Strategic Governance

Chapter 5, part 2 of 2
 CHAPTER DIVISIONS
Prelims Tentative dates
1. A new approach and model for Organizational Governance. - August 18, 22 - 24
2. Context, Background, and Principles. – Aug. 25, 29 - 31, Sept. 1
3. Delivering high performance organizations through
enterprise-wide governance and strategic leadership. - Sept. 4 - 8

Midterms
4. Operational Governance. – Sept. 18 - 22
5. Strategic Governance. – Sept. 25 - 29
6. Corporate Governance. – Oct. 2 - 6

Finals
7. Enterprise Risk Management. - Oct. 16 - 20
8. Joint Governance. – Oct. 23 - 2
9. Systematizing Enterprise Governance. – Oct. 30-31, Nov. 6 - 10
10. Case and Analysis: Enterprise Governance
across the world - Nov. 15-17, 20-24, 28,
Dec. 1
CHAPTER TOPIC OUTLINE:
Part 1 - Lecture
A. Setting Strategic Objectives and Direction
B. Setting and Managing Expectations
C. Developing and Reshaping Core Competences
D. Shaping Culture
E. Designing Systems and Structures for Alignment and Oversight
Part 2 - Lecture
F. Intelligence, Empowerment and Delegation
G. Stimulating Creativity and Innovation
H. Effective Quality Delivery Through Operations Management
I. Stakeholder Relationship Management
J. Effective Controls and Risk Management as Part of the Strategic Governance Layer
D. Shaping Culture

‘Shaping Organizational Culture’

Boundless Management, ©
 Shaping Organizational Culture
Building Organizational Culture
Managers are tasked with both creating and
communicating a consistent organizational culture.
Communicating Organizational Culture
Management is tasked with both creating culture and
accurately communicating it across the organization.
Building a Culture of High Performance
A high-performing culture is a results-driven business culture
focused on generating efficiency and completing
objectives.
‘Shaping Organizational Culture’
Boundless Management, ©
Cultural Change in an Organization:
The Feedback Loop

‘Shaping Organizational Culture’

Boundless Management, ©
Organization Triangle

‘Shaping Organizational Culture’

Boundless Management, ©
 1. Influences on Organizational Culture
Founders
When a company is founded, there is usually a single individual or group of individuals
involved. The founder or founders have a vision for their new company—and that vision
helps to form the corporate culture. In some cases, the founder is very intentional about
creating a particular culture; he or she may actually want to create a business in which, for
example, innovation or teamwork is valued. in other cases, the founder’s personality
unintentionally forms the culture.
Industry
It’s one thing to be creative, innovative, and fun in the hospitality or entertainment business.
But that type of culture won’t work well in an industry that’s built around regulations and
policies that cannot be changed or bent. Industries such as pharmaceuticals and nuclear
power require attention to detail and cannot tolerate a “creative” approach to following
rules. True, a pharmaceutical company can be people-oriented to a degree, but its
willingness to support the individual needs of employees must be secondary to its absolute
compliance with regulations and the law. ‘Influences on Organizational Culture’
Culture and Diversity, Principles of Management
Lumen Waymaker, ©
2. The Value of a Shared Purpose

‘How to Create a Shared Purpose, Vision & Values’

Triple Crown Leadership
December 1, 2022
The Purpose Statement
A well-written purpose statement goes deeper
[than a mission statement]. Simon Sinek’s book,
Start with Why, summarizes this concept well. A
purpose states “why” the organization exists—its
reason for being.

The ideal purpose statement lasts for a long

time. It won’t change as products and markets
do. The ideal purpose statement is short and
highly memorable. It answers why people should
commit to your organization, engaging their
hands, heads, and hearts.
‘How to Create a Shared Purpose, Vision & Values’
Triple Crown Leadership
December 1, 2022
E. Designing Systems and Structures for Alignment
and Oversight
Organizational design is the process of
designing your organization to achieve
desired results by aligning key
elements of the organization: work
processes, structure and governance,
information and metrics, people and
rewards, continuous improvement and
leadership and culture, in a way that
supports your strategy.

