CA Intermediate · Financial Management and Strategic Management · Strategy Implementation and Evaluation
Rohan Pharma Ltd. has just acquired a smaller firm. Six months later, managers from the two firms still follow different reporting norms and values, causing friction and slow decisions. The CEO wants to use a lever that shapes shared beliefs and behaviour rather than structure or budgets. Which implementation issue is the CEO primarily addressing, and what is the most suitable approach?
The CEO is addressing strategy-culture fit. Since friction arises from differing values and behaviour after the acquisition, the suitable approach is to manage culture by reinforcing shared values and symbols while changing practices that conflict with the strategy. Budget, structure or reporting changes do not shape beliefs directly.
- AResource allocation; increase the budget of the acquired firm
- BStrategy-culture fit; manage culture by reinforcing shared values and symbols while changing practices that conflict with the strategyCorrect
- CStructure; shift to a pure functional structure immediately
- DEvaluation; shorten the reporting cycle to monthly
Explanation
The problem is clashing shared values and behaviour, so it is a strategy-culture issue. Managing culture through reinforced values, symbols and selectively changed practices addresses it. Budgets, structure or reporting frequency do not directly shape beliefs, which the CEO specifically wants to influence.
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