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Copyright (c) 2007 by Thomson South-Western. All rights reserved. 10-1

EFFECTIVEEFFECTIVELEADERSHIPLEADERSHIP

3rd Edition3rd EditionRobert N. Lussier Robert N. Lussier

and Christopher F. Achuaand Christopher F. Achua

This presentation updated and enhanced by:This presentation updated and enhanced by: George W. CrawfordGeorge W. Crawford

Assistant ProfessorAssistant ProfessorClayton State UniversityClayton State University

Morrow, GA 30260Morrow, GA [email protected]@mail.clayton.edu


Chapter 10Chapter 10Leadership of Leadership of

Culture and Culture and Diversity, Diversity,

and the Learning and the Learning OrganizationOrganization


Organizational Organizational CultureCulture• Great culture is the common Great culture is the common

denominator among great denominator among great companiescompanies

• High-performance companies have High-performance companies have high-performance cultureshigh-performance cultures

• High-performance culture is a High-performance culture is a source of competitive advantagesource of competitive advantage

• E.g southwest Airlines and Starbucks E.g southwest Airlines and Starbucks often attributed to their success to often attributed to their success to the culture their leaders helped the culture their leaders helped createcreate..

• Leaders at Other companies such as Ford Leaders at Other companies such as Ford Motor company, Boeing Corporation and J.C. Motor company, Boeing Corporation and J.C. Penny trying to shift their culture values to Penny trying to shift their culture values to remain competitive in today’s environmentremain competitive in today’s environment. .


CultureCultureThe aggregate of beliefs, The aggregate of beliefs, attitudes, values, attitudes, values, assumptions, andassumptions, and ways ofways of thinking that is shared by thinking that is shared by members of an organization members of an organization andand taught totaught to new membersnew members


CultureCulture• Each organization has unique Each organization has unique

culture, distinguished by itsculture, distinguished by its– Beliefs and philosophyBeliefs and philosophy– Approaches to decision making and problems Approaches to decision making and problems

solvingsolving• Based on the values and principles Based on the values and principles

displayed by leadersdisplayed by leaders• Has its own stories and mythsHas its own stories and myths• Determines how to respond to Determines how to respond to

threats and opportunitiesthreats and opportunities– In both the external and internal environmentIn both the external and internal environment

• Deeply rootedDeeply rooted– Core essence of organizationCore essence of organization– Often first expound (developed) by founderOften first expound (developed) by founder


Container StoreContainer Store• Sells-boxes, garbage cans,shelving and Sells-boxes, garbage cans,shelving and

anything that need to organize anything that need to organize home,office and carhome,office and car

• Encourage employees to do whatever Encourage employees to do whatever needs to be done- “be helpful to others”.needs to be done- “be helpful to others”.

• Culture promote open communication, Culture promote open communication, cooperation and equalitycooperation and equality

• Consistently win top sports in Fortune Consistently win top sports in Fortune magazine’s list of best companies to magazine’s list of best companies to work for in America.work for in America.


Culture and StrategyCulture and Strategy• Must matchMust match• Energize members to do their Energize members to do their

jobsjobs• When out of syncWhen out of sync

– Reduces efficiency and effectivenessReduces efficiency and effectiveness• When culture is well matched When culture is well matched

to strategyto strategy– Can lead to successful organizationCan lead to successful organization– Creates internal unity Creates internal unity (shared vision, (shared vision,

mission, goals & strategy) – shared understanding mission, goals & strategy) – shared understanding abt identity of org.abt identity of org.

– Helps organization to adapt to external Helps organization to adapt to external environment environment (changes-external (changes-external factors-customers needs)factors-customers needs)

– Creates strong member identification Creates strong member identification with the organizationwith the organization


cultureculture•Surface level-visible Surface level-visible

artifacts (manners of artifacts (manners of dress, patterns of dress, patterns of behavior, symbols, behavior, symbols, ceremonies and office ceremonies and office layout)layout)


CultureCultureWeakWeak • Little agreement on values, beliefs, Little agreement on values, beliefs,

and norms of member behaviorand norms of member behavior• Can work against strategy Can work against strategy

implementationimplementation• No deeply felt sense of identification No deeply felt sense of identification

with the organizationwith the organization• Culture has little meaning to Culture has little meaning to

employees and managersemployees and managers• Things like gossiping, manipulation, Things like gossiping, manipulation,

favoritism, poor communication, and favoritism, poor communication, and intense internal competition prevail intense internal competition prevail (exist) (exist) e.g; Kmart,Ford & GM, Enron- struggling to e.g; Kmart,Ford & GM, Enron- struggling to any changesany changes


