Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
Related questions
Question
Read the pages and make a brief summary of them with your own words, please. Don't make copy-paste, please. Mention important parts only. Also, you will put your comments and ideas about the topic. Write your comments and opinions briefly on the subject in a separate paragraph at the bottom. Please don't write item by item. Write the summary in paragraph form.
Transcribed Image Text:P charade at another organization.
UNDERSTANDING WHAT
A QUALITY CULTURE IS
employee to employee typically play a major role in the estab- Operating Philosophy
Attitude toward Customers
Organizational rites, rituals, and customs express the
organization's unwritten rules about how things are done.
How employees dress, interact with each other, and ap-
proach their work are all part of this element of an organiza-
tion's culture. Rites, rituals, and customs are enforced most
effectively by peer pressure.
Cultural transmitters are the vehicles by which an or-
ganization's culture is passed down through successive gen-
erations of employees. The grapevine in any organization is
a cultural transmitter, as are an organization's symbols, slo-
gans, and recognition ceremonies.
What an organization truly values will show up in the
behavior of its employees, and no amount of lip service or
advertising to the contrary will change this. If an organiza-
tion's culture is its value system as manifested in organiza-
tional behavior, what is a quality culture?
lishment and perpetuation of an organization's culture. All of
these factors can either help or hurt an organization.
If managers treat employees with trust, dignity, and re-
spect, employees will be more likely to treat each other in
this way, and trust, dignity, and respect in
tion will become part of the
other hand, if management treats employees poorly, employ-
ees are likely
will become ingrained as traditions. These traditions will be upgrades, or eliminate training programs for employees. An
perpetuated both by the behavior of employees and by the organization might cut back on equipment maintenance,
stories they pass along to one another. This is why it is so im- employee benefits, or
portant to establish a quality culture. If mistrust is part of the of these shortsighted methods are common in organizations
organizational culture, it will be difficult to build partner-
To understand what a quality culture is, one must first un-
derstand the concept of organizational culture. Every orga-
nization has one. An organization's culture is the everyday
manifestation of its underlying values and traditions. It
shows up in how employees behave at work, what their ex-
In an organization with a traditional culture, the primary
focus is return on investment and short-term profits. Often
the methods used to maximize profits in the short term
have a negative effect in the long run. In order to improve
the organization's bottom line on the next quarter's profit-
and-loss statement, executives might decide to "unload" a
defective product on customers, put off critical technology
Organizations with traditional cultures tend to look in-
ward. They are more concerned about their needs than
those of customers. Customer relations might actually
be adversarial. Organizations with a quality culture are
customer-focused. Customer satisfaction is the highest pri-
ority and is the primary motivation driving continual im-
provement efforts.
everyday interac-
respect culture, On the
organizations cuture.
follow suit. Both situations, if not changed,
what
considered normal in terms of how employees approach
ever shopped at a store or eaten in a
restaurant in which the service and the employ-
ces surly or disinterested? Such organizations have a cultural
problem. Valuing the customer is not part of their culture.
No matter what slogans or what advertising gimmicks they
use, the behavior of their employees clearly says, "We don't
pectations are of the organization and each other,
and
is
their jobs. Have
Problem-Solving Approach
was poor
performance-incentive
programs.
All
one and
There is a lot of finger pointing in organizations with a
traditional culture. When problems occur, decision mak-
ers and employees tend to expend more energy on deflect-
or assigning blame than on identifying the root cause
me with
traditional
they invariably lead to disaster in
term
ing
of the problem, which must occur before the problem can
be solved. Traditional organizations suffer from the "most
valuable player (MVP)" syndrome, in which problem solv-
ing is viewed as an individual undertaking wherein inde-
pendent "heroes" operating all alone jump into the breach
put things
is erratic.
difficult to establish an environment of mutually supportive the long run. A short-term operating philosophy is the rea-
merience a large
why traditional organizations often experience a large
care about customers."
An organization's culture has the following elements:
teamwork. Organizations that have these problems are not
likely to be world-class-
son
A quality culture is an organizational value system that
results in an environment that is conducive to the estab-
lishment and continual improvement of quality. It consists
of values, traditions, procedures, and expectations that
promote quality.
s competitors.
turnover at the
top.
