Organizational Culture 2014 (03)


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An updated look at organizational culture including a brief discussion of three measurement tools and a list of academic references behind the notes on the slides. Some personal (some) commentary as well. Enjoy. Learn. Use.

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  • The impact of internal and external forces upon organizations requires adaptability and change at increasing speed (Kotter & Cohen, 2002; Mallinger, Goodwin, & O’Hara, 2009). Organizational culture is always the responsibility of leadership (Avolio 1999; Deal, 1982; Heifetz, 1994, Jackson, Meyer & Wang, 2013; Ja'afaru Bambale, 2014; Melchar & Bosco, 2010; Pepper, 2002; Peterson, Walumbwa, Avolio & Hannah, 2012; Schein, 2010; Senge, Kleiner, Roberts, Ross, Roth & Smith, 1999; Walumbwa, Hartnell & Oke, 2010). Leadership cannot effectively change organizational culture without self-knowledge and vision (Goleman, 1995; Goleman, Boyatzis & McKee, 2002; Drucker, 1990). While too often negative behavior by organizational management is publicized, positive leadership creating organizational culture change requires moving the hearts and minds of engaged followers through both the vision communicated and behavior of those in authority power (Deal, 1982; Avolio 1999; Senge, Kleiner, Roberts, Ross, & Smith, 1994; Kouzes & Posner, 2007). Thus any lasting change in culture is a change of behavior which occurs both in followers and leaders. Heifetz (1994) and Schein (2003; 2010) argue that organizational culture change requires years to develop though more recently successful sustainable efforts have been achieved (Bradt, Check & Pedraza, 2009; Deal, 1982; Mallinger, 2009) if multiple factors are aligned. Despite considerable research too often change efforts fail because organizational culture is either ignored during strategic planning or assumed by leadership without sufficient data or a clear understanding of the term.
  • Depending on one’s experience the word culture is often mentally translated into ethnicity - referring to the values, beliefs and practices of family, region, society and country. While ethnicity and country of both origin and residence/work life have a role to play (Hofstede, 1980) they are only a small part of defining organizational culture. At the most basic level Deal and Kennedy define organizational culture as “the way we do things around here” (pg. 4, 1982). Doing things the way they’ve always been done leads to extinction though. Schein (2003, 2010) states that the challenge of leadership is to evolve the culture of the organization to be more adaptive to both internal and external forces, and that leadership cannot be defined without considering organization culture. At its research core there are seven underlying dimensions of organizational culture: The nature of time; the nature of human activity, relationships and human nature; the nature of truth and reality; diversity versus homogeneity; and the organization’s relationship to its environment (Schein, 1985). As the science has grown over the past 35 years Schein (2010) describes organizational culture as the outwardly observable structures, processes, mission, vision, strategies and goals of an organization reaching toward the more difficult to determine underlying feelings and beliefs of organizational participants that drive performance. Pepper (1999) states organizational culture is discovered by analyzing multiple types and levels of organizational communication which are observable both past and present. For the average layman or business leader this sounds like too complicated of a psychological analysis when trying to meet quarterly objectives but the importance of understanding one’s organizational culture cannot be taken lightly. Nor it is as time consuming or expensive as it may appear.
  • The primary forefathers of organizational culture theory are Geert Hofstede in Europe and Edgar Schein in the United States. Schein first began publishing in the 1950’s, Hofstede in the 1960’s and both continue to have a major impact on organizational and academic research globally today. One can only imagine the knowledge that could be gleaned while serving them as wait staff during an evening meal (joining them at the table being too presumptuous). The culture of any organization begins with the founders before passing to other family members or professional managers (Burns, 1978; de Brito, da Silva & de Jesus Muniz, 2010; Doina, Mirela, & Constantin, 2008; Schein, 1983). An abundance of research links leadership, organization citizenship behavior (OCB) and organizational learning culture (OLC) to productive changes in organizational culture (Bass et al., 2003; Biswas, 2009; Barbuto, 2005; Boerner & Griesser, 2007; Rowold & Roman, 2009; Sarros, Cooper, & Santora, 2008; Wang & Huang, 2009; Wolfram & Mohr, 2009; Kotter & Cohen, 2002). The ability of leadership to gain trust (transactional) through the dissemination and control of information (communication) which creates the necessary adaption of follower attitudes, habits, values, and relationships (transformational) in order to begin effective problem solving begins first in the hearts and minds (Bellah, Madsen, Sullivan, Swidler & Tipton, 1985; Heifetz, 1994; Pepper, 1995). Founder Henry Ford is quoted above because experiencing in order to increase employee motivation and reduce turnover at a time when the firm was hiring 52,000 employees annually to keep only 14,000 he raised wages from the national average of $2.25 a day to $5.00 a day (Worstall, 2012). While overcoming the difficulties the Ford company had in the 1970’s are much attributed to the work of Edward Deming and Total Quality Management (Motavalli, 2009) there certainly is a role in the adoption of the mission statement “Quality is Job #1” that all organizational stakeholders could clearly understand and support. The foundation of organizational culture and change is demonstrated by the integrity, vision, and will of leadership to tie individual and organizational mission and values together toward achieving a common goal. The increased adaptation of workloads, organizational strategies, missions, values, and funding streams requires an extreme level of leadership when compared to more stable environments.
