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Enhancing Organizational Performance (1997)

Chapter: 3 Organizational Culture

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Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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3 Organizational Culture

We begin our discussion of organizational culture with a case study from the aerospace industry (Snyder, 1988):

Plant 10 of Lockheed-California's L-1011 program was considered an albatross by Lockheed's top management. In 1979, when Dan Daniels was named vice president of manufacturing and given direct responsibility for the plant, he faced a myriad of performance problems in Plant 10, including production behind schedule, production costs significantly over budget, quality problems, a climate of fear that suppressed information needed to correct problems, and open hostility between departments. Fortunately, from his experiences over the years, Daniels had developed a strong managerial philosophy that was very different from the autocratic and demeaning style of management for which Plant 10 had been known.

From his first week there, Daniels embarked on actions of cultural significance. He began by sending a memo to all employees expressing his philosophy. Realizing they would read more into what he did than what he said, he then promoted his philosophy by walking around and talking to people throughout the plant. At first they were reluctant to talk, but Daniels was persistent and open. He worked with people to solve problems and urged his managers to do the same. He made it clear to his managers that employees were to be treated considerately and fired one punitive manager who was unable or unwilling to change his style. Another manger who would not provide accurate information was replaced. To build team spirit, managers were issued special blue flight jackets that they wore with pride.

In these and other ways, Daniels consistently put his philosophy into action. By 1981, two years later, the entire plant was on schedule and under

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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budget. Morale had also greatly improved. Daniels had succeeded in drastically changing the plant's culture and, in the process, had achieved impressive gains in performance.

Organizations have always had cultures, and some managers have probably always been astute enough to figure out how to manage them, as this case illustrates. Systematic research on the cultures of work organizations and how they might be managed to enhance performance and productivity, however, was not pursued with any frequency until the 1980s. A number of popular management books published at that time called attention to cultural issues in the management of organizations (Ouchi, 1981; Pascale and Athos, 1981; Peters and Waterman, 1982; Deal and Kennedy, 1982). The general theme of these books was that managers can shape the cultures of the organizations they manage in ways that enhance performance and productivity. Each organization, it was suggested, could develop a distinctive culture with the enlightened guidance of management. The appearance of these volumes and the competitive threat posed by Japanese organizations that was evident at that time awakened substantial interest in the cultures of work organizations within the management community. Another example (Wilmer et al., 1994) comes from the automobile industry:

In 1984, when GM and Toyota formed the NUMMI joint venture, they undertook a dramatic cultural transformation of what had been one of the worst GM plants in the U.S. Union-management conflict had raged for 20 years resulting in strikes, absenteeism, and low productivity and quality. The original intent was simply to adopt and learn Toyota's highly successful production system. But because the Japanese production system depended on positive relations between management and labor, many Japanese management principles and practices were also adopted and gradually modified to fit the American work force. These changes gave rise to a new culture that fostered trust, mutual respect, and the recognition of the interdependencies between management and labor and between different parts of the plant. Employees and management ate together in a communal cafeteria; there were no reserved parking places; offices were open. Work charts, attendance boards, and defect records hung on the wall in work team areas. Consensual decision making became the norm. By the late 1980s, the Japanese had scaled back their presence at the plant, but the original U.S. management team remained almost intact. NUMMI continued to be both efficient and to have high-quality, producing the same number of cars as GM did in the same plant in the past with much higher quality and half the work force. In May of 1994 its Geo Prizm won the highest quality score ever attained by a U.S.-made vehicle.

From these and other cases, it became clear that cultural factors play an important role in organizational performance, but there was a dearth of systematic knowledge on which to base interventions into organizational cultures. Academic researchers found the popular treatments of culture too

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

simplistic to match the known complexities of organizational life. Before the popular books appeared, research on organizational cultures was sparse. After their appearance, the research literature grew rapidly, but researchers have thus far failed to reach consensus on either theoretical or methodological issues. The field of organizational culture research is still at a very early stage of development.

Because every definition of culture involves sets of ideas that cannot be directly observed, and because these ideas and related behaviors are theorized to be interconnected and likely to form unique patterns within any given organization over time, empirical study of them is extremely difficult. Established quantitative methods using questionnaires, archival data, and laboratory observations have severe limitations, primarily because they require researchers to decide in advance what a culture is like in order to measure it, and they usually fail to capture the continuity and all of the context in which the studied phenomena occur. Qualitative methods adapted from anthropology, sociology, and other fields require intensive observations over substantial time periods and thus limit how many organizations can be studied by any group of researchers.

As a result, theoretical discussions and debates about organizational cultures far outnumber empirical studies, and empirical results do not cumulate well. Any discussion of what is known about organizational cultures must depend heavily on theory to fill in the gaps and connect empirical results from one study to another. In this chapter, we distinguish empirical results from theory and conventional wisdom by the use of such terms as ''___ found …" and "as ___ showed. …"

Because of the paucity and scattered nature of the empirical findings on organizational cultures, we do not know for certain exactly how the cultures of the Lockheed L-1011 program and of NUMMI affected employee performance. The current state of knowledge, however, is sufficient to be able to specify likely pathways through which cultures affect individual and collective work performance and to identify levers that can be used by managers and others to enhance such performance. But first we address what culture is, what it does for people, how it arises, and where it is found.

Culture As A Construct

Although the research literature contains many different conceptualizations of culture, researchers agree reasonably well on what culture is, what it does, and how it arises. Most basic is that culture is a collective phenomenon. People who belong to the same culture think and behave similarly in key respects. Most researchers agree that organizational cultures have both ideational and observable aspects (Kopelman et al., 1990:283). In terms of the two examples given above, the new management principles people subscribed

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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to and what they actually did differently together constituted the changed cultures of the Lockheed plant and of NUMMI. Two influential treatments of culture present these two elements of culture—ideas and actions—in somewhat different terms.

Schein (1992) portrays culture as existing at three levels of awareness. The most apparent are artifacts, which are visible organizational structures and processes. Somewhat less evident are espoused values, which are the strategies, goals, and philosophies expressed by managers and other members of the organizational culture. Least evident are what he calls the basic underlying assumptions, which are unconscious and taken-for-granted beliefs, perceptions, thoughts, and feelings. He sees the latter as the "ultimate source of values and action" (1992:17). Other writers have applied the metaphor of layers to Schein's basic conceptualization, portraying culture as consisting of successive encompassing layers, like those of an onion (Ott, 1989; Rousseau, 1990; Hunt, 1991). The outer layer is composed of the observable aspects of culture, whereas the two inner layers are ideational.

Trice and Beyer (1993) describe these two aspects of cultures as substance and forms. The substance of cultures consists of shared, emotionally charged belief systems that they call ideologies. By ideologies they mean "shared, interrelated sets of beliefs about how things work; values that indicate what's worth having or doing; and norms that tell people how they should behave" (p. 33). Although they agree with Schein and others that cultural substance is often taken for granted and tacit, they suggest that certain circumstances or informed efforts can bring cultural substance to awareness. They define cultural forms as the observable entities, including actions, through which members of a culture express, affirm, and communicate the substance of their culture to one another. Team meetings, the communal cafeteria, posted defect records, and consensual decision making are examples of cultural forms that symbolically communicated and affirmed new beliefs and values at the NUMMI plant.

What cultures do for human societies is manage collective uncertainties and create social order, continuity, collective identity, and commitment (Trice and Beyer, 1993). On the down side, they also encourage ethnocentrism, we-versus-them thinking (Druckman, 1994). Of course, cultures are neither monolithic nor simple, but rather have underlying dualities. Some of their consequences are practical, others are expressive; some are obvious, others are hidden; some are positive for the cultural entity; others are negative. To illustrate just the latter duality, the cultures of organizations may enhance performance in relatively stable times but prove to be an impediment to needed change when environments become unstable.

Another important conceptual issue concerns the origins of culture. Schein sees culture as the result of a complex learning process that occurs among

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

groups of people. Their shared learning addresses two major problems: (1) survival, growth, and adaptation in the environment and (2) internal integration that permits a group to function and adapt (Schein, 1992). Because human beings have the capacity to abstract and be self-conscious, this learning can occur at both a behavioral and an abstract internal level. Culture formation then occurs as people strive toward stability, consistency, and meaning.

