Chapter 12 - Leadership and Culture
Chapter 12
Leadership and Culture
Chapter Summary
This chapter examines organizational leadership and organizational culture—two factors essential
to the successful implementation and execution of a company’s strategic plan. Organizat ional
leadership is guiding and shepherding an organization over time and developing that
organization’s future leadership and its organization culture. Good organization leadership
involves three considerations: clarifying strategic intent, building an or ganization, and shaping the
organization’s culture. Leaders use education, principles, and perseverance to build their
organization. Leaders start to shape organizational culture by the passion they bring to their role,
and their choice and development of young manager and future leaders. Understanding seven
sources of power and influence, rather than just the power of position and punishment, is a critical
skill for effective future leaders to grasp.
Organizational culture is the set of important assumptions, values, beliefs, and norms that
members of an organization share in common. The organizational leader plays a critical role in
developing, sustaining, and changing organizational culture. Ethical standards, the leader’s basis
for differentiating right from wrong, quickly spread as a centerpiece between the leader and the
organization’s culture. Leaders use many means to reinforce and develop their organization’s
culture—from rewards and appointments to storytelling and rituals. Managing the strategy-culture
relationship requires different approaches, depending on the match between the demands of the
new strategy and the compatibility of the culture with that strategy. This chapter examines four
different scenarios.
Learning Objectives
1. Describe what good organizational leadership involves.
2. Explain how vision and performance help leaders clarify strategic intent.
3. Explain the value of passion and selection/development of new leaders in shaping an
organization’s culture.
4. Briefly explain seven sources of power and influence available to every manager.
5. Define and explain what is meant by organizational culture, and how it is created,
influenced, and changed.
6. Describe four ways leaders influence organizational culture.
7. Explain four strategy-culture situations.
Lecture Outline
I.
Strategic Leadership: Embracing Change
A.
The blending of telecommunications, computers, the Internet, and one global marketplace
has increased the pace of change exponentially during the past 10 years.
1.
All business organizations are affected.
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B.
2.
Change has become an integral part of what leaders and managers deal with daily.
3.
The leadership challenge is to galvanize commitment among people within an
organization as well as stakeholders outside the organization to embrace change and
implement strategies intended to position the organization to succeed in a vastly
different future.
4.
Leaders galvanize commitment to embrace change through three interrelated
activities: clarifying strategic intent, building an organization, and shaping
organizational culture.
Clarifying Strategic Intent
1.
Leaders help their company embrace change by setting for their strategic intent—
a clear sense of where they want to lead the company and what results they expect
to achieve.
a)
2.
They do this by concentrating simultaneously and very clearly on two very
different issues: vision and performance.
Vision
a)
A leader needs to communicate clearly and directly a fundamental vision of
what the business needs to become.
(1) Traditionally, the concept of vision has been a description or picture of
what the company could be that accommodates the needs of all its
stakeholders.
(2) The intensely competitive, rapidly changing global marketplace has
refined this to be targeting a very narrowly defined leader’s vision—an
articulation of a simple criterion or characterization of what the leader
sees the company must become to establish and sustain global
leadership.
b)
Keep the Vision Simple
(1) Exhibit 12.1, Top Strategist, shows how CEO Mayor Michael
Bloomberg articulated a radical yet simple vision of NYC that has
resonated with New York’s famously cynical citizenry who give him a
75% approval rating.
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3.
Performance
a)
Clarifying strategic intent must also ensure the survival of the enterprise as it
pursues a well-articulated vision, and after it reaches the vision.
(1) So a key element of good organizational leadership is to make clear the
performance expectations a leader has for the organization, and
managers in it, as they seek to move toward that vision.
b)
Oftentimes this can create a bit of a paradox, because the vision is a future
picture and performance is now and tomorrow and next quarter and this year.
(1) The job of a good leader, in clarifying strategic intent, is to do so by
painting a picture of that intent in future terms, and in setting sound
performance expectations while moving toward that vision and as the
vision becomes a reality.
C.
Building an Organization
1.
The previous chapter examined alternative structures to use in designing the
organization necessary to implement strategy.
a)
b)
c)
Leaders spend considerable time shaping and refining their organizational
structure and making it function effectively to accomplish strategic intent.
Because leaders are attempting to embrace change, they are often rebuilding
or remaking their organization to align it with the ever-changing environment
and needs of a new strategy.
