IMPLEMENTING STRATEGY: CULTURE AND LEADERSHIP

IMPLEMENTING STRATEGY: CULTURE AND LEADERSHIP

 WHAT IS CORPORATE CULTURE AND WHY IS IT IMPORTANT?

What are the fundamental components of a company's culture?

• The manner in which it deals with employees, unions, stockholders, customers, vendors, and the communities where it operates.
• The traditions the organization maintains.
• The values and business principles that management preaches and practices.
• The peer pressures that exist and the legends and stories that people repeat about company happenings.

 2. From whom do the beliefs and practices that become embedded in a company's corporate culture usually originate?

Influential individuals (often a founder or prior CEOs) and influential work groups, departments, or divisions.

 3. Once established, what happens to a company's culture when there is systematic indoctrination of new employees in the culture's fundamentals and constant reiteration of core values by senior managers and group members?

 The company's culture can be perpetuated.

. What type of culture(s) do companies, especially large ones, typically have?

 Multiple cultures (or subcultures) rather than a single culture.

 

 TYPES OF CORPORATE CULTURES

What is the function of a culture that is grounded in values, practices, and behavioral norms that match the requirements for good strategy execution?

It helps energize organizational members to do their jobs in a strategy-supportive fashion.

 2. Given that a company's culture is out of sync with the values, practices, and behavioral norms needed for good strategy execution, what potential difficulty does this pose to the organization? What must the organization do?

The culture is an obstacle to successful strategy execution.

 The culture has to be changed as rapidly as can be managed.

 3. What are the consequences of a strong strategy-supportive culture?

• Nurtures and motivates people to do their jobs in ways conducive to effective strategy execution.
• Provides structure, standards, and a value system in which to operate.
• Provides a system of informal rules and peer pressures regarding how to conduct business internally and how employees should go about doing their jobs.
• Promotes strong employee identification with the company's vision, performance targets, and strategy.

 4. With respect to traits, it is typical of companies with strong cultures to: 

• have very distinct values, beliefs, rituals, operating styles, and work atmospheres.
• have senior managers who persist in reinforcing the culture through both work and deed.
• be committed to winning employees over to the established values and beliefs.
• work diligently at causing employees to observe cultural norms.

 5. The implications of a strong corporate culture for good strategy execution is such that:

It promotes good strategy execution where there's good fit with the strategy and hurt execution where there's poor fit.

  6. What are the typical characteristics of low performance or unhealthy company cultures?

• A politicized internal environment. 
• Hostility to change and to people who champion new ways of doing things.
• An aversion to looking outside the company for superior practices and approaches.

 

 CHANGING CORPORATE CULTURES AND BRINGING THEM INTO BETTER ALIGNMENT WITH STRATEGY

. Changing a company's culture and bringing it into better alignment with strategy: 

• Is one of the toughest managerial tasks.
• Involves diagnosing which facets of the present culture are strategy-supportive and which are not.
• Requires active leadership by the CEO and other senior executives, including pushing for new behaviors and communicating the reasons for cultural change.
• Entails both substantive and symbolic actions to transform the culture.

. Shaping a company's culture to create better alignment with strategy can involve: 

• Replacing old-culture managers with new-breed managers.
• Changing long-standing policies and operating practices and making major changes in budgets and resource allocation.
• Leadership by example on the part of the CEO and other senior executives.
• Using company gatherings and ceremonial occasions to praise individuals and groups that display the desired cultural traits and behaviors.

 3. What should generally be the nature of management actions and initiatives that are needed to tighten the culture-strategy fit?

They should be both symbolic and substantive.

BUILDING A SPIRIT OF HIGH PERFORMANCE INTO THE CORPORATE CULTURE

. What are the key tests of assessing whether an organization is instilled with a spirit of high performance? The extent to which the organization: 

• Is focused on achievement and excellence.
• Has a results-oriented culture.
• Pursues policies and practices that inspire employees to do their best.

 

 ETHICS AND VALUES

. What is the nature of the relationship between a company's ethical corporate culture and long-term strategic success? 

An ethical corporate culture has a positive impact on a company's long-term strategic success.

What is the cornerstone for culture-building? What is the cornerstone for developing a corporate conscience?

Values statements

Codes of ethics

What does the success or failure of efforts to instill values and insist on ethical conduct depend largely upon?

How well corporate values and ethical standards are visibly integrated into company policies, managerial practices, and decisions at all levels

 4. What does enforcing ethical behavior entail?

• Managers at all levels setting an excellent ethical example in their own behavior.
• The CEO and other senior officers being openly and unequivocally committed to ethical conduct.
• Developing procedures for handling enforcement and specifying the consequences for breaching the company's ethical standards.
• Providing training in what kind of ethical conduct is expected.

EXERCISING STRATEGIC LEADERSHIP

. What is most integral to the task of exercising effective strategic leadership?

Staying on top of how well things are going or Managing By WalkingAround (MBWA).

What are the characteristics of successful strategy implementers? 

• Do a lot of managing by walking around.
• They are experts in the use of symbols to build and nurture a strategy-supportive culture

What does the task of implanting a corporate culture that is supportive of strategy require? 

A sincere, sustained commitment by the chief executive who reinforces the desired cultural norms at every opportunity through both word and deed.

. What is the single most visible factor that distinguishes successful culture-change efforts from failed attempts? 

Competent leadership at the top of the organizational hierarchy.

. What is involved in the leadership task of creating a flexible, responsive, innovative internal environment?  

• Promoting a culture that accepts continuous adaptation to changing conditions.
• Generating a dependable supply of fresh ideas from managers and employees.
• Being a leader in developing new organizational capabilities

. In what type of business conditions is top management leadership in creating a flexible, responsive, innovative internal environment especially important?

• Fast-moving, high technology businesses.
• Businesses where product life cycles are short.
• Widely-diversified corporations where opportunities are varied and scattered.
• Businesses where product differentiation via continuous product improvement is key

. When approaching the task of creating a better 'fit' between strategy and culture, the strategy leader's first step should be to:

Identify which aspects of the present culture are supportive of good strategy execution and which ones are not.

 8. What is MBWA?

Managing By Walking Around

. What is the purpose of managing by walking around?

To gather information informally about what is happening and what is on people's minds