The Impact of organisational culture on successful strategy execution in the short-term insurance industry

Abstract

Edgar Schein (2004) defined culture as a “common set of values and beliefs” of the people within an organisation. Very often, in the modern context, are companies fighting for a differentiating factor which will afford them a competitive edge in the market. This rings especially true for the short-term insurance industry, which is essentially offering a product, but the service and experience for the client is a critical part of sealing the deal. Strategy is the organisations plan of action to accomplish its long, and short-term goals via a unique value proposition to clientele. However, in most organisations, strategy formulation is not the problem; the difficulty is strategy execution. Though there is a vast body of literature on the two separate subjects of culture, and strategy execution, there is very little describing the interconnection in the short-term insurance industry in South Africa and the influence organisational culture has on successful strategy execution, as well as predictability. The approach to this study was quantitative using a questionnaire, distributed electronically, to accumulate all relevant data pertinent to organisational culture and strategy execution. Statistical Package for the Social Sciences (SPSS) was used to analyse the 110 useable responses received, thus enabling the computation of the Pearson’s correlation coefficient and regression coefficients. There were a total of six (6) hypotheses; from the analyses executed there were five (5) cases of partial association between the organisational culture dimensions with each individual strategy execution dimension; however, in the 6th hypothesis tested, there was no association at all, thus we failed to reject the null hypothesis in that instance. With the partial associations for hypotheses one through 5, the correlations varied between weak, medium and strong. This research attempts to contribute to the current literature on organisational culture and the interconnectedness with strategy execution. It is hoped that this work will be of use to managers in the short-term insurance industry in South Africa.