Three Roads to Innovation

Presented by Group 8 Aayush Agarwal 191002 Amit Khanna 191006 Bhavna 191021 Ishu Singla 191026 Surbhi Grover 191058 Tarun Gupta 191059

Organizational Culture
The set of shared values & norms that control organizational members interactions with each other and with people outside the organization.

Values
General criteria, standard or guiding principles that people use to determine which types of behaviors, events, situations & outcomes are desirable or undesirable

2 Kinds of Values
Terminal Values
Desired end state or outcome people seek to achieve

Desired mode of Instrumental behavior

Values

Norms
Standards or styles of behavior that are considered acceptable or typical for a group of people.

Transmission of Organisations culture

Socialization & Socialization tactics Stories, Ceremonies & Organizational Language

Socialization & Socialization tactics

Socialization : The process by which members learn & internalize the values & norms of an organizations culture A socialization model by Van Mannen & Schein, suggests that structuring socialization teaches newcomers key values. Role orientation is the characteristic way newcomers respond to a situation.

Two types of role orientations:Institutionalized role orientation Newcomers are taught to respond the same way as existing members do Individualized role orientation Newcomers are encouraged to be creative and experiment with creative norms & values

Socializations tactics
Institutionalized Collective Formal Sequential Fixed Serial Individualized Individual Informal Random Variable Disjunctive

Divestiture

Investiture

Collective vs. Individual

Common Individual tactics experiences to generate standard allow newcomers to learn new responses responses .

Formal vs. Informal

Separate newcomers from Encourage learning on the existing organizational job as members members during of the team learning

Sequential vs. Random

Establish a sequence for activities & occupancy of roles Based on interests and needs of individual, no set sequence

Fixed vs Variable
A specific Set no timetable timetable, associated with Training depends completing each on needs & stage of the interests of the learning process newcomer

Serial vs. Disjunctive

Existing members as role models and mentors for the newcomers Newcomers are expected to figure out & develop their own way of behaving

Divestiture vs. Investiture

Gives members Gives positive negative social social support support (ignored immediately, or taunted) until encourages they conform to individuals to be norms themselves

Stories, Ceremonies, and Organizational Language

Type of Rite
Rite of Passage

Purpose of Rite

Example of Rite

Learn & Induction & Basic internalize norms training & values Office Diwali Party Presentation of annual award

Rite of Integration Build common norms & values Rite of Enhancement Motivate, Commitment to norms & values

Stories
-whether fact or fiction- about organizational superstars provide important clues about cultural values & norms
Reveals the kind of behaviour the oirganisation values & the kind of behavior the organization frowns upon

Languages
Spoken
technical languages & terms used in certain companies Eg. 3M Way of addressing each other

Way of dressing Casual or formal Organizational symbols

the types of offices occupied the cars driven by the employees & the executives

Sources of Organizational culture

Property Rights system
Organizational structure

Organizational Culture

Characteristics of people within the organization

Organizational Ethics

Characteristics of People within the Organization

Companies attract, hire, and retain people with different values, personalities, and ethics. People are drawn to companies with values similar to their own. As people and values become more similar, organizational culture becomes more unique. The founder impacts the culture by setting the initial values and hiring the first employees.

Property rights given to managers and employees

Managers Rights Golden parachutes Workforce Rights Notification of Layoffs

Stock options Large salaries

Control over organizational resources Decision making

Severance Payments Lifetime employment

Long-Term employment Pension & Benefits Employee stock ownership plans Participation in decision making

Property Rights too strong?

Implicit promise of lifetime employment
Can make employees cautious & noninnovative No motivation to perform or to take risks

Members become preoccupied with their own rights & interests leading to conflicts, internal power struggle & loss of innovation

Organizational Ethics
Organizations can consciously & purposefully develop certain cultural values like ethical values- to control members behaviors Ethical values & the rules & norms embodied in them help shape the values that members use to manage situations & make decisions

Corporate Social Responsibility

Obstructionist Approach

Defensive Approach

Accommodat ive Approach

Proactive Approach

Low

High

Social Responsibility

 Obstructionist Approach : Low end of organizations commitment to social responsibility Defensive approach: An approach indicating a commitment to ethical behavior Accommodative approach: Acknowledgement of the need to support the social responsibility Proactive approach: managers actively embrace the need to behave in socially responsible ways, go out of way to learn about the needs of different stakeholders groups & willing to use organisational resources to promote the interests of all stakeholders (not just stockholders)

Three Roads to Innovation

Company Overview
Founded in 1902, as Minnesota Mining & Manufacturing Corporation

Sales: $25.3 billion

Net income: $3.5 billion

Over 79,000 employees

55,000+ products

489 U.S. patents issued in 2008

Six Market Leading Businesses

Consumer & Office

Display & graphics

Electro & Safety,security Communications & protection Services

Health Care

Industrial & Transportation

Values at 3M
Act with uncompromising honesty and integrity in everything we do. Satisfy our customers with innovative technology and superior quality, value and service. Provide our investors an attractive return through sustainable, global growth. Respect our social and physical environment around the world. Value and develop our employees' diverse talents, initiative and leadership. Earn the admiration of all those associated with 3M worldwide.

Terminal & instrumental values of 3M?

Terminal Values
Innovation
Is the use or application of creativity to get a practical output which is new or novel.

Excellence
Identifying & meeting customer needs

Quality
continually focus on activities throughout to produce quality growth

Instrumental Values
Entrepreneurship Creativity Risk Taking

What are the main ways in which 3M tries to create a culture that supports innovation?

 25 percent Rule o Twenty five percent of business unit revenues must come from products introduced in the last five years. Business unit bonuses are based on this. Freedom and resources for risk-taking. o 3M encourages employees to use 15 percent of their time on projects of their choice. o 3M scientist Arthun Fry had freedom & resources to develop post-it notes while doing research for sticky-backed bookmarker.

 Management sponsorship o Senior managers encourage and support innovation, and recognize and reward them.

Cross-functional teams
o From product development, process development, marketing, manufacturing, packaging, and other functions, empowered to design and develop products to meet customer needs. Rewarding and honoring cross-functional teams 3M Golden Step Program, which provides tangible rewards, and the Carleton Society, a hall of fame for 3M scientists.
o

 Product champions
oA

product champion supports group members, encourages shared group norms, and provides the resources needed to meet team goals. Dual-ladder system of promotion

o Parallel promotional paths for technical workers and supervisory personnel. Both allow equal advancement opportunities. R&D Spending
o3M spends approximately 67 percent of revenue on R&D . The R&D spending of 3M is, on average, twice that of a typical manufacturing company.

How do the interactions among people, property rights, and structure and ethics combine to influence 3Ms cultural values?

Interaction among people Product champions and management sponsors provide leadership and support to teams for experimentation. Cross-functional teams and the product team structure provide an organic structure. People from different functions can cooperate and develop the shared norms and values that enhance innovation. Teams provide autonomy and allow risk-taking and individual decision-making

Property Rights 3M tangibly rewards employees through promotion into Management or technical ladder in 3Ms dual promotion system. Golden Step program honors cross-functional team for successful new product development. Intangible rewards like Carelton Society, a hall of fame for 3M scientists.

Ethics

3Ms concern for customers , they work closely with customers.

Satisfy customer expectations by staying close to customer. This culture dates back to Mcknight, he belived in going into back shop factories to see how product is used. Extensive research to pin point present & future customer needs. Reward for successful product innovation but no penalty for failure.