Part IV Bringing Out the Best in Organizations and Yourself
CHAPTER 8 Organizational Skills 8.1 Leadership and Organizational Culture
8.2 Leading an Effective Organizational Communication System
8.3 Ethics and Social Responsibility
8.4 Leadership and Organizational Politics
Chapter Summary
CHAPTER 9 Leading Change 9.1 The Nature of Organizational Change
9.2 Models of Change Processes
9.3 Leadership and the Management of Change
9.4 Additional Challenges
Chapter Summary
CHAPTER 10 Balancing Life as a Leader 10.1 Stress Management
10.2 Time Management
10.3 Work-Life Balance
10.4 Committing to Being a High-Impact Leader and Making a Difference
Chapter Summary
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8 Organizational Skills
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Learning Objectives
After reading this chapter, you should be able to:
• Integrate leadership activities with organizational effectiveness criteria. • Recognize the role of organizational culture in achieving success. • Analyze organizational communication systems and learn how to lead them. • Understand ethical and socially responsible activities. • Adjust to and manage organizational politics as needed.
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Section 8.1 Leadership and Organizational Culture
Introduction
Seth Goldman could be described as a “thirsty” man. As a college student, he became frus- trated with the products available on the market to quench a person’s thirst. Some had too much sugar, some had too much water, and others had weak flavors. He shared his disillusion with his professor at the Yale School of Management, Barry Natebuff, in a class discussion about major soft drink products in 1988.
In 1997, Goldman was playing with different beverage combinations when he became deter- mined to create a new product ideal for rehydrating and quenching thirst. He reconnected with Natebuff, who had recently traveled to India and discovered that many bottled tea prod- ucts were brewed from the dust and fannings left over from whole tea leaves that had been designated for other uses. The two joined forces and started brewing Honest Tea from whole leaves.
After a successful start-up sale to Fresh Fields (Whole Foods Market), the company was launched. A strong, ethically driven culture has always been at the forefront of the firm’s oper- ation. The mission statement states: “Honest Tea seeks to create and promote great-tasting, healthier, organic beverages. We strive to grow our business with the same honesty and integ- rity we use to craft our products, with sustainability and great taste for all.”
The mission represents more than words. The firm has been well known for seeking out sup- pliers of flavors and other items from impoverished areas, thereby helping low-income farm- ers, even in remote locations, build thriving businesses. Since being bought by Coca-Cola in 2011, the company has expanded its distribution to more than 100,000 stores across the United States. The growth allows Honest Tea to make a greater impact in line with the com- pany’s mission. The beverages are organic, fair trade certified, and the containers are made with environmentally friendly materials. Tea leaves that have been brewed go back into the soil to help compost the next generation of products.
Every aspect of Honest Tea’s operations reflects Goldman’s and Natebuff’s “thirst” for a socially conscious business that exhibits great success over many years. Such great leadership began as a simple conversation and eventually evolved into a thriving enterprise.
8.1 Leadership and Organizational Culture
In preparing organizations to succeed, leaders need to be keenly aware of the significant influence culture can have on the success or failure of organizations. They also need to know how to build, sustain, and change organizational cultures.
Little had been written about organizational culture until the 1980s when organizational scholars began to research the important role culture plays in the success of organizations and the strong link between culture and performance (Deal & Kennedy, 1982; Schein, 1985; Gordon & DiTomaso, 1992; Marcoulides & Heck, 1993; Kee, 2003). Researchers have offered many definitions trying to capture the essence of culture. We may define culture as the pre- dominant beliefs, values, attitudes, behaviors, and practices that are characteristic of a group of people. Schein used the word “group” in defining culture as a reference to social units of
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Visible
1. Artifacts: dress, ceremonies, office design, slogans.
Invisible
2. Expressed values: “We value customer feedback,” “Quality is our number 1 concern.”
3. Underlying assumptions and deep beliefs: “We will earn your respect.”
Culture that can be seen at the surface level
Deeper values and shared understandings held by organization members
Section 8.1 Leadership and Organizational Culture
all types and sizes (1992). In other words, a group could include a country, private or public sector organization, a team, a family, or any group of people that develops norms or standards that become characteristic of the group.
A second definition of culture is that it refers to a system of shared meaning held by members of an organization that distinguishes it from other organizations (Schein, 1996). This section identifies some of the key concepts associated with culture, especially as they apply to the nature of effective organizational leadership.
