Corporate Culture and the Strategic Grid: Preparing for the Implementation of a Strategic Plan

Dr. Lance Revenaugh Dept of Information Systems City University of Hong Kong Tat Chee Avenue Kowloon, Hong Kong

1.

INTRODUCTION

Strategic plan implementation is a critical process facing senior management now and into the foreseeable future. While literature abounds on how to go about strategic planning, there is comparatively little written about how to implement a strategic plan once it is developed. One explanation for this phenomenon is that successful implementation is inextricably linked to the culture of the organisation. Corporate culture can be hard to define, measure, or manage. As a result both researchers and practitioners have tended to shy away from placing emphasis on culture considerations when implementing a strategic plan. This paper, however, develops a practical framework for managers to use when preparing for a strategic plan implementation. The domain described here is information systems, but the framework has implications for all types of implementations.

2.

STRATEGIC PLANNING FOR INFORMATION SYSTEMS

Strategic planning for information systems (IS) is receiving considerable emphasis in many organisations. In addition, IS is increasingly perceived as having the capability to change or alter core organisational directions, to reorient corporate strategy, and to even redefine industry structure (Raghunathan and Raghunathan, 1990). With this new strategic thrust of IS comes a heightened need for planning and co-

ordination of

the information resource. Researchers are now advocating

development of an overall company plan for information systems called an information systems architecture (ISA). To date, unfortunately, the implementation of IS strategic plans, and specifically ISAs, has not had a high success rate. In an attempt to address this problem, this paper explores a new approach to strategic plan implementation. Current research has given us insight into the value of considering the strategic importance of IS applications to the firm when implementing an IS strategic plan. Current research also stresses the importance of considering corporate culture when an organisation is undergoing any major change. In this paper, these two areas of research are analysed for their affect on the degree of difficulty encountered when implementing an ISA. ISA is a concept centered on bringing together and co-ordinating a firm's information. Although one standard definition of ISA does not exist, several authors have provided important insights. Vogel and Wetherbe (1984) define an ISA as a road map for developing the various information subsystems that must be tied together to co-ordinate the management of different organisational efforts. Brancheau and Wetherbe (1986, p. 453) add that it is a "personnel-, organisationand technology-independent profile of the major information categories used within an enterprise". Zachman (1987) is more specific when he adds that an ISA should define and control the interfaces and integrate all of the components of a firm's information system. The search for one or more methods to best develop an ISA is currently in progress. The Zachman framework (Zachman, 1987), the Dooley Group approach (Senn, 1986), and Wetherbe and Davis' (Brancheau and Wetherbe, 1986) "Longrange information system architecture" are three of the more prevalent methodologies discussed in the literature. Zachman (1987) models his framework after an architect's drawings for building a structure, from a general overview down to detailed representations for data, functions and networks. He further suggests that his framework can be expanded to include descriptions for people, time, and 2

purpose dimensions of the organisation. The Dooley Group approach (Senn, 1986) emphasises dissection of information architecture into five levels that results in an incremental implementation of an ISA. "Long-range information system architecture" (LRISA) is a blending of three general planning techniques--IBM's business systems planning, Rockart's critical success factors, and Wetherbe and Davis' ends/means analysis in order to arrive at a more manageable and less time consuming method for developing an ISA (Brancheau and Wetherbe, 1986).

With the increased attention that ISA is receiving, a major question arises concerning the level of importance a firm should place on its strategic planning for IS. Should all organisations place the same emphasis on ISA? Research has clearly shown the answer to be "no" (Raghunathan and Raghunathan, 1990; Cash, McFarlan, McKenney, and Vitale, 1988). The importance of an ISA does vary depending on how critical information technologies (applications) are in achieving a firm's overall strategic goals. This position is strongly advocated by Raghunathan and Raghunathan (1990), and is discussed by Cash, McFarlan, McKenney, and Vitale (1988) in the context of the Information Technology Strategic Grid. The Strategic Grid will be described later in this paper.

3.

