CHAPTER 12

CORPORATE CULTURE AND LEADERSHIP:

Keys to Good Strategy Execution

Student Version
Copyright 2012 The McGraw-Hill Companies, Inc.

McGraw-Hill/Irwin

INSTILLING A CORPORATE CULTURE

THAT PROMOTES GOOD STRATEGY
EXECUTION
Corporate Culture

Is the meshing of shared values, beliefs,

business principles, and traditions that imbues
a firms operating style, behavioral norms,
ingrained attitudes, and work atmosphere.

Is important because it influences the firms

actions and approaches to conducting
business.
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WHY IS MANAGING CULTURE

IMPORTANT FOR STRATEGY
IMPLEMENTATION
Well matched culture for strategy
execution focuses attention of employees
to what is important

E.g. low cost strategy requires more focus on

cost saving

Induces peer pressure

Well matched culture deepens
commitment
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Forces That Cause a Firms

Culture to Evolve
New or revolutionary
technologies
Diversification into
new businesses

New challenges in
the marketplace

Need for
Cultural
Change
Shifting internal
conditions

Rapid growth
of the firm

Merger or acquisition
of another firm

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Healthy Cultures That Aid

Good Strategy Execution
Performance

Good Strategy
Execution
High-Performance
Cultures

Adaptive
Cultures

Commitment to
achieving stretch
objectives and
accountability

Willingness to accept
change and take on
challenges

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Unhealthy Cultures That Impede

Good Strategy Execution
Insular, inwardly
focused cultures

Change-resistant
cultures

Unhealthy
Cultures
Politicized
cultures

Unethical and greeddriven cultures

Incompatible
Subcultures

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Changing a Problem Culture:

The Role of Leadership
A strong, out of sync, or unhealthy culture must
be changed in order to execute strategy
successfully.
Competent leadership at the top is necessary
for culture-change efforts to succeed.

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Strategic leadership roles

Leadership is the process of influencing an
organisation (or group within an organisation)
in its efforts towards achieving an aim or goal.
Three key roles in leading strategic change:

Envisioning future strategy.

Aligning the organisation to deliver that
strategy.
Embodying change.

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Envisioning future strategy

Strategy requires

Vision leadership creates the picture of the

future
Make clear cut choices- leadership makes
the decision
Create competitive advantage- leadership
identifies organizations competencies
Manage reactive vs proactive- leadership
acts on the feedback
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Making a Compelling Case

for Culture Change
Selling the Change

Explain why and how certain behavioral norms and

work practices are obstacles to good execution of
strategic initiatives.

Explain how new behaviors and work practices will

be produce better results.

Cite reasons why the current strategy has to be

modified, if the need for cultural change is due to a
change in strategy.

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Newcomers and outsiders

Outsiders can also play an important role in
strategic change.
These could include:
A new chief executive from outside the
organisation can bring a new perspective.
New management from outside can also
increase the diversity of ideas.
Consultants are used to help formulate
strategy or to plan the change process.
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LEADING THE STRATEGY EXECUTION

PROCESS
Leading Strategy Execution requires:

Staying on top of what is happening and

closely monitoring progress.

Putting constructive pressure on the

organization to execute the strategy well
and achieve operating excellence.

Initiating corrective actions to improve

strategy execution and achieve the
targeted performance results.
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http://www.youtube.com/watch?v=
K1WmackWSQY

http://www.youtube.com/watch?v=f60
dheI4ARg

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