Strategic Management

Module 12

Prof. Salman Ali, IIM Raipur

CORPORATE CULTURE AND
LEADERSHIP: KEYS TO GOOD
STRATEGY EXECUTION
 INSTILLING A CORPORATE CULTURE
CONDUCIVE TO GOOD STRATEGY
EXECUTION

Corporate Culture
Is the meshing of shared values, beliefs, business
principles, and traditions that imbues a firms operating
style, behavioral norms, ingrained attitudes, and work
atmosphere.
Is important because it influences the firms actions and
approaches to conducting business.

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 KEY FEATURES OF A FIRMS
CORPORATE CULTURE
Values, principles, Management Atmosphere and How managers and
and ethical practices and spirit embodied employees interact
standards organizational in the firms 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

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TRANSFORMING CORE VALUES AND ETHICAL
STANDARDS INTO CULTURAL NORMS

Recruit and hire applicants with values and ethics

compatible to those of the firm.
Incorporate the values statement and the code
of ethics into orientation and training programs.
Have senior executives frequently reiterate and
stress the firms values and ethical principles.
Use values statements and codes of ethics as
benchmarks for the firms polices and practices.

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 TRANSFORMING CORE VALUES AND ETHICAL
STANDARDS INTO CULTURAL NORMS (CONTD)

Use core values and ethical principles when

evaluating each persons job performance.
Encourage all employees to help enforce the
observance of core values and ethical standards.
Periodically have ceremonial occasions to recognize
individuals and groups who display the firms values
and ethical principles.
Institute strict ethics enforcement procedures.

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 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
firms legends cultural norms
Ceremonies
honoring
employees

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 FORCES THAT CAUSE A FIRMS
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

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 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.

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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

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UNHEALTHY CULTURES THAT IMPEDE
GOOD STRATEGY EXECUTION

Incompatible
Subcultures

Change-resistant Insular, inwardly

cultures focused cultures
Unhealthy
Cultures
Politicized Unethical and greed-
cultures driven cultures

Poor Strategy
Execution

Poor Performance

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 MAKING A COMPELLING CASE
FOR CULTURE CHANGE

Selling the Change

Explain why and how certain behavioral norms and work
practices are obstacles to good execution of strategic
initiatives.
Explain how new behaviors and work practices will be
produce better results.
Cite reasons why the current strategy has to be modified,
if the need for cultural change is due to a change in
strategy.

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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

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HOW LONG DOES IT TAKE TO CHANGE
A PROBLEM CULTURE?

Changing a problem culture is never a short-term exercise.

A sustained and persistent effort to reinforce the culture at
every opportunity through word and deed is required.
It takes time for a new culture to emerge and prevail; it takes
even longer for it to become deeply embedded.
Fixing a problem culture and instilling a new set of attitudes
and behaviors can take two to five years.

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 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.

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 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.

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 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

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