CultureCultureStrong Strong • Good for the bottom lineGood for the bottom line• Clear, explicit set of principles and valuesClear, explicit set of principles and values• Contributes to a competitive advantageContributes to a competitive advantage• Used to conduct businessUsed to conduct business• Management communicates values and Management communicates values and

principles, continuouslyprinciples, continuously• Shared throughout organizationShared throughout organization• Bias for action; to get things doneBias for action; to get things done• Managers teach and live the valuesManagers teach and live the values• Does not significantly change when new Does not significantly change when new

leader is chosenleader is chosen• E.g; HP,Southwest Airlines, Wal-MartE.g; HP,Southwest Airlines, Wal-Mart


Factors Contributing Factors Contributing To Strong CultureTo Strong Culture

• Strong founder or leader develops Strong founder or leader develops principles, practices, and behavior for:principles, practices, and behavior for:– Customers’ needsCustomers’ needs– Strategic requirementStrategic requirement– Competitive conditionsCompetitive conditions

• Total organizational commitmentTotal organizational commitment– To operating under these valuesTo operating under these values

• Unwavering Unwavering (steady)(steady) commitment commitment from:from:– EmployeesEmployees – CustomersCustomers– ShareholdersShareholders– Other stakeholdersOther stakeholders


Types of Types of Organizational Organizational

CultureCulture• Cooperative cultureCooperative culture represents represents a leadership belief in strong, a leadership belief in strong, mutually reinforcing exchanges mutually reinforcing exchanges and linkages between and linkages between employees and departmentsemployees and departments

• Adaptive cultureAdaptive culture represents a represents a leadership belief in active leadership belief in active monitoring of the external monitoring of the external environment for emerging environment for emerging opportunities and threatsopportunities and threats


Types of Types of Organizational Organizational Culture (cont.)Culture (cont.)

• Competitive cultureCompetitive culture represents a leadership that represents a leadership that encourages and values a encourages and values a highly competitive work highly competitive work environmentenvironment

• Bureaucratic cultureBureaucratic culture represents a leadership that represents a leadership that values order, stability, status, values order, stability, status, and efficiencyand efficiency


ValuesValues• Generalized beliefs and Generalized beliefs and

behaviors that are behaviors that are considered by an individual considered by an individual or group to be importantor group to be important

• Relationships between Relationships between leaders and members are leaders and members are based on shared valuesbased on shared values

• Employees learn Employees learn organizational values by organizational values by observing leadersobserving leaders


EthicsEthics•Provide guidelines for Provide guidelines for judging conduct and judging conduct and decision makingdecision making

•Leadership must have Leadership must have high ethics for the high ethics for the organization to have organization to have themthem

•Top management must Top management must be committed to high be committed to high ethicsethics


Supporting High Supporting High Ethical StandardsEthical Standards

•Codes of ethicsCodes of ethics– Formal statementFormal statement– May be part of mission May be part of mission

statementstatement•Ethics committeesEthics committees

– To oversee ethical issuesTo oversee ethical issues•Ethics ombudspersonEthics ombudsperson- - A single person entrusted with responsibility of acting as the A single person entrusted with responsibility of acting as the

org’s conscience.he/she investigate complaints and point out org’s conscience.he/she investigate complaints and point out ethcs failure to top mgt.ethcs failure to top mgt.


Supporting High Supporting High Ethical StandardsEthical Standards

•Training ProgramsTraining Programs– Teach employees to Teach employees to

internalize ethics into internalize ethics into performance of organizationperformance of organization

•Disclosure MechanismsDisclosure Mechanisms– Allow individual to report Allow individual to report

ethics violations without ethics violations without retributionretribution


Whistle BlowingWhistle Blowing• Employee disclosure of illegal Employee disclosure of illegal

or unethical practices on the or unethical practices on the part of the organizationpart of the organization

• Can be risky for the employeeCan be risky for the employee• Employees have been know to Employees have been know to

suffer consequences like being suffer consequences like being fired, ostracized, demoted, or fired, ostracized, demoted, or transferredtransferred

• Has become a more accepted Has become a more accepted practice than in the pastpractice than in the past


DiversityDiversityThe The

inclusion of inclusion of all groups all groups

at all levels at all levels in an in an

organizatioorganizationn


National Cultural National Cultural DifferencesDifferences

• A nation’s values and norms A nation’s values and norms determine attitudes and behaviors determine attitudes and behaviors acceptable or appropriateacceptable or appropriate

• People are socialized into national People are socialized into national values as they grow upvalues as they grow up

• Norms and social guidelines Norms and social guidelines prescribe how members of a prescribe how members of a nation culture act toward each nation culture act toward each otherother

