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Dysfunctional culture, dysfunctional organization Capturing the behavioral norms that form organizational culture and drive performance

Dysfunctional culture

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Pierre A. Balthazard School of Global Management and Leadership, Arizona State University, Phoenix, Arizona, USA

Robert A. Cooke College of Business Administration, University of Illinois at Chicago, Chicago, Illinois, USA, and

Richard E. Potter Department of Information and Decision Sciences, College of Business Administration, University of Illinois at Chicago, Chicago, Illinois, USA Abstract Purpose – This paper aims to describe how organizational culture is manifested in behavioral norms and expectations, focusing on 12 sets of behavioral norms associated with constructive, passive/ defensive, and aggressive/defensive cultural styles. Design/methodology/approach – The organizational culture inventory, a normed and validated instrument designed to measure organizational culture in terms of behavioral norms and expectations, was used to test hypotheses regarding the impact of culture. Data are summarized from 60,900 respondents affiliated with various organizations that have used the instrument to assess their cultures. Also presented is a brief overview of a practitioner-led assessment of four state government departments. Findings – The results of correlational analyses illustrate the positive impact of constructive cultural styles, and the negative impact of dysfunctional defensive styles, on both the individual- and organizational-level performance drivers. The results clearly link the dysfunctional cultural styles to deficits in operating efficiency and effectiveness. Originality/value – The concept of organizational culture is derived from research in the field of organizational behavior characterized by use of qualitative methods. Yet, one of the most powerful strategies for organizational development is knowledge-based change, an approach that generally relies on the use of quantitative measures. Although both methods share the potential for producing cumulative bodies of information for assessment and theory testing, quantitative approaches may be more practical for purposes of knowledge-based approaches for organizational development generally, and assessing cultural prerequisites for organizational learning and knowledge management specifically. Keywords Organizational culture, Organizational behaviour, Performance Paper type Research paper

This paper is based on, and incorporates materials from, the Organizational Culture Inventoryw with permission by the publisher, Human Synergistics International (USA). The authors extend their appreciation to Dr Cheryl Boglarksy, Director of Research and Development at Human Synergistics’ Michigan office, for compiling the data set analyzed in this paper. OCI style descriptions and sample items are from Robert A. Cooke and J. Clayton Lafferty, Organizational Culture Inventory, q Human Synergistics International, Plymouth MI USA. Copyright q 1987, All Rights Reserved. Used by permission.

Journal of Managerial Psychology Vol. 21 No. 8, 2006 pp. 709-732 q Emerald Group Publishing Limited 0268-3946 DOI 10.1108/02683940610713253

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Introduction The dysfunctional organization, much like a dysfunctional individual, is so characterized because it exhibits markedly lower effectiveness, efficiency, and performance than its peers or in comparison to societal standards. While environmental considerations are important for individuals as well as organizations, internal forces often play a more pivotal role. With the individual, this can be cognition. With the organization, we contend, it is the culture. Consider the following two examples that illustrate how an organization’s culture can foment dysfunction. In the aftermath of the Columbia space shuttle accident, we learned (again) that there were people inside NASA who were discussing critical information with each other, but not with senior decision makers. This life-saving knowledge might have saved the spaceship and its crew. Following the earlier Challenger accident, a nine-year study of NASA’s standard operating procedures regarding risky decision-making – in which technical anomalies were repeatedly considered to be of “acceptable risk” – showed that the organizational culture created an environment in which conformity to the rules led to the fatal errors (e.g. Vaughan, 1996, 2003). The causes of the Columbia and Challenger disasters were not due to intentional managerial wrongdoing, safety rule violations or any type of conspiracy. Rather, the nature of NASA’s organization was such that the decisions to launch Challenger and land Columbia were inevitable – and inevitable mistakes. NASA’s organizational culture, routines and systems are designed to allow for a process of normalizing signals of potential danger. Thus, known technical problems become an operating norm and did not prevent NASA managers from giving the go-ahead to proceed with problematic operations (Vaughan, 1996, 2003). Examining the multi-organization system that oversees the air travel industry, a Gannet company investigation of the American Airlines Flight 587 crash in Belle Harbor, New York, found widespread cultural and structural impediments at Airbus Industrie, the National Transportation Safety Board, and American Airlines. Although these information technology-intensive organizations are components of the nation’s aviation safety system designed to prevent crashes by learning from close calls, the system is dependent on airlines and aircraft manufacturers sharing their knowledge and experience with the same federal regulators charged with their oversight (USA Today, 2003). As critical and fundamental that knowledge sharing might be in an organization, it is not safe to assume that it will occur unless it is a recognized norm or expected behavior as part of the organization’s culture. These two examples, and others like the more recent failures at the Federal Emergency Management Administration, portray how elements of an organization’s culture can lead to dysfunctional outcomes, even when those organizations are peopled with earnest and capable members. In this paper we present a quantitative approach to the assessment of organizational culture based on shared norms and behavioral expectations at the individual and organizational-unit levels. Alternative patterns of norms and expectations are associated with constructive, passive/aggressive, and aggressive/defensive organizational culture styles, each associated with particularly healthy or dysfunctional organizational drivers of performance. We discuss a statistically normed and validated instrument and methodology that accurately assesses the behavioral norms operating within an organization and is used to identify

