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whole or part.
Chapter 12
Leadership and Culture
Chapter Summary
This chapter examines organizational leadership and organizational culture—two factors essential
to the successful implementation and execution of a company’s strategic plan. Organizational
Organizational culture is the set of important assumptions, values, beliefs, and norms that
members of an organization share in common. The organizational leader plays a critical role in
developing, sustaining, and changing organizational culture. Ethical standards, the leader’s basis
Learning Objectives
1. Describe what good organizational leadership involves.
2. Explain how vision and performance help leaders clarify strategic intent.
3. Explain the value of passion and selection/development of new leaders in shaping an
organization’s culture.
4. Briefly explain seven sources of power and influence available to every manager.
5. Define and explain what is meant by organizational culture, and how it is created,
influenced, and changed.
6. Describe four ways leaders influence organizational culture.
7. Explain four strategy-culture situations.
Lecture Outline
I. Strategic Leadership: Embracing Change
A. The blending of telecommunications, computers, the Internet, and one global marketplace
has increased the pace of change exponentially during the past 10 years.
1. All business organizations are affected.
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2. Change has become an integral part of what leaders and managers deal with daily.
3. The leadership challenge is to galvanize commitment among people within an
4. Leaders galvanize commitment to embrace change through three interrelated
activities: clarifying strategic intent, building an organization, and shaping
B. Clarifying Strategic Intent
1. Leaders help their company embrace change by setting for their strategic intent—
a clear sense of where they want to lead the company and what results they expect
to achieve.
a) They do this by concentrating simultaneously and very clearly on two very
2. Vision
a) A leader needs to communicate clearly and directly a fundamental vision of
what the business needs to become.
(1) Traditionally, the concept of vision has been a description or picture of
(2) The intensely competitive, rapidly changing global marketplace has
b) Keep the Vision Simple
(1) Exhibit 12.1, Top Global Strategist, shows how CEO Mayor Michael
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3. Performance
a) Clarifying strategic intent must also ensure the survival of the enterprise as it
pursues a well-articulated vision, and after it reaches the vision.
(1) So a key element of good organizational leadership is to make clear the
b) Oftentimes this can create a bit of a paradox, because the vision is a future
picture and performance is now and tomorrow and next quarter and this year.
(1) The job of a good leader, in clarifying strategic intent, is to do so by
C. Building an Organization
1. The previous chapter examined alternative structures to use in designing the
organization necessary to implement strategy.
a) Leaders spend considerable time shaping and refining their organizational
b) Because leaders are attempting to embrace change, they are often rebuilding
c) And because embracing change often involves overcoming resistance to
(1) Ensuring a common understanding about organizational priorities.
(2) Clarifying responsibilities among managers and organizational units.
2. There are three ways good leaders go about building the organization they want
3. Education and leadership development is the effort to familiarize future leaders
with the skills important to the company and to develop exceptional leaders among
the managers you employ.
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distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a webs ite, in
whole or part.
4. Leaders do this in many ways.
a) All managers adapt structures, create teams, implement systems, and
5. Others create customer advisory groups, supplier partnerships, R&D joint
a) These, in addition to the fundamental structural guidelines described in the
organization.
6. Perseverance is the capacity to see a commitment through to completion long
7. Principles are your fundamental personal standards that guide your sense of
honesty, integrity, and ethical behavior.
a) If you have a clear moral compass guiding your priorities and those you set
b) This observation is repeatedly one of the first things effective leaders
interviewed by researchers, business writers, and students mention when they
8. Principle boils down to a personal philosophy we all deal with at an individual
level—choices involving honesty, integrity, and ethical behavior.
a) Indeed Exhibit 12.3, Global Strategy in Action, gives you the chance to
“test” your personal principles in comparison with the actions at Duke
University’s MBA Program, and BusinessWeek’s thoughts too.
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whole or part.
D. Shaping Organizational Culture
1. Leaders know well that the values and beliefs shared throughout their organization
will shape how the work of the organization is done.
a) And when attempting to embrace accelerated change, reshaping their
organization’s culture is an activity that occupies considerable time for most
leaders.
b) Elements of good leadership—vision, performance, principles, perseverance,
c) Leaders shape organizational culture through their passion for the enterprise
2. Passion, in a leadership sense, is a highly motivated sense of commitment to what
3. Like many other traits of good leaders, passion is best seen through the leaders’
a) They must use special moments to convey a sincere passion for and delight
4. Leaders also use reward systems, symbols, and structure among other means to
5. As leaders clarify strategic intent, build an organization, and shape their
a) Leaders look to managers they need to execute strategy as another source of
b) So selection and development of key managers becomes a major leadership
E. Recruiting and Developing Talented Operational Leadership
1. As noted at the beginning of this section on organizational leadership, the
a) We also defined one of the key roles of good organizational leadership as
building the organization by educating and developing new leaders.
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whole or part.
d) Exhibit 12.4, Global Strategy in Action, provides an interesting perspective
2. Today’s need for fluid, learning organizations capable of rapid response, sharing,
and cross-cultural synergy place incredible demands on young managers to bring
important competencies to the organization.
a) Exhibit 12.5, What Competencies Should Managers Possess, describes the
3. Researcher David Goleman addressed the question of what types of personality
attributes generate the type of competencies described in Exhibit 12.5, What
Competencies Should Managers Possess?
a) His research suggested that a set of four characteristics commonly referred to
from today’s desirable manager:
(1) Self-awareness in terms of the ability to read and understand one’s
4. A key way these characteristics manifest themselves in a manager’s routine
activities is found in the way they seek to get the work of their unit or group done
over time.
a) How do they use power and influence to get others to get things done?
b) Effective leaders seek to develop managers who understand they have many
5. Organizational sources of power are derived from a manager’s role in the
organization.
a) Position power is formally established based on the manager’s position in
done.
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whole or part.
c) It is the source of power many new managers expect to be able to rely on, but
d) Reward power is available when the manger confers rewards in return for
f) Information power can be particularly effective and is derived from a
6. Leaders today increasingly rely on their personal ability to influence others
perhaps as much, if not more so, than organizational sources of power.
a) Personal influence, a form of “power,” comes mainly from three sources.
7. Effective leaders make use of all seven sources of power and influence, very often
in combination, to deal with the myriad situations they face and need others to
handle.
a) The exact best source(s) of power and influence are often shaped by the
8. One final perspective on the role of organizational leadership and management
selection is found in the work of Bartlett and Ghoshal.
a) Their study of several of the most successful global companies in the last
b) They see three critical management roles: the entrepreneurial process
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whole or part.
c) Traditionally viewed as the domain of top management, their research