ORGANIZATIONAL CULTURE

1. ORGANIZATIONAL CULTURE • Multiple theoretical roots of cultural analysis: • Cultural anthropology:Ethnographic, qualitative methodologies • “A system of shared beliefs, values, customs, behaviours, and artifacts that the members of society use to cope with their world and with one another, and that are transmitted from generation to generation through learning.”(Boas) • Field theory:analytic separation of person and social context: “org climate” (Lewin) • Interpretivist sociology: Symbolic Interaction (Mead); Phenomenology (Schutz); Social constructivism (Berger & Luckmann); Ethnomethodology (Garfinkel) • Social reality is constructed and given meaning through human interactions, mediated by use of symbols and interpretations of one another’s actions • Institutionalist: Four carriers cross-classify the three institutional pillars • Symbolic & relational systems, routines, artifacts (material culture) (Scott 2001:77) • Post-Modernist: contra modernism’s positivist rationality, knowledge is fundamentally fragmented, multiplicitous, contradictory; all cultural generalizations are ambiguous • New sociology of culture:“considers material products, ideas, and symbolic means and their relation to social behavior” (ASA Section on Culture) <http://www.newcollege.usf.edu/culture/>

2. Corporate Culture • Edgar Schein’s proposed an Assumptions-Values-Artifacts framework: • Corporate Culture: A variable internal to an organization that explains its work-related structures, practices, outcomes • Corporate culture constitutes a collective purpose that becomes morally binding on all organizational participants “The pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and, therefore to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.” (Schein 1994) • Shared beliefs:self-regulatory rules shape cognitive and affective aspects of membership in the organization • Integrated/unitary perspective at org’l level: consistency-consensus about goals, intrinsic rewards & sanctions • Internalization via socialization & learning processes

3. Cultural Dynamics Mary Jo Hatch expanded Schein’s trinity into a cultural dynamics model of four concepts (“VASA”) with bi-directional processes. Cultural changes occur via interplay of four clockwise & counter-clockwise influences evolving over time, generating a spiraling double-helix: VALUES Realization Manifestation ASSUMPTIONS ARTIFACTS Interpretation Symbolization SYMBOLS The Domain of Cultural Dynamics (Hatch 1993)

4. Values & Assumptions Assumptions and Values are deep-structure elements Assumptions:taken-for-granted beliefs about reality & human nature Values:social principles, philosophies, goals, and standards considered to have intrinsic worth Manifestationoccurs when specific values, behavioral norms are evoked perceptually, cognitively, or emotionally Realizationoccurs when values are expressed in outcomes or acts • 3M Corp describes itself as a “Culture of Innovation” • What underlying assumptions does 3M make regarding human creativity and learning capabilities? • How are those assumptions manifested as values of employees in R&D dept, product marketing, human resource management? • Which org’l artifacts express 3M’s values (e.g., reward ceremonies)?

5. Artifacts & Symbols Artifacts and Symbols are surface components of org’l culture Artifacts:the visible, tangible and audible results of activity that are grounded in values and assumptions Symbols:anything that represents a conscious or unconscious association with some wider, usually more abstract concept or meanings Symbolization translates artifacts into symbols, linking an artifact’s literal meaning to its subjective meanings Interpretationlinks previous assumptions to possibilities for new symbolic understandings EX What symbolic meanings do you attach to these artifacts? Have their meanings changed as result of recent events?

6. Symbolic Buildings I • Corporate cultures are encoded in org’l languages, ideologies, narratives (“story-telling”), metaphors, rituals, myths & ceremonies • Slogans: IBM “Think”; Saturn “A different kind of car company” • Logos, brand names, advertising campaigns: “An army of one” • Physical layouts, design, décor, & architecture What corporate cultural assumptions & values do you see manifested in the Walt Disney Company’s corporate headquarters building in Burbank, CA?

7. Symbolic Buildings II What different set of assumptions and values are expressed by the just-opened Walt Disney Concert Hall in Los Angeles? (Designed by Frank Gehry, also architect of UM’s Wiseman Art Museum)

8. Symbolic Buildings III Now consider the Chiat Day advertising firm, whose clients include Apple Computer, Seagram, Levi Strauss What’s the meaning of the entrance to their Venice, CA, building? (Another Gehry design, in collaboration with pop artist Claes Oldenburg)

9. What is the U of M Culture? • We all know something about the organizational culture (and subcultures) of the University of Minnesota. Let’s see whether we can collectively identify some of the U’s core assumptions, values, artifacts, and symbols: • Each group works on one of the 4 components • Re-assemble and list some of these elements • Discuss how these cultural elements are connected • How and why is the University’s culture changing?