And because embracing change often involves overcoming resistance to
change, leaders find themselves addressing problems such as the following as
they attempt to build or rebuild their organization:
(1) Ensuring a common understanding about organizational priorities.
(2) Clarifying responsibilities among managers and organizational units.
(3) Empowering newer managers and pushing authority lower in the
organization.
(4) Uncovering and remedying problems in coordination and
communication across the organization and across boundaries inside
and outside the organization.
(5) Gaining the personal commitment to a shared vision from managers
throughout the organization.
(6) Keeping closely connected with what’s going on inside and outside the
organization and with its customers.
2.
There are three ways good leaders go about building the organization they want
and dealing with problems and issues like those listed: education, principles, and
perseverance.
3.
Education and leadership development is the effort to familiarize future leaders
with the skills important to the company and to develop exceptional leaders among
the managers you employ.
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4.
Leaders do this in many ways.
a)
5.
All managers adapt structures, create teams, implement systems, and
otherwise generate ways to coordinate, integrate, and share information about
what their organization is doing and might do.
Others create customer advisory groups, supplier partnerships, R&D joint
ventures, and other adjustments to build an adaptable, learning organization that
buys into the leader’s vision and strategic intent and the change driving the future
opportunities facing the business.
a)
These, in addition to the fundamental structural guidelines described in the
previous chapter for restructuring to support strategically critical activities,
are key ways leaders constantly attempt to educate and build a supportive
organization.
6.
Perseverance is the capacity to see a commitment through to completion long
after most people would have stopped trying. Exhibit 12.2, Top Strategist,
provides the example of Jeff Bezos of Amazon.
7.
Principles are your fundamental personal standards that guide your sense of
honesty, integrity, and ethical behavior.
a)
b)
8.
If you have a clear moral compass guiding your priorities and those you set
for the company, you will be a more effective leader.
This observation is repeatedly one of the first things effective leaders
interviewed by researchers, business writers, and students mention when they
answer a question about what they think is most important in explaining their
success as leaders and the success of leaders they admire.
Principle boils down to a personal philosophy we all deal with at an individual
level—choices involving honesty, integrity, and ethical behavior.
a)
b)
c)
d)
e)
Indeed Exhibit 12.3, Strategy in Action, gives you the chance to “test” your
personal principles in comparison with the actions at Duke University’s
MBA Program, and BusinessWeek’s thoughts too.
The key thing to remember as a future leader is that your personal
philosophies, or choices, manifest themselves exponentially for you or any
key leaders of any organization.
The people who do the work of any organization watch their leaders and
what their leaders do, sanction, or stand for.
These people then reflect those principles in what they do or come to believe
is the way to do things in or with that organization.
An effective organization is better built—is stronger—when its leaders show
by example what they want their people to do and the principles they want
their people to operate by on a day-to-day basis and in making decisions
shaped by values and principles—a clear sense of right and wrong.
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D.
Shaping Organizational Culture
1.
Leaders know well that the values and beliefs shared throughout their organization
will shape how the work of the organization is done.
a)
b)
c)
And when attempting to embrace accelerated change, reshaping their
organization’s culture is an activity that occupies considerable time for most
leaders.
Elements of good leadership—vision, performance, principles, perseverance,
which have just been described—are important ways leaders shape
organizational culture as well.
Leaders shape organizational culture through their passion for the enterprise
and the selection/development of talented managers to be future leaders.
2.
Passion, in a leadership sense, is a highly motivated sense of commitment to what
you do and want to do.
3.
Like many other traits of good leaders, passion is best seen through the leaders’
intermittent behaviors while in the throws of the challenging times of the
organizations they lead.
a)
They must use special moments to convey a sincere passion for and delight
in the work of the company they lead.
4.
Leaders also use reward systems, symbols, and structure among other means to
shape the organization’s culture.
5.
As leaders clarify strategic intent, build an organization, and shape their
organization’s culture, they look to one key element to help—their management
team throughout the organization.
a)
E.
Leaders look to managers they need to execute strategy as another source of
leadership to accept risk and cope with the complexity that change brings
about.
b) So selection and development of key managers becomes a major leadership
role.
Recruiting and Developing Talented Operational Leadership
1.
