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Siop 2012 - Contrasting Culture Strength and Climate Strength


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SIOP 2012 presentation in which Daniel Denison presents as one of the leading experts on "Contrasting Culture Strength and Climate Strength"

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Siop 2012 - Contrasting Culture Strength and Climate Strength

  1. 1. Contrasting Culture Strength andClimate Strength: Perspectives fromLeading Experts Jennifer Chatman University of California, Berkeley Daniel Denison IMD & Denison Consulting Maribeth Kuenzi Southern Methodist University Benjamin Schneider CEB Valtera
  2. 2. Strength – A Long History Different conceptualizations and operationalizations Today’s Purpose ◦ Discuss the Challenges and Controversies ◦ Future Research ◦ Implications for Practice 2
  3. 3. Meet the Panel 3
  4. 4. Jennifer ChatmanCortese Distinguished Professor of ManagementHaas School of BusinessUniversity of California, Berkeley 4
  5. 5. Jenny Chatman Culture Strength Psychologists have defined strong situations as those that induce uniform behavior, and are distinctive and observable (Kelley, 1967; Mischel, 1977) We disagree. ◦ Example: A transparent or opaque HR system could constitute an equally strong situation, but the content of the norm would be different (transparency norm in first case, lack of candor and secrecy in the second) ◦ A culture’s strength is independent of it’s distinctiveness  Secrecy at Apple – induces uniform behavior, unmistakable  Agree to disagree at Intel, challenging the status quo at Aligent – norm fosters highly variant, non-uniform behavior – do people agree about the value of “agree to disagree,” or do they disagree about everything including this norm?
  6. 6. Jenny Chatman: A Key Insight aboutCulture Strength Observers could misinterpret behavioral variation associated with norms like “challenging the status quo” or “agreeing to disagree” as a sign of weaker, less agreed- upon group norms, when in fact, the norm is strong but behavioral manifestations of the norm are highly variable. Implications for culture research: ◦ Relying on outsiders’ evaluations of culture content or strength can be a problem (Kotter & Heskett, 1992) ◦ Norm can be deemed strong simply if members interpret it similarly and conform to it regularly (rather than it being distinctive or uniform), that is, people behaving non-uniformly is not necessarily evidence of a weak culture. Important distinction between uniformity and conformity.
  7. 7. Strength in Culture & Climate Research Daniel Denison International Institute for Management Development Lausanne, Switzerland
  8. 8. Dan Denison Adaptability Mission Direction..Purpose..Blueprint Pattern..Trends..Market Defining a meaningful Translating the long-term direction demands of the for the organization business environment into action “Do we know where we are going?” “Are we listening to the marketplace?” Consistency Involvement Systems…Structures… Processes Commitment..Ownership Responsibility Defining the values Building human capability, and systems that are theownership, and responsibility basis of a strong culture “Are our people aligned “Does our system and engaged?“ create leverage?”
  9. 9. Benjamin Schneider - Climate Strength Research Paradox  Rests on a presumption of strength being a moderator, not a main effect—main effects are presumed to be a function of the level of the climate of interest, not variability in the climate of interest. • Necessary to think this way since a negative climate can also be a strong one. • Yet, some research on culture strength shows a positive relationship between strength and performance. – Likely due to the fact that strength was a perceptual variable and not a statistical variable, and – The more positive a culture is the more likely people are to believe others share their perception  Rests on the presumption of variability since a moderator requires high variance • Within units (teams, functions, departments. branches, etc.) • Between units in the variability within© 2012 The Corporate Executive Board Company. All Rights Reserved. 9
  10. 10. Benjamin SchneiderClimate Strength Focus  Unit level climate strength as a moderator of climate level relationship.  Specifically, climate strength as a moderator of the service climate level – customer satisfaction level relationship.© 2012 The Corporate Executive Board Company. All Rights Reserved. 10
  11. 11. Maribeth Kuenzi, Ph. D.Assistant ProfessorDepartment of Management and OrganizationEdwin L. Cox School of BusinessSouthern Methodist University 11
  12. 12. Question 1How strength is defined and how it is measuredvaries, how do you define strength in yourresearch? What are the “roots” of your view ofthe construct and what presumptions does it reston? 12
  13. 13. Culture Strength – A Combination of Agreementand Intensity About Norms Definition of strong culture: ◦ One in which members both agree about the relative importance or lack of importance of a specific set of norms and feel intensity about one or a few highly important norms. ◦ Intensity aspect is where culture strength and content need to be considered together Strength is a combination of: ◦ Agreement – the extent to which members of a group or organization agree about norms. ◦ Intensity – the extent to which members care about those norms. High Agreement Low High Strong Culture Warring Factions Intensity Low Vacuous Beliefs Weak Culture 13
