Case Study: Organizational Culture in Montenegrin Companies

According to ranking of certain types of organizational culture, perception of each respondent as to what type of organizational culture belongs to his company was determined. Of the total of 324 respondents, the largest number, i.e. 41% of respondents perceived presence of power culture in their companies, 32% perceived task culture, 22% role culture and 5% of trespondents perceived presence of support culture in their companies.

Table 1. Type of organizational culture 

Type of culture		Number companies	Structure of the company
	Power culture	3133
	Task culture	0104	3
	Role culture	772
	Support culture	115
	Total	3324

Further research relates to the type of strategy that applies to companies included in the sample. In analysis of business strategy of the company and for the purposes of this research we decided to classify strategies according to M. Porter, under which we distinguish the following strategies market segmentation, according to which the company, taking into account differences among consumers focuses its operations on one or more market segments, cost leadership and differentiation strategy.

Since the type of organizational culture is a categorical variable with four modalities (role culture, power culture, task culture and support culture) and the issue relating to the strategy is also a categorical variable with two modalities (one market segment and all market segments), we used the Chi Square Test to examine their mutual relations. Statistical significance is measured at 0.05 and 0.01 levels, or the confidence based on 95% and 99%. Therefore, organizational culture has no influence on the decision of the company to opt for one or more market segments when choosing appropriate business strategy (x²=2.824, p=0.420). Namely, the data obtained showed that out of 72 respondents in role culture, 29 of them (40.3%) believe that in choosing business strategy their company is oriented to one market segment, and 43 (59.7%) of them are still oriented to all market segments. In power culture 53 respondents (40.5%) opted for one market segment, and 78 (59.5%) for all market segments. In task culture 32 respondents (30.8%) opted for one market segment, and 72 (69.2%) for all market segments and in support culture 5 respondents (33.3%) opted for one, and 10 respondents (66.7%) opted for all market segments when choosing business strategy in their company.

Table 2. Type of organizational culture * the choice of bussiness strategy in the company

Type of strategy			Type of organizational culture				Total
						Role culture		Power culture	Task culture	Support culture
When choosing business strategy your company is oriented to:	One market segment	Total	29	53	32	5	119
		%	40.3%	40.5%	30.8%	33.3%	37.0%
	All market segments	Total	43	78	72	10	203
		%	59.7%	59.5%	69.2%	66.7%	63.0%
Total		Total	72	131	104	15	322
		%	100.0%	100.0%	100.0%	100.0%	100.0%

Chi-Square Tests
	Value	df	p
Pearson Chi-Square	2.824	3	0.420
Likelihood Ratio	2.859	3	0.414
Linear-by-Linear Association	1.877	11	0.171
N of Valid Cases	322

Figure 2: The choice of bussiness strategy in the company

In this part of the research, besides market coverage, we checked whether the organizational culture affects the choice of one of the two competing strategies, such as: cost leadership strategy and product differentiation strategy. The cost leadership strategy implies that the company, thanks to lower costs, offers a product at prices which are more favorable than the competing ones. Differentiation strategy refers to the fact that through physical and psychological differentiation of own from similar products, the company gains greater customer loyalty and more room to maneuver pricing policy. In order to understand how the company won the competition according to the aforementioned classification, the company may opt for cost leadership or product differentiation strategy. The results obtained show that there is a statistically significant connection between the aforementioned strategies and the type of organizational culture (x ² = 10.80, p = 0.013), i.e. different cultures imply the use of different strategies in the company. In that sense, role culture and power culture imply product differentiation strategy. Namely, in role culture 40 (55.6%) out of 72 respondents believe that their company won the competition using differentiation of their own products, and 32 (44.4%) of respondents believe that their company won the competition by leadership in costs. In power culture 77 (57.9%) out of 133 respondents believe that product differentiation strategy helped their company to win the competition in the previous period, while 56 (42.1%) opted for cost leadership strategy as a way to win the competition.

Table 3. Type of organizational culture * your company won competition in the market in the previous period

Type of strategy			Type of organizational culture				Total
						Role culture		Power culture	Task culture	Support culture
Your company won competition in the market in the previous period:	by leadership in costs	Total	32	56	2	5	118
		%	44.4%	42.1%	24.0%	33.3%	36.4%
	by differentiation of its own products	Total	40	77	79	10	206
		%	55.6%	57.9%	76.0%	66.7%	63.6%
Total		Total	72	131	104	15	324
		%	100.0%	100.0%	100.0%	100.0%	100.0%

Chi-Square Tests
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	10.806	33	0.013
Likelihood Ratio	11.173	33	0.011
Linear-by-Linear Association	7.364	11	0.007
N of Valid Cases	324

Figure 3: The company won competition in the market in the previous period