Leadership

of
Culture
and
Diversity
 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
Gives meaning to each individuals membership in the
workplace and, in so doing, defines the organizations
essential purpose
Is recognized as a source of competitive advantage
Is the operating system that brings to life the
underlying core values of an organization
Determines the way that an organization responds to
problems of survival in its external and internal
environments.
Emerges from the history and experiences of
individuals and groups in that particular organizations
context
 The Power of Culture
A deeply rooted culture that is well matched to
strategy and external environmental trends is a strong
recipe for successful strategy execution
A weak or shallowroot culture can become an
obstacle to successful strategy execution
Culture serves two important functions in
organizations:
It creates internal unity
It helps the organization adapt to the external
environment
 Internal unity
Organizational culture defines a normative order that serves as
a source of consistent behavior within the organization
Provides organizational members with a way of making
sense of their daily lives
Establishes guidelines and rules for how to behave
Provides a system of informal rules and peer pressures
Provides a value system in which to operate
Promotes strong employee identification with the organizations
vision, mission, goals, and strategy
Provides a shared understanding about the identity of an
organization
External adaptation
Culture determines how the organization responds to changes
in its external environment
The appropriate culture type can ensure that an organization
responds quickly to rapidly changing customer needs or the
offensive actions of a competitor
 Low and HighPerformance Cultures
The strength of any culture depends on the degree to
which a set of norms and values are widely shared and
strongly held throughout the organization
A weak culture symbolizes a lack of agreement on key
values and norms
A strong culture symbolizes widespread consensus

Characteristics of LowPerformance Cultures

Insular thinking
There is a tendency to avoid looking outside the organization for
superior practices and approaches
This often prevents the organization from making the necessary
cultural adaptation as external conditions change, thus leading to
a decline in company performance
 Resistance to change
Avoiding risks and not making mistakes becomes more
important to a persons career advancement than
entrepreneurial successes and innovate accomplishments
Politicized internal environment
An environmental that allows influential managers to operate
their units autonomouslylike personal kingdomsis more
likely to resist needed change
What is best for the organization is secondary to the self
interests of individual players
Unhealthy promotion practices
Lowperformance cultures tend to promote managers into
higher leadership positions without serious consideration of a
match between the job demands and the skills and capabilities
of the appointee
Promotions are often based on personal considerations
(friendship, family ties, favoritism, and so forth) rather than
professional considerations
Characteristics of HighPerformance Cultures
Culture reinforcement tools
Ceremonies highlight dramatic examples of what the company
values, recognize and celebrate highperforming employees, and
help create an emotional bond among all employees
Leaders tell stories to new employees to illustrate the companys
primary values and provide a shared understanding among
workers
They also use symbols and specialized language
(such as slogans) to convey meaning and values
 Intensely people oriented
Organizations with high
performance cultures:
Treat employees with dignity
and respect
Grant employees enough
autonomy to excel and
contribute
Cultivate a relationship with
employees based on mutual
respect and interdependency