CORPORATE CULTURE

Over the last fifteen years corporate culture has been increasingly analysed in terms of its influence in organisations. The study of culture is becoming more and more prevalent as management seeks to find better ways to handle the need for increased adaptability in their organisations as brought on by the proliferation of information systems technologies. Clearly, there is increasing evidence that culture affects performance (Cash et al., 1988; Kilmann, Saxton, and Serpa, 1986; Saffold, 1988). Many researchers assume that corporate culture is an important

consideration for understanding and effectively managing organisations. They often 3

fail, however, to validate their assumptions (Arogyaswamy and Byles, 1987; Reimann and Wiener, 1988; Saffold, 1988). These researchers simply posit that the importance of culture is self-evident as one analyses an organisation. Thompson and Strickland (1987, p.237), for example, make this assumption as they state that the "best way to understand corporate culture is by example ". They then go on to describe culture on a case description basis, discussing parallels with Peters and Waterman's In Search of Excellence (1982). A significant omission is that no attempt is made to objectively measure culture.

Corporate Culture Defined In order to measure corporate culture, however, we must first define it. As one studies culture it becomes clear that arriving at a common definition is not an easy task. Several definitions of culture have been offered; some of the most prominent include:

Culture is the shared philosophies, ideologies, values, assumptions, beliefs, expectations, attitudes, and norms that knit a community together. All of these interrelated psychological qualities reveal a group's agreement, implicit or explicit, on how to approach decisions and problems, i.e., "the way things are done around here" (Kilmann, Saxton, and Serpa, 1986, p. 89).

Culture involves how and why organisations create myths and legends, engage in rites and rituals, and are governed through shared symbols and customs (Meek, 1988, p.453).

Every organisation is a unique culture. It has its own special history of how the organisation has been managed, its own set ways of approaching problems and conducting activities, its own mix of 4

managerial personalities and styles, its own established patterns of "how we do things around here ", its own legendary set of war stories and heroes, its own experiences of how changes have been instituted-in other words, its own climate, folklore, and organisation personality (Thompson and Strickland, 1987, p. 237).

Culture can be the social or normative glue that holds the organisation together. The corporate culture expresses the values and beliefs that members of the organisation have come to share. Moreover, these values are typically manifested by symbolic devices such as myths, rituals, stories, legends, and specialised language (Reimann and Wiener, 1988, p. 36).

Organisational culture refers to the unwritten, often unconscious message that fills in the gaps between what is formally decreed and what actually takes place; it involves shared philosophies, ideologies, values, beliefs, expectations, and norms (Deshpande and

Parasuraman, 1986, p. 28).

These definitions reveal that culture is a complex concept that involves many factors. This has led some researchers to conclude that culture can only be studied in a piecemeal fashion. Many authors (e.g., Allen, 1985; Deshpande and Parasuraman, 1986; Kilmann, Saxton, and Serpa, 1986; Peters and Waterman, 1982; Thompson and Strickland, 1987), however, assert that culture must also be analysed from a holistic, macro perspective. These researchers state that there are sub-cultures within organisations, but the sub-cultures are comparatively less significant than the overall corporate culture. This line of research then focuses on analysis of the overall corporate culture.

Corporate Culture Classification One of the most comprehensive research results regarding culture classification is by Deal and Kennedy (1982). Their "Corporate Tribes Model of Organisational Culture" is one of the most popular and influential typologies for overall culture (Deshpande and Parasuraman, 1986). Their model suggests that corporate culture can be understood and managed by identifying four different "tribes": ToughGuy/Macho, Work Hard/Play Hard, Bet-Your-Company, and Process. The degree of risk associated with company activities and the speed of feedback from the environment are the determining factors as to which quadrant best describes the overall culture of an organisation. The Corporate Tribes Model is shown in Figure 11. Bet-Your-Company organisations operate in a high risk/slow feedback environment typified by the phrase "Play it Safe". Typical industries include oil, drugs, aerospace, and public utilities. Large capital investments are usually required and the results from those investments are not usually known for a long time. A clear example would be NASA's development of the space shuttle.

Tough-Guy/Macho

organisations

have

high

risk/quick

feedback

environment typified by the phrase "Find a mountain and climb it". Typical industries include advertising, entertainment, and construction. Large capital outlays are usually required up front and the results (feedback) are usually known rather quickly. "Go for it all" decisions would fit the Tough-Guy/Macho representation.

Work Hard/Play Hard firms operate in a low risk/quick feedback environment and can be described by the phrase "Find a need and fill it". Typical industries include retail and sales organisations. It is usually not very expensive to have a salesman make a particular sales call (low risk), but the feedback is rather immediate (quick feedback).

All figures and tables can be found in the Appendix.