10. Charismatic Leadership Hatch (2002) adapted Max Weber’s theory of charismatic leadership to explain both cultural stability & org’l change • Charismatic leader (“entrepreneur”) introduces new artifacts into org’l culture; e.g., policies, programs, rhetorical styles • Change occurs only if followers transform artifacts (incl. leader’s example) into symbols having new meanings within culture’s existing frames of meaning • Routinization of charisma dampens revolutionary impacts, “makes change possible by blending it with stability (i.e., giving it continuity and coherence)” General Electric CEO Jack Welch widely seen as super-manager whose confrontational style (“Neutron Jack”) legitimated cutting costs & employees to boost corporate profits Did Welch create innovations that made GE a model to emulate, or was his genius in understanding changes well under way & positioning himself at the head of the parade?

11. Strong Culture  Performance + Control • “Strong” Corp Cultureenthusiasm emerged in 1980s academic & practitioner writings (e.g., Peters & Waterman In Search of Excellence) • General org’l mission statement sustains high member commitments • Strong culture provides guidelines for effective actions • Source of meanings & member identities (1950s “organization men”) • Strong cultures produce superior individual & collective performances • Exemplars: 3M, IBM, Kodak, HP; Nonexemplars: Enron, K-Mart, etc • Strong culture is difficult to imitate/transplant; its competitive advantage lies in its reproductive rarity • Strong culture is a social control mechanism for reducing supervision • Origins in an entrepreneurial leader’s values, norms, vision • Learning an org culture: Recruiting & socializing newcomers to inculcate commitment (Military boot camp; cult indoctrination; monastic rituals) • Validation, reinforcement through folklore, stories, legends, interpreting org’l history as consistent with its cultural values

12. Organizational Subcultures • Subcultures: Given the evident ambiguities held by many organizational participants, the assumption of a unitary corporate culture is questionable • Differentiated org’l subcultures arise and persist, especially among diverse occupational communities that make differing, conflicting assumptions about what values are important to uphold • Alternative values and interests, competing occupational commitments overwhelm conformity to a single corporate culture • Many participants resist the culture & ideology imposed by the org’s dominant coalition (owners, managers) • Schein identified three conflicting subcultures inside many companies, whose integration requires the organization to understand better how these occupational communities learn and interact. • What incompatible assumptions and values are held by: • Executives – in charge of overall corporate strategic direction • Engineers – professionals engaged in research & design • Operators – direct production & service activities

13. NASA’s Catastrophic Subcultures Columbia shuttle breakup was 2nd NASA catastrophe in 111 flights. Review panel: “NASA’s organizational culture had as much to do with this accident as foam did.” Conclusion echoes Diane Vaughan’s (1996) analysis of 1986 Challenger shuttle disaster, when NASA decided to launch despite unknown combination of brittle O-rings + ice. “Culture of production:” crucial information was structurally dispersed & managers were unable to assemble credible evidence of a looming disaster Loosely coupled subcultures weakened NASA safety systems  “normal accident” (Perrow) • Performance pressures arose from the fatal interplay of political, bureaucratic, and technical subcultural scripts • Engineers followed an extrapolation paradigm, putting faith in built-in redundancy and deference to administrative authority • NASA managers’ adversarial review process, which demanded “proof” to halt launches, effectively silenced engineers with tacit reservations

14. A Walk on the Darkside of Culture Root of both culture & cult from Latin “cultus” = cultivate, care, adoration Greedy Institutions: Pathologies of unconstrained self-demands when members internalize the organizational culture into a total-institution identity Personality absorbed into org’l mission, to neglect of alternative external ties Structural isolation, milieu control facilitate asymmetric flows of information At extreme, org may demand members sacrifice their resources, even lives • “Coercive persuasion” in Korean POW camps (Schein) • Doomsday cults (Jonestown, Solar Temple, Heaven’s Gate) • Direct sales orgs: Mary Kay Cosmetics; Herbal Life; Amway • Mann Gulch: “Drop your tools or die!”  loss of firefighter identity