the type of culture characterizing the organization. We present data from 60,900 respondents in the field along with a brief analysis, the results of which illustrate the linkage between two dysfunctional organizational cultural styles and individual and organizational-level performance drivers. We also present a brief overview of a practitioner-led assessment of four state government departments and results that clearly link dysfunctional cultures to deficits in operating efficiency and effectiveness. Organizational culture Organizational culture has been characterized as the “glue that holds organizations together” (Goffee and Jones, 1996) and “isn’t just one aspect of the game – it is the game” (Gerstner, 2002). Culture can support linkages between technology adoption and organizational growth (Chatman and Jehn, 1994); it can be a critical success factor in implementing manufacturing strategy (Bates et al., 1995) and can play a crucial role in determining the success or failure of mergers and acquisitions (Weber et al., 1996; Javidan, 2001). On a more micro level, researchers have found significant relationships between the “fit” of employees and the prevailing organizational culture and a number of important outcomes such as job commitment and turnover (O’Reilly et al., 1991; Kotter and Heskett, 1992). But many unanswered questions remain regarding the meaning and content of organizational culture (Black, 2003; Martin and Siehl, 1983; Louis, 1983), the methods by which it should be measured (Cooke and Rousseau, 1983; Schein, 1984; Sashkin and Fullmer, 1985) and, more fundamentally, the feasibility of managing culture and change (e.g. Uffal, 1983; Collins and Porras, 1994), especially when attempting to operationalize and attain specific organizational goals. While debates around these issues continue, culture has been accepted as a “fact of organizational life” by managers and has become an integral aspect of many organizational development programs. Much of the research on organizational cultures has focused on descriptors of culture and frequently resulted in dimensions or typologies of culture (Hanges and Dickson, 2002; House et al., 2002; Kreitner and Kinicki, 1998; Schein, 1996; Hofstede et al., 1993; Reichers and Schneider, 1990; O’Reilly, 1989). Certain types of organizational cultures, or certain styles of cultures, have been associated with either positive or negative outcomes for either the effectiveness of the organization (as the introductory discussion of NASA and the American Airlines crash illustrate) or for individual employees within the organization (Schein, 1996; Deal and Kennedy, 1982). Positive outcomes for individual members of organizations potentially include motivation and satisfaction (Cooke and Szurnal, 1993, 2000; O’Reilly, 1989) while negative outcomes might include job insecurity and stress (Kahn et al., 1964; Katz and Kahn, 1966, van der Velde and Class, 1995). In this paper, we link organizational culture to measures of both individual and organizational outcomes. The concept of organizational culture is derived from research in the field of organizational behavior characterized by use of qualitative methods. To an extent, the use of these methods derives from the issues of interest to scholars who have studied culture in organizations: symbolism, sense-making, and socialization (e.g. Louis, 1980; Martin and Siehl, 1983; Smircich, 1983), issues involving unique individual perspectives highly amenable to qualitative study. Yet, one of the most powerful strategies for organizational development is knowledge-based change, an approach


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that generally relies on the use of quantitative measures (e.g. Huse and Cummings, 1985; Nadler, 1977). Qualitative and quantitative methods are complementary approaches to the study and assessment of organizational processes and attributes. The advantages of qualitative methods include the use of the focal unit’s own terms to describe itself, the intensive and in-depth information that can be obtained about a unit, and the amenability of the method for exploratory research on issues and processes about which little information exists. Alternatively, the advantages of quantitative methods include the ease of cross-sectional assessments and comparisons (across individuals, organizations, or sub-units), the replicability of the assessment in different units and by other researchers or organizational development professionals, and a common, articulated frame of reference for interpreting the collated information. Although both methods share the potential for producing cumulative bodies of information for assessment and theory testing, quantitative approaches may be more practical for purposes of knowledge-based approaches for organizational development generally, and assessing cultural prerequisites for organizational learning and knowledge management specifically. For instance, different subgroups within an organization, such as departments or units, may have the organizational culture in common, but also experience a subculture unique to the individuals within the unit (Trice, 1993; Cooke and Rousseau, 1988). Shared values and expectations within such units exert pressures leading to a localized variation of the organizational culture for members, and ultimately affect the culture of the organization as a whole. The organizational culture inventoryq At the core of our study is the Organizational Culture Inventory (OCI), a statistically normed and validated survey used for organizational consulting and change purposes, developed by Human Synergistics International (Cooke and Lafferty, 1987). The OCI is a quantitative instrument that measures twelve sets of behavioral norms associated with three general styles of organizational culture – constructive, passive/defensive, and aggressive/defensive. Since its introduction in prototype form in 1983, the inventory has been used by thousands of organizations and completed by over two million respondents throughout the world. The instrument has been translated into numerous languages – including French (Canadian and Parisian), Spanish (Castillian and Latin American), German, Japanese, Chinese, Dutch, Swedish, Romanian, and Korean – and is, arguably, the most globally used organizational culture assessment instrument in the world. It has been administered for a variety of purposes, including to direct, evaluate, and monitor organizational change (e.g. Gaucher and Kratochwill, 1993); identify and transfer the cultures of high performing units (Human Synergistics, 1986); study and enhance system reliability and safety (Haber et al., 1991; Shurberg and Haber, 1992; Keenan et al., 1998); facilitate strategic alliances and mergers (Slowinski, 1992); promote collaborative relations within and across units (Leeds, 1999); and test hypotheses on the relationship between culture and antecedent variables (Klein et al., 1995a). This wide range of applications has produced an extensive information base regarding the ways in which culture operates in different types of organizations. The OCI measures 12 distinct but interrelated sets of behavioral norms and expectations that describe the thinking and behavioral styles that might be implicitly

