MGMT Ch.12

Adaptive cultures have a willingness to..

accept change and take on challenges

_____ and ______ contribute to a good strategy execution and performance.

Adaptive; High Performance

Why is corporate culture important?

Because it influences the firm's actions and approaches to conducting business

A company's value statement and code of ...

Communicate expectations of how employees should conduct themselves in the workplace

What is necessary for culture-change efforts to succeed?

Competent leadership at the top

Why do corp. cultures matter to the strategy execution process?

1. A culture that is well matched to the chosen strategy and the requirements of the strategy execution effort focuses the attention of employees on what is most important to this effort. 2. Culture-induced peer pressure further induces personnel to do things in a manner that aids the cause of good strategy execution. 3. A culture that is consistent with the requirements for good strategy execution can energize employees, deepen their commitment to execute the strategy flawlessly, and enhance worker productivity. 4. It is in management's best interest to dedicate considerable effort to establishing a corporate culture that encourages behaviors and work practices conducive to good strategy execution.

What do unhealthy cultures include?

1. Change-resistant cultures 2. Insular, inwardly focused cultures 3. Politicized cultures 4. Unethical and greed-driven cultures

A strong culture is developed by...

1. Founder/Strong leader with strong values 2. Commitment by the firm to ethical behavior

What are the steps in changing a problem culture?

1. Identify facets of present culture that are dysfunctional and impede good strategy exectuion 2. Specify clearly what new actions, behaviors and work practices should characterize the new culture 3. Talk openly about problems with current culture and make a persuasive case for cultural reform 4. Follow with visible, forceful actions (both substantive and symbolic) to ingrain a new set of behaviors, practices, and norms

List ways to embed cultural norms in the org and perpetuate the culture (1-4)

1. Make display of cultural norms a factor in evaluating job performance, granting compensation increases, and offering promotions 2. Stress that line managers all the way down to first-level supervisors give ongoing attention to explaining the desired cultural traits and behaviors in their areas and clarifying why they are important. 3. Encourage company personnel to exert strong peer pressure on co-workers to conform to expected cultural norms. 4. Hold periodic ceremonies to honor people who excel in displaying the company values and ethical principles.

How long does it take to change a problem culture?

1. Never a short-term exercise 2. A sustained and persistent effort to reinforce the culture at every opportunity thru word and deed is required 3. Takes time for new culture to emerge & prevail; takes even longer for it become embedded 4. Fixing a problem culture and instilling a new set of attitudes and behaviors can take 2-5yrs

List ways to embed cultural norms in the org and perpetuate the culture (5-8)

1. Screen applicants and hire those who will mesh well with the culture. 2. Incorporate discussions of the firm's culture and its behavioral norms into orientation programs for new employees and training courses for managers and employees. 3. Have senior executives frequently reiterate the importance and role of the firm's values and ethical principles at the firm's events and in internal communications to employees. 4. Expect managers at all levels to be cultural role models and exhibit advocated cultural norms in their own behavior.

Leading strategy execution requires

1. Staying on top of what is happening and closely monitoring progress 2. Putting constructive pressure on the org to execute strategy well and achieve operating excellence 3. Initiating corrective actions to improve strategy execution and achieve the targeted performance results

Culture of an organization can be changd by...

1. Top executive & upper mgmt behaviors 2. Ceremonial events to honor exemplary employees 3. Physical symbols that represent the new culture

What are symbolic culture changing actions?

1. Top executive and upper management behaviors 2. ceremonial events to honor exemplary employees 3.physical symbols that represent the new culture

What are the 8 key features of company corporate culture?

1. Values, principles, and ethical standards in use 2. Management practices and organizational polices 3. Atmosphere and spirit embodied in the firm's work climate 4. How managers and employees interact & relate to one another 5. Strength of peer pressure to conform & observe norms 6. Actions and behaviors encouraged & rewarded 7. Traditions & stories and "how we do things around here" 8. How the firm treats its stakeholders

If these three conditions exist, then the firm has a good strategic leadership and is a well-manged enterprise

1. Whether firm is achieving its performance targets 2. Whether its strategy is competently executed 3. Whether the firm has a good strategy and business model

What are the culture building roles of a company's core values and ethical standards

1. foster a work climate where company personnel share common and strongly held convictions about how the company's business is to be conducted 2. provide company personnel with guidance about how to do their jobs - steering them towards both doing things right and doing the right thing

List the causes of cultural change

1. new or revolutionary technologies 2.diversification into new businesses, 3. rapid growth of the firm 4. merger or acquisition of another firm 5. shifting internal conditions 6. new challenges in the market place.

What is a strong culture company?

A firm with deeply rooted values and norms of the behavior are widely shared values and regulate how it conducts its business - Insists that its values and principles are to be reflected in decisions and actions taken by all company personnel

A valuable ally in strategy execution process is

A strong culture that encourages actions, behaviors, and work practices that are in sync with the chosen strategy and conducive to good strategy execution

What is Management by walking around (MBWA)?

A technique that effective leaders us e to stay informed about how well the strategy execution process is progressing - Involves spending time with people at company facilities, asking questions, listening to their opinions and concerns, and gathering firsthand information about how well aspects of the strategy execution process are going.

Making corrective actions successfully requires:

A thorough analysis of the situation 2. Good business judgement in deciding what actions to take 3. Good implementation of the corrective actions

Unhealthy cultures lead to

Poor strategy execution => poor performance

Define corporate culture

Refers to the meshing of shared values, beliefs, ingrained attitudes, business principles and traditions that determine norms of behavior, accepted work practices, and style of operating.

What are substantive culture changing actions?

Replace key executives who are resisting or obstructing needed organizational and cultural changes. Promote individuals who support cultural shifts and can serve as role models for the cultural behavior. Appoint outsiders with the desired cultural attributes to high-profile positions. Screen all candidates for positions carefully, hiring only those who appear to fit in with the new culture. Mandate that all personnel attend culture-training. Design compensation incentives that boost the pay of teams and individuals who support culture change. Revise policies and procedures to drive cultural change.

How to mobilize effort for excellence in strategy execution

Treat employees as valued partners. Foster an esprit de corps that energizes members. Use empowerment to create a fully engaged workforce. Set stretch objectives that require personnel to give their best in achieving performance targets. Use benchmarking, reengineering, TQM, and Six Sigma tools to focus attention on continuous improvement. Use motivational techniques and compensation incentives to inspire, nurture a results-oriented work climate, and enforce high standards. Celebrate individual, group, and company successes.

Crafting, implementing, and executing strategy is a

continuous process that requires much adjusting and fine-tuning of the strategy to fit changing circumstances.

High performance cultures...

have a commitment to achieving stretch objectives and accountability

It is difficult to separate leading the process of executing strategy from

leading the strategy process

To deeply ingrain the stated core values and high ethical standards, firms must

turn them into strictly enforced cultural norms

In making a persuasive case for culture 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 produce better results. •If the need for cultural change is due to a change in strategy, cite reasons why the current strategy has to be modified.