Defining Characteristics of Corporate Culture by aqv56188

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									            Defining Characteristics
             of Corporate Culture
 Core  values, beliefs, and business principles
 Ethical standards
 Operating practices and behaviors defining
  “how we do things around here”
 Approach to people management
 “Chemistry” and “personality” permeating
  work environment
 Oft-told stories illustrating
   Company’s values
   Business practices
   Traditions
                           13-1
                Where Does Corporate
                Culture Come From?
 Founder     or early leader
 Influential   individual or work group
 Policies,   vision, or strategies
 Operating     approaches
 Company’s      approach to people management
      Traditions, supervisory practices, employee attitudes

 Organizational     politics
 Relationships     with stakeholders
                                13-2
How Is a Company’s Culture Perpetuated?

 Selecting   new employees who will “fit” in
 Systematic    indoctrination of new employees
 Senior management efforts to reinforce core
  values, beliefs, principles, key operating practices
 Story-telling   of company legends
 Ceremonies    honoring employees who display
  cultural ideals
 Visibly   rewarding those who follow cultural norms

                            13-3
        Forces Causing Culture to Evolve
 New challenges in marketplace
 Revolutionary technologies
 Shifting internal conditions
     Internal crisis
     Turnover of top executives
 A new CEO who opts to change things
 Diversification into new businesses
 Expansion into foreign countries
 Rapid growth that involves adding many new
  employees
 Merger with or acquisition of another company
                              13-4
Types of Corporate Cultures


  Strong vs. Weak Cultures


    Unhealthy Cultures


 High-Performance Cultures


     Adaptive Cultures
             13-5
                Characteristics of
            Strong Culture Companies
 Conduct business according to a clear, widely-
  understood philosophy
 Considerabletime spent by management
  communicating and reinforcing values
 Values    are widely shared and deeply rooted
 Have  a well-defined corporate character,
  reinforced by a creed or values statement
 Careful screening/selection of new employees to be
  sure they will “fit in”
                            13-6
Characteristics of Weak Culture Companies

 Lack     of a widely-shared core set of values

 Few  behavioral norms evident in operating
  practices

 Few      strong traditions

 No   strong sense of company identity

 Little   cohesion among departments

 Weak   employee allegiance to company’s vision and
  strategy
                               13-7
   Characteristics of Unhealthy Cultures

 Highly   politicized internal environment
      Issues resolved on basis of political clout
 Hostility   to change
      Avoid risks and don’t screw up
      Experimentation and efforts to alter status quo
       discouraged
 “Not-invented-here” mindset – company
  personnel discount need to look outside for
    Best practices
    New or better managerial approaches
    Innovative ideas
 Disregardfor high ethical standards and
  overzealous pursuit of wealth by key executives
                                 13-8
                Characteristics of
            High-Performance Cultures
   Standout cultural traits include
     A can-do spirit
     Pride in doing things right
     No-excuses accountability
     A results-oriented work climate in which people go the extra
      mile to achieve performance targets
 Strong sense of involvement by all employees
 Emphasis on individual initiative and creativity
 Performance expectations are clearly identified for all
  organizational members
 Strong bias for being proactive, not reactive
 Respect for the contributions of all employees
                                  13-9
      Hallmarks of Adaptive Cultures

 Willingness  to accept change and embrace
  challenge of introducing 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
                        13-10
         Culture: Ally or Obstacle
          to Strategy Execution?
A company’s culture can contribute to – or hinder
 – successful strategy execution

A culture that promotes attitudes and behaviors
 that are well-suited to first-rate strategy
 execution is a valuable ally in the strategy
 execution process

A culture where attitudes and behaviors impede
 good strategy execution is a huge obstacle to
 be overcome

                        13-11
  Substantive Culture-Changing Actions

 Replace   key executives strongly associated with
  old culture
 Promote individuals who have desired cultural traits
  and can serve as role models
 Appoint outsiders who have desired cultural
  attributes to high-profile positions
 Screen all candidates for new positions carefully,
  hiring only those who fit in with the new culture
 Mandate all company personnel attend culture-
  training programs to learn more about new work
  practices, operating approaches, and behaviors
                          13-12
           Substantive Culture-
         Changing Actions (continued)
 Push  hard to implement new-style work practices
  and operating procedures
 Design compensation incentives to reward teams
  and individuals who display the desired cultural
  behaviors
 Grant generous pay raises to individuals who lead
  the way in adopting desired work practices,
  displaying new-style behaviors, and achieving
  pace-setting results
 Revise policies and procedures in ways to drive
  cultural change
                         13-13
    Symbolic Culture-Changing Actions