An early analysis of ways of studying culture pointed out that it can be viewed either as a property of organizations—something the organization has—or as something the organization is (Smircich, 1983). Most popular treatments of culture describe it as just another variable that characterizes the organization—in effect, as something that the organization has. Scholarly treatments of culture, however, vary considerably. Studies that use quantitative methods usually treat culture as a variable that can be measured much like other properties of organizations (Denison, 1990; Schneider, 1990; Hofstede et al., 1990). Studies that use qualitative methods, particularly those in the ethnographic tradition, are more likely to treat cultures as something the organization is (Rohlen, 1974; Barley, 1983, 1986; Van Maanen, 1973, 1975; Trice and Sonnenstuhl, 1988; Kunda, 1991; Browning et al., 1995). Many of these studies seek to describe cultures and their contexts in rich detail and from their members' point of view and to develop grounded theory—that is, theories derived from a rigorous analysis of qualitative data systematically generated from observations, interviews, and relevant documents. Such theory helps to explain what was observed in the setting and contributes to general theory by abstracting those elements and relationships from the situation that appear to have the most explanatory power for possible future study in other settings.

Despite differences in approach, most organizational researchers agree on six aspects of organizational culture:

  1. Cultures are a property of groups of people and not individuals.
  2. Cultures engage the emotions as well as the intellect.
  3. Cultures are based on shared experiences and thus on the histories of groups of people; to develop a culture takes time.
  4. Cultures are infused with symbols and symbolism.
  5. Cultures continually change because circumstances force people to change.
  6. Cultures are inherently fuzzy in that they incorporate contradictions, paradoxes, ambiguities, and confusion.

The multiplicity of cultures to which organization members belong greatly complicates the analysis of how cultures affect work performance. Although the presence of multiple cultures in organizations is generally recognized,

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

most empirical studies and theories of organizational culture have tended to focus on one level of culture at a time. Researchers have focused on national cultures (Williams, 1970; Hofstede, 1980; Bellah et al., 1985), industry-wide cultures (Abrahamson and Fombrun, 1994; Browning et al., 1995), occupational cultures (Van Maanen, 1973, 1975; Barley, 1983, 1986; Trice and Sonnenstuhl, 1988; Trice, 1993), managerial cultures in general (Bendix, 1956; Sutton et al., 1956; Chatov, 1973), organizational cultures (Rohlen, 1974; Biggart, 1977; Denison, 1990; Kunda, 1991; Martin et al., 1985), and work group cultures (Roy, 1960; Zald and Berger, 1978; Brown, 1983). The most likely reason for this limitation of focus is methodological. Studying even one level of culture well is difficult and time-consuming. Studies sometimes incorporate some treatment of adjoining levels of culture, either by design or because they emerge as important during the course of the study, but these inclusions are neither systematic nor similar enough to make the separate effects of different levels of culture evident.

Because this chapter focuses primarily on the organizational level of analysis, the term culture is used to refer to the cultures of whole organizations and the term subcultures is used to refer to any other cultures existing at lower levels of analysis within organizations. Although few studies have tried to look at more than one type of culture at a time, all of the cultures to which organization members belong have the potential to affect their work performance. The limits of empirical evidence to date make us dependent on theory to suggest which levels of culture might matter most for the performance of employees and organizations and to specify how cultures affect that performance. Before discussing the little that is known about culture and performance, we examine some of the problems involved in evaluating effects.

Difficulties In Evaluating Effects

Documenting an empirical link between organizational culture and effectiveness is fraught with difficulty (Siehl and Martin, 1990). For example, determining the relationship between culture and performance requires researchers to control for and thus measure other factors likely to affect performance. A later section on theoretical linkages between culture and performance specifies some of these, but it does not exhaust the possibilities. One reason identifying such mediating factors is difficult is because it is not clear what is not affected by culture. Also, unless studies of culture are longitudinal and long-term, the direction of causality associating culture and effectiveness is ambiguous because performance may have significant effects on culture as well as vice versa. Separating out these reciprocal effects is extremely difficult.

Similarly, measuring performance itself is difficult because effectiveness

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

is multidimensional (Cameron, 1978). Any comprehensive assessment of the relationships between culture and effectiveness must therefore take account of multiple relationships. The measurement of firm performance with financial measures is the most common approach, yet it has provoked endless controversy about reliability and validity. Also, theoretical links are needed to identify which aspects of culture are associated with which aspects of effectiveness. In addition, most effectiveness measures are fraught with well-documented methodological weaknesses (e.g., Cameron and Whetten, 1983). Coupling the ambiguity associated with culture measurement to the multidimensional complexity associated with effectiveness measurement makes the research task difficult indeed. Finally, research on effectiveness needs to control for contextual factors that could affect performance, like industry competitiveness, employee demographics, technological sophistication, and worker experience. We discuss three of the major issues associated with the characteristics of culture that make it especially difficult to assess—definitional issues, measurement issues, and dimensional issues.

Definition

First, some ambiguity surrounds the definition of culture itself. Multiple cultures may be present within an organization that may affect performance—for example, a national culture, a functional culture, a gender-based culture, a work group culture, and a company culture. With a few exceptions (e.g., Hofstede, 1980; Barley, 1983; Trice and Beyer, 1993; Van Maanen, 1973), empirical researchers have failed to identify the specific level of culture studied. Without such specificity, it is difficult to determine what measures of effectiveness are appropriate. Similarly, because of the different disciplinary perspectives on culture research (e.g., organizations have cultures versus organizations are cultures), there is no consensus about whether any influence cultures have on organizational performance can be assessed. The former approach—that cultures are properties of organizations—assumes that researchers and managers can identify differences among organizational cultures, can empirically measure cultures and performance separately, and thus can assess the impacts of cultures on performance. The latter perspective—that organizations are cultures—assumes that cultures are unique and underlie everything that happens in organizations. They are inseparable from other organizational phenomena, including effectiveness.

In this book, we try to take a middle ground. Culture is treated as a property of organizations, so that it makes sense to try to assess its effects on people's performance in organizations. At the same time, culture is treated as a pervasive force, so that most actions and beliefs can be seen as having cultural as well as practical significance.

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×
Measurement

A second set of issues relates to the measurement of organizational culture or the most appropriate methods for obtaining data on organizational culture. Three strategies have been used: (1) a holistic approach, in which the investigator becomes immersed in the culture and engages in in-depth participant observation; (2) metaphorical or language approaches, in which the investigator uses language patterns in documents, reports, stories, and conversations in order to uncover cultural patterns, just as detectives use fingerprints, voiceprints, and word prints to detect a person's identity; and (3) quantitative approaches, in which the investigator uses questionnaires or interviews to measure particular dimensions of cultures, with numerical scales or codes.

Heated debates are common among culture researchers about the best ways to measure culture. A central issue is whether a quantitative approach to culture assessment is valid, or whether an in-depth, qualitative or holistic approach is the only way to detect and describe culture. The basic issue is: When assessing culture via questionnaires, interviews, documents, is one really measuring superficial characteristics of an organization—namely organizational climate—rather than in-depth cultural values? Because culture is based on underlying values and assumptions, often unrecognized and unchallenged in organizations, one perspective argues that only by utilizing in-depth qualitative procedures in which artifacts, stories and myths, and interpretation systems are studied over long periods of time in an in-depth way can cultural attributes be identified (Schein, 1992; Trice and Beyer, 1993; Siehl and Martin, 1990). Alternatively, assessing perceptions or practices of organization members is likely to capture climate and structure rather than the underlying culture. In addition, questionnaires, it is argued, measure the dimensions of culture determined in advance by the researcher, thus potentially missing or distorting the actual dimensions of cultures existing a priori in the organization itself. "One can understand something in-depth only if one has experienced it" is an underlying philosophy represented by this approach.

The opposing point of view argues that breadth and comparability are sacrificed by employing a qualitative approach. The investigation of multiple organizational cultures becomes impossible when immersion in each one is mandatory. To conduct comparisons among multiple cultures, quantitative approaches must be used. It is crucial, however, that respondents to a survey instrument actually report underlying values and assumptions (culture), not just superficial attitudes or perceptions (climate).