  14. 14. Diagnosing Culture Using The Organizational Culture Profile (OCP)(Chatman, 1989; 1991; O’Reilly, Chatman & Caldwell, 1991; Chatman & Jehn, 1994; Caldwell, Chatman & O’Reilly, 2008; Chatman, Caldwell, O’Reilly & Doerr, 2012) 12 9 9 Number of items  6 6 per category 4 4 2 2 1 2 3 4 5 6 7 8 9 Most Uncharacteristic Most Characteristic Allocate 54 descriptors of culture (e.g., results-oriented, risk-taking, integrity) across 9 categories from most characteristic to least characteristic
  15. 15. Jenny Chatman: Typical Organizational Culture Norms • Frequent experimentation in all realms Innovative • Actively encourages risk‐taking and creative thought and action • Acts quickly and frequently scans for new opportunities • Rewards teamwork and cooperationCollaborative • Discourages internal competition • Establishes low levels of aggression and conflict Results‐ • Sets and achieves concrete, aggressive performance goals • Favors action over calmness or contemplation Oriented • Sets high ethical standards for all organizational members Integrity • Thinks and behaves with honesty and integrity Customer  • Focuses on defining the customer and what the customer expects/desires(Patient)‐Oriented • Spends a great deal of time listening to and interacting with customers • Pays close attention to what the market demands Detail‐ • Maintains vigilance about performance specs, product quality, and analytical precision Oriented • “Dots every i and crosses every t” • Shares information between individuals and units to best benefit the organization as a Transparency whole • Discourages “political” behavior (activity intended to benefit one individual at the  expense of the group)
  16. 16. SAMPLE Organizational Culture Comparison: One Company vs. All Participating Companies 9.0 8.0 7.0 6.0 5.0 4.0 Average: All Companies Average: Hardware 3.0 Average: Software 2.0 Your Company 1.0 Results- Customer- Detail- People- Innovative Collaborative Integrity Transparency Oriented Oriented Oriented OrientedAll Companies 5.24 4.24 6.19 6.28 6.21 5.40 4.45 4.71 (N=32)All Hardware 5.38 5.04 6.30 6.23 6.20 5.47 4.42 4.51 (N=18)All Software 5.06 5.51 6.04 6.33 6.24 5.31 4.49 4.96 (N=14)Your 6.59 ** 5.21 6.15 6.10 5.97 5.99 ** 3.60 ** 4.44 **Company* *Data on Your Company are based on survey responses from 53 current US employees as of Fall 2009. ** Statistically significant at the level of 10% (p < 0.1).
  17. 17. Dan DenisonOne Hundred Year Old Manufacturing Company 68 29 12 11 18 9 12 55 8 66 63 82
  18. 18. Benjamin SchneiderOperationalize; roots  Operationalize: Standard deviation in unit members’ perceptions.  Roots: – Schneider and Bartlett (1970) worked on the issue via multi-dimension/multi- rater approach anticipating the use of ICC and rwg – Worked for years to get rid of variability within units so could legitimate aggregation. Then asked the question: What about the lingering variability within units?  Presumption: Unit climate requires a certain amount of consensus/agreement before it can be considered a unit attribute.© 2012 The Corporate Executive Board Company. All Rights Reserved. 18
  19. 19. Maribeth KuenziWhat is Climate Strength? Within-unit agreement/variability in perceptions of organizational climate ◦ AD index (Burke et al., 1999) reversed in sign ◦ Coefficient of variation (Allison, 1978) - standard deviation of climate perceptions divided by mean level and reversed in sign ◦ Standard deviation Types of climate strength? (Ostroff et al., 2003) ◦ Agreement-based ◦ System-based ◦ Alignment-based 19
  20. 20. Question 2In your opinion, what are the pros and cons ofthese different approaches to the construct? Howcan we learn from differing perspectives andbridge these camps of organizational research? 20
  21. 21. Dan Denison Assessing “Strength” Potential to create theory Can be applied and method defining areasPro to any measure where normative integration is most important Integration of what? Atheoretical. No theory contrasting A methodological definition diversity and integrationCon of a content domain Variance Normative Scores Integration
  22. 22. Jenny Chatman Culture content is frequently confounded with culture strength: ◦ Identifying culture in terms of content presumes that norms are viewed similarly enough among members that they can be accurately represented as a single unified profile (e.g., weak culture can only be amenable to “meta” content descriptions such as “the culture is fragmented.” (Martin, 1992; Saffold, 1983). ◦ Strong and weak cultures do not have equivalently identifiable content:  Strong culture organization can intensely value being results-oriented but an equivalently low emphasis on being results oriented in a weak culture may derive either from lack of shared intensity about the norm (e.g., people don’t believe it’s important) or a lack of consensus about it (e.g., some in the organization value while others do not). It is still possible and essential to differentiate between content and strength; culture strength should be assessed distinctly from content!
