Exploring Corporate Culture and Strategy: Sainsbury at Home and Abroad during the Early to Mid 1990s

Abstract

In this paper the UK food retailer, J Sainsbury pic, is used as an example to illustrate the intimate power relationship between corporate culture and corporate strategy, and it is argued that corporate culture plays a key role in determining the economic performance of firms. Specifically, it is shown how corporate culture can concurrently be advantageous and burdensome within the same firm. Indeed, it is argued that the strength of Sainsbury's corporate culture prevented it from reacting to competitive changes rocking its ‘home’ market in the early 1990s. However, the very corporate culture that was becoming increasingly inappropriate within the UK food retailing market was being successfully employed ‘abroad’ by Sainsbury. In the paper it is demonstrated that the ‘Sainsburyisation’ of its US subsidiary, Shaw's Supermarkets, released Shaw's from its limited trajectory of growth. It is suggested that this move will allow Shaw's to become an increasingly important source of capital accumulation for the Sainsbury Group once opportunities within the ‘home’ market decline further.