What Makes Up a Companys Culture? Where Does Corporate Culture Come From? How Is a Companys Culture Reinforced? What Forces and Factors Cause Culture to Evolve? Culture and Strategy Execution: Ally or Obstacle? Culture can contribute to -- or hinder -- successful strategy execution Requirements for successful strategy execution may -- or may not -- be compatible with culture A close match between culture and strategy promotes effective strategy execution Why Culture Matters: Benefits of a Good Culture-Strategy Fit Shape mood and temperament of the work force Provide standards, values, informal rules and peer pressures Strengthen employee identification with the company, its performance targets, and strategy Stimulates people Optimal condition: A work environment that Promotes can do attitudes Accepts change Breeds needed capabilities
Types of Corporate Cultures Strong vs. Weak Cultures Unhealthy Cultures Adaptive Cultures Strong vs. Weak Cultures Characteristics of a Strong Culture How does a Culture become Strong? Leader who establishes values A deep, abiding commitment to espoused values and business philosophy Genuine concern for well-being of Customers, Employees, Shareholders Characteristics of a Weak Culture
Unhealthy Cultures
Characteristics of Unhealthy or Low performance Cultures Politicized internal environment Hostility to change Promotion of managers more concerned about process and details than results Aversion to look outside for superior practices
Characteristics of Adaptive Cultures Introduction of new strategies to achieve superior performance Strategic agility and fast response to new conditions Risk-taking, experimentation, and innovation to satisfy stakeholders Proactive approaches to implement workable solutions Entrepreneurship encouraged and rewarded Top managers exhibit genuine concern for customers, employees, shareholders, suppliers Diagnose which facets of present culture are strategy-supportive and which are not Talk openly about why aspects of present culture need to be changed Follow with swift, visible actions to modify culture - include both substantive and symbolic actions Creating a Strong Fit Between Strategy and Culture Culture-Changing Actions
Types of Culture-Changing Actions
Symbolic Culture-Changing Actions
Substantive Culture-Changing Actions
Value Statements/Codes of Ethics Training programs Applicant screening Communication Management involvement and oversight Strong endorsement by CEO Word-of-mouth Instilling Values and Ethics in the Culture Building a Spirit of High Performance into the Culture Emphasize achievement and excellence Promote a results-oriented culture Pursue practices to inspire people to excel Approaches? Management Practices?
Strategic Leadership
What Roles may a Strategic Leader take? Strategic Leadership: Leadership Roles of the Strategy Implementer 1. Stay on top of whats happening 2. Promote a culture energizing organization to accomplish strategy 3. Keep firm responsive to changing conditions 4. Exercise ethics leadership 5. Take corrective actions to improve overall strategic performance Role #1: Stay on Top of Whats Happening Develop a broad network of formal and informal sources of information Talk with many people at all levels Be an avid practitioner of MBWA Monitor operating results regularly Get feedback from customers Watch competitive reactions of rivals Role #2: Foster a Strategy - Supportive Culture Successful leaders spend time convincing organizational members, nurturing values, building a culture Role in matching culture to strategy Implement a stakeholders-are-king philosophy Challenge status quo with very basic questions Create events where all managers must listen Energize employees to make new strategy happen Initiate substantive actions to reinforce desired cultural traits Reward people exhibiting desired cultural norms
Role #3: Keep Internal Organization Responsive Promote openness to fresh ideas Pursue attractive new opportunities Support people who are willing to champion Promote continuous adaptation to changing conditions Build new competencies and capabilities Role #4: Exercising Ethics Leadership Display unequivocal commitment to ethical and moral conduct Encourage compliance and establish tough consequences for unethical behavior Make it a duty for employees to Observe ethical codes and Report ethical violations Managers role in exercising ethics leadership Key approaches to Enforcing Ethical Behavior Actions demonstrate corporate citizenship and social responsibility Role #5: Lead the Process of Making Corrective Adjustments Requires both Reactive adjustments Proactive adjustments Involves Reshaping long-term direction, objectives, and strategy to unfolding events Promoting initiatives to align internal activities and behavior with strategy Transformational Leadership The Leadership Challenge Practices Model the Way Inspire a Shared Vision Challenge The Process Enable Others To Act Encourage The Heart Idealized Influence Individualized Consideration Inspirational Motivation Intellectual Stimulation Transformational Leadership