Visible and Invisible Factors
Figure 8.1 portrays culture on three levels. First, we can observe culture on a visible level through artifacts such as dress, office layout, office design, and slogans. Artifacts could also include how leaders lead, the type of work environment an organization has, how people are treated, how decisions are made, and how things get done.
On a deeper level, we can understand invisible culture by the expressed values that help shape the visible artifacts. For example, an expressed value may be that it is important to take great care of our people and our customers. This will result in behaviors that create a different cul- ture than in an organization where an expressed value is that our number one priority is to maximize the bottom line. At a still deeper level are strong beliefs and assumptions that are so much a part of the culture that they are taken for granted and not questioned. An example would be that doing what is right is important no matter what the cost.
Figure 8.1: Levels of culture
From Daft, R.L. The Leadership Experience (4th ed.). © 2008 South-Western, a part of Cengage Learning, Inc. Based on Organizational Culture and Leadership (2nd ed. pp.3-27) by Edgar Schein, 1992. San Francisco, CA: Jossey-Bass.
Visible
1. Artifacts: dress, ceremonies, office design, slogans.
Invisible
2. Expressed values: “We value customer feedback,” “Quality is our number 1 concern.”
3. Underlying assumptions and deep beliefs: “We will earn your respect.”
Culture that can be seen at the surface level
Deeper values and shared understandings held by organization members
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Section 8.1 Leadership and Organizational Culture
The Roles Culture Plays
Leaders would probably pay more attention to culture if they better understood the impact culture can have and the many roles it plays in the success or failure of organizations of all types and sizes. Culture can have a significant influence on the performance, morale, and atti- tudes of people and on how things get done. It can be a positive or negative influence, can bring out the best or worst in people, and can make an organization a great place to work or a dysfunctional place to work. It can create a sense of identity in terms of the reputation of an organization and what it stands for. Culture also helps employees make sense of the behaviors and practices that are acceptable or unacceptable. It also can play a strong role in attracting and retaining talented employees.
Dominant Cultures and Subcultures
Another consideration in understanding culture is to recognize that in an organization there is likely to be a dominant culture and one or more subcultures (Martin & Meyerson, 1988). The dominant culture is the most pervasive in the organization. It expresses the core val- ues of the majority of members. Some have called it the “personality” of an organization. As an example, the dominant culture at Southwest Airlines encourages employees to cooperate with one another and customers, as well as to have fun while doing so.
Subcultures evolve to express the problems, frustrations, or unique experiences of certain members within the larger, dominant culture. For example, a subculture may develop in the quality control area, as members find they are often put in the position of rejecting the out- put of other members, and as a result, are viewed as “different” and at times antagonistically. Leaders are advised to make sure that subcultures do not become viewed as so separate and distinct that they cannot function as part of the larger unit.
Strong Versus Weak Cultures
The term strong culture describes those cultures in which the core values are intensely held and widely shared (Weiner, 1988). As a result, they have a significant influence on the behav- iors and practices of employees. Strong cultures are often built by strong leaders. Examples of companies with strong cultures include IBM, Southwest Airlines, Honest Tea, and Edward Jones, to name a few. In strong cultures, members understand the cultural values and norms, and there is a commitment by the leaders to maintaining the culture. Strong cultures are gen- erally associated with high performance (Jin, Drozdenko, & DeLoughy, 2013). The exception is when the culture is strong but unhealthy.
The term weak culture describes those cultures in which the norms and practices are confus- ing and inconsistent. Weak cultures are difficult to work in because expectations are unclear and there is little consistency throughout the organization. As you might expected, weak cul- tures typically result in low performance (Mushtaq, Ahmad, & Tanveer, 2012). In addition to the strength of the culture, leaders need to be observant of the types of behaviors and atti- tudes a culture is driving and whether they are desirable or undesirable. In essence, leaders need to know how strong a culture is and the types of behaviors it is influencing.
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Section 8.1 Leadership and Organizational Culture
Characteristics of High- and Low-Performance Cultures
Much of the interest in culture has come from the extensive research on the link between culture and performance. John Kotter and James Heskett conducted one of the classic studies on culture. These researchers studied companies over an 11-year period and found that the companies that exhibited healthy cultures had increases in sales of an average of 682% ver- sus 166% for comparable companies, and they had stock increases of 901% versus 74% for comparable companies (Kotter & Heskett, 1992). Other studies indicate that strong, healthy cultures can have a significant influence on productivity, job satisfaction, morale, attitudes, quality, customer satisfaction, innovation, turnover and absenteeism rates, commitment to the organization, and efforts to attract and retain talented workers (Denison, 1997; Rollins & Roberts, 1998; Weiner, 1988; Ehrhart, Schneider, & Macey, 2014; Cameron & Quinn, 2011).
