The Implementation of Strategy, Organizational Culture and Performance: Finding 'The Best Fit'

Abstract

Objective - The purpose of this empirical study was to examine the degree of alignment between the implementation of strategy and organization's culture, and its implication on company performance. Methodology/Technique - The study is quantitative in nature using survey questionnaires. Total numbers of 201 questionnaires were sent to operational managers of Kimia Farma Pharmacy and 114 questionnaires were returned and analyzed using descriptive analysis with SPSS version 20, and the analysis of Structural Equation Modeling (SEM) with a statistical program AMOS version 7. Findings - The finding of the study shows the implementation of strategy and two types of organizational culture (adhocracy and clan culture) respectively influence the performance of PT Kimia Farma Pharmacy. This study, however, failed to find the best fit between the implementation of strategy and organizational culture in general. Further analysis shows that clan and hierarchy culture become the trigger of the implementation of strategy Novelty - This study proves that clan and hierarchy culture become the trigger of strategy implementation which eventually generate a better performance of the company. Type of Paper - Empirical Keywords: Best Fit; Strategy Implementation; Organizational Culture; Performance.