Tuesday, September 14, 2004

Should organizational DNA exclude E.?

Recently, consulting firm Booz Allen Hamilton used a DNA metaphor to determine the overall culture of an organization. In an S+B article called “The Four Bases of Organizational DNA”, three consultants, Gary Neilson, Bruce Pasternack, and Decio Mendes believe that better execution of B. strategies will be the key attribute of superior-performing organizations in the future.

In order to achieve a better execution of strategy, the four bases of BAH's organizational DNA are:

  1. Structure—What does the organizational hierarchy look like?
  2. Decision Rights—Who decides what?
  3. Motivators—What objectives, incentives, and career alternatives do people have?
  4. Information—What metrics are used to measure performance?

For Curtis C. Verschoor CMA "The absence in this analysis of any mention of Core Values as an important determinant of the culture of an organization is striking". In an article in the September 2004 issue of Strategic Finance, Verschoor has a point when he argues: "It is unwise, however, to ignore how important it is to an organization’s success that its management has the ability to articulate and then infuse a set of core values and the resulting ethical standards and code of conduct throughout the company. Motivation results from expression of the “soft” controls that unify an organization’s ability to perform effectively'. Moreover, "As stated in the COSO Principles, integrity and ethical values are critical to the establishment and maintenance of effective management controls".

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