Behavioral Implementation

Corporate Culture
 Culture- differentiates good organizations from bad ones.
 Shared things
 Shared sayings
 Shared actions
 Shared feelings

 COMPOSIOTION OF CUTURE:
 Beliefs
 Values
 “culture as a strength can also be a weakness”

 Characteristics of weak culture:

 Many subcultures
 Few values & behavioral norms
 Rare traditions
 Lack of sense of commitment, loyalty, identity
 Politicized environment
 Hostility to change

 Characteristics of strong culture:

 Explicit set of values & principles
 Considerable time devoted by the management for
communication
 Values shared widely across the organization
 Factors contributing for strong culture:
 A founder or an Influential leader who established desired
values
 Sincere and dedicated commitment to operate business of
the organization according to these desired values
 Genuine concern for the well-being of the organization's
stake holders
Strategy-Culture Relationship
Approaches to create strategy supportive
culture:

1) To ignore corporate culture

2) To adapt strategy implementation to suit corporate culture
3) To change corporate culture to suit strategy requirements
4) To change strategy to fit the corporate culture
Corporate Politics And Power
 All corporate culture include a political component, so all
organizations are political in nature.
 Organizational members bring with them their likes and
dislikes, views and opinions, prejudices and inclinations,
when they enter into organization.
 Managerial behavior cannot be purely rational and,
therefore, an understanding is to be acquired of how
corporate politics works and how the use of power is to be
made for effective strategic management.
 Understanding Politics and Use of
Power
 Power is defined as ‘the ability to influence others’ and corporate politics is
‘the carrying out of activities not prescribed by policies for the purpose of
influencing the distribution of advantages within the organization.
 Managers derive power within an organization from five types of sources.
1. Reward power arises from the ability of managers to reward positive
outcomes
2. Coercive power arises from the ability of managers to panelize negative
outcomes
3. Legitimate power arises from the ability of managers to use position to
influence behavior
4. Referent power arises from the ability of managers to create liking among
subordinates due to charisma or personality
5. Expert power arises from the managers’ competence, knowledge and
expertise that is acknowledged by others
 The nature of organization itself creates the conditions for power
and politics to manifest. For instance, the manner in which the
organization structure is created leads to power and politics.

 Since material rewards, promotions, prestige and ego are involved,

each organization more or less is affected by corporate politics.

 The exercise of power and use of politics has two connotations:

negative and positive.

 When viewed negatively, power and politics are means for

domination, manipulation and subjugation. They entail self-serving
behavior involving deception and dishonesty for achieving
individual or group interest, leading to conflict and disharmony in
the organization.
 When taken positively, power and politics are means for
achieving organizational objectives. The use of power and
politics is the means to resolve conflicts and bridge
genuine differences of opinions through a process of
negotiations and seeking collaboration.

 Political considerations and use of power, therefore, are a

part of behavioral implementation by strategists.
Strategic use of Power and Politics
 Strategy implementation is basically about change
management. Therefore corporate politics and use of
power have a definite role to play in strategy
implementation.
 Politics and power affect the way a strategy is formulated
and implemented. A manager cannot effectively formulate
and implement strategy without being perceptive about
company politics.
 Political consideration affect which type of objectives take
precedence over others and what strategy the firm has to
choose.
 Generally, there is more politics in implementing strategy than in
formulating it. In implementation, politics and power affect a number of
elements. The nature of strategy implementation requires consensus
building, managing coalitions and creating commitments.

 Few examples, resource allocation is ultimately a rational- political decision,

which results in the sharing of scares resources among different
organizational units, structure result in the distribution of authority and
responsibility and decides how power will be exercised, and corporate
culture is itself partly, the outcome of the use of politics and power.

 Having an understanding of the use of politics and power, strategist can

perform the tasks of strategic management better. ‘Indeed, having astute
political skill is a definite and even a necessary, asset for a general manager
to have in orchestrating the whole strategic process.
 The typical approaches to a strategic use of power and
politics may involve one or more of the tactics mentioned
below.

 First of all, to accept the inevitability of politics being there in the

organization.

 Understand how an organization’s power structure works, who

wields real power and influence and who are the individuals and
groups whose opinions carry weight and cannot be disregarded.

 To be sensitive and alert to political signals emanating from

different part of the organization.
 To know when to tread softly and rely on coalition management and
consensus-building and when to push through decisions and actions by a
selective and judicious use of ‘Machiavellian’ methods.

 To lead strategy and not to dictate it, being patient till the consensus
emerge.

 To let most negative decisions emerge as a group consensus rather than

as a directive from the top

 To gather support for acceptable proposals and let the unaccepted ideas
die a natural death

 To reward organizational commitment and penalize negative or

indifferent attitude

 To practice principled politics and use openness and honesty to counter

unprincipled politics
Corporate Politics and Power in the Indian
Context
 In the Indian context, the presence of politics and use of power are,
perhaps, more visible than in other culture.

 This may be due to two factors: the nature of Indian society and the
higher level of enviousness exhibited by Indian managers

 J.L. Pearce describe India as a nonfacilitative organization context

 The person-oriented nature of Indian society suggests an emphasis

on particularistic rather than universalistic treatment of employees,
which leads to reliance on personal characteristics in hiring,
promoting and rewarding employees.
 Employees feel that competence alone may not enable
them to progress in their career. Some may resort to
manipulative or ingratiatory behavior.
 One research study in Indian firms found that employees’
actual political behavior was related to feelings of
alienation and interpersonal mistrust in the work place.
 Another factor could be pervasive enviousness exhibited
in Indian organizations.
 Manager have not only to deal with – and be affected by –
intracorporate politics, but also intercorporate politics
between rival companies.
 At a higher level, Indian companies are plagued with
politics between associations and federations of business
and industry, public versus private sector, small versus
large sector, multinational versus local firms, and
technocrats versus bureaucrats.