or explicitly required for people to “fit in” and “meet expectations” in an organization or sub-unit. The behavioral norms measured by the OCI are defined by two underlying dimensions, the first of which distinguishes between a concern for people versus a concern for tasks. The second dimension distinguishes between expectations for behaviors directed toward fulfilling higher-order satisfaction needs versus those directed toward protecting and maintaining lower-order security needs. Based on these dimensions, the 12 sets of norms measured by the OCI are categorized into three general “clusters” or styles of organizational cultures: constructive, passive/defensive, and aggressive/defensive. Empirical support for these clusters, and therefore the construct validity of the inventory, is provided by the results of principal components analyses presented elsewhere (e.g. Cooke and Rousseau, 1988; Cooke and Szumal, 1993; Xenikou and Furnham, 1996). This focus on behavioral norms distinguishes the OCI from other questionnaires which measure more global aspects of culture such as shared beliefs and values (e.g. House et al., 2002; Deal and Kennedy, 1982; Sashkin, 1983). While norms and expectations are closely related to beliefs and values, the former have a more direct impact on the day-to-day activities and work situation of organizational members than do the latter (Cooke and Rousseau, 1988). Thus, norms also have a relatively great impact on individual and organizational outcomes and are potentially indicative of environments that support organizational learning and knowledge management. In short, by measuring norms and expectations, the OCI makes the concept of culture somewhat less abstract and easier for organizational members to understand and manage. The OCI circumplex The 12 sets of behavioral norms measured by the OCI are graphically represented using a circumplex, a circular diagram on which the distance between behavioral norms reflects their degree of similarity and correlation. The collection of behavioral norms, and their placement around the circle, enables respondents to generate a holistic and meaningful profile of the culture of their organizations (Guttman, 1954). The behavioral norms measured by the OCI were identified and positioned around the circumplex on the basis of the interpersonal personality system proposed by Leary (1957) and research on personality by McClelland et al. (1953), Rogers (1961), Horney (1954), and others. Developmental work was especially influenced by research on human needs (e.g. Maslow, 1954, 1959) and the extensive body of literature on leadership styles (e.g. Katz et al., 1959; Stodgill, 1963). As noted above, the location of the behavioral norms on the circumplex is based on the extent to which they emphasize a concern for people versus tasks (Katz et al., 1959; Stodgill, 1963) and promote behaviors leading to the fulfillment of satisfaction versus security needs (Maslow, 1959, 1970). The norms on the right side of the OCI Circumplex reflect expectations for behaviors that are people-oriented; those on the left side reflect expectations for behaviors that are relatively task-oriented. Norms toward the top of the OCI Circumplex promote behaviors that are directed toward the fulfillment of higher-order satisfaction needs; those near the bottom promote behaviors directed toward the fulfillment of lower-order security needs. As shown in Figure 1, each set of norms falls into one of three groups representing the aggregate cultural styles.


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Figure 1. The Human Synergistics OCI circumplex

The statistically-normed OCI Circumplex allows members of an organization to compare their results to those of others who have completed the inventory. The bold center ring on the OCI profile reflects the median score for each of the twelve sets. More specifically, the concentric circles (from the center of the profile outward) represent the 10th, 25th, 50th, 75th, 90th and 99th percentiles, or progressively stronger norms along each of the 12 sets. The impact of organizational culture The culture of an organization is shaped by many factors – some of which can be changed, and some of which might be intractable. Organizations adapt to their external environments by designing responsive structures and systems, adopting relevant technologies, and developing and harvesting members’ skills and qualities (Cooke and Szumal, 2000). Though constrained by its environment, an organization makes a number of “choices” which, collectively, eventually define its culture. These choices are

influenced by the philosophy of the organization, the values of top management, and the “assumptions” of founding principals and succeeding generations of organizational leaders (Schein, 1983; Sathe, 1985). Beyond the assumptions held by leaders, their skills and qualities (including their personal styles and leadership strategies) have a profound impact on organizational culture. This impact can be positive and transformational (e.g. Kouzes and Posner, 2002) – sending signals for achievement-oriented and cooperative behaviors and thereby creating and reinforcing a constructive culture. However, this impact can alternatively be negative and dysfunctional (e.g. Kets de Vries and Miller, 1986; Litzky et al., 2006) – implicitly requiring passive and aggressive behaviors and creating a defensive culture. Our model of the role of organizational culture (see Figure 2) proposes a causal chain –from antecedents, to culture, through to outcomes –that is consistent with earlier models developed for the OCI (Cooke, 1989; Cooke and Szurnal, 2000) and the parallel work of Kilmann et al. (1985). Our model is also consistent with more recent work on organizational culture and related constructs, exemplified by the writings of Collins and Porras (1994), Lawler (1996), Ulrich (1997), and Pfeffer and Sutton (2000). The conceptual and theoretical frameworks that most closely correspond to those developed for the OCI (Cooke, 1989) perhaps are those proposed by Kotter and Heskett (1992). Their descriptive and retrospective study of the effects of “adaptive” versus “non-adaptive” cultures on problem solving, innovation, and organizational performance lend some independent support for the OCI model and the proposition that constructive (as opposed to defensive) norms lead to organizational effectiveness. Though organizational effectiveness is influenced by a myriad of factors, we posit that the norms quantified by the OCI have an impact that is discernable and significant. Specifically, strong norms for constructive behaviors should lead to desirable outcomes and should minimize undesirable outcomes. Constructive norms promote achievement-oriented and cooperative behaviors which should promote individual-level outcomes such as satisfaction, organizational outcomes including


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Figure 2. The organizational culture –performance driver relationship

