Organizational culture has been extensively studied over recent decades. “... culture isn’t just one aspect of the game – it is the game” said Gerstner (2002) the former CEO of IBM who lead the company in its historic turnaround in the late 90s. Culture is a set of values, beliefs, common understanding, thinking and norms for behaviors that are shared by all members of a society. You cannot precisely define it, but you can sense it and feel it. This paper will show that corporate culture has a strong influences on the organizational effectiveness, incl. its financial performance. An organizational culture model developed by Daniel Denison (1990) of IMD business school, Switzerland will be introduced to have a better understanding how corporate culture works in effective organizations in contras with ineffective organizations. Some best practice examples from China, Japan and a global cross-cultural study will be introduced. Finally the national culture issues in implementing the model that developed in western culture context in Asia will be discussed.

1. Hangzhou, January 2011
Prof. Dr. Hora Tjitra, Zhejiang University
Change that Makes Results
Organizational
Culture
and
Powerful
Leadership

2. Organiza(onal
Culture
and
Powerful
Leadership
2
Agenda
1. Why
does
organiza1onal
culture
ma7er?
2. What
is
organiza1onal
culture?
3. Measuring
organiza1onal
culture:
The
Denison
organiza1onal
culture
survey
4. Corporate
culture
and
organiza1onal
effec1veness
5. Best
prac1ce
examples
from
China
and
across
na1onal
study
6. Is
Asia
differ
from
the
rest
of
the
world?

3. Organiza(onal
Culture
and
Powerful
Leadership
3
14
years
in
Germany
7
years
in
China
Born
and
grew
up
in
Indonesia
Prof.Dr.Hora Tjitra - Cross-cultural and Business Psychology
Dipl.-Psych.,Technical University of Braunschweig
Organizational Psychology and Human Resource Management
Dr.Phil.,University of Regensburg
Intercultural Psychology and Strategic Management
Executive Education,INSEAD
HR Management in Asia

4. Organiza(onal
Culture
and
Powerful
Leadership
4

5. Organiza(onal
Culture
and
Powerful
Leadership
5
I
came
to
see
in
my
1me
at
IBM,
that
culture
isn’t
just
one
aspect
of
the
game
–
it
IS
the
game.
In
the
end,
an
organiza1on
is
no
more
than
the
collec1ve
capacity
of
its
people
to
create
value.
Vision,
strategy,
marke1ng,
financial
management
–
any
management
system,
in
fact
–
can
set
you
on
the
right
path
and
can
carry
you
for
a
while.
But
no
enterprise
–
whether
in
business,
government,
educa1on,
health
care,
or
any
area
of
human
endeavor
–
will
succeed
over
the
long
haul
if
those
elements
aren’t
part
of
its
DNA.

6. Organiza(onal
Culture
and
Powerful
Leadership
6
Why does corporate culture matter?
Culture
ma7ers
because
decisions
made
without
awareness
of
the
opera1ve
cultural
forces
may
have
unan1cipated
and
undesirable
consequences.
Culture
is
a
powerful,
latent,
and
o2en
unconscious
set
of
forces
that
determine
both
our
individual
and
collec8ve
behavior,
way
of
perceiving,
thought
pa;erns,
and
values.
Organiza8onal
culture
in
par8cular
ma;ers
because
cultural
elements
determine
strategy,
goals,
and
modes
of
opera8ng..
The
values
and
thought
pa;erns
of
leaders
and
senior
managers
are
par8ally
determined
by
their
own
cultural
backgrounds
and
their
shared
experience.
Schein,
1999

7. Organiza(onal
Culture
and
Powerful
Leadership
7
What is Corporate Culture?
The way we do things around here
What
really
drives
the
culture
－
its
essence
－
is
the
learned,
shared,
tacit
assump1ons
on
which
people
base
their
daily
behavior.
Culture is deep
Culture
controls
you
more
than
you
control
culture.
You
develop
beliefs
and
assump8ons
that
eventually
drop
out
of
awareness
and
become
tacit
rules
of
how
to
do
things,
how
to
think
about
things,
and
how
to
feel
Culture is broad
As
a
group
learns
to
survive
in
its
environment,
it
learns
about
all
aspects
of
its
external
and
internal
rela8onships.
Deciphering
culture
can
therefore
be
an
endless
task.
Culture is stable
Culture
provides
meaning
and
make
life
predictable.
Humans
do
not
like
chao8c,
unpredictable
situa8ons
and
work
hard
to
stabilize
and
„normalize“
them.
Schein,
1999

