Running head: Rothaermel Exercise 3
1
Rothaermel Exercise 3 – BUSI 690
Thonya Lucas
Liberty University
ROTHAERMEL EXERCISE 3
2
Strategy and Structure Alignment
Structure is “the design of organization through which the enterprise is administered”
(Rothaermel, 2017, p. 346). According to Rothaermel (2017) the relationship between strategy
and structure is codependent and affects the performance of the organization, therefore conclude
that in order for successful strategy implementation, the design or structure must adjust to the
devised strategy and future growth of the firm (Rothaermel, 2017). As an organization goes
through different stages of growth (size, development, diversification, increased sales, extended
reach), structures must be changed to support the current strategy (Rothaermel, 2017).
Incorporating Organizational Culture
Rothaermel (2017) defines organizational culture as the “collectively shared values and
norms of an organization's members” (p. 359). Values are those things the organization considers
important, and norms are the appropriate attitudes and behaviors exhibited by employees
(Rothaermel, 2017). The organization’s culture is revealed to employees through socialization, “a
process whereby employees internalize an organization's values and norms through immersion in
its day-to-day operations” (Rothaermel, 2017, p. 360). Corporate culture is communicated
through artifacts which includes elements such as “design and layout of physical space, symbols,
vocabulary, shared stories, and choice of events and how they are celebrated (Rothaermel, 2017).
Duke Energy is the largest utility company in the United States and its values are safety,
caring, integrity, openness, passion, and respect. The firm’s culture is demonstrated through these
values in several ways. Employees share a safety moment from personal experience at the
beginning of every meeting or town hall conveying its importance to employees and the
company. Duke Energy’s caring environment is demonstrated through the connectivity of its
ROTHAERMEL EXERCISE 3
3
teams and involvement in the community (i.e. semi-annual employee volunteer events). The
corporate culture at Duke Energy is communicated through their monthly newsletter that
highlights stories of historical facts about the company and the achievements of employees. The
firm is also known for employing second and third generations which promotes a continuous
flow of the values and culture being passed down.
Employee’s commitment to maintain the organizational culture through the
embodiment of its values increases productivity, creativity, and teamwork which positively
affects the firm’s competitive advantage.
Corporate Governance
Corporate governance is the system of rules organizations use to govern the processes by
which they carry out their strategic goals successfully and legally. It involves monitoring the
principal-agent relationship in hopes of balancing the interests of the firm’s stakeholders
(Rothaermel, 2017). Principals (stakeholders) trust that agents (managers) will act in their best
interest when making decisions regarding resources, however because managers are more
informed than principals, opportunity exists for agents to promote their own self interests.
Business ethics is an agreed-upon code of conduct in business, based on societal norms. Business
ethics lay the foundation and provide training for “behavior that is consistent with the principles,
norms, and standards of business practice that have been agreed upon by society” (Rothaermel,
2017, p. 3878).
Organizations can implement things such as codes of conduct or offer employees stock
options to prevent temptations to pursue their own interest.
ROTHAERMEL EXERCISE 3
4
Shared Value Creation Model
The shared value creation framework provides direction to managers mesh how to mesh
economic and pursuit of competitive advantage with corporate social responsibility (Rothaermel,
2017). Nike has experienced its share of backlash from the community regarding the condition of
its factories and treatment of workers. I would suggest Nike use their famous slogan: “Just Do It”
as an incentive for education to make a difference in the lives of urban families that cannot afford
Nike’s for their children. The incentive could be attached to math and science programs so that
the children will also advance academically.
