Organizational Culture and
Ethical Values – Chapter 10
Culture is the set of values, norms, guiding
beliefs and understandings that is shared by
members of an organization and taught to new
members as the correct way to think, feel and
behave. It represents the unwritten, feeling part
of the organization. Everyone is a culture being,
but culture generally goes unnoticed. (386-387)
Culture is like an iceberg!
Observable symbols, ceremonies,
stories, slogans, behaviors, dress,
physical settings.
Underlying values, assumptions, beliefs,
attitudes, feelings
Culture provides people with a sense of
organizational identity and generates in them a
commitment to beliefs and values that are larger
than themselves. Though ideas that become
part of the culture can come from anywhere
within the organization, an organization’s
culture generally begins with a founder or early
leader who articulates and implements
particular ideas and values as a vision,
philosophy, or business strategy. (387-388)
Internal Integration –members develop a
collective identity and know how to work
together effectively. Guides day-to-day working
relationships and determines how people
communicate within the organization, what
behavior is acceptable or not acceptable, and
how power and status are allocated. (388)
External Adaptation – how the organization
meets goals and deals with outsiders. Culture
helps guide the daily activities of workers to
meet certain goals. It can help the organization
respond rapidly to customer needs or the moves
of a competitor. The right culture can help
transform an organization’s performance from
average to truly great. (388)
Interpreting Culture – To identify and interpret
culture requires that people make inferences
based upon observable artifacts. Examples
include rites and ceremonies, stories and
sayings, symbols, organizational structures,
power relationships, power relationships and
control systems. (389)
Symbols
Rites and
Ceremonies
Stories
and
Sayings
Culture
Organization
Structures
Control
Systems
(389)
Power
Relationships
Adaptability Culture – Characterized by strategic
focus on the external environment through
flexibility and change to meet customer needs.
Google, Zappos (394)
Mission Culture – Emphasis on a clear vision of the
organization’s purpose and on the achievement of
goals, such as sales growth, profitability, or market
share, to help achieve the purpose. AnheuserBusch InBev (395)
Clan Culture – Primary focus on the involvement and
participation of the organization’s members and on
rapidly changing expectations from the external
environment. In a clan culture, an important value is
taking care of employees and making sure they have
whatever they need to help them be satisfied as well as
productive. UKRD commercial radio station in England is
an example.
Bureaucratic Culture – has an internal focus and a
consistency orientation for a stable environment. This
type of culture supports a methodical approach to doing
business. Symbols, heroes and ceremonies reinforce the
values of cooperation, tradition and following established
policies. SAS Institute and Pacific Edge Software use
some of the elements of a bureaucratic culture.
(395-396)
Culture and Performance
Creating and influencing a constructive culture is
one of a leader’s most important jobs. The right
culture can drive high performance. (398)
Ethical Values and Social Responsibility
A recent study by the Ethics Resource Center indicates
that 41 percent of the 6,400 U.S. employees surveyed say
they have observed wrongdoing at work. The really bad
news, though, is that 60 percent of the ethical violations
were by someone with managerial authority. Other
countries have had similar problems.
Ethics refers to the code of moral principles and values
that governs the behaviors of a person or group with
respect to what is right or wrong. Ethical values set
standards as to what is good or bad in conduct and
decision making.
(Be familiar with Exhibit 10.5 on page 400!)
(400)
The notion of Corporate Social Responsibility (CSR)
is an extension of the idea of managerial ethics and
refers to management’s obligation to make choices
and take action so that the organization contributes
to the welfare and interest of all organizational
stakeholders, such as employees, customers,
shareholders, the community and the broader
society.
(See MAS Holdings in middle of page 403)
(403)
Conscious Capitalism
Also referred to as a shared value approach,
refers to organizational policies and practices
that both enhance the economic success of a
company and advance the economic and social
conditions of the communities in which the
company operates.
(403)
There seems to be a positive relationship
between ethical and socially responsible
behavior and financial results. There is also
evidence that people prefer to work for
companies that demonstrate a high level of
ethics and corporate social responsibility, so
these companies can attract and retain highquality employees.