15. National vs Org’l Cultures National Cultures: Societies have distinct value configurations and ways of life that emerged through historical experiences, institutional developments originating in traditional family and kinship systems Proposition: National cultures shape distinctly different org’l cultures Orgs are cultural objects -- sets of beliefs and practices -- that inevitably reflect the external contexts, environments within which they are embedded • Lammers & Hickson (1979) orgs reflect three broad national cultures • Latin (Fr-Sp-It): high centralization, rigid strata, sharp inequality, conflicts erupting around areas of uncertainty • Anglo-Saxon (US-Br-Scand): decentralization, fluid strata, flexible rule applications • Traditional (3rd World): paternalistic leaders, implicit rules, elite collusion • EX: Different beliefs about legitimacy of huge ratios of executive compensation to worker wages: US >> Europe > Japan

16. A Globalizing Org’l Culture? • Are globalization processes creating a worldwide org culture? Multinational corps (MNC) subsidiaries serve as the primary sites for production of a managerial culture homogenization • Do MNC employees, especially top & middle managers, adopt corporate culture or persist with distinct “host” national cultural values? • Hofstede (1980) Factor analyses of 120,000 IBM subsidiary managers’ core work values uncovered 4 cultural dimensions • Power distance: accept inequalities of power, wealth, prestige • Uncertainty avoidance: accept innovation, eccentricities • Individualism: live and act independently or collectively • Masculinity: gender role separation, stress on advancement & earnings • Guillen (1994) updated Bendix’s (1956) classic on managerial ideologies • Content analysis of US, UK, German, Spanish management journals 1900-1975 • Differential embrace of scientific mgmt, human relations, structuralism: • Christian values diffused HR more in Spain & UK • Scientific mgmt promoted by German military, US engineering profession

17. References Bendix, Reinhard. 1956. Work and Authority in Industry: Ideologies of Management in the Course of Industrialization. NY: Wiley. Guillen, Mauro F. 1994. Models of Management: Work, Authority, and Organization in a Comparative Perspective. Chicago: University of Chicago Press. Hatch, Mary Jo. 2000. “The Cultural Dynamics of Organizing and Change.” Pp. 245-260 in Handbook of Organizational Culture and Climate, edited by Neal M. Ashkanasy, Celeste Wilderom and Mark F. Peterson. Thousand Oaks, CA: Sage Publications. Hofstede, Geert. 1980. Culture’s Consequences: International Differences in Work-Related Values. 2nd Ed. Beverly Hills, CA: Sage. Lammers, Cornelis J. and David J. Hickson (eds.). 1979. Organizations Alike and Unlike: International and Interinstitutional Studies in the Sociology of Organizations. London: Routledge & Kegan Paul. Vaughan, Diane. 1996. The Challenger Launch Decision: Risky Technology, Culture, and Deviance at NASA. Chicago: University of Chicago Press. Weick, Karl E. 1996. “Drop Your Tools: An Allegory for Organizational Studies.” Administrative Science Quarterly 41:301.

18. How to Compare Mangoes & Guavas? Geert Hofstede (1998) discusses problems in comparing national cultures, arguing that values are more comparable than institutions. His surveys of IBM international employees & the Chinese Value Survey identified five core dimensions of national cultures: • Power Distance • Individualism/Collectivism • Masculinity/Feminity • Uncertainty Avoidance • Long/Short-Term Orientation How do the U.S. & China compare on these dimensions? On which dimensions are they most similar & different? Are incompatibilities on these cultural traits a source of current & future conflicts between these nations?

19. Org’l Culture & Effectiveness Daniel Denison & Aneil Mishra (1995) note paucity of evidence showing that org’l cultures affect firm performance. They induce propostions about four traits from five case studies, find CEO survey evidence of differing effects on corporate outcomes (not controlling for other causes/covariates): Mission & Consistency predict profitability (ROA) Involvement & Adaptability predict sales growth Do their propositions constitute an org’l theory? What mechanisms or processes might link variation along these cultural dimensions to firm performance? Do particular cultural configurations lead to superior innovation, adaptation, environmental fit/selection?