Two approaches are common for addressing this issue. One is to construct surveys based on ethnographic observation, so that the questionnaire items reflect the aspects of culture uncovered by the qualitative observation

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

(see Enz, 1988; Schall, 1983; Siehl and Martin, 1990). Another way is to use a scenario analysis procedure, in which respondents report the extent to which written scenarios are indicative of their own organization's culture (Ouchi and Johnson; 1978; O'Reilly, 1983; Denison, 1990; Cameron and Freeman, 1991; Quinn and Spreitzer, 1991). The scenarios serve as cues—both emotionally and cognitively—that may bring to the surface core cultural attributes. The old proverb, "fish discover water last" (people are not aware of their culture until it is described for them), illustrates the philosophical basis of this approach. Respondents may be unaware of crucial attributes of culture until they are cued by scenarios on a questionnaire.

Dimensions

The third set of issues relates to the most appropriate dimensions of culture to assess in determining the relationships between culture and effectiveness. Since it may be impossible to assess all aspects of an organization's culture, it becomes necessary to focus on certain dimensions of an organization's culture more than others. At least two kinds of dimensions are relevant for assessment: content and pattern. Content dimensions refer to the aspects of an organization's culture that capture its substance—the assumptions, values, beliefs, and norms. They reflect what the culture is. Examples that have been used in research include internal-external focus, speed, riskiness, participativeness, clarity, power distance, masculinity, and individualism. Pattern dimensions refer to the interrelationships among these content dimensions, the patterns by which they manifest themselves. The most common pattern dimensions are cultural strength, cultural congruence, and cultural type.

The challenge in assessing content dimensions of organizational culture is to identify and assess the key archetypes that capture the culture's core dimensions. A variety of models of culture have been proposed, with dimensions and attributes being proposed by various authors (see Cameron and Ettington, 1988, for a review). These models each use a different rationale for their claims as a valid representation or core cultural dimensions. One attempt to assess core dimensions empirically, for example, was the application of a competing values framework to culture assessment (Cameron and Freeman, 1991; Quinn and Spreitzer, 1991; Yeung et al., 1991; Zammuto and Krakower, 1991). These authors argue that most individuals describe their organizational cultures according to the dimensions of this instrument (see Mason and Mitroff, 1973; Mitroff and Kilmann, 1976). Their approach assesses culture by way of a survey instrument, however, with the liabilities articulated earlier.

Although it is by no means a simple matter, assessing pattern dimensions of culture is less controversial than assessing content dimensions,

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

because some consensus exists on the most important dimensions. Cultural strength refers to the dominance or preeminence of certain aspects of the culture in affecting everything that happens in an organization. It also reflects the intensity with which cultural values are held and clung to. It has been proposed as a key predictor of effectiveness. Deal and Kennedy (1982:5), for example, asserted that "a strong culture has almost always been the driving force behind continuing success in American business." Cultural congruence refers to the extent to which the culture reflected in one part of the organization is similar to and consistent with the culture reflected in another part of the organization. Congruence has also been hypothesized to be a major predictor or organizational effectiveness. For example, Nadler and Tushman (1980:75) found that, "other things being equal, the greater the total degree of congruence or fit between the various components [of an organization], the more effective will be organizational behavior at multiple levels." Cultural type refers to the specific kind of culture that is reflected in the organization (for example, an innovative, entrepreneurial culture). Cultural type reflects the extent to which certain cultural attributes or content dimensions dominate others in the organization. Cameron and Ettington (1988:385) found that ''the effectiveness of organizations is more closely associated with the type of culture present than with the congruence or the strength of that culture." Each of these pattern dimensions, in other words, has been proposed as a key predictor of organizational effectiveness.

Because the measurement of both culture and organizational effectiveness is so difficult, reports of such relationship must be viewed with caution. Their value rests on the clarity and credibility of the theoretical linkages on which they are based and on whether the research focuses on meaningful and convincing aspects of cultures and effectiveness. It is highly unlikely that any study can encompass all of the complexities or eliminate all of the difficulties involved, so that progress in determining the relationship between culture and performance is likely to require some sacrifice of precision and control to reach insights and possible understanding about even parts of the whole picture.

Also, to fully assess the effects of cultures, we must take into account the dualities of their consequences. Since this volume addresses issues of improving human performance, the duality of positive versus negative consequences is especially pertinent. Although the examples cited at the beginning of this chapter and many others portray organizational cultures in terms of their positive effects on performance, it is clear that not all of the effects of cultures are positive or even benign. As already mentioned, existing cultures are often blamed for the failure of organizations to respond to changing circumstances. For example, many analysts saw IBM's culture as an impediment to needed change. Attempts to establish quality circles and

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

participatory management often founder on the deeply held authoritarian values of management (Fitzgerald, 1988).

Scholars have identified other deleterious consequences of organizational cultures. On the basis of a careful and long-term study of a corporation in the high-tech industry, Kunda (1991) raised three concerns:

  1. Do corporate cultures threaten individual autonomy with "a rather subtle form of domination, a culture trap combining normative pressure with a delicate balance of seductiveness and coercion" (p. 224)?
  2. Do corporate cultures marginalize those not incorporated into the culture—temporary or contract workers, for example?
  3. What effects will corporate cultures have on society "if their [members'] fundamental conceptions of themselves and their relationships to others are shaped in the corporate image" (p. 226)?

He then suggests that members should remember that organizations are instruments of social action and not ends in themselves, that social boundaries may have positive value, and that other arenas for self-definition exist and can be cultivated.

Another ethnographic study of managers in three large organizations found that the bureaucratic ethos evident in their cultures created "moral mazes." Managers' success was tied to pleasing their bosses and submitting to impersonal market demands (Jackall, 1988:191-192) rather than to adherence to any set of moral principles. Clearly, cultures can have various consequences that are not immediately obvious or necessarily desirable.

It is important to keep in mind the limits of both empirical evidence and theoretical development as we discuss the ways in which cultures may influence organizational performance.

Culture And Performance

Organizational cultures cannot directly affect performance because it is people who do the performing. Cultures must therefore somehow influence people in order to affect their individual or collective performance. To fully assess effects of culture on performance, we need to determine the paths by which culture affects people and how those effects are tied to their performance. Ideally, studies of the effects of organizational culture on performance would develop theories and evidence that links specific aspects of culture to specific aspects of performance through specified intervening variables. Unfortunately, only a very modest beginning has been made on this agenda. To identify all of the consequences for performance of any culture, we need to consider, as comprehensively as possible, the pathways by which cultures shape people's thoughts, feelings, and behaviors.

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

Culture affects performance because it affects how people think, feel, and act and helps to determine the situations in which they act. In more scientific terms, cultures influence people's cognitions, affective states, and behaviors, many of which have implications for work performance. Cultures also shape the contexts in which people work and the environments in which organizations operate and, in these ways, constrain individual behavior.

Cultures are clearly repositories of information and knowledge and, as such, can help or hinder work performance. Accurate information and valid knowledge will assist performance, whereas inaccurate information and superstitious knowledge are likely to detract from it (Daft and Weick, 1984; Feldman and March, 1981). Also, cultures provide cognitive frameworks through which people interpret what they observe and experience and provide language and referents to use in communicating with others (Wilkins and Ouchi, 1983). Research on strategic decision making has shown that different managers may interpret identical events as opportunities or threats and that these interpretations, in turn, are related to the actions taken (Dutton and Jackson, 1987). Cultures also contribute schemas and scripts that can affect performance by providing preexisting ways of understanding what is occurring, how to evaluate it, and what sequences of actions are appropriate to the situation (Lord and Foti, 1986; Wilkins and Ouchi, 1983).

Feelings through which culture is likely to affect performance include identification, loyalty, and commitment. Identification involves the linking of one's self-concept with membership in a culture. Such identification with an organizational culture may enhance performance if it enhances self-concepts and feelings of self-esteem. Athletes on a winning team are likely to experience such performance-enhancing identification. Identification could lessen performance if it leads to decreased self-esteem and worse self-concepts. Interviews with employees of the New York Port Authority revealed that they experienced such negative feelings as shame when their organization was subject to harsh criticism for its handling of the homeless (Dutton and Dukerich, 1991). Other instances in which identification with employing organizations probably led to negative feelings include the cases of Exxon employees after the oil tanker accident at Valdez, Alaska, and of Hooker Chemical Company employees after the contamination of the Love Canal area in Niagara Falls, New York, was revealed.