(405)
A survey of 13-25 year-olds found that 79% say they
want to work for a company that cares about how it
affects or contributes to society.
In a study of ethics policy and practice in successful
companies such as J&J and General Mills, no point
emerged more clearly than the role of top
management in providing commitment, leadership
and examples for ethical behavior.
Values-based Leadership
Organizational values are developed and
strengthened primarily through values-based
leadership, a relationship between a leader and
followers that is based upon shared, strongly
internalized values that are advocated and acted
upon by the leader. Employees learn about values,
beliefs and goals from watching managers, just as
students learn which topics are important for an
exam, what professors like and how to get a good
grade from watching professors. Values-based
leaders “walk their talk”!!! (Costco)
(406-407)
• Chuck Williams, Sonoma-Williams Company
• Nordstrom Department Stores
• General Norman Schwarzkopf once said,
“Leadership is a combination of strategy and
character. If you must be without one, be
without the strategy.”
(407)
Personal Actions and
Expectations
Hold self to high ethical
standards.
Strive for honesty, humility,
integrity.
Accept responsibility for ethical
failings.
Interpersonal Behaviors
Treat people with care
Be helpful and kind
Support others
Maintain positive
relationships
ValuesBased
Leadership
(408)
Fairness with Others
Treat everyone equitably
Never be condescending
Accept others’ mistakes
Organizational Leadership
Articulate and communicate
ethical vision
Hold people accountable
Put ethics above short-term
interests
Who (or what) a person is
(character, integrity) will
ultimately determine if their
brains, talents, competencies,
energy, effort, alliance-building
abilities, and opportunities will
succeed.
Code of Ethics
Formal statement of the company’s values
concerning ethics and social responsibility; it
clarifies to employees what the company stands
for and its expectations for employee conduct.
(409)
Whistle-blower. Tell me about it!
•
•
•
•
What is it?
Who does it?
Why are companies trying to protect them?
When safe-guards are not in place, what
happens to a whistle-blower?
(409)
MGT 4153
Chapter 11
Innovate or Fail
Three types of change:
(1) Episodic change
(2) Continuous change
(3) Disruptive change and innovation.
Page 422
24
Four Areas for Innovation and
Change
• Technology
– Changes in production process
• Products and Services
– Changes in outputs
• Strategy and Structure
– Administrative changes
• Culture
– Changes in values, attitudes, behaviors
(424-426)
Long
25
Change vs Innovation
• Organizational change is considered the
adoption of a new idea or behavior by an
organization.
• Organizational innovation, in contrast, is the
adoption of an idea or behavior that is new to
the organization’s industry, market or general
environment.
Technology Change
• Conditions that promote new ideas are not generally the
best for implementing those ideas for routine production.
• An innovative organization is characterized by flexibility,
empowered employees and the absence of rigid work
rules.
• An organic, free-flowing organization is typically associated
with change and is considered the best organization form
for adapting to a chaotic environment.
• A mechanistic structure, in contrast, stifles innovation with
its emphasis on rules and regulations, but it is often the
best structure for efficiently producing routine products.
• To attain both aspects of technological change, many
organizations use an ambidextrous approach.
Page 429, top of page.)
Elements for Successful Change
Environment
Suppliers
Professional
Associations
Consultants
Research
literature
Internal
Creativity and
Inventions
Organization
1. Ideas
3. Adoption
Customers
Competition
Legislation
Regulation
Labor force
4.Implementation
2. Needs
5. Resources
Perceived
Problems or
Opportunities
(427
Long
28
Techniques for Encouraging
Technology Change
1. Creative Departments (research lab, idea
incubator.
