Whether strategy should follow culture or culture should follow strategy is a million dollar question before numerous managers. Some managers state that an organization must pursue the strategies that fit the organizational culture. On the other hand, some suggest that the organizational culture must be flexible enough to be altered to fit the strategy. Strategies formulated through objective methods may fail if a firm discounts the cultural forces. Researches uncovered the evidence that new strategies are often market-driven and directed by competitive forces. Therefore, changing a firm’s culture to fit to a new strategy is more effective than changing a strategy to fit an existing culture.1 It is understood that if enough attention is not paid to the cultural factors in an organization while implementing a strategy, culture may eat up the strategy. Hence, culture matters more than strategy. For strategists in organizations, culture is an important concern.

The concept of ‘corporate culture’ and its companion notion of shared values are important in the field of strategic management. Researchers recognize that organizations develop different cultures, that these cultures have different performance implications and that they can be changed. Strong cultures that fit the needs and challenges of the situation are ‘in’, whereas weak or poorly matched cultures are ‘out’. The case of AT&T, the telecommunications giant, is a good example. For many years, the company operated as a regulated monopoly and created what many observers felt was the best phone system in the world. All this was achieved in a highly structured corporate culture where ‘universal service at reasonable cost’ was the predominant value. Things are different for AT&T today. The culture is changing, albeit slowly, as the company tries to instill in itself the sense of innovation and competition that is necessary to prosper in a deregulated environment.2 To analyze the above evidences and arguments, it is necessary to understand the concept and nature of strategy and culture.

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