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CHAPTER 14: SHAPING CULTURE AND VALUES 437
Safeco Insurance has functioned well with a bureaucratic culture. Employees

take their coffee breaks at an assigned time, and a dress code specifies white shirts
and suits for men and no beards. However, employees like this culture—reliability
is highly valued and extra work isn’t required. The bureaucratic culture works for
the insurance company, and Safeco succeeds because it can be trusted to deliver
on insurance policies as agreed. In today’s fast-changing world, very few organi-
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zations operate in a stable environment, and most leaders are shifting away from
bureaucratic cultures because of a need for greater fl exibility.
Each of the four cultures can be successful. The relative emphasis on various
cultural values depends on the organization’s strategic focus and the
needs of the external environment. Leaders might have prefer-
Determine your own cultural preferences
ences for the values associated with one type of culture, but they Action Memo
learn to adjust the values they emulate and encourage, depending by completing the exercise in Leader’s Self-
on the needs of the organization. It is the responsibility of leaders
to ensure that organizations don’t get “stuck” in cultural values Insight 14.3 on page 438.
that worked in the past but are no longer successful. As environ-
mental conditions and strategy change, leaders work to instill new
cultural values to help the organization meet new needs.
For example, leaders at Ford Motor Company are trying to instill new values
to get the struggling automaker back on track. The culture, which past and present
employees have described with words like “cautious,” “cliquish,” and “hierarchi-
cal,” refl ects values that fall primarily in the bureaucratic category. As the new
head of Ford’s North and South American auto operations, Mark Fields is try-
ing to instill a sense of urgency for change and shift the culture toward values
that encourage adaptability rather than predictability. In his “Way Forward”
conference room, where teams of workers from all parts of the company meet
to plot a new course for the future, team members wear wristbands that say
“Red, White, and Bold” and talk about phrases such as “Culture eats strategy
for breakfast.” 54

Ethical Values in Organizations

Of the values that make up an organization’s culture, ethical values are considered
highly important for leaders and have gained renewed emphasis in today’s era of fi -
nancial scandals and moral lapses. Most organizations that remain successful over
the long term have leaders who include ethics as part of the formal policies and
informal cultures of their companies. Some companies place signifi cant emphasis
on ethics in their business conduct. For example, leaders at Baxter International
Inc. quickly yanked a product from the market when a number of people died after
undergoing dialysis using a Baxter blood filter. It’s a CEO’s nightmare, but top

leaders at Baxter did the right thing by investigating the problem, admitting their
role in the deadly mistake, and providing financial compensation to families of the

victims. Moreover, in atonement for the error, CEO Harry M. Jansen Kraemer,
Jr. slashed his annual bonus by 40 percent and the bonuses of other top executives
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by 20 percent.

Ethics is difficult to define in a precise way. In general, ethics is the code of Ethics
Ethics
the code of moral principles and
moral principles and values that governs the behavior of a person or group with the code of moral principles and
values that governs the behavior
respect to what is right or wrong. Ethics sets standards as to what is good or bad values that governs the behavior
of a person or group with respect
of a person or group with respect
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in conduct and decision making. Many people believe that if you are not break- to what is right and wrong
to what is right and wrong
ing the law, then you are behaving in an ethical manner, but ethics often goes far
beyond the law. The law arises from a set of codifi ed principles and regulations
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