  • For-profit or non-profit organizations often face high turnover of employees/volunteers leading to a lack of positive perception from stakeholders which contributes to decreasing organizational performance (Cascio, 2006; Garvin, Natarajan & Dowling, 2014; Kroll, 2014;; Watty-Benjamin & Udechukwu, 2014). Sarros, Cooper and Santora (2008) examined the relationship between transformational leadership, organizational culture and organizational innovation finding that “vision, setting high performance expectations, and caring for fellow workers through individual support are powerful forces in the culture-leadership relationship” (pp.154). The key components are the mission-vision of an organization’s leaders, the ability to impart that mission-vision across the organization, and the support given to subordinates in creativity and innovation that create a culture which enables success in a time of uncertainty (Alavi & Karami, 2009; Bart, Bontis & Taggar, 2001). There is no denying the importance of mission, vision and values to organizational trust, alignment and performance (Bart & Baetz, 1998; Cady, Wheeler, DeWolf, & Brodke, 2011; Christopher, Nick & Simon, 2001; Schein, 2010). The shared assumptions of an organization are paramount to understanding the existing organizational culture prior to implementing any desired change (Schein, 2010) which is why deeper engagement is needed. Although often long and convoluted, mission and vision statements must be concise and clear since they provide direction and purpose for existence and all activities internally as well as external stakeholder perceptions (Vizeu & Souza Matitz, 2013). Clarity is important in that language barriers may exist between organizational members (based on education, position, task) but leaders must align individual and organizational purpose, mission, vision and values may create a more trustworthy corporate culture increasing job satisfaction and performance outcomes while reducing turnover intention (Crossley, Cooper, & Wernsing, 2013; Schein, 2010; Shanock & Eisenberger, 2006). In a knowledge based society team members need to understand the answer to why. The ability of an organization to develop a culture adhering to core values (trust) but readily willing to abandon historical principles no longer applicable in the current environment is crucial for sustainable success.
  • As previously stated a core foundation for effective organizational culture change is the trust and vision shared between leaders and followers (Schein, 1995, 2004; Pepper 1995, Goleman, Boyatzis & McKee, 2002; Rath & Conchie, 2008). Living on historical successes or failures as time passes and the organization becomes more complex, as the environment changes, and as technology becomes more complicated becomes a liability. Defining the system and identifying, missing, unnecessary, confusing, or misdirected inputs or outputs that are causing the problem is managing the white space (represented by the stars above). Figuring out what happens during a process when the baton is passed, not the official corporate transactional view of the organization, is how performance can be improved on all three levels to reach replicable organizational culture change (Rummler & Brache, 1995). Organizational structure and processes have strong impact on culture that cannot simply be instantly changed by leadership but must be guided by the practices, skills and procedures that are implemented with sufficient resources, reinforcements and rewards (Appelbaum, Mitraud, Gailleur, Iacovella, Gerbasis & Ivonova, 2008; Gardner, 2006). A 2013 global Booz and Allen survey of over 2200 employees including executives showed 96% believe their organizational culture needed to change noting that leadership needs to understand, reinforce and live by cultural values communicated through all levels of the firm (Aguirre, Alpern, Hull & Von Post, 2014). What structure is best for the company given the market environment, core competencies and intended outcomes falls in the realms of organization design which will be discussed shortly.
