Leading by Leveraging Culture

Jennifer A. Chatman1 Sandra E. Cha


The 1st author composed this chapter while a Marvin Bower Fellow at the Harvard Organization School, and it is grateful for support.

Copyright В© 2002 by Jennifer A. Chatman and Sandra E. Cha Working documents are in draft contact form. This working paper is usually distributed to get purposes of comment and discussion only. It may not be reproduced devoid of permission from the copyright holder. Copies of working paperwork are available from your author.

Leading by Leveraging Culture

Jennifer A. Chatman1 Haas School of Organization University of California Berkeley, CA 94720-1900 [email protected] berkeley. edu And Sandra Electronic. Cha Harvard Business College Soldiers Field, Sherman Hall 102 Harvard University Boston, MA 02163 [email protected] edu

December 10, 2001

To look in, Embriagar Chowdhury (Ed), Next Generation Business Series: Management, Financial Times-Prentice Hall Publishers, forthcoming, 2003.


The first writer wrote this kind of chapter while a Marvin Bower Other at the Harvard Business School, and is thankful for their support.


We occasionally receive calls by prospective clients who have, having noticed that we consult with organizations to improve their ethnicities, ask all of us to " come on down to our organization and get us a better one particular. ” Maybe they are thinking that, somehow, after we have performed our culture magic, employees will probably be singing and dancing inside their cubicles. Though this is a good image, merely trying to help to make employees content misses the strength of leveraging tradition. The problem is that organizational lifestyle has become faddish, and as such, it has been over-applied and underspecified. The goal in this chapter is to precisely simplify why lifestyle is effective, and provide certain criteria intended for developing a solid, strategically relevant culture that may be likely to enhance your organization's overall performance over the long term. A few tricks apply to each of our discussion. 1st we will not likely claim that by just managing lifestyle, leaders will probably be assured of organizational success, or by neglecting lifestyle, doomed to get corrupted. As this kind of volume illustrates, leveraging traditions is yet one of several key command tools. We will claim, however , that by definitely managing culture, your organization, plus the people working within it, will be more likely to deliver on your strategic goals over the long haul. We start by defining company culture and psychological foundation its powerful effects upon performance. We then discuss how emphasizing development enhances long term strategic accomplishment. Next, all of us present a collection of managerial practices—recruiting and selecting employees for culture match, intensive socialization and teaching, and the usage of formal and informal rewards—that leverage tradition for overall performance. Throughout the part, we show that lifestyle boosts company performance mainly because it (1) is usually strategically relevant, (2) is strong, and (3) highlights innovation and alter. We conclude that culture " works” when it is very clear, consistent and comprehensive, particularly during demanding times. How come Organizational Culture Powerful? Centering People Extremely on Strategy Execution A lot magazine article highlighting path-breaking research by simply Ram Charan and Geoffrey Colvin (1999) led which has a provocative cover – " Why Entrepreneurs Fail. ” The definitive answer

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had been discovered, and it was notoriously straightforward: CEOs failed when they did not execute their very own strategy. This was an amazing bottom line because, as opposed to what commercial economists have already been telling us for years–that firms with well-formulated and hard-to-imitate business strategies emerge as the winners (e. g., Porter, 1980)—Charan and Colvin's article recommended that companies with basically reasonable strategies who do fully in those could be the most effective. This alterations our concentrate from approach formulation to strategy setup, and culture is all about setup. Consider the often-cited example of Southwest Flight companies,...

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