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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 l.jpg

Organization Theory: Strategy Implementation Process

Steven E. Phelan

July, 2006


Power, Culture, People

Overview l.jpg

  • 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 l.jpg
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

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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?

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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?

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  • 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?

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Some key questions

Where does culture come from?

How is it sustained?

How do we create or change a culture?

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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

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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?

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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

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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???

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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

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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

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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?

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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?

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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

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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 l.jpg

  • 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?

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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

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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

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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

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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?

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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

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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?

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Pfeffer’s practices

Employment security

Selective recruitment

High wages

Incentive pay

Employee ownership

Information sharing

Participation & empowerment

Self-managed teams



Rotation and cross-training

Symbolic egalitarianism

Wage compression

Promotion from within

Long view


Overarching philosophy

People advantage