As noted at the beginning of this section on organizational leadership, the
accelerated pace and complexity of business will increase pressure on corporations
to push authority down in their organizations ultimately meaning that every line
manager will have to exercise leadership’s prerogatives to an extent unthinkable a
generation earlier.
a)
b)
c)
We also defined one of the key roles of good organizational leadership as
building the organization by educating and developing new leaders.
They will each be global managers, change agents, strategists, motivators,
strategic decision makers, innovators, and collaborators if the business is to
survive and prosper.
So we want to examine this more completely by looking at key competencies
these future managers need to possess or develop.
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d)
2.
Today’s need for fluid, learning organizations capable of rapid response, sharing,
and cross-cultural synergy place incredible demands on young managers to bring
important competencies to the organization.
a)
3.
Exhibit 12.4, Strategy in Action, provides an interesting perspective on this
reality showing how IBM’s Helen Cheng uses online multi-player games to
develop young managers.
Exhibit 12.5, What Competencies Should Managers Possess, describes the
needs organizations look to managers to meet and then identify the
corresponding competencies managers would need to do so.
Researcher David Goleman addressed the question of what types of personality
attributes generate the type of competencies described in Exhibit 12.5, What
Competencies Should Managers Possess?
a)
His research suggested that a set of four characteristics commonly referred to
as emotional intelligence play a key role in bringing the competencies needed
from today’s desirable manager:
(1) Self-awareness in terms of the ability to read and understand one’s
emotions and assess one’s strengths and weaknesses, underlain by the
confidence that stems from positive self-worth.
(2) Self-management in terms of control, integrity, conscientiousness,
initiative, and achievement orientation.
(3) Social awareness in relation to sensing others’ emotions (empathy),
reading the organization (organizational awareness), and recognizing
customers’ needs (service orientation).
(4) Social skills in relation to influencing and inspiring others;
communicating, collaborating, and building relationships with others;
and managing change and conflict.
4.
A key way these characteristics manifest themselves in a manager’s routine
activities is found in the way they seek to get the work of their unit or group done
over time.
a)
b)
c)
5.
How do they use power and influence to get others to get things done?
Effective leaders seek to develop managers who understand they have many
sources of power and influence, and that relying on the power associated
with their position in an organization is often the least effective means to
influence people to do what is needed.
Managers have available seven sources of power and influence.
Organizational sources of power are derived from a manager’s role in the
organization.
a)
b)
Position power is formally established based on the manager’s position in
the organization.
By virtue of holding that position, certain decision-making authorities and
responsibilities are conferred that the manager is entitled to use to get things
done.
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c)
d)
e)
f)
g)
6.
Leaders today increasingly rely on their personal ability to influence others
perhaps as much, if not more so, than organizational sources of power.
a)
b)
c)
d)
e)
f)
g)
h)
7.
Personal influence, a form of “power,” comes mainly from three sources.
Expert influence is derived from a leader’s knowledge and expertise in a
particular area or situation.
This can be a very important source of power in influencing others.
Referent influence comes from having others want to identify with the
leader.
We have all seen or worked with leaders who have major influence over
others based simply on their charisma, personality, empathy, and other
personal attributes.
Peer influence can be a very effective way for leaders to influence the
behavior of others.
Most people in organizations and across organizations find themselves put in
groups to solve problems, serve customers, develop innovations, and perform
a host of other tasks.
Leaders can use the assignment of team members and the charge to the team
as a way to enable peer-based influence to work on key managers and the
outcomes they produce.
Effective leaders make use of all seven sources of power and influence, very often
in combination, to deal with the myriad situations they face and need others to
handle.
a)
8.
It is the source of power many new managers expect to be able to rely on, but
often the least useful.
Reward power is available when the manger confers rewards in return for
desired actions and outcomes.
This is often a power source.
Information power can be particularly effective and is derived from a
manager’s access to and control over the dissemination of information that is
important to subordinates not yet easily available in the organization.
Punitive power is the power exercised via coercion or fear of punishment for
mistakes or undesired actions by a manager’s subordinates.
The exact best source(s) of power and influence are often shaped by the
nature of the task, project, urgency of an assignment, or the unique
characteristics of specific personnel, among myriad factors.