• Significant differences between Significant differences between national cultures exist and make a national cultures exist and make a difference in how leaders and difference in how leaders and employees behave in organizationsemployees behave in organizations


Individualism–Individualism–CollectivismCollectivism

• IndividualismIndividualism is a psychological is a psychological state in which people see state in which people see themselves first as individuals themselves first as individuals and believe their own interests and believe their own interests and values are primaryand values are primary

• CollectivismCollectivism is the state of mind is the state of mind wherein the values and goals of wherein the values and goals of the group—whether extended the group—whether extended family, ethnic group, or family, ethnic group, or company—are primarycompany—are primary


High–Low Uncertainty High–Low Uncertainty AvoidanceAvoidance

• A society with A society with High Uncertainty High Uncertainty AvoidanceAvoidance contains a majority of contains a majority of people who do not tolerate risk, people who do not tolerate risk, avoid the unknown, and are avoid the unknown, and are comfortable when the future is comfortable when the future is relatively predictable and certainrelatively predictable and certain

• A society where the majority of A society where the majority of the people have the people have Low Uncertainty Low Uncertainty AvoidanceAvoidance has people who are has people who are comfortable with and accept the comfortable with and accept the unknown, and tolerate risk and unknown, and tolerate risk and unpredictabilityunpredictability


High–Low Power High–Low Power DistanceDistance

• In a In a High Power-DistanceHigh Power-Distance culture, leaders and followers culture, leaders and followers rarely interact as equalsrarely interact as equals

• In a In a Low Power-DistanceLow Power-Distance culture, leaders and their culture, leaders and their members interact on several members interact on several levels as equalslevels as equals


Long-Term – Short-Term Long-Term – Short-Term OrientationOrientation

• People from a People from a Long-Term OrientedLong-Term Oriented culture have a future-oriented culture have a future-oriented view of life, are thrifty, persistent view of life, are thrifty, persistent in achieving goals, and less in achieving goals, and less inclined to demand immediate inclined to demand immediate returns on their investmentsreturns on their investments

• A culture with a A culture with a Short-Term Short-Term OrientationOrientation have values that have values that express concern for maintaining express concern for maintaining personal stability or happiness personal stability or happiness and for living for the present. and for living for the present. Immediate gratification is a Immediate gratification is a prioritypriority


Masculinity–Masculinity–FemininityFemininity

• MasculinityMasculinity describes a culture describes a culture that emphasizes assertiveness that emphasizes assertiveness and competitive drive for and competitive drive for money and material objectsmoney and material objects

• FemininityFemininity describes a culture describes a culture that emphasizes developing that emphasizes developing and nurturing personal and nurturing personal relationships and a high relationships and a high quality of lifequality of life


Demographic Demographic DiversityDiversity

• Any characteristic that serves as a basis Any characteristic that serves as a basis for social categorization and self-for social categorization and self-identificationidentification

• Includes:Includes:– RaceRace– GenderGender– AgeAge– EthnicityEthnicity– Physical appearancePhysical appearance– LanguageLanguage– DialectDialect

• Diversity is the inclusion of all groups at Diversity is the inclusion of all groups at all levels in an organizationall levels in an organization


STRENGTH OF STRENGTH OF DIVERSE DIVERSE

ORGANIZATIONORGANIZATION•Marketing advantagesMarketing advantages•Development and Development and

retaining talented retaining talented peoplepeople

•Cost effectivenessCost effectiveness•CreativityCreativity


Achieving DiversityAchieving Diversity•All employees are given All employees are given

equal opportunities to equal opportunities to contribute their talents, contribute their talents, skills, and expertiseskills, and expertise

•Contributions are used Contributions are used without regard to race, without regard to race, gender, ethnic gender, ethnic background, etc.background, etc.


Achieving Diversity Achieving Diversity (cont.)(cont.)

Remove Remove obstaclesobstacles

• Stereotypes and Stereotypes and prejudiceprejudice

• EthnocentrismEthnocentrism• Outdated policies Outdated policies

and practicesand practices• Glass ceilingGlass ceiling• Unfriendly work Unfriendly work

environmentenvironment


Achieving DiversityAchieving Diversity

ObstaclesObstaclesPolicies

and PracticesEthnocentrism

GlassCeiling

UnfriendlyWork

Environment

Stereotypes and

Prejudice


Stereotypes and Stereotypes and PrejudicePrejudice

• A A StereotypeStereotype is a conventional, is a conventional, formulaic, and oversimplified formulaic, and oversimplified conception, opinion, or imageconception, opinion, or image