‘Organizational Design: What is it?’

AlignOrg Solutions, © 2023
Understanding the Six Sides of the Organizational
Cube
Work Processes: Work processes are the daily tasks employees perform to
create and deliver value. To create results, leaders must identify and prioritize
the work processes that create marketplace differentiation.
Structure & Governance: An organization's structure and governance must be
shaped in a way that allows you to deliver on your differentiating capabilities and
implement your strategy.
Information & Metrics: Information systems should be designed to ensure that
the right information - that which allows leaders to solve critical problems or
make decisions that impact strategy - gets to the right people at the right time.
People & Rewards: This system should be aligned to motivate employees and
maximize their potential while supporting the organization's strategic goals.
Continuous Improvement: To keep pace with changes in the marketplace and
within the organization, an organization must have a system to continually
review and realign all systems within it.
Leadership & Culture: The beliefs, behaviors and norms within an organization
should be cultivated to contribute to differentiation and value.

‘Organizational Design: What is it?’

AlignOrg Solutions, © 2023
 The Organizational Design Process

Group work and Ensure that your

Determine how your organization’s
resources to Implement the
Identifying the organization will win in processes, structure,
best deliver design choices
problem, the marketplace, metrics, practices,
your across your
challenge or identify choices that talent and resources
organization’s organization
root cause of need to be redirected to are in alignment with
strategy
the issue. drive strategy and build your chosen strategy
teams to address these to deliver ‘Organizational Design: What is it?’
AlignOrg Solutions, © 2023
deficiencies. differentiation.
 1. Effective Oversight Processes
Oversight refers to maintaining a watchful eye on
something. For instance, in the case of a citizen review
board, an internal group monitors the quality and
effectiveness of the service their organization provides.

Oversight involves taking responsibility for the

operation, implementation, and/or outcome of a
process, program, organization or institution, or effort.

An oversight mechanism is the system or process used

to maintain a watchful eye.

‘Establishing Oversight Mechanisms ’

Phil Rabinowitz
The Community Toolbox, Univ. of Kansas ©
1994-2023
How to Establish Oversight Mechanisms:
 In most situations, gather a group of stakeholders to plan and
set up oversight mechanisms.
 Decide what kind of oversight you need.
 Choose an oversight mechanism that is best suited to the
type of oversight you expect to conduct.
 Decide who will conduct the actual oversight.
 Decide on the methods you will use to conduct the oversight.
 Train those who will conduct the oversight if necessary.
 Create an analysis and reporting system.
 Determine how you will use oversight to maintain or improve
the quality of your work or of the entity or situation you’re
overseeing.
 Evaluate the effectiveness of your oversight mechanism and
adjust it as necessary.
 Continue oversight over the long term.

‘Establishing Oversight Mechanisms ’

