MANAGING CORPORATE MANAGING CORPORATE CULTURE FOR CULTURE FOR COMPETITIVE COMPETITIVE ADVANTAGEADVANTAGE

APPLICATIONS AND APPLICATIONS AND IMPLICATIONSIMPLICATIONS

By Bolaji OkusagaBy Bolaji Okusaga

OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATION

• Objective of presentationObjective of presentation

• Corporate Culture defined Corporate Culture defined

• Relevance of corporate culture in Relevance of corporate culture in managementmanagement

• Managing corporate culture in a change Managing corporate culture in a change processprocess

• Implications for managersImplications for managers

• Model of discourse and conclusionModel of discourse and conclusion

OBJECTIVES OF OBJECTIVES OF PRESENTATIONPRESENTATION

• To understand what corporate culture isTo understand what corporate culture is

• To determine and understand the To determine and understand the significance of corporate culture for significance of corporate culture for organisational performance and the organisational performance and the achievement of corporate objectivesachievement of corporate objectives

• To understand how corporate culture can be To understand how corporate culture can be best managed to effectively support strategic best managed to effectively support strategic business objectives business objectives

WHAT IS CORPORATE CULTUREWHAT IS CORPORATE CULTURE

• Ideal corporate culture is a pattern of basic Ideal corporate culture is a pattern of basic assumptions that has worked well enough to assumptions that has worked well enough to be considered valuable, and therefore taught be considered valuable, and therefore taught to new members as the correct way to to new members as the correct way to perceive, think and act in relation to official perceive, think and act in relation to official matters and corporate issuesmatters and corporate issues

• Corporate culture is the personality and Corporate culture is the personality and identity of the organisationidentity of the organisation

• It is the sum total of the shared values and It is the sum total of the shared values and ethos which govern decision making and ethos which govern decision making and actions within an organisationactions within an organisation

JUSTIFICATION…JUSTIFICATION…

• Corporate entities tend to have distinct Corporate entities tend to have distinct or specific shared characteristics or or specific shared characteristics or organizational behaviour which makes organizational behaviour which makes for differentiation and identity. for differentiation and identity.

• Given the fact that organisations in the Given the fact that organisations in the same sector are likely to have similar same sector are likely to have similar process, however the salient factor process, however the salient factor which makes for attitudinal which makes for attitudinal differentiation is corporate culture differentiation is corporate culture

• This can be observed in the values, This can be observed in the values, norms, traditions and service orientation norms, traditions and service orientation of organisationsof organisations

ELEMENTS / CHARACTERISTICS OF ELEMENTS / CHARACTERISTICS OF CORPORATE CULTURECORPORATE CULTURE

• BELIEFSBELIEFS: These are the consistent or : These are the consistent or integrated values and expectations integrated values and expectations that that provide a framework for shaping what provide a framework for shaping what

people hold to be true or false, people hold to be true or false, relevant relevant or irrelevant, good or bador irrelevant, good or bad

• BEHAVIOUR : BEHAVIOUR : These are observable These are observable actions that constitute the way people actions that constitute the way people

operate on day to day basisoperate on day to day basis

ELEMENTS…ELEMENTS…

• ASSUMPTIONS: ASSUMPTIONS: These refer to the These refer to the unconscious rationale for continuing to apply unconscious rationale for continuing to apply certain beliefs or specific behaviourscertain beliefs or specific behaviours

• PHILOSPHY:PHILOSPHY: This refers to policies set forth by This refers to policies set forth by organisations to guide behaviour, whether organisations to guide behaviour, whether expressly stated (mission statement) or notexpressly stated (mission statement) or not

• RULES:RULES: These refers to strict guidelines on how These refers to strict guidelines on how to get along in an organisation to get along in an organisation

• ORGANISATIONAL CLIMATE:ORGANISATIONAL CLIMATE: This represents This represents the general environment and socio-the general environment and socio-psychological atmosphere within which psychological atmosphere within which organisational members interactorganisational members interact

MANIFESTATION…MANIFESTATION…

• DOMINANT CULTURE: DOMINANT CULTURE: This is a set of core This is a set of core values shared by a majority of organisational values shared by a majority of organisational members. This could include concerns for members. This could include concerns for quality, customer service, loyalty etc.quality, customer service, loyalty etc.

