Tuesday, September 19, 2006

Culture and Competitive Advantage

Famed economist, Michael Porter wrote in Chapter 1 of "Competitive Advantage" the following:

"The concept of generic strategies also has implications for the role of culture in competitive success. Culture, that difficult to define set of norms and attitudes that help shape and organization, has come to be viewed as an important element of a successful firm. However, different cultures are implied by different generic strategies." "Culture can powerfully reinforce the competitive advantage a generic strategy seeks to achieve. If the culture is an appropriate one. There is no such thing as a good or bad culture per se. Culture is a means of achieving competitive advantage, not and end to itself."

I have the utmost respect for Porter and his theories, however, in this case, I disagree with his assessment on culture not being the "end to itself". I believe that things are changing and that an organizations very survival depends on its culture. If one focuses on a vibrant and positive culture, you can secure a competitive advantage. Culture cannot be manufactured, it is nurtured and the most natural state of your business. As individuals are advised to "just be your Self", so too must a company just be its Self. From there, the right strategy will emerge. As Porter points out, the strategy can change and this idea is not out of synch with culture. If you are true to your Self, your company culture, you will find that your strategy fits naturally and also changes naturally as you are in tune with your organization, industry and customers.

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