Chapter 12

What are the two types of cultures that tend to be healthy?

(1) High-Performance Cultures and (2) Adaptive Cultures.

Where is hostility to change most commonly found?

In companies with multi-layered management bureaucracies that have enjoyed considerable market success in years past and are wedded to the "We have done it this way for years".

As a rule, companies are attentive to what?

To the task of hiring people who will fit in and who exhibit character traits compatible with the prevailing culture.

A company's culture is, to a very large extent, shaped by...

its core values and ethical standards. This is what has established ethics within a company.

The company's approach to people management and the official policies, procedures, and operating practices that paint the " ___ ___ " for the behavior of company personnel.

white lines

What can precipitate significant culture change?

Diversification into a new business, expansion into foreign countries, rapid growth that brings an influx of new employees, and a merger or acquisition of another company.

How long does it take for cultural values, attitudes, and behaviors to be deeply ingrained?

It can take years for these to exert a truly major influence on how a company operates. But once implanted, the values, behaviors, and ways of doing things are deeply rooted and hard to weed out.

What is high-performance culture?

It is where standout traits are a "can-do" spirit, pride in doing things rights, no-excuses accountability, and pervasive results-oriented work-climate where people go the extra mile to meet or beat objectives.

What is adaptive culture?

It is where there is willingness on the part of the organization members to accept change and take on the challenge of introducing and executing new strategies. Company personnel share a feeling of confidence that the organization can deal with whatever threats and opportunities come down the pike; they are receptive to risk-taking, experimentation, innovation, and making changes in strategy and work practices.

What makes a politicized internal environment so unhealthy?

Political infighting consumes a great deal of organizational energy, often with the result that what's best for the company takes a backseat to political maneuvering.

What is the hallmark of a strong-culture company?

The dominating presence of certain deeply rooted values, business principles, behavioral norms, and ways of doing things that "regulate" the conduct of a company's business and the climate of its workplace.

What sustains an adaptive culture?

The fact that organization members perceive the changes management is trying to institute as legitimate, in keeping with culturally approved values and business principles, and in the overall best interest of stakeholders.

What is the distinctive characteristic of an unhealthy culture?

The presence of counterproductive cultural traits that adversely impact the work climate, company performance, and strategy execution initiatives.

What is the problem with subcultures?

They can clash or at least not mesh well, particularly if they embrace conflicting business philosophies or operating approaches, if key executives employ different approaches to people management, or if important differences between a company's culture and those of recently acquired companies have not yet been ironed out.

Global and multinational companies tends to be...

at least partly multicultural because cross-country organization units have different operating histories and work climates, as well as members who speak different languages.

Many executives want the work climate in their companies to mirror...

certain values and ethical standards, partly because they are personally committed to these values and ethical standards but mainly because they are convinced that adherence to such values and ethical principles will improve strategy execution, make the company a better performer, and positively impact its reputation.

Cultural weakness can also stem from...

moderately entrenched subcultures that block the emergence of a well-defined company-wide work climate .

A company's values and ethical standards have been developed to deliberately...

mold the culture and communicate what actions and behavior are expected of all company personnel.

A company's corporate culture is mirrored in the character or "____" of its work environment --- the features that underpin how the company goes about its business and the workplace behaviors held in high esteem.

personality

Although all employees in an organization influence the culture, the most important people who have the greatest influence are...

senior executives. Top management must make it unequivocally clear that conforming to the company's values, ethical standards, and cultural norms has to a way of life at the company and that there will be adverse consequences for "outside the lines" behavior.

Corporate culture refers to...

the character of a company's internal work climate and psyche --- as shaped by its core values, business principles, ethical standards, ingrained beliefs and behaviors, approach to people management, style of operating, and traditions.

Execution-supportive cultural norms and behaviors make it easier for management to win...

the commitment and cooperation of company personnel in undertaking whatever new execution-related action, modified operating approaches, and different work practices.