  • The organization design and change movements (Total Quality Management, Reengineering, Six Sigma, Lean) through the relatively young history of the science still often fail to produce the desired outcomes (Beer, Eisenstat & Spector, 1990; Keller & Aiken, 2009; Olson, 2008). IBM (2008) reported that while over 83% of CEO’s expect substantial change to be continual, only 41% of projects reached successful completion. Researching more than 100 firms, Kotter (1995) found that more than half of change efforts failed. Although Beer, Eisenstat and Spector state that focusing on culture does not cause the successful change efforts that aligning employee responsibilities, roles and relationships will. That alignment both internally and externally understanding the gaps between where the organization is and the desired level of functioning and production is exactly what organizational culture survey tools provide. Bryson (2011) makes an excellent case for internal and external environmental scanning as part of strategy planning and implementation. More recently Dr. Roger Martin (2014) notes the standard models often used for strategic planning are dead, and that both internally and externally the performance metrics need to be tied to customer satisfaction and market share (external). Internally within the organization Martin (2009) espouses Design Thinking whereby employees use both intuitive and analytical thinking, what David Kelley (IDEO and Stanford University) would refer to as the hands on process where one focuses on the end user, overcomes fear of the unknown, of losing control, and of being judged (Kelley & Kelley, 2012). This level of organizational culture only comes about through trust; in the highest levels of leadership partially, but in direct managers and team members specifically (Ashleigh, Higgs & Dulewicz, 2012; Atkinson, 2007; Colquitt, Scott & LePine, 2007; Covey, 2006; Yoon Jik & Hanjun, 2011). Whether internal or external stakeholders organizational culture measurement tools can provide leadership with an affordable and fairly quick means of understanding the differences between the surface level interactions and the meanings often not discussed that drive behavior and performance.
  • A quick Google search of organizational culture measurement tools (or instruments) reveals nearly 400,000 entries. Certainly every major consulting firm whether global or national in nature either has developed their own version or uses one of the more established models. Delobbe, Haccoun and Vandenberghe (2003) conducted a study of 20 existing culture measurement instruments at that time, creating one of their own in the process. Based on the extensive work of Dr. Schein, Armenakis, Brown and Mehta (2011) developed and tested the Organizational Ethical Practices Audit (OEPA) for use by a 102 year old family business which leadership effectively used to transform the firm’s culture. The consultant (a student of life-long learning and adjunct professor) has used two specific tools with several organizations in the past. That experience has taught that while standard quantitative tools, including the three to be discussed next may be insufficient without either coinciding or follow-up qualitative data specifically relating to the meaning of the organization’s mission, vision, values both espoused and observed. Too often organizational decisions (process, structure, strategy, objectives) are made without this intimate knowledge with mixed results. A simple truth Bill Murray stated in the film Stripes, “It’s not just the uniforms you wear, it’s the stories you tell.” Within larger organizations or small family businesses, the stories stakeholders tell about the organization are crucial to understanding resistances to change and roadblocks in organizational culture as well as used to engage, encourage and motivate (Baker, 2014; Brady & Haley, 2013; Barker & Gower, 2010; Dailey & Browning, 2014; Pepper, 1995; Schein, 2010).
  • Geert Hofstede founded and worked at the IBM personnel research department in Europe during which time he conducted nationals values differences surveys with over 117,000 employees leading to a number of published studies in the 1970’s and the creation of the organizational culture survey with four anthropological dynamics: Uncertainty avoidance, masculinity, power-distance, and individualism. Over the next forty years of research globally both by The Hofstede Centre and numerous scholars and consultants was further developed to include two additional dimensions: Long vs. short-term orientation, and restraint vs. indulgence. Specifically related to organizational management and change Hofstede, working with Bob Waisfisz developed an additional tool containing eight separate categories: Local vs. professional, means -oriented vs. goal-oriented, easy or strict work discipline, external or internal drive, closed vs. open system, degree of identification with the organization, employee or work oriented, and the degree of identification with leadership (Waisfisz, 2011). For global organizations or smaller firms with international clients, these tools may provide more insight into organizational dynamics. Consulting firm ITIM International owns the rights to multiple cultural survey tools related to management, change and strategy and while the global client list is impressive cost is beyond the reach of smaller organizations. Hofstede’s values model (1994, 2008; 2013) is a simple 30 question tool available for free download and use by researchers.
  • Dr. Mark Mallinger has consulted and taught at the University of Pepperdine (though like Hofstede now partially retired) and in 1999 collaborated with Dr. Gerard Rossey at California State University in Northridge. That work resulted in what’s now known as the integrated cultural framework, an easy to use 5 point Likert-type scale questionnaire with 35 questions that correlate to six categories: Ability to influence, ability to handle ambiguity, individual or collective orientation, use of time, use of space, and achievement orientation. Dr. Mallinger provides the survey tool, a scoring rubric and framework for understanding the concepts for free to those who ask, requesting only that the anonymous results be provided. The consultant has used this tool several times in combination with qualitative mission-vision-values statement questions and the Multi-factor Leadership Questionnaire to enable organizational leadership to better comprehend the differences between executive, middle manager, and entry level employee engagement feedback before entering organizational culture and performance change with considerable success.