Process organisations operate in a low risk/slow feedback environment typified by the phrase "Be perfect". Typical industries include banking, insurance, and government departments. The process culture is exemplified by accounting departments and large, bureaucratic organisations where employees frequently focus on how they do something rather than on what they do (Deshpande and Parasuraman, 1986).

4.

THE STRATEGIC GRID

As previously stated, the importance of the strategic planning of information systems within a firm varies depending on how critical its information technologies (applications) are in achieving its overall strategic goals. When assessing the criticality of IS applications to a particular firm, however, a complication arises because of the changing nature of the competitive environment and IS technology. Firms that today do not have strategically critical IS applications may, because of the thrust of its applications portfolio, have strategic applications in the future. Thus strategic planning is very important. The opposite could also be true. In firms where IS applications play a strategic operational role today, future applications may not be expected to offer the same benefits or payoff. In this case, a less intensive approach to IS strategic planning is appropriate. The strategic grid is a well-accepted strategic planning tool for evaluating the importance of a particular organisational element to the strategic direction of the firm. Cash, McFarlan, McKenney, and Vitale (1988) applied the strategic grid to information systems and labelled it the Information Technology (IT) Strategic Grid. The axes of the IT-strategic grid portray the current (shown as the Y-axis) and future (X-axis) strategic importance of information systems activities to a firm. As shown in figure 2, four quadrants are identified as "Strategic", "Turnaround", "Factory", and "Support".

Organisations classified in the Strategic cell are critically dependent on the smooth functioning of the IS activity for both their current and future IS needs. Strong IS planning is essential and should be closely integrated with corporate planning. The impact of IS on company performance is such that there should be significant top management attention and guidance in the IS planning process. Firms in the Turnaround quadrant of the grid are not critically dependent on IS applications for its current operations, but applications under development are expected to play a vital role in the firm's future. Similar to organisations in the strategic quadrant, turnaround firms should have significant top management involvement in their IS planning process. Since turnaround firms are not used to this type of involvement, other changes should occur to enhance senior management's understanding and overview of IS. Organisations in the Factory quadrant are critically dependent on existing IS support systems; however, applications under development are not crucial to the firm's ability to compete successfully. Strategic IS planning and linkage to long-term corporate plans are not nearly as critical in this environment. IS planning should continue to take place with guidance as to where the firm is going, but senior management involvement in the planning process is appropriately much less. Support cell organisations are in the low-low quadrant of the grid which suggests that organisations in this cell would place the least amount of emphasis on IS and IS planning in terms of top management concern and involvement. The four IS environments delineated by the strategic grid framework suggest that each environment does require a different IS management approach. IS is of great strategic importance in some organisations, while it has minimal importance in others. It is inappropriate to expect both types of organisations to place the same amount of emphasis on IS strategic planning. The Cash, McFarlan, McKenney, and Vitale (1988) strategic grid is becoming an often cited framework for its assistance in determining the strategic importance of IS to firms and thereby, its affect on IS

planning and plan implementation (Flaatten, McCubbrey, Riordan, and Burgess, 1989; Raghunathan and Raghunathan, 1990).

5.

LINKING IS STRATEGIC PLAN IMPLEMENTATION TO CORPORATE

CULTURE. As stated earlier in this paper, Deal and Kennedy (1982) have made one of the strongest efforts toward a general cultural classification with their Corporate Tribes Model of Organisational Culture. This paper combines the Deal and Kennedy (1982) Corporate Tribes Model with the Cash et al. (1988) Strategic Grid to analyse the relationship between these two factors and the level of IS Strategic Plan implementation effort. The following tables present IS planning implications with and without culture consideration. When culture is considered and is considered as the first variable, it has been termed the Culture-IT Planning Grid. When culture is considered and the strategic grid position is considered as the first variable, it has been labelled the Strategic Plan Implementation Grid. Table 1 presents information systems planning without culture consideration. Cash et al. (1988) state that the stronger the perceived need for an IS plan, the easier the implementation. The terms used to describe the IS planning effort (in the middle column of Table 1) were developed to delineate the range of effort that is required for IS planning implementation, given an organisation's position on the strategic grid. The terms represent a continuum of effort ranging from a fairly simple implementation to an extremely difficult implementation. The terms are defined as follows (ordinal numbers are also included):

(1) Facile--able to be performed without great effort. (2) Moderate--reasonable; between extremes in size, quality, or degree. (3) Difficult--hard to do; hard to deal with. (4) Considerable--quite large in extent, amount, or degree. 9

(5) Importunate--persistently demanding, especially in an annoying or unreasonable way. (6) Herculean--demanding exceptional effort.

