4/5/14

Lecture Session #5

Leader as Maker of Culture
Leader as Structural Architect

Prof. Sarah S. M. Townsend

Organizational
Culture:

Organizational
Climate:

A system of shared
meaning held by
members that
distinguishes the
organization from
others (values, beliefs,
norms)

Shared perception of
members about their
organization and work
environment

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Innovation &
risk-taking

creativity and risk-taking are encouraged

Attention to detail

members are expected to show precision,

analysis, and attention to detail

Outcome
orientation

management focuses on outcomes rather than

techniques/processes

People orientation

management considers how decisions will aect

members

Team orientation

work is primarily done in teams

Aggressiveness
Stability

people are aggressive and competitive

pursuit of status quo, rather than growth/change

Can improve performance and help

people do their jobs eectively

Enhance organizational commitment

Serves as a guide for behavior (ecient)

Can reduce performance and

prevent people from doing their jobs
eectively
Barriers to change, diversity
Hinders success of mergers and

acquisitions

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Find a work culture that

ts your style and

preferences (e.g., hawks
vs. doves)

Be aware of culture when

switching from one org.

to another (often major
dierences)

Founders
Hire/keep employees who are like them
Indoctrinate and socialize employees
Serve as role models

Other paths?

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Selection
Identify and hire employees who t the

organization

Top management
Goal setting
Role models

Socialization (indoctrinated upon arrival)

Learn stories, rituals, material symbols, language

In what ways is boot camp used to establish a

culture?

What is the culture? What purpose does this

culture serve for the military?

Are there similarities between a business

culture and the culture of the military? If so,

what are they?

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I have gone over the top We are getting lackluster performance results from a large number
of our K.C.-based employees. The parking lot is sparsely used at 8 a.m.; likewise at 5 p.m.
Never in my career have I allowed a team that worked for me to think they had a 40-hour job. I
have allowed YOU to create a culture that is permitting this. NO LONGER. As managers you
either do not know what your EMPLOYEES are doing; or YOU do not CARE. In either case, you
have a problem and you will x it or I will replace you.

Hell will freeze over before this CEO implements ANOTHER EMPLOYEE benet in this Culture.
I think this parental type action SUCKS. However, what you are doing, as managers, with
this company makes me SICK.

Folks this is a management problem, not an EMPLOYEE problem. Congratulations, you are
management. You have the responsibility for our EMPLOYEES. I will hold you accountable.
The parking lot should be substantially full at 7:30 a.m. and 6:30 p.m. on weekdays and half
full on Saturdays.

You have two weeks. Tick, tock.

What are the aws in his approach?

What is likely to be the outcome of his new

incentive scheme?

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Employee morale plummeted

The email was posted on a Yahoo Finance

discussion board

Cerners stock dropped 22% in two weeks

Punishment?

Positive
Reinforcement?

Modeling?

Goal Setting?

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Catch negative behaviors early in terms of the

number of times the incident occurs

Punishment should follow negative behavior

immediately

Punishment should focus on the behavior, not

on the individual

Provide specic information about the right way

of doing things and how this positive behavior
will be rewarded

Tell employees explicitly what behaviors are

rewarded and which entail a full/partial

reward

Make consequences equivalent to behavior

Be consistent
Do not reward all people equally create

contingencies so employees can tell who is

doing better

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Who: Who is involved?

What: What should be accomplished?
When: Establish a time frame.
Where: Identify a location.
Why: Specify purpose and benets of accomplishing the goal.
How: Clarify what steps to take in order to achieve the goal.

Measurable: Establish
criteria for measuring
progress.

Achievable: Make sure

the steps you need to
take to achieve your goal
are doable.

Reasonable: Be sure to
balance your ideal plan
and reality.

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In the 1990s, Sears, Roebuck and Co. imposed a sales quota on its
auto repair sta of $147/hr.
Sta overcharged for work
Unnecessary repairs became part of the company culture

In the late 1960s, Ford Motor Company set goal of new car under
2000 lbs and under $2,000 by 1970.
Management signed o on unperformed safety checks
The Ford Pinto had a faulty fuel tank and could ignite upon impact

Ken OBrien, former NY Jets quarterback, was given a goal of

throwing fewer interceptions (penalized nancially for each one).
He threw fewer interceptions . . . because he threw fewer passes. His

overall performance suered.

Goals can be too motivating

People dont deviate from the goal
Wont try to exceed the goal
Often no sense of the bigger picture
Goals may stie creativity
Goals can become embedded (regardless of

eectiveness)

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Making changes to an organizations culture

is a dicult undertaking:

Soft concept; hard to measure but so impactful!

Collective norms and behaviors hard enough to

change your own behavior!

The Challenge: Ailing

tech giant with culture

problem looking for
turnaround.
Annual revenues had

fallen more then 20%

over past 2 years
In 2012, operating prot
fell 30%

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Lack of rigor - 2nd place is good enough

mentality

Too long to make decisions

Need to move fast so want consensus

Groupthink, not willing to play devils advocate

Not decisive in choosing/killing products

Yahoo well-paid and safe job

Unclear overall vision what are they?

Hacker culture? Engineering culture? Suit culture?

July 2012, A savior? Yahoo

hires former Google employee
Marissa Mayer as CEO

Imagine you are Mayer and

walking into this challenge.

Brainstorm ve rst steps you

might take.

Think of unintended
consequences

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Gimmicky things to send a signal

Free food
Free iphones

Weekly meetings with leadership

Took Yahoos current stock price o home page of intranet

Why?

Update Yahoo homepage, logo (new, more modern)

Lights on later; timeline expectations ramped up

Hiring process has gotten more bureaucratic

At least four people interview every candidate, all le reports

Every hire personally approved by Mayer

Yahoo employees who work remotely will

need to relocate to company facilities

Speed and quality are often sacriced when we

work from home We need to be one Yahoo!, and

that starts with physically being together.
Email went viral; sparked wide debate
Good move or mistake?

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Work specialization

Degree to which activities are subdivided into jobs

Departmentalization

Basis for grouping jobs together

Chain of command
Span of control

Line of authority (who individuals and groups report to)

Number of people a manager can direct

Centralization vs.
Decentralization

Where decision-making authority lies

Formalization

Degree to which jobs are standardized

Mechanistic (> 60)

High Formalization
High Centralization
Hierarchical
Control Oriented
E.g.: Bureaucracy

Organic (< 45)

Low Formalization
High Decentralization
Flat & Lean
Commitment Oriented
E.g.: Simple Structure;
Matrix Structure;
Virtual Org.;
Boundaryless or
Horizontal Org.

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In which industries are you likely to nd

Mechanistic organizational structures?
Organic organizational structures?

Which do you prefer? Why?

Small centralized core

Outsource major business functions

Costs
Loss of control; requires trust
Hard to form and manage

Benets
Gain scale without mass
Flexible and adaptive
Quickly access new markets

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Engines
(General
Electric)

Wing
(Mitsubishi)

Stabilizers and
rear fuselage
(Aerospace
Ind. Dev.)

Tailcone
(Hawker de
Havilland)

Fairings to
improve
aerodynamics
(Fischer)
Landing gear
(Messier-
Dowty)

Cockpit, center,
and forward
fuselage;
Assembly
(in house)

Avionics
(Rockwell
Collins)

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