Chapter 11

Question 1

Organizational culture and strategy

Answer 1

Organizational culture refers to the shared values and patterns of belief and behavior that are accepted and practiced by the members of a particular organization.
An organization’s culture and its strategies should be in alignment.
Subcultures represent “cultures within a culture.”

Question 2

Two key areas associated with strategic change

Answer 2

(1) organizational culture and (2) leadership. Both dimensions must be aligned with the strategy and managed properly if a strategy is to be implemented effectively.

Question 3

Adaptive and Inert Cultures

Answer 3

Adaptive cultures exist when members of an organization are willing and eager to embrace any change that it consistent with the core values. Adaptive cultures emphasize innovation—developing something new—and encourage initiative.
Inert cultures are conservative and encourage maintenance of existing resources.

Question 4

Cultural Strength

Answer 4

A strong culture is characterized by deeply rooted values and ways of thinking that regulate firm behavior.
A weak culture lacks values and ways of thinking that are widely accepted by members of the organization.

Question 5

Diversity

Answer 5

Diversity refers to the extent to which individuals within an organization are different, but can be defined in many ways. Research linking diversity to firm performance is inconclusive.

Question 6

Shaping the culture

Answer 6

Cultural change is a complex process. Cultures do not develop overnight and are rarely changed in a short period of time.
Culture change is possible but efforts often fail, due primarily to a lack of understanding about how a culture can be changed and how long it is likely to take .

Question 7

5 ways to shape the culture #1

Answer 7

#1- Systematically pay attention to areas of the business believed to be linked to the success of the strategy.
This goal can be accomplished formally by measuring and controlling the activities of those areas, or less formally by making specific comments or questions at meetings. These areas should be ones identified as critical to the firm’s long-term performance and survival, such as customer service, new product development, or quality control.

Question 8

5 ways to shape the culture #2

Answer 8

#2- React strategically to critical incidents and organizational crises.
The way a CEO deals with a crisis, such as declining sales or technological obsolescence, can emphasize norms, values, and working procedures, or even create new ones.

Question 9

5 ways to shape the culture #3

Answer 9

#3- Serve as a deliberate role model, teacher, or coach.
When a CEO models certain behavior, others in the organization are likely to adopt it as well. 
Example: Executives who give up their reserved parking place in favor of the general parking lot send a message about the importance of status in the organization.

Question 10

5 ways to shape the culture #4

Answer 10

#4- Strategically allocate rewards and status.
Leaders communicate their priorities by consistently linking pay raises and promotions, or the lack thereof, to particular behaviors. 
Rewarded behavior tends to continue and become ingrained in the fabric of the organization.

Question 11

5 ways to shape the culture #5

Answer 11

#5- Modify the procedures through which an organization recruits, selects, promotes, and terminates employees. 
Hire and promote individuals whose values are similar to those of the firm and whose beliefs and behaviors more closely fit the organization’s changing value system. 
The easiest way to affect culture over the long term is to hire individuals who possess the desired cultural attributes.

Question 12

5 ways to shape the culture

Answer 12

#1- Systematically pay attention to areas of the business believed to be linked to the success of the strategy.
#2- React strategically to critical incidents and organizational crises.
#3- Serve as a deliberate role model, teacher, or coach.
#4- Strategically allocate rewards and status.
#5- Modify the procedures through which an organization recruits, selects, promotes, and terminates employees.

Question 13

Global Concerns

Answer 13

The self-reference criterion (introduced in a previous chapter) presents a potential problem. Managers often believe that the leadership styles and organizational culture that work in their home country should work elsewhere. However, each nation—like each organization—has its own unique culture, traditions, values, and beliefs.
Organizational values and norms must be tailored to fit the unique culture of each country in which the organization operates, at least to some extent.

Question 14

Strategic leadership

Answer 14

A manager exhibits (managerial) leadership when he or she secures the cooperation of others in accomplishing a goal.
Strategic leadership is more than managerial leadership. It involves creating the vision for the firm, developing strategies, and empowering individuals throughout the organization to put those strategies into action.

Question 15

Strategic vision

Answer 15

The vision is a view of the future when your mission is achieved in the present.
The vision sets the stage for the firm’s strategy by focusing members of the organization on key capabilities, offering a sense of direction, and even providing a mental picture of what the firm should look like in the future

Question 16

Leadership style

Answer 16

Every leader has a distinctive leadership style—a consistent pattern of behavior when governing and making decisions.

Question 17

Transactional leaders

Answer 17

Transactional Leaders use the authority of their office to exchange rewards such as pay and status for employees’ work efforts and generally seek to enhance an organization’s performance steadily, but not dramatically.

Question 18

Transformational leaders

Answer 18

Transformational Leaders inspire involvement in a mission, giving followers a “dream” or “vision” of a higher calling, thereby seeking more dramatic changes in organizational performance.

Question 19

Transformational Leadership & Innovation (5 types of innovation)

Answer 19

Transformational leadership is often associated with innovation.
Austrian economist Joseph Schumpeter identified five types of innovation: (1) new products, (2) new materials or resources, (3) new markets, (4) new production processes, and (5) new forms of organization.
Innovation often occurs through a process Schumpeter called creative destruction, whereby managers consciously and constantly destroy the old by recombining its elements into new forms.

Question 20

Leadership Style in Practice

Answer 20

Most effective leaders employ some of both extremes.
The best style depends on the situation, although many scholars and leaders are beginning to prefer a transformational style in most instances.

Question 21

Leadership & Emotional Intelligence

Answer 21

Regardless of leadership style, a leader’s likelihood of success has also been tied to emotional intelligence, one’s collection of psychological attributes, such as motivation, empathy, self-awareness, and social skills.
Executives who possess a passion for their work, are socially oriented, and understand their own needs, as well as those of their subordinates, are more likely to gain the trust, confidence, and support necessary to lead their organizations

Question 22

Executing strategic change (3 steps)

Answer 22

Step 1: Recognize the need for change.
Step 2: Create a shared vision of what the change will “look like.”
Step 3: Institutionalize the change

Question 23

Executing strategic change step #1

Answer 23

Step 1: Recognize the need for change.
Poor performing firms are usually first to recognize the need for change, and often replace their CEOs with outsiders. New leaders can sometimes make the decisions that an insider might be reluctant to make, while bringing a fresh perspective to the firm and its problems.

Question 24

Executing strategic change step #2

Answer 24

Step 2: Create a shared vision of what the change will “look like.”
The vision might be one of excellent customer service, industry leadership, or a leaner firm following a restructuring. The change effort is likely to be successful if members of the firm share a common vision for the company’s future.

Question 25

Executing strategic change step #3

Answer 25

Step 3: Institutionalize the change
“Change starts at the top.” Without a strong commitment from the top executive and his or her top management team, strategic change efforts are less likely to succeed.