Loyalty and commitment both involve an emotional bonding between the individual and his or her cultural group and, as such, imply a willingness to exert effort and make sacrifices on behalf of that group (Druckman, 1994). Of course, whether or not loyalty and commitment are positively associated with performance desired by the organization may depend on what values and norms the target cultural group holds regarding performance. O'Reilly (1989) suggested that employees committed to an organization

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

will be more dedicated because they care about their organization's fate, and their caring heightens the power of organizational norms to control their behavior. In this way, the ability of a culture to create commitment may affect its effectiveness in eliciting high performance from its members.

Another way in which cultures can affect performance is by programming people to behave in ways that are more or less effective in terms of performance. Swidler (1986) argued that cultures provide "tool kits" of stories, rituals, symbols, and world views that people often use to construct ways of ordering their behavior. She suggests (p. 277) that "people do not build lines of action from scratch, choosing actions one at a time as efficient means to given ends. Instead, they construct chains of action beginning with at least some prefabricated links. Culture influences action through the shape and organization of those links, not by determining the ends to which they are put."

In work organizations, various work-related skills, routines, and habits are culturally acquired and persist because they fit into valued strategies of action. By performing their work routines, organization members often get positive reinforcement and begin to internalize the routines as the way to do their work.

To the degree that culture programs people to behave in certain ways, it can have direct effects on individual performance. In many situations, however, performance is constrained by other factors. Also, individual performance does not always translate into organizational performance. Despite the consequent lack of certainty that a cultural intervention will affect performance in desired ways, astute managers take advantage of various levers available to them for managing their organizational cultures.

Levers For Managing Cultures

Because cultures involve people's innermost thoughts and feelings, their ongoing relations with other people, and complex patterns of behavior, and because cultures take time to develop, they are not easy for managers to manipulate and control. There is also a spontaneous and indigenous side to cultures. On one hand, many of the informal subcultures that emerge in organizations develop without anyone's conscious intent or control. On the other hand, it seems obvious that, over time, various individuals have probably taken leadership roles in the creation and development of any culture, even those that are informal. To successfully manage their cultures, managers need to assume the role of cultural leader. Some, like Dan Daniels at the Lockheed L-1011 plant, may have intuitively developed a culturally sensitive style of managing from their experiences. Others may need to self-consciously learn to use the cultural levers available to them.

Theory suggests that cultures have leverage points—social mechanisms

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

through which leaders and members can affect the culture in major or minor ways. These include selection, socialization, cultural forms, leadership, and subcultures. Research findings on each of these levers provide evidence supporting their effects on performance. Another leverage point, not usually under the control of managers or members, is the environment of the organization.

The idea of managers or other leaders controlling and managing cultures in organizations is very troubling to some observers (Martin and Powers, 1983; Georges and Jones, 1980; Kan, 1989; Alvesson and Berg, 1992) because they fear that those who succeed in managing cultures will use that ability to exploit others. It would be naive to ignore the ethical issues they raise and unrealistic to ignore the fact that, through their actions, managers do manage their cultures, more or less effectively, all of the time. The practical way to deal with ethical concerns about managing cultures thus becomes not a question of whether or not managers should manage their cultures, but rather one of how ethical concerns can be built into management efforts.

In most societies, managers of work organizations do not have unlimited control over their employees, who often find various ways to resist management control. Administrators and managers in some types of organizations do, however, have fewer societal limits on their control. Institutions like prisons and some mental hospitals, for example, have large amounts of control over their inmates and patients (Goffman, 1961). The military also has a large degree of control over its members than do many other employing organizations (Janowitz, 1971). In high-control organizations, ethical issues become especially crucial in the management of culture.

Selection

One way to manage a culture is to select members so carefully that only those whose values and customary behaviors are consonant with the desired culture are admitted. Organizations vary in their ability to use selection, however. U.S. public schools, for example, are required by law to admit virtually all children, regardless of language skills, social skills, and physical handicaps. Furthermore, they cannot easily expel students who do not fit in. Private schools, in contrast, can be selective. Prisons, although they must take all criminals sent to them, have extreme sanctions available to shape prisoners' behaviors, if not their internal values systems. Prisoners can also be assigned to different types of prisons and different settings within the prison. Business and other employing organizations use various selection techniques—from interviews and psychological tests to lie detector and drug tests—to try to eliminate those candidates most likely to be

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

disruptive in their cultures and to help them hire those candidates most likely to fit in and make positive contributions.

Socialization

What cannot be accomplished by selection, organizations can try to accomplish by socializing members to their culture after they are admitted. Organizations vary greatly, however, in the attention they pay to socialization and the tactics they employ (Van Maanen and Schein, 1979). Some tactics serve to shape recruits into the same mold as established members. The military uses many such techniques with its new recruits. Other techniques serve to develop less uniform and more individualized adaptations to the culture. These are usually reserved for roles that require autonomy and individual initiative. Training for higher ranks in the military employs these techniques.

The socialization tactics that organizations employ with new members can be classified along several dimensions (Van Maanen and Schein, 1979). Sometimes members are socialized in groups; at other times, they are socialized individually by old-timers or just by doing the job. Some socialization experiences are formal, in that the recruits are separated from others in the organization during the socialization process; others are informal, in that they occur in the regular work setting. Some socialization programs involve fixed sequences and timetables of activities and accomplishments; others allow for variability. Sometimes experienced members of the culture will be assigned to groom newcomers; at other times, newcomers self-select whatever socializing agents they can find. Finally, some socialization seeks to divest members of former roles that are seen as dysfunctional to organizational performance; other socialization accepts the current identities, skills, and values of entering members as appropriate and valued as it invests them in the new setting. Specific socialization experiences in actual organizations tend to combine these tactics in many different ways. Those that use more institutionalized tactics, with fixed sequences and timetables, are likely to encourage members to preserve existing cultural values and practices, and those that employ more innovative tactics, which are flexible and allow for variability, are likely to encourage recruits to develop innovative role orientations departing from past cultural prescriptions.

Organizations face trade-offs between selection and socialization (Wanous, 1980). They will find it easier to socialize new members into their cultures if the members they admit already hold beliefs and values consonant with their cultures and have learned behavioral routines consistent with their strategies and goals.

Western scholars were sensitized to the power of adult socialization when the Japanese established large numbers of factories or "transplants" in

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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North America and Europe in the 1980s. Japanese management is based on teamwork and unquestioned loyalty to the firm, whereas American and British management have historically stressed individual responsibility on the job and adversarial collective labor organizations to represent worker interests. Rather than resocialize individualist and union-oriented laborers, the Japanese have often selected "green-field" sites for setting up transplants (Abegglen and Stalk, 1985). Green-field sites are locations with no history of industrial organization, or sites where unemployment is high and unions are weak. In these settings the Japanese have been very successful in taking young workers and subjecting them to intense socialization experiences in order to instill in them loyalty to the firm and skill in teamwork practices such as quality circles (Oliver and Wilkinson, 1988).

Communication plays an important role in the socialization process. The communication that newcomers do or do not have with supervisors, coworkers, and others can affect their satisfaction with communication, role clarity, identification with the organization, organizational commitment, and the likelihood of staying or leaving (Jablin, 1987). Interview data on the types of socialization experiences that new graduates of business schools found most helpful in their initial jobs concluded that the most important aids to socialization were interactions with peers, supervisors, and coworkers (Louis et al., 1983).

Other research on the experiences of new business recruits found that both expectations and initial performance are important for later performance. In this research, company expectations were conveyed by the difficulty of the job to which a recruit was assigned (Berlew and Hall, 1966). Recruits who were put in more demanding jobs internalized more positive job attitudes and set higher standards for themselves. Both initially and subsequently, they also tended to perform better than recruits placed in less demanding jobs.