  23. 23. Benjamin SchneiderPros and Cons  Pros: Anytime conceptually meaningful operationalizations are used we can learn from them—perceptions, standard deviations, rwg, or what have you.  Cons: It would be useful to have several studies in which the different forms of strength are simultaneously studied.© 2012 The Corporate Executive Board Company. All Rights Reserved. 23
  24. 24. Maribeth KuenziPros and Cons of Climate Strength Interesting to consider asking about climate strength rather than relying solely on a statistical method If we look at climate strength at the organizational-level, how do we differentiate this from culture strength? 24
  25. 25. Question 3What are the major points of misunderstandingor confusion with this construct? What is mostimportant for those interested in this constructto understand? 25
  26. 26. Jenny Chatman - Paradox: Strong Culture Increases Consistency But May Also Reduce Firm’s Ability to Adapt to Different Environments Strong culture increases consistency in performance (Sorensen, 2002): ◦ Consensus & endorsing organizational values promotes social control ◦ Goal clarity derived from strong culture reduces uncertainty ◦ Motivation enhanced through feelings of freely chosen action Strong cultures induce cognitive and behavioral uniformity (Nemeth & Staw, 1989) ◦ Groups tolerate less deviation as cohesion among members intensifies (Kaplan et al., 2009) ◦ Strong norms induce people to choose (or affirm) dominant perspective (Forster et al., 2005) As such, strong culture organizations may be less able to modify behavior when environment changes (Sorensen, 2002), and are less likely to foster creativity (Nemeth & Staw, 1989) BUT – what if strong culture emphasizes non-uniform behavior? Reason why culture can’t always be assessed by outsiders or subjectively
  27. 27. Dan Denison Confusion?Strength is not always a good thing…
  28. 28. Benjamin SchneiderMisunderstandings and Confusion  Strength is a moderator, not a main effect  Studying strength presents a major paradox: Can study it only when there is poor consensus within units and differences in consensus between units© 2012 The Corporate Executive Board Company. All Rights Reserved. 28
  29. 29. Maribeth KuenziPoints of Confusion with Climate Strength Measurement of climate ◦ Measured differently ◦ Referent makes a difference (Klein et al., 2001)  I versus we  Unit vs organization ◦ What percent of the group do we need to be able to calculate climate strength? ◦ How do we deal with the issue that we require agreement for aggregation? ◦ Is there a lack of agreement because there is no climate or a “negative” climate which is not reflected in measures? 29
  30. 30. Question 4What are the gaps in culture or climate literaturein terms of strength? What should future researchin this area be focused on? 30
  31. 31. Maribeth KuenziFuture Research for Climate Strength Operationalization and measurement of climate strength Climates not existing or just not strong? Negative versus positive climates Interaction of climates and what role climate strength plays in which becomes dominant Does the level (e.g., org versus unit) matter? Longitudinal research and climate change Darkside of strong climates 31
  32. 32. Jenny Chatman - Results from current study of 60 of thelargest high technology firms: Assessed culture in 2008 andpredicted financial performance in 2011 (Chatman, O’Reilly,Caldwell & Doerr) Strong culture is not necessarily a disadvantage in turbulent environments, in contrast to Sorensen, (2002) Instead, whether culture strength is an advantage or disadvantage depends on culture content Specifically firms with strong cultures that emphasize and foster innovation perform better, are more demonstrably innovative, and enjoy a stronger reputation than those that emphasize innovation less. Back to Kotter and Heskett (1992) BUT with focused study in one industry and based on insider perceptions
  33. 33. Dan Denison Gaps We were unable to find any studies that have used both methods. How can we tell the relative value if there is no research on the topic? Our experience with reviewers on a recent paper on culture strength indicates that even at top journals, there are reviewers who will argue hard that “strength” can only be measured by variance scores. One of our papers, currently under review shows that assessments of normative integration are actually better predictors of organizational outcomes How do you study diversity when variance is the measure of strength?
  34. 34. Benjamin SchneiderGaps—Effects on External Perception Strength Overall Quality WEC .38 SEC .24 Efficiency WEC .53 SEC .31 Security WEC .40 SEC .30 Competence WEC .32 SEC .26 Relationship WEC .31 SEC .22 WEC = Weak Employee Climate SEC = Strong Employee Climate© 2012 The Corporate Executive Board Company. All Rights Reserved. 34
  35. 35. Question 5How can practitioners benefit from this stream ofresearch? What type of organizational initiativescould be most benefitted by this stream ofresearch? 35
  36. 36. Benjamin SchneiderUse of Strength Research  If lousy, be weak; if positive, be strong  Thomas’s English Muffin model: All in the nooks and crannies  For change, begin with climate  For change—keep what is truly valued and useful  Structural change is not enough: Change the nature of the people who gain entry—but not too different© 2012 The Corporate Executive Board Company. All Rights Reserved. 36
  37. 37. Jenny Chatman A Few Practical Implications Organizations have no choice about whether a culture forms or not, only whether norms support strategy and ultimately improve performance - or constrain it. Culture is too important to leave to chance. Managers might usefully consider cultivating a culture in which people agree and care about strategically relevant behaviors and innovation and adaptation over time.
  38. 38. Dan Denison Guidelines for Practice Be careful when you use the word “strength” with organizations. It has two meanings, so be clear which one you mean. When organizations use the word “strength,” ask questions so that you are sure what they mean. Be clear that normative integration around positive traits is most likely to impact effectiveness. Being consistently bad is worse than being randomly bad.
  39. 39. Maribeth KuenziPractical Implications for Climate StrengthResearch Provide guidance on…. ◦ benefits and shortcomings of strong climates ◦ alignment of climates to goals ◦ how to manage multiple climates ◦ how to develop strong climates ◦ how to change strong climates 39
  40. 40. Question & Answer 40