Int. J. Hum. Cap. Urban Manage., 1(1): 31-36, Winter 2016 31 Int. J. Hum. Cap. Urban Manage., 1(1): 31-36, Winter 2016 DOI: 10.7508/ijhcum.2016.01.004 *Corresponding Author Email: kfatehi@kennesaw.edu Tel.: +1 470 578 6785; Fax: +1 470 578 9021 ORIGINAL RESEARCH PAPER Cultural implications of business strategy-making K. Fatehi * Management and Entrepreneurship Department, Coles College of Business Kennesaw State University, 560 Parliament Garden Way, Kennesaw, GA 30144-5591, USA Received 1 November 2015; revised 25 November 2015; accepted 5 December 2015; available online 1 January 2016 ABSTRACT:The central issue in strategy formulation and implementation process, or strategy-making, is the identification of environmental forces and the preparation of a plan of action to deal with them. This necessitates scanning the environment for gathering information. Environmental scanning should enable the firm to identify these forces. Doing this not only calls for information gathering, but also for deciding what to look for, where to look, and what to select from the very large amount of information available. These steps are based on culturally programmed perception processes. Also, strategy-making requires assessing internal capabilities of the firm. Both, internal and external steps in the strategy-making process involve perception and thinking, both of which are influenced by culture. Therefore, country differences can be expected in each step. In this regard, the process of strategy-making varies among managers of different cultures. This paper addresses these issues and discusses implications of cultural differences on the strategy-making process. KEYWORDS: Culture and strategy; Culture and perception; Cultural impact . INTRODUCTION The central issue in strategy formulation is the identification of environmental forces that may have an influence on the organization and the preparation of a plan of action to deal with them. Environmental scanning should enable the firm to identify these forces. Doing this not only calls for information gathering, but also for deciding what to look for, where to look, and what to select from the very large amount of information available. The process is not an objective and mechanistic activity that is free of human biases. The scanning and information gathering is a culturally based perceptual process. The external environmental assessment aspect of strategy formulation has been described by Schneider (1989) as a five-step process of scanning behavior, information selection, interpretation, validation, and prioritizing. Because these steps are based on culturally programmed perception processes, country differences can be expected in each step. Strategy formulation and implementation also deal with internal organizational issues that center on the relationships among people, such as the place of individuals and groups in the society, the hierarchy, power, and authority. Both internal and external steps in the strategy-making process involves perception and thinking, both of which are influenced by culture. Therefore, the process of strategy making varies among people of different cultures. The paper elaborates on these issues in two parts. First, how people relate to the environment is discussed. Second, the relationship among people in different cultures is examined. Within the framework of these two presentations, cultural difference in perception and thinking is explained. The paper concludes with a discussion on implications on strategy-making.