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quality of service, and ultimately knowledge management processes. Conversely, expectations for defensive behaviors should have the opposite impact according to our model of how culture works. Defensive norms create pressures for dependent and avoidant (passive) and/or power-oriented and internally competitive styles (aggressive) and, in turn, are dysfunctional for both the organization and its members. Specifically, targeting outcomes at the level of organizational members, we predict: H1a. Constructive cultural norms will be positively related to individual outcomes such as role clarity, communication quality, organizational fit and job satisfaction and negatively related to members’ comfort with those norms. H2a. Defensive cultural norms (both passive and aggressive) will be negatively related to individual outcomes such as role clarity, communication quality, organizational fit and job satisfaction and positively related to members’ comfort with those norms. Similar patterns of relationships have been found between the OCI culture styles and individual outcomes, including stress (van der Velde and Class, 1995) and member satisfaction (McDaniel and Stumpf, 1995; Rousseau, 1990; Klein et al., 1995b). Further insight into the impact of operating cultures on employees is provided by other studies that have incorporated the OCI instrument. For example, Haley (1998) found that constructive norms were positively associated with affective commitment (that is, commitment based on emotional attachment to the organization). On the other hand, Lahiry (1994) found that defensive norms (particularly passive/defensive) were positively related to continuance commitment (that is, people staying with their organizations because they feel that the costs of leaving are relatively great). In another study, Weidner (1997) observed a significant and positive relationship between constructive norms and the trust of hospital personnel in their supervisors and the organization. Quality of customer service is a commonly measured organizational outcome in studies of culture. The need for organizations to gain greater knowledge of their cultures to not only improve customer service and preserve customer loyalty but also increase revenue streams has never been stronger. Klein et al. (1995a) analyses suggest that a positive outlook, combined with employees’ perceptions of control led to improved customer service. Quality of customer service has also been considered in a number of cultural analyses of health care organizations (e.g. Shortell et al., 1991; Komoski-Goeffert, 1994; Haley, 1998; Gillett and Stenfer-Kroese, 2003). Haley (1998) is particularly interesting in that it included patient satisfaction data and other quality indicators (e.g. “untoward events” such as medication error rates and patient falls). Consistent with her hypotheses and our model, patient satisfaction was positively related to humanistic (constructive) norms and negatively related to Dependent (passive/defensive) norms. However, rates of medication errors and patient falls unexpectedly appeared to be higher in units with constructive cultures and lower in units with defensive cultures. Based on qualitative data collected on the units and previous research on the discrepancies between the number of untoward events that actually occur in hospitals and the number that are reported, Haley (1998) proposed that constructive norms encourage and permit nurses to report problems; in contrast,

defensive norms may impede organizational transparency by forcing members to look good and please those in positions of authority. Beyond quality of service, cross-sectional studies on culture have considered a number of other organizational-level outcomes (Szumal, 1998). A post-hoc analysis of OCI data on supermarkets (Human Synergistics, 1986) showed that Achievement (constructive) norms were positively related to sales per square foot of selling space as well as to subjective measures of store effectiveness. Klein (1992) found a significant relationship between the strength of constructive norms and sales growth in a study of apparel stores. Thornbury’s (1994) study of 17 units of four European companies showed that effectiveness in dealing with change was positively related to constructive norms and negatively related to passive/defensive norms. Rousseau (1990) study of multiple units of a large fund – raising organization demonstrated that passive/defensive norms were negatively related to the generation of revenues. Evidence that the norms measured by the OCI are causally related to organizational performance is also provided by cultural change programs that have been evaluated longitudinally (Dale, 1997; Human Synergistics, 1998; Sarkis et al., 1992; United Auto Workers, 1990; Workforce, 1998). Such programs were designed to bring about cultural change and performance improvements by means of interventions directed at systems, structures, technologies, and/or members’ skills. Although not based on controlled experimental designs, these practitioner-led field studies lend support to the notion that culture has an impact on effectiveness. Considered together, there is considerable evidence that culture is directly related to organizational-level performance drivers, many of which bear directly on efficiency and effectiveness, and conversely, to dysfunctional consequences. The present study examines a number of these relationships. Consistent with the studies cited above: H1b. Constructive cultural norms will be positively related to organizational outcomes such as commitment to customer service, perceived quality of products and services, organizational adaptability and quality of the workplace and negatively related to members’ intention to leave the organization. H2b. Defensive cultural norms (both passive and aggressive) will be negatively related with organizational outcomes such as commitment to customer service, perceived quality of products and services, organizational adaptability and quality of the workplace and positively related to members’ intentions to leave the organization. To test our hypotheses, we present a secondary analysis of data provided by members of organizations using the OCI and a case study comparison of four state government departments involved in an organizational change program. Method Sample We analyzed data provided by 60,900 individuals whose Organizational Culture Inventory (OCI) questionnaires were scored by the Michigan office of Human Synergistics International between 2001 and the second quarter of 2004. These