One final perspective on the role of organizational leadership and management
selection is found in the work of Bartlett and Ghoshal.
a)
b)
Their study of several of the most successful global companies in the last
decade suggests that combining flexible responsiveness with integration and
innovation requires rethinking the management role and the distribution of
management roles within a twenty-first-century company.
They see three critical management roles: the entrepreneurial process
(decisions about opportunities to pursue and resource deployment), the
integration process (building and deploying organizational capabilities), and
the renewal process (shaping organizational purpose and enabling change).
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c)
II.
Traditionally viewed as the domain of top management, their research
suggests that these functions need to be shared and distributed across three
management levels as suggested in Exhibit 12.6, Management Processes
and Levels of Management.
Organizational Culture
A.
Organizational culture is the set of important assumptions (often unstated) that
members of an organization share in common.
1.
Every organization has its own culture.
a)
b)
c)
2.
A member of an organization can simply be aware of the organization’s beliefs
and values without sharing them in a personally significant way.
a)
b)
c)
d)
e)
B.
An organization’s culture is similar to an individual’s personality—an
intangible yet ever-present theme that provides meaning, direction, and the
basis for action.
In much the same way as personality influences the behavior of an
individual, the shared assumptions (beliefs and values) among a firm’s
members influence opinions and actions within that firm.
Exhibit 12.7 Strategy in Action shows the results of a Business Week
survey conducted by Staffing.org to identify how employees view their
company’s culture in the context of various TV shows or cartoon characters.
Those beliefs and values have more personal meaning if the member views
them as a guide to appropriate behavior in the organization and, therefore,
complies with them.
The member becomes fundamentally committed to the beliefs and values
when he or she internalizes them; that is, comes to hold them as personal
beliefs and values.
In this case, the corresponding behavior is intrinsically rewarding for the
member—the member derives personal satisfaction from his or her actions in
the organization because those actions are congruent with corresponding
personal beliefs and values.
Assumptions become shared assumptions through internalization among an
organization’s individual members.
And those shared, internalized beliefs about values shape the content and
account for the strength of an organization’s culture.
The Role of the Organizational Leader in Organizational Culture
1.
The previous section of this chapter covered organizational leadership in detail.
a)
b)
c)
Part of that coverage discussed the role of the organizational leader in
shaping organizational culture.
Several points in that discussion apply here.
It is important to emphasize that the leader and the culture of the
organization s/he leads are inextricably intertwined.
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C.
2.
The leader is the standard bearer, the personification, the ongoing embodiment of
the culture, or the new example of what it should become.
3.
As such, several of the aspects of what a leader does or should do represent
influences on the organization’s culture, either to reinforce it or to exemplify the
standards and nature of what it needs to become.
4.
How the leader behaves and emphasizes those aspects of being a leader become
what all the organization sees are “the important things to do and value.”
Build Time in the Organization
1.
Some leaders have been with the organization for a long time.
a)
b)
c)
d)
e)
2.
Many leaders in recent years, and inevitably in any organization, are new to the
top post of the organization.
a)
b)
c)
3.
If they have been in the leader role for an extended time, then their
association with the organization is usually strongly entrenched.
They continue to reinforce the current culture, are empowered by it, and
understandably go to considerable lengths to reinforce it as a key element in
sustaining continued success.
The problematic long-time leaders are those who have built a successful
enterprise that also sustains a culture that appears unethical or worse.
Either type of long-time leader is often a widely known figure in today’s
media-intense business world.
And in their setting, while the culture may be exceptionally strong, their role
in creating it usually means they seemingly hold sway over the culture rather
than the other way around.
Their relationship within the organization’s culture is perhaps more complex.
Those who built a management career within that culture have the benefit of
knowledge of the culture and credibility as an “initiated” member of that
culture.
This may be quite useful in helping engender confidence as they take on the
task of leader of that culture, or, perhaps more difficult, as change agents for
parts of that culture as the company moves forward.
In the other situation, a new leader who is not an “initiated” member of the
culture, or tribe faces a much more challenging task.
a)
b)
c)
d)
e)
Quite logically, they must earn credibility with the “tribe,” which is usually
somewhat resistant to change.
And, very often, they are being brought in with a board of directors desiring
change in the strategy, company, and usually culture.
That becomes a substantial challenge for these new leaders to face.
Some make it happen, others find the strength of the organization’s culture
far more powerful than their ability to change it.