 In such condition, strategists have to be aware of not only

internal political consideration but also the politics and
power play present in other organization, particularly
government departments and ministries, with whom they
have to deal with on a continual basis.
  PERSONAL VALUES AND BUSINESS ETHICS

Values
Personal values refer to a conception of what an individual or groups
regard as desirable.
A value is a view of life and a judgement of what is desirable, which is
very much a part of person’s personality and a groups morale.
e.g A benign attitude to labour welfare is a value which may prompt an
industrialist to do much more for workers than what labour laws
stipulate.
Service mindedness is a value, manifests in better customer satisfaction
Personal values imbibed from parents, teachers, elders and an individual
grows, values are adapted and refined in light of new knowledge and
experience.
Within organization, values are imparted by founder entrepreneur or a
dominated CEO and these remain in some form for a long time after a
person is not there
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  Business ethics
In the discipline of management studies, business ethics is The study
of how personal moral norms apply to activities and goals of a
commercial enterprise.
It is not a separate moral standard, but the study of how the business
context poses its own unique problems for the moral person who
acts as the agent of this system.
Practically, business ethics operates as a system of values and is
concerned primarily with the relationship of business goals and
techniques to “specifically human ends” means viewing the needs
and aspirations of individuals not merely as individuals but as a part
of society It also means the realization of the personal dignity of
human beings.
A major task of leadership is to inculcate personal values and impart
a sense of business ethics to the organizational members. At one end,
values and ethics shape the corporate culture and dictate the way
how politics and power will be used, and at the other end, clarify the
social responsibilities of the organization.
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  Importance of values and ethics

Increased awareness around the world about ethical practices in

business.
International organizations like world bank and IMF concerned
whether aid provided is used for intended purpose and not fritterd
away by corrupt Govt officials.
Transparency international brings out annual rating of countries on
an index of corruption that serves as guideline for foreign investors
and international donor agencies.
Corruption in industry is a major by-product of degradation of
values and ethics, which is also related to discretionary powers of
regulatory system designed and administered by an unholy alliance
of bureaucrats and politicians.

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  Values, ethics and strategy
The intentions of individuals, that is, their “purity of mind” as
decision makers within an organization matter a lot in strategic
management.
There has to be a right connection between values, ethics and
strategy.
The decisions should not only be on the basis of purely economic
reasons but also consider values and ethics.
Business ethics is considered to integrate core values such as
honesty, trust, respect, fairness into strategic management, policy
making, practicing management and decision making. It has been
percieved as a set of a legally driven codes, in the form of a list of
do’s and don’ts for the company executives, which have to be
complied with.
Business ethics is being identified as a major source of competitive
advantage.
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Values are personal in nature ( e.g. belief in providing customer
satisfaction and being a good paymaster ) while ethics is a generalised
value system (e.g. avoiding discrimination in recruitment and adopting
fair business practices )
business ethics can provide the general guidelines based on which
strategic management can operate.
Values, however, offer alternatives to choose from.
Organizations derive values and ethics from their corporate culture.
Corporate culture is the outcome of shared assumption that individual
members of the organisations have.
The right set of values and code of ethics have to be formulated by an
organization on the basis of founding philosophy, cherished traditions,
norms of ethical behavior and social requirements.
 Inculcating values and ethics
 Considering values and ethics in recruitment and selection to
ensure compatibility of the character traits of potential employees to
the ethical system of the organization.
 Incorporating the statement of values and code of ethics into
employee training and educational programmes .
 Example setting by top management in terms of actions and
behaviour that reinforce the values.
 Communication of values and code of ethics through wide
publicity and explanation of compliance procedures.
 Constant monitoring of compliance by superior staff and top
management.
 Consistent nurturing of values within the organization through
their integration into policies, practices and actions.
 Paying special attention to those parts of the organization that are
susceptible to ethically- sensitive activities such as purchase and
22 procurement, dealing with Govt and other external agencies.
  Reconciling divergent values
Strategists have to reconcile divergent values and if necessary.
A typical case of value divergence may arise while setting objectives
and determining the precedence of different objectives.
One group- production oriented objectives, say , standardization and
mass production
Another group- Marketing related objectives, say, quality, variety
and small lot production
CEO should reconcile these divergent values in the light of strategic
requirements and environmental considerations.
 Modifying values to create consistency
Modification of values is frequently required in strategy
implementation
It is difficult, if not impossible, to change, like culture.
A judicious use of politics and power, redesigning of corporate
culture and making systematic changes in the organization can help
23 to modify the values gradually.
Importance of social responsibility in
business
 Strategic planning provides answer to what organization
“might & can do”
 Personal values determines what organization “wants to
do”
 Social responsibility relates to what organization “ ought
to do”
 So social responsibility should be made explicit and
meaningful
Differing views on social responsibilty

View 1 View 2

 Function of business is  Business organizations

just to achieve economic are part of society
efficiency and maximize  Have to serve societal
profit interests and not just profit
 Social functions should be  Allocate resources for this
left to institutions of purpose
society
Indian context
 There are four models of CSR operating in India :
1. Gandhian model = voluntary commitment
2. Nehruvian model = state driven policies
3. Milton Friedman model = owner objectives
4. Freeman model = stake holders responsiveness
Some drivers of CSR in India
1. Market based pressures and incentives
2. Civil society pressures
3. Regulatory environment
Social responsiveness and strategic
management
 Generally top management decides on major decisions
taken in CSR
 So alignment of social responsiveness with strategic
management is necessary
 Hence role of strategists will be affected by social
responsiveness