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STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
Chapter 11
Creating a
Learning and
Ethical
Organization
McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
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Learning
After studying this chapter, you should have
Objectives a good understanding of:
• The three key activities in which all successful leaders must
be continually engaged
• The importance of recognizing the interdependence of the
three key leadership activities
• The value of creating and maintaining a “learning
organization” in today’s global marketplace
• The five central elements of a “learning organization”
• The leader’s role in establishing an ethical organization
• The benefits of developing an ethical organization
• The high costs–both financial and non-financial–associated
with ethical crises
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
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Exhibit 11.1 Three Interdependent Activities of
Leadership
Designing the
Determining a Direction
Organization
Nurturing a Culture
Dedicated to Excellence
and Ethical Behavior
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
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Developing a Learning Organization
• Knowledge is a key factor of production
• Learning is the process of developing and
sharing new knowledge
• Learning allows a firm to maximize its
human and social capital
• Learning allows a firm to fully exploit its
competitive advantage
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Developing a Learning Organization
• Empowerment is crucial
• Accumulating and sharing internal
knowledge (competition and cooperation)
• Gathering and integrating external
information
• Challenging the status quo through
creativity
• Creating an ethical organization
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
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Exhibit 11.2 Management by Walking Around
(adapted)
10 MBWA tips from the pros
1. Wander frequently.
2. Wander aimlessly without an agenda.
3. Be inconsistent. Be spontaneous. Schedule time for
this spontaneity if necessary.
4. Be a good listener. Don’t try to steer the
conversation. Let the other person do most of the
talking.
5. Be open and don’t argue. The goal is to provide an
open environment of trust.
Source: Hoppe, J.B. 1997. Is MBWA still alive? Measure (a Hewlett-Packard internal company publication), July-August: 27-28.
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
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Exhibit 11.2 Management by Walking Around
(adapted)
6. Talk about non-company matters to really get to know
your employees.
7. Wander about even if you’re an introvert; it gets easier
with time and practice.
8. Remember, this is not a waste of time. Personal
involvement is essential to good management.
9. Ask open-ended questions. Do you like your job? How
could it be more meaningful and productive? How is the
family? How was the vacation?
10. Talk with all your employees, not just the ones who are
talkative or who have similar interests.
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
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Characteristics of an Ethical
Organization
• Leaders serve as role models
• Credos and codes of conduct exist that are visible
and are well communicated
• Reward and evaluation systems reward ethical
behavior
• Policies and procedures are in place and are followed
- Customers - Accounting
- Investors - Human Resources
- Manufacturing process (quality, emissions, etc.)
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin
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Exhibit 11.3 Johnson & Johnson’s Credo (1)
We believe our first responsibility is to the doctors, nurses and patients, to
mothers and fathers and all others who use our products and services. In
meeting their needs everything we do must be of high quality. We must
constantly strive to reduce our costs in order to maintain reasonable prices.
Customers’ orders must be serviced promptly and accurately. Our suppliers and
distributors must have an opportunity to make a fair profit.
We are responsible to our employees, the men and women who work with
us throughout the world. Everyone must be considered as an individual. We
must respect their dignity and recognize their merit. They must have a sense of
security in their jobs. Compensation must be fair and adequate, and working
conditions clean, orderly and safe. We must be mindful of ways to help our
employees fulfill their family responsibilities. Employees must feel free to
make suggestions and complaints. There must be equal opportunity for
employment, development and advancement for those qualified. We must
provide competent management, and their actions must be just and ethical.
Source: Company records.
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Exhibit 11.3 Johnson & Johnson’s Credo (2)
We are responsible to the communities in which we live
and work and to the world community as well. We must be good
citizens—support good works and charities and bear our fair share
of taxes. We must encourage civic improvements and better health
and education. We must maintain in good order the property we
are privileged to use, protecting the environment and natural
resources.
Our final responsibility is to our stockholders. Business must
make a sound profit. We must experiment with new ideas.
Research must be carried on, innovative programs developed and
mistakes paid for. New equipment must be purchased, new
facilities provided and new products launched. Reserves must be
created to provide for adverse times. When we operate according
to these principles, the stockholders should realize a fair return.
Source: Company records.
STRATEGIC MANAGEMENT CHAPTER 11 Gregory G. Dess and G. T. Lumpkin