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Chapter5.pptxChapter 5
Building Social Architecture
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Toyota
Toyota established its first international plant in 1962
Clarification and codifying of Toyota Principles needed
Formalized in Toyota Way and Toyota Business Practices
Emphasis on socialization and selection of employees.
Originally all training was done by one Japanese plant
Later, Japanese managers went abroad, followed by foreigners.
Problems remain
Not enough international trainers
Employee turnover makes socialization difficult
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The Three Dimensions of Social Architecture
1. Social capital
The relationships among employees
2. Organizational culture
Shared values, beliefs, and norms
3. Global mindsets
Cultural and strategic
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Social Capital
Social capital:
Benefits from connections & interpersonal relationships
Why social capital?
Can be used to access information, knowledge, and support
Investments in relationships today yield returns tomorrow
Social relationships must be maintained so they don’t depreciate
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Dimensions of Social Capital
Structural dimension:
Links between people or units
Individuals as bridges
Relational dimension:
Trust, obligations, and identities developed through interaction
Strength of relationships – internal bonding
Cognitive dimension:
Shared languages and systems of meaning among parties.
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Adapted from Nahapiet, J., and S. Ghoshal (1998). “Social capital, intellectual capital,
and the organizational advantage.” Academy of Management Review 23(2): 242–66.
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How to Approach Conflicts
Conflicts are best resolved through social relationships
Absence of conflict is not a good goal
Leads to apathy, static, and a lack of innovation
Functional (task-oriented) conflict is good when managed
Provides different perspectives and fresh assumptions
High quality relationships increase effectiveness
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Resolving Conflict
Ensure there is agreement on goals
Actively listen before you disagree
Focus on facts
Ensure balanced power structures
Explore multiple alternatives to enrich the debate
Inject humor into the decision-making process
Focus on the issues, not personalities or individuals
Social capital & shared norms create task-oriented debates
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Ensure that there is agreement on goals. Absence of agreement about goals (or vision or strategic criteria) will lead to political infighting and unconstructive debate.
Actively listen before you disagree. Showing the other person that you have understood their views increases the probability that they will listen constructively to yours.
Data, data, data … Measurement, measurement. A focus on facts keeps dialog constructive. Companies with cultures of constructive debate tend to believe in measuring everything.
Ensure balanced power structures. If certain functions or units are left out of the debate, which is simplified by focusing the power on an inner circle, it is highly likely that there will be no debate before a decision is taken.
Explore multiple alternatives to enrich the debate. Focusing on your preferred option to simplify the process of debate will slow down the process of exploration and increase the probability of conflict.
Inject humor into the decision-making process. Trust the psychologists—research shows that humor can keep tension constructive.
Focus on the issues, not personalities or individuals. Much conflict could be avoided by making sure that it is the idea that is challenged, not the individual who voiced it.
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How to Build and Manage Social Capital
Build relationships with tomorrow’s needs in mind
Shape informal relationships through structural solutions
Even if interaction is task-oriented, social aspects will develop
Encourage informal professional networks
View social capital creation as a goal of people management
Encourage and support mentoring and leadership programs
Plan effective getaways and meetings
Offer management training and development
Grant leaves of absence, sabbaticals, forum attendance
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The Dark Side of Social Captial
High level of bonding may cause closed groups
Language, nationality, and gender can create in-groups
Close relationships make the organization inward-looking
Reluctance to share social capital for the benefit of the firm
Building and maintaining social networks is costly
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Organizational Culture
Values, norms, and beliefs are widely shared
Benefits of a strong organizational culture
Increases consistency of behavior
Engenders coordination and facilitates interaction
Enhances goal alignment
Some evidence suggests relation to better performance
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Dangers
Strong cultures also tend to be associated with:
Self-sufficiency and complacency
Mental blindness to surroundings
Embedded routines and traditions that are not critically evaluated
Difficulties in implementing necessary changes in strategy and operational routines
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Shared values, beliefs, and norms must be challenged!
Building Shared Values
Factors that shape an organization’s culture:
Broader culture, institutional environment in which the firm was founded
Beliefs and actions of founders, important past and present leaders
Efforts at defining and communicating corporate values
Processes of employee socialization
International employee transfers
Monitoring how well employees adhere to corporate values and norms
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National and Organizational Cultures
Organizations can reflect the society they were founded in
Many successful firms are cultural outliers
Honda vs. Toyota culture
Organizational cultures anchored in distinct shared values
Good to be different at home, sometimes risky to be different abroad
Many leading firms are successful at implementing values globally
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Historical Legacy or Engineered Outcome?
Founders and leaders influence organizational culture
Firms highlight aspects of culture through stories
Provide legitimacy for how things are done today
Ways to reinforce values:
Shared language and vocabulary
Material symbols
Actively create values (ex. values jamborees)
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Managing Employee Socialization
Newcomers need to feel accepted as insiders.
Socialization at entrance to organization
Most intense
Distinct messages to labor market bring applicants who “fit” the culture
Formal introduction programs
Socialization for externally recruited leaders
Helps them understand values and develop personal relationships
Socialization vs. desired change
International mobility is key for diffusion of values
Transfer into headquarters helps absorption of company values
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Monitoring Value Adherence
Surveys to measure how well values are followed
Data fed back to unit, discussed, and corrected when necessary
Senior management walk the talk
Strong cultures practice zero-tolerance
Compliance first, performance second
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Complexity of Managing Culture
Heavy culture manipulation can backfire
Managing culture successfully requires care
Understand cross-cultural factors influencing human behavior
Awareness of what parts of firm culture should be kept vs. changed
Involvement of employees from different parts of the corporation
Attention to how decisions and actions are interpreted across units
Attention to realignment of a range of HR practices across the firm
Executives and managers who “walk the talk”
Long-term perspective; change in culture takes continuity.
The best way to instill culture is to lead by example
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A profound understanding of factors influencing human behavior across cultures.
Consciousness of the key elements of the existing culture that the firm wants to retain and those that it would like to change and why.
The involvement of employees from different parts of the corporation in the process.
Attention to how decisions and actions are interpreted by organizational members across units and borders.
Attention to the realignment of the whole range of HR practices in all parts of the firm.
Parent company executives as well as local managers who “walk the talk.”
A long-term perspective, recognizing that change in culture requires continuity in change.
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Global Mindset
Cultural perspective
Citizens of the world
See diversity as opportunity and channels it through teamwork
Cultural self-awareness, openness to and understanding of cultures
Strategic perspective
Reflects conflicting strategic orientations
Cognitive ability to cope with complexity
“Matrix in the mind” – contradictions need to be a way of thinking
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Developing Global Mindset
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Equal opportunity for all regardless of passport
International mobility and project work
Management training programs
Adjusting performance metrics
The role of senior executives
Equal opportunity for all regardless of passport
Ability of talent from anywhere in the world to be globally promoted
International mobility and project work
Transfers develop global skills, learn to handle cultural diversity.
Managers avoid excessive localism or globalism to eliminate future issues
Exposes to competing pressures, likely to be appointed to global projects
Language training and travel increase global mind-set
Management training programs
Recruiting from global business schools and in-house training
Adjusting performance metrics
The role of senior executives
Personally encouraging global mind-set, often in person
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