MNGT 4800 Hopkins Final
Sources of Ethical Standards
(1) The School of Ethical Universalism (2) The School of Ethical Relativism (3) Integrated Social Contracts Theory
Two 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 and (2) provide company personnel with guidance about how to do their jobs —steering them toward both doing things right and doing the right thing.
5 Components of Corporate Social Responsibility Strategy
1. Actions to ensure the company operates honorably and ethically 2. Actions to support philanthropy, participate in community service, and better the quality of life worldwide 3. Actions to protect and sustain the environment 4. Actions to enhance employee well-being and make the company a great place to work 5. Actions to promote workforce diversity
Strong Culture
1. Founder or strong leader with strong values 2. Commitment by the firm to ethical behavior
2 Primary reasons for sustainable CSR Strategy
1. Moral Case: Focuses on stakeholder benefits, not just shareholder benefits 2. Business Case: Focuses on valuable competitive advantages gained from CSR
3 types of paramount actions
1. Staffing the Organization. This includes putting together a strong management team and recruiting and retaining talented employees. 2. Acquiring, developing and strengthening key resources and capabilities. This action includes developing a set of resources and capabilities suited to the current strategy; updating resources and capabilities as external conditions and the firm's strategy change; and finally, training and retaining company personnel to maintain knowledge-based and skills-based capabilities. 3. Structuring the organization and work effort. The steps for this action include instituting organizational arrangements that facilitate good strategy execution; establishing lines of authority and reporting relationships; and deciding how much decision-making authority to delegate.
5 Steps to take a stretch goal from capability to competence
1. Thinking strategically about a firm's knowledge and skills base 2. Setting a stretch goal of developing an organizational ability to do something well 3. Evolving the ability into a competence or capability by performing it well and at an acceptable cost 4. Thinking strategically about a firm's opportunities and challenges 5. Refreshing, updating, and upgrading competencies and capabilities as necessary to gain and maintain competitive advantage
Five action steps that can be taken to realize the value of TQM and Six Sigma Initiatives
1.Committing to total quality and continuous improvement 2.Fostering quality-supportive behaviors 3.Empowering all employees to improve quality 4.Using online systems to speed the adoption of best practices 5.Emphasizing the necessity for improved performance
Structuring the Work Effort to Promote Successful Strategy Execution
1.Decide which value chain activities to perform internally and which ones to outsource 2.Align the organizational structure with the strategy 3.Decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees 4.Provide for cross-unit coordination 5.Finally, facilitate collaboration with external partners and strategic allies This will structure the work effort to promote successful strategy execution
2 signs of good strategy execution
1.Meeting or beating performance targets 2. attaining proficiency in critical value-chain activities
The Implied Social Contract: "Its the Right Thing to Do"
1.Operate ethically and legally 2. Provide good work conditions for employees 3. Be a good environmental steward 4. Display good corporate citizenship
Well-conceived policies and procedures
1.Provide top-down guidance about how certain things need to be done (such as by channeling individual and group efforts along a strategy-supportive path, by aligning the actions and behavior of company personnel with the requirements for good strategy execution, and by placing limits on independent action and helping to overcome resistance to change.) 2.Help enforce consistency in how strategy-critical activities are performed (such as by improving the quality and reliability of strategy execution and by helping coordinate the strategy execution efforts of individuals and groups throughout the organization.) 3.Promote the creation of a work climate that facilitates good strategy execution.
Eight key features of a company's corporate culture
1.Values, principles, and ethical standards in actual use 2.Management practices and organizational policies 3.Atmosphere and spirit embodied in the firm's work climate 4.How managers and employees interact and relate to one another 5.Strength of peer pressure to conform and observe norms 6.Actions and behaviors encouraged and rewarded 7.Traditions and stories and "how we do things around here" 8.How the firm treats its stakeholders
Triple Bottom Line
A firm is measured by 3 dimensions of performance, the goal is to achieve excellence in all three; 1. Economic (Profit) 2. Social (People) 3. Environmental (Planet)
Leading the Process of Making Corrective Adjustments
A thorough analysis of the situation, Good business judgment in deciding what actions to take, Good implementation of the corrective actions
Continuous Improvement (TQM, Six Sigma)
Aims at ongoing incremental improvements
managing for continuous improvement
Benchmarking, process reengineering, Six Sigma quality programs, total quality management (TQM) and best practices. Wide-scale use of best practices across a firm's entire value chain promotes operating excellence and good strategy execution. The more that organizational units use best practices in performing their work, the closer a company comes to achieving effective and efficient strategy execution.
Developing and Building Critical Resources and Capabilities
Building new competencies and capabilities is a multistage process that occurs over a long time. You must develop capabilities internally, acquire capabilities through mergers and acquisitions, and access capabilities through collaborative partnerships.
Total quality management (TQM)
Creating a total quality culture, involving managers and employees at all levels, bent on continuously improving the performance of every value chain activity.
Existing Processes and Six Sigma: DMAIC
Define Define what constitutes a defect or variation. Measure Collect data to find out why, how, and how often this defect occurs. Analyze Determine when, why, and where the defect is occurring. Improve Implement best practice to eliminate defect or variation. Control Implement training, monitoring and controls to sustain the improvement.