The CEOS who apply this short-term
Commitment to quality cannot be faked. Employees operating philosophy are often "cut-and-run" managers
- Business environment
- Organizational values
know when management is just going through the motions.
Changing an organization's culture requires a total commit-
ment and a sustained effort at all levels of the organization.
who maximize short-term profits by eliminating essential
functions, activities, and personnel. They then take their
of the resulting profits and leave, only to repeat
to
right just in the nick of time. At best, this ap-
- Cultural role models
- Organizational rites, rituals, and customs
. Cultural transmitters
proach
Another phenomenon that occurs in traditional cul-
tures is the "waiting game." With this strategy, decision
makers hold back until someone appears to have the prob-
lem almost solved; then they jump on board and act as if
the idea was theirs all along. Such an approach encourages
manipulation and subterfuge rather than innovation and
creative thinking-
When difficulties occur in organizations with a qual-
ity culture, the focus is on identifying and isolating the root
cause so that the problem, and not just its symptoms, can be
eliminated. Problem solving is typically a systematic process
undertaken by teams, with input solicited from all stake-
holders. The goal is to create solutions, not "heroes."
the
In an
How do you recognize an organization with a quality
culture? It is actually easier to recognize a quality culture
than to define one. Organizations with a quality culture,
regardless of the products or services they provide, share a
number of common characteristics, presented in Figure 6.1.
h n an organization with a quality culture, the core of
operating philosophy is customer satisfaction. Quality
organizations focus on doing what is necessary to exceed
expectations of customers. Such an approach
can lower profits in the short run but is the key to
QUALITY CULTURE VERSUS
TRADITIONAL CULTURES
The business environment in which an organiza-
tion must operate is a critical determinant of its culture.
Organizations that
environment that changes rapidly and continually are likely
to develop :
erate in a stable market in which competition is limited may
develop a don't-rock-the-boat culture.
Organizational
thinks is important. Adherence to these values is synony-
mous with success. Consequently, an organization's values
the reasonable
t operate in a highly competitive business
Organizations that develop and maintain a quality culture
will differ significantly from those with a traditional culture.
term survival and prosperity. For example, making a major
How Are Organizational Cultures Created?
The differences will be most noticeable in the following areas: investment in an expensive technology upgrade can
pa change-oriented culture. Organizations that op-
cause
Over
Many factors contribute to the creation of an
culture. The value systems of executive-level decision makers
are often reflected in their organization's culture. How manag-
ers treat employees and how employees at all levels interact on
a personal basis also contribute to the organizational culture.
Expectations are important determinants of organizational
culture. What management expects of employees and what
employees, in turn, expect of management both contribute
to an organization's culture. The stories passed along from
organization's
the next quarter's profit-and-loss statement to
flat.
time, however, the benefits of the new technology will take
will be reflected in profit-and-loss statements for
years to come. Organizations that adopt a quality culture
typically have less turnover at the top. This is because such
a philosophy encourages decision makers to stay in their
positions long enough to either enjoy or suffer the conse-
be
• Operating philosophy
. Objectives
• Management approach
hold
and
describe what the organization
I Attitude toward customers
. Problem-solving approach
- Supplier relationships
• Performance-improvement approach
are the heart and soul of its culture.
Cultural role models are employees at any level who
personify the organization's values. When cultural role mod-
els retire or die, they typically become legends in their orga-
nizations. While still active, they serve as living examples of
what the organization wants its employees to be.
quences of their decisions.
Supplier Relationships
In organizations with a traditional culture, suppliers are kept
at arm's length in relationships that are often adversarial.
The maximum possible pressure is exerted on suppliers to
bring down prices and speed up delivery, even when such
an approach is likely to drive the supplier out of business.
In organizations with a quality culture, suppliers are viewed
as partners.
atively for the good of both. Each gets to know the other's
processes, problems, strengths, and weaknesses, and they
collaborate, using this information to continually improve
the relationship and the performance of both.
Objectives
Organizations with traditional cultures typically adopt
short-term objectives. The focus is on what the organization
should accomplish over the next several weeks and months.
Organizations that adopt a quality culture plan strategically.
They develop both long- and short-term objectives, and they
do so within the context of an organizational vision.
