Corporate Culture and Leadership:: Keys To Good Strategy Execution

CHAPTER 12
CORPORATE CULTURE AND LEADERSHIP:

Keys to Good Strategy Execution
Copyright ®2012 The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

INSTILLING A CORPORATE CULTURE
THAT PROMOTES GOOD STRATEGY
EXECUTION
♦ Corporate Culture
● Is the meshing of shared values, beliefs,
business principles, and traditions that imbues
a firm’s operating style, behavioral norms,
ingrained attitudes, and work atmosphere.
● Is important because it influences the firm’s
actions and approaches to conducting
business.
12–2
Key Features of a Firm’s Corporate Culture
Values, principles, Management Atmosphere and How managers and

and ethical practices and spirit embodied employees interact
standards organizational in the firm’s work and relate to one
in actual use polices climate another
Features of a Corporate Culture
Strength of peer Actions and Traditions and

How the firm
pressure to behaviors stories and “how
treats its
conform and encouraged we do things
stakeholders
observe norms and rewarded around here”
12–3
Perpetuating the Culture
Systematic
indoctrination of
new members
Screening and Vocal support by
selecting new senior managers
employees
Perpetuating
the Culture
Telling and Rewarding those

retelling of the who display
firm’s legends cultural norms
Ceremonies
honoring
employees
12–4
Forces That Cause a Firm’s
Culture to Evolve
New or revolutionary
technologies
New challenges in Diversification into

the marketplace new businesses
Causes of
Cultural
Change
Shifting internal Rapid growth
conditions of the firm
Merger or acquisition
of another firm
12–5
Company Cultures Can Be Strongly
or Weakly Embedded
♦ Strong-Culture Firm ♦ Weak-Culture Firm

● Has deeply rooted ● Lacks values and
widely-shared values, principles that are
behavioral norms, and consistently preached
operating approaches. or widely shared.
● Insists that its values ● Has few or no
and principles be traditions, beliefs,
reflected in the decisions values, common
and actions taken by all bonds, or behavioral
company personnel. norms.
12–6
Development of a Strong Culture
Founder or Commitment
strong leader Strong by the firm to
with strong Culture ethical
values behavior
Closely aligning corporate culture with the requirements

for proficient strategy execution merits the full attention
of senior executives.
12–7
Why Corporate Cultures Matter to
the Strategy Execution Process
♦ A culture well matched to the requirements of the

strategy execution effort focuses the attention of
employees on what is most important to this effort.
♦ Culture-induced peer pressure induces personnel to do
things in a manner that aids good strategy execution.
♦ A culture consistent with the requirements for good
strategy execution can energize employees, deepen
their commitment to execute the strategy, and enhance
worker productivity.
12–8
Healthy Cultures That Aid
Good Strategy Execution
Performance
Good Strategy
Execution
High-Performance Adaptive
Cultures Cultures
Commitment to
Willingness to accept
achieving stretch
change and take on
objectives and
challenges
accountability
12–9
Unhealthy Cultures That Impede
Good Strategy Execution
Change-resistant Insular, inwardly

cultures focused cultures
Unhealthy
Cultures
Politicized Unethical and greed-
cultures driven cultures
Incompatible
Subcultures
12–10
Substantive Culture-Changing Actions
♦ Replace key executives who are stonewalling needed

organizational and cultural changes.
♦ Promote individuals who advocate for cultural shifts and
can serve as a role model for the cultural behavior.
♦ Appoint outsiders with the desired cultural attributes to
high-profile positions.
♦ Screening candidates for positions carefully, hiring only
those who appear to fit in with the new culture.
♦ Mandate that all personnel attend culture-training.
♦ Design compensation incentives that boost the pay of
teams and individuals.
12–11
Symbolic Culture-Changing Actions
Changing the culture

of an organization
Top executive Ceremonial

Physical symbols
and upper events to honor
that represent
management exemplary
the new culture
behaviors employees
12–12
LEADING THE STRATEGY EXECUTION
PROCESS
♦ Leading Strategy Execution requires:

● Staying on top of what is happening and
closely monitoring progress.
● Putting constructive pressure on the
organization to execute the strategy well
and achieve operating excellence.
● Initiating corrective actions to improve
strategy execution and achieve the
targeted performance results.
12–13
Staying on Top of How Things Are Going
♦ Management by Walking Around (MBWA)

● Is used by leaders to stay informed about how well
the strategy execution process is progressing.
● Involves spending time with people at company
facilities, asking questions, listening to their opinions
and concerns, and gathering firsthand information
about how well aspects of the strategy execution
process are going.
12–14
Pressuring Organizational Units to Execute
Strategy Well and Achieve Operating Excellence
♦ Treat employees as valued partners.

♦ Foster an esprit de corps that energizes members.
♦ Use empowerment to create a fully engaged workforce.
♦ Make champions out of the people who spearhead new
ideas and/or turn in winning performances.
♦ Set stretch objectives that require personnel to give their
best in achieving performance targets.
12–15
Pressuring Organizational Units to Execute
Strategy Well and Achieve Operating Excellence
♦ Use benchmarking, reengineering, TQM, and Six Sigma

to focus attention on continuous improvement.
♦ Use motivational techniques and compensation
incentives to inspire, nurture a results-oriented work
climate, and enforce high standards.
♦ Celebrate individual, group, and company successes.
12–16
Leading the Process of Making
Corrective Adjustments
Making corrective actions

successfully requires:
Good business Good

A thorough
judgment in implementation
analysis of the
deciding what of the corrective
situation
actions to take actions
12–17

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CHAPTER 12

CORPORATE CULTURE AND LEADERSHIP:

Copyright ®2012 The McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Values, principles, Management Atmosphere and How managers and

Features of a Corporate Culture

Strength of peer Actions and Traditions and

Telling and Rewarding those

New challenges in Diversification into

♦ Strong-Culture Firm ♦ Weak-Culture Firm

Closely aligning corporate culture with the requirements

♦ A culture well matched to the requirements of the

Change-resistant Insular, inwardly

♦ Replace key executives who are stonewalling needed

Changing the culture

Top executive Ceremonial

♦ Leading Strategy Execution requires:

♦ Management by Walking Around (MBWA)

♦ Treat employees as valued partners.

♦ Use benchmarking, reengineering, TQM, and Six Sigma

Making corrective actions

Good business Good

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