Organizational Culture and Leadership Fifth Edition PDF

ORGANIZATIONAL CULTURE AND LEADERSHIP 5TH EDITION EDGAR H. SCHEIN WITH PETER SCHEIN 2 Cover design: Wiley Copyright © 2017 by Edgar H. Schein. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750–8400, fax (978) 646–8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748–6011, fax (201) 748–6008, or online at www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for damages arising herefrom. For general information about our other products and services, please contact our Customer Care Department within the United States at (800) 762–2974, outside the United States at (317) 572–3993 or fax (317) 572–4002. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Names: Schein, Edgar H., author. Title: Organizational culture and leadership / Edgar H. Schein. Description: Fifth Edition. | Hoboken : Wiley, | Revised edition of the author’s Organizational culture and leadership, c2010. | Includes index. Identifiers: LCCN 2016039774 (print) | LCCN 2017005359 (ebook) | ISBN 9781119212041 (pbk.) | ISBN 9781119212133 (pdf) | ISBN 9781119212058 (epub) Subjects: LCSH: Corporate culture. | Culture. | Leadership. Classification: LCC HD58.7.S33 2017 (print) | LCC HD58.7 (ebook) | DDC 302.3/5—dc23 LC record available at https://lccn.loc.gov/2016039774 3 Contents Acknowledgments Preface Foreword About the Authors Part One: Defining the Structure of Culture 1 How to Define Culture in General The Problem of Defining Culture Clearly Summary and Conclusions Suggestions for Readers 2 The Structure of Culture Three Levels of Analysis Summary and Conclusions Suggestions for Readers 3 A Young and Growingxs U.S. Engineering Organization Case 1: Digital Equipment Corporation in Maynard, Massachusetts Summary and Conclusions Suggestions for Readers 4 A Mature Swiss-German Chemical Organization Case 2: Ciba-Geigy Company in Basel, Switzerland Can Organizational Cultures Be Stronger than National Cultures? ">Summary and Conclusions Questions for Readers 5 A Developmental Government Organization in Singapore Case 3: Singapore’s Economic Development Board The EDB Nested Cultural Paradigms Summary and Conclusions: The Multiple Implications of the Three Cases Questions for Readers Part Two: What Leaders Need to Know about Macro Cultures 6 Dimensions of the Macro-Cultural Context Travel and Literature Survey Research Ethnographic, Observational, and Interview- Based Research Human Essence and Basic Motivation Summary and Conclusions Questions for Readers 7 A Focused Way of Working with Macro Cultures Cultural Intelligence How to Foster Cross-Cultural Learning The Paradox of Macro Culture Understanding Echelons as Macro Cultures Summary and Conclusions Suggestion for the Change Leader: Do Some Experiments with Dialogue Suggestion for the Recruit Suggestion for the Scholar or Researcher 4 Suggestion for the Consultant or Helper Part Three: Culture and Leadership Through Stages of Growth 8 How Culture Begins and the Role of the Founder of Organizations A Model of How Culture Forms in New Groups The Role of the Founder in the Creation of Cultures Example 1: Ken Olsen and DEC Revisited Example 2: Sam Steinberg and Steinberg’s of Canada Example 3: Fred Smithfield: a “Serial Entrepreneur” Example 4: Steve Jobs and Apple Example 5: IBM—Thomas Watson Sr. and His Son Example 6: Hewlett and Packard Summary and Conclusions Suggestions for Readers Implications for Founders and Leaders 9 How External Adaptation and Internal Integration Become Culture The Socio-Technical Issues of Organizational Growth and Evolution Issues around the Means: Structure, Systems, and Processes Summary and Conclusions Suggestion for the Culture Analyst Suggestion for the Manager and Leader 10 How Leaders Embed and Transmit Culture Primary Embedding Mechanisms Secondary Reinforcement and Stabilizing Mechanisms Summary and Conclusions Questions for Researchers, Students, and Employees 11 The Culture Dynamics of Organizational Growth, Maturity, and Decline General Effects of Success, Growth, and Age Differentiation and the Growth of Subcultures The Need for Alignment between Three Generic Subcultures: Operators, Designers, and Executives The Unique Role of the Executive Function: Subculture Management Summary and Conclusions Suggestions for the Reader 12 Natural and Guided Cultural Evolution Founding and Early Growth Transition to Midlife: Problems of Succession Organizational Maturity and Potential Decline Summary and Conclusions Questions for Readers Part Four: Assessing Culture and Leading Planned Change 13 Deciphering Culture Why Decipher Culture? How Valid Are Clinically Gathered Data? Ethical Issues in Deciphering Culture Professional Obligations of the Culture Analyst Summary and Conclusions Questions for the Reader 14 The Diagnostic Quantitative Approach to Assessment and Planned Change 5 Why Use Typologies, and Why Not? Typologies that Focus on Assumptions about Authority and Intimacy Typologies of Corporate Character and Culture Examples of Survey-Based Profiles of Cultures Automated Culture Analysis with Software-as-a-Service Summary and Conclusions Suggestions for the Reader 15 The Dialogic Qualitative Culture Assessment