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Culture and

Screen graphics created by:

c  Jana F. Kuzmicki, Ph.D.
Troy University-Florida Region
DThe biggest levers you·ve got
to change a company are
strategy, structure, and
culture. If I could pick two, I·d
pick strategy and culture.µ
Wayne Leonard, CEO Entergy Corp.

D n organization·s capacity
to execute its strategy depends
on its Dhardµ infrastructure ² its
organization structure and systems
² and on its Dsoftµ infrastructure ²
its culture and norms.µ
mar Bhide
X £ 














'  ( 








X Core values, beliefs, and business principles
X Ethical standards
X Operating practices and behaviors defining
³how we do things around here´
X Approach to people management
X ³Chemistry´ and ³personality´ permeating
work environment
X Ofttold stories illustrating
Company¶s values
Business practices

X edication to customer satisfaction
X Zealous pursuit of low costs
X Frugal operating practices
X Strong work ethic
X Ritualistic Saturday morning meetings
X Executive commitment to
Visit stores
Listen to customers
Solicit employees¶ suggestions


X arddriving, resultsoriented atmosphere prevails
All businesses are held to a standard
of being #c or # in their industries as
well as achieving good business results
X Extensive crossbusiness sharing of ideas, best
practices, and learning
X Reliance on ³workout sessions´ to identify, debate,
and resolve ³burning issues´
X Commitment to Six Sigma Quality
X Globalization of the company

X Entrepreneurship of employees
X Empowered employees are encouraged to
Be innovative
Excel in their fields of specialization
Respond quickly to strategic opportunities
Creatively apply stateoftheart technology in a manner
to promote operating excellence


X eliver exceptional customer service to customers

X Company motto
³Respond to Unreasonable
Customer Requests´

X Outoftheordinary
customer requests
viewed as opportunities for ³heroic´ acts

X Promotions based on outstanding service

X Salaries based entirely on commission

c c

A ! !
is    in . . .
X Values, business principles, and ethical standards preached
and practiced by management
X Approaches to people management and problem solving
X Official policies and procedures
X Spirit and character permeating work environment
X Interactions and relationships among managers and
X Peer pressures that exist to display core values
X Its revered traditions and oftrepeated stories
X Its relationships with external stakeholders
c cc
X Founder or early leader
X Influential individual or work group
X Policies, vision, or strategies
X Operating approaches
X Company¶s approach to people management
Traditions, supervisory practices, employee attitudes

X Organizational politics
X Relationships with stakeholders
c c

Ofttold    focus on . . .
X Long work hours of programmers
X Emotionalpeaks and valleys in encountering and
overcoming coding problems
X Exhilaration of completing a complex program on
X Satisfaction of working on cuttingedge projects
X Rewards of being part of a team responsible
for a popular new software program
X Tradition of competing aggressively
c c

X Selecting new employees who will ³fit´ in

X Systematic indoctrination of new employees
X Senior management efforts to reinforce core
values, beliefs, principles, key operating practices
X Storytelling of company legends
X Ceremonies honoring employees
who display cultural ideals
X Visiblyrewarding those
who follow cultural norms
c c

X mew challenges in marketplace
X Revolutionary technologies
X Shifting internal conditions
Internal crisis
Turnover of top executives
X A new CEO who opts to change things
X iversification into new businesses
X Expansion into foreign countries
X Rapid growth that involves adding many new
X Merger with or acquisition of another company

c c
 "  " "


X Values, beliefs, and practices within a company can vary by
Geographic location
Business unit
X Subcultures can clash if
They embrace conflicting business philosophies
Key executives use different approaches to people
ifferences between a company¶s culture and recent
acquisitions have not been ironed out
X Existence of subcultures does not preclude important areas
of commonality and compatibility being established in
different countries
c c




c c


X Conduct business according to a clear, widely
understood philosophy
X Considerabletime spent by management
communicating and reinforcing values
X Values are widely shared and deeply rooted
X ave a welldefined corporate character,
reinforced by a creed or values statement
X Carefulscreening/selection of new
employees to be sure they will ³fit in´
c c
%' ( 

