A comparative studyof organizational strategyand culture across industry

Bindu GuptaInstitute of Management Technology, Ghaziabad, India

Abstract

Purpose – The present study examines the strategy and culture of 32 Indian organizations belongingto seven industry segments namely construction, banking, information technology (IT),pharmaceuticals, power, steel, and telecom. Further it also examines the linkage between theorganization’s strategy and the culture of the organization.

Design/methodology/approach – It has used the typology suggested by Miles and Snow andorganizational culture assessment instrument developed by Cameron and Quinn which is based on thecompeting values framework of Quinn and Rohrbaugh. The Miles and Snow framework suggests fourorganizational strategies namely, prospector, defender, analyzer and reactor. Organizational culture iscategorized into four types: adhocracy, clan, market, and hierarchy.

Findings – The findings indicated that there are significant differences in the strategy and culture oforganizations belonging to different industry segments. Prospector strategy is most widely used by thetelecom industry and least in construction. The analyzer strategy was reported to be most frequentlyused by the IT sector and defender and reactor strategy were used by the construction sector. Adhocracyculture was most prevalent in the pharmaceutical sector. Clan, market, and hierarchy culture were mostprevalent in the construction industry. Further organizations using prospector strategy were high onadhocracy culture. Both clan and adhocracy cultures were found more in organizations with analyzerstrategy. Organizations with defender and reactor strategy were high on hierarchy and clan culture,respectively.

Practical implications – This study asserts that different culture and strategy is used in Indianorganizations.

Originality/value – The contribution of the study lies in examining the differences in culture andstrategy of organizations belonging to different industry segments.

Keywords Culture, India, Industry type, Strategy, Organizational culture, Corporate strategy

Paper type Research paper

In the global environment, organizations all around the world are constantly facingchallenges to have competitive advantage. The global world is characterized by morecompetition, diverse work force, continuously changing customers’ needs, and newtechnological changes, etc. Till the nineties the process of globalisation of the Indianeconomy was constrained by the barriers to trade and investment. The organizationswere working in protected environment with few competitors. After the liberalisation oftrade, investment and financial flows initiated in the nineties has progressively loweredthe barriers to competition and hastened the pace of globalisation. In this uncertainenvironment only those organizations can survive and grow which are able to define

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The author sincerely acknowledges the reviewer for giving constructive criticisms which havehelped to improve the paper. The author also acknowledges the contribution of colleagues andstudents who have helped directly and indirectly in developing this paper.

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Benchmarking: An InternationalJournalVol. 18 No. 4, 2011pp. 510-528q Emerald Group Publishing Limited1463-5771DOI 10.1108/14635771111147614

the strategy which is aligned with the industry environment. Numerous researchesacross the world indicate that firms with a strategy have got much more chances ofsuccess compared to those without a strategy. Within India, strategy has becomepopular particularly after the reforms on 1991 brought and influx of multinational andincreasing competition. The companies operating in India need to understand theinherent issues in strategy on one hand and focus on strategy implementation on theother hand to get the intended results. (Pillania, 2009).

Organizational strategy can be defined as a plan for interacting with the competitiveenvironments to achieve organizational goals (Daft, 1995, p. 49). The study oforganizational strategy started with Andre (Collis and Montgomery, 1995) who definedstrategy as the match between what an organization can do within the universe of whatit might do. Later researchers, as represented by Porter (1980), focused on the industryenvironment of an organization and concluded that the structural characteristics of anindustry determine the strategy of organizations in it.

There have been different typologies for strategy and among all the typologies, the mostfrequently used in empirical research into a wide variety of organizations and industries, isthat proposed by Miles and Snow. The various studies that have applied Miles and Snow’smodel have lent it strong support in different environments (Zahra and Pearce, 1990). Dent(1990) concludes that the Miles and Snow typology provides the richest portrayal oforganizational arrangements associated with particular business strategies. Variousstudies have provided support for the reliability and validity of this approach and it hasrecognized as one having good codification and prediction strengths (Snow and Hambrick,1980; Hambrick, 1983a, b; Shortell and Zajac, 1990; Abernethy and Guthrie, 1994).

The purpose of this study is to address three questions in the context of Indianenterprises. First, what is the dominant strategy across the industries in India and arethere significant differences in the strategy of organizations belonging to differentindustry segment? Second, which is the most prevalent culture across the industries inIndia and are there significant differences in the culture of organizations belonging todifferent industry segment? Further, there have been rich theoretical descriptions todemonstrate the importance of aligning culture and strategy for organizationalperformance and effectiveness (Schein, 2004; Sackmann, 1991). However, researchershave pointed out (Bitici et al., 2004; Lee and Yu, 2004) that there are few studies that haveexamined empirically, and across multiple organizations, the link between specificcomponents of culture and strategy. So, this study intends to examine the relationshipbetween different components of organizational culture and strategy of the organization.It has used the strategy typology suggested by Miles and Snow (1978) and the competingvalues framework (CVF) of Quinn and Rohrbaugh (Quinn and Rohrbaugh, 1981; Quinn,1988; Rohrbaugh, 1983) for measuring organisational culture.