• SUB-CULTURE: SUB-CULTURE: This is a set of values shared This is a set of values shared by a small minority. Sub- cultures can weaken by a small minority. Sub- cultures can weaken and undermine organisational goals if they and undermine organisational goals if they conflict with the dominant cultureconflict with the dominant culture

INDICES OF THE STRENGHT OF INDICES OF THE STRENGHT OF CORPORATE CULTURECORPORATE CULTURE

• The indices of the strength of corporate The indices of the strength of corporate culture are:culture are:– SHAREDNESS: SHAREDNESS: The degree to which organizational The degree to which organizational

members have the same core valuesmembers have the same core values– INTENSITY:INTENSITY: The degree of the commitment The degree of the commitment of of

members to the core valuesmembers to the core values

• Two major factors that determine the Two major factors that determine the strengths of corporate culture are:strengths of corporate culture are:– The orientation of members to group goalsThe orientation of members to group goals– Reward structure prevailing in the system Reward structure prevailing in the system

RELEVANCE OF CORPORATE RELEVANCE OF CORPORATE CULTURE IN MANAGEMENTCULTURE IN MANAGEMENT

• Peters et. al.(1984), in their study of excellent companies Peters et. al.(1984), in their study of excellent companies in the U.S.A, discovered that outstanding performers, in the U.S.A, discovered that outstanding performers, over a long time, exhibit a strong corporate cultureover a long time, exhibit a strong corporate culture

• These business leaders adopt value disciplines which These business leaders adopt value disciplines which will be suited to their work process and corporate culture.will be suited to their work process and corporate culture.

• Successful business leaders are increasingly recognising Successful business leaders are increasingly recognising that one of their competitive weapons is their corporate that one of their competitive weapons is their corporate culture culture

• They recognise that corporate culture is a critical factor They recognise that corporate culture is a critical factor in long term economic success. For these business in long term economic success. For these business leaders, the name of the game is competitive leaders, the name of the game is competitive differentiation via the vehicle of corporate culturedifferentiation via the vehicle of corporate culture

CORPORATE CULTURE AND CORPORATE CULTURE AND BUSINESS SUCCESSBUSINESS SUCCESS

• A positive corporate culture binds, directs and A positive corporate culture binds, directs and reinforces positive actionreinforces positive action

• The stronger the corporate culture and the more The stronger the corporate culture and the more directed and focused it is towards the directed and focused it is towards the organisations strategic and market organisations strategic and market requirements, the less would be the need for requirements, the less would be the need for policy manuals, charts or documented policy manuals, charts or documented procedures and valuesprocedures and values

• This because members of the group are more This because members of the group are more likely to align their actions to the share values likely to align their actions to the share values and goals of the organisation and goals of the organisation

CORPORATE CULTURE AND CORPORATE CULTURE AND BUSINESS FAILURESBUSINESS FAILURES

• Poor performing companies do not have Poor performing companies do not have strong culture, such companies are usually strong culture, such companies are usually dysfunctional dysfunctional

• An organisation’s culture will invariably An organisation’s culture will invariably determine the nature and direction of determine the nature and direction of management practicesmanagement practices

• A weak culture is not likely to engender A weak culture is not likely to engender the desired sense of belonging which the desired sense of belonging which causes an immersion into the corporate causes an immersion into the corporate goal goal

INFLUENCE OF CORPORATE CULTURE INFLUENCE OF CORPORATE CULTURE ON MANAGEMENT PRACTICESON MANAGEMENT PRACTICES

• The relationship between corporate The relationship between corporate culture and management practices are culture and management practices are evident in:evident in:– MotivationMotivation– Decision-makingDecision-making– Performance and reward managementPerformance and reward management– CommunicationCommunication– LeadershipLeadership– TeamworkTeamwork

MANAGING CORPORATE MANAGING CORPORATE CULTURE IN A CHANGE CULTURE IN A CHANGE

PROCESSPROCESS• Today’s business environment is described as turbulent, Today’s business environment is described as turbulent,

unpredictable and rapidly changing. This type of unpredictable and rapidly changing. This type of business environment has established a compelling business environment has established a compelling need for cultural changeneed for cultural change

• The challenge which corporate culture poses for The challenge which corporate culture poses for organisations is to manage it effectively, create change organisations is to manage it effectively, create change or adapt to change and do so quickly or lose groundor adapt to change and do so quickly or lose ground

• Studies have shown that many business organisations Studies have shown that many business organisations have failed in their bid to introduce strategic changes have failed in their bid to introduce strategic changes dictated by economic realities. The causes of such dictated by economic realities. The causes of such failure in effectively managing corporate culture for long failure in effectively managing corporate culture for long term business goalsterm business goals

EFFECTS OF CORPORATE EFFECTS OF CORPORATE CULTURE MISMANAGEMENTCULTURE MISMANAGEMENT

• Inadequate understanding of organisation's Inadequate understanding of organisation's underlying cultureunderlying culture

• Basic differences in the values which the Basic differences in the values which the existing corporate culture stresses and the existing corporate culture stresses and the values required to drive the new strategic values required to drive the new strategic changechange