• PrejudicePrejudice is the tendency to is the tendency to form an adverse opinion form an adverse opinion without just cause about without just cause about people who are different from people who are different from the mainstream in terms of the mainstream in terms of their gender, race, ethnicity, their gender, race, ethnicity, or any other definable or any other definable characteristic characteristic


EthnocentrismEthnocentrism•The belief that one’s own The belief that one’s own

group or subculture in group or subculture in naturally superior to naturally superior to other groups and culturesother groups and cultures

•Tends to produce a Tends to produce a homogeneous culture homogeneous culture where everyone looks and where everyone looks and acts the same and shares acts the same and shares the same values and the same values and beliefsbeliefs


Policies and PracticesPolicies and Practices• Organizations can have Organizations can have

embedded policies and embedded policies and practices that work against practices that work against maintaining a diverse maintaining a diverse workforceworkforce

• Leaders must audit policies Leaders must audit policies and practices, and if any and practices, and if any exists that limit diversity the exists that limit diversity the leaders must take action to leaders must take action to have them removedhave them removed


The Glass CeilingThe Glass Ceiling• An invisible barrier that An invisible barrier that

separates women and minorities separates women and minorities from top leadership positionsfrom top leadership positions

• Represents an “white male” Represents an “white male” club within the organizationclub within the organization

• Exists between upper-middle Exists between upper-middle management and the executive management and the executive levellevel

• Women and minorities face Women and minorities face great obstacles in breaking great obstacles in breaking through the glassthrough the glass


Unfriendly Work Unfriendly Work EnvironmentEnvironment

• Minorities and women may Minorities and women may be excluded from social be excluded from social activities in and out of the activities in and out of the officeoffice

• Leads to feelings of Leads to feelings of alienation and despairalienation and despair

• Further leads to job Further leads to job dissatisfaction and high dissatisfaction and high turnover among minority turnover among minority groupsgroups


Learning Learning OrganizationsOrganizations•Skilled at creating, Skilled at creating,

acquiring, and acquiring, and transferring knowledgetransferring knowledge

•Modifies behavior to Modifies behavior to reflect new knowledge reflect new knowledge and insightsand insights

•Value experimentation, Value experimentation, initiative, innovation, initiative, innovation, flexibilityflexibility


Organizational Organizational KnowledgeKnowledge

•The tacit and explicit The tacit and explicit knowledge that knowledge that individuals possess individuals possess about products, services, about products, services, systems, and processessystems, and processes

•Often codified in Often codified in manuals, databases, and manuals, databases, and information systemsinformation systems


Learning Learning OrganizationsOrganizations

• Strong top-Strong top-management management supportsupport

• Provide Provide resources to resources to foster learning foster learning at all levelsat all levels

• Emphasis on Emphasis on both long-and both long-and short-term short-term performanceperformance

• Little fear of Little fear of failurefailure


Learning OrganizationLearning OrganizationCharacteristicsCharacteristics

• Learning embedded in cultureLearning embedded in culture• Values experimentation, Values experimentation,

initiative, innovation, and initiative, innovation, and flexibilityflexibility

• Visible and strong management Visible and strong management supportsupport

• Mechanisms and structures to Mechanisms and structures to nurture ideasnurture ideas

• Knowledge and information is Knowledge and information is disseminateddisseminated

• Resources are committed in Resources are committed in fostering learningfostering learning


Learning OrganizationLearning OrganizationCharacteristics (cont.)Characteristics (cont.)

• Employees empowered to Employees empowered to resolve problemsresolve problems

• Equal emphasis on short- Equal emphasis on short- and long-term performanceand long-term performance

• Deep desire throughout to Deep desire throughout to develop, define, and adapt develop, define, and adapt knowledgeknowledge

• People are not afraid to failPeople are not afraid to fail


Guidelines for Guidelines for Enhancing Enhancing

Organizational Organizational LearningLearning• Encourage creative thinkingEncourage creative thinking

• Create a climate to Create a climate to encourage experimentationencourage experimentation

• Provide incentives for Provide incentives for learning and innovationlearning and innovation

• Encourage systems thinkingEncourage systems thinking• Create a culture for team and Create a culture for team and

individual learningindividual learning


Guidelines for Enhancing Guidelines for Enhancing Organizational Learning Organizational Learning

(cont.)(cont.)• Have a system to channel Have a system to channel

and nurture creative ideas and nurture creative ideas and innovationand innovation

• Create a shared vision for Create a shared vision for learninglearning

• Broaden employees’ frames Broaden employees’ frames of referenceof reference

• Create an environment that Create an environment that allows learning from allows learning from mistakesmistakes

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