Miles and Snow’s strategy frameworkMiles and Snow’s (1978) framework is rooted in Child’s (1972) conceptualization ofstrategic choice and considers the rate at which organizations change their products ormarkets. According to Miles and Snow (1978) organizations act to create their ownenvironments through a series of choices regarding markets, products, technologies,desired scale of operations, and so on.

Miles and Snow (1978) classified strategy types as defender, analyzer, prospector,and reactor. Research over the years has investigated differences among these four

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strategic types with respect to variety of internal factors, including innovation,management characteristics, organizational performance, and organizational design.According to Miles and Snow (1978), organizations in each category show a consistentpattern of strategic behavior in their decisions when dealing with various environmentalforces (Conant et al., 1990). More than one strategy can be successful in a givenenvironment, but it is imperative for a firm to be organized appropriately and to plan andimplement strategies relevant to a particular strategic type (Gupta et al., 1997, p. 400).

Defenders are internally oriented organizations. They stress efficiency, and aretightly organized firms focused on maintaining a niche with a limited range ofproducts or services (Miles and Snow, 1978). They try to protect their markets throughlower prices, high-quality, well-target products, and superior delivery while not oftenbeing at the forefront of industry developments. Because of their narrow focus, thesefirms hardly ever need to make major adjustments in their technology, structure, ormethods of operation. These firms devote primary attention to improving the efficiencyof existing operations. They develop a core technology that is highly efficient and usesan organization structure with centralized control.

The prospectors are the exact opposite of a defender. The prospectors have anexternal focus and assumes more business risk than the defender by attempting to be“first to market” with new products and services, even when these efforts are nothighly profitable initially. These firms more emphasizes in maintaining the image of aninnovator in product terms than securing high profitability (McDaniel and Kolari,1987). They are continuously involved in monitoring the external environment as theseintend to respond quickly to early signs of opportunities and exploiting the benefits ofbeing a pioneer in a new product/market area (Mitchell, 1991; Robinson et al., 1992).They are aggressive, rather than passive, in their efforts. The prospector avoidslong-term commitments to any type of technological process. These firms usuallycreate change and uncertainty in the marketplace to which competitors are forced toreact (Stathakopoulos, 1998, p. 539) The structure of these firms is characterized by alow degree of formalization and routine, decentralization and lateral as well as verticalcommunication, emphasizing aspects such as innovation and flexibility.

Analyzers blend the characteristics of both the prospector and defender orientations(Miles and Snow, 1978). The analyzer maintains a moderate level of business risk bywaiting to see the experience of others before entering a market. They are rarely first-inwith new services or into new markets, but are often second-in with better offerings.Analyzer firms show frequent dialogue with customers and commonly weigh up theircompetitors’ activities (Slater and Narver, 1993). They put emphasis on longer-termplanning and much thought about decisions prior to action in most instances. Theanalyzer partitions its technology so that it can serve its stable domains with efficienttechnologies and its dynamic domains with flexible and effective technologies. Theyinclude flexibility as well as stability, adopting structures that can accommodate bothstable and changing domains.

Reactor organizations do not present any consistent pattern of response behavior toenvironmental conditions (Matsuno and Metzer, 2000, p. 4). These firms do not attemptto maintain an already acquired defined product/market domain, nor do they try tocapitalize on viable environmental opportunities or take true risks (Croteau et al., 1999,p. 2). Their actions are mostly reaction to outside forces, such as the economy,competitors, or market pressures. They lack a consistent strategy-structure relationship

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(Parnell and Wright, 1993, p. 30).They are not planners, but reactive and thinkers bynecessity. Miles and Snow consider this strategy type to be a nonstrategy, but Hrebiniakand Joyce (1985) consider the reactor to be an appropriate strategy in an extremely placidenvironment.

Organizational cultureOrganizational culture can be defined a pattern of shared basic assumptions that thegroup has learned as it solved its problems of external adaptation and internalintegration that has worked well enough to be considered valid and, therefore, to betaught to new members as the correct way to perceive, think, and feel in relation to theseproblems (Schein, 1985, p. 12). Organizational culture can serve as a tool to improveproductivity and has a significant effect on an organization’s long term sustainability,economic performance and outcomes such as profitability, turnover, and commitment(Kotter and Heskett, 1992; Tidball, 1988; Cremer, 1993) and if properly communicated,culture can be used to encourage all employees to subscribe to organizational goals (Dealand Kennedy, 1982; Wilkins and Ouchi, 1983). According to Schein (1992) understandingof organizational culture is fundamental to examine what goes on in organizations, howto run them and how to improve them. Studies have emphasized the importance ofculture in implementing organizational initiatives such as supply chain management(Mello and Stank, 2005) and reported that the organizational culture supports thelinkages between the adoption of technology and organizational growth and as criticalfactor in determining the success or failure of mergers and acquisitions (Balthazard et al.,2006). It has also been considered a form of organizational capital (Barney, 1985;Camerer and Vepsalainen, 1988).

