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Organization Theory: Strategy Implementation Process. Steven E. Phelan July, 2006 STRATEGY EXECUTION: Power, Culture, People. Overview. Culture Hrebiniak, Chapter 8 Morgan, Chapter 5 Charan, “Culture change at Home Depot” Case: “Culture change at Seagram” Power Hrebiniak, Chapter 9

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organization theory strategy implementation process

Organization Theory: Strategy Implementation Process

Steven E. Phelan

July, 2006

STRATEGY EXECUTION:

Power, Culture, People

overview
Overview
  • Culture
    • Hrebiniak, Chapter 8
    • Morgan, Chapter 5
    • Charan, “Culture change at Home Depot”
    • Case: “Culture change at Seagram”
  • Power
    • Hrebiniak, Chapter 9
    • Morgan, Chapter 6
    • Kramer “The great intimidators”
    • Case: “Donna Dubinsky”
  • People
    • Pfeffer “Competitive advantage through people”
organizations as cultures
Organizations as Cultures
  • Culture: “the way we do things around here”
    • National cultures
    • Regional cultures
    • Organizational cultures
    • Departmental cultures
  • Culture…
    • Is not homogenous
    • Affects performance
    • Is affected by peformance
cultural metaphors
Cultural metaphors
  • How is culture like:
    • A language, an iceberg, an onion, an umbrella, or sticky glue?
    • What else could be a metaphor for culture?
exercise corporate cultures
Exercise: Corporate cultures
  • Take some time to share the following answers to these questions about your organization with a partner:
    • What kinds of beliefs and values dominate your organization (officially…unofficially)
    • What are the main norms (do’s and don’ts)
    • What are the dominant stories and rituals?
    • What are the favorite topics of informal conversations?
    • Think of three influential people in the organization. How do they symbolize the character of the organization?
    • Are there subcultures? Are they in conflict or harmony?
debrief
Debrief
  • What struck you as abnormal or strange about your partner’s answers? Why?
  • What management challenges do you think your partner’s organization might present? How hard would it be to change the culture?
  • What are the implications for strategy implementation?
some key questions
Some key questions

Where does culture come from?

How is it sustained?

How do we create or change a culture?

