Culture, Cognition, and Strategy

10 September 2007 at 1:17 pm dhoopes Leave a comment

| David Hoopes |

Although managers frequently refer to their companies’ culture, culture’s influence on business strategy receives limited attention in the academy. Over the years, organizational culture has gone in and out of fashion. Currently, it remains out of fashion. Yet, strategy researchers often stress the importance of shared beliefs, shared values, administrative history, and other organizational characteristics presumably influenced by or reflecting an organization’s culture. A cogent theory of culture and organizational culture can better integrate organizational beliefs, values, and knowledge with current theories of strategy (and for my interests in competitive heterogeneity). Of particular interest to me is a branch called cognitive anthropology.

Most anthropologists include themselves in one of two traditions. One, generally associated with Ward Goodenough, considers culture to be knowledge necessary to get along in a particular society. The other, generally associated with Clifford Geertz, considers culture as something outside of any particular person. Thus Geertz (1973: 12) decries “…the cognitive fallacy [that] culture consists of mental phenomena.” Building on Goodenough’s work, cognitive anthropologists describe culture in terms of member’s schema or cognitive models (e.g. D’Andrade, Hollins, Quinn, Hutchinson). D’Andrade states that cultural schema are “Socially inherited solutions to life’s problems” (1995: 249).

Cognitive anthropology approach can be very helpful to organizational scholars because it connects cultural forces to individual behavior. It is also important because culture is a broad force not easily manipulated. Thus, allowing researchers to discriminate between changing a company’s culture and changing a set of beliefs. D’Andrade argues that culture is not a unified “thing” but consists of multiple components. The extent to which cultural components are internalized, varies across the culture. Further, the nature of a cultural component’s internalization heavily influences the extent to which it will change. Thus, in discussing organizational culture, we can focus on particular components, why or why they have been internalized consistently across the organization (or industry), and how this influences behavior.

Mentioning culture and strategy in the same sentence will no doubt lead to a lot of forehead slapping and eye rolling. Here we go again: how to manipulate organizational culture and make money too! Given organizational culture’s cyclical pattern in academics and consulting-fad history, skepticism is neither surprising nor unwarranted. Nevertheless, to those interested in competitive heterogeneity, competitive advantage, the development of unique capabilities, and other topics in strategy, the presence of organization-wide cultures, industry-wide cultures (see Maggie Philips) and organization sub-cultures (e.g., occupational sub-cultures) should matter.