A range of tools to measure organizational culture have been developed and appliedin industrial, educational, and health care settings over the last two decades. For thepresent study, the CVF of Quinn and Rohrbaugh (Quinn and Rohrbaugh, 1981; Quinn,1988; Rohrbaugh, 1983) has been adopted. Quinn and Cameron (1983) assert thatorganizational culture is a complex, interrelated, comprehensive and ambiguous set offactors and it is impossible to include all relevant factors in diagnosing and assessingorganizational culture. Organizational Culture Assessment Instrument (OCAI), hasbeen developed by Cameron and Quinn (1999) which is based on the competing valueframework. Cameron and Quinn (1999) categorized organizational culture into fourtypes: hierarchy, clan, market, and adhocracy. Their two cultural variables are stabilityand control versus flexibility and direction, and internal focus versus external focus.While stressing the importance of establishing a fit between organizational culture andthe organization, Cameron and Quinn (1999) concluded that there is a progressiontoward higher flexibility and external focus in order for an organization to thrive.

These four patterns of organizational culture show differences in terms of focus,leadership styles, criteria for effectiveness, management of employees, organizationalglue and criteria of success (Cameron and Quinn, 1999). Hierarchy culture emphasizesstability or control with high level of internal focus. This culture is characterized byuniformity, coordination, internal efficiency, and a close adherence to rules andregulations. The leaders are coordinators and organisers. Formal rules and policies holdthe organisation together. Success is defined in terms of dependable delivery, smoothscheduling, and low cost. Adhocracy culture would be its opposing contrast in thatit underlines flexibility and external orientation toward changes. Creativity, innovation,

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and external growth are emphasized in response to the changing demands of the externalenvironments (e.g. competitors and customers). Clan culture is similar to hierarchyculture in that it stresses the internal aspects of an organization, but different in that anemphasis is given more on the flexibility dimension. In this culture, employees areempowered and encouraged to participate in enhancing and optimizing internalresources and business processes. Market culture is externally oriented with a stress oncontrol and stability. Organizations with market culture accentuate productivity andachievement with well-defined objectives against external competitions (Stock et al.,2007). People are competitive and goal-oriented. The leaders are hard drivers, producers,and competitors. Success is defined in terms of market share and penetration.Competitive pricing and market leadership are important in this culture (Cameron andQuinn, 1999, p. 87).

The market, adhocracy, clan, and hierarchy culture types are dominant ones ratherthan mutually exclusive classifications. Hence although the majority of organizationsmay be characterized by more than one form of culture, one culture type assumes apredominant position over a period of time (Deshpande and Webster, 1989). Cameron andQuinn (1999) explained some examples of different types of organisations and pointed outthat government organisations fit in the hierarchy quadrant. Government organizationsshare some characteristics such as being well-organised, secure, stable, controlledsystems. Financial organisations belonged to the hierarchical and market quadrant.

Strategy and cultureOrganizational culture and strategy are highly interrelated. It is generally accepted thatonce the organization change strategy, it must align organizational culture with strategy,or face almost certain strategic failure. Behaviors that are intended to achieve strategicgoals may be supported or impeded by the culture (Semler, 1997; Tosti and Jackson, 1994).Vestal et al. (1997) explained the relationship between organizational culture and strategyand it was supported by other researchers (Semler, 1997; Tushman and O’ Reilly, 1996).Schwartz and Davis (1981, p. 47) pointed out, ‘for better or worse, a corporate culture has amajor impact on a company’s ability to carry out objectives and plans, especially when acompany is shifting its strategic direction’. Studies also have indicated the significance oforganizational culture in strategy implementation among the other factors such asorganization structure, work and information system, and essential business process(Wu et al., 2004). Bates et al. (1995) found that in manufacturing environment, strategy thatinclude formal planning, communication of strategy, contribution to competitive position,and a long range orientation co-exist with a clan oriented culture that is characterized bythe use of groups and teams (Bates et al., 1995). Weber and Pliskin (1996) explained cultureas a determinant of quality in public sector organizations. Organizations, such asHewlett-Packard, which pursued a prospector/differentiation strategy developed aculture that fostered risk-taking, individuality, and innovation. In contrast, EmersonElectric pursued a defender/low cost strategy and, also appropriately, shaped a culturethat emphasized frugality, attention to detail, and discipline (Miles et al., 1993).

The above discussions re-emphasize that component of organizational culture needto be aligned with specific organizational strategy. Following section discusses somemore findings related to specific strategy and culture of the organization and hypothesesfor investigation.