Exhibit 12.8 Strategy-in-Action provides an interesting example of Netflix
and its CEO, Read Hastings.
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4.
Ethical standards are a person’s basis for differentiating right from wrong.
a)
b)
c)
d)
e)
5.
Leaders use every means available to them as an organizational leader to influence
an organization’s culture and their relationship with it.
a)
b)
D.
An earlier section of this chapter emphasized the importance of “principles”
in defining what a leader needs to incorporate in his or her recipe to become
an effective leader.
We need not repeat those points in the context of being a leader, but it is
critical to recognize that the culture of an organization, and particularly the
link between the leader and the culture’s very nature, is inextricably tied to
the ethical standards of behavior, actions, decisions, and norms that leader
personifies.
Enron, Worldcom, Qwest, Computer Associates, Ken Lay, Jeff Skillings,
Sanjay Kumar, Joseph Nacchio, Bernie Ebbers, and Martha Stewart are
companies, people, and situations we discussed in Chapter 3—they are all
imprinted in each of our minds.
They speak volumes about this very point: Leaders, and their key associates,
play a key role in shaping and defining the ethical standards that become
absorbed into and shape the culture of the organizations they lead.
Those ethical standards then become powerful, informal guidelines for the
behaviors, decisions, and dealings of members of that culture or tribe.
It bears repeating in this regard that reward systems, assignment of new
managers form within versus outside the organization, composition of the
firm’s board of directors, reporting relationships, and organizational
structure—each of these fundamental elements of executing a company’s
vision and strategy are also a leader’s key “levers” for attempting to shape
organizational culture in a direction s/he sees it needing to go.
Because we have already discussed these levers, we move on to other ways
leaders have sought to shape and reinforce their organization’s culture.
Emphasize Key Themes or Dominant Values
1.
Businesses build strategies around distinct competitive advantages they possess or
seek.
2.
Quality, differentiation, cost advantages, and speed are four key sources of
competitive advantage.
3.
Insightful leaders nurture key themes or dominant values within their organization
that reinforce competitive advantages they seek to maintain or build.
4.
Key themes or dominant values may center around wording in an advertisement.
5.
They are often found in internal company communications.
6.
They are most often found as a new vocabulary used by company personnel to
explain “who we are.”
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E.
F.
G.
Encourage Dissemination of Stories and Legends about Core Values
1.
Companies with strong cultures are enthusiastic collectors and tellers of stories,
anecdotes, and legends in support of basic beliefs.
2.
The examples in the text are very important in developing an organizational
culture, because organization members identify strongly with them and come to
share the beliefs and values they support.
Institutionalize Practices That Systematically Reinforce Desired Beliefs and Values
1.
Companies with strong cultures are clear on what their beliefs and values need to
be and take the process of shaping those beliefs and values very seriously.
2.
Most important, the values espoused by these companies underlay the strategies
they employ.
Adapt Some Very Common Themes in Their Own Unique Ways
1.
The most typical beliefs that shape organizational culture include (1) a belief in
being the best; (2) a belief in superior quality and service; (3) a belief in the
importance of people as individuals and a faith in their ability to make a strong
contribution; (4) a belief in the importance of the details of execution, the nuts and
bolts of doing the job well; (5) a belief that customers should reign supreme; (6) a
belief in inspiring people to do their best, whatever their ability; (7) a belief in the
importance of informal communication; and (8) a belief that growth and profits
are essential to a company’s well-being.
a)
b)
c)
2.
The stronger a company’s culture and the more that culture is directed toward
customers and markets, the less the company uses policy manuals, organization
charts, and detailed rules and procedures to enforce discipline and norms.
a)
b)
c)
H.
Every company implements these beliefs differently to fit its particular
situation, and every company’s values are the handiwork of one or two
legendary figures in leadership positions.
Accordingly, every company has a distinct culture that it believes no other
company can copy successfully.
And in companies with strong cultures, managers and workers either accept
the norms of the culture or opt out from the culture and leave the company.
The reason is that guiding values inherent in the culture convey in crystal clear fashion what everybody is supposed to do in most situations.
Poorly performing companies often have strong cultures.
However, their cultures are dysfunctional, being focused on internal politics
or operating by the numbers as opposed to emphasizing customers and the
people who make and sell the product.