Process Case 4: MA-COM—Revising a Change Agenda as a Result of Cultural Insight Case 5: U.S. Army Corps of Engineers Reassessing Their Mission Case 6: Apple Assessing Its Culture as Part of a Long-Range Planning Process Case 7: SAAB COMBITECH—Building Collaboration in Research Units Case 8: Using A Priori Criteria for Culture Evaluation What of DEC, Ciba-Geigy, and Singapore? Did Their Cultures Evolve and Change? Summary and Conclusions Suggestion for the Reader 16 A Model of Change Management and the Change Leader The Change Leader Needs Help in Defining the Change Problem or Goal General Change Theory Why Change? Where Is the Pain? The Stages and Steps of Change Management Cautions in Regard to “Culture” Change Summary and Conclusions Suggestions for Readers 17 The Change Leader as Learner What Might a Learning Culture Look Like? Why These Dimensions? Learning-Oriented Leadership A Final Thought: Discover the Culture within My Own Personality References Index EULA 6 List of Illustrations Chapter 2 Figure 2.1 The Three Levels of Culture Figure 2.2 The Lily Pond as a Metaphor for Levels of Culture Chapter 3 Figure 3.1 DEC’s Cultural Paradigm: Part One Figure 3.2 DEC’s Cultural Paradigm: Part Two Chapter 6 Figure 6.1 7 8 9 Acknowledgments The six years since the last edition have been different in many respects. I am now living in Palo Alto, California, in a retirement complex close to my son, Peter, who has also become my colleague and coauthor. Living in Silicon Valley and seeing the world out here through the lenses of Peter’s 25 years of experiences in a number of different start-ups and mature companies have given me a new perspective on organizational culture and leadership issues. I am therefore most grateful to Peter who is now also my partner in our Organizational Culture and Leadership Institute (OCLI.org), and to various friends and clients with whom I have worked out here. Peter’s wife, Jamie Schein, has also provided great insights from her current leadership role in the administration of the Stanford Graduate School of Business. I am especially grateful to Google, Human Synergistics, Genentech, Stanford Hospital, IDEO, The Institute of the Future, Intel, and the Silicon Valley Organization Development Network, which have provided a variety of opportunities for me to learn from and contribute to what goes on in this fascinating geographically contained pocket of innovation. My growing focus on the culture of medicine has led to many important insights about occupational cultures in particular, thus I want to thank Mary Jane Kornacki, Jack Silversin, Gary Kaplan, and the other members of the summer workshop that I attended for many years at Mary Jane’s and Jacks’ retreat on Cape Ann. Here in California I want to thank James Hereford and the members of the impromptu monthly lunch meetings that I have had with a group of doctors and administrators at the Stanford Hospital. Others who deserve thanks for educating me on the complexities of the medical world are Marjorie Godfrey, Kathy McDonald, Diane Rawlins, Dr. Lucian Leape, Dr. Tony Suchman, and my surgeon son-in-law Dr. Wally Krengel. In my new life out here I have become less of a teacher and more of a writer and coach. In that regard I want to acknowledge the stimulation and help I have received from Steve Piersanti and his Berrett-Kohler publishing company that has facilitated my writing three new books in the applied areas of helping, coaching, and consulting, which supplement in important ways the scholarly work that underlies this book. I also want to thank iUniverse for working with me on my memoirs and thereby providing an opportunity to think much more broadly about the evolution of culture and leadership in my own career. In the broad world of organization development, I have greatly benefited from many new local colleagues, particularly Tim Kuppler, Kimberly Wiefling, Jeff Richardson, John Cronkite, Stu and Mary Winby, and Joy Hereford. The network of trainers who run the training groups for the Stanford Business School’s leadership program welcomed me and enabled me to stay in touch with my former world of “experiential learning” for which I thank them. Special thanks also to my overseas friends and colleagues—Philip Mix, Michael and Linda Brimm, David Coghlan, Tina Doerffer, Peter and Lily Chen, Charles and Elizabeth Handy, Leopold Vansina, Joanne Martin, and Michael Chen who is active in bringing my culture work into China. Many thanks also to my friend and colleague Joichi Ogawa who has been actively championing my work in Japan. My three children, Louisa, Liz, and Peter, their spouses, Ernie, Wally, and Jamie, and my seven grandchildren, Alexander, Peter, Sophia, Oliver, Annie, Ernesto, and Stephanie, have always provided an important perspective on cultural matters. I especially appreciate their observations on how culture is changing, how the world changes with the generations, and how what they are growing into is a different world from what I experienced. The organizations they are entering are different from the ones I was familiar with, and the social values that are debated in the world today are different and in many ways more