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Prospectors are highly proactive and innovative and need flexibility andeffectiveness while defenders are much less proactive and need stability and efficiency(Reeve, 1994, p. 19). Studies indicate that the prospector strategy is associated with morewith R&D, new product introduction, and marketing efforts compared to analyzer anddefender strategy (Thomas et al., 1991; Hambrick, 1983a, b, Snow and Hrebiniak, 1980; andConnant et al., 1990). Organization with prospector strategies are more likely to encourageexperimentation and innovation (Brown, 2005), are likely to emphasize creativity to a greatextent (O’ Regan and Ghobadian, 2006), and characterized by organizational cultureshigher on innovation and outcome orientation than defenders (Baird et al., 2007).

Defender’s emphasis on low cost requires close attention to operational details,including the relentless pursuit of cost economies and productivity improvementsthrough standardization of components and processes, routinization of procedures andthe integration of functional activities across business units (Walker and Ruekert,1987). According to Day and Nedungadi (1994), preoccupation with the internalbusiness environment is common with defenders, causing executives to emphasizeefficiency rather than effectiveness. The findings of the study by Baird et al. (2007)indicated that defenders were characterized by culture higher on stability.

Analyzer strategy is a hybrid strategy which greatly focuses both on aspects ofinnovation and efficiency. Analyzers are an intermediate type both as regardsproactiveness and innovativeness, needing greater stability and efficiency thanprospectors but greater flexibility and effectiveness than defenders (Reeve, 1994, p. 19).Information needs of analyzers will be the combination of the needs identified forprospectors and defenders (Miles and Snow, 1978). Alike to firms emphasizingprospector strategy, firms emphasizing analyzer strategy also are expected to viewcustomer and learning and growth measures as being very important. Shortell and Zajac(1990) found no significant differences in the actual number of new services offered byhealth care organizations adopting prospector and analyzer strategy.

The above discussions lead to the development of the following hypotheses:

H1. Organizations following defender strategy will be high on hierarchy andmarket culture.

H2. Organizations following prospector strategy will be high on adhocracy andclan culture.

H3. Organization with analyzer strategy will be high on market and adhocracyculture.

MethodologyIndustry/sample descriptionData were collected by means of questionnaires that were sent through electronic mail.Overall 1,600 questionnaires were mailed, and 1,030 usable questionnaires werereceived, with response rate 64.37 per cent of respondents. Thus, sample was notrandom; only participants who volunteered to take part in the study were surveyed.

The respondents came from 32 organizations from seven industries namelyconstruction, Banking, Information technology (IT), pharmaceutical, power, steel, andtelecom. These industries have been considered to make significant contribution toIndian economy for some decades. The breakdown of the respondents by industrialgroups is as follows:

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. IT – 31.9 per cent.

. Steel industry – 17.5 per cent.

. Banking – 15.1 per cent.

. Pharmaceutical – 9.3 per cent.

. Telecom – 8.7 per cent.

. Construction – 8.7 per cent.

. Power – 8.6 per cent.

There have been variations in the number of organizations and participants from eachindustry; this can be attributed to some of the factors like presence of organizationsacross India and percentage of returned responses from participants. The organizationsselected for the study are high performance organizations within their industry segmentand are among the top ten organizations in India and represent right mix of public,private, and multinationals. The average age of participants was 35.09 years, averageexperience in current organisation 5.61 years. The only those employees were requestedto respond to questionnaire who have minimum three years of experience with thepresent organization, as employees need to spend some time with the organization tounderstand the strategy of organization. With respect to the level of qualifications,60.8 percent were graduates from various streams (i.e. commerce, science, computers,arts, management, electrical, textile etc); and 39.2 per cent were post-graduates frommanagement, science, etc. Male respondents accounted for 64.5 percent of the populationand 35.5 percent were the females.

Earlier studies examining the strategy of organizations relied on CEO of company,which was challenged by later studies (Bowen, 1987; Chaganti and Sambharya, 1987).Golden (1992) reported that 58 per cent of CEOs surveyed did not agree with thepreviously validated accounts of their organization’s past strategies (see also Hiam,1993; Sayles, 1993). In respond to these observations later studies have surveyed theindividuals from lower-top, middle and lower level to analyze the strategy of thecompany (Parnell, 1997). The present study also took the responses from the lower,middle and top level employees from of the organizations surveyed.

Description about industriesThe economy of India is as diverse as it is large, with a number of major sectors includingmanufacturing industries, agriculture, textiles and handicrafts, and services. Thirty-twoorganizations from seven industries were selected to investigate their dominant strategyand culture. This section discusses briefly the industries represented in the study.

Banking. Banking in India has a long and detailed history of more than 200 years.This industry started in 1786, when the country’s first bank, Bank of Bengal, wasestablished. The industry has changed rapidly and drastically, after the nationalizationof banks in 1969.Liberalization and economic provided the Indian banking scenario aremarkable facelift that only continues to get better with time. The Indian bankingsystem includes nationalized banks, private banks and specialized banking institutions.Nationalized banks are the biggest lenders in the country because of the size of the banksand the penetration of the networks. The Reserve Bank of India is a centralized body inthe Indian financial sector that monitors discrepancies and shortcomings in thesystem (http://info.shine.com/Industry-Information/Finance-and-Banking/117.aspx).

