Impact of Unhealthy Cultures in Strategy Management

1. The distinctive characteristic of an unhealthy corporate culture is the presence of counterproductive cultural traits that adversely impact the work climate and company performance.

2. The following three traits are particularly unhealthy:

a. A highly politicized internal environment in which many issues get resolved and decisions made on the basis of which individuals or groups have the most political clout to carry the day
b. Hostility to change and a general wariness of people who champion new ways of doing things
c. A “not invented here” mindset that makes company personnel averse to looking outside the company for best practices, new managerial approaches, and innovative ideas

3. What makes a politicized internal environment so unhealthy is that political infighting consumes a great deal of organizational energy. Often with the result that political maneuvering takes precedence over what is best for the company.

4. In less adaptive cultures where skepticism about the importance of new developments and resistance to change are the norm, managers prefer waiting until the fog of uncertainty clears before steering a new course.

5. Change-resistant cultures encourage a number of undesirable or unhealthy behaviors – risk avoidance, timidity regarding emerging opportunities, and laxity in product innovation and continuous improvement.

6. The third unhealthy cultural trait – the not-invented-here mind-set – tends to develop when a company reigns as an industry leader or enjoys great market success for so long that its personnel start to believe they have all the answers or can develop them on their own.

7. Unhealthy cultures typically impair company performance.