profound. I mention all of this because it has emboldened me in doing this fifth edition to get some new perspectives on what aspects of culture and leadership have to be considered for tomorrow and our future beyond. Last but certainly not least, I have to acknowledge past and present colleagues and fellow scholars who have continued to stimulate me over the last six years—John Van Maanen, with whom I cowrote the new version of Career Anchors; Lotte Bailyn, whose wisdom continues to be awesome; Bill Isaacs and Gervaise Bushe, who brought me into the whole dialogic world; Otto Scharmer, who keeps opening up new worlds of thinking and learning; David Bradford, who provided much needed advice and stimulation out here; Noam Cook, whose philosophical insights provide important perspectives on cultural matters; and Steve Barley, Warner Burke, Amy Edmondson, Jody Gittell, Charles O’Reilly III, and Melissa Valentine, whose current research is pushing us into much needed 10 new dimensions of cultural analysis. As was the case with previous editions, the editorial staff from Wiley, Jeanenne Ray and Heather Brosius, were most helpful in first gathering feedback of how to improve this book and then facilitating the editorial process. 11 Preface This fifth edition of my Organizational Culture and Leadership book is being written in Palo Alto, California, in the heart of Silicon Valley. I am acutely aware that I am writing in a different place and at a very different time. I have now partnered with my son who has experienced over his 25 years of change in various Silicon Valley technology companies all kinds of leadership and all kinds of organizational cultures. I cannot convey adequately how different things feel at this time and in this place from what I was experiencing in Cambridge in 2008 when I wrote the fourth edition. I am happy to have Peter working with me on this next edition and to help me capture some of what we both feel, and that provides some of the flavor of what has happened to the concept of “organizational culture” during the past couple of decades. With his insights and our joint experience of the past several years, I can navigate a bit better through the various different culture “trees” without losing sight of the forest as a whole. Much of what is new in this book is hinted at in Peter’s Foreword. Before you get to that I want to say a few words about what I think is the same in this edition and what I think is different and to some extent “new.” My three-level model of how to define and think about culture has held up well and remains the strong skeleton of this whole approach to cultural analysis. What is new is to begin to apply this thinking to the bigger picture of a multicultural world. To this end I have added as a case my study of the Economic Development Board of Singapore and followed that up with two chapters on the problems of analyzing and working with macro cultures such as nations or worldwide occupations. I have emphasized that every organizational culture is nested in other, often larger cultures that influence its character; and every subculture, task force, or work group is, in turn, nested in larger cultures, which influence them. I have enhanced the discussion of how one can begin to work across national culture divides. Although it is not a new emphasis, I am much more concerned in this edition with focusing on how our own socialization experiences have embedded various layers of culture within us. The cultures within us need to be understood because they dominate our behavior and, at the same time, provide us choices of who to be in various social situations. These choices are only partially attributable to “personality” or “temperament”; rather, they depend on our situational understandings that have been taught to us by our socialization experiences. I have therefore introduced as an important element for leadership choices a description of the social “levels of relationship” that we all have learned as part of our upbringing. We can be formal, personal, or intimate and can vary that behavior according to our situation. In that way, recognizing and managing the cultures inside us becomes an important leadership skill. I continue to be impressed that culture as a concept leads us to see the patterns in social behavior. I have, therefore, ignored much of the recent research that (1) picks out one or two dimensions of culture, (2) relates those to desired outcomes of various sorts, and then (3) claims that culture matters. I thought we always knew that. However, the growing interest in unraveling the patterns we see in nations and in organizations and the various typologies of culture that have sprung up deserve review and analysis in this edition. In that regard it is important to differentiate the quantitative diagnostic studies from the more qualitative dialogic inquiry processes, and, with help of my son, to reflect on some of the more recent “rapid” diagnostic methods. My emphasis is on culture as what a group learns, the explanation of how leadership and culture formation are two sides of the same coin, and the fact that the role of leadership changes with the growth and aging of