X Leaderwho establishes values and behaviors

consistent with # 
Customer needs 
Competitive conditions  
Strategic requirements
XA deep, abiding commitment to espoused
values, beliefs, and business philosophy
Practicing what is preached!
X Genuine concern for wellbeing of
c c


X Lack of a widelyshared core set of values

X Few behavioral norms evident in operating


X Few strong traditions

X mo strong sense of company identity

X Little cohesion among departments

X Weak employee allegiance to

company¶s vision and strategy


X ighly politicized internal environment

Issues resolved on basis of political clout
X ostility to change
Avoid risks and don¶t screw up
Experimentation and efforts to
alter status quo discouraged
X ³motinventedhere´ mindset ± company
personnel discount need to look outside for
Best practices
mew or better managerial approaches
Innovative ideas
X isregard for high ethical standards and
overzealous pursuit of wealth by key executives
c c

X Standout cultural traits include
A cando spirit
Pride in doing things right
moexcuses accountability
A resultsoriented work climate in which people go the extra
mile to achieve performance targets
X Strong sense of involvement by all employees
X Emphasis on individual initiative and creativity
X Performance expectations are clearly identified for all
organizational members
X Strong bias for being proactive, not reactive
X Respect for the contributions of all employees

X Willingness to accept change and embrace challenge

of introducing new strategies
X Risktaking, experimentation, and innovation to satisfy
X Entrepreneurship is encouraged
and rewarded
X Funds provided for new products
X mew ideas openly evaluated
X Genuine interest in wellbeing
of all key constituencies
X Proactive approaches to
implement workable solutions


X !  in operating practices and behaviors

G   compromise core values and longstanding business

  in the sense of not having an inappropriate or
unfair impact on the best interests of key stakeholders

§ Customers

§ Employees

§ Shareholders

§ Suppliers

§ Communities


XA company¶s culture can !    ± 
± successful strategy execution

XA !
that promotes      


in the strategy

execution process

XA !
where attitudes
and behaviors  
 $ ( 


XA culture that encourages !    
   of      !  
Provides employees with clear guidance regarding what
behaviors and results constitute good job performance
Creates significant peer pressure among coworkers to
conform to culturally acceptable norms
XA culture imbedded with 
that !
      !   promotes
strong employee commitment to the company¶s
Performance targets


XA    of !
 by managers
Promotes cando attitudes
Encourages acceptance of change
Instills strong peer pressure for
strategysupportive behaviors
Enlists enthusiasm and dedicated
effort to achieve company objectives








X Conflictsbetween culturallyapproved
behaviors and behaviors needed for good
strategy execution send mixed signals

 employees by loyal to the culture and company
traditions and resist actions and behaviors promoting
better strategy execution?
Î should they support the strategy by engaging in
behaviors that run counter to the culture?







Select a strategy compatible with the
sacred or unchangeable parts of
organization¶s prevailing corporate culture


Once strategy is chosen, change
whatever facets of the corporate
culture hinder effective execution





X Make a compelling case why a new cultural

atmosphere is in best interests of both company and
Challenge status quo
Create events where employees
must listen to angry key stakeholders
X Cite why and how certain behavioral norms and work
practices in current culture pose obstacles to good
execution of new strategic initiatives
X Explain how new behaviors and work practices to be
introduced will be more advantageous and produce
better results
c  c


X Replace key executives strongly associated with

old culture
X Promote individuals who have desired cultural traits
and can serve as role models
X Appoint outsiders who have desired
cultural attributes to highprofile positions
X Screen all candidates for new positions carefully,
hiring only those who fit in with the new culture
X Mandate all company personnel attend culture
training programs to learn more about new work
practices, operating approaches, and behaviors