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The study sampled 156 managers from the six organizations. The participants belongedto both from the public and private banks.

Information technology. IT industry in India is among the rapidly growingindustries. It has created brand equity for itself in the global markets. IT industry inIndia involves software industry and information technology enabled services (ITES),which also includes business process outsourcing (BPO) industry. India is pioneer insoftware development and a favorite destination for IT-enabled services. Today,Indian IT companies such as Tata Consultancy Services, Wipro, Infosys, HCL, etc. arerenowned in the global market for their IT proficiency. The organizations surveyedproduced 329 responses from 10 major IT organizations including Indian andmultinational organizations.

Telecom. Telecom industry in India has a high market potentiality and is a fastgrowing sector. India has nearly 200 million telephone lines which make it the thirdlargest network in the world after China and USA. With a growth rate of 45 per cent,Indian telecom industry has the highest growth rate in the world. Bharat SancharNigam Limited, Mahanagar Telephone Nigam Limited, Bharti Airtel, TataTeleservices, Reliance communications and IDEA are the major telecommunicationsservice providers in India. In this study, 90 respondents from three major privatetelecom players participated in the survey.

Construction. The Indian construction industry is a one of the key growth driver forthe national economy and it contributes on average 6.3 per cent of the GDP. It is thesecond largest contributor to the national economy and second largest employmentgeneration avenue in the country. This industry is highly fragmented. It includessmaller builders and major players those involved in infrastructure development. Forthis study, 90 responses were received from the employees of three organizationsrepresenting the major players in construction industry.

Pharmaceutical. The Indian Pharmaceutical Industry is among the top rank ofIndia’s science-based industries with extensive ranging capabilities in the field of drugmanufacture and technology. It is estimated to be worth $ 4.5 billion, growing at about8 to 9 percent annually. It ranks very high in the third world for technology, qualityand range of medicines manufactured. This sector is highly fragmented and has morethan 20,000 registered units (http://pharmaceutical-drug-manufacturers.com/pharmaceutical-industry/). It has expanded significantly in the last two decades.Ninety-six respondents from three Indian private players participated in the survey.

Power. India is the 5th largest power producer in the world with the total powercapacity of more than 145,000MW (http://researchandmarkets.com/reportinfo.asp?report_id¼694706). Key players in the Indian power sector are NationalThermal Power Corporation Limited, Nuclear Power Corporation of India Limited,North Eastern Electric Power Corporation Limited, Power Grid Corporation of India,Tata Power, etc. The study sampled 89 managers from the three organizations. Theparticipants belonged to both from the public and private organizations.

Steel. India’s rapid economic growth and increasing demand by sectors likeinfrastructure, real estate and automobiles, at home and abroad, has put Indian steelindustry on the global map. The report by International Iron and Steel Institute indicatethat India is the seventh largest steel producer in the world. This industry is organizedin three categories, i.e. main producers, other major producers and the secondaryproducers. The main producers and other major producers have integrated steel making

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facility with plant capacities over 0.5 mT and utilize iron ore and coal/gas for productionof steel. The major players are Tata Steel, SAIL, and RINL, and the other majorproducers are ESSAR, ISPAT and JVSL (http://iloveindia.com/economy-of-india/steel-industry.html). The organizations surveyed produced 180 responses from mainproducers and major producers in steel industry.

MeasuresBusiness strategy. A multi-item scale developed by Parnell (1997), based on the work ofConant et al. (1990) was used for operationalizing the Miles and Snow strategictypology. This multi-item scale can be referred to as multivariate measurement ofstrategy which contains a broad set of strategic variables (Hambrick, 1980). There werea total of 12 questions with each consisting of four statements, one for each possiblestrategy. Each respondent was required to indicate which statement is true for his/herorganization. The terms Prospector, Analyzer, Defender, and Reactor were omittedfrom the questions in order not to indicate that the types necessarily represent good orpoor strategy. To measure the strategy, an overall evaluation of the degree to which thefirm emphasizes a given strategy was derived by taking the no of agreements acrossthe twelve items. The study assigned strategies to organizations based on the degree ofagreement among the respondents of specific organization. The twelve responses foreach participant in each organization was used to classify the business into one of thefour strategy categories, depending on which strategy received the more than andequal to 50 per cent responses.

Organizational culture was measured with OCAI developed by Cameron and Quinn(1999). There were 20 items in all, five for each of the culture classifications. Within thisclassification, a question for each type of culture was considered in the context of fivedifferent organizational variables, namely organizational leadership, management ofemployees, organizational glue, strategic emphasis, and criteria of success. Eachrespondent was required to indicate whether he or she agrees or disagrees with eachstatement concerning their organization by using a five-point Likert scale ranging from“1 ¼ Strongly disagree” to “5 ¼ Strongly agree”. To measure the culture, an overallevaluation of the degree to which the firm emphasizes a given culture was derived bytaking the mean score across the five items for each culture dimension. A reliabilitycheck using Cronbach alpha was done to test the internal consistency of the cultureconstructs. This test produced the alpha coefficients of 0.65 (clan), 0.60 (adhocracy) and0.62 (Market), and 0.70 (Hierarchy). According to Nunnally (1978), alpha coefficients of0.50 to 0.60 are acceptable for exploratory research.

