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CHAPTER 4 • THE INTERNAL ASSESSMENT 97

The RBV has continued to grow in popularity and continues to seek a better under-
standing of the relationship between resources and sustained competitive advantage in
strategic management. However, as alluded to in Chapter 3, one cannot say with any
degree of certainty that either external or internal factors will always or even consistently
be more important in seeking competitive advantage. Understanding both external and
internal factors, and more importantly, understanding the relationships among them, will
be the key to effective strategy formulation (discussed in Chapter 6). Because both external
and internal factors continually change, strategists seek to identify and take advantage of
positive changes and buffer against negative changes in a continuing effort to gain and
sustain a firm’s competitive advantage. This is the essence and challenge of strategic man-
agement, and oftentimes survival of the firm hinges on this work.

Integrating Strategy and Culture

Relationships among a firm’s functional business activities perhaps can be exemplified
best by focusing on organizational culture, an internal phenomenon that permeates all
departments and divisions of an organization. Organizational culture can be defined as “a
pattern of behavior that has been developed by an organization as it learns to cope with its
problem of external adaptation and internal integration, and that has worked well enough
to be considered valid and to be taught to new members as the correct way to perceive,
6
think, and feel.” This definition emphasizes the importance of matching external with
internal factors in making strategic decisions.
Organizational culture captures the subtle, elusive, and largely unconscious forces that
shape a workplace. Remarkably resistant to change, culture can represent a major strength
or weakness for the firm. It can be an underlying reason for strengths or weaknesses in any
of the major business functions.
Defined in Table 4-1, cultural products include values, beliefs, rites, rituals, ceremonies,
myths, stories, legends, sagas, language, metaphors, symbols, heroes, and heroines. These
products or dimensions are levers that strategists can use to influence and direct strategy for-
mulation, implementation, and evaluation activities. An organization’s culture compares to an
individual’s personality in the sense that no two organizations have the same culture and no
two individuals have the same personality. Both culture and personality are enduring and can
be warm, aggressive, friendly, open, innovative, conservative, liberal, harsh, or likable.
At Google, the culture is very informal. Employees are encouraged to wander the halls on
employee-sponsored scooters and brainstorm on public whiteboards provided everywhere.

TABLE 4-1 Example Cultural Products Defined

Rites Planned sets of activities that consolidate various forms of cultural expressions into one event.
Ceremonial Several rites connected together.
Ritual A standardized set of behaviors used to manage anxieties.
Myth A narrative of imagined events, usually not supported by facts.
Saga A historical narrative describing the unique accomplishments of a group and its leaders.
Legend A handed-down narrative of some wonderful event, usually not supported by facts.
Story A narrative usually based on true events.
Folktale A fictional story.
Symbol Any object, act, event, quality, or relation used to convey meaning.
Language The manner in which members of a group communicate.
Metaphors Shorthand of words used to capture a vision or to reinforce old or new values
Values Life-directing attitudes that serve as behavioral guidelines
Belief An understanding of a particular phenomenon
Heroes/Heroines Individuals greatly respected.

Source: Based on H. M. Trice and J. M. Beyer, “Studying Organizational Cultures through Rites and Ceremonials,” Academy of Management
Review 9, no. 4 (October 1984): 655.