X Push hard to implement newstyle work practices
and operating procedures
X esign compensation incentives to reward teams
and individuals who display the desired cultural
X Grant generous pay raises to individuals who lead
the way in adopting desired work practices,
displaying newstyle behaviors, and achieving
pacesetting results
X Revise policies and procedures
in ways to drive cultural change


X Lead by example ± Walk the talk

X Emphasize frugality
X Eliminate executive perks
X Require executives to spend
time talking with customers
X Ceremonial events to praise people and
teams who ³get with the program´
X Alter practices identified as cultural hindrances
X Visible awards to honor heroes


XA culture based on ethical principles is
vital to longterm strategic success

X Ethics programs help make  

ethical conduct a way of life

X Executives must provide genuine support

of personnel displaying ethical standards
in conducting the company¶s business

X Value statements serve as a

cornerstone for culturebuilding

X Formal values statement and a code of ethics
X Wordofmouth indoctrination and tradition
X Annual reports and Websites
X Making stakeholders aware of a commitment
to ethical business conduct is attributable to
Greater management understanding of role
these statements play in culture building
Renewed focus on ethical standards
stemming from recent corporate scandals
Growing numbers of consumers who
prefer to patronize ethical companies
. % 

Which of the following topics would

 likely be a topic or
element of a company¶s statement of its core values?

A dedication to superior customer service, topnotch quality,
product innovation, and/or technological leadership
An expectation that company personnel will display creativity,
exercise initiative, and accept responsibility

Prohibiting giving or accepting bribes, kickbacks, or gifts
A commitment to exhibiting such qualities as integrity,
fairness, trustworthiness, pride of workmanship, Golden Rule
behavior, and respect for coworkers

A commitment to making the company a great place to work

. % 

Which of the following topics would

 likely be contained in
a company¶s code of ethics?

Expecting all employees to not divulge trade secrets or
proprietary information to outsiders
Expecting all company personnel to display honesty and
integrity in their actions and avoid conflicts of interest

mot dealing with suppliers that employ child labor or engage in
other unsavory practices
Committing to create a work environment characterized by
teamwork and employee empowerment

Mandating full compliance with all laws and regulations


  % (



+  #  

X Screen out applicants who do not exhibit compatible
character traits
X Incorporate values statement and ethics code in
employee training programs
X Strong endorsement by senior executives of the
importance of core values and ethical principles at
company events and in internal communications
X Use values statements and codes of ethics as
benchmarks to judge appropriateness of company
policies and operating practices
X Make the display of core values and ethical principles a
big factor in evaluating employee performance
c c

+  #  
  * , 

X Make sure managers at all levels are diligent in

stressing the importance of ethical conduct and
observance of core values
X Encourage everyone to use their influence in
helping enforce observance of core values and
ethical standards
X old periodic ceremonies to recognize individuals
and groups who display the values
X Institute
enforcement procedures







X Institute training programs to
Communicate the meaning of core values 
Explain the case for common operating
principles and practices
X Create a cultural climate where the norm is to
Adopt best practices
Use common work procedures
Pursue operating excellence
X Give local managers
Flexibility to modify people management
approaches or operating styles
iscretion to use different motivational and compensation
incentives to induce personnel to practice desired behaviors


Identify one cultural trait that you would like to see at

the company you decide to go to work for when you
graduate? Why is this cultural trait important to you?













Stay on top of what¶s happening

Put constructive pressure on
company to achieve good results

Lead development of stronger core
competencies and competitive capabilities

Exercise ethics leadership and lead social
responsibility initiatives

Take corrective actions to improve overall
strategic performance

X evelop a broad network of formal

and informal sources of information
X Talk with many people at all levels
X Be an avid practitioner of MBWA
Observe situation firsthand

X Monitor operating results regularly

X Get feedback from customers
X Watch competitive reactions of rivals


X Successful leaders spend time
Mobilizing organizational energy behind
§ Good strategy execution and
§ Operating excellence

murturing a resultsoriented work climate

Promoting certain enabling cultural drivers
§ Strong sense of involvement on part of company personnel
§ Emphasis on individual initiative and creativity
§ Respect for contributions of individuals and groups
§ Pride in doing things right