Table 1 is then expanded to suggest information systems planning implications with culture consideration. The results are shown in Table 2 which is termed the Culture-IT Planning Grid. The four categorisations of corporate culture (Deal and Kennedy, 1982) are in the first column. The second column lists the four categorisations of the IT-strategic grid position (Cash et al., 1988) for each culture. Proposed IS plan (ISP) implementation effort and IS planning implications for each pair were then developed and are presented in columns three and four. A summarisation of Table 2 according to culture is then analysed. If the IS plan implementation efforts and the implications of the Culture-IT Planning Grid are plausible, then several observations for each culture become apparent. Overall implications of Table 2 for each culture are presented here.

PROCESS Culture: Benefits and projected results of the IS plan must be clearly stated. Policies and procedures are critical to a successful IS plan in a process culture. Everything must be put into a memo and/or documented. Job titles play an important role in process culture, so as new responsibilities are created or delegated, careful consideration should be given to job title and perceived status.

WORK HARD/PLAY HARD Culture: This is an action oriented culture. Amount is more important than quality (e.g. sales). Listing the number of benefits of an IS plan will foster more commitment than giving details on a few benefits. Immediate benefits must be highlighted whenever possible. Success comes from persistence.

BET-YOUR-COMPANY Culture: The ritual of this culture is the business meeting. Important issues will get full discussion. Decision making is top-down once all the 10

inputs are in. Actions are measured and deliberate. Once the importance of the IS plan is evident, specific decisions are made by top management and the plan starts becoming a reality. The decision makers have a great deal of character and selfconfidence, which should enhance good follow-through on decisions. Also people in this culture become highly dependent on one another (they never "burn any bridges"). This implies better-than-average co-operation and communication between departments during the implementation effort.

TOUGH-GUY/MACHO Culture: The immediate feedback of this culture fosters a short-term perspective. The youth of many people typically in this type of culture does not support a strong planning orientation. These factors lead to difficulty in implementing and IS plan. Speed, not endurance is often the focus. Not taking an action, however, is as important as taking one. There is also extremely strong internal competition which breeds individualism and weak communication, another challenge for successful implementation of the IS plan. Implementation considerations according to strategic grid position were also considered. The two independent variables in the Culture-IT Planning grid were reversed to obtain the Strategic Plan Implementation Grid shown in Table 3. The Strategic Plan Implementation Grid presents implementation patterns and concerns related to strategic grid position. The grid also serves to validate the IS planning implications presented in the Culture-IT Planning Grid (see Validation section). Similar to the process that was done with the Culture-IT Planning Grid, IS planning implications from the Strategic Plan Implementation Grid (Table 3) were then analysed. General implications for each strategic grid position became apparent.

STRATEGIC Position: Information systems planning is critical to the current and future performance of the firm. IS planning must be closely linked to corporate planning. IS planning should have immediate attention from the firm's top 11

management team. Implementation of the IS plan tends to be slightly easier due to the strong perceived need for a smooth running IS.

TURNAROUND Position: IS planning is very important to the future performance of the firm. Without IS planning, performance will suffer significantly in the long run. IS planning must be closely linked to corporate planning. The IS plan implementation effort varies greatly depending upon the organisation's ability to adapt to new strategies.

FACTORY Position: IS planning is needed for the IS activity to be co-ordinated and to run smoothly. It is important to current company performance, but it is not expected to be a critical factor in the future. The IS plan implementation effort is significant. Even though a smooth running IS is not critical to future strategies, current need for such an IS lends support to the IS plan implementation effort.

SUPPORT Position: IS planning is still needed for the IS activity to be co-ordinated and to run smoothly. It is not critical to current company performance and is very unlikely to be of strategic importance in the future. Without clear benefits (over the old system) for future decisions, commitment to the IS plan is very low and implementation especially difficult.

6.

VALIDATION

In order to check for consistency of the IS plan implementation effort between the strategic grid alone and the Strategic Plan Implementation Grid, each level of difficulty was assigned an ordinal number with Facile being 1 and Herculean being 6. Each implementation effort level was matched with the appropriate ordinal rank and in the case of the Strategic Plan Implementation Grid, the ranks for each position of the IT-Strategic Grid were summed. Details are presented in Tables 4 and 5. 12

The implementation effort described in Table 5 was consistent with that described in Table 4 as the sum of the ordinal ranks in Table 5 followed the same pattern as the ordinal ranks in Table 4. Turnaround and Factory strategic grid positions had an equal rank, Strategic position ranked slightly easier and Support position ranked more difficult comparatively.