Initiate unique onetoone
relationships with top performers
Give increased responsibility
to the best employees
Implement major programs
 Celebrate employee achievements
Hold managers at every level responsible for the growth
and development of the people who report to them
Use the full range of rewards and punishment to enforce
high performance standards
Encourage employees to use their own initiative and
creativity in performing their jobs
Set reasonable and clear performance standards for all
employees
 Results oriented
Quantitative measures of success are used to identify
employees who turn in winning performances
Emphasis is placed on individual goal setting, whereby
employees draft performance goals and have them approved
by their managers
Emphasis on achievement and excellence
Achieving excellence requires a corporate culture that holds
excellence above all and pursues processes that bring about
persistent perunit cost reductions, zero defects, improved
product quality, and extraordinary customer service
 The Role of Leadership in Culture Creation
and Sustainability
Making sure an organizations culture is aligned with its
strategies is among the most challenging responsibilities of
leadership
To build and maintain a strong culture, senior managers
must have a clearly defined vision, mission, and culture
statements that define the way things are done
Changing the culture of an organization to adapt to
changes in the environment is a vital leadership
responsibility
To create strong, highperforming cultures, leaders can
initiate many different types of organizational processes
These processes represent actions that require significant
leadership involvement or engaging leadership
 Symbolic Leadership Actions
for Shaping Culture
Leaders serving as role models
Employees learn what is valued most in an organization by
watching what attitudes and behaviors leaders pay attention
to and reward and whether the leaders own behaviors match
the espoused values
Celebrating achievements
Ceremonies reinforce specific values and create emotional
bonds by allowing employees to share in important meetings
Interacting facetoface with rankandfile
Effective leaders should appear at both ceremonial
functions and non-ceremonial events
They understand the symbolic value of their pressure at
group gatherings and use the opportunity to reinforce the key
aspects of the culture
Matching organizational structure to culture
Substantive Leadership Actions for Shaping Culture
Matching HR practices to culture
The strongest sign that management is truly committed to
creating a new culture is replacing oldculture members who are
unwilling to change with a new breed of employees
Leaders can also influence culture by establishing new criteria
for recruiting, selecting, promoting, and firing employees
Matching operating policies and practices to culture
Policies on budgets, planning reports, and performance
reviews can be used to emphasize aspects of the organizations
culture
 Creating a strategyculture fit
It is the leaders responsibility to select a strategy that is
compatible with the prevailing culture or to change the
culture to fit the chosen strategy
The lack of a fit will hinder or constrain strategy execution
Aligning reward/incentive system with culture
Tying compensation incentives directly to new measures of
strategic performance is a cultureshaping undertaking
It gives the leader leverage to reward only those
performances that are supportive of the strategy and culture
 Matching work environment design to culture
Developing a written values statement
Written statements have the advantage of explicitly
stating the companys position on ethical and moral issues
They serve as benchmarks for judging both company
policies and actions and individual conduct
Value statements serve as a building block in the task of
culture creation and maintenance
 Types of Organizational Cultures
Degree of Environmental Turbulence