8. Organiza(onal
Culture
and
Powerful
Leadership
8
Working Definition of Organizational Culture
A Pattern of basic assumptions, values, beliefs and norms shared
by members of an organization.
It is:
– Guides
behavior
inside
the
organiza8on
– Reduces
ambiguity
and
need
for
formal
control
mechanisms
– Facilitates
an
organiza8onal
ability
to
adapt
to
changes
in
the
external
environment
and
to
integrate
internally.
Source:
Mobley,
2005;
See
e.g.
Schein,
1999;
Denison
et
al,
2004;
Ko;er
&
Hasket,
1992

9. Organiza(onal
Culture
and
Powerful
Leadership
9
Understanding Organizational,National
and Industrial Culture
Organizational Culture
Industrial CultureNational Culture

10. Organiza(onal
Culture
and
Powerful
Leadership
10
Measuring Organizational Culture
Adaptability
Pattern..Trends..Market
Translating the demands
of the business
environment into action
“Are we listening
to the marketplace?”
Mission
Direction..Purpose..Blueprint
Defining a meaningful
long-term direction
for the organization
“Do we know where
we are going?”
Involvement
Commitment..Ownership
Responsibility
Building human capability,
ownership, and responsibility
“Are our people aligned
and engaged?“
Consistency
Systems…Structures… Processes
Defining the values
and systems that are the
basis of a strong culture
“Does our system
create leverage?”

11. Organiza(onal
Culture
and
Powerful
Leadership
11
Linking Organizational Culture and Business Performance

12. Organiza(onal
Culture
and
Powerful
Leadership
12
Return on Shareholder’s Equity
Low Performing Culture High Performing Culture
Average ROE = 6% Average ROE = 21%
• Study of 161 publicly traded companies from a broad range of industries
• Contrasts the performance of the 10% of the organizations with the best culture
scores with the 10% of the organization with the worst culture scores
• Average ROE for the organizations with the lowest culture scores is 6%, average
ROE for organizations with high culture scores is 21%
• Highly similiar results for return on total investment

13. Organiza(onal
Culture
and
Powerful
Leadership
13
Satisfying Your Customers
• Study of Automotive Service Centers in the USA
• Total of 338 dealerships and over 12,000 employees
• Compares organizational culture and customer satisfaction
Below 50% Highly Satisfied Above 80% Highly Satisfied
N = 554
N = 1232

14. Organiza(onal
Culture
and
Powerful
Leadership
14
Growing Your Business
• Study of retail supermarkets in the USA
• Includes 12,000 Individuals in 2500 stores
• Compares culture profiles with growth rates
Over 5% Sales Decrease Over 5% Sales Increase
N = 1305 N = 424

15. Organiza(onal
Culture
and
Powerful
Leadership
15
Organizational Culture Profile for a Global Office
Furniture Company in China
Mobley
et
al.,
2005

16. Organiza(onal
Culture
and
Powerful
Leadership
16
Organizational Culture Profile for a Chinese Insurance
Company in China
Mobley
et
al.,
2005

17. Organiza(onal
Culture
and
Powerful
Leadership
17
Is Asia Different from the Rest of the World?
Denison
et
al.,
2004

18. Organiza(onal
Culture
and
Powerful
Leadership
18
References
• Denison,
D.
R.
(1990).
Corporate
Culture
and
Organiza8onal
Effec8veness.
New
York:
Willey.
• Denison,
D.
R.,
Haaland,
S.
&
Goelzer,
P.
(2004).
Corporate
Culture
and
Organiza8onal
Effec8veness:
Is
Asia
Different
from
the
rest
of
the
World?
Organiza8onal
Dynamics.
33-­‐1:
98-­‐108.
• Denison,
D.
R.
&
Mishra,
A.
H.
(1995).
Toward
a
Theory
of
Organiza8onal
Culture
and
Effec8veness.
Organiza8onal
Science.
6:
204-­‐223.
• Mobley,
W.
H.,
Wang,
L.
&
Fang,
K.
(2005).
Organiza8onal
Culture:
Its
Defini8on
and
Measurement.
Harvard
Business
Review
China.
March;
128-­‐139.
• Schein,
E.
H.
(1999).
The
Corporate
Culture:
Survival
Guide.
San
Francisco:
Jossey-­‐Bass.
• Schein,
E.
H.
(2004).
Organiza8onal
Culture
and
Leadership
(3rd
Ed.).
San
Francisco:
Jossey-­‐Bass.

19. Thank
You
Contact us via …
Mail: hora_t@mac.com
Follow: twitter@htjitra
Website: http://horatjitra.com
Zhejiang
University,
Hangzhou
(China)