Phil Rabinowitz
The Community Toolbox, Univ. of Kansas ©
1994-2023
2. Effective Planning, Policies and Procedures for
Oversight and Alignment
Strategic Alignment is a process that senior leaders should
implement and monitor throughout the planning lifecycle to
link key operational systems and processes to the organization's
mission and mission objectives.
The standards for the Strategic Planning and Alignment System require an
agency [or organization] to ensure … human capital management
strategies, plans, and practices—
1. Integrate strategic plans, annual performance plans and goals, and other
relevant budget, finance, and acquisition plans;
2. Contain measurable and observable performance targets; and
3. Communicate in an open and transparent manner to facilitate cross-
agency collaboration to achieve mission objectives.
“Human Capital Framework System: Strategic Planning and
Alignment”
US Office of Personnel Management, ©
3. Internal Control as a Means of Oversight
Internal control is a process, effected by an entity’s board of directors,
management and other personnel, designed to provide reasonable assurance:
❖ That information is reliable, accurate and timely
❖ Of compliance with applicable laws, regulations, contracts, policies and
procedures
❖ Of the reliability of financial reporting
Internal controls are established to further strengthen:
➢ The reliability and integrity of information
➢ Compliance with policies, plans, procedures, laws and regulations
➢ The safeguarding of assets
➢ The economical and efficient use of resources
➢ The accomplishment of established objectives and goals for operations
or programs
Committee of Sponsoring Organizations of the Treadway
Commission (COSO)
 4. Designing the Organizational Structure for
Effective Alignment
Organization
Design is
often divided
into two
distinct styles:
1. Hierarchical.
2. Organic.
‘Organization Design’
Mind Tools Content Team
 Organization Design
1. Hierarchical Organization Designs.
Functional structures. Functions – such as accounting, marketing, HR
and so on – are separate, each led by a senior executive who reports
to the CEO.
Divisional structures. The company is organized by office or customer
location. Each division is autonomous and has a manager who reports
to the CEO.
2. Organic Organization Designs.
Simple/Flat structure. This type of structure is common among small
businesses. There may only be two or three management levels, with
people working together as one, large team, and reporting to the
same, single person.
Matrix structure. Here, people typically have two or more lines of report.
Network structures. Often known as a "lean" structure, this type of
organization has central, core functions that operate the strategic
business, and outsources or subcontracts non-core functions.
‘Organization Design’
Mind Tools Content Team
 How to Use Organization Design:

1. CONSIDER THE IMPACT

Strategy, Size, Environment, Controls, Incentives
2. CREATE A COLLABORATIVE PLAN OF ACTION
3. COMMUNICATE AND PROVIDE SUPPORT

‘Organization Design’
Mind Tools Content Team
F. Intelligence, Empowerment and Delegation
ONE OF THE KEYS TO EFFECTIVE GOVERNANCE IS
RESPONSIBLY GATHERING AND HARNESSING STAKEHOLDER
INTELLIGENCE; AND DELEGATING AND EMPOWERING
EMPLOYEES, FROM FRONTLINE TO SUPPORT AND UP, TO
ENGAGE AND COME UP WITH IDEAS AND SUGGESTIONS,
AND BE ACTIVE PARTICIPANTS ON IMPROVEMENT.

THIS CALLS ON TOP MANAGEMENT TO HAVE SUFFICIENT

EMOTIONAL INTELLIGENCE TO HANDLE A DIVERSE
WORKFORCE, A WIDER MARKET, CONFIDENCE TO DELEGATE,
AND ACCOUNTABILITY TO BOTH SHARE IN THE RESPONSIBILITY
AND EMPOWER SUBORDINATES TO FULFILL THEIR
CORRESPONDING TASKS WELL.1
“Role of Emotional Intelligence in Delegation and Empowering Leadership: An Empirical Study on Bangladesh”,
Md. Sahidur Rahman1; Swadip Bhattacharjee2
The Chittagong University Journal of Business Administration, Vol. 29, 2014, pp. 15-32
1. Gathering and Utilizing Stakeholder Intelligence:
Focal Points/Challenging Areas
1. Intelligence
2. Transparency
3. Internal Engagement and Dialogue
4. with Corporate Purpose as the centrepiece.

Corporate purpose, as distinct from a mission statement, is a declaration

of what a company stands for beyond its immediate business goals;
balancing financial goals, long-term value, identity and aspirations of an
organization .

Intelligence and internal alignment are closely interrelated and speak to

the internal and external aspects of the process of consistently socializing
corporate purpose and a stakeholder engagement ethos both within the
organization and in the broader stakeholder universe. Christophe Guibeleguiet
GlobeScan Co-CEO
GlobeScan Incorporated © 2023
Features of a Successful Stakeholder Engagement
Program

GlobeScan Incorporated © 2023

2. Fostering Dissent
How Leaders can encourage contributory dissent

‘Into All Problem-Solving, a Little Dissent Must Fall,’

Fletcher, Harley, Hoskin and Maor
McKinsey & Company, February 2023
The leader’s choices…

