Chapter 12: Corporate Culture and Leadership: Keys to Good Strategy Execution Flashcards
What is corporate culture?
Corporate culture refers to the character of a company’s internal work climate - as shaped by a system of shared values, beliefs, ethical standards, and traditions that define behavioral norms, ingrained attitudes, accepted work practices, and styles of operating
It is important because it influences the firm’s actions and approaches to conducting business
What are the key features of a company’s corporate culture?
1) The values, business principles, and ethical standards that management preaches and practices
2) The company’s approach to people management and the official policies, procedures, and operating practices that provide guidelines for behavior of employee
3) The atmosphere and spirit in the work climate
4) The way managers and employees interact and relate to one another
5) The strength of peer pressure to conform to expected norms
6) The actions and behaviours that are explicitly encouraged and rewarded in the form or compensation and promotion
7) The company’s revered traditions and stories about heroic acts
8) The manner in which the company deals with external stakeholders
What are the 2 roles which core values and ethical standards serve in culture-building process?
1) They help to create a work climate where employee share common and strongly held convictions about how the company’s business is to be conducted
2) They serve as yardsticks for gauging the appropriateness of particular actions, decisions, and behaviors, thus helping steer company employee toward both doing things right and doing the right thing
What are the forces that cause a company’s culture to evolve?
1) Internal condition (internal crisis, top executive turnover)
2) Advancement in technology
3) Move/expand to foreign countries
4) Merger/acquisition
5) Crisis
What is the distinctive feature of a strong-culture company?
The dominating presence of certain deeply rooted values, behavioural norms, and operating approaches that are widely shared and “regulate” the conduct of company’s business and the climate of its workplace
The managers walk the talk (display these principles in their own actions and behavior)
What are the 2 factors that contribute to the development of strong cultures?
1) A founder or strong leader who established core values, principles, and practices that are viewed as having contributed to the success of the company
2) A sincere, long-standing company commitment to operating the business according to these established traditions and values, thereby creating an internal environment that supports decision making based on cultural norms.
Why strong corporate culture matter to the strategy execution process? A culture that is conducive to good strategy execution assists the effort in 3 ways:
1) Focuses the attention of employees on what is most important to this effort. It align the efforts and decisions of employees
2) It minimises direct supervision
3) Culture-induced peer pressure induces employee to do things in a manner that aids the cause of good strategy execution
4) Energise employees, deepen their commitment to execute the strategy flawlessly, and enhance worker productivity
What are the features of high-performance cultures?
1) Commitment to achieving objectives and accountability
2) Performance targets are outlined for the whole and different levels of organisation
3) Result-oriented behaviours and passion to make organisation successful
4) Value high performers and keep them
What are the features of adaptive cultures?
1) Willingness to accept change and take on challenges
2) Organisation in competitive environments
3) Managers are open in evaluating ideas, fund new initiatives to develop better products and pursue market opportunities
What are the 5 types of unhealthy cultures that impede good strategy execution?
1) Change-resistant cultures (risk adverse)
2) Politicised Cultures (draining on organisational energy)
3) Insular, Inwardly Focused Cultures (do not learn from external parties)
4) Unethical and greed-driven cultures (potential scandals)
5) Incompatible subcultures (hard to coordinate)
How to make a compelling case (sell) for culture change?
1) Explain why and how certain behavioural norms and work practices are obstacles to good execution of strategic initiatives
2) Explain how new behaviours and work practices will produce better results
3) Cite reasons why the current strategy has to be modified, if the need for cultural change is due to a change in strategy
Strong culture-changing actions includes:
1) Sell it
2) Replacing key executives who obstruct needed changes
3) Promote the supporters who exhibit a new culture attributes (act as role model)
4) Bring outsiders with desired cultural attributes to key positions (to signal new era is dawning)
5) Carefully scan new candidates and hire only those who fit with the new culture
6) Provide cultural training programs
7) Design compensation incentives to those who display the desired cultural behaviours
8) Revise policies and procedures that will drive cultural change
3 symbolic culture-changing actions:
1) Top executive to lead by example
2) Ceremonial events to honour exemplary employees
3) Use of physical symbols that represent the new culture (eg. employee of month award, army medal of honour)
What are the 3 actions an effective leader should do to lead the drive for good strategy execution?
1) Staying on top of what is happening and closely monitoring progress. Usually done through management by walking around (MBWA)
2) Putting constructive pressure on the organisation to execute the strategy well and achieve operating excellence
3) Initiating corrective actions to improve strategy execution and achieve targeted performance results
Monitoring mechanisms for leaders:
1) Chair periodic strategic implementation meeting
2) Serial performance seminar
3) Open door policy
4) Hosting get-togethers
5) MBWA
