Group 1 - Ch 9 and 10

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Ch:9 Corporate Culture & Values

What is Culture ? Culture (definition) is a set of values,

norms, guiding beliefs and understanding that is shared by members of an organization and taught to new members as the correct way to think, feel, and behave

Culture is intangible , It defines how the

belief system of people/workers in the company. It obviously cant be measure, yet people hold on to it

Levels of Organizational CulturesObservable Symbols Ceremonies, Stories, Slogans, Behaviors, Dress, Physical Settings

Underlying Values, Assumptions, Beliefs, Attitudes, Feelings


Surface Level :Visible Artifact

Underlying Values

The Building was built in a gallery concept, with beautiful architectural design and concept. The Onix Setting in front of the gallery funtction as a lighting system for the gallery

The Onix Setting values are : The onix itself is a solid rock, yet design is made to similize wave philosophy), whuch represent organization adaptibilty to change commitment to personalize services

the (yet the and

Emergence and Purposes of Culture Culture emerges through early leader

who articulates and implements particular ideas and values of vision, philosophy or business strategy There are 2 critical function of culture in organization :

Internal Integration : Integrate members (communication and working habit) External Adaptation : Adapt to external environment (customer needs or movement of competitors)

Observable aspects of organizational cultures:

Rites and ceremonies


Stories and Myths

Organizational Culture

Organization Structures Control Systems

Power Relationships

Observable aspects of organizational cultures :

1. Rites and Ceremonies

Rites and cermonies conducted to perform a dramatic examples of a company values There are 2 types of rites : Rite of passage Picking up of new employee and introduction to the Board Of Managers Rite of Integration We can, We Will yell everyday after Morning Briefing Ceremonies

Promotion Ceremonies Company Birthday Celebration

Observable aspects of organizational cultures :

2. Stories and MythsNarratives based on true events that are frequently shared among employee and told among new employee. The point is to keep the company values alive and true in the eyes of the employee

Example : The Horse Statue of LEXUS Indonesia which eventually are known towards the LEXUS Global

Observable aspects of organizational cultures :

3. SymbolsSomething that represent other things, which include stories , rites and also a physical artifact. Symbols can be both positive and negative

Example : In all Toyota company, all the working place design with no doors and specific chambers, to simplify the coordination and communication process

4. Organization Structures The organizational design either its mechanistic or organic reflect the organizational culture (hierarchy and communication)

Observable aspects of organizational cultures :

5. Power Relationship Who influences or manipulates? Consider aspect of formal or informal, hierarchy, and expertise. Example: at Tobacco Company, we highly regard: 1) Sales; 2) Customers; 3) Suppliers 6. Control Systems The inner working of how the organization controls people and operations. Example: at Tobacco Company, we highly focus on increasing sales, while maximizing cost efficiency, and maintaining compliance.

Relationship of Environment and Strategy to Corporate CultureNeeds of the EnvironmentFlexibility Stability


Strategic Focus

Adaptability Culture

Mission Culture

Clan Culture

Bureaucratic Culture


Relationship of Environment and Strategy to Corporate Culture1. Adaptability Culture Strategic focus on the external environment through flexibility and change to meet customer needs. Example: Google & Apple 2. Mission Culture Emphasis on a clear vision of the organizations purpose and on the achievement of goals. Example: at Philip Morris Indonesia, all Employees are given the same mission: To be regarded as the most respected Company in Indonesia.

Relationship of Environment and Strategy to Corporate Culture3. Clan Culture Primary focus on the involvement and participation of the organizations members and on rapidly changing expectations from the external environment Example: Gucci & Alexander McQueen 4. Bureaucratic Culture Internal focus and a consistency orientation for a stable environment Example: BUMN

Culture Strength

Degree of agreement among member about the importance of specific values

Does a widespread

consensus exist? The culture is strong

Is there little

agreement? Weak culture

Strong Culture

Typically associated with:

Ceremonies Symbols Stories Heroes Slogan

Subculture: Culture within Culture It reflects common problems, goals, and

experiences that members of a team share Subculture = Basic values of culture +

additional unique values Conflict: Subculture values > Corporate culture values

Culture, Learning, and PerformanceStrong culture: Enable learning and innovative response Enhances organizational performance Must be adaptive to environment changes

Check This Out

Working for Google.mp4

Can Culture Drive High Performance? Studies show positive relationship

between culture and performance: Kotter and Heskett, Corporate Culture and

Performance: companies that intentionally managed cultural values outperformed similar companies that did not Caterpillar, Inc: CAP (Cultural Assessment Process), gives data about millions of dollars in savings that comes from cultural factors.

Adaptive vs Non-adaptive Corp. CultureAdaptive Non-adaptive

Core Values

Managers care about customer, stockholder, and employee They value people and processes

Care mainly about themselves. They value orderly and risk reducing management process

Common behavior

Pay attention to customer Initiate change when needed

Tend to be somewhat isolated, political, bureaucratic. Do not change strategies quickly.

Ethical Values and Social Responsibility Ethics

code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong

Managerial Ethics

Principles that guide the decisions and behaviours of managers with regards to whether they are right or wrong. Example : A north American manufacturer operating abroad was asked to make cash payments (a bribe) to government officials and was told it was consistent with local customs, despite being illegal in North America.

Source of Individual Ethical Principles and ActionHistoryReligion, Philosophy, Geographic, Environment, Nationality, Society, Culture

History leads to development of society morality

SocietySocietal norms and values Laws, Codes, and Regulations

Local EnvironmentOrganizations Geographic Regions/Community Family/Clan

History leads to development of society morality

Individual Ethics and Actions

The Local environment shapes individual behaviour

Rule of Law & Ethical DilemmaRule of Law Arise from a set of codified principles and regulations that describe how people are required to act, that are generally accepted in society, and that are enforceable in the courts. Current law often reflect combined moral judgments, but not all moral are codified into law Ethical StandardsRelationship between the Rule of Law and Ethical Standard

Legal Requirement

Source : LaRue Tone Hosmer, The Ethical of Management, 2nd ed ( Homewood, III.; Irwin, 1991 )

Ethical Dilemma Ethical Dillema arises in a situation concerning right and wrong in which values are in conflict . Right or wrong cannot be clearly identified in such situations. Example , A salesperson at the beauty supply store , the value conflict is between being honest with customers and adhering to the bosss expectations.

Johnson & Johnson Credo

Many of the recent scandals in the news have dealt with people and corporations that broke the law Xerox District Court of New York charges Xerox manipulated the financial statements from 1997 to 2000 with increased revenue of 3 billion dollars and raise pretax profit of 15 billion dollars. Xeroxs financial and tax consultants KPMG then replaced by PriceWaterhouseCooper. Xerox was fined 10 million dollars for the infraction. Olympus $ 1.7 billion accounting fraud at the company and the camera maker's medical equipment. Enron Worldcom

How Leaders Shape Culture and Ethics Ethical companies, top management in providing

commitment, leadership, and examples for ethical behaviour Values can be communicated in a number of ways speeches, company publications, policy statement, and especially, personal actions. Top leaders are responsible for creating and sustaining a culture that emphasizes the importance of ethical behavior for every employee. Managers throughout the organizations need to espouse and model ethical value. Formal ethical program are worthless if leaders do not live up to high standards of ethical conduct.

Values-Based Leadership

Organization value are developed and strengthened primarily through value-based leadership, a relationship between a leader and followers that is based on shared, strongly internalized values that are advocated and acted upon by the leader. Every act and statement of managers has an impact on culture and values. Employees learn about values, beliefs, and goa