 Lead    by example – Walk the talk
 Emphasize     frugality
 Eliminate   executive perks
 Requireexecutives to spend time talking with
  customers
 Ceremonial   events to praise people and teams who
  “get with the program”
 Alter   practices identified as cultural hindrances
 Visible   awards to honor heroes
                             13-14
           Approaches to Establishing
               Ethical Standards
 Formal   values statement and a code of ethics
 Word-of-mouth    indoctrination and tradition
 Annual   reports and Websites
 Making  stakeholders aware of a commitment
 to ethical business conduct is attributable to
     Greater 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
                             13-15
    Techniques to Transform Core Values and
      Ethical Standards into Cultural Norms
 Screen out applicants who do not exhibit compatible
  character traits
 Incorporate values statement and ethics code in
  employee training programs
 Strong endorsement by senior executives of the
  importance of core values and ethical principles at
  company events and in internal communications
 Use values statements and codes of ethics as
  benchmarks to judge appropriateness of company
  policies and operating practices
 Make the display of core values and ethical principles a
  big factor in evaluating employee performance
                            13-16
Techniques to Transform Core Values and Ethical
    Standards into Cultural Norms (continued)

 Make  sure managers at all levels are diligent in
  stressing the importance of ethical conduct and
  observance of core values
 Encourage   everyone to use their influence in
  helping enforce observance of core values and
  ethical standards
 Hold periodic ceremonies to recognize individuals
  and groups who display the values
 Institute   ethics enforcement procedures

                            13-17
Numerous Roles of Strategic Leaders

                           Culture
                                             Taskmaster             Mentor
       Visionary           Builder

                                Negotiator             Process         Coach
                Chief                                 Integrator
            Entrepreneur
            & Strategist             Capabilities
                                                               Head
                                       Builder
                                                            Cheerleader
       Resource Acquirer &
            Allocator                     Spokesperson
                                                                   Arbitrator

   Crisis          Motivator               Consensus
                                            Builder             Chief
   Solver                                                    Administrator
                Policy                                        & Strategy
               Enforcer                 Policymaker          Implementer

                                13-18
       Leadership Activities of Chief
           Strategy Implementer
1. Stay on top of what’s happening

2. Put constructive pressure on company to achieve
   good results

3. Lead development of stronger core competencies
   and competitive capabilities

4. Exercise ethics leadership and lead social
   responsibility initiatives

5. Take corrective actions to improve overall
   strategic performance
                          13-19
Role #1: Stay on Top of What’s 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
      Observe situation firsthand

 Monitor    operating results regularly
 Get   feedback from customers
 Watch    competitive reactions of rivals
                                13-20
  Role #2: Put Constructive Pressure on
   Company to Achieve Good Results
 Successful      leaders spend time
     Mobilizing organizational energy behind
         Good strategy execution and
         Operating excellence

     Nurturing a results-oriented work climate
     Promoting certain enabling cultural drivers
         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
                                        13-21
       Role #3: Promote Stronger Core
        Competencies and Capabilities
 Top management intervention is
  required to establish better or new
     Resource strengths and competencies
     Competitive capabilities
 Senior   managers must lead the effort because
     Competencies reside in combined efforts of different
      work groups and departments, thus requiring cross-
      functional collaboration
     Stronger competencies and capabilities can lead to a
      competitive edge over rivals

                                 13-22
  Role #4: Display Ethics Leadership and
   Lead Social Responsibility Initiatives
 Set   an excellent example in
     Displaying ethical behaviors

     Demonstrating character and personal integrity in
      actions and decisions

 Declare  support of company’s ethics code and
 expect all employees to conduct themselves in an
 ethical fashion

 Encourage
          compliance and establish tough
 consequences for unethical behavior
                              13-23
        Role #5: Lead the Process of
        Making Corrective Adjustments
 Requires    deciding
     When adjustments are needed
     What adjustments to make
 Involves
     Adjusting long-term direction, objectives, and strategy on
      an as-needed basis in response to unfolding events and
      changing circumstances
     Promoting fresh initiatives to bring internal activities and
      behavior into better alignment with strategy
     Making changes to pick up the pace when results fall
      short of performance targets
                                13-24

								
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