Corporate Culture and Leadership

1. Corporate Culture and Leadership Screen graphics created by: Jana F. Kuzmicki, Ph.D. Troy University-Florida Region

2. Defining Characteristics of Corporate Culture • Core values, beliefs, and business principles • Ethical standards • Operating practices and behaviors defining“how we do things around here” • Approach to people management • “Chemistry” and “personality” permeatingwork environment • Oft-told stories illustrating • Company’s values • Business practices • Traditions

3. Identifying the Key Featuresof Corporate Culture A company’s culture is manifested in . . . • Values, business principles, and ethical standards preached and practiced by management • Approaches to people management and problem solving • Official policies and procedures • Spirit and character permeating work environment • Interactions and relationships among managers and employees • Peer pressures that exist to display core values • Its revered traditions and oft-repeated stories • Its relationships with external stakeholders

4. Where Does CorporateCulture Come From? • Founder or early leader • Influential individual or work group • Policies, vision, or strategies • Operating approaches • Company’s approach to people management • Traditions, supervisory practices, employee attitudes • Organizational politics • Relationships with stakeholders

5. Strong vs. Weak Cultures Unhealthy Cultures High-Performance Cultures Adaptive Cultures Types of Corporate Cultures

6. Characteristics ofStrong Culture Companies • Conduct business according to a clear, widely-understood philosophy • Considerable time spent by management communicating and reinforcing values • Values are widely shared and deeply rooted • Have a well-defined corporate character,reinforced by a creed or values statement • Careful screening/selection of newemployees to be sure they will “fit in”

7. Characteristics of Weak Culture Companies • Lack of a widely-shared core set of values • Few behavioral norms evident in operating practices • Few strong traditions • No strong sense of company identity • Little cohesion among departments • Weak employee allegiance tocompany’s vision and strategy

8. Characteristics of Unhealthy Cultures • Highly politicized internal environment • Issues resolved on basis of political clout • Hostility to change • Avoid risks and don’t screw up • Experimentation and efforts toalter status quo discouraged • “Not-invented-here” mindset – company personnel discount need to look outside for • Best practices • New or better managerial approaches • Innovative ideas • Disregard for high ethical standards and overzealous pursuit of wealth by key executives

9. Characteristics ofHigh-Performance Cultures • Standout cultural traits include • A can-do spirit • Pride in doing things right • No-excuses accountability • A results-oriented work climate in which people go the extra mile to achieve performance targets • Strong sense of involvement by all employees • Emphasis on individual initiative and creativity • Performance expectations are clearly identified for all organizational members • Strong bias for being proactive, not reactive • Respect for the contributions of all employees

10. Hallmarks of Adaptive Cultures • Willingness to accept change and embrace challenge of introducing new strategies • Risk-taking, experimentation, and innovation to satisfy stakeholders • Entrepreneurship is encouraged and rewarded • Funds provided for new products • New ideas openly evaluated • Genuine interest in well-being of all key constituencies • Proactive approaches toimplement workable solutions

11. Culture: Ally or Obstacleto Strategy Execution? • A company’s culture can contribute to – or hinder – successful strategy execution • A culture that promotes attitudes and behaviors that are well-suited to first-rate strategy execution is a valuable ally in the strategy execution process • A culture where attitudesand behaviors impedegood strategy execution is ahuge obstacle to be overcome

12. Fig. 13.1: Changing a Problem Culture

13. Our ethics program consists of . . . Grounding the Culture inCore Values and Ethics • A culture based on ethical principles isvital to long-term strategic success • Ethics programs help make ethical conduct a way of life • Executives must provide genuine supportof personnel displaying ethical standardsin conducting the company’s business • Value statements serve as acornerstone for culture-building

15. Fig. 13.2: The Two Culture-Building Roles of aCompany’s Core Values and Ethical Standards

16. Fig. 13.3: The Benefits of Cultural Norms StronglyGrounded in Core Values and Ethical Principles

17. Establishing a Strategy-Culture Fit in Multinational and Global Companies • Institute training programs to • Communicate the meaning of core values and • Explain the case for common operatingprinciples and practices • Create a cultural climate where the norm is to • Adopt best practices • Use common work procedures • Pursue operating excellence • Give local managers • Flexibility to modify people managementapproaches or operating styles • Discretion to use different motivational and compensation incentives to induce personnel to practice desired behaviors

18. Role #1: Stay on Top of What’s Happening • Develop a broad network of formaland informal sources of information • Talk with many people at all levels • Be an avid practitioner of MBWA • Observe situation firsthand • Monitor operating results regularly • Get feedback from customers • Watch competitive reactions of rivals

19. Role #2: Put Constructive Pressure onCompany to Achieve Good Results • Successful leaders spend time • Mobilizing organizational energy behind • Good strategy execution and • Operating excellence • Nurturing a results-oriented 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

20. Role #3: Promote Stronger CoreCompetencies and Capabilities • Top management intervention isrequired to establish better or new • Resource strengths and competencies • Competitive capabilities • Senior managers must lead the effort because • Competencies reside in combinedefforts of different work groups and departments, thus requiring cross-functional collaboration • Stronger competencies and capabilitiescan lead to a competitive edge over rivals

21. Our ethics code is . . . Role #4: Display Ethics Leadership and Lead Social Responsibility Initiatives • Set an excellent example in • Displaying ethical behaviors • Demonstrating character andpersonal integrity in actions and decisions • Declare support of company’s ethics codeand expect all employees to conductthemselves in an ethical fashion • Encourage compliance and establish toughconsequences for unethical behavior

22. Role #5: Lead the Process ofMaking Corrective Adjustments • Requires deciding • When adjustments are needed • What adjustments to make • Involves • Adjusting long-term direction, objectives, and strategy on an as-needed 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