• Insufficient commitment of time and Insufficient commitment of time and resources to cultural change effort resources to cultural change effort perceived to be desirableperceived to be desirable

CORPORATE CULTURE AND STRATEGIC CORPORATE CULTURE AND STRATEGIC CHANGE IMPERATIVESCHANGE IMPERATIVES

• Given that strong corporate culture can Given that strong corporate culture can affect the ability of a business organisation affect the ability of a business organisation to adopt strategic changes, the following to adopt strategic changes, the following options for managing a strong culture in a options for managing a strong culture in a change management process are:change management process are:

– Ignore the cultureIgnore the culture– Manage round itManage round it– Attempt to change dysfunctional elements of Attempt to change dysfunctional elements of

culture to fit strategyculture to fit strategy– Change the strategyChange the strategy

WEIGHING THE CORPORATE CULTURE WEIGHING THE CORPORATE CULTURE OPTIONS IN CHANGE OPTIONS IN CHANGE

MANAGEMENT1& 2MANAGEMENT1& 2OPTION 1 – “IGNORE THE CULTURE”OPTION 1 – “IGNORE THE CULTURE” -- The inextricable link we have established The inextricable link we have established between between

corporate culture and organisational corporate culture and organisational performance performance makes this an unenviable and makes this an unenviable and unattractive optionunattractive option

OPTION 2 – “MANAGE ROUND IT”OPTION 2 – “MANAGE ROUND IT”-- Organisations make no attempt to change culture Organisations make no attempt to change culture but but selects only those strategic changes which selects only those strategic changes which have have the least the least possibility of being resisted by the possibility of being resisted by the existing existing cultureculture-- This option might force organisations to compromise what This option might force organisations to compromise what

is strategically desirable for what is convenientis strategically desirable for what is convenient This might work whereThis might work where

-Dysfunctional aspect of culture is weak-Dysfunctional aspect of culture is weak-There is a considerable area of congruence -There is a considerable area of congruence between current culture and strategic needs between current culture and strategic needs

WEIGHING THE CORPORATE CULTURE WEIGHING THE CORPORATE CULTURE OPTIONS IN CHANGE MANAGEMENT 3OPTIONS IN CHANGE MANAGEMENT 3

• OPTION 3 – “CHANGE OPTION 3 – “CHANGE DYSFUNCTIONAL DYSFUNCTIONAL ELEMENTS OF ELEMENTS OF CULTURE”CULTURE”

-This is the option which is strategically -This is the option which is strategically desirable and attractive because this desirable and attractive because this ensures ensures that culture effectively that culture effectively supports corporate supports corporate strategystrategy

DEMANDS OF EMPLOYING THE DEMANDS OF EMPLOYING THE THIRD OPTIONTHIRD OPTION

• Employing this option involves the following steps:Employing this option involves the following steps: - - Conduct environmental analysisConduct environmental analysis

- Conduct internal analysis- Conduct internal analysis- Decide on strategic focus- Decide on strategic focus- Understand character of current culture - Understand character of current culture

and consolidate its strengthand consolidate its strength- Determine aspects of culture that would - Determine aspects of culture that would be be

dysfunctional to achievement dysfunctional to achievement of of strategic strategic objectivesobjectives

- Initiate and implement a culture - Initiate and implement a culture change change programmeprogramme

WEIGHING THE CORPORATE CULTURE WEIGHING THE CORPORATE CULTURE OPTIONS IN CHANGE MANAGEMENT 4OPTIONS IN CHANGE MANAGEMENT 4

• OPTION 4 – “CHANGE THE OPTION 4 – “CHANGE THE STRATEGY”STRATEGY”

• Similar to option 2, except that the change Similar to option 2, except that the change to be effected in strategy is fundamental to be effected in strategy is fundamental

• Again, desirable strategic choice might be Again, desirable strategic choice might be compromised compromised

IMPLICATIONS FOR MANAGERSIMPLICATIONS FOR MANAGERS

• Understand your culture and implications Understand your culture and implications for business strategyfor business strategy

• Merge your organisation’s value discipline Merge your organisation’s value discipline with the corporate culturewith the corporate culture

• Articulate desirable cultural valuesArticulate desirable cultural values• Persistently communicate your ideal Persistently communicate your ideal

cultural valuescultural values• Continuously improve cultural values Continuously improve cultural values

through socialisationthrough socialisation

MODEL OF DISCOURSEMODEL OF DISCOURSE

CORPORATE CULTURECORPORATE CULTURE

ORGANISATIONAL GOALSORGANISATIONAL GOALSCHANGE MANAGEMENT PROCESSCHANGE MANAGEMENT PROCESS

THANK YOUTHANK YOU