.
Competitiv
External Adaptive
e
Culture
Culture
Strategic
Focus
Bureaucrat Cooperativ
Internal ic e
Culture Culture

Stable Dynamic
 Cultural Value Types
Cooperative culture
Represents a leadership belief in strong, mutually
reinforcing exchanges and linkages between employees and
departments
Operating policies, procedures, standards, and tasks are
all designed to encourage cooperation, teamwork, power
sharing, and camaraderie among employees
Management thinking is predicated on the belief that
organizational success is influenced more by employee
relationships inside the organization than by external
relationships
Employees are trained to think like owners rather than
hired hands
 Adaptive culture
Represents a leadership belief in active monitoring of the
external environment for emerging opportunities and threats
Made up of policies, procedures, and practices that
support employees ability to respond quickly to changing
environmental conditions
Members are encouraged to take risks, experiment, and
innovate
Management thinking is based on the belief that
organizational success is influenced more by events outside
the organization than by internal factors
Employees are empowered to make decisions and act
quickly to take advantage of emerging opportunities or
avoid threats
 Competitive culture
Represents a leadership that encourages and values a
highly competitive work environment
Organizational policies, procedures, work practices,
rules, and tasks are all designed to foster both internal
competition and external competition
Leaders focus on the achievement of specific targets
such as market share, revenue, growth, or profitability
Values competitiveness, personal initiative,
aggressiveness, achievement, and the willingness to work
long and hard for yourself or for the team
 Bureaucratic culture
Represents a leadership that values order, stability,
status, and efficiency
Leaders perceive their environments as basically stable
with an internal strategic focus
Emphasizes strict adherence to set rules, policies, and
procedures
Are highly structured and efficiency driven
How to Sustain an Organizations Culture
Define a strategic plan for implementing the company
culture
Use welltrained and experienced employees to train new
hires
Make sure that employees at all levels know what the
culture is and accept it
Institute a system by which new employees learn the
written and unwritten parameters of the culture
National Culture IdentitiesHofstedes Value
Dimensions
A nations values and norms determine what kinds of
attitudes and behaviors are acceptable or appropriate
The people of a particular culture are socialized into
national values as they grow up
Norms and social guidelines prescribe how members of
a nation should behave toward each other
Significant differences between national cultures exist
and make a difference in how leaders and employees
behave in organizations
Individualistic to Collectivist Cultures
Individualism is a psychological state in which people see
themselves first as individuals and believe their own interest
and values are primary
Examples:
United States
Great Britain
Canada
Collectivism is the state of mind wherein the values and
goals of the groupwhether extended family, ethnic group, or
companyare primary
Examples:
Greece
Japan
Mexico
High to Low Uncertainty Avoidance Cultures
A society with high uncertainty avoidance contains a
majority of people who do not tolerate risk, avoid the
unknown, and are comfortable when the future is
relatively predictable and certain
Examples:
United States
Australia
Canada
A society where the majority of the people have low
uncertainty avoidance has people who are comfortable
with and accepting the unknown, and tolerate risk and
unpredictability
Examples:
Italy
Japan
Israel
High to Low PowerDistance Cultures
In a high powerdistance culture, leaders and followers
rarely interact as equals
Examples:
Mexico
Spain
Japan
France
In a low powerdistance culture, leaders and their
members interact on several levels as equals
Examples:
Germany
United States
Ireland
LongTerm to ShortTerm Oriented Cultures
People from a culture with a longterm orientation have a
futureoriented view of life and thus are thrifty and
persistent in achieving goals
Examples:
Most Asian countries
A shortterm orientation derives from values that express
a concern for maintaining personal happiness and living for
the present
Examples:
Most European countries
United States
MasculinityFemininity
Masculinity describes a culture that emphasizes
assertiveness and a competitive drive for money and
material objects
Examples:
Japan
Italy
Femininity describes a culture that emphasizes developing
and nurturing personal relationships and a high quality of
life
Examples:
Sweden
Denmark
Implications for Leadership Practice
The growing diversity of the workforce and the increasing
globalization of the marketplace create the need for leaders
with multicultural backgrounds and experiences
Multicultural leaders possess competencies that enable
them to relate effectively to and motivate people across
race, gender, age, social strata, and nationality
Crosscultural and international joint venture (IJV) studies
often identify cultural differences as the cause of many
interpersonal difficulties, including conflict and poor
performance
Changing Demographics and Diversity
Demographic diversity
Is any characteristic that serves as a basis for social
categorization and selfidentification
Includes:
Race
Gender
Age
Ethnicity
Religion

Diversity
Is the inclusion of all groups at all levels in an
organization
Generational diversity in the workplace
Traditionalists (19001945)
Baby Boomers (19461964)
Generation Xers (19651980)
Millennials (19812000)
 Baby Gen-Xers Millennials
Traditionalists Boomers
Loyal Loyal Adaptable to Goal-oriented
S Honors/Respects Optimistic change Techno-savvy
T authority Responsible Techno-literate Collaboration
R Follows Orders and Dedicated Self-starters and
E Formal Team player Global mindset Achievement
N Rewards later Workaholic Informal important
T Practical Personal Skepticism Optimistic
H Personal gratification Self Moral mindset
S Sacrifice The Me Preservation Social
Civic Duty Generation Individuality activism
Material The Not More
Acquisition Impressed impatient
generation Entrepreneuri
al
Individuality
Uniqueness
More
independent

