Do you Know Applications and theories of Leadership?

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Leadership of Culture, Ethics, and Diversity

Chapter 10 Part Three: Organizational Leadership

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Learning Outcomes

Explain the power of culture to an organization’s effectiveness, both internally and externally.

Describe the characteristics of low- and high-performing cultures.

Distinguish between symbolic and substantive leadership actions for shaping organizational culture.

Identify and briefly describe the four types of culture commonly found in organizations.

Describe Hofstede’s theory of National Culture Identities.

Identify organizational practices that do foster an ethical work environment.

Explain how authentic leadership has its roots in moral and ethical theory of leadership.

Explain the benefits of embracing diversity.

What leadership actions can support and sustain a pro-diversity culture?

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What Is Organizational Culture?

An organization’s culture is manifested in several ways.

Organizational culture gives identity to an organization.

Culture is the aggregate of beliefs, norms, attitudes, values, assumptions, and ways of doing things that is shared by members of an organization and taught to new members.

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Discussion Question

Based on your knowledge of the Enron case, what part did culture play in its actions and ultimate demise?

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Culture Creation and Sustainability

Culture is created by design or by default.

By design:

A new leader can impose a new culture.

By default:

Culture happens as a slowly evolving process.

A culture is sustained with each successive generation of leaders and followers.

Through stories, artifacts, rituals, slogans, symbols, and special ceremonies.

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The Power of Culture

Internal unity

Culture defines a normative order that provides consistent behavior.

The right culture can make employees feel like valued participants.

They become self-motivated.

Resulting in a unified workforce.

Full of creativity and innovation.

External adaptation

Culture determines how the organization responds to changes.

The right culture ensures an organization responds quickly.

For optimum performance, there has to be a strategy-culture fit.

Culture serves two important functions:

(1) it creates internal unity, and (2) it helps the organization adapt to changes in its environment.

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Strong versus Weak Cultures

Organizational culture may influence performance outcomes.

A unique corporate culture can be a competitive advantage.

The strength of any culture depends on the degree to which norms and practices are widely shared and strongly held throughout the organization.

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Strong versus Weak Culture

Symbolizes a complete agreement or shared mind-set on key values and norms, with leaders playing a key role.

Symbolizes a lack of agreement or shared mind-set on key values and norms.

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Strong Culture

Weak Culture

Characteristics of Weak (Low) Performing Cultures

Exhibit 10.1

Weak cultures are generally associated with low performance.

There is a low degree of fit between strategy and an organization’s culture.

Exhibit 10.1

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Characteristics of Strong (High) Performing Cultures

Exhibit 10.2

Strong cultures are generally associated with high performance.

There is a higher degree of fit between strategy and an organization’s culture.

Exhibit 10.2

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The Leader’s Role in Influencing Culture

Leaders use different tools for changing, modifying, or sustaining culture.

Substantive actions are explicit and highly visible and indicative of management’s commitment to a new way of doing things.

Symbolic actions are valuable for the signals they send about the kinds of behavior and expectations leaders wish to encourage.

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Leadership Actions for Shaping Culture

Exhibit 10.3

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Types of Culture

There is no one best organizational culture.

The focus here is on four culture types:

cooperative, adaptive, competitive and bureaucratic.

They are not mutually exclusive.

An organization’s culture may reveal characteristics of one or more of these types.

However, high-performing organizations with strong cohesive cultures tend to lean more toward one particular culture type.

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Types of Culture

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Cooperative Culture

Represents a leadership belief in strong, mutually reinforcing exchanges and linkages between employees and departments.

Adaptive Culture

Competitive Culture

Represents a leadership belief in active monitoring of the external environment for emerging opportunities and threats and adapting to them.

Bureaucratic Culture

Represents a leadership mind-set that encourages and values a highly competitive work environment.

Represents a leadership mind-set that values order, stability, status, and efficiency.

Discussion Question

Describe some of the practices, policies, and norms that you would expect to find in an organization that prides itself on building a culture of respect and trust.

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National Culture Identities – Hofstede’s Value Dimensions

On a national level, there are unique cultural identities associated with different countries.

Geert Hofstede developed five value dimensions that distinguish a nation’s culture from other nations.

Each dimension contains two opposing values on opposite ends of a continuum.

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Hofstede’s Value Dimensions for Understanding National Cultural Differences

Exhibit 10.4

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Individualistic or Collectivistic Cultures

Individualism is a psychological state in which people see themselves first as individuals and believe their own interest and values are primary.

Collectivism is the state of mind wherein the values and goals of the group – whether extended family, ethnic group, company, or community – are primary.