an organization. These remain the same and are the heart of the book. I have tried to shorten this edition by taking out material that was either redundant or irrelevant, and to make the suggestions to the reader more interesting. I continue to believe that culture is serious business, but it will be a useful construct for us only if we really observe, study, and understand it. 12 Foreword Ed and I have been partnering for the past year to expand his readership, grow his consulting business, and provide for more opportunities for helping and learning. It’s a great honor to share some thoughts in this foreword to the book that provides us with the name for our venture, the Organizational Culture and Leadership Institute (OCLI.org). When Ed first started this book in the early 1980s, organizational culture was a pretty new concept. Now, the concept is universally accepted, discussed, diagnosed, shaped, “changed,” blamed, and so on. This has happened in a generation. When I was finishing my social anthropology undergraduate degree in 1983, Ed was finishing the first edition of Organizational Culture and Leadership. Earlier this year (2016), as Ed’s granddaughter (my daughter) was finishing her undergraduate economics degree and was preparing to join an international management consulting firm, he asked her to describe the firm’s culture. This was perhaps presumptuous on Ed’s part as she had had only a summer internship’s worth of experience in this culture with which to answer the question. Yet, with little hesitation she described key artifacts and espoused values of this firm’s culture. We drew the inference that after just a couple of months she had been exposed to, even indoctrinated into, this culture deeply enough that she could articulate it and, ideally, thrive within it. However, there is nothing surprising about this; mature corporations (in this case, firms that offer business advisory services) have studied their culture and have established imagery, metaphors, and a vocabulary with which to describe it and teach it. Is it surprising that such implicit cultural immersion or indoctrination would be part of the summer internship program? If there is one thing that a summer internship should test it is “fit” between the firm and the individual. So it does make perfect sense that both firm and individuals have figured out that as with industry, training, and job function, corporate culture is central to any assessment of mutual “fit” and is a critical priority at the beginning of an employment term. Yet, should I be surprised that my daughter could easily answer this open-ended question about her prospective employer’s culture? Like me, she grew up in a household and extended family that talks routinely about this stuff. It’s in the DNA, so this question would never seem particularly out of context for her. Yet the facility with which she responded still stood out for me. I am pretty sure Ed asked me the same question about my first employer, and I’m pretty sure I fumbled around trying to articulate what I was experiencing. I had just as much corporate culture to observe, but none of it was made explicit, and I did not have the vocabulary with which to describe it. Over the course of four editions of Organizational Culture and Leadership, we’ve moved from culture being something that everyone at work had a vague sense was guiding behavior and shaping decisions, to culture being understood and described with a common language, to being a vital measure of “fit” for retention, to being touted as a firm’s greatest virtue, to being leveraged for strategic change. Culture, in this explicitly leading role in our consciousness of our work lives, is now the subject of numerous deeply analytical survey-based diagnostic systems as well as simple “app”- based dashboarding tools (some of which have garnered many millions of dollars of start-up investment from top-tier venture capitalists). “There’s money in them thar hills” is now something that we can project without hesitation about the diagnosis, analysis, and change of organizational culture. This has happened within a generation. My views on organizational culture have been shaped mostly from my approximately 25 years in Silicon Valley. Whether drawn from Apple in the early 1990s, or internet start-ups in web “1.0,” or Sun Microsystems in the 2000s, I recognize that cultural norms in tech companies, while all different from each other, are also categorically different from typical norms in other industries and locales. One of the first explicit descriptions of Silicon Valley tech-company culture that I experienced was captured in this simple question—“Is it a penguin culture or a bear culture”? I did not know what this meant, though I assumed it must be better to be a “bear culture.” Whether or not it is possible to create a descriptive culture model that is value-neutral, devoid of any normative tilt, is not the focus here except to propose that the simpler the taxonomy the more likely it is to have a normative leaning, one way or the other. In this case, the two culture types differ when describing how a company or group responds to the challenge of an incompetent or weak