) where the protagonists are the company’s top managers. As a consequence, the generation of new strategic concepts, ideas, initiatives, visions and decisions, and of new incipient patterns of behaviour, and hence of new strategic learning and new strategies, will be reduced.
– The participative management style, in promoting the participation of subordinates, will encourage the appearance and development of bottom-up (emergent) and democratic type (deliberate and emergent) strategic actions, as a result of which new strategic concepts, ideas, initiatives, visions or decisions, or new incipient patterns of behaviour will be generated, and thus new strategic learning and new strategies, which may lead to the generation and exploitation of new business opportunities.
Of course, with this type of management style, there will also be top-down strategic processes (both deliberate and emergent), in which the key players are the company’s top management.
Organizational culture
Organizational culture is the set of beliefs, assumptions and values shared by the members of an organization.
The existing culture in a company influences the style of thinking favoured in that company, which affects both the nature or typology of the strategic processes themselves and the content of the strategies that are developed from them.
Culture also acts as a filter for information (causing attention to be paid to certain kinds of information while others are overlooked) and as a filter that sets the premises for decision making. As a result, organizations with different cultures operating in the same environment may interpret that environment in very different ways, which will influence both the nature of their strategic processes and the content of their strategies.
Furthermore, the degree of richness and intensity of the organizational culture can also influence the nature of strategic processes. Thus, for example, as Mintzberg (1994) argues, in companies with strong cultures, where there is a high commitment from people, formal strategic planning systems are often not used and are perceived as excessively impersonal and technocratic. This would be the case in many Japanese companies, which have strategic objectives but no specific action programmes, lacking foresight and planning techniques. In short, these companies are less planned, less rigid and more vision-driven (Ohmae, 1982).
While it is true that an organization’s culture does not tend to change quickly or permanently, it is also true that it will evolve over time as a result of learning from the company’s experience (Morcillo, 2002).
In addition to organizational culture, there are also other types of culture that can be observed depending on the level of aggregation considered: culture of a country, culture of an industry and organizational or corporate culture. It should be borne in mind that each of these cultural levels influences the others. In this respect, for instance, Roth and Ricks (1994) note how national cultures influence the way in which the environment is interpreted, so that different strategic responses are created by the same company based in different countries.
Finally, it is interesting to note that companies that have a ‘culture of innovation’ [2] will be in a better position to change their strategic processes and strategies in order to adapt them to the changing conditions of the organization and its environment.
Internal power or politics
Internal power or politics is understood as the exercise of influence [3] by some individuals or groups over other individuals or groups within the organization with different perceptions and/or interests, in order to implement strategies that are consistent with the perceptions and/or interests of the former.
In this regard, it should also be borne in mind that premeditated strategies can lead to changes in power relations, which can lead to the emergence of political maneuvering on the part of those affected.
In short, internal power or politics refers to a basic reality of organizational life: the fact that companies are made up of people with different perceptions, desires, expectations, interests and fears. This may seem obvious, but it has long been ignored in this field of study, where it was assumed that top managers were completely rational people who defined the strategy that the rest of the people in the organization faithfully implemented as obedient and loyal employees.
In those strategic processes where the phenomenon of politics occurs, the strategies that arise will usually be emergent rather than deliberate and will take the form of specific positions rather than integrated perspectives or shared visions. The people who carry out the influencing exercise may have the most premeditated of intentions, but the final outcome for the company (from the perspective or point of view of the top management) will most likely be emergent, and it is even possible that none of the protagonists imagined things that way at the outset.
The phenomenon of politics tends to occur most intensely in organizations that are large, complex and decentralized, and/or lack strong leadership and culture, and generally during periods of major change (involving shifts in power relations), periods of fluctuation (when the organization is unable to establish a clear direction) and periods of deadlock (when there is resistance to strategic change).
[1] The existence of this type of strategic actions (‘democratic’ type emergent actions) has recently been considered in this field of study, being defined (theoretically) and verified (empirically) for the first time during the research carried out in his doctoral thesis by Roch (2016 and 2019). This type of strategic actions are also described in the book: “The strategic process of the firm: Theory and cases” (Roch, 2024).
[2] ‘Culture of innovation’ is understood as the set of “values, convictions and behaviours that are prone to arouse, assume and promote ideas and changes that lead to improvements in the operation and efficiency of companies, even when this implies a break with the conventional or traditional” (Morcillo, 2006).
This ‘culture of innovation’ is characterized not only by not resisting change but also by promoting it within the organization. The definition and implementation of a ‘culture of innovation’ in a company will make it possible to generate an ‘adaptive advantage’ in that company. An advantage that, on the one hand, accelerates the adoption of innovations from outside, and on the other hand, the development and diffusion of its own innovations. This advantage will lead to the generation of organizational skills capable of converting changes into business opportunities, whether promoted by the company itself or coming from any other agent in the environment (Morcillo, 2012).
[3] This exercise of internal influence often takes the form of: persuasion, negotiation, concessions, and even direct confrontation.
If you are interested in going deeper into the strategic process, allow me to recommend you: - Book: "The strategic process of the firm: Theory and cases" (Roch, 2024). - Courses and consulting program on the strategic process.
