1. 10 - 1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Leadership of Culture, Ethics, and Diversity Chapter 10 Part Three: Organizational Leadership

2. 10 - 2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Learning Outcomes 1)Explain the power of culture to an organization’s effectiveness, both internally and externally. 2)Describe the characteristics of low- and high-performing cultures. 3)Distinguish between symbolic and substantive leadership actions for shaping organizational culture. 4)Identify and briefly describe the four types of culture commonly found in organizations. 5)Describe Hofstede’s theory of National Culture Identities. 6)Identify organizational practices that do foster an ethical work environment. 7)Explain how authentic leadership has its roots in moral and ethical theory of leadership. 8)Explain the benefits of embracing diversity. 9)What leadership actions can support and sustain a pro-diversity culture?

3. 10 - 3 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. What Is Organizational Culture? 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. Culture creation and sustainability. Culture is created by design or by default. A culture is sustained with each successive generation of leaders and followers.

4. 10 - 4 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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.

5. 10 - 5 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Strong versus Weak Cultures Organizational culture may influence performance outcomes. A unique corporate culture can be a competitive advantage. > A weak culture symbolizes a lack of agreement or shared mind-set on key values and norms. > A strong culture symbolizes a complete agreement or shared mind-set on key values and norms, with leaders playing a key role.

6. 10 - 6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Characteristics of a Weak (Low) Performing Culture Generally associated with low performance. Low degree of fit between strategy and an organization’s culture. See Exhibit 10.1 and accompanying text. Leader/follower relationships feature: > Lack of trust, > Closed-mindedness, > Low expectation, and > Absence of accountability and integrity.

7. 10 - 7 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Characteristics of Strong (High) Performing Cultures Generally associated with high performance. High degree of fit between strategy and culture. See Exhibit 10.2 and accompanying text. Leader/follower relationships feature: > Trust, > Responsibility, > Accountability and integrity.

8. 10 - 8 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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. See Exhibit 10.3 and accompanying text.

9. 10 - 9 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Types of Culture There is no one best organizational culture. The focus here is on four culture types: o 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.

10. 10 - 10 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cooperative Culture Represents a leadership belief in strong, mutually reinforcing exchanges and linkages between employees and departments Adaptive Culture Represents a leadership belief in active monitoring of the external environment for emerging opportunities and threats and adapting to them Competitive Culture Represents a leadership mind-set that encourages and values a highly competitive work environment Bureaucratic Culture Represents a leadership mind-set that values order, stability, status, and efficiency Types of Culture

11. 10 - 11 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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. See Exhibit 10.4.

12. 10 - 12 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Hofstede’s Value Dimensions 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. 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.

13. 10 - 13 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Hofstede’s Value Dimensions 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. 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. 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.

14. 10 - 14 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Organizational Ethics Ethics are the standards of right and wrong that influence behavior. Some of the available tools for fostering an ethical work environment include: > Code of Ethics. o Must be supported by the corporate culture. > Ethics Committees. o An ethics ombudsperson is a single person entrusted with the responsibility of acting as the organization’s conscience. > Training and Education. o Aligns member behaviors with the organization’s values. > Disclosure Mechanisms. o Whistle blowing is employee disclosure of illegal or unethical practices on the part of the organization.

15. 10 - 15 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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.

16. 10 - 16 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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.

17. 10 - 17 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Benefits of Embracing Diversity Some of the economic benefits of diversity: > Can offer a company a marketing advantage. > Embracing diversity allows companies to, o Recruit from a larger pool, o Train and retain superior performers, and o 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.

18. 10 - 18 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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. See Exhibit 10.5.

19. 10 - 19 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 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