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respondents represent a small but significant subset of OCI respondents in the field – specifically, those affiliated with client organizations that requested from this particular office a comprehensive computer-generated report on their culture. (Most of the surveys are self-scored or processed by the other offices of Human Synergistics.) The broad sample represents the demographics of organizations in America in terms of gender, age, ethnicity, education, organizational type, profession/occupations of respondents, and organizational or managerial level. The number of men and women in the sample was roughly equal: 54 percent male, 46 percent female. Respondents’ ethnicity was predominantly White/Caucasian (83 percent) with 7 percent identifying themselves as Black/African American, 4 percent as Asian, and 4 percent as Hispanic. Approximately 2 percent of the respondents identified themselves as “other” or opted not to respond to the question regarding ethnicity. The respondents ranged in age from 20 to over 60. The modal age range was 40 to 49, comprising 33 percent of the sample, with those between 30 and 39 comprising the next largest segment at 29 percent of the sample. A majority (82 percent) indicated at least some college education, with 48 percent holding a Bachelor’s or higher-level degree. The participants identified themselves as members of various types of organizations [including manufacturing (22 percent), transportation/distribution (13 percent), financial and insurance (11 percent), health care (8 percent), public sector (7 percent), retail (6 percent), educational (6 percent), and non-profits (3 percent), among others] and occupations [including general management (18 percent), engineering (11 percent), administrative and clerical (9 percent), production (7 percent), sales (6 percent), direct labor (4 percent), among others]. The sample consists of respondents at all organizational levels, including non-management (55 percent), line management (13 percent), middle management (16 percent), senior management (5 percent), executive/senior vice-president (1.4 percent), CEO/president (0.4 percent), and owner (0.3 percent). Independent variables The OCI contains 96 items designed to produce 12 scales of eight items each. Each item describes a behavior or personal style that might be expected of members of an organization. On a scale of 1 to 5, respondents are asked to indicate the extent to which each behavior is expected or implicitly required (of them and people like themselves) in their organization. Responses to the items associated with the scales are summed to derive estimates of the strength of each of the 12 behavioral norms within the organization. Descriptions of the 12 cultural norms measured by the OCI, along with illustrative items, are provided below: (1) 1 o’clock position: A Hurnanistic-encouraging culture characterizes organizations that are managed in a participative and people-centered way. Members are expected to be supportive,constructive, and open to influence in their dealings with one another. (Helping others to grow and develop; taking time with people.) (2) 2 o’clock position: An Affiliative culture characterizes organizations that place a high priority on constructive interpersonal relationships. Members are expected to be friendly, open, and sensitive to the satisfaction of their work group. (Dealing with others in a friendly way, sharing feelings and thoughts.)

(3) 3 o’clock position: An Approval culture describes organizations in which conflicts are avoided and interpersonal relationships are pleasant – at least superficially. Members feel that they should agree with, gain the approval of, and be liked by others. (Making sure people accept you; “going along” with others.) (4) 4 o’clock position: A Conventional culture is descriptive of organizations that are conservative, traditional, and bureaucratically controlled. Members are expected to conform, follow the rules, and make a good impression. (Always following policies and practices; fitting into the “mold”.) (5) 5 o’clock position: A Dependent culture is descriptive of organizations that are hierarchically controlled and non-participative. Centralized decision making in such organizations leads members to do only what they are told and to clear all decisions with superiors. (Pleasing those in positions of authority, doing what is expected.) (6) 6 o’clock position: An avoidance culture characterizes organizations that fail to reward success but nevertheless punish mistakes. This negative reward system leads members to shift responsibilities to others and avoid any possibility of being blamed for a mistake. (Waiting for others to act first, taking few chances.) (7) 7 o’clock position: An oppositional culture describes organizations in which confrontation prevails and negativism is rewarded. Members gain status and influence by being critical and thus are reinforced to oppose the ideas of others and to make safe (but ineffectual) decisions. (Pointing out flaws; being hard to impress.) (8) 8 o’clock position: A power culture is descriptive of non-participative organizations structured on the basis of the authority inherent in members’ positions. Members believe they will be rewarded for taking charge, controlling subordinates and, at the same time, being responsive to the demands of superiors. (Building up one’s power base; motivating others any way necessary.) (9) 9 o’clock position: A competitive culture is one in which winning is valued and members are rewarded for out-performing one another. People in such operations operate in a “win-lose” framework and believe they must work against (rather than with) their peers to be noticed. (Turning the job into a contest, never appearing to lose.) (10) 10 o’clock position: A Perfectionistic culture characterizes organizations in which perfectionism, persistence, and hard work are valued. Members feel they must avoid all mistakes, keep track of everything, and work long hours to attain narrowly-defined objectives. (Doing things perfectly, keeping on top of everything.) (11) 11 o’clock position: An Achievement culture characterizes organizations that do things well and value members who set and accomplish their own goals. Members of these organizations set challenging but realistic goals, establish plans to reach these goals, and pursue them with enthusiasm. (Pursuing a standard of excellence; openly showing enthusiasm.)


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(12) 12 o’clock position: A Self-actualization culture characterizes organizations that value creativity, quality over quantity, and both task accomplishment and individual growth. Members of these organizations are encouraged to gain enjoyment from their work, develop themselves, and take on new and interesting activities. (Thinking in unique and independent ways; doing even simple tasks well.) As stated earlier, empirical evidence for the internal consistency of the 12 scales and their association with three different types of cultures (and therefore the construct validity of the OCI) is provided by the results of reliability and principal components analyses presented elsewhere (e.g. Cooke and Rousseau, 1988; Cooke and Szurnal, 1993; Xenikou and Furnham, 1996). Means, standard deviation, and Cronbach alpha coefficients for each scale, based on the current sample, are offered in Table I. The table indicates that the mean scores for the four constructive styles (achievement, self-actualizing, humanistic-encouraging, and affiliative) are higher than those for the eight defensive styles. Since social desirability biases (i.e. the tendency to endorse positive or desirable items and descriptions) can operate with respect to the former items and scales, the circumplex profiles on which results are plotted are normatively scaled to correct for such effects.

