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How great

companies think
By Rosabeth Moss Kanter

Yuman Sun Ensar Yilmaz Ziqi Ren Yuriy Bulanov

What is an institutional logic?
A Common Purpose
Emotional Engagement
Partnering with the Public
A Long-Term Focus
Institutional logic
Its built on a foundation
of purpose and values,
which serve as buffer
uncertainty and change.
There are six facets of institutional logic, which
radically alters leadership and corporate behavior:

a common purpose;
a long-term view;
emotional engagement;
community building;
A Common Purpose
Conceiving of the firm as a social institution serves as a
buffer against uncertanity and change by providing
corporations with a coherent identity.
117,000 emplyees in 100 countries

Globalization detaches
organizations from one
specific society, but at the
same time requires that
companies intenalize the
needs of many society.
Establishing clear
institutional values can
help resolve this complex

Enronmental responsility

Talent retention
The name can change, but the identity and purpose
will live on
Spans Grupo Santander acquired Brazils Banco Real

CEO Fabio Barbosa

Focus on social and environmental responsibility

Succesful mergers are noteworthy for their emphasis on
values and culture

New companys mission to be globally meaningful

and central to the integration and growth strategy

The idea of global day of community services

The day of service has become an annual Novartis

event, held on the mergers anniversay
Affirming purpose and values through service is a
regular part of how great companies express their

In 2011 IBM celebrated its 100th anniversary by

offering service to the world.

They contributed training and access to software tools

to schools, governmenta agencies, and NGOs.
Emotional Engagement
Delivering the institutional values
could evoke positive emotions,
stimulate motivation,and propel
self-regulation etc.

Ensure that employees use the

organizational Values as a guide for
business decision
P&G examples
The CEO of P&G ,Robert McDonald had long
believed that the companys purpose,valuse,
and principles was a cornerstone of its
culture ,evoking strong emotions in employees
and giving meaning to the companys brands.
In P&G west Africa, every employees has
quantitatively measurable purpose driven goal:
how have i touched this year?

The emotional tugs for P&G people are strong,

they feel inspired by the fact that their product
is at the centre of a mission to save lives
Partnering with the Public
---" This is not sales or marketing its a high-level conversation to
demonstrate the company's commitment to furthering the
development of the countries it operates in ."

IBM 's CEO cricumnavigates the globe six or seven times a year to
meet with national and regional officials discussing how IBM can
help their countries achieve their goals.-----The results is such
engagement at the top helps other IBM leaders get a seat at the
table when diacussion about the country's future take place.
A Long-Term Focus
Companies using institutional logic are often willing to invest the
human side of organization--investment that cannot be justified by
immediate financial retures but that help create sustainable institutions.

Shinhan Bank set out to acquire Chohung Bank. over 3500 employees of
CB protest the merger.The leaders deferring formal integration for 3
years giving equal representation and increasing the salary of CB to
match the higher wages of SB's employees.---By the third year when
formal intergration took place shinhan was outperforming not only the
banking industry but also the South Korean stock market.
Case study---Emirates Airline
Emirates maintains a rapid growth in the aviation industry.Its
unique marketing of sports sponsorship has attracted widely
attention.By comparing with other airline companies the
content and strategy of sports sponsorship of Emirates shows:
1) Multiple sort of sports sponsorship
2) Widely ranging sports sponsorship combined with
globalization business
3) Sponsoring high level sports events
4) Implementation of equality marketing activities to maximize
the effect of sponsorship.
Sponsor Partnership
Long-term vision
---Petrol Resource

Articulating a purpose broader than making money
can guide strategies and actions, open new sources
for innovation, and help people express corporate
and personal values in their everyday work.
Companies claims that they serve society become credible when leaders
allocate time, talent, and resources to national or community projects
without seeking immediate returns and when they encourage people
from one country to serve another

Creating diverse teams of best

companys talents for month-
long projects around the world
Companies claims that they serve society become credible when leaders
allocate time, talent, and resources to national or community projects
without seeking immediate returns and when they encourage people
from one country to serve another

Cemex is considering still

unmet societal needs and
than produces innovations
for its satisfying
Institution building helps connect partners across
an ecosystem, producing business model innovation

Cemexs Construrama distribution

program which offers the small
stores training, support, strong
brand and easy access to products
Great companies assume they can
trust people and can rely on
relationships, not just rules and
structures. They are more likely to
treat employees as self-
determining professionals who
coordinate and integrate activities
by self-organizing and generating
new ideas.
Company requires knowledge of its social
structure and informal networks, and optimizing
performance requires social investments

Brazil department
independently developed low-
cost, high-quality alternatives
to premium products
Himalaya team found ways of
making Gillette razors
affordable and desirable to
men often bloodied by barbers
using rusty or worn-out blades
When people self-organize to create networks to share
information, new initiatives or innovations are often
the result

Latin Americas company

managers developed new kind
of potatoes which is suitable
for southern climates, what
allowed them to become a
head of potato development
center in Peru
Self-organizing communities can be a potent force for
change, propelling companies in directions they might
not have taken otherwise

IBM was able to develop

virtualization and green
computing only because of
Innovation Jam (held in July
Institution building is not the result of carrying out
specific activities but a coherent, holistic pursuit in
which elements reinforce one another, are
inextricably intertwined, and reflect a logic and
leadership style that permeate the corporation