‘Into All Problem-Solving, a Little Dissent Must Fall,’

Fletcher, Harley, Hoskin and Maor
McKinsey & Company, February 2023
For individuals and teams…

‘Into All Problem-Solving, a Little Dissent Must Fall,’

Fletcher, Harley, Hoskin and Maor
McKinsey & Company, February 2023
3. Bureaucracy and the Death to Commitment
Weberian model and its challenges
1. The term Weberian bureaucracy refers to Max Weber’s (1864–1920) ideal type (or
model) of rational bureaucracy, published in Economy and Society posthumously in
1921/22 by his wife Marianne Weber. His ideal type of bureaucracy consists of a number
of organizational features of administrative order. At the ideal type’s core lies a
hierarchically structured, professional, rule-bound, impersonal, meritocratic, and
disciplined body of public servants who possess a specific set of competences and who
operate outside the sphere of politics.
2. Bureaucratic structure plays a large role in shaping public policies, their
implementation, and the related socioeconomic outcomes. The effect of the different
characteristics of civil service systems on employee work attitudes is an important
empirical question. ..

Civil servants in closed systems are more committed to their organization than those in
more open systems. However, the types of commitment are not the same. Bureaucrats
in closed systems have higher continuance and normative commitment than those in
the open systems. 2. Bureaucratic structures and organizational commitment:
1. Weberian Bureaucracy, findings from a comparative study of 20 European
Fritz Sager and Christian Rosser countries; Kohei Suzuki & Hyunkang Hur
https://doi.org/10.1093/acrefore/9780190228637.013.166 https://doi.org/10.1080/14719037.2019.1619813
September 29, 2021 June 11, 2019
Open and Closed Systems in Organizational
Structure

Published on ‘BizFluent’, April 29, 2019

 G. Stimulating Creativity and Innovation
IFF, as an example:
• Intelligent Fast Failure is a tool to enhance creativity
and innovation in social contexts such as schools,
universities, workplaces as well as informal settings.
• IFF is particularly relevant for university contexts where
new solutions are being searched for.
• IFF is a process of trial and error until a satisfactory and
valuable solution and/or product is achieved.
• IFF has already been used in numerous contexts as a
teaching and learning technique to instigate creative and
innovative thinking.
‘ Stimulating creativity and innovation through
Intelligent Fast Failure ’
Armend S. Tahirsylaj
https://doi.org/10.1016/j.tsc.2012.05.005
Thinking Skills and Creativity
Volume 7, Issue 3, December 2012, Pages 265-
270
 1. Provocation as a Means of Discovery
“Powerful learning begins with the perfect provocation.
A well-crafted provocation should encourage curiosity.
The right provocation sparks questions and invites
exploration.
A powerful provocation should challenge our paradigms.”

Likewise, in the organization, Provocation incites people to

come up with new ideas, discover new things, or pay
attention.

‘Powerful Provocations for Learning: Sparking

curiosity and increasing engagement
Nigel Coutts, The Learner’s Way
August 11, 2019
 2. Driving Innovation

1. Set the example.

2. Develop innovation-friendly policies.
3. Communicate.
4. Try it out.
5. Be realistic about your appetite for
failure.

‘How To Drive Innovation In Five Steps’

Kristl Hedges,
Author, ‘The Power of Presence: Unlock Your
Potential to Influence and Engage Others.’
April 10, 2014
 CHAPTER BREAK: CHECK UP QUIZ – MWF
(25 POINTS)
1. State and define the sides of organizational culture. (5
points)
2. Draw and explain the organizational design process. (5
points)
3. What are the focal points/challenging areas in socializing
organizational purpose with stakeholder engagement? (5
POINTS)
4. Enumerate and give examples of the four categories of
general environmental influences or organizational structure
(5 POINTS)
5. How can leaders encourage healthy dissent? (5 POINTS)
 TTH LECTURE CONTINUES…
(MWF LECTURE, NEXT MEETING)
END OF PART 2