member of the group. Bears attempt to nurture the weak pack member back to health—that is, to improve the underperforming team member. This was not the reason for my leaning to the bear culture that I expected before hearing the explanation. I assumed it would have something to do with strength and 13 dominance coupled with intelligence. Instead it was about nurturing the weak. Penguins, by contrast, respond to the weak member of their flock by pecking the weakling to death. Rather than the cute sophistication we associate with penguins, this cultural foundation was all about brutal decisiveness. Reflecting on this continuum, from penguin to bear, my first thought is that this is one fairly accurate way to delineate tech companies, ranking them along this nurturing-to-brutal dimension. But as we think about culture models, this simple example reveals two other important themes that Ed explores at length in this edition. First, we are drawn to simple, compelling models or taxonomies. For example, Cameron and Quinn’s OCAI (Organizational Culture Assessment Instrument) represents an interesting culture model based on a “competing values framework” (as one could say bear versus penguin represent competing values). What I find most compelling about OCAI is the language and metaphor: cultures are described as “clan,” “adhocracy,” “hierarchy,” or “market.” These descriptors resonate; they make sense and stick with us as we try to understand or describe what we experience. Similarly, technology innovators in Silicon Valley have relied heavily on metaphors from the very beginning to illuminate and sell breakthrough technology to the uninitiated and uninformed. For example, the “window” and “navigator” helped us understand PC user interfaces and internet browsers. With the right metaphors we can refer to things in standardized ways, describing disparate artifacts as conforming to a model. The “operating system” term has come to mean far more than OS X or Linux these days; these OS abstractions and standardizations are what made it possible for business and personal users to find general utility in highly complex machines. We have now come full circle to where we borrow personal computing metaphors to characterize business structures and functions. The “business operating system” notion provides metaphor and language to standardize the descriptions of an organization’s way of doing things. And a company’s culture is one abstraction that we now accept as integral to its “operating system.” Silicon Valley has made a point of describing dimensions, attributes, and facts as fitting into nice compelling models described in memorable metaphors that provide just enough detail to represent a consistent model of a complex human system in an unforgettable symbolic way. This too has happened within a generation. My emphasis on this progress over the past generation raises the question: Can we or should we project what the next generation will bring to the understanding of organizational culture, leadership, and change? While I am not a futurist, anticipating the impacts of two things in particular seems important. First, as I mentioned previously, there are many ways and new schemes continue to be created for measuring culture and climate. In general, we can predict that more and more of what we experience in our work and personal lives will be measured, benchmarked, and scored, all in the interest of fine-tuning and improving. With ubiquitous networks, powerful low- power sensors capable of instrumenting practically anything, and unlimited cloud computing and storage, there is no reason why nearly every aspect of our work lives (and home lives) can’t be measured from one second to the next. “Big data” is a many-faceted phenomenon affecting most dimensions of leadership, including culture and climate. There is the self-reinforcing notion that we can instrument and study so much of our productivity, so why not study at finer-tuned intervals? This might allow us to see patterns and interactions in data that we did not know were in any way related (trying to understand “the unknown unknowns”). Shouldn’t we expect a system that provides the instrumentation that would allow us to study individuals, teams, interactions, conflicts, and resolutions to have real-time predictive culture analytics? Yes, this is cringe-worthy, which is probably why I would expect that whoever is developing these systems will have many options for sponsorship and financing. We are living in a “measure everything” world in which benchmarks and scorecards, particularly when standardized, are magnetic in their attraction and quite possibly radioactive in their potential (harm). “More better” is now more better faster. Should we not expect a surge in popularity of culture models and culture analytics that provide for more better faster, catalyzing faster positive change? Whether we can change culture more better faster will not be proved or disproved anytime soon, and those arguing that only climate can really be changed faster will remain on higher ground. Regardless, surveys using standard 5-point scales constitute instrumentation, just as recording and coding natural language (e.g., interview transcripts) or logging yes/no responses on apps on smartphones is all instrumentation. We will, with increasing frequency, capture, code, parse, analyze, store, and re-analyze culture and climate, using all of the latest big data techniques until we far exceed the point of diminishing returns. And I do not think we are anywhere near that point today. 