Case Study: Organizational Culture in Montenegrin Companies

The hypothesis that organizational culture determines business strategy is confirmed only partially. Therefore, in the part that relates to company's orientation to one or more market segments when choosing a business strategy, it was found that there is no statistically significant connection between the type of organizational culture and the strategy chosen, i.e. organizational culture does not affect the decision of the company to opt for one or more market segments when choosing the business strategy. Thus, the initial hypothesis that organizational culture determines business strategy in this area has not been confirmed yet.

In fact, despite the fact that the analysis encompassed companies that are relatively successful in their scope of activities, all companies in Montenegro are faced with the same or similar problems. These problems are actually the consequence of the crisis that caused macroeconomic instability, loss of the market, decline in market share, loss of competition (problems relevant to this study). In such a situation, it is understandable that companies will try to resolve these problems as soon as possible. On the other hand, the choice of strategy, as a business decision, depends on processes in the company (and those depend of in the company's environment). Market coverage represents the orientation of the company to a large enough market segment with a desire to strengthen the company in a given market and provide a competitive position. So, in order to consolidate the company in the market and ensure a competitive position (which is their primary target), regardless of the fact that the findings showed that organizational culture does not affect the choice of the company to opt for one or more market segments, the findings showed that the majority of respondents, when choosing a business strategy, opted for more market segments, i.e. 63% and 37% for one market segment.

The second part that refers to the way by which the company won the competition, the hypothesis is confirmed. Namely, the research has shown that there is statistically significant connection between organizational culture and the way the company won the competition in the market. Our research has confirmed that the role culture and power culture imply a product differentiation strategy. It may be noted that the concentration of power leads to product differentiation strategy.

Role culture and power culture are both authoritarian cultures with uneven distribution of power , i.e. distribution of power concentrated at leaders (in power culture) and the top management of the company, i.e. technological profession (in role culture). This can be interpreted as a desire of the management to transfer its power to other segments outside the company (customers, suppliers and the like.) They will, through improvement of their products quality, try to build a powerful and recognizable brand in the market, which will , through power and advantage over the competition, provide affection and loyalty of customers.

Besides, cost leadership strategy is quite risky. It is often said that it means "all or nothing". By choosing this strategy the company wants to gain an advantage on the basis of lower costs and sales prices. In that sense, companies that opt for this type of strategy have to withstand price war or not. In addition, there is the risk that the company loses its market, because it neglected development of product characteristics, then the risk of falling behind in technological development and the like. In our enterprises a dose of risk aversion is certainly present. The reasons can be found in current global economic crisis and increasingly caution about investing and also partly in national culture which, in the course of socialism was not exposed to risk (or the risk was minimal). Both role and power culture are bureaucratic cultures characterized by the resistance to risky combinations, inflexibility, resistance to changes and the like. So it is more realistic to expect that the companies in which power and role cultures dominate will avoid cost leadership strategy, thereby choosing product differentiation strategy, which, at this point, seems less risky which has also been shown by our research.