2. Venture Teams (skunkworks, new-venture
fund)
3. Corporate Entrepreneurship
432-433)
New Product Success Rate
Enormous uncertainty in development of new products;
• RCA’s VideoDisc – Lost $500 million
• Time, Inc.’s TV-Cable Week lost $47 million
• Pfizer invested 70+ million, anti-aging drug, flopped in final
testing
• 5,000 new food items each year, failure is 70-80%
100 Ideas (by Product Dev. and Management Assoc.)
• 33 developed projects
• 28 pass all testing
• 24 fully commercialized
• 14 succeed in marketplace
(436)
Long
30
Horizontal Linkage Model for New
Product Innovations
Specialization, Boundary Spanning, Horizontal Coordination
Environment
Organization
Environment
General
Manager
Technical
Development
Linkage
R&D
Linkage
Marketing
Linkage
Customer
Needs
Production
Long
31
Open Innovation
Open innovation means extending the search for
commercialization of new products beyond the
boundaries of the industry. (Game maker Rovio
extended the commercialization of the Angry Birds
brand into books, movies and toys by letting outsiders
license the popular gaming app.) (page 440)
Dual-Core Approach to Organization
Change
Type of Innovation Desired
Administrative
Structure
Administrative
Core
Technology
Technical
Core
Direction of Change:
Top-Down
Examples of Change:
Strategy
Downsizing
Structure
Production
techniques
Workflow
Mechanistic
Organic
Best Organizational
Design for Change:
(444)
Bottom-Up
33
Forces for Culture Change
Page 446)
• Reengineering and Horizontal Organization
• Diversity
• Emphasis on learning and adaptation in
organizations.
Long
34
Organizational Development
• One method of bringing about culture change
is known as organizational development. (OD)
• OD focuses on the human and social aspects
of the organization as a way to improve the
organization’s ability to adapt and solve
problems. (page 447)
OD Culture Change Interventions
• Large Group Intervention
• Team Building
• Interdepartmental Activities (pages 447-448)
Long
36
Techniques for Change
• Establish a sense of urgency for change.
• Establish a coalition to guide the change.
• Create a vision and strategy for change.
• Find an idea that fits the need.
• Develop plans to overcome resistance.
• Create change teams.
• Foster idea champions. (page 450-451)
Long
37
Who
Moved
My
Cheese?
An Amazing Way to Deal With Change In Your Work &
In Your Life
DR SPENCER JOHNSON
“Cheese” – a metaphor for what we want to
have in life, whether it is a job, a relationship,
money, a big house, freedom, health,
recognition, spiritual peace, or even an activity
like jogging or golf.
Each of us has our own idea of what Cheese is,
and we pursue it because we believe it makes
us happy. If we get it, we often become
attached to it. And if we lose it, or it’s taken
away, it can be traumatic.
ONCE, long ago, there lived 4 little characters
who ran through a maze looking for cheese to
nourish them & make them happy.
Two were mice named “Sniff” & “Scurry” and
two were little people named “Hem” &
“Haw”.
Every morning, the mice & the little people
dressed in their running gear & headed over to
Cheese Station C where they found their own
kind of cheese. It was a large store of Cheese
that Hem & Haw eventually moved their
homes to be closer to it & built a social life
around it.
To make themselves feel more at home, Hem
& Haw decorated the walls with sayings. One
read:
Having Cheese
Makes You
Happy
One morning, Sniff & Scurry arrived at
Cheese Station C & discovered there was no
cheese.
They weren’t surprised. Since they had noticed
the supply of cheese had been getting smaller
every day, they were prepared for the
inevitable & knew instinctively what to do.
They were quickly off in search of New
Cheese.
Later that same day, Hem & Haw arrived.
“What! No Cheese? Who moved my Cheese?
It’s not fair!”, Hem yelled. They went home
that night hungry & discouraged. But before
they left, Haw wrote on the wall:
The More Important
Your Cheese is To
You, The More You
Want To Hold Onto
It.
The next day Hem & Haw left their homes, &
returned to Cheese Station C. But situation
hadn’t changed. Haw asked, “Where are Sniff
& Scurry? Do you think they know something
we don’t?” Hem scoffed, “What would they
know? They’re just simple mice. They just
respond to what happens. We’re little people.
We’re smarter.”
Haw suggested, “Maybe we should stop
analyzing the situation so much and just get
going & find some New Cheese.
Haw decided to leave Cheese Station C while
Hem was more comfortable staying in the
cheeseless Station C. Hem announced, “It’s
MAZE time!” and wrote:
If You Do Not
Change, You Can
Become Extinct
Meanwhile, Sniff & Scurry went farther into
the maze until they found Cheese Station N.