14 Are we headed back to the future, updated Taylor-ist “scientific management,” and time-and-motion analytics using big data for knowledge workers because more better faster is ultimately better for everybody? The purpose of doing any of this instrumentation and rapid analysis is to create positive change, which will typically be judged by ROI metrics; businesses study their culture to drive positive change that is ultimately related back to profitability. Is there some other more altruistic reason to study organizational culture that is not explicitly tied to improving key performance indicators: profitability from increased productivity, “engagement,” and retention? Ed has been asked many times over many years to help companies “do a culture study.” I do not believe he has ever offered to help with a culture study without knowing what the problem was. There is little point in spending hours on ethnography, diagnostics, and analytics without knowing what truly concerns senior management. Similarly, there is little point in doing culture studies that do not factor in the shifting motivations and evolving norms of non-leader stakeholders and employees. In 2016 there is much concern and hand-wringing about how “millennials” (those born from 1980 to 1995) will change everything in the workplace. (I should note here that “generation Z” is broadly considered to be a different post-millennial cohort; for the purposes of this discussion, I will include generation Z in the broader term.) Regardless of the reality that baby-boomers and Gen-Xers seemed different as well, many have pointed to a difference that millennials appear to be “entitled” and motivated by things other than corporate or even personal profitability. The notion that “purpose-driven” millennials may make capricious work and career choices strikes fear in leaders of companies large and small. Is it possible that organization design and organizational culture can no longer assume rational economic self-interested behavior from the current cohort filling the workforce? Shaping artifacts and conventions around core beliefs that motivate newly indoctrinated employees is vital to corporate self-preservation and growth. Economic self-interest among most if not all members of a corporation is generally assumed to be a given and therefore leverageable. Yet if economic self-interest is less important among millennials than environmental, spiritual, or collective shared interest, the artifacts, conventions, and assumptions—the cultural DNA of the company—may be out of sync with the interests of the company’s younger employees. Engagement has become a central concern for senior management of all organizations, particularly those that employ younger workers. Many software-as-a-service companies offer survey solutions for benchmarking and tracking engagement. The promise is insight into and knowledge of employees’ motivations that will provide levers for retention and hiring, not to mention improved productivity and optimized organizational designs (for example, “holacracy”). Engagement surveys can be very efficient (quick and smartphone-based), prime examples of more better faster ways to make work-life improvements adapted to perceived shifting motivations of millennials. The engagement survey typically measures an individual’s response to a series of statements reflecting the climate and attitudes of the subject organization. Putting aside methodological concerns with quick online surveys, these are still individual surveys of individual attitudes. Central to the study of organizational culture, as Ed expands on in this edition, is the argument that point-in-time surveys of individual attitudes run the risk of missing the two most critical underpinnings of organizational culture and climate: (1) group attitudes and responses to challenges and (2) the precedent events that have led to the present—said another way, the history that is always present. Perhaps rather than just surveying for engagement of individual millennials, it will be important to consider what is distinct about them as a group (a subculture) with reference to the history of their early work lives. What makes the subculture is more than the current attitudes of frequently surveyed individuals. Deal, Levenson (and Gratton) summarize in their excellent What Millennials Want From Work (2016) that for the culture of those born between 1980 and 1995, their coming-of- age milieu is critical to understanding any present-day motivations. Those entering the workforce this millennium have had the internet in their hands for many years (smartphones providing instant connectedness to facts, people, and opinions from everywhere). And this same cohort has seen more cataclysmic terrorism and recession than any group since the period from 1930 