Organization Theory: Strategy Implementation Process

1
Organization Theory Strategy Implementation
Process

• Steven E. Phelan
• July, 2006
• STRATEGY EXECUTION
• Power, Culture, People

2
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

3
Culture
4
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

5
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?

6
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 (officiallyunofficially)
• What are the main norms (dos and donts)
• 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?

7
Debrief

• What struck you as abnormal or strange about your
  partners answers? Why?
• What management challenges do you think your
  partners organization might present? How hard
  would it be to change the culture?
• What are the implications for strategy
  implementation?

8
Some key questions

• Where does culture come from?
• How is it sustained?
• How do we create or change a culture?

9
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
• Dont try to change attitudes, change behavior
  (and attitudes will follow)
• Behavior doesnt 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 Depots 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???

13
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 Seagrams 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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Power
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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

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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?

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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 peoples 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 dont 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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People advantage

• Pfeffers 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

REALISTIC OR NOT?