Other research has suggested that feelings about the self that are rooted in past experience are important moderators in the socialization process (Smith, 1968; Morrison, 1977; Weiss, 1978; Jones, 1983, 1986; Miller and Jablin, 1991). Differences in self-esteem, feelings of competence and confidence, and perceptions of self-efficacy are associated with different responses to socialization experiences. Negative feelings tend to produce avoidance strategies that constrain task immersion, information seeking, and social contacts, whereas positive strategies seem to facilitate learning how to act appropriately but do not necessarily ensure role acceptance (Jones, 1983; Miller and Jablin, 1991; Trice and Beyer, 1993).

Other researchers have also emphasized the active role that individuals play in their own socialization. Newcomers' information seeking has been theorized to influence a variety of cognitive and affective states that intervene between culture and performance, as discussed above. Chief among

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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these are role clarity, role conflict, job satisfaction, and job tenure. Information-seeking tactics include testing limits, indirect questioning, surveillance, observing, disguised conversations, using third parties, and overt questioning (Miller and Jablin, 1991).

Both theory and the available empirical evidence indicate that socialization has many facets and that experiencing even some of these facets leads to better adjustment to organizational roles and cultures. Socialization must be viewed in terms of the adjustments that are required at various stages of membership in a group or organization. Socialization is an ongoing process that continues in some form throughout individuals' lives and careers.

Cultural Forms

Cultural forms are the concrete manifestations of culture. They consist of observable entities through which members of a culture affirm, express, and communicate cultural substance to one another. Dan Daniels used many cultural forms as levers to change the culture at the Lockheed L-1011 plant. He communicated his philosophy in colorful, easy-to-remember language and sayings (Snyder, 1988:197):

"Don't sell your integrity—it's the only thing that can't be bought."

"You may be better at something than some one else, but you are not better than they are."

"You don't have to make people do things your way to get performance."

He reinforced these messages by his own personal conduct—coming to work early, walking around, listening, and not criticizing others. He promoted people who could plan, treated their subordinates decently, and got results. He encouraged the managers working for him to emulate these behaviors. He developed a symbol of pride in the organization—blue flight jackets.

At the NUMMI plant, an abundance of cultural forms also served as levers for cultural change. Two were very basic: (1) the new union contract that embodied new levels of union-management trust and cooperation and (2) the production process itself, which embodied the highly successful Japanese way of producing cars. In addition, the very fact that Toyota sent 400 trainees from Japan to work with their U.S. counterparts was a symbol of Toyota's commitment to the joint venture. NUMMI's investing $3 million to send 600 employees to Toyota plants in Japan for training expressed a serious intent to change and the importance of learning new ways of doing things. Records posted in work team areas signified management's willingness to share information and the teams' responsibilities for finding ways to improve performance.

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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Many other examples of cultural forms could be given. They are all around us. Members of organizations and of occupational groups use specialized language, symbols, and signs. They wear uniforms and special clothes that signify their status. They tell stories to one another that express their work-related tensions and concerns (Martin et al., 1983). They practice rituals and taboos that help to reassure them in the face of uncertainty. They also engage in elaborate rites and ceremonies that have mixtures of practical and expressive consequences. Table 3-1 lists and illustrates six types of cultural rites that have been identified in both tribal societies and modern work organizations. Of the many cultural rites that probably occur in organizations, three have been documented: rites of creation (Turner, 1990), rites of transition (Deal and Kennedy, 1982), and rites of parting (Harris and Sutton, 1986). All involve a series of actions, sets of performers, and the use of artifacts that convey cultural meaning.

Subcultures

Organizations are rarely characterized by single cultures (Wilkins and Ouchi, 1983); instead, subcultures are pervasive and have important effects in most organizations (Gregory, 1983; Barley and Louis, 1983). There is still considerable controversy over whether it is misleading or helpful to look at organizations as having organization-wide cultures as well as subcultures (Martin, 1992; Meyerson, 1991; Schein, 1991; Trice, 1991). The sensible resolution of this controversy is to look for both in analyzing any particular organization. However, organization-wide cultures may not develop in all organizations because the conditions for their growth are not present. Also, organization-wide cultures are unlikely to maintain themselves in the face of some circumstances, especially the loss of many long-term members or rapid turnover among members. Thus, subcultures are probably more prevalent in organizations than are organization-wide cultures. When popular writers and journalists refer to the organizational culture, they are often describing only the managerial subcultures subscribed to by those at the top of an organization.

Since subcultures share all of the characteristics of the more encompassing concept of culture, many of the findings and theories related to cultures are equally applicable to subcultures. The important practical question for managers is to manage subcultures so that their values and goals are congruent with those of the overall culture. To enhance performance, subcultures must also accept organizational strategies for realizing those values and goals.

An example of how subcultures are employed to influence performance is provided by the United States Military Academy at West Point. West Point's stated purpose is "to provide the nation with leaders of character

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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who serve the common defense" (United States Military Academy, 1993). West Point strives to achieve this purpose through a four-year experience designed around three distinct programs—intellectual, physical, and military development—as well as an overarching experience of ethical development that is integrated throughout each of the other programs.

The nature of followership that is learned by cadets at West Point is at least partly a function of the experiences they encounter during their plebe year, when they are subject in varying degrees to the authority of not only all commissioned officers but also all cadets of the upper three classes. The plebe system historically consisted of a socialization experience designed to strip new cadets of at least some of their previous characteristics and replace them with characteristics more acceptable to the military profession. In effect, they lose much of their old identities. The plebe system also made sure that all cadets, regardless of social status, started with the same opportunities. It served a useful purpose in leveling the playing field for all new cadets, in fostering cohesion and class bonding, in weeding out cadets who were unable to cope with an intellectually, emotionally, and physically demanding year, and in providing a powerful rite of passage into membership in what is called the Long Gray Line. However, the system required careful monitoring and was highly susceptible to unacceptable abuses.

More than once in its storied history, West Point officials have attempted to reform or do away with the plebe system (Lovell, 1979). Although the current cadet leader development system (USMA Cir 1-101, 1993) focuses on the overall four-year experience and deemphasizes the plebe experience, many vestiges of the plebe system remain. Constant vigilance on the part of leaders is necessary to prevent abuses similar to those all too familiar on civilian college campuses in the form of fraternity hazing. It is critical to the accomplishment of the Academy's purpose that developmental experiences encountered in this living laboratory be compatible with the espoused ideology relating to leadership and leader development.

Cadet companies are indeed fertile ground for subculture formation, because members interact more with each other than with anyone else, share powerful common experiences, and have many similar personal characteristics. The resultant subcultures have a powerful influence on their performance. Some companies have the reputation for being particularly demanding and strict in their enforcement of regulations pertaining to fourth-class duties; other companies are viewed as mellow or laid back with little concern for enforcing regulations. So long as the company subculture is enhancing (that is, concerned with issues that do not interfere with the desired culture), the company's tactical officer in charge is not likely to be concerned and may even encourage the subculture.

Serious, wide-scale abuses of the fourth-class system have almost always

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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TABLE 3-1 Six Cultural Rites and Their Social Consequences

Types of Rites

Example

Evident Expressive Consequences

Examples of Possible Hidden Expressive Consequences

Rites of passage

Induction and basic training, U.S. Army

Facilitate transition of persons into social roles and statuses that are new for them.

Minimize changes in ways people carry out social roles. Reestablish equilibrium in ongoing social relations.

Rites of degradation

Firing and replacing top executive

Dissolve social identities and their power.

Publicly acknowledge that problems exist and discuss their details. Defend group boundaries by redefining who belongs and who doesn't. Reaffirm social importance and value of role involved.

Rites of enhancement

Mary Kay seminars

Enhance social identities and their power.

Spread good news about the organization. Provide public recognition of individuals for their accomplishments; motivate others to similar efforts. Enable organizations to take some credit for individual accomplishments. Emphasize social value of performance of social roles.

been associated with subcultural forms that are clearly counter to those espoused by the Academy. Academy officials are so mindful of the potential for disruptive subcultures that cadet companies are scrambled each year to forestall the development of strong subcultures that are extremely resistant to change. At the end of their sophomore year, cadets are assigned to different companies from those to which they were assigned during their first two years.