Closely aligning corporate culture with the requirements for proficient strategy execution merits...

the full attention of senior executives.

What are the two roles of a company's core values and ethical principles?

(1) A company that works hard at putting its stated core values and ethical principles into practice fosters a work climate where company personnel share common and strongly held convictions about the company's business is to be conducted and, (2) the states values and ethical principles provide company personnel with guidance about the manner in they are to do their jobs --- what behaviors and ways doing things are approved (and expected) and which are out-of-bounds.

What two factors contribute to the development of strong cultures?

(1) a founder or strong leader who established and then gradually embeds values, principles, and practices that are viewed as having contributed to the company's success and (2) strong top management commitment to operating the business in accordance with stated core values and certain behavioral norms, and then holding employees accountable for displaying these values and norms.

Management is careful to institute changes in operating practices and behaviors that...

(1) do not compromise core values and long-standing business principles (since they are at the root of the culture) and (2) in ways that lessen any adverse impact on key constituencies - customers, employees, share owners, suppliers, and communities where the company operates.

____-____ peer pressures steer company personnel into actions and behaviors that aid the cause of good strategy execution.

Culture-instigated

What are change-resistant cultures?

Cultures where there is fear of change and skepticism about the importance of responding to new developments --- places a premium on such undesirable or unhealthy behaviors such as avoiding risks, protecting the status quo from unwanted disruption, going slow in changing the current approach to doing business, and developing safe or conservative strategies to pursue new opportunities.

____-____ cultural influences not only help rally company personnel to implement whatever internal changes are needed but also to exert their best efforts to attain execution-critical performance targets.

Execution-supportive

In strong-culture companies, what do senior managers make a point of explaining and reiterating?

Why values, principles, norms, and operating approaches need to govern how the company conducts its business and how they ultimately lead to better business performance.

What do weak-culture companies lack?

Widely shared and strongly-held values, principles, and behavioral norms, often because the company has had a series of CEOs with different values and differing views about how the company's business ought to be conducted.

A weak-culture is..

a liability in executing strategy because there are no ingrained, execution-supportive traditions, values, peer pressures, or behavioral norms that management can rely upon to help align the actions and behavior of employees with the requirements for good strategy execution.

Typically, key elements of the culture originate with a founder or certain strong leaders who articulated themselves as...

a set of business principles, company policies, operating approaches, and ways of dealing with employees, customers, vendors, shareholders, and local communities where the company has operations.

A culture that encourages...

actions, behaviors, and work practices conducive to good strategy execution adds significantly to the power and effectiveness of a company's strategy execution effort.

When a company's culture is unhealthy or otherwise out of sync with the actions and behaviors needed to execute the strategy successfully, the culture must be...

changed as rapidly as can be managed. This means eliminating any unhealthy or dysfunctional cultural traits.

A company's values statement and code of ethics...

communicate expectations of how all company personnel should conduct themselves in the workplace.

The single most visible factor that distinguishes successful culture-change efforts from failed attempts is

competent leadership at the top.

In a strong-culture company...

culturally approved behaviors and ways of doing things flourish, while culturally disapproved behaviors and work practices get squashed.

It common for companies to have multiple...

cultures or subcultures. Values, beliefs, and practices within a company sometimes vary significantly by department, geographic location , division, or business unit.

In strong-culture companies, values and behavioral norms are so ingrained they can...

endure leadership changes at the top --- although their strength can erode over time if new CEOs cease to nurture them or move aggressively to institute cultural adjustments.

It is management's best interest to...

invest considerate time and effort in establishing and nourishing a corporate culture that automatically steers company personnel toward actions and behaviors that promote good strategy execution.

The values, business principles, and ethical standards that management preaches and practices are ---

key to a company's culture but actions speak louder than words.

In companies with execution-supportive cultural influences, managers can...

use ingrained values, business principles, behavioral norms, and established ways of doing things as levers to mobilize the energy and actions of company personnel squarely behind the drive for good strategy execution.