  • There are a number of competing values framework survey tools available but the graphics above come from the work of Dr.’s Cameron and Quinn at the Ross School of Business at the University of Michigan. This larger 60 question (5 point Likert-type scale) survey is available for free as are the guides for use. A collection of experts including faculty from a number of Universities will provide an analysis of the data in the form of a 15 slide PowerPoint for $600 dollars. The competing values framework takes into account four specific types of organizational cultures which vary depending on the product or service: Collaborative (also referred to as Clan culture) where the focus is on community, shared values and trust; Creative (also referred to as Adhocracy) where innovation, entrepreneurial spirit, and risk taking are encouraged; Control (Hierarchy focused) where structure, stability and efficiency are the focus; and Compete (Market directed) where performance, achievement and results are the key drivers. One of the significant differences in this measurement tool is that it asks participants to create a ranking for how things are now, and where they think the organization should be in the future as demonstrated by the graph above. All organizations exhibit some characteristics along the grid (creative organizations with no financial controls cease to exist) but being able to visually grasp the gaps between now and a desired future can be extremely useful in engaging participants in the how of achieving desired outcomes.
  • As with leadership measurement tools it is the author’s position that there is no one absolutely correct measurement tool for measuring organizational culture. The best assessment is the one that fits the organization in terms of time, accessibility and the data needed to be analyzed. Firms with larger corporate learning or human resources budgets, and certainly those in any stage of mergers or acquisitions can generally afford to hire consultants to administer the surveys and provide feedback. Smaller for-profit and many non-profit organizations may simply not have the funds but may be able to engage local or regional graduate students studying the fields of leadership, management, organizational culture, change and human resources to conduct the research and return professional reports as a means of learning practice. Too often the concepts and all of the components of organizational culture are overlooked or downplayed but the importance of this information as one piece in the many factors businesses must consider in developing the best talent, solving product and service needs for constituents, and creating a more sustainable and hospitable future for local, regional and global societies. The question is not whether organizational culture theory and practice is valid after 40 years of research, but when will it be recognized for the valuable and needed contributions made to improving the well-being of multiple stakeholders while improving outcomes.
  • Organizational Culture 2014 (03)

    1. 1. Introduction to Organizational Culture
    2. 2. Defining Organizational Culture What is the meaning of: Human Nature Human Activity Relationships Diversity Community Time
    3. 3. Mission, Vision and Values
    4. 4. History, Structure & Processes “A primary contribution of a manager at the second level or above is to manage interfaces. The boxes already have managers; the Senior manager adds value by managing the white space between the boxes” (pp. 7, Rummler & Brache).
    5. 5. Internal/External Environments
    6. 6. Organizational Culture
    7. 7. Hofstede
    8. 8. Integrated Cultural Framework
    9. 9. Competing Values
    10. 10. Organizational Culture Alignment
    11. 11. References Aguirre, D., Alpern, M., Hull, K., & Von Post, R. (2014). Use culture to pave the way for change. Chief Learning Officer, 13(4), 44-46. Alavi, M., & Karami, A. (2009). Managers of small and medium enterprises: mission statement and enhanced organizational performance. Journal of Management Development, 28(6), 555-562. Appelbaum S. H., Mitraud, A., Gailleur, J., Iacovella, M., Gerbasis, R., & Ivonova, V. (2008). The impact of organizational change, structure and leadership on employee turnover: A case study. Journal of Business Case Studies. 4(1): 21-38. Armenakis, A., Brown, S., & Mehta, A. (2011). Organizational culture: Assessment and transformation. Journal of Change Management, 11(3), 305-328. Ashleigh, M. J., Higgs, M., & Dulewicz, V. (2012). A new propensity to trust scale and its relationship with individual well- being: Implications for HRM policies and practices. Human Resource Management Journal, 22(4), 360-376. Atkinson, C. (2007). Trust and the psychological contract. Employee Relations, 29(3), 227-246. Avolio, B. J. (1999). Full leadership development: building the vital forces in organizations. California. Sage Publications. Barbuto, Jr., J. E. (2005). Motivation and transactional, charismatic and transformational leadership: a test of antecedents. Journal of Leadership & Organizational Studies, 11(4), 26-40. Baker, B. (2014). Use storytelling to engage and align employees around your strategic plans. Industrial & Commercial Training, 46(1), 25-28. Barker, R. T., and Gower, A. Strategic Application of Storytelling in Organizations: Toward Effective Communication in a Diverse World. Journal of Business Communication. 47: 295-312.
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    19. 19. Graphic Sources Slides 1-3, 6: Microsoft Clipart, Bing search Common License Slide 4 - http:// Slide 5 - Slide 7 - Slide 7 - employee-engagement-survey-readiness-checklist?trk=mp-details-rr- rmpost Slide 8 - Slide 9 - w=468 Slide 11 –