Principles of Management 9: Culture and Diversity

Steve Jobs of Apple was known as a perfectionist. "My job is not to be easy on people," he said. "My jobs is to take these great people we have and to push them and make them even better." Apple probably looks to hire people who are innovative and

detail-oriented.

Many experts, including the Boston Consulting Group, recommend ________ as a long-term strategy. They use a broader meaning which includes personality, cognitive style, education, social background, and more.

diversity

When John, an American, and Qing, a Taiwanese immigrant, worked together, there were many missteps due to unspoken assumptions. Americans tend to prefer working independently, and Chinese value consensus more in decision making. ________ differ from culture to culture.

Work styles

Donald Grinder wrote in The Police Chief magazine that officers should possess courage, competence, compassion, commitment, restraint, respect, and integrity. "Now more than ever, it is imperative for police managers to make connections with their employees, understand their backgrounds, uncover their talents, and place them in positions where they can excel," he wrote. Grinder recommends

a people-oriented culture for police.

Corporate culture is rooted in

an organization's goals, strategies, structure, and approaches to labor, customers, investors, and the greater community.

Employee diversity enhances

creativity, image, and morale.

When Home Depot needed to re-establish a customer service culture, they instructed employees on how to behave, how quickly to speak to customers, and what to say. Home Depot accelerated the culture change with

a training program.

E.H. Schein's three levels of corporate culture are

artifacts, values, and assumptions.

Google's industry, online search, is competitive, and customers can switch easily if another search tool, like Microsoft's Bing, better serves their needs. Eric Schmidt, chairman of Google, says, "We think that company culture and ________ can't be separated. You have to have the culture, and you need to get it right."

innovation

Using the Organizational Culture Profile (OCP), companies are scored on several dimensions, such as detail-oriented or aggressive. Other dimensions include

innovative, stable, and outcome-oriented.

Satya Nadella, CEO of Microsoft, wanted employees to start cooperating instead of competing. Employees are no longer assessed on a curve, with those ending up at the lower end often getting no bonus or promotion. For the firm's annual executive retreat in 2015, Mr. Nadella included the heads of companies Microsoft had recently acquired, such as Mojang, the maker of the Minecraft video game, and Acompli, an email app. In doing so, he broke with the tradition that only longtime executives can attend the retreat. Nadella is

modeling the change he wants

Theo Chocolate has very public dedication to international fair trade, a dedication that comes before profits. Customers and employees who care about fair trade are

more likely to buy from or stay loyal to the firm.

Joe has scheduled interviews with two financial companies, American Express and Lehman Brothers. His first stop in understanding the differences between the companies is

the mission and values statements.

According to Robert Half Management Resources, most change efforts fail because of

inadequate communication.

Companies make choices in their HR processes that can help maintain the culture. The processes include

recruiting, hiring, and training.

Goldman Sachs is a white-shoe investment bank. The firm does well by maintaining close connections throughout the business, investment, and political worlds and staying well-informed. Hank Paulsen, a former CEO, became the U.S. Secretary of the Treasury and managed the Treasury during the Great Recession of 2008-2009. To maintain its connections, Goldman hires people

of varied backgrounds.

Diversity as a strategy hopes to gain, for example, from more problem-solving approaches or more connections. In this context, diversity includes

personality, cognitive style, education, and social background.

Bob visited the offices of MASS, a successful insurance company in Boston. MASS needs people who are good with numbers. When Bob visited, he noticed that the analysts wore conservative suits and their desks were laid out in a large space like a warehouse, without cubicles, walls, or decorations. The ________ seemed like a clue to a miserly culture.

physical spaces and decor

GE's SVP of Global Operations, Shane Fitzsimons, wrote a 2016 article for Fast Company magazine, stating what kind of person GE wants to hire. For example, he writes, "the kind of person who succeeds at GE is humble." The article shows GE's approach to ________ candidates.

recruiting

In an article in Fast Company, GE's Shane Fitzsimons, SVP of Global Operations, writes, "We want people who are comfortable being a little uncomfortable, who thrive in the ambiguity of a less hierarchical structure, and are prepared to fail-repeatedly-because we know it takes trial and error to bring ideas to life." GE is using ________ to manage its culture.

recruiting

According to a 2012 Reuters article with the headline "Prostitute scandal challenges U.S. Secret Service's proud culture," "U.S. Secret Service agents are...drilled almost from Day One on the need for probity, discretion and solid morals." But thirteen agents were caught hiring prostitutes and partying in Mexico. What most likely went wrong?

When corporate culture is not intentional, the culture winds up being disjointed or even antagonistic.

Fannie Mae, a finance company, hired highly skilled immigrants to fill programming jobs. All spoke English but some had heavy accents. To native speakers, the accents slowed discussions significantly. This illustrates how differences in background can lead to

difficulty with communication.

A ________ workforce may offer more creative approaches or solutions to problems.

diverse

Companies recruit candidates who are most likely to fit their culture. Studies have found that a good fit between a candidate's personality and the company's culture leads to better retention. Companies can also use ________ to maintain their culture.

hiring decisions and training

When CEO Robert Nardelli took over Home Depot in 2000, there was little central control. Store managers acted independently and costs were higher than competitors like Lowes. Nardelli changed the culture to focus on central control and cutting costs. To control costs, store managers were not allowed to choose products for local customers. Employees lost their customer-focused attitudes, and customer service suffered. To repair this, the next CEO, Frank Blake, sought to restore the "Orange Apron" culture. What does this example best illustrate?

Corporate culture is chosen by senior management, and middle managers and employees have little control over it (wrong)

Apple, the tech company, has received numerous architectural awards for its store designs. The stores, in fact, embody the culture of design at Apple. The stores are cultural

artifacts.