7.

CONCLUSION

Strategic plan implementation is a critical process facing most senior management now and into the foreseeable future. It is a long-term challenge. We have significant help through literature and consultants in determining how to go about strategic planning. We have little assistance with understanding implementation. One plausible explanation for this lack of implementation assistance is that successful implementation is inextricably linked to the culture of the organisation. Corporate culture, however, can be hard to define, measure, or manage. As a result both researchers and practitioners have tended to shy away from placing emphasis on culture considerations when implementing a strategic plan. The Strategic Plan Implementation Grid discussed in this paper, however, is a thought provoking framework useful for managers to consider when planning for the implementation of a specific strategic plan. The Strategic Plan Implementation Grid was developed using general strategic planning tools. The Corporate Tribes Model of Organisational Culture and the strategic grid are both general assessment tools. Cash, et al. (1988) applied the strategic grid to information systems and labelled it the Information Technology (IT) Strategic Grid which has been used here. The strategic grid can also be adapted for evaluating the importance of other organisational elements to the strategic direction of a firm without changing the basic contribution of the Strategic Plan Implementation Grid.

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8.

REFERENCES

Allen, R.F. (1985) Four Phases for Bringing About Cultural Change, in: Kilmann, R., Saxton, M.J. and Serpa, R. (Eds.), Gaining Control of the Corporate Culture, Jossey-Bass: San Francisco, 332-350. Arogyaswamy, B. and Byles, C.M. (1987) Organizational Culture: Internal and External Fits, Journal of Management, 13, 4, 647-658. Brancheau, J.C. and Wetherbe, J.C. (1986) Information Architectures: Methods and Practice, Information Processing and Management, 22, 6, 453-463. Cash, J.I., McFarlan, F.W., McKenney, J.L. and Vitale, M.R. (1988) Corporate Information Systems Management: Text and Cases, (2nd Ed.), Richard D. Irwin Inc.: Homewood, IL. Deal, T.E. and Kennedy, A.A. (1982) Corporate Cultures, Addison-Wesley: Reading, Mass. Deshpande, R. and Parasuraman, A. (1986) Linking Corporate Culture to Strategic Planning. Business Horizons, 29, 3, 28-37. Flaatten, P.O., McCubbrey, D.J., O'Riordan, P.D. and Burgess, K. (1992) Foundation of Business Systems, (2nd Ed.), The Dryden Press: Fort Worth, TX. Kilmann, R.H., Saxton, M.J. and Serpa, R. (1986) Issues in Understanding and Changing Culture, California Management Review, 28, 2, 87-94. McFarland, W. (1984) Computer Technology: The Competitive Edge, Presentation to the Society for Information Management Conference, Chicago, IL, October 7-12. Meek, L.V. (1988) Organizational Culture: Origins and Weaknesses, Organization Studies, 9, 4, 453-473. Peters, T.J. and Waterman, R.H. (1982) In Search of Excellence, Harper and Row: New York. Raghunathan, B. and Raghunathan, T.S. (1990) Planning Implications of the Information Systems Strategic Grid: An Empirical Investigation, Decision Sciences, 21, 287-300. Reimann, B.C. and Wiener, Y. (1988) Corporate Culture: Avoiding the Elitist Trap, Business Horizons, 31, 2, 36-44.

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Saffold, G.S. III. (1988) Culture Traits, Strength, and Organizational Performance: Moving Beyond "Strong" Culture, Academy of Management Review, 13, 4, 546-558. Senn, J.A. (Ed.) (1986) Linking Business and Information Systems Planning, Spectrum, 3, 3, 1-6, 1-5. Thompson, A.A. and Strickland, A.J. (1987) Strategic Management: Concepts and Cases, (4th Ed.). Business Publications Inc.: Plano, TX. Vogel, D.R. and Wetherbe, J.C. (1984) University Planning: Developing a LongRange Information Architecture. Planning and Changing, January. Zachman, J.A. (1987) A Framework for Information Systems Architecture, IBM Systems Journal, 26, 3, 276-292.

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