where does culture come from
Where does culture come from?
  • Leadership (setting mission/vision)
    • Selznick (1957) says purpose-setting is essence of leadership
  • Shared values
    • Religious groups, etc.
  • Stories, legends, myths, symbols
  • Reward systems
  • Professional values
    • e.g. engineers, doctors, accountants
  • Historical accidents
  • Morgan makes a big deal about enactment – what is it and why is it important?
  • Hegemony and ideology
    • Indoctrination of masses, coalition with powerful
    • Hrebiniak mentions “cultural due diligence” on new recruits
changing a culture
Changing a culture
  • According to Hrebiniak:
    • Don’t try to change attitudes, change behavior (and attitudes will follow)
    • Behavior doesn’t change easily in the face of requests to do so. Requests are “useless and ineffective”.
      • Change people, incentives, controls, processes, and structure
      • “Get the right people on the bus”
      • Changing incentives might even affect the “wrong people”
    • Beware of excessive speed
      • People must build a belief in the new culture
      • Performance builds belief
      • One change agent advocates manufacturing ‘short-term’ wins
    • Can cultures and cultural change be measured?
changing culture a comprehensive list
Changing culture: A comprehensive list
  • trigger shifts in the established mindset
  • breakdown habitual behavior patterns including routines, structures and rewards
  • move outside established information channels
  • use data and analysis to shock people
  • introduce new people and outsiders
  • co-opt or break adversarial political alliances
  • revamp employee communication mechanisms
  • training and development
  • use symbolism , ritual, and enactment
  • reward new behavior, celebrate success
  • provide leadership
culture change at home depot
Culture change at Home Depot
  • How did Nardelli change Home Depot’s culture
    • Through the use of mechanisms to alter the social interactions of people in the organization
      • the ‘social architecture’
    • By adding a “dose of discipline” to the entrepreneurial culture
      • With standardized metrics, disciplined talent reviews, Monday morning conference calls, mapping the HR process, learning forums, focus on accountability
    • Was this a major achievement???
strengths of the cultural metaphor
Strengths of the cultural metaphor
  • Emphasizes the symbolic significance of what we do
  • We learn that organization and shared meaning may be one and the same
  • We see how success hinges on the creation of shared meaning
  • Leaders and managers gain a new understanding of their impacts and roles
  • We see that organizations and their environments are enacted domains
  • Strategic management is understood as an enactment process
  • The metaphor offers a fresh perspective on organizational change
limitations of the cultural metaphor
Limitations of the cultural metaphor
  • The metaphor can be used to support ideological manipulation and control
  • Culture is holistic and cannot readily be managed by a simple checklist
  • Important dimensions are invisible and what is easily seen may be relatively unimportant
  • Culture usually has a deep political dimension
seagram case
Seagram Case
  • Questions:
    • Why has Seagram initiated a values initiative?
      • How well has the implementation been done to date?
      • What tools and techniques are more potent than the use of explicit corporate values?
    • If you were one of Seagram’s executives, how would you respond to each of the five challenges at the end of the case?
      • Actions on recommendations
      • Punishments for values violators
      • Rewards for value champions
      • Values for MCA/Universal
      • Sustaining and consolidating the change?
organizations as political systems
Organizations as political systems
  • Power – the ability to get what you want, when you want
  • Politics – the process of acquiring and using power
  • As no-one can get everything they want when they want it, politics inevitably involves coalitions, compromises, and conflict management.
  • According to Morgan, many organizations have strong autocratic tendencies – does that mean CEOs always get what they want?
sources of power
Sources of power
  • Toffler
    • Power rests on delivering or withholding:
      • Violence (feudalism) – coercive power
      • Wealth (capitalism) – reward power
      • Knowledge (third wave) – expert power
  • Lukes
    • Three faces of power
      • Ability to make decisions (authority)
      • Agenda-setting: ability to decide who/what/when/how decisions will be made (influence)
      • Ability to shape perceptions so that policies that favor the powerful are seen as natural, normal, or rational and therefore not questioned (ideology or enactment)
  • Resource Dependency
resource dependency
Resource Dependency
  • Control of:
    • scarce resources,
    • decision processes,
    • knowledge/information,
    • boundaries,
    • technology, uncertainty,
    • informal networks,
    • counter-organizations
  • Units that deal with the critical problems of the organization will typically have power
    • Dependency is the opposite of power
exercise
Exercise
  • How political is your organization?
    • Which department has the most power?
      • Does this follow the predictions of resource dependency theory?
    • How much conflict is there between departments?
    • Does politicking hurt performance or limit the strategic choice?
power and ethics
Power and ethics
  • Are these tactics from the 48 laws of power ethical? Necessary?
    • #2 Never put too much trust in friends
    • #3 Conceal your intentions
    • #7 Get others to do the work but take the credit
    • #10 Avoid the unhappy and unlucky
    • #11 Learn to keep people dependent on you
    • #14 Pose as a friend, work as a spy
    • #15 Crush your enemy totally
    • #32 Play to people’s fantasies
    • #38 Think as you like but behave like others
    • #45 Preach the need for change but never reform too much
great intimidators
Great intimidators
  • Angle
    • Social intelligence vs political intelligence
    • Empathy/soft power vs. intimidation/exploitation
    • Leverage strengths vs. leverage fear/anxiety
  • Behaviors
    • Get up close and personal, be angry, keep them guessing
    • Know it all, be aloof
  • Counters
    • Do your homework, work harder
    • Laugh at their antics, earn their respect, call their bluff
    • Keep your perspective, stick around
implications for strategy execution
Implications for Strategy Execution
  • Dysfunctional organizations
    • Often have misaligned power structures
    • Can be very resistant to new initiatives
    • Hrebiniak argues that boards will often discipline CEOs that don’t make tough decisions (really?)
    • Successful execution may require co-opting or destroying the dominant elite
      • Ability to use hard power as well as soft power
    • Strategic choices create new fiefdoms
donna dubinsky case
Donna Dubinsky Case
  • Questions:
    • Why was Dubinsky initially so successful at Apple?
    • How and why did things unravel for Dubinsky?
      • What changed in the business and the Apple context?
    • Why did she respond the way she did to the JIT proposal? (Put yourself in her situation -both intellectually and emotionally)
      • Do you think she and others at Apple could have done things differently?
      • How should Campbell respond to Dubinsky?
  • What are the key lessons from this case for strategy execution?
strengths of the political metaphor
Strengths of the political metaphor
  • We see how all organizational activity is interest-based
  • Conflict management becomes a key activity
  • The myth of organizational rationality is debunked – rational for whom?
  • Organizational integration becomes problematic
  • Politics is a natural feature of organization
  • It raises fundamental questions about power and control in society
limitations of the political metaphor
Limitations of the political metaphor
  • Politics can breed more politics
    • Is there an optimal level of politics?
    • Is zero the target?
  • It underplays gross inequalities in power and influence
    • Can a marketer ever become CEO in an engineering organization?
people advantage
Pfeffer’s practices

Employment security

Selective recruitment

High wages

Incentive pay

Employee ownership

Information sharing

Participation & empowerment

Self-managed teams

Ctd.

Training

Rotation and cross-training

Symbolic egalitarianism

Wage compression

Promotion from within

Long view

Measurement

Overarching philosophy

People advantage

REALISTIC OR NOT?

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