Data analysis – data were analyzed through descriptive statistics and analysis ofvariance (ANOVA).

ResultsResults for business strategyTable I shows the mean scores for all the strategy across the industries and for eachindustry. The mean score indicates that most used strategy is analyzer (M ¼ 4.36)followed by prospector (M ¼ 3.53). The least used strategy is defender (M ¼ 1.97). Theresults of ANOVA with repeated measure on strategy indicated the significantdifference in the use of these four strategy F (3, 3069) ¼ 217.48, p , 0.00.

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The mean scores for different industries indicate that prospector strategy is most usedin telecom sector and least in construction industry. The result of ANOVA indicatedthe significant differences in different industries for the use of prospector strategy(F (6, 1023) ¼ 16.47, p , 0.00. There is also significant difference in the use of analyzer,defender, and reactor strategy in different industries (F (6, 1023) ¼ 7.51, p , 0.00.;F (6, 1023) ¼ 43.50, p , 0.00; and F (6, 1023) ¼ 12.59, p , 0.00, respectively). Analyserstrategy is most used in IT sector and least in construction sector. Defender and reactorare most used in construction industry (Table I).

Results for organizational cultureTable II shows the mean scores for different organizational culture across the industrieswhich indicates that most prevalent culture is adhocracy culture (M ¼ 4.36) followed

Industry Mean SD n

ProspectorConstruction 2.18 1.58 90Banking 3.36 2.05 156IT 3.63 2.28 329Pharmaceutical 3.86 2.23 96Power 2.52 1.52 89Steel 3.96 1.82 180Telecom 4.64 2.31 90Total 3.53 2.15 1,030AnalyzerConstruction 3.39 2.03 90Banking 4.45 2.03 156IT 4.69 1.98 329Pharmaceutical 4.60 1.96 96Power 4.57 2.16 89Steel 4.31 2.04 180Telecom 3.60 1.99 90Total 4.36 2.06 1,030DefenderConstruction 3.46 1.52 90Banking 2.50 1.93 156IT 1.38 1.27 329Pharmaceutical 1.50 1.09 96Power 3.24 1.57 89Steel 1.49 1.29 180Telecom 1.88 1.73 90Total 1.97 1.64 1,030ReactorConstruction 2.96 1.75 90Banking 1.50 1.28 156IT 2.22 1.58 329Pharmaceutical 1.54 1.39 96Power 1.67 1.18 89Steel 2.24 1.78 180Telecom 1.87 1.42 90Total 2.04 1.58 1,030

Table I.Mean scores

for business strategies

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by clan culture (M ¼ 3.45). The least prevalent culture is market culture (M ¼ 3.35). Theresults of ANOVA with repeated measure on culture indicated the significant differencein industries in terms of these four culture F (3, 3069) ¼ 13.26, p , 0.00.

The mean scores of organizational culture for different industries indicate that clanculture is most prevalent in construction sector and least in power sector. The result ofANOVA indicated the significant differences in different industries for the clan culture(F (6, 1023) ¼ 29.32, p , 0.00). There is also significant difference for adhocracy, market,and hierarchy culture in different industries (F (6, 1023) ¼ 4.51, p , 0.00.;F (6, 1023) ¼ 17.58, p , 0.00; and F (6, 1023) ¼ 8.74, p , 0.00, respectively). Adhocracyculture is most prevalent in pharmaceutical sector and least in power sector. Market andhierarchy culture is most prevalent in construction industry (Table II).

Industry Mean SD n

Clan cultureConstruction 3.69 0.48 90Banking 3.43 0.68 156IT 3.62 0.46 329Pharmaceutical 3.53 0.41 96Power 3.03 0.49 89Steel 3.43 0.47 180Telecom 3.06 0.56 90Total 3.46 0.55 1,030Adhocracy cultureConstruction 3.51 0.50 90Banking 3.49 0.55 156IT 3.54 0.52 329Pharmaceutical 3.59 0.37 96Power 3.31 0.73 89Steel 3.39 0.54 180Telecom 3.34 0.46 90Total 3.47 0.54 1,030Market cultureConstruction 3.50 0.52 90Banking 3.27 0.58 156It 3.47 0.55 329Pharmaceutical 3.48 0.49 96Power 3.44 0.64 89Steel 3.20 0.39 180Telecom 2.93 0.52 90Total 3.35 0.55 1,030Hierarchy cultureConstruction 3.63 0.54 90Banking 3.49 0.65 156IT 3.49 0.62 329Pharmaceutical 3.38 0.53 96Power 3.27 0.83 89Steel 3.42 0.55 180Telecom 3.07 0.56 90Total 3.42 0.63 1,030

Table II.Mean scores fororganizational culture

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Table III shows the mean scores of organizational culture for different strategy.These results indicated that when organizations use defender strategy the mostprevalent cultures is hierarchy culture (M ¼ 3.41) followed by market culture (3.34)which support the stated hypotheses hypothesized that the organizations followingdefender strategy more likely to have market culture and hierarchy culture (H1). Theresults of ANOVA with repeated measure on culture indicated the significant differencein prevalent cultures when organization use defender strategy F (3, 87) ¼ 6.77, p , 0.00.