A Behavior matches slogans.
Customer input is actively sought and used to continually improve quality.
Employees are both involved and empowered.
Work is done in teams.
Supplier and customers work together cooper-
Executive-level managers are both committed and involved; responsibility for
quality is NOT delegated.
* Sufficient resources are made available where and when they are needed to
ensure the continuous improvement of quality.
Management Approach
Education and training are provided to ensure that employees at all levels
have the knowledge and skills needed to continuously improve quality.
* Reward and promotion systems are based on contributions to the continual
improvement of quality.
- Fellow employees are viewed as internal customers.
Suppliers are treated as partners.
Peak performance of people, processes, and products is a top priority.
In organizations with traditional cultures, managers think
and employees do. In fact, employees don't just do; they do
what they are told. Managers are seen as "bosses" who give
orders and enforce policies, procedures, and rules. In orga-
nizations with quality cultures, managers are seen as coaches
of the team. They communicate the vision, mission, and
goals; provide resources; remove barriers; seek employee
input and feedback; build trust; provide training; and reward
and recognize performance.
Performance-Improvement Approach
In organizations with a traditional culture, performance im-
provement is an erratic, reactive undertaking that is typically
triggered by problems. In organizations with a quality cul-
ture, continual improvement of processes, people, products,
the working environment, and every other factor that affects
performance is at the very core of the operating philosophy.
FIGURE 6.1 Characteristics Shared by Organizations with a Quality Culture.
Transcribed Image Text:ganization.
ACTIVATING CULTURAL
CHANGE
The criteria in
behaviors can become habitual. When this happens,
such attitudes and behaviors can be almost impossible
to change. Consequently, it is important that supervisors
monitor the quality-related attitudes and behaviors of
their direct reports continually. When quality-positive
attitudes and behaviors are observed, they should be
reinforced immediately. Correspondingly, when quality-
negative attitudes and behaviors are observed, they
should be corrected immediately.
10. Reinforce and maintain quality. In order to maintain
a quality culture once it has been established, organiza-
tions must reinforce the quality-related attitudes and
behaviors they expect of their personnel. This means
that recognition and reward systems must factor in
quality as a key criterion. Quality-related attitudes and
behaviors should be factors in all decisions about raises,
and characterize total quality as being just the latest one;
they may take a "This too shall pass" attitude toward it.
Senior executives who have a history of starting change
initiatives but failing to follow through on them are poor
candidates to lead an organization through a major cultural
shift. With such executives in leadership roles, employees at
all levels are likely to adopt an attitude of "This too shall pass."
Finally, senior executives who are unwilling to empower em-
ployees at all levels to help
that the effort to bring change will fail. Cultural change re-
quires support, ideas, and leadership from employees at all
levels. Senior executives who are unwilling to empower em-
ployees to think and do will block cultural change.
checklist in Figure 6.6–All employees know the mis-
sion of the organization-receives an organization-wide
average score that is unacceptably low (e.g., less than 3),
specific actions should be planned for correcting this
problem. The same is true of all criteria that receive low
average ratings.
The past is not just an important part of an organiza-
tion's culture; it can also be the most difficult part to
leave behind.
To attempt the implementation of total quality without creating
a quality culture is to invite failure. Organizations in which the
prevailing culture is based on traditional management practices
are not likely to succeed in the implementation of total qual-
ity. Successful total quality requires cultural change. Several
primary reasons cultural change must either precede or at least
parallel the implementation of total quality are described here.
lead
change will
actually
ensure
CHANGING LEADERS
TO ACTIVATE CHANGE
4. Expect. An organization's corporate culture is one of
those
Consequently, it is important for executives, managers,
phenomena
in
which you get what you expect.
Cultural change is one of the most difficult challenges an or-
ganization will ever face. It is hard to achieve under even the
f circumstances. Leadership from the top is essential.
Consequently, sometimes an organization's culture simply
cannot be changed without a change in leadership.