Constructs

Table I. Constructs, example items, scale reliability, means and standard deviations

Measurement items/first 2 order constructs

Constructive (CC1) Humanistic 2 encouraging scale (e.g. culture: “help others to grow and develop”) (CC2) Affiliative scale (e.g. “use good human relations skills”) (CC3) Achievement scale (e.g. “work on self-set goals”) (CC4) Self-actualizing scale (e.g. “emphasize quality over quantity”) Passive (PC1) Approval scale (e.g. “switch properties culture: to please others”) (PC2) Conventional scale (e.g. “rules more important than ideas”) (PC3) Dependent scale (e.g. “do what is expected”) (PC4) Avoidance scale (e.g. “take a few chances”) Aggressive (AC1) Oppositional scale (e.g. “look for culture: mistakes”) (AC2) Power scale (e.g. “use the authority of their position”) (AC3) Competitive scale (e.g. “turn the job into contest”) (AC4) Perfectionistic scale (e.g. “never make a mistake”)

n

Cronbach Standard alpha Mean deviation

59,878

0.91

3.28

1.30

60,690

0.91

3.53

1.26

60,323

0.85

3.41

1.21

60,005

0.80

3.00

1.32

59,985

0.80

2.71

2.01

60,246

0.84

3.10

1.36

60,391

0.83

3.23

1.36

59,869

0.86

2.36

1.40

59,589

0.73

2.40

1.17

59,829

0.85

2.61

1.51

59,946

0.85

2.51

1.51

60,199

0.77

3.01

1.34

Dependent variables The OCI includes a set of supplementary items that assess some of the outcomes of culture, many of which can drive the performance and long-term effectiveness of an organization. Results along these items provide clients with initial insights as to whether culture change should be considered and in what direction such change should take place. These items, which assess five outcomes pertaining to individual members and five pertaining to the organization, are used here to test our hypotheses. At the individual level, the most immediate drivers are the thinking and behavioral styles exhibited by organizational members. Although it is imperative for all members to be socialized into the culture, when organizational norms and expectations are weak or inconsistent, their impact on members’ personal styles will be minimal and members will report ambiguous roles and norms (Katz and Kahn, 1966). In contrast, organizations with strong, positive cultures and/or effective cultural change programs reinforce the targeted behaviors. People who “fit in” will become a node on the network and gain influence; and those who do not will be disconnected and might eventually leave. Those who do not fit in but stay will experience “person/norm conflict,” a source of stress resulting from inconsistencies between personal predispositions and the demands of the situation. Based on the work of Katz and Kahn (1966) on role conflict, the following individual-level measures were included in the OCI (response options ranged along a five-point Likert scale from (1) not at all to (5) to a very great extent): . Role clarity: The extent to which organizational members know what is expected of them. . Communication quality: The extent to which organizational members exchange clear and consistent messages regarding what is expected. . “Fit” with organization: The extent organizational members comfortably “fit in” the organization. . Behavioral conformity: The extent to which organizational members are required to think and behave differently than otherwise would be the case (person/norm conflict). . Job satisfaction: The extent to which organizational members report positive appraisals of their work situation. Performance drivers at the organizational or sub-unit level, while less direct and more difficult to establish, are nevertheless important to consider. Some of these drivers are due to the aggregated effects of norms and expectations on individual members. For example, “quality of workplace” should be higher in organizations with Constructive cultures than in those with defensive cultures. Similarly, turnover (based on members’ intentions to leave) should be lower in the former organizations than in the latter. The positive drivers translate into members exercising more control at various levels of the organization, making better decisions, and more effectively implementing decisions and solutions. Low levels of these drivers, and intentions to leave, represent a focus on self-protection rather than organizational goals, insularity rather than cooperation and coordination, and rigidity as opposed to adaptability. The following organizational-level measures were collected (response options again ranged along a five-point Likert scale ranging from (1) not at all to (5) to a very great extent):


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.

.

722 .

.

Quality of products/services: The extent to which members evaluate positively the quality of their organization’s products or services. Commitment to customer service: The extent to which members make sure customers feel good about the service provided by the organization. Adaptability: The extent to which the organization responds effectively to the changing needs of its customers. Turnover: The extent to which members expect to leave the organization within two years. Quality of workplace: The extent to which members appraise their organization as a good place to work.

Results Correlations were run between the twelve cultural norms and the dependent variables to test the hypotheses. The results, shown in Table II, support our hypotheses. Constructive cultural norms are positively and significantly associated with members’ reports regarding role clarity, quality of communication, “fit,” and job satisfaction. Constructive norms are negatively related to members’ reports of behavioral conformity. Conversely, expectations for defensive behaviors (passive and aggressive) are negatively associated with role clarity, communication quality, “fit,” and job satisfaction and are positively associated with behavioral conformity. Examining the drivers of organizational performance (Table III), constructive norms are positively associated with quality of products and services, commitment to customer service, adaptability, and the quality of the workplace. Constructive norms are also negatively related to turnover intentions. Conversely, expectations for defensive behaviors are negatively related to quality of products and services,

Role Communication “Fit” with clarity quality organization

Table II. Correlations between organizational culture and individual performance drivers

Constructive: Humanisticencouraging Affiliative Achievement Selfactualization Passive: Approval Conventional Dependent Avoidance Aggressive: Oppositional Power Competitive Perfectionistic Number of respondents Note: * Significant p , 0.01

