Can Organizational DNA Exclude Ethics?

By Verschoor, Curtis C. | Strategic Finance, September 2004 | Go to article overview

Can Organizational DNA Exclude Ethics?


Verschoor, Curtis C., Strategic Finance


THE METAPHOR OF ORGANIZATIONAL DNA attempts to apply the all-inclusive biological characteristic known as DNA to the culture of organizations. While several examples involving organizational DNA have been published, one of the first uses of DNA in connection with the culture of an organization may have been in a speech by SEC Chair William Donaldson shortly after his appointment and confirmation.

Addressing the National Association for Business Economics in Washington, D.C., in March 2003, Donaldson concluded his remarks on the subject of good corporate governance by strongly emphasizing the importance of ethics to appropriate corporate culture: "I hope that you will agree that the most important first step for a board grappling with the issues of corporate governance is not debating the issues of structure. Rather, it is defining the parameters of an inviolate corporate culture by answering simple questions: What kind of moral compass do we want guiding this corporation? What ethical standard do we want embedded in this corporation's DNA? How will we demonstrate it in our every action? How can we protect the long-term interests of our investors?" [emphasis added]

More recently, the prominent management consulting firm Booz Allen Hamilton also used the DNA metaphor. In its continuing research into how American corporations are managed, it used a unique approach to define organizational DNA. In contrast to the ethical framework chosen by Donaldson, Booz Allen virtually ignores the importance of ethics as a determinant of the overall culture of an organization.

In "The Four Bases of Organizational DNA," an article in the Winter 2003 issue of the firm's Strategy+Business magazine, three Booz Allen consultants--Gary Neilson, Bruce Pasternack, and Decio Mendes--explain how "a company's DNA holistically means weaving intelligence, decision-making capabilities, and a collective focus on common goals widely and deeply into the fabric of the organization so that each person and unit is working smartly--and working together." The authors note that each organization has an idiosyncratic way of doing things that influences how individuals within the organization perform, and it's the individual behaviors that determine an organization's success over time.

Neilson, Pasternack, and Mendes state: "Just as the double-stranded DNA molecule is held together by bonds between base pairs of four nucleotides, whose sequence spells out the exact instructions required to create a unique organism, we describe the DNA of a living organization as having four bases that, combined in myriad ways, define an organization's unique traits." Booz Allen believes that better execution of business strategies will be the key attribute of superior-performing organizations in the future. The four bases, as described by Neilson, Pasternack, and Mendes, are:

Structure--What does the organizational hierarchy look like?

Decision Rights--Who decides what?

Motivators--What objectives, incentives, and career alternatives do people have?

Information--What metrics are used to measure performance?

The absence in this analysis of any mention of core values as an important determinant of the culture of an organization is striking.

In "The Seven Types of Organizational DNA," appearing in the Summer 2004 Strategy+Business, the authors extended Booz Allen's concept of organizational DNA, stating: "Like the DNA of living organisms, the DNA of living organizations consists of four building blocks, which combine and recombine to express distinct identities, or personalities. These organizational building blocks--structure, decision rights, motivators, and information--largely determine how a firm looks and behaves, internally and externally." In their article, Neilson, Pasternack, and Mendes detail the results of more than 4,000 assessments from the Booz Allen Org DNA Profiler[TM] (www. …

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Can Organizational DNA Exclude Ethics?
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