P Prefers structure Enjoys much Skeptical Requires

R Technology- recognition Feel others owe supervision and
O challenged Elder care them support
B Set in ways absences Motivation Sociable
Current State of Workforce Diversity
The most significant increase in workforce diversity is
due to:
National demographic changes
Greater minority representation in the workforce
A greater likelihood exists that individuals will find
themselves leading or under the leadership of someone
demographically different from them
In the new work environment, workers must often share
work duties and space with coworkers of diverse races,
social backgrounds, and cultures
 In the last 25 years, attitudes toward diversity have
and continue to change
Companies that can effectively manage diversity will
be able to recruit from a larger pool, train and retrain
superior performers, and maximize the benefits of this
diverse workforce
More organizations are highlighting diversity in their
advertising, because they are competing for talent in a
tight labor market
They recognize that demographic shifts are going to
dramatically change their marketplace over the next
20 years
The Impact of Globalization on Diversity
Globally interconnected economies mean changes in one
economy quickly impact others
A global labor market is emerging, dominated by India and
China
Collaboration among competitors, suppliers, and financial
institutions has become a common way to compete globally
Global strategic alliances between independent firms are
becoming more prevalent for the purpose of:
Achieving common goals
Overcoming domestic country bias
 Understanding cultural differences and learning to deal
effectively with partners from different cultures will be
critical
The increased need for leaders with global mindsets and
crosscultural leadership abilities has led to a shortage of
qualified people
Organizational leaders need to recognize that:
Each person can bring values and strengths to the
workplace based
on his or her own unique backgrounds
Cultural values and norms can shape employee receptivity
to leadership styles
Reasons for Embracing Diversity
Can offer a company a marketing advantage
Can help a company to develop and retain
talented people
Can be cost effective
May provide a broader and deeper base of
creative problem solving and decision
making
The Downside of Diversity
Despite its benefits, negative outcomes can result if
diversity is not effectively managed
Left unmanaged, workforce diversity is more likely to:
Damage morale
Increase turnover
Cause communication problems
Ultimately cause conflict
Obstacles to Achieving Diversity
Stereotypes and prejudice
Prejudice is the tendency to form an adverse opinion
without just cause about people who are different from the
mainstream in terms of their gender, race, ethnicity, or any
other definable characteristic
It is an assumption, without evidence, that people
who are not part of the mainstream culture
(women, African Americans, and other minorities) are:
Inherently inferior
Less competent at their jobs
Less suitable for leadership positions
 Ethnocentrism
Is the belief that ones own group or subculture is
naturally superior to other groups and cultures
Produces a homogeneous culture
Policies and practices
The glass ceiling
Is an invisible barrier that separates women and
minorities from top leadership positions
Remains a pervasive problem in corporate America
Unfriendly work environment
Sexual harassment, intimidation, bullying, and social
rejection are all examples of actions that make the
workplace unfriendly
Making the workplace friendly for everyone will go a
long way toward alleviating the problem of high turnover
and preserve diversity initiatives
Creating a Culture That Supports Diversity
For organizations to embrace and value diversity, the
concept itself must be embedded in the organizations
business model
A companys business model defines its vision,
mission, strategic objectives, and strategies for
achieving those objectives
When diversity leadership becomes part of the
organizations mission, all employees are given equal
opportunities to contribute their talents, skills, and
expertise toward achieving organizational objectives
 A successful diversity program requires a
team approach
A strong commitment to attract, retain, and
promote employees of minority backgrounds
The creation of a culture that fully supports and
rewards diversity initiatives throughout the
organization
Leaders have a responsibility to create a
work culture that accommodates the needs
of a diverse workforce
Diversity Awareness Training and Leadership Education
The ultimate objective of diversity training and education is
to create a diversity sensitive orientation (DSO) within the
entire workforce
Diversity training
Training sessions are aimed at increasing peoples
awareness of and empathy for people from different cultures
and backgrounds
Diversity training can include:
Roleplaying
Selfawareness activities
Awareness activities
Training programs can last hours or days
 They can be conducted by outside experts on diversity,
or by existing members of the organization with expertise
in diversity
Not all diversitytraining programs are successful.
Diversity training is most likely to be successful when it is
not a onetime event, but an ongoing or repeated activity
along with followup activities to see whether training
objectives were accomplished
 Education
Additional education is sometimes needed for leaders
beyond diversity training
Leaders develop personal characteristics to make them
better able to communicate and work with diverse employees
Leaders are taught to view diversity in the larger context of
the organizations longterm vision
They should be educated on the strategic significance of
linking diversity to the organizations competitiveness
Through education, leaders learn how to:
Communicate effectively
Encourage feedback from all employees regardless of
background
Accept criticism
Adjust their behavior when appropriate
Mentor and empower employees of diverse cultures