Some cadet companies develop subcultures that emphasize one of the developmental dimensions much more than the others. For example, a company may place priority of effort on physical excellence to the detriment of intellectual development. In such a company, very powerful norms may emerge causing cadets to focus discretionary time on physical fitness or training for an intramural sport instead of a more balanced use of time to

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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Types of Rites

Example

Evident Expressive Consequences

Examples of Possible Hidden Expressive Consequences

Rites of renewal

Organizational development activities

Refurbish social structures and improve their functioning.

Reassure members that something is being done about problems. Disguise nature of problems. Defer acknowledgment of problems. Focus attention toward some problems and away from others. Legitimize and reinforce existing systems of power and authority.

Rites of conflict reduction

Collective bargaining

Reduce conflict and aggression.

Deflect attention away from solving problems. Compartmentalize conflict and its disruptive effects. Reestablish equilibrium in disturbed social relations.

Rites of integration

Office Christmas party

Encourage and revive common feelings that bind members together and commit them to a social system.

Permit venting of emotions and temporary loosening of various norms. Reassert and reaffirm, by contrast, the moral rightness of usual norms.

accomplish all developmental tasks to some satisfactory level. When the attention paid to one of the developmental experiences is so far skewed toward a single dimension that other developmental dimensions are not adequately addressed, the subculture is damaging overall performance.

This example illustrates how subcultures can have positive and negative impacts on intended organizational cultures and performance. Some subcultures are supportive or even enhancing of the overall culture; some pursue values that are orthogonal to the culture (the physical fitness enthusiasts), whereas other groups seem to be countercultural in the sense that they enact values (by hazing) that are contrary to those prescribed by current policy. Academy administrators are sensitive to these differences and try to manage them as best they can. But the impulses of subcultures cannot be totally controlled from the top of the hierarchy. For the shaping

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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and maintenance of subcultural values that are congruent with those of the overall organizational culture, cultural leadership that communicates and reinforces congruent ideas and values is needed throughout the organization.

Cultural Leadership

In Chapter 4 we deal with how leaders influence the performance of the practical tasks of the organization. Here we focus on how the expressive side of leadership affects thoughts, feelings, and programmed behaviors that in turn affect performance.

Elements of cultural leadership that have been addressed in the literature include: the personal qualities of the leader, the situation as perceived by the leader and followers, the vision or mission of the leader, follower attributions about the leader and the situation, the performance of the leader, characteristic leader behaviors or style, administrative actions, the use of cultural forms, the use of tradition, and the persistence of consequences over time.

There are several views on the nature of the leader/culture interaction. Based on his observations as a researcher and consultant, Schein conceives of cultural leadership as emanating especially from the founders of organizations, whom he sees as imposing their cultural assumptions on the initial group of employees. As he puts it (Schein, 1992:212): ''Leaders not only choose the basic mission and the environmental context in which the new group will operate, but they choose the group members and bias the original responses that the group makes in its efforts to succeed in its environment and to integrate itself." Founders use a variety of embedding mechanisms, he argues, to create what might be called the climate of the organization. At this stage the climate reflects only the assumptions of its leader. Through socialization, and over time, however, these assumptions begin to be internalized by the members.

Trice and Beyer (1993) see cultural leadership quite differently. They argue that cultural leadership is fairly common and can occur in many different groups and at many different places at the same time within a single organization. Thus, their approach addresses cultural leadership at the subcultural level as well as at the overall cultural level.

Ott (1989), building on Sathe's (1985) discussion of how organizational cultures tend to perpetuate themselves and using essentially the same mechanisms described by Schein, suggests that managers seeking to change organizational cultures must intervene appropriately in each of the important events or processes that influence the culture.

A useful typology describes four types of cultural leadership (Trice and Beyer, 1993):

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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  1. Leadership that creates cultures occurs when leaders set social processes in motion to achieve their visions of what their organizations should be like and what they should try to accomplish. Founders often create cultures.
  2. Leadership that changes cultures causes either the ideas or behaviors embedded in culture to become different than they were before. Dan Daniels, the manager of the Lockheed L-1011 plant, is a good example of a cultural change leader.
  3. Leadership that embodies cultures represents, preserves, and nourishes an existing a culture. George Washington was an embodiment leader who represented relatively conservative values and principles as the first president of the United States.
  4. Leadership that integrates cultures manages to keep some harmony among various subcultures while preserving their cultural differences. The Japanese managers who headed up the NUMMI joint venture during its early days must have had a flair for integrative leadership, for they had to reconcile the diverse interests of U.S. labor unions, General Motors management, and the Japanese managers of Toyota. Although these managers could not change the culture of the unions, GM, or Toyota, they managed to forge enough consensus to make the joint venture succeed.

Another way to look at the combination of culture and leadership is to assess how culture may facilitate or hinder leadership and its effectiveness. Because almost all organizations have subcultures, the presence of a strong overarching set of ideas and values, such as are embedded in military doctrine, greatly facilitates the exercise of leadership throughout an organization. When different leaders convey similar ideas and values throughout an organization, they are contributing to internal integration. When they manage to instill somewhat different ideas and values in their own units, they may be contributing to external adaptation by helping the organization to satisfy multiple, competing demands. Both types of cultural leadership can thus contribute positively to overall organization performance.

Managing Organization Cultures

One implication of this discussion of cultural levers is that cultures develop inertia. The levers of selection, socialization, and cultural forms not only bring the culture to new members but also serve to reinforce culturally determined values and behaviors in those organizational members who are already acculturated. The stronger the culture—that is, the more pervasive it is in the organization—the more inertia it generates. Strong cultures are more resistant to managerial intervention than weak ones. The levers creating strong cultures may therefore lead to both effectiveness and

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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ineffectiveness in organizations. Strong cultures, on one hand, can lead an organization to the "success breeds failure" syndrome in which organizations refuse, or are unable, to adapt to changing environmental demands. IBM's lingering overreliance on mainframe computer business is a well-known example. On the other hand, strong cultures also can lead organizations to a "success breeds success" situation in which a unique market niche and "brand identity" become associated with the organization because of its strong culture.

Organizations change as their environment, personnel, circumstances, and missions change. Culture serves not merely to slow the rate of change but also to keep change focused and in accord with current organizational operation; in strong cultures, change must be accommodated in order to avoid disruption and discontinuity. Therein lies the problem: those cultures most resistant to change, the strong ones, are precisely those in organizations in which culture is most influential in the organization's functioning. How can managers actually produce change in organizations with strong cultures?

Particular events sometimes occur that provide a window of opportunity for managing cultural change. Consider, for example, a telecommunications company located in a downtown business district. For a variety of financial and logistical reasons, the firm moved its entire operation to an outlying suburban area. The physical structure of the workplace changed. The balance of influence of subsections of the organization changed, e.g., technical support became more crucial at the time of the move than in routine day-to-day activities. Most important, there was a dramatic shift in personnel. Many employees who had relied on public transportation to get to the old central-city workplace were faced with a difficult commute to the suburbs. Others chose not to make the move and to resign rather than add hours to travel time and disrupt daily patterns of household organization. These difficulties affected employees across the organization, from front-line workers to supervisors to middle management. The move itself was accompanied by a pervasive and unprecedented turnover in personnel.

The use of levers to change culture was clearly at work in this case. Selection entered into the recruitment of a new workforce and socialization after they were recruited. The new site provided a vehicle for altering cultural forms as well, such as a new dress code for the suburbs, a new arrangement for lunches and breaks, and so forth. Subcultures were deconstructed and reassembled by the new physical arrangement of the move. Topology may not be destiny, but it was a major force in who talked to whom and how friendships and cohesive subunits formed (Festinger et al., 1950): friendships form from repeated casual contacts by people with similar interests and circumstances.

For a management desirous of managing organizational culture, a major

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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move of this sort presents a fortuitous opportunity. However, such opportunities do not always arise as needed. Thus, an enduring problem for managers is how to employ cultural levers when such drastic environmental changes do not aid in moving organizational cultures in desired directions.

Unlike redesigning organizational structure or forming an organizational alliance, managing culture is fraught with ambiguity and uncertainty. Because culture is collective, emotional, historical, symbolic, dynamic, fuzzy—as well as largely unrecognized—it is difficult to pinpoint just what is to be managed or how. Well-known examples of culture management published both in the popular press and in the scholarly literature indicate that culture management takes at least three forms: creating culture purposely in a new organization, remodeling or reorienting an existing culture in an organization, and strengthening an organization's culture in the face of threats or pressures to change. Each of these three representations of culture management present its own challenges and issues as managers attempt to address them.