They found what they had been looking for: a
great supply of New Cheese. It was the biggest
store of cheese the mice had ever seen.
Haw on the other hand become more anxious
& wondered if he really wanted to go out into
the Maze. He wrote a saying on the wall ahead
of him & stared at it for some time:
What Would You Do
If You Weren’t
Afraid?
Haw now realized that the change probably
would not have taken him by surprise if he had
been watching what was happening all along
and if he had anticipated change. He stopped
for a rest & wrote on the wall of the Maze:
Smell The Cheese
Often So You Know
When It Is Getting
Old.
Haw wondered if Hem had moved on, or if he
was still paralyzed by his own fears. Then,
Haw remembered the times when he had felt
his best in the Maze. It was when he was
moving along. He wrote:
Movement In A New
Direction Helps You
Find New Cheese.
As Haw started running down the dark
corridor, he began to smile. Haw didn’t realize
it yet, but he was discovering what nourished
his soul. He was letting go & trusting what lay
ahead for him, even though he did not know
exactly what it was.
To his surprise, Haw started to enjoy himself
more & more. He stopped to write again on the
wall:
When You Move
Beyond Your Fear,
You Feel Free.
To make things even better, Haw started to
paint a picture in his mind again. He saw
himself in great realistic detail, sitting in the
middle of a pile of all his favorite cheesesfrom Cheddar to Brie! He saw himself eating
the many cheeses he liked, & he enjoyed what
he saw.
The more clearly he saw the image of himself
enjoying New Cheese, the more real &
believable it became. He wrote:
Imagining Myself
Enjoying New
Cheese, Even Before
I Find It, Leads Me
To It.
Haw wondered why he had always thought
that a change would lead to something worse.
Now he realized that change could lead to
something better.
Then he raced through the Maze with greater
strength & agility. Until he found bits of New
Cheese. He entered the Cheese Station but it
was empty. Someone had already been there.
He stopped & wrote on the wall:
The Quicker You Let
Go Of Old Cheese,
The Sooner you Find
New Cheese.
Haw made his way back to Cheese Station C
to offer Hem bits of New Cheese but was
turned down. Hem wanted his own Cheese
back. Haw just shook his head in
disappointment but this does not stop him from
finding New Cheese. He smiled as he realized:
It Is Safer To Search
In The Maze Than
Remain In The
Cheeseless
Situation.
Haw realized again, that what you are afraid of
is never as bad as what you imagine. The fear
you let build up in your mind is worse than the
situation that actually exists.
He realizes it was natural for change to
continually occur, whether you expect it or
not. Change could surprise you only if you
didn’t expect it & weren’t looking for it.
When he realized he had changed his beliefs,
he paused to write on the wall:
Old Beliefs Do Not
Lead You To New
Cheese.
Haw now realized that his new beliefs were
encouraging him to behave in a new way. He
was behaving differently from the way he had
when he had kept returning to the same
cheeseless station.
It all depends on what you choose to believe.
He wrote on the wall:
When You See That
You Can Find And
Enjoy New Cheese,
You Change Course.
Haw just hoped he was heading in the right
direction. He thought about the possibility that
Hem would read The Handwriting On The
Wall & find his way.
He wrote on the wall what he had been
thinking about for some time:
Noticing Small
Changes Early Helps
You Adapt To The
Bigger Changes That
Are To Come.
He continued on through the Maze with greater strength &
speed. He proceeded along a corridor that was new to him,
rounded a corner, & found New Cheese at Cheese Station N
where he saw the greatest supply of Cheese he had ever
seen.Sniff & Scurry welcomed him.
“Hooray for Change!”
Haw wrote down a summary of what he had learned on the
largest wall of Cheese Station N & smiled as he looked at
what he had learned:
THE HANDWRITING ON THE WALL
Change Happens
Anticipate Change
Monitor Change
Adapt To Change Quickly
Change
Enjoy Change !
Be Ready To Change Quickly & Enjoy It Again.
Move With The
Cheese & Enjoy It !
Presented to you by Gerbie Rose Argañosa
WG&A Passage Customer Service