Former Senate Majority Leader George Mitchell responded to a white supremacist rally in Charlottesville, Virginia, with this argument: "Amazon was created by Jeff Bezos, whose adoptive father was born in Cuba. Google was co-founded by Sergey Brin, who was born in Russia. Would we be a better country if they had not been admitted? Of equal importance, what are the chances that if Steve Jobs had lived his life in Syria he would have created Apple? Or Jeff Bezos in Cuba? Or Sergey Brin in Russia?" He argued that

diversity is America's strength.

Studies show financial advantages to diversity in senior management. But the promotion process tends to suppress expressed differences. To be seriously considered for promotion to a top-level management position in many U.S. companies, individuals must assimilate to the company's culture. Companies can manage this through

employee training and diversity-oriented company policies.

The explosive growth in global trade means that large corporations are hiring Americans of mixed cultural backgrounds. For example, first-generation Americans of immigrant parents may speak two or more languages well. To deal with firms in other countries, large corporations benefit from

employees from diverse backgrounds.

Bob Cratchett is an accountant with Marly and Co., a prosperous lender in London. Marly and Co. has survived some severe downturns in the market and has been a stable employer. Bob wears heavy wool suits at work in the winter and works at a standing desk. The ________ is a clue to the culture at Marly and Co.

employees' dress

Carnegie Mellon University has the best master's program in financial engineering. The Wall Street banks should

hire from Carnegie Mellon and other top schools for a range of approaches.

Some of the visible clues to a company's culture are

how employees dress, snack areas and candy jars, and plaques and awards.

Amazon competes with low prices, selection, quick deliveries, and easy returns. Employees know they succeed through efficiency improvements in any part of the process. Customers rely on Amazon for prices, selection, and easy service. What does this illustrate about the relationship between Amazon's culture and brand?

The culture and the brand reinforce each other.

Mergers can be difficult because of cultural differences between firms. In 2008, Bank of America bought Merrill Lynch, a stockbroker. Their cultures and pay packages were starkly different. After the merger, in 2009, leading brokers of Merrill began departing for friendlier waters. Some went to Morgan Stanley, and some became independent brokers. The rating agency, Standard & Poor's, called the departures a "cause for concern," adding that "if brokerage attrition picks up, the acquisition becomes less valuable." Divided cultures in one firm can be

a competitive disadvantage.

In The Wealth of Nations, Adam Smith wrote, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." On Wall Street, New York's financial district, The Wealth of Nations is the unspoken gospel. Every employee expects to share in any profit he creates, and incentive plans are set up to reinforce this. Wall Street has

a deep-seated assumption about free markets and how people behave.

Johnson & Johnson is an American multinational manufacturer of medical devices, pharmaceuticals, and consumer packaged goods. Its credo, on a stone at the entrance to headquarters, says that stockholders come fourth, after customers, employees, and communities. The credo is

a statement of values.

General Motors had long-running problems with Chevy Cobalt ignition switches. The switches could disable the emergency airbags, causing accidental deaths. The GM culture discouraged anyone from stepping up and addressing the problem. Mary Barra, the new CEO, made a public commitment to change. After an investigation, two senior managers left the company in 2014. By ________, GM was better able to move forward.

changing leaders

Home Depot's return to a customer service culture included recognitions, bonuses, and buttons for employees' orange aprons. HD advanced a culture change by

changing reward systems and corporate symbols.

Public Health Management Corp. (PHMC) took advantage of a move to transform its work environment into an open, industrial-style space to better support employee collaboration, creativity, and communication. Management believed they needed to walk the walk and talk the talk in their own space. Management changed the culture by

changing the look and feel of the workplace.

Warren Buffett and Berkshire-Hathaway have a reputation for fair dealing and a hands-off approach to management. Because of this, company founders who are planning for retirement will negotiate with him. Other investors may not even hear that a firm is for sale until the sale is announced. Berkshire Hathaway's culture has created a ________.

competitive advantage

To deliberately initiate culture change at company is an uphill struggle. Most employees tend to return to familiar ways of doing business. To succeed, executives need to

create a sense of urgency, model the changes that they want, and show commitment to the new culture.

A firm's statement of values requires a lot of pruning. There are many acceptable values, but to be effective, the list must be short. Executives choose the most important values. Therefore, the clue to ________ is in what is chosen.

culture

In the Organizational Culture Profile (OCP), companies can be scored on seven dimensions that reflect their culture. These include

detail-oriented, aggressive, and people-oriented.

The banking industry is heavily regulated to prevent crises like the Great Recession of 2008. At the same time, it can be very competitive, with bankers each trying to win deals. A company in this industry may have two cultures, one to enforce regulations and another to make the sales or investment decisions. The employees working on regulations need to be

detail-oriented.

When Deloitte does audit work, its accountants deal with huge amounts of data. Yet one receipt or one memo may be the clue to fraud. Deloitte looks for employees who are

detail-oriented.

Organizational culture includes

the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature.

Apple and Microsoft are competitors in selling computer operating systems, the MAC OS and Windows. Yet they have very different cultures and values. Apple is known for design and attention to detail. Microsoft is aggressive, launching products before they are finished. Both cultures reflect

their founders.

Culture change is difficult. Executives usually need a crisis to persuade employees to focus on the change. The crisis may be a competitive threat or a large loss. That is, executives need

to create a crisis (wrong)

The investment portfolio staff earn millions in profits by anticipating near-term market movements. The programmers tend to come in late and work late. Their goals are saving thousands of dollars through cost reductions. Differences in ________ can create friction over decisions that make little sense to the other group.

work styles