One of the most revealing ways to view culture is to consider the degree to which a culture is a high- or low-performance culture. While all cultures exhibit differences, there are consis- tent patterns of high- and low-performance cultures. Table 8.1 summarizes research findings on typical characteristics of high- and low-performance cultures (Rosenthal & Masarech, 2003; Kilmann, Saxton, & Serpa, 1985; Rollins & Roberts, 1988; Lussier & Achua, 2016; Weiss, 2011; Daft, 2015; Fisher, 2000).
Table 8.1: Characteristics of high-performance and low-performance cultures
High-Performance Culture Low-Performance Culture
Leaders emphasize both cultural values and per- formance and build strongly people-oriented and results-oriented organizations
Leaders provide minimal leadership and emphasize performance or people but not both
Clear and compelling vision, mission, and goals Vision, mission, and goals are unclear, not compelling, not used, or do not exist
Core values that drive the culture and are used in decision making
Core values are unclear, not compelling, not used, or do not exist
Committed to excellence, ethics, and doing things right
Lack of commitment to excellence, questionable ethics, and a reputation for doing what is expedient rather than what is right
Clear roles, responsibilities, and success criteria, and strong commitment to engaging, empower- ing, and developing people
Unclear roles and responsibilities and little interest in fully utilizing and developing the capabilities and potential of people
Positive, can-do work environment Negative, tense, stressful, resistant work environment
Open, candid, straightforward, and free-flowing communication
Guarded communication, reluctance to be open and straightforward, and consequences for saying things leaders don’t want to hear
Teamwork, collaboration, and involvement are the norm
Top-down decision making with minimal teamwork, collaboration, and involvement
Emphasis on constant improvement and state-of- the-art knowledge and practices
Slow to make needed improvements and behind the times in knowledge and practices
Willingness to change, adapt, learn from suc- cesses and mistakes, take reasonable risk, and try new things
Poorly planned change, resistance to change, minimal learning from successes and mistakes, and either risk averse or risk foolish
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Section 8.1 Leadership and Organizational Culture
Cultural Vulnerability
Cultures are like a precious and prized treasure when they are strong and healthy and driving the right behaviors. They are among the greatest assets an organization can have. However, they are vulnerable assets that can be damaged or lost if leaders are not aware of their value and are not keeping close watch over possible culture-changing practices, attitudes, threats, or events. Leaders need to be aware that many things can impact culture and need to be dealt with and managed to hopefully avoid cultural damage. For example, budget cuts, rapid mar- ket changes, economic downturns, natural disasters, and changes in ownership or leadership could change cultures. In potential culture-changing situations, leaders should be involved and engage the appropriate people in finding ways to sustain the culture or possibly even use challenging situations to strengthen the culture.
Bill Marriott: People-Based Culture
The Marriott hotel chain is a major success in U.S. business. Its founder and CEO, Bill Marriott, has always understood the value of a strong organizational culture based on people (Forbes, 2014). As he once noted,
It’s always been the major belief of our company, take good care of your people, they’ll take good care of the customer and the customer will come back. And we celebrate them. We train them. We teach them. We provide opportunity for them. Fifty percent of our general managers have come out of the hourly ranks and we continue to promote. We’re at almost 4,000 hotels around the world and the majority of our senior people in the company and in the hotels themselves have had a lot of opportunity to work with people and work very hard to develop a relationship with our people, because we know they make the difference, particularly in the hospitality business. (Forbes, 2014, para. 8–9)
We’re not like an assembly line in a factory. People are out there meeting the guests, checking them in, checking them out, waiting on them in the restaurants, cleaning their rooms, so they have millions of interactions every day with our guests. . . . We have detailed procedures for checking guests in and checking guests out. But at the same time we want our people to know that they’ve got latitude (Marriott, quoted in Forbes, 2014, para. 10, 14).
The emphasis on quality relationships with employees extends to Marriott. Over the years he regularly tours as many sites as possible, stopping to greet individual employees along the way. In some company circles he has nearly taken on the status of “rock star.” The enduring culture of Marriott should continue years after Bill Marriott’s tenure.