In the case when organizations use prospector strategy the most prevalent culture isadhocracy (M ¼ 3.60) followed by clan culture (M ¼ 3.53) and these results support thestated hypothesis organizations following prospector strategy will be high onadhocracy culture and clan culture. (H2). The results of ANOVA with repeatedmeasure on culture also indicated the significant difference in prevalent cultures whenorganization use prospector strategy F (3, 237) ¼ 38.83, p , 0.00.

When organizations use analyzer strategy the most prevalent cultures are clan culture(M ¼ 3.43) and adhocracy culture (M ¼ 3.43). The results of ANOVA with repeatedmeasure on culture indicated the significant difference in prevalent cultures whenorganization use analyzer strategy F (3, 667) ¼ 3.02, p , 0.029. The most prevalentculture was clan culture (M ¼ 3.97) when organization use reactor strategy and results ofANOVA with repeated measure on culture indicated the significant difference inprevalent cultures when organization use reactor strategy F (3, 27) ¼ 7.43, p , 0.001.

DiscussionStrategy type, viewed as the particular approach chosen by the firm to achieve success inits competitive environment, may require a tailored culture for effective implementation.This research focused on organizational culture and type of strategy adopted by Indianorganization.

Three basic questions regarding organizational strategy and culture were examined.First, what is the dominant strategy across the industries in India and are there significantdifferences in the strategy of organizations belonging to different industry segment?Second, which is the most prevalent culture across the industries in India and are theresignificant differences in the culture of organizations belonging to different industrysegment? Third, it examined the linkage between types of business strategies and cultureof organization. The contribution of the study lies in examining the differences in culture

Strategy Clan culture Adhocracy culture Market culture Hierarchy culture

Analyzer Mean 3.43 3.43 3.37 3.42SD 0.57 0.57 0.56 0.65n 670 670 670

Prospector Mean 3.53 3.60 3.28 3.38SD 0.45 0.42 0.48 0.58n 240 240 240 240

Defender Mean 3.28 3.16 3.34 3.41SD 0.55 0.50 0.56 0.54n 90 90 90 90

Reactor Mean 3.97 3.70 3.74 3.83SD 0.26 0.36 0.35 0.44n 30 30 30 30

Table III.Means scores for culture

for different strategy

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and strategy of organizations belonging to different industry segment. Further it alsoexamines the culture and strategy of the organizations in the Indian context which isconsidered to be one of the stars of global economics The findings indicated that mostdominant strategy is analyzer strategy and most prevalent culture is adhocracy culturefollowed by clan culture across the industries in India. These findings may be interpretedin the light of the national culture dimension of Hofstede (1991). Hofstede (1991) defined thenational value as the collective mental programming of the people of a nation, whichshapes the values, attitudes, competencies, behaviors and perceptions of individuals ofspecific nations in a particular manner. It is known to have a significant influence onmanagerial styles and functions of an organization (e.g. Hofstede, 1993; Budhwar andSparrow, 2002). Indian work culture exhibits a high power-distance, collectivism andaffective reciprocity among the cultural values of Indian managers (Chhokar, 2000; Sinha,1997). With respect to uncertainty avoidance, while Hofstede (1997) suggests that India ishigh on uncertainty avoidance, a later study by Chhokar (2000) found India to be moderateon this dimension, which may be the reason that Indian organizations use more analyzerstrategy which maintains a moderate level of business risk by waiting to see theexperience of others before entering a market. Further, in the line of contingencyperspective, these findings may be attributed to the journey of Indian organizations fromprotected environment to more global competitive environment. According to Kumar(2009), India organizations transformed from domestic players, scared of globalcompetitors and constantly seeking government protection in domestic markets, intoconfident players capable of building Indian multinational.

The study also points out there are significant differences in the strategy and cultureof organizations belonging to different industry segment. The findings indicated thatprospector strategy is most widely used by telecom industry and most prevalent cultureis adhocracy culture in organizations belonging to telecom industry. Miles and Snow(1978) proposed that organizations develop relatively enduring patterns of strategicbehavior to co-align the organization with the environment. Prospectors perceive adynamic, uncertain environment and maintain flexibility to combat environmentalchange. The prospector seeks to identify and exploit new product and marketopportunities. Telecom industry in India has a big market potentiality and is a fastgrowing sector. With a growth rate of 45 per cent, Indian telecom industry has thehighest growth rate in the world. These facts may justify why prospector strategy isdominant in telecom sector in India.