This possibility arises when the staunchest defenders of
status quo are the most senior managers. Senior manag-
ers are likely to be the individuals in an organization with the
the
and supervisors
that quality-positive
to make sure that all
personnel know
1. Change cannot occur in a hostile environment. The
total quality approach to doing business may be radi-
cally different from what management and employees
are accustomed to. Managers who are used to sitting in
their lonely towers at the top of the pecking order and
issuing edicts from on high are likely to reject the con-
of
attitudes and behavior are
thát
This can be achieved by (1) including a corporate value
relating to quality in
(2) including quality in the job e
sonnel, (3)
:(3) including quality in all of the
team charters, (4) including quality criteria in all of the
organization's strategic plan,
LAYING THE FOUNDATION
job descriptions of
per-
***
FOR A QUALITY CULTURE
organization's
cept employee involvement and empowerment.
Employees who are used to competing against their
fellow employees
may not be open to mutually supportive internal part-
nerships and teamwork. Situations such as these can
create an environment that is hostile toward change, no
matter how desirable that change is. Change can be dif-
ficult, even when people want to do so. It can be impos-
sible in a hostile environment.
Establishing a quality culture is a lot like constructing a
building. The process begins with laying a solid foundation.
Like a building, without a solid foundation an organization's
corporate culture will quickly crumble. What follows is a
ten-step model that quality professionals can use to establish
a solid foundation for a quality culture in any organization.
performance
organizations per
talking about quality at all levels in the organization,
appraisal instruments, (5)
greatest investment in the past and, as a result,
to orthodoxy. If the old adage holds true that "an or-
ganization is the lengthened shadow of one person," then the
CEO must be the key player in changing an organization's
the
greatest
promotions, and recognition awards.
for promotions and wage increases
(6) recognizing and rewarding quality-positive attitudes
and behavior, (7) providing quality-related training for
personnel at all levels, and (8) setting quality-related
goals for all teams, units, departments, and divisions in
the organization.
LEARNING WHAT A QUALITY
CULTURE LOOKS LIKE
culture.
1. Understand. Quality is at its heart a cultural con-
cept. The tone for an organization's culture is set by
the CEO and executive managers. Without the buy-in
How does one know or how can one tell when it will
Part of laying the groundwork for a quality culture is under-
standing what one looks like. This is a lot like a person who
wants to lose weight where an effective strategy is to tape a
picture of a slender person to the mirror. The picture serves
not only as a constant reminder of the destination, but also
as a measurement device that indicates when a goal has been
met. If a picture of a company with a strong quality culture
could be taped to an organization's wall for all employees to
see, it would have the following characteristics:?
be necessary to change leaders to change the organization?
What follows are several questions that can be used by senior
executives for self-assessment or by the organization in mak-
ing its own assessment of the need for new leadership:
5. Model. Executives, managers, and supervisors must be
consistently positive role models of the quality-related at-
and commitment of executive management, there can
quality culture. Consequently, the cornerstone
of the cultural foundation must be an understanding
The nature of
2. Moving to total quality takes time.
total quality is such that the organization may have to
go down somewhat before it can turn things around
and start to
titudes and behaviors expected of personnel. Employees
are more likely to follow the behavior of management
be no
1. Are the current leaders fully knowledgeable of the need
to change and the ramifications of not changing?
personnel than their words. Consequently, it is impor-
tant to do more than talk a good game when it comes to
the concept of
quality culture and their role in establishing and main-
taining such a culture. Brien Palmer recommends
to sell higher
come up. In a conversion to total quality,
on the part of executive managers c
of
positive results are rarely achieved in the short run. This
characteristic
quality. Management personnel must walk the talk.
6. Orient. New employee orientations should have a
comprehensive quality component. A new employee's
first exposure to the organization occurs during his or her
initial orientation. Consequently, it is important to begin
emphasizing the organization's quality-related expecta-
tions from the outset as part of the orientation process.
2. Are the current leaders able to articulate a vision for the
gives
nonbelievers and people who just
new organization?
3. Have the current leaders set the tone for change and
established an organization-wide sense of urgency?
4. Are the current leaders willing to remove all obstacles to
cultural change?
5. Do the current leaders have a history of following
through on change initiatives?