6 Sigma and New Projects: DMADV (Define-Measure-Analyze-Design-Verify)
Define What are our project goals and customer requirements? Measure How do we measure and determine both our goals and the needs of our customers? Analyze What existing process options do we have for meeting customer needs? Design Should we use an old or new process to meet customer needs and specifications? Verify How will we verify design performance and our ability to meet customer needs?
CSR Strategy
Defined by the specific combination of socially beneficial activities the company opts to support with its contributions of time, money, and other resources
Drivers of Unethical Business Behavior and Strategies
Faulty oversight and self dealing, pressure for short-term performance, and a weak or corrupt ethical environment
Healthy Cultures That Aid Good Strategy Execution
High-performance cultures have a commitment to achieving stretch objectives and accountability. Adaptive cultures have a willingness to accept change and take on challenges.
Ethical Litmus Test
Questioning ones decision deciding if it is ethical to continue forward
Strategy Execution
Requires a team effort. 1. Operations driven involving management of both people and business processes 2.A job for the whole management team, not just senior managers 3. Can take many years to develop as a proficient strategy 4. Requires a determined commitment to change, action, and performance
Changing a problem culture
Step 1: Identify facets of the present culture that are dysfunctional and impede good strategy execution. Step 2: Specify clearly what new actions, behaviors, and work practices should characterize the new culture. Step 3: Explain why the current culture poses problems and make a persuasive case for cultural reform. Step 4 : Follow with visible, forceful actions, both substantive and symbolic, to ingrain a new set of behaviors, practices, and norms.
A question of successful integration
Tacit knowledge and complex routines may not transfer readily from one organizational unit to another
Sustainability
The relationship of a firm to its environment and use of natural resources
Relationship managers
Used to build and maintain cooperative arrangements of value to both parties. They facilitate strategic alliances, outsourcing arrangements, joint ventures, and cooperative partnerships.
A question of market opportunity
When a market opportunity can slip by faster than a needed capability can be created internally
A question of competitive necessity
When industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence
Corporate Social Responsibility (CSR)
a firm's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in local communities where it operates and society
Ambidextrous organization
adept at employing continuous improvements in operating processes while allowing R&D to operate under a set of rules that allows for exploration and the development of breakthrough innovations.
Business Process Reengineering
aims at one-time quantum improvement, while continuous improvement programs like TQM and Six Sigma aim at ongoing incremental improvements
Ethical Relativism
making decisions based on personal values/beliefs rather than on military rules, regulations, and codes of conduct
best practice
method of performing an activity that consistently delivers superior results compared to other approaches
Causes of cultural change
new or revolutionary technologies, diversification into new businesses, rapid growth of the firm, a merger or acquisition of another firm, shifting internal conditions, and new challenges in the market place
Unhealthy Cultures That Impede Good Strategy Execution
politicized cultures; change-resistant cultures; incompatible subcultures; insular, inwardly focused cultures; unethical and greed-driven cultures.
Sustainable Business Practices
practices that meet the needs of the present without compromising the ability to meet the needs of the future
Two motivational approaches a firm can take toward affecting employee performance
rewards (consisting of commitment-generating incentives and rewards) or punishment (which consists of adverse employment consequences).
corporate culture
shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices, and styles of operating
Business Ethics
the application of ethical behavior in a business context
Changing the Culture of an Organization
top executive and upper management behaviors, by ceremonial events to honor exemplary employees, and by physical symbols that represent the new culture.
Six Sigma programs
utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes.
Six Sigma principles
•All work is a process. •All processes have variability. •All processes create data that explain variability.
Promoting Good Strategy Execution
•Allocating ample resources to execution-critical value chain activities •Instituting policies and procedures that facilitate good strategy execution •Employing process management tools to drive continuous improvement in how value chain activities are performed •Installing information and operating systems that enable company personnel to carry out their strategic roles proficiently •Using rewards and incentives to promote better strategy execution and the achievement of strategic and financial targets
How Long Does It Take to Change a Problem Culture?
•Changing a problem culture is never a short-term exercise. •A sustained and persistent effort to reinforce the culture at every opportunity through word and deed is required. •It takes time for a new culture to emerge and prevail; it takes even longer for it to become deeply embedded. •Fixing a problem culture and instilling a new set of attitudes and behaviors can take 2 to 5 years.
Linking Reward to promote good strategy execution
•Focus on and reward results, not effort. •Create a results-oriented work environment that focuses on what to achieve, not what to do. •Set strategically-relevant, specific, and measurable stretch performance goals that are difficult but achievable. •Link the performance goals of each individual in an organizational unit to the unit's goals. •Reward and recognize as success superior performance in accomplishing the goals.
Strong-culture firm
•Has deeply rooted widely-shared values, behavioral norms, and operating approaches •Insists that its values and principles be reflected in the decisions and actions taken by all company personnel
Weak-culture firm
•Lacks values and principles that are consistently preached or widely shared •Has few or no traditions, beliefs, values, common bonds, or behavioral norms
