This action might not be possible to undo. Are you sure you want to continue?
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 Creating conductive work environment Illustrated in the form of:
± Company s values ± Business practices ± Traditions
Corporate Culture at Wal-Mart Dedication to customer satisfaction Achieving low costs Proper operating practices Strong work ethic Ritualistic Saturday morning meetings Executive commitment to
± Visit stores ± Listen to customers ± Solicit employees suggestions
Compensation based entirely on commission .Corporate Culture at Nordstrom s Deliver exceptional customer service to customers Company motto ± Respond to Unreasonable Customer Requests Immediately addressing ordinary customer requests Promotions based on outstanding customer service .
and resolve burning issues Commitment to Six Sigma Quality Globalization of the company .Corporate Culture at General Electric Hard-driving. best practices. debate. 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. and learning Reliance on workout sessions to identify.
Corporate Culture at Microsoft Long work hours of programmers Emotional peaks and valleys in encountering and overcoming coding problems Exhilaration of completing a complex program on schedule Satisfaction of working on cutting-edge projects Rewards of being part of a team responsible for a popular new software program Tradition of competing aggressively .
. beliefs.Identifying Corporate Culture A company s culture is manifested in . and business principles management preaches and practices Official policies and procedures Revered traditions and oft-repeated stories Attitudes and behaviors of employees Peer pressures that exist to display core values Organizational politics Approaches to people management and problem solving Relationships with external stakeholders . Values. .
vision. supervisory practices. employee attitudes Peer pressures that exist Organizational politics Relationships with stakeholders Company s approach to people management . or strategies Traditions.Sources of Corporate Culture Founder or early leader Influential individual or work group Policies.
key operating practices Story-telling of company legends Ceremonies honoring employees who display cultural ideals Visibly rewarding those who follow cultural norms . beliefs. principles.Sustaining corporate culture Selecting new employees who will fit in Systematic training of new employees Senior management efforts to reinforce core values.
Forces and Factors Causing Culture to Evolve New challenges in marketplace Revolutionary technologies Shifting internal conditions ± Internal crisis ± Turnover of top executives 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 .
Culture: Impact on Strategy Execution A company s culture can contribute to or hinder successful strategy execution A culture promoting attitudes and behaviors well-suited to first-rate strategy execution is a valuable strength in the strategy execution process A culture embracing attitudes and behaviors that impede good strategy execution is a huge obstacle to be overcome .
Benefits of a Tight Culture-Strategy Fit A culture encouraging 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 A culture imbedded with values and behaviors that facilitate strategy execution promotes strong employee commitment to a company s ± Vision ± Performance targets ± Strategy .
Outcome of a Tight Culture-Strategy Fit A good job of culture-building by managers ± Promotes can-do attitudes ± Encourages acceptance of change ± Instills strong peer pressure for strategy-supportive behaviors ± Enlists enthusiasm and dedicated effort to achieve company objectives Closely aligning corporate culture with requirements for proficient strategy execution merits the full attention of senior executives! .
Types of Corporate Cultures .
widelyunderstood philosophy Considerable time spent by management communicating and reinforcing values Values are widely shared and deeply rooted Have a well-defined corporate character.Characteristics of Strong Culture Companies Conduct business according to a clear. reinforced by a creed or values statement Careful screening/selection of new employees to be sure they fit in .
and business philosophy ± Practicing what is preached! Genuine concern for well-being of ± Customers ± Employees ± Shareholders . beliefs. abiding commitment to espoused values.Creating a strong culture Leader who establishes values and behaviors consistent with ± Customer needs ± Competitive conditions ± Strategic requirements A deep.
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 .
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 .
Hallmarks of Adaptive Cultures Willingness to accept change and embrace challenge of introducing new strategies Risk-taking. and innovation to satisfy stakeholders Internal 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 . experimentation.
Dominant Traits of Adaptive Cultures Any changes in operating practices and behaviors ± Must not compromise core values and long-standing business principles ± Must satisfy legitimate interests of key stakeholders Customers Employees Shareholders Suppliers Communities .
Creating a Strong Fit Between Strategy & Culture Responsibility of Strategy Maker Select a strategy compatible with the sacred or unchangeable parts of organization s prevailing corporate culture! Responsibility of Strategy Implementer Once strategy is chosen. change whatever facets of the corporate culture hinder effective execution! .
8.Fig.4: Changing a Problem Culture FROM THE BOOK .
Culture-Changing Actions Make a compelling case why a new culture is in best interests of both company and employees ± Challenge status quo ± Create events where employees must listen to angry key stakeholders Continuously repeat messages of why cultural change is good for stakeholders Visibly praise and reward people who display new cultural norms .
Culture-Changing Actions (continued) Alter incentive compensation to reward desired cultural behavior Hire new managers and employees who have desired cultural traits and can serve as role models Replace key executives strongly associated with old culture Revise policies and procedures to help drive cultural change .
Symbolic Culture-Changing Actions Emphasize frugality Eliminate executive perks Require executives 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 .
downsizing and upsizing Reinforce culture through both word and deed Enlist support of cultural norms from frontline supervisors and employee opinion leaders .Substantive Culture-Changing Actions Engineer quick successes to highlight benefits of proposed cultural changes Bring in new blood. replacing traditional managers Change dysfunctional policies Change reward structure Reallocate budget.
Grounding the Culture in Core Values and Ethics A culture based on ethical principles is vital to long-term strategic success Ethics programs help make ethical conduct a way of life Executives must provide genuine support of personnel displaying ethical standards in conducting the company s business Core values and ethical principles serve as a cornerstone for culture-building .
5: The Two Culture-Building Roles of a CultureCompany·s Core Values and Ethical Standards FROM THE BOOK . 8.Fig.
6: How a Company·s Core Values and Ethical Principles Positively Impact the Corporate Culture FROM THE BOOK . 8.Fig.
Approaches to Establishing Ethical Standards Word-of-mouth indoctrination and tradition Annual reports and Web sites Orientation courses for new employees Training courses for managers and employees 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 .
Instilling Values and Ethics in the Culture Incorporate values statement and ethics 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 .
and work history of prospective employees Educate employees about ethical behaviors Encourage employees to raise issues with ethical dimensions Explain how company values and ethics code apply at all levels of a company Insist company values and ethical standards become a way of life .Structuring the Ethics Compliance & Enforcement Process Develop procedures for ± Enforcing ethical standards and ± Handling potential violations Scrutinize attitudes. character.
Structuring the Ethics Compliance & Enforcement Process (continued) Form an ethics committee to provide guidance Appoint an ethics officer to head compliance effort Establish an ethics hotline/Web site employees can use to ± Anonymously report a possible violation ± Get confidential advice on a troubling ethics-related situation Conduct annual ethics audit to measure extent of ± Ethical behavior and ± Identify problem areas .
Key Approaches to Enforcing Ethical Behavior Have mandatory ethics trainings for employees Conduct an annual audit to assess ± Each manager s efforts to uphold ethical standards ± Actions taken by managers to remedy deficient conduct Require all employees to sign a statement annually certifying they have complied with firm s code of ethics Openly encourage employees to report possible infractions via ± Anonymous calls to a hotline or ± Posting to a special company Web site .
to accommodate local customs and traditions . if necessary.Establishing a Strategy-Culture Fit in Multinational and Global Companies Institute training programs to ± Communicate meaning of core values and ± Explain case for common operating principles and practices Draw on full range of motivational and compensation incentives to induce personnel to adopt and practice desired behaviors Allow some leeway for certain core values and principles to be interpreted and applied somewhat differently.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.