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13
Corporate Culture and Leadership
Screen graphics created by: Jana F. Kuzmicki, Ph.D. Troy State University-Florida and Western Region
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An organizations capacity to execute its strategy depends on its hard infrastructure its organization structure and systems and on its soft infrastructure its culture and norms. Amar Bhide
Chapter Roadmap
Building a Corporate Culture that Promotes Good Strategy Execution
What to Look for in Identifying a Companys Culture Culture: Ally or Obstacle to Strategy Execution? Types of Cultures Creating a Strong Fit Between Strategy and Culture Grounding the Culture in Core Values and Ethics Establishing a Strategy-Culture Fit in Multinational Companies Staying on Top of How Well Things Are Going Pushing Company to Achieve Good Results Keeping Internal Organization Focused on Operating Excellence Exercising Ethics Leadership Making Corrective Adjustments
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McGraw-Hill/Irwin
Patterns of how we do things around hereits style of Oft-told stories illustrating companys values Its approach to people management Ethical standards Internal politics Traditions
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Dedication to customer satisfaction Zealous pursuit of low costs Frugal operating practices Strong work ethic
Company motto
Respond to Unreasonable
Customer Requests
Out-of-the-ordinary customer requests
Features of the Corporate Culture at General Electric Hard-driving, results-oriented atmosphere prevails
All
businesses are held to a standard of being #1 or #2 in their industries as well as achieving good business results
Cross-business sharing of ideas, best practices, and learning Reliance on workout sessions to identify, debate, and resolve
burning issues
Commitment to Six Sigma Quality Globalization of the company
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management preaches and practices Official policies and procedures Its revered traditions and oft-repeated stories Attitudes and behaviors of employees Peer pressures that exist to display core values Its politics Approaches to people management and problem solving Its relationships with external stakeholders Chemistry and personality permeating work environment
employee attitudes
The peer pressures that exist Organizational politics Relationships with stakeholders Companys approach to people management
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Arrival of a new CEO Diversification into new businesses Expansion into foreign countries Rapid growth involving adding new employees Merger with or acquisition of another company
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behaviors that are well-suited to first-rate strategy execution is a valuable ally in the strategy execution process
A culture that embraces attitudes and
Why Culture Matters: Benefits of a Tight Culture-Strategy Fit A culture that encourages actions and behaviors supportive of
good strategy execution
Provides employees with clear guidance regarding what behaviors and results constitute good job performance Creates significant peer pressure among coworkers to conform to culturally acceptable norms
that facilitate strategy execution promotes strong employee commitment to the companys
Vision Performance targets Strategy
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objectives
Closely aligning corporate culture with the requirements for proficient strategy execution merits the full attention of senior executives!
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behaviors and behaviors needed for good strategy execution send mixed signals
Should
employees by loyal to the culture and company traditions and resist actions and behaviors promoting better strategy execution? Or should they support the strategy by engaging in behaviors that run counter to the culture?
When a companys culture is out of sync with what is needed for strategic success, the culture has to be changed as rapidly as can be managed!
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Adaptive Cultures
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philosophy
Considerable time spent by management communicating and
reinforcing values
Values are widely shared and deeply rooted Have a well-defined corporate character,
consistent with
Customer needs Competitive conditions Strategic requirements
is preached!
clout
Hostility to change
Avoid risks and dont
new strategies Risk-taking, experimentation, and innovation to satisfy stakeholders Entrepreneurship is encouraged and rewarded Funds provided for new products New ideas openly evaluated Genuine interest in well-being of all key constituencies Proactive approaches to implement workable solutions
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not compromise core values and long-standing business principles satisfy legitimate interests of key stakeholders
Must
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traditional managers
Change dysfunctional policies Change reward structure Reallocate budget, downsizing and upsizing Reinforce culture through both word and deed Enlist support of cultural norms from frontline supervisors and
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Fig. 13.2: The Two Culture-Building Roles of a Companys Core Values and Ethical Standards
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Fig. 13.3: How a Companys Core Values and Ethical Principles Positively Impact the Corporate Culture
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Orientation courses for new employees Training courses for managers and employees Making stakeholders aware of a commitment
management understanding of role these statements play in culture building Renewed focus on ethical standards stemming from recent corporate scandals Growing numbers of consumers who prefer to patronize ethical companies
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code in employee training programs Screen out applicants who do not exhibit compatible character traits Frequent communications of the values and ethics code to all employees Management involvement and oversight Strong endorsement by CEO Ceremonies and awards for individuals and groups who display the values Institute ethics enforcement procedures
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employees Educate employees about what is ethical and what is not Encourage employees to raise issues with ethical dimensions Explain how company values and the ethics code apply at all levels of a company Insist that company values and ethical standards become a way of life
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to measure extent of
Ethical
Each managers efforts to uphold ethical standards Actions taken by managers to remedy deficient conduct
and
interpreted and applied somewhat differently, if necessary, to accommodate local customs and traditions
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STRATEGIC LEADERSHIP
McGraw-Hill/Irwin
Culture Builder
Mentor Coach
2. Put constructive pressure on company to achieve good results 3. Keep company focused on operating excellence 4. Lead development of stronger core competencies and competitive capabilities 5. Exercise ethics leadership 6. Take corrective actions to improve overall strategic performance
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information
Talk with many people at all levels Be an avid practitioner of MBWA
Observe situation
firsthand
Monitor operating results regularly Get feedback from customers Watch competitive reactions of rivals
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Role Pressure
Strong sense of involvement on part of company personnel Emphasis on individual initiative and creativity Respect for contributions of individuals and groups Pride in doing things right
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Treat employees with dignity and respect Make champions out of people who excel
Encourage employees to use initiative Set stretch objectives and expectations that employees are to give
their best Grant employees autonomy to contribute Use full range of motivational techniques and compensation incentives to
how things are done Support mavericks with creative ideas to improve ways of operating Ensure rewards for successful champions are large and visible Use all kinds of ad hoc organizational forms to support experimentation Use tools of benchmarking, best practices, reengineering, TQM, and Six Sigma to focus attention on continuous improvement
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combined efforts of different work groups and departments, thus requiring cross-functional collaboration can lead to a competitive edge over rivals
behaviors and
Our ethics code is . . .
Demonstrating character
codes
ethical violations
compliance
Actions Demonstrating Commitment to a Strategy of Social Craft a strategy that Responsibility positively improves well-being of
employees, environment, communities, and society Use social and environmental metrics to evaluate company performance Tie social and environmental performance to executive compensation Take special pains to protect environment Take an active role in community affairs Generously support charitable causes and projects benefiting society Support workforce diversity and commit to overall well-being of employees
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adjustments to make
Involves
Adjusting long-term direction,
objectives, and strategy on an asneeded basis in response to unfolding events and changing circumstances activities and behavior short of into better alignment with strategy
performance targets
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