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High- or Low-Uncertainty-Avoidance Cultures

High-uncertainty-avoidance culture has a majority of people who do not tolerate risk, avoid the unknown, and are comfortable when the future is relatively predictable and certain.

Low-uncertainty-avoidance culture has a majority of people who are comfortable with and accepting of the unknown, and tolerate risk and unpredictability.

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High- or Low-Power-Distance Culture

In a high-power-distance culture, leaders and followers rarely interact as equals.

In a low-power-distance culture, leaders and their followers interact on several levels as equals.

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Long- or Short-Term Orientation

People with a long-term orientation have a future-oriented view of life and thus are thrifty (saving for the future) and persistent in achieving goals.

A short-term orientation derives from values that express a concern for maintaining personal happiness and for living for the present.

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Masculinity or Femininity Cultures

Masculinity describes a culture that emphasizes assertiveness and a competitive drive for money and material objects.

Femininity describes a culture that emphasizes developing and nurturing personal relationships and a high quality of life.

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Implications for Leadership

In the academic community:

There is greater recognition that future leaders need diversity competencies to leverage a diverse workforce.

At the organizational level:

More and more organizations are relying on leaders with international experience to lead a multicultural workforce and compete in a global marketplace.

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Organizational Ethics

Ethics are the standards of right and wrong that influence behavior.

Here, the focus is on the role of leadership in creating an ethical work environment.

Whose absence can lead to severe consequences for the for organization.

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Fostering an Ethical Work Environment

Some of the tools available include:

Code of Ethics.

Must be supported by the corporate culture.

Ethics Committees.

An ethics ombudsperson is a single person entrusted with the responsibility of acting as the organization’s conscience.

Training and Education.

Aligns member behaviors with the organization’s values.

Disclosure Mechanisms.

Whistle blowing is employee disclosure of illegal or unethical practices on the part of the organization.

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Authentic Leadership

Personality profile of the authentic leader

Holds themselves to a higher standard.

Has an introspective quality.

Driven by a strong value system.

Character provides a moral compass.

Courage allows them to speak out to right wrongs, admit and own up to mistakes.

How authentic leaders influence follower behavior and attitudes

Emphasize transparency.

Increase follower organizational citizenship.

Increase job satisfaction and retention.

Followers know what is expected.

There are high levels of identification with the leader.

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Diversity Leadership

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

The changing work place.

Demographic changes account for the most significant increase in workforce diversity.

Passage of the ADA broadens that diversity.

Another demographic trend is the age and gender mix.

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Discussion Question

Describe the different generations that make up what some people are now referring to as “generational diversity” and identify their unique characteristics.

What are the implications of generational diversity on effective leadership?

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Benefits of Embracing Diversity

Some of the economic benefits of diversity:

Can offer a company a marketing advantage.

Embracing diversity allows companies to:

Recruit from a larger pool,

Train and retain superior performers, and

Maximize the benefits of a diverse workforce.

Diversity may lower costs.

Creates a broader base for creative problem solving.

Diverse teams often outperform non-diverse teams.

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Discussion Question

Despite the benefits of diversity, some have described it as a “double-edged sword”.

Explain why.

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Creating a Pro-Diversity Organizational Culture

The best companies look beyond diversity compliance to diversity institutionalization.

Saying you have a pro-diversity culture and being a diversified organization are two different things.

Diversity proponents emphasize the importance of executive leadership and organization-wide participation.

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Discussion Question

What is the difference between diversity compliance and diversity institutionalization?

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Factors That Support and Sustain a Pro-Diversity Culture

Exhibit 10.5

Ethnocentrism is the belief that one’s own group or subculture is naturally superior to other groups and cultures.

The glass ceiling is defined as an invisible barrier that separates women and minorities from top leadership positions.

Exhibit 10.5

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The Effects of Globalization on Diversity Leadership

Corporations are becoming more global and hence more ethnically diverse.

Global companies must learn to deal with diverse, cross-cultural stakeholders.

Learning to deal effectively with partners from different cultures will be critical.

Multinational companies are recruiting leaders with multicultural experiences.

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Discussion Question

In your opinion, what would be some strategies for developing a diversity sensitive orientation (DSO)?

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Key Terms

adaptive culture

bureaucratic culture

collectivism

culture

competitive culture

cooperative culture

diversity

ethics

ethics ombudsperson

ethnocentrism

femininity

glass ceiling

high-power-distance culture

high-uncertainty-avoidance culture

individualism

long-term orientation

low-power-distance culture

low-uncertainty-avoidance culture

masculinity

short-term orientation

strong culture

weak culture

whistle-blowing

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