Behavioral conformity

Job satisfaction

0.43* 0.43* 0.42*

0.33* 0.29* 0.28*

0.48* 0.45* 0.43*

20.25* 20.23* 20.20*

0.53* 0.50* 0.48*

0.42* 20.16* 20.17* 20.16* 20.36* 20.13* 20.24* 20.15* 20.03*

0.28* 20.31* 20.37* 20.35* 20.45* 20.27* 20.38* 20.29* 20.26*

0.46* 20.20* 20.27* 20.25* 20.39* 20.17* 20.31* 20.20* 20.11*

20.20* 0.31* 0.33* 0.30* 0.40* 0.29* 0.37* 0.31* 0.26*

0.52* 20.20* 20.29* 20.27* 20.42* 20.17* 20.33* 20.19* 20.14*

60,742

60,693

60,615

60,531

60,670

Quality of products/ services Constructive:

Passive:

Aggressive:

Humanisticencouraging Affiliative Achievement Selfactualization Approval Conventional Dependent Avoidance Oppositional Power Competitive Perfectionistic Number of respondents:

Quality of customer service

Adaptability

Turnover

Quality of workplace

0.46* 0.46* 0.46*

0.40* 0.41* 0.39*

0.42* 0.40* 0.40*

20.31* 20.30* 20.29*

0.54* 0.50* 0.48*

0.44* 20.14* 20.19* 20.17* 20.37* 20.17* 20.26* 20.13* 20.04*

0.41* 20.08* 20.12* 20.12* 20.28* 20.09* 20.20* 20.08* 0.00

0.42* 20.12* 20.18* 20.16* 20.33* 20.10* 20.23* 20.11* 20.04*

20.30* 0.13* 0.14* 0.13* 0.25* 0.12* 0.20* 0.14* 0.08*

0.52* 20.20* 20.30* 20.29* 20.42* 20.17* 20.34* 20.19* 20.14*

60,334

60,391

60,578

60,532

60,651

Note: * Significant p , 0.01


723

Table III. Correlations between organizational culture and organizational performance drivers

commitment to customer service, adaptability and quality of the workplace and positively related to intention to leave. The results presented in Tables III and IV clearly demonstrate the relationships that exist between the OCI cultural styles and performance drivers. Although correlations do not imply causation, the results suggest that impacting on one variable may cause another to change. This is a key underlying tenet of any cultural transformation initiative. As the culture-outcome frameworks presented here and elsewhere (Cooke and Szurnal, 2000) suggest, alignment of the organization’s structure, systems, technology, Success predictors Individual outcomes:

Organizational outcomes:

Totals:

Role clarity Communication quality “Fit” with organization Behavioral conformity Job satisfaction Quality of prod./serv. Commitment to customer service Adaptability Turnover Quality of workplace

Dept. 1

Dept. 2

Dept. 3

Dept. 4

C C B C C C C B B C 0 “A” 3 “B” 7 “C”

C B A B C C C A C B 2 “A” 3 “B” 5 “C”

C C B C C C C C B C 0 “A” 2 “B” 8 “C”

C B C C C C C B A C 1 “A” 2 “B” 7 “C”

Notes: “A” ¼ at or better than the constructive benchmark; “B” ¼ at or better than the historic average; “C” ¼ not as good as the historical average and constructive benchmark

Table IV. Departments’ performance driver scorecard

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and skills/qualities with organizational values, philosophy, and mission is critical. This alignment cannot be assumed or taken for granted, as the following results illustrate: . Of the respondents, 11 percent in the current sample report little or no role clarity; . Only 55 percent of respondents feel they “fit in” as members of their organization; . A total of 27 percent of respondents do not believe that their organization adapts to the changing needs of their customers; . Only 11 percent would not recommend their organization to potential customers; . A total of 17 percent of respondents are dissatisfied being a member of their current organization; . Of the respondents, 21 percent would not recommend their organization as a good place to work. The case of four state departments A state government involved in an organizational change initiative administered the OCI to members of four different departments to generate baseline data on their cultures. Their results are presented here to demonstrate how the OCI can be used to evaluate operating efficiency and effectiveness. The results also illustrated, for the client organization, that the more effective departments established systems, structures and skills and qualities (particularly at the leadership level) that promoted more Constructive and less defensive cultures. The departments’ OCI results are plotted on the circumplex discussed above. Styles at the top of the diagram (11 o’clock to 2 o’clock positions) are constructive; styles toward the lower right (3 o’clock to 6 o’clock positions) are passive/defensive; and styles toward the lower right (7 o’clock to 10 o’clock positions) are aggressive/defensive. As noted earlier, the bold ring (3rd ring from the center) identifies the 50th percentile. Scores above this ring are higher than those for the median organizations; scores below are lower than the median. The styles that are the most extended from the center of the circumplex are those that best describe the departments’ current operating cultures. Figure 3 shows that Department 3 has the most defensive and least constructive culture of the four departments. On Department 3’s profile, seven of the eight defensive styles extend beyond the 50th percentile and all four of the constructive styles hover around the 25th percentile. More specifically, the culture of Department 3 is passive/defensive, with avoidance and conventional behaviors as the dominant norms. Department 2 has the least defensive culture of the four. While all the other departments exhibit at least three defensive styles at or above the 50th percentile, Department 2 has only two such styles at or above the 50th percentile. In addition, only Department 2 has a constructive style (achievement) as one of its two most extended behavioral norms. While Department 4’s profile shows extensions in the constructive cluster that are even greater than some of those shown in Department 2’s profile, its strongest cultural norms overall are passive/defensive. Based on these OCI profiles and our research model, we would expect Department 2 to perform the most favorably and Department 3 to perform the least favorably in terms of efficiency and effectiveness.


