1. Leadership of Culture, Diversity, and the Learning Organization
Chapter 10
Leadership of Culture, Diversity, and the Learning Organization
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

2. Summary of Lecture 21 & 22
Role of leadership in strategic management process
Relevance of internal and external environment
Importance of a vision and mission statement
Relationship between corporate objectives and strategies
Importance of strategy evaluation
Risk Assessment Process
Crises Leadership and Management
Need for Change
Phases of the change process
Major reasons for resisting change
People and task-oriented techniques for overcoming resistance
to change
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning 2

3. Learning Objectives The power of culture.
Distinguish between a weak and strong culture.
Low and high performance cultures.
Symbolic and substantive leadership actions.
The four cultural value types.
Framework for understanding global cultural value differences.
Primary reasons for embracing diversity.
Leader’s role in creating a diverse culture.
Leader’s role in creating learning organization.
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

4. Organizational Culture
Great culture is differentiating factors among low and high performance companies
High-performance companies have high- performance cultures
Strong corporate culture improve performance through consistent behavior
High performance corporate have people, structure, management system and culture
Culture is the source of competitive advantage
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

5. Culture
The set of key values, assumptions, understandings, and ways of thinking that is shared by members of an organization and taught to new members
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

6. CULTURE Each organization has unique culture
Based on the values & principles displayed by leaders
Has its own stories & myths
Determines how to responds to threats &
opportunities in both the external & internal environment
Deeply rooted (employees follow unconsciously)
Core essence of organization
How to approach problem and make decisions
Organizational culture is enduring and can be said as
warming, friendly, open, innovative, conservative,
aggressive, harsh etc
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

7. CULTURE Power structure in organization
Procedure and criteria for allocating resources
Many components of culture are expressed in written from in policies, statements, philosophies
Often first expounded by founder
Wal-Mart Culture: Customer satisfaction, pursuit of low cost, strong work ethics
Wal-Mart: Executives visit to stores and Saturday morning meeting to exchange ideas
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

8. CULTURE & STRATEGY
Culture must match with strategy and external environment
For example: Product innovation and technological leadership need supportive culture of innovation, embracing change, risk taking and challenging status quo
Energized members to do their jobs
When out of sync
Reduces efficiency & effectiveness
When culture is well matched to strategy
Can lead to successful organization
Creates internal unity (set of norms to guide behavior)
Culture compatible behaviors are rewarded otherwise discouraged
Helps organization to adapt to external environment
Creates strong member identification with the organization mission, goals and objectives
Ensures that organization respond to market changes and competitors moves quickly
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

9. CULTURE Weak: Little agreement on values & norms of member behavior
Because leader did not communicate the vision
Lack of self identity
Manipulation, favoritism, intense internal competition
Autonomy promises but whereas reality is otherwise (lip service)
Strong: Clear, explicit set of principles & values
Used to conduct business, decision making and guide appropriate behaviors
Management communicates values & principles, continuously
Shared throughout organization
Does not significantly change when new leader is chosen
Strong culture is destructive if it is not adapted to environment and strategy
For example: IBM focus on strong bureaucratic and mainframes culture
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

10. FACTORS FOR STRONG CULTURE
1 Strong founder or leader develops principles, practices, & behavior for:
Customers’ needs
Strategic requirement
Competitive environment
2 Total organizational commitment
To operating under these values
3 Unwavering commitment from:
Employees
Customers
Shareholder
Other stakeholders
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

11. Characteristics of Low-Performance Cultures
Weak culture means low performance
1 Insular thinking (avoid to look outside for benchmark, relying too much on past success, more inward thinking fail to adapt to environment changes, top management unaware of employees needs pursuing their personal goals)
2 Resistance to change (maintain status quo, avoiding risk)
3 Politicized Internal Environment (influential managers operate their departments in their own way, self interest is above of corporate interests)
4 Unhealthy promotion practices (promoting employees without considering job demands and personality fit, promoting hard worker but lacks leadership skills, transactional skill-set managers expert in day to day routine operations promoted to job where transformational skills needed)
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

12. Characteristics of High-Performance Cultures
Culture reinforcement tools (ceremonies, slogans, stories, language, and policies, ensures that employee and culture is compatible)
Intensely people oriented
treats employees with respect and dignity
Give autonomy
one to one relationship with high performers
mentors programs
increased responsibility to best employees (job enrichment)
celebrate employee achievements
Held manager responsible for subordinate growth
Allow to take initiatives to perform their job
Clear and reasonable performance standards
Results oriented
Emphasis on achievement and excellence
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

13. Characteristics of High-Performance Cultures
Results oriented
Employee who achieve standards are rewarded
Performance appraisal system
Employee set goals with consultation of managers and held accountable
At GE and 3M creative workers are supported and encouraged
In high performance culture who do not performs are fired or reassigned
Emphasis on achievement and excellence
management follow policies that inspires to do their best
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

14. Leadership Actions for Shaping Culture
Leadership responsibility to craft organizational culture
Leader first identify which aspects of culture are supportive for strategy implementation and which are not?
In second phase leader must communicate where change is required
At third stage leader should take action
Implementation of new culture may need modification in human resources areas, policies, and office design
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

15. Symbolic Leadership Actions for Shaping Culture
Leaders serve as role models
Ceremonial events for high achievers
Special appearances by leaders (at meetings and trainings and parties)
Organizational structure (it symbolizes culture, for example decentralized structure belief in individual initiatives and centralized culture reflect that leader knows every thing)
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

16. Substantive Leadership Actions for Shaping Culture
Replace members of old culture with new members
Change dysfunctional policies and practices
Reengineer strategy-culture fit (example of Mergers and Acquisition)
Realign rewards/incentives, resources (rewarding performance consistent with strategy, reallocation of resources to new projects)
Facilities design (common lunch area, no special parking areas, and similar office represent equality, office layout)
Develop a written statement
code of ethics and values in written form
In mission statement
see Exhibit 10-4
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

17. Types of Organizational Culture Degree of Environmental Turbulence
Culture is not bad or good more
In dynamic market best to follow market oriented culture S t r a e g i c F o u s
External
Competitive Culture
External
Adaptive Culture
Bureaucratic Culture
Cooperative Culture
Internal
Static
Stable
Dynamic
Environment
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

18. Discussion Questions Discussion Question 1: What is culture?
Discussion Question 2: What are different types of culture?
Discussion Question 3: Define the role of leader in defining culture?
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning

19. Summary The power of culture
Distinguish between a weak and strong culture
Low and high performance cultures
Symbolic and substantive leadership actions
The four cultural value types.
Lussier, R. and Achau, C. (2007): Effective Leadership, 3rd Edition, South-Western, Cangage Learning