Creating Culture

When new organizations form, cultures are usually created within them. Cultures have a tendency to develop through predictable stages in the early part of an organization's life cycle, regardless of managerial intervention. Empirical research has been carried out in this area on government agencies, health care organizations, educational organizations, and the computer industry (see Cameron and Whetten, 1983; Cameron and Quinn, 1996, for reviews of the extensive research available).

In the earliest stages of development, organizations tend to be dominated by an "adhocratic" culture—characterized by an absence of formal structure, creativity and entrepreneurship, fluid and nonbureaucratic methods, and an emphasis on individuality, freedom, and flexibility among employees.

Over time, organizations supplement that orientation with a clan culture—a family feeling, a strong sense of belonging and dedication, personal identification with the organization, and a strong missionary-like zeal.

Organizational expansion eventually produces the need to emphasize structure, standard procedures, and control—that is, a hierarchy-focused culture. Such a shift makes members feel that the organization has lost the friendly, personal feeling that once characterized the workplace, and the focus on reduction of deviation, standardization, and restraint may give rise to escalating resentment or rebellion.

The fourth cultural shift is to a market-focused culture—a focus on competitiveness, achieving results, aggressiveness in customer relations, elaboration of structure, and an emphasis on external interactions. Market cultures

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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are more typical of larger and more mature organizations than small or new organizations, and they are more typical of business organizations than service or educational organizations (Cameron and Freeman, 1991).

These life-cycle shifts in cultural orientation notwithstanding, forceful managers can have a powerful impact on the formation of a dominant culture that persists in their organizations. Almost four generations later, for example, IBM still reflects the culture created by founder Thomas Watson. Polaroid still reflects the culture created by Edwin Land, and Sony still reflects the culture created by Akio Morita. Among the mechanisms by which these powerful cultures were created are:

  1. A unique and clearly articulated ideology,
  2. The recruitment of like-minded employees,
  3. The use of symbols to reinforce cultural attributes,
  4. Repetitive socializing and training of employees in the key cultural values,
  5. The appraisal and rewarding of behavior consistent with the desired culture, and
  6. The design of an organizational structure that reinforces the key cultural values among all organization members.

These six levers are neither comprehensive nor unique to cultural formation, of course, but they are among the social mechanisms managers can initiate and largely control.

It is important note that there may be a liability associated with strong cultures. In the airline industry, for example, People Express Airlines effectively used cultural levers to develop a strong culture. It was patterned after the values of Don Burr, its founder and chief executive officer. Burr's explicit purpose was to form an airline that would be the model of customer concern, people sensitivity, and teamwork. People Express achieved almost unbelievably successful results during its first five years of existence, setting world records for income and profitability. However, a change in environmental demands brought about by the airline's purchase of Frontier Airlines, a unionized company, led to the rather swift demise of both companies. The strong culture of People Express was simply unable to adjust to the requirements of a radically different environment.

Changing Culture

Once an organization's culture is formed, tremendous pressure exists for it to persist. To change culture means that organization members become subject to ambiguity, disrupted patterns of interaction, a new reinforcement structure, different allocation procedures, and a different set of

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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definitions of "how things are." Such a change is fearsome and disruptive, so organizational cultures tend to be very difficult to change. Often the more successful the organization, the more difficult the change.

That said, cultural change is sometimes necessary for organizational survival. A lack of fit may develop between the organization's culture and the demands of the competitive environment, or between the organization's culture and the demands of customers, or between the organization's culture and the style or personality of new leaders, or between the organization's culture and the cultures of other organizations with which alliances have been formed. In other words, mismatches may create conditions in which culture change is necessary for the organization to survive.

One well-known example of major culture change involved the U.S. Postal Service (Biggart, 1977:417, 420):

When Winton Blount was named postmaster general in 1972, he was charged with making the post office pay its own way. To do so he needed to discredit and destroy the old ideologies of dependency on Congress and of providing "service, service at all costs.…" To symbolize the new order he replaced many established symbols and cultural forms with new ones. To signal the change of political status, the 200-year-old name of the post office was changed. A new logo, new typeface for all publications, and new postal colors were put in place. Nationwide birthday parties were held in every post office in the country, and a new stamp was printed with the new logo to commemorate the event.… The result of Blount's actions was the replacement of the old U.S. Post Office culture with a new U.S. Postal Service culture typified by more innovation and flexibility, service orientation, and efficiency.

Another example is the U.S. Army, whose culture changed not so much by the actions of a single leader but by a new policy instituted by Congress that replaced the former draft-based Army with an all-volunteer Army. The fact that volunteers now populated the Army led to several significant changes in the nature of the fighting force. Overall, the Army was able to attract more qualified recruits, with more formal education, higher skill levels, less drug and alcohol abuse, and less involvement in crime. Women joined the service in larger numbers than ever before. This new, more qualified workforce markedly changed the level of technological sophistication, improvements in quality, and efficiency of performance. The family responsibilities of military personnel and the relationships between the genders became critical issues for the Army, and ways of operating as well as some deeply embedded core values (e.g., men rule) changed as a result. Technical training became both a key motivator and a key incentive for Army service, and access to educational benefits became the single greatest motivator for Army enlistment. The formation of a joint chiefs structure led to more coordination

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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and interchange among the services, resulting in less insularity and self-sufficiency.

The challenge faced by many managers of organizations is to actually lead a culture change effort themselves. The question is, how can culture change be purposively stimulated and managed in an organization? How can a profound and fundamental shift in the way the organization thinks of itself be induced?

Of the many approaches to systematically managing a culture change effort, one procedure, based on what is called the competing values framework, rests on the assumption that key dimensions of organizational culture can be assessed by way of a survey instrument (a controversial assumption, as pointed out earlier in the chapter). Highlighting the contradictory values and orientations that exist in all organizations, this framework identifies four types of organizational cultures (also see Yeung et al., 1991; Zammuto and Krakower, 1991; Quinn and Spreitzer, 1991; Hoijberg and Petrock, 1993, for empirical research on this framework).

Table 3-2 identifies the two dimensions that separate these different value orientations. As illustrated in the table, these dimensions produce quadrants that have been found to represent much more than value orientations. They identify congruent leadership styles, bonding mechanisms, and dominant theories of effectiveness (Cameron and Quinn, 1996). The two dimensions shown in the table, as well as the resulting quadrants and their attributes, have been empirically tested in multiple studies and have been found to have strong associations with organizational effectiveness (e.g., see Quinn and Rohrbaugh, 1983; Cameron and Freeman, 1991; Cameron and Quinn, 1996).

One dimension in the table differentiates values emphasizing flexibility, discretion, and dynamism from values emphasizing stability, order and control. This continuum ranges, in other words, from versatility and pliability on one end to steadiness and durability on the other end. The second dimension differentiates values emphasizing an internal orientation, integration, and unity from values that emphasize an external orientation, differentiation, and competition. This continuum ranges, in other words, from cohesion and consonance on one end to separation and independence on the other. Each of these culture types is based on different theories of organizational performance, values of goodness, leadership approaches, reward systems, core competencies, styles of management, and definitions of success.

The Dutch-based Philips Electronics used this framework to manage an intended culture change in a five-step process (see Cameron and Quinn, 1996). In the first step, the top management team reached consensus on the current organizational culture. This was done by constructing a culture profile based on responses to a survey instrument that assessed dimensions

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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TABLE 3-2 A Model of Cultural Congruence for Organizations

FLEXIBILITY

Type: Clan

Type: Adhocracy

Dominant Attributes: Cohesiveness, participation, teamwork, sense of family

Dominant Attributes: Creativity, entrepreneurship, adaptability, dynamism

Leader Style: Mentor, facilitator, parent-figure

Leader Style: Entrepreneur, innovator, risk taker

Bonding: Loyalty, tradition, interpersonal cohesion

Bonding: Entrepreneurship, flexibility, risk

Strategic Emphases: Toward developing human resources, commitment, morale

Strategic Emphases: Toward innovation, growth, new resources

INTERNAL ORIENTATION---------- ----------EXTERNAL ORIENTATION

Type: Hierarchy

Type: Market

Dominant Attributes: Order, rules and regulations, uniformity, efficiency

Dominant Attributes: Competitiveness, goal achievement, environment exchange

Leader Style: Coordinator, organizer, administrator

Leader Style: Decisive, production- and achievement-oriented

Bonding: Rules, policies and procedures, clear expectations

Bonding: Goal orientation, production, competition

Strategic Emphases: Toward stability, predictability, smooth operations

Strategic Emphases: Toward competitive advantage and market superiority

STABILITY

 

Source: Cameron and Freeman (1991).

of culture consistent with the competing values framework. The consensus-producing discussion was an important clarification exercise in this step. In the second step, the top management team reached consensus on a "preferred" or future culture that they believed the organization had to achieve in order to become more successful. These two profiles, the current and the preferred cultures, were compared to identify discrepancies and to highlight needed changes.