Defender strategy was found most dominant in organizations belonging toconstruction industry and most dominant culture was clan culture followed byhierarchy culture. The current size of the construction industry in India is estimated at$70.8bn, of which the 87 key players account for nearly one third, while the rest isdistributed amongst the 25,000 plus smaller players. The present study includes theorganizations from the key players segment that may be the reason these organizationsperceive the environment to be stable and certain, and thus seek stability and control intheir operations to achieve maximum efficiency.

The analyzer strategy was reported to be most frequently used by IT sector andmost prevalent culture is clan culture. IT industry in India comprises of softwareindustry and ITES, which also includes BPO industry. Further, the organizationsbelonging to IT provides products, solutions, and services to client organizations, thesefactors may be some of the reasons of using analyzer strategy by IT industry.

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Regarding the relationship between strategy and culture, the direction is vieweddifferently by different authors. Some studies views strategy as a outcome oforganizational culture (Saffold, 1988) and maintains that “strategic options are limitedby the culture of the organization” (Schein, 2004, p. 91). Others maintain that anorganization’s strategic position may subsequently influence culture ( Joyce and Slocum,1990). While, the direction of causality between culture and strategy is beyond the scopeof this study, the findings of the study indicate that the two concepts are interrelated andneed to be aligned to ensure organizational success and support the findings of earlierstudies (Bate, 1994; Lado and Wilson, 1994).

As expected, organizations with prospector strategy were characterized byorganizational cultures higher on adhocracy (combination of flexibility and externalfocus) than defenders. These findings are aligned with findings of other studies whichstated that organization with prospector strategies are more likely to encourageexperimentation and innovation (Brown, 2005), are likely to emphasize creativity to agreat extent (O’ Regan and Ghobadian, 2006), and characterized by organizationalcultures higher on innovation and outcome orientation than defenders (Baird et al., 2007).Defenders were characterized by cultures higher on hierarchy (combination of stabilityand internal focus) and are congruent with the the findings of the study conducted inAustralian organizations (Baird et al., 2007) which indicated that defenders arecharacterized by culture higher on stability. Organizations with analyzer strategy washigh on both clan and adhocracy culture. For reactor strategy no hypothesis wasproposed, however the findings indicated that in the organizations using the reactorstrategy the most prevalent culture is clan culture.

Implications of the studyThis study suggests that the organizations that operate in different competitiveenvironments and rely on the different types of strategies should have different cultures,with the characteristics of the culture aligned to the unique demands of the competitiveenvironment and strategy type. The results obtained in the study study haveimplications for Indian organizations. There have been few studies in Indian contextexamining the strategy and culture of organizations of different industry segment. Thespecific implications are discussed below:

(1) Organizations in the telecom sector need to use more prospector strategy as lotof untapped market in this sector and scope for innovation.

(2) Organizations in the IT industry need to have blend of defender and prospectorindustry, as this industry is not very old in India. It started with imitation and toprovide services to global clients. Now it needs to bring more innovation alongwith leveraging on existing products and services.

(3) Organizations which are high capital intensive such as construction and power,the better strategy will be defender.

(4) Organizations with prospector strategy should support its strategy withadhocracy culture, which reinforce the creativity among employees.

(5) Organizations with defender strategy should be high on hierarchy which ismore efficiency focused.

(6) Organizations with analyzer strategy need to blend clan and adhocracy culture.

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ConclusionsIt is concluded that this study reaffirms the theoretical contention that culture needs tobe aligned with strategic intent. Organizations seeking particular strategies need toconsider whether their culture is favorable to, or can be changed to be favorable to, thedesired strategy. As the organization’s strategy evolves, managers need to create ormodify systems and structures to install and reinforce the kind of culture neededto effectively implement the type of strategy selected. The findings of study can beused as benchmarking tool to select the right strategy and culture for the organizationsto suit their environment and to develop right culture and cultural artifacts fordominant organizational strategy.

The present study has also some limitations that need to be addressed in futureresearch. The study would have included financial performance of the organizationswhich can be strong indicator of how the congruence between strategy and cultureinfluence organization’s effectiveness. Yet, some inferences can be made as theorganizations surveyed were among the top ten organizations of country. Further thestudy did not examined the differences among organizations belonging to same industrysegment as Indian organizations varies in terms of ownership, i.e. public, private andmultinational organizations. Future study can examine the differences in organizationalstrategy and culture with respect to size, ownership and cross cultural variables.

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Further reading

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About the authorBindu Gupta has a PhD in Psychology from the Indian Institute of Technology Kanpur, India.She has nearly 15 years experience in the areas of teaching and research. At present,Dr Bindu Gupta is Associate Professor in the area of organizational behavior at IMT, Ghaziabad,India. She has authored various papers that have appeared in reputed national and internationaljournals. She has also been the editor of three books. She has organized an internationalconference and presented papers in national and international conferences. She has been activelyinvolved in training and consultancy and is a qualified trainer of MBTI. Bindu Gupta can becontacted at: bgupta@imt.edu

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