X Treat employees with dignity and respect
X Make champions out of people who excel
X Encourage employees to use initiative
X Set stretch objectives and expectations that employees are
to give their best
X Use tools of benchmarking, best practices, business process
reengineering, TQM, and Six Sigma quality to focus
attention on continuous improvement
X Use full range of motivational techniques
and compensation incentives to
Inspire employees
murture a resultsoriented climate
Enforce highperformance standards
X Celebrate individual, group, company successes
c c

X Top management intervention is
required to establish better or new
Resource strengths and competencies
Competitive capabilities
X Senior managers must lead the effort because
Competencies reside in combined
efforts of different work groups and
departments, thus requiring
crossfunctional collaboration
Stronger competencies and capabilities
can lead to a competitive edge over rivals
 0 '



X Set an excellent example in !

isplaying ethical behaviors

emonstrating character and

personal integrity in actions and decisions

support of company¶s ethics code

X eclare
and expect all employees to conduct
themselves in an ethical fashion

X Encourage
compliance and establish tough
consequences for unethical behavior



X Set an excellent ethical example

X Provide
training to employees
about what is ethical and what isn¶t

X eclare unequivocal support of ethics code

X Act as final arbiter on hard calls

Remove people from key positions
if found guilty of a violation

Reprimand people lax in monitoring ethical compliance



X Form an ethics committee to give guidance on
ethics matters
X Appoint an ethics officer to head compliance effort
X Establish an ethics hotline/Web site employees can
use to
Anonymously report a possible violation
Get confidential advice on a
troubling ethicsrelated situation
X Conduct an annual ethics audit
to measure extent of
Ethical behavior 
Identify problem areas



X ave mandatory ethics trainings for employees
X Openly encourage employees to
report possible infractions via
Anonymous calls to a hotline 
Posting to a special company Web site
X Conduct an annual audit to assess
Each manager¶s efforts to uphold ethical standards
Actions taken by managers to remedy deficient conduct
X Require all employees to sign a statement annually
certifying they have complied with the ethics code
X Make sure ethical violations carry appropriate
punishment, including dismissal for egregious violations
. % 
Assuming that a company¶s senior executives are really serious
about enforcing high standards of ethical behavior, then they
probably need to consider doing all but which one of the following?

Appointing a committee of highprofile employees to serve on a committee or
task force that is charged with (a) being champions of high ethical standards,
(b) finding ways to ingrain high ethical standards as a cultural norm, and ( )
heading up the company¶s ethics enforcement process
aving mandatory ethics training programs for employees

Conducting an annual audit of each manager¶s efforts to uphold ethical
standards and requiring formal reports on the actions taken by managers to
remedy deficient conduct
Requiring all employees to sign a statement annually certifying that they
have complied with the company¶s code of ethics and making sure that
ethical violations carry appropriate punishment, including dismissal if the
violation is sufficiently egregious

Openly encouraging company personnel to report possible infractions via
anonymous calls to a hotline or emails sent to a designated address


What would your reaction be if your employer

required you to sign a statement annually certifying
that you have complied with the company¶s code of





X Craft a strategy that positively improves wellbeing of
employees, environment, communities, and society
X Use social and environmental metrics to evaluate
company performance
X Tie social and environmental performance to executive
X Take special pains to protect environment
X Take an active role in community affairs
X Generously support charitable causes
and projects benefiting society
X Support workforce diversity and commit
to overall wellbeing of employees


X Requires deciding
   adjustments are needed
  adjustments to make
X Involves
Adjusting longterm direction, objectives, and strategy on
an asneeded basis in response to unfolding events and
changing circumstances
Promoting fresh initiatives to bring internal activities and
behavior into better alignment with strategy
Making changes to pick up the pace when results fall
short of performance targets