Manage Organizational Culture in a Global Organization
1.
The reality of today’s global organizations is that organizational culture must
recognize cultural diversity.
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I.
2.
Social norms create differences across national boundaries that influence how
people interact, read personal cues, and otherwise interrelate socially.
3.
Values and attitudes about similar circumstances also vary from country to
country.
4.
Where individualism is central to a North American’s value structure, the needs of
the group dominate the value structure of their Japanese counterparts.
5.
Religion is yet another source of cultural differences.
6.
Holidays, practices, and belief structures differ in very fundamental ways that
must be taken into account as one attempts to share organizational culture in a
global setting.
7.
Finally, education, or ways people are accustomed to learning, differ across
national borders.
8.
Formal classroom learning in the United States may teach things that are only
learned via apprenticeship in other cultures.
9.
Because the process of shaping an organizational culture often involves
considerable “education,” leaders should be sensitive to global differences in
approaches to education to make sure their cultural education efforts are effective.
Manage the Strategy-Culture Relationship
1.
Managers find it difficult to think through the relationship between a firm’s
culture and the critical factors on which strategy depends.
a)
b)
c)
d)
2.
They quickly recognize, however, that key components of the firm—
structure, staff, systems, people, style—influence the ways in which key
managerial tasks are executed and how critical management relationships are
formed.
And implementation of a new strategy is largely concerned with adjustments
in these components to accommodate the perceived needs of the strategy.
Consequently, managing the strategy-culture relationship requires sensitivity
to the interaction between the changes necessary to implement the new
strategy and the compatibility or “fit” between those changes and the firm’s
culture.
Exhibit 12.9, Managing the Strategy-Culture Relationship, provides a
simple framework for managing the strategy-culture relationship by
identifying four basic situations a firm might face.
Link to Mission
a)
A firm in cell 1 is faced with a situation in which implementing a new
strategy requires several changes in structure, systems, managerial
assignments, operating procedures, or other fundamental aspects of the firm.
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(1) However, most of the changes are potentially compatible with the
existing organizational culture.
(2) Firms in this situation usually have a tradition of effective performance
and are either seeking to take advantage of a major opportunity or are
attempting to redirect major product-market operations consistent with
proven core capabilities.
(3) Such firms are in a very promising position: They can pursue a strategy
requiring major changes but still benefit from the power of cultural
reinforcement.
b)
Four basic considerations should be emphasized by firms seeking to manage
a strategy-culture relationship in this context:
(1) Key changes should be visibly linked to the basic company mission.
(a)
Because the company mission provides a broad official foundation
for the organizational culture, top executives should use all
available internal and external forums to reinforce the message that
the changes are inextricably linked to it.
(2) Emphasis should be placed on the use of existing personnel where
possible to fill positions created to implement the new strategy.
(a)
Existing personnel embody the shared values and norms that help
ensure cultural compatibility as major changes are implemented.
(3) Care should be taken if adjustments in the reward system are needed.
(a)
These adjustments should be consistent with the current reward
system.
(b) If, for example, a new product-market thrust requires significant
changes in the way sales are made, and, therefore, in incentive
compensation, common themes should be emphasized.
(c) In this way, current and future reward approaches are related, and
the changes in the reward system are justified (encourage
development of less familiar markets).
(4) Key attention should be paid to the changes that are least compatible
with the current culture, so current norms are not disrupted (see Exhibit
12.10, Strategy in Action, for an example).
3.
Maximize Synergy
a)
A firm in cell 2 needs only a few organizational changes to implement its
new strategy, and those changes are potentially quite compatible with its
current culture.
(1) A firm in this situation should emphasize two broad themes:
(a)
Take advantage of the situation to reinforce and solidify the
current culture.
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(b) Use this time of relative stability to remove organizational
roadblocks to the desired culture.
4.
Manage around the Culture
a)
A firm in cell 3 must make a few major organizational changes to implement
its new strategy, but these changes are potentially inconsistent with the firm’s
current organizational culture.
(1) The critical question for a firm in this situation is whether it can make
the changes with a reasonable chance of success.
b)
A firm can manage around the culture in various ways: create a separate firm
or division; use task forces, teams, or program coordinators; subcontract;
bring in an outsider; or sell out.
(1) These are a few of the available options, but the key idea is to create a
method of achieving the change desired that avoids confronting the
incompatible cultural norms.