725

Figure 3. OCI profiles of four state departments

A scorecard of the departments’ operating efficiency and effectiveness was constructed by comparing each department’s outcomes to the “Historical Averages” (based on over 1,000 organizational units) and “Constructive Benchmarks” (based on 172 organizational units with predominantly constructive cultures as measured by the OCI). The Historical Average describes the results achieved by the average organization whereas the constructive benchmark defines the results attained by the most constructive and effective organizations in the norming sample. These comparisons are shown in Table IV. Departments received an “A” in areas where their results are the same or better than the constructive benchmark, a “B” where their results are the same as or better than the Historical Average (but not at the level of the Constructive Benchmark), and a “C” where their results are less favorable than both the Historical Average and constructive benchmark.

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Consistent with the research model, Department 3 (which has the most defensive and least constructive culture) is the least efficient and effective of the four departments. Of the ten outcomes measured, Department 3 scored at or better than average along only two outcomes – turnover and “fit” with the organization. Also consistent with expectations, Department 2 (which has the least defensive culture) is the most effective and efficient of the departments surveyed. Of the ten measures, Department 2 scored at or better than the constructive benchmark along two outcomes (“fit” and adaptability) and at or better than the Historical Average along three other outcomes (behavioral conformity, communication quality, and quality of the workplace). Discussion Results of this study, including the secondary analysis of over 60,000 respondents and the comparison of four state government departments involved in an organizational change initiative, illustrate how the OCI can be used to understand the relationship of an organization’s culture to its efficiency and effectiveness. The correlations observed between organizational culture and a set of performance drivers were consistent with our predictions. Also consistent with our model, the governmental department with the least defensive and most constructive culture was more effective in more areas than the other departments. Similarly, the department with the most defensive culture exhibited the weakest performance drivers. More generally, results of the study indicate that normative beliefs and shared behavioral expectations are quantifiable and can be used as indicators of an organization’s or department’s culture. In contrast to the traditional use of qualitative assessments in the study of culture (e.g. Martin and Siehl, 1983), quantitative methods facilitate large-scale studies of organizations and their sub-units, replication, and triangulation of other forms of assessment. Results of this study further suggest that quantitatively assessed behavioral norms and expectations can supplement the qualitative study of more semiotic facets of organizational culture. Beyond facilitating the research process, quantitative devices such as the OCI have important advantages for organization development interventions and other programs directed toward system-wide change. Culture interventions based solely on qualitative data collection techniques tend to be broad, and from the focal organization’s perspective, often somewhat vague. By bringing significantly more structure to the assessment, survey instruments like the OCI can reduce uncertainty on the part of the focal organization and possibly improve upon its dysfunctional nature by decreasing resistance among members to organization development and change. This resistance can be strong given that members of organizations with aggressive/defensive cultures are likely to challenge any type of feedback (oppositional and perfectionistic norms) and members of organizations with passive/defensive cultures may question their ability to effect any type of change (dependent and avoidance norms). From the perspective of a practitioner seeking to oversee or manage the change processes, quantitative assessments of culture such as those made possible by the OCI can be extremely valuable. A culture analysis can identify distinct differences across sub-units and levels, and offer specific information on features of corporate culture, especially subgroup norms and behavior patterns, not readily available from more

global assessments. As with the government agency discussed above, departmental profiles can identify the subcultures of high-performing units, lead to an analysis of the managerial styles and related factors reinforcing those subcultures, and facilitate a “transfer” of those levers to other units. In more extreme (and negative) cases, departmental profiles can alert managers and consultants to dysfunctional subcultures that may be leading to paranoid and avoidant thinking (Kets de Vries and Miller, 1986), corrupt and unethical decisions (Anand et al., 2004), or unduly perfectionistic and “addictive” behaviors (Schaef and Fassel, 1988). Finally, while the OCI is often administered on-line or through the use of machine-scored forms, the survey is also available as a self-scored inventory. In our experience, participants in culture assessments respond very favorably to the self-scoring feature of the OCI, which allows them to get immediate feedback on how they as individuals view the behavioral norms within their organization or sub-unit. This feedback not only facilitates the process of debriefing participants, but also involves them in discussion and interpretation of their profiles in comparison to those of other respondents, a feature useful in both validating and making sense of the data the OCI provides. In this manner, cultural assessment and interpretation can be both public and participative, thereby promoting perceived legitimacy, commitment to change, and battling dysfunctional behavior. Conclusion Political and social realities shape all forms of human conduct within and between organizations and their partners. Regardless of professionalism and professed or assumed goal sharing or congruency, organizational members may not behave in ways that promote efficiency and effectiveness if doing so is inconsistent with their reference prevailing culture. Within any organization there may be a variety of cultures, shaped by characteristic differences in professional orientation, status, history, power, visibility, or other factors. In this paper we have shown that understanding these cultures in terms of expected behaviors and norms can explain why some organizational units (or the entire organization) exhibit dysfunctional behaviors that are counter to the organization’s expressed values or mission, and which hamper efficiency and effectiveness. We have also presented a validated technology for cultural assessment that can be used at many levels, from individual to enterprise, which identifies these underlying cultural components. Clearly, fixing dysfunctional organizations requires first and foremost insights into the relatively tangible aspects of their culture that is reflected in the behaviors that members believe are expected of them. References Anand, V., Ashforth, B.E. and Joshi, M. (2004), “Business as usual: the acceptance and perpetuation of corruption in organizations”, Academy of Management Executive, Vol. 18 No. 2, pp. 39-53. Bates, K.A., Amundson, S.D., Schroeder, R.C. and Morris, W.T. (1995), “The crucial interrelationship between manufacturing strategy and organizational culture”, Management Science, Vol. 41 No. 10, pp. 1565-81.


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