Week 4 Organizational Culture and Environment for Entrepreneurship

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Week 4 Organizational Culture and Environment
for Entrepreneurship
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Week 4/1 Organizational and Entrepreneurial
Culture
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Parameters of Managerial Discretion
Organizational Culture (Internal
Environment)
Organizations Environment (External
Environment)
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Organizational Culture
Organizational Culture (also known as Corporate
Culture) is defined as the collective behaviors
of an organization which express the ongoing
values of the organization
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Organizational Culture
Values and Beliefs
Behavior Patterns
ORGANIZATION
Cultural Artifacts
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Sources of an Organizational Culture

• Vision of the founders/entrepreneurs
• Founders/entrepreneurs biases and assumptions
• Employees own experiences

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How Culture Emerges
(Source Hatch Organizational Consulting Inc.)
C u l t u r e Culture emerges reflecting vision,
values success
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Types of Culture
(Source Hatch Organizational Consulting Inc.)

• Strong Culture
• Entrepreneur or other strong leader shapes the
  culture
• Successful pattern or niche develops early
• Does not change easily
• May come unglued when environment changes
• Adaptive Culture
• Requires different leadership style
  orientation
• Changes readily as environment changes
• Characterized by different structure than strong
  culture

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Cultural Transformation
(Source Hatch Organizational Consulting Inc.)

CRISIS
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Strategically Appropriate Cultures
(Source Hatch Organizational Consulting Inc.)
Finds a "fit" for operating in a way appropriate
to the industry segment. Uses this "fit" to
create good short-term performance. If the
market is stagnant in terms of change, the "fit"
works.If the market is not stagnant in terms of
change, the "fit" begins not to work. If this
happens, only a crisis usually begins the process
of innovation.
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How it can go Wrong
(Source Hatch Organizational Consulting Inc.)
Firm has Strategically Appropriate Culture
Firm Performs Well
Business Environment Changes
Strong Culture continues on track that bred
success
Performance Deteriorates
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Forces Driving Cultural Change
(Source Hatch Organizational Consulting Inc.)

• More demanding less loyal customers
• More opportunities / more competition
• Traditional cycle times compressed everywhere

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Solutions
(Source Hatch Organizational Consulting Inc.)

• SOLUTIONS (Peter Drucker)
• An in-depth understanding of customers' values
• Customizable offerings
• Deliver value (remove time cost reduce
  'hassle')
• ORGANIZATION IMPACT (Peter Drucker)
• Flatter organizations
• Information-based
• Knowledge at bottom of organization

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Go for Adaptive Culture
(Source Hatch Organizational Consulting Inc.)
What makes a culture adaptive?

• Non-bureaucratic
• Shared confidence
• Creative
• Supportive
• Candid discussions at all levels
• Team-oriented
• Risk-takers
• Encourages entrepreneurship

• Trusting
• Innovative
• Non-hierarchical
• Spirit of doing
• Fast information
• Values leadership at all levels
• Values customers, employees stakeholders
  alike

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Go for Adaptive Culture
(Source Hatch Organizational Consulting Inc.)

• Adaptive Culture in a Nutshell
• Decisions are made with confidence by everyone
  in the organization
• Strategic financial information flow
  systematically (and fully)
• Success is measured by customer satisfaction
• Customers, employees, and suppliers are
  considered in the business strategy
• The environment is flexible

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Go for Adaptive Culture
(Source Hatch Organizational Consulting Inc.)

• The Leader's Contribution
• Develops strategies that enable people to
  contribute from their strengths
• Focuses initiatives on all stakeholder groups
• Knows how to produce change will do it
• Creates teams to make it happen
• Communicates context for change (why it must
  happen)
• Builds sound measurement systems
• Encourages dialogue in the organization
• Engineers small wins to create momentum
• Recognizes rewards these accomplishments
• Removes barriers to change
• Is patient with the change process

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Go for Adaptive Culture
(Source Hatch Organizational Consulting Inc.)

• Kotter Heslett cited the following Bottom Line
  Results of one successful company embracing the
  Adaptive Culture (Kotter Heslett, Corporate
  Culture Performance, p. 11, cited Hatch
  Organizational Consulting Inc.)
• The Bottom Line Results
• Revenues increased 682 compared to 166 - 4X
• Workforce expanded 282 vs. 36 - 8X
• Stock grew 901 vs. 74 - 12X
• Net Income grew 756 vs. 1 - 756X!!!

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Road Map to Adaptive Culture
(Source Hatch Organizational Consulting Inc.)
Leaders create business vision and appropriate
strategy that fits and works
Firm succeeds .
Leaders push importance of leadership
stakeholders
A strong culture emerges that values leadership
strong service to stakeholders (customers,
suppliers, employees etc.)
Leaders work to preserve the adaptive core of the
culture
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How to build innovative and creative work cultures
A research finding from James C. Sarros et al.
suggests that in order to build innovative and
creative work cultures, organizational leaders
should consider challenging convention, and be
willing to take calculated risks. And that
Changing organizational culture is easier in
smaller-sized firms.
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Entrepreneurial culture
Culture is significant in organizational
orientation to entrepreneurial innovation. Steven
son and Gumpert (1985) uses a corporate
opportunity matrix to illustrate the type of
organization and the extent to which each
corporate culture supports a desire for change
and a believe in its capacity to influence the
competitive environment.
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Entrepreneurial culture
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Entrepreneurial culture vs. traditional culture
Entrepreneurial Organization - Evolving,
futuristic - Short Long-term, many criteria -
Emphasized rewarded - Integral - Culture of
empowerment - Given away - OK teaches a lesson -
Decentralized - Flexible facilitates
innovation - Organic - Prized - Valued if it
helps achieve goals

• Dimension
• Strategy
• Productivity
• Risk
• Opportunity
• Leadership
• Power
• Failure
• Decision Making
• Communication
• Structure
• Creativity
• Efficiency

Traditional Organization - Status quo,
conservative - Short-term focus profitability -
Averse, punished - Absent - Top-down,
autocratic - Hoarded - Costly - Centralized - By
the book chain of command - Hierarchical -
Tolerated - Valued, accountants are heroes
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Management of Cultural Diversity
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Competitive Advantage
Management of Cultural Diversity
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SELECTED METHODS OF CROSS-CULTURAL TRAINING
Cognitive Involves knowledge of other people
and their culture, especially customs, values,
and social institutions. Awareness Focuses on
either self-awareness for better adjustment
outside ones culture, or cultural awareness in
being sensitive to the cultural factors that
influence both parties in human
interaction. Behavioral Emphasizes learning
about specific cultural behaviors and
expectations in host cultures for which the
trainee is being prepared, and experiential
exercises about a host culture. Area
Simulation Relies on creation of a particular
cultural environment or situation comparable to a
host culture to which the trainee is going, even
as to similar physical climate and conditions.
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SELECTED METHODS OF CROSS-CULTURAL TRAINING
Exchange / Interaction Involves interaction
with representatives of host or other cultures to
increase awareness of the others backgrounds,
values, and learned behaviors. Languages Studies
Focuses upon a specific foreign language and
the cultures of the peoples who speak that
particular language. Cultural Encounters
(Contrast) Involves either confronting or
contrasting differences between ones own culture
and that of another through role-playing or
simulation represented by a native.
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REMINDER
Please read up the research paper The Transfer
of Western Management to China by Ying Fan Call
number p HD30.42.G7M266You can also access it
online from ABI/Inform database via this link
http//www.ntu.edu.sg/lib/collections/rbr/rbr03-1/
CS.htmSC132
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END OF LECTURE Thank You!