6. Are the current leaders willing to empower employees
at all levels of the organization to make cultural change?
don't want to change (and such people are often in the
majority at first) the opportunity to promote the "I told
you it wouldn't work" syndrome.
three-pronged approach when a
management on
ron the concept of quality culture: (1) align
the concept with organizational goals, and get help to
identify the financial benefits; (2) become the project
manager of this challenge, and then measure and miti-
gate resistance, inertia, and opposition; and (3) prepare
a brief but powerful presentation that can be made for
. Widely shared philosophy of management
It can be difficult to overcome the past. Employees
an organization for any period of
time have probably seen a variety of management fads
come and go. Promoting the latest management gim-
mick and then letting it die for lack of interest may
be part of the existing organizational culture. If this
is the case, it will be difficult to overcome the past.
Employees will remember earlier fads and gimmicks
. Emphasis on the importance of human resources to the
organization
. Ceremonies to celebrate organizational events
. Recognition and rewards for successful employees
- Effective internal network for communicating the culture
3.
who have worked
in
7. Mentor. Many organizations use mentors to help in the
development of employees. Typically, mentors provide
technically oriented assistance (e.g., helping new person-
nel learn the necessary job skills). By taking this concept
one step further, organizations can help their new per-
sonnel develop quality-positive attitudes and behaviors.
executive managers.
2. Assess. In this step, a comprehensive assessment of
the existing corporate culture as it relates to quality is
completed and the results are compiled. Figure 6.6, dis-
cussed later in the chapter, is a sample quality culture
assessment instrument that can be used as a guide in
for any or
. Informal rules of behavior
In an organization that needs to make a major cul-
change, the answer to all of these questions must be
yes. Senior executives who fail to comprehend the need to
change
- Strong value system
. High standards for performance
. Definite organizational character
tural
8. Train. Providing quality training at all levels is not a
new concept to competitive organizations. However, what
might be new is the need to expand quality training be-
yond the typical technical topics to include attitudinal and
behavioral topics. In other words, it is important to help derstanding the characteristics of organizations that have
personnel understand not just
also the "why." The why can be summarized in just one strong quality cultures are important to any executive team
word: competition. All personnel need to understand that that hopes to change the culture of its organization. Before
the organization's survival depends on its ability to com- implementing any of the specific strategies for establishing a
pete successfully every day over the long term and that quality culture that are explained later in this chapter, every
they play a critical role in helping the organization do so. person who will be involved in the change or affected by it
9. Monitor. Attitudes and behaviors tend to be habitual. should be familiar with these laws and characteristics.
If people are allowed to continue inappropriate attitudes
and behaviors relating
and the ramifications of a lack of change cannot lead
developing a similar assessment instrument for any or-
criteria in Figure 6.6 are suggested as
of the kinds of items that should be contained
However,
QUALITY TIP
an organization through a major cultural change. Senior
executives who cannot envision the new
Can There Really Be Shared Corporate Values in a
Diverse Society?
ar-
exampality culture
Knowing the laws of organizational change and un-
ticulate what they see will be unable to lead an organization
through the change.
change, they will inhibit rather than lead the organization.
Senior executives who fail to create a sense of urgency
will see cultural change fall victim to complacency. Senior
executives who are unwilling to remove obstacles that inhibit
cultural change have the wrong set of priorities. This some-
times happens when the obstacles are perquisites, such as
corporate aircraft or luxurious office suites to which execu-
tives have grown accustomed.
Wirat uhey
in a
assessment instrument.
If they fail to set the tone for cultural
of quality but
America is one of the most diverse societies in the world, a fact that
is reflected in the workplace. Since people who come from differ-
ent backgrounds often have different values, one could reasonably
ask if an organization can realistically adopt a set of shared corpo-
rate values. Surprisingly, the answer to this question is yes. Even
in the most diverse settings, people still want to be treated with
honesty, integrity, and dignity. Further, they understand the need to
compete in order to survive. Consequently, self-interest promotes
the sharing of values that in turn promotes competitiveness.
this example is
organizations will want to add other criteria and, per-
haps, eliminate some of those shown. All employees
should be allowed to complete the survey instrument
without attribution, and the organization-wide average
for each criterion should be compiled.
3. Plan. Based on the results of the survey in the previ-
ous step, develop a comprehensive plan for establishing
a quality culture. For example, if the first criterion in the
not meant
to be comprehensive.
Most
the
"how"
quality, those attitudes and
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