The third step consisted of answering two questions regarding the observed discrepancies: (1) What does it mean to change? (2) What doesn't it mean to change? For example, a change toward a more team-oriented, participative culture and away from a controlling, directive culture meant that more value was placed on team performance, more decision authority was passed down to lower levels, and more sharing of leadership roles occurred. It did not mean that measurements were abandoned, that individual accountability was shelved, or that policies and procedures were ignored. The fourth step involved identifying specifically what was to be done, operationalizing the change agenda developed in the previous three

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

steps. The fifth step involved implementing the newly developed culture change agenda by executing a model for managing change (e.g., Cameron and Ulrich, 1989; Galbraith and Lawler, 1993).

Of course, culture change did not occur quickly. Time frames for successful change are usually measured in years (even decades) rather than in months. The intent of any such model of culture change is simply to make the change management process systematic and rational rather than merely a product of historical or environmental inertia.

Reinforcing Culture

Despite the current emphasis on change, innovation, and transformation of cultures, it is equally important for managers to understand how to maintain and reinforce cultures. Some well-known organizations have found that they unwisely abandoned a culture that had proven successful in the past. Such abandonment may be gradual and unintended and occur more through neglect than conscious intent. It has been referred to as losing the organization's roots, abandoning core competency, and dishonoring the past (Wilkins, 1990).

For example, in the face of large market share losses to Japanese competitors, Harley-Davidson discovered the costs of abandoning the culture that had made it the premier motorcycle producer in the United States in the 1960s. The erosion of a sense of family and teamwork, the loss of feelings of employee involvement and empowerment, and the explosion of hierarchy and staff led to dismal quality, low morale, and poor management-worker relations. The former Harley family culture had gradually eroded, and it was exposed only by the threat of company extinction in the late 1970s. In addition to a number of major changes in manufacturing processes, supplier relations, and quality tools, a return to the core Harley-Davidson family culture was a significant reason why the firm recaptured market share and returned to profitability.

A contrasting example to this unwitting change in organizational culture is Hewlett-Packard (H-P). Despite severe profit erosion and an environment that trumpeted the value of downsizing and head count reductions, H-P maintained the culture during the 1970s and 1980s that had been created by its founders, Bill Hewlett and Dave Packard. "Instead of laying off some workers, they adopted a policy whereby their staff took a 10 percent pay cut and worked 10 percent fewer hours. H-P's keeping its full complement of staff, while other companies were taking lay-offs, conveyed the message that everyone on the team was valued and mattered to the company" (Wilkins, 1984:46).

An important question, of course, is how an organization can avoid culture drift in the face of pressures to change. One powerful device under

Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
×

the control of managers is what Trice and Beyer (1984) called cultural rites, already discussed as cultural forms (see Table 3-1). These organizational practices and ceremonies exemplify and thus reinforce the core values of the organization and create resistance to drift. Some rites and rituals are focused on individuals, whereas others are focused on the organization or group.

In addition to rites and ceremonies, selection and socialization are powerful levers to reinforce the culture. Aronson and Mills (1959) long ago illustrated that when people go through a great deal of trouble or pain to obtain something, they value it more highly and protect it more vehemently. Pascale (1990) pointed out that the process of entry into an organization can powerfully reinforce its culture. Providing barriers to entry into the organization, having people earn their place in the system, and extracting a price for membership help reinforce and maintain the existing culture by creating more attraction to it and protection of it.

A host of additional mechanisms exist, of course, to reinforce desired cultures. Cultural leaders can, for example, specify how the central vision of the organization is relevant to current goals (Cartright, 1968) and thus keep it relevant and vital. They can model the desired behaviors and preach desired values and beliefs. They can search out incongruent values and behaviors and work to eliminate them or bring them into alignment (Nadler and Tushman, 1980). They can identify subcultures whose values and behaviors exemplify the desired culture and broadcast their accomplishments. Finally, they can find and emphasize commonalties that override divisive conflicts. Imaginative managers can find almost unlimited opportunities to reinforce culture once they are sensitive to what culture is about.

Conclusions

The discussion of organizational culture in this chapter suggests the following observations:

  1. Because cultures develop in work organizations, just as they do in other groups in societies, cultural processes underlie much of what happens in organizations.
  2. Various levels of culture, including national cultures, occupational cultures, organization-wide cultures, and those of various work groups, influence performance in organizations.
  3. Cultures consist of powerful and pervasive sets of ideas and related sets of behaviors that help people manage collective uncertainties and create social order, continuity, collective identity, and commitment. In organizations, cultures help managers and other members to deal with problems of external adaptation and internal integration.
Suggested Citation:"3 Organizational Culture." National Research Council. 1997. Enhancing Organizational Performance. Washington, DC: The National Academies Press. doi: 10.17226/5128.
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  1. Because cultures channel behaviors in some ways and not others, they are bound to affect individual and organizational performance.
  2. The precise linkages between culture and performance have not been documented, however, because of lack of adequately precise criteria either for culture or for successful performance.
  3. Past behavioral research and theory suggest that cultures can directly affect performance by leading to certain patterns of behavior, but they are more likely to influence performance indirectly through effects on those thoughts, feelings, and behaviors that contribute to members' performance at the individual and organizational levels.
  4. Because cultures consist of ideas and behaviors that are implicit rather than conscious, managers may not be aware of how their statements, actions, and policies may be incongruent with the desired culture and thus undermine or weaken it.
  5. Among the levers that managers can use to manage cultures in organizations are selection, socialization, and leadership. Managers can use each of these levers and other tools at their disposal to create, change, or reinforce cultures. Each of these forms of cultural management may be occurring at the same time in different parts of the organization.
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Total quality management (TQM), reengineering, the workplace of the twenty-first century--the 1990s have brought a sense of urgency to organizations to change or face stagnation and decline, according to Enhancing Organizational Performance. Organizations are adopting popular management techniques, some scientific, some faddish, often without introducing them properly or adequately measuring the outcome.

Enhancing Organizational Performance reviews the most popular current approaches to organizational change--total quality management, reengineering, and downsizing--in terms of how they affect organizations and people, how performance improvements can be measured, and what questions remain to be answered by researchers.

The committee explores how theory, doctrine, accepted wisdom, and personal experience have all served as sources for organization design. Alternative organization structures such as teams, specialist networks, associations, and virtual organizations are examined.

Enhancing Organizational Performance looks at the influence of the organization's norms, values, and beliefs--its culture--on people and their performance, identifying cultural "levers" available to organization leaders. And what is leadership? The committee sorts through a wealth of research to identify behaviors and skills related to leadership effectiveness. The volume examines techniques for developing these skills and suggests new competencies that will become required with globalization and other trends.

Mergers, networks, alliances, coalitions--organizations are increasingly turning to new intra- and inter-organizational structures. Enhancing Organizational Performance discusses how organizations cooperate to maximize outcomes.

The committee explores the changing missions of the U.S. Army as a case study that has relevance to any organization. Noting that a musical greeting card contains more computing power than existed in the entire world before 1950, the committee addresses the impact of new technologies on performance.

With examples, insights, and practical criteria, Enhancing Organizational Performance clarifies the nature of organizations and the prospects for performance improvement.

This book will be important to corporate leaders, executives, and managers; faculty and students in organizational performance and the social sciences; business journalists; researchers; and interested individuals.

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