(2) As cultural resistance diminishes, the change may be absorbed into the
firm.
5.
Reformulate the Strategy or Culture
a)
A firm in cell 4 faces the most difficult challenge in managing the strategyculture relationship.
(1) To implement its new strategy, such a firm must make organizational
changes that are incompatible with its current, usually entrenched,
values and norms.
(2) A firm in this situation faces the complex, expensive, and often longterm challenge of changing its culture; it is a challenge that borders on
impossible.
b)
When strategy requires massive organizational change and engenders cultural
resistance, a firm should determine whether reformulation of the strategy is
appropriate.
(1) Are all of the organizational changes really necessary/
(2) Is there any real expectation that the changes will be acceptable and
successful?
(3) Is these answers are yes, then massive changes are often necessary.
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Chapter 12 - Leadership and Culture
Questions for Discussion
1. Think about any two leaders you have known, preferably one good and one weak. They can be
businesspersons, coaches, someone you work(ed) with, and so forth. Make a list of five traits,
practices, or characteristics that cause you to consider one good and the other weak. Compare
the things you chose with the seven factors used to differentiate effective organizational
leadership in the first half of this chapter.
Student responses will vary depending on the people they choose and the personal reasons
they chose them. Each student should compare their criteria with the seven factors outlined in
the text, which are used to differentiate effective organizational leadership.
2. This chapter describes seven attributes that enable good leadership—vision, performance,
principles, education of subordinates, perseverance, passion, and leader
selection/development. Which one have you found to be the most meaningful to you in the
leaders you respond to the best?
Students will find information on each of these seven attributes in the text under the sections
titled “Clarifying Strategic Intent,” “Building an Organization,” and “Shaping Organiza tional
Culture.” Depending on personal experiences and the context of the students’ interactions
with good leaders, the responses will vary.
3. Consider the following situation and determine whether the VC group is engaging in
something that would violate your principles, or be totally acceptable to you. Explain why.
Who likes those ubiquitous online pop-up ads planted by intrusive spyware? Technology
Crossover Ventures is betting few do. The Silicon Valley venture-capital firm helped to
finance the anti-spyware company Webroot Software. But it appears to hedge that bet with a
sizable investment in Claria, a company vilified for spreading spyware. More than 40 million
Web surfers viewed Claria ads. TCV pumped at least $13 million into Claria, but it has
removed the company from a list of investments on its Web site. Critics wonder why TCV
would make dual investments. “Users are rubbed the wrong way by even the suggestion that
the same companies that made this mess are now profiting from helping to clean it up,” says
Harvard University researcher and spyware expert Ben Edelman. TCV declined to comment.
There is a similar element in both ventures: the potential to make money.
The venture capital firm is capitalizing on two sides of the same market—funding the spyware
company itself, but then also financing a company that eliminates/eradicates spyware. They
are making money both ways. There are questions of personal principles and ethics involved
in this case, and the students may have varying responses based on their personal experiences,
upbringing, and outlooks.
4. Read Exhibit 12.3. What would you do if invited by a peer to access this information for an
admission decision about yourself or a friend? What should happen to those that did?
Again, personal student responses will vary. Students may feel more sympathetic to the
Harvard, MIT, and Carnegie crowd who are denying admission to any of the hackers than
those at Stanford, who are making decisions on a case-by-case basis. Either way, students
should support their answers and be ready to defend their positions.
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Chapter 12 - Leadership and Culture
5. Do you think Alan Lafley is a good organizational leader? What is his most important
contribution to her organizational culture in your opinion?
Again, responses will vary depend on how the student views the situation. There are legal
issues involved, ethical issues, and issues regarding her ability to lead well. Students should
become familiar with the Lafley’s leadership of P&G, and outside research in the business
press may be necessary.
6. What three sources of power and influence are best suited to you as a manager?
The sources of power and influence are discussed on pages 338-339 in the text. They include:
position power, reward power, information power, and punitive power, as well as expert
influence, referent influence, and peer influence. Student responses will vary considerably
based on their personal experience and personality.
7. Describe two organizations you have been a part of based on differences in their
organizational cultures.
Student responses will vary. The organizations should be described in the context of the
differences between their organizational cultures. Students should elaborate on their examples
in some detail.
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