to 1950. Is it “entitlement” or is it self-determination drawn from the power of instant information and global personal networks, compounded by justifiable doubts about the permanence of jobs, companies, countries, and ways of life? If the engagement surveys echo “a sense of entitlement” among this cohort of the workforce, part of the understanding of this must be the history this group shares and how the group responds to the cultural DNA of the company in which it exists. Another aspect of millennials holding access to the (digital) world in their hands is clock and time- zone flattening. The “always-on” device suggests a much different work day (>16 waking hours versus 9-to-5) for a millennial, particularly if there is no distinction made between work and home phone numbers or email addresses. Likely this engenders a very different attitude about blending 15 work and personal life for this cohort. Yet, if these blurred lines are taken advantage of by employers, there are bound to be disconnects if not dis-satisfiers. Millennials are also inextricably bound to the “gig economy.” Whether by choice or by accident, a thirty-something in 2016 or 2026 may have, or plan to have, a period in his or her career that is characterized by uncommitted gigs of low-engagement project work. Companies have learned over the past generation how attractive it can be to build productivity through contract hiring. It offers effective risk mitigation and cost containment. Among the potential downsides, perhaps the biggest, is that the knowledge and training gained by the contract employee leaves the company when the gig is over. Regardless of the costs and benefits of the emerging gig economy, it is critical to recognize that millennials have not adapted to this change, they were born into the gig economy. And for many it is preferable for its freedom, flexibility, and exposure to many new people, new companies, and new networks. A millennial may be deeply engaged with many things, and the current work gig may just not be one of them, despite all of the emphasis placed on creating a culture of engagement at work. Time-zone flattening matters because the personal networks woven together by savvy smart-device users have become global and inclusive of time and place. Social networks spawn affinity groups that thrive on diversity of country and culture of origin. Such global affinity groups are powerful overlays that shape or shift subcultural attitudes of the like-minded, wherever they may happen to live and work. Millennials may well arrive at work with a global cross-cultural awareness that demands the attention of managers and leaders seeking to retain them in light of their diffuse focus on their world and their lives that encircle their work. Cultural stereotypes (norms) can be like bright lights to moths, attractive in their clarity, powerful in their simplicity, and incendiary in their effect. We know it is too easy to reduce millennials to a rigid collection of known attributes and expected behaviors. But if “entitlement” and “low engagement” are commonly associated with this cohort, managers and leaders will be justifiably compelled to study the behaviors and search for patterns that can be understood and generalized. Stereotyping is just another way of scaling information in the interests of operational efficiency. If all the more better faster survey approaches yield is echoes of stereotypes, the management responses that survey results suggest may be incendiary. Subcultural sediment, from age (or youth), history, geography, and technology, is subtle and requires more ethnographic and deliberative study than can be drawn from mechanical data-gathering approaches focused on individual employees. In dealing with the deepest layers of culture, such as the tacit assumptions that may motivate millennials, Ed’s fifth edition of Organizational Culture and Leadership expands on this central argument: organizational culture should be studied, with qualitative insights captured, shared, and steeped in the group, ever mindful of the founder’s and the organization’s history in which, and out of which, the culture evolves. PETER A. SCHEIN 16 About the Authors Ed Schein is Professor Emeritus of the Massachusetts Institute of Technology (MIT) Sloan School of Management. He was educated at the University of Chicago, Stanford University, and Harvard University, where he received his Ph.D. in Social Psychology. He worked at the Walter Reed Army Institute of Research for four years and then joined MIT, where he taught until 2005. He has published extensively, including Organizational Psychology, 3rd ed., (1980), Process Consultation Revisited (1999), a book on career dynamics (Career Anchors, 4th ed. with John Van Maanen, 2013), Organizational Culture and Leadership, 4th ed. (2010), The Corporate Culture Survival Guide, 2nd ed. (2009), a cultural analysis of Singapore’s economic miracle (Strategic Pragmatism, 1996), and Digital Equipment Corp.’s rise and fall (DEC is Dead; Long Live DEC, 2003). In 2009 he published Helping, a book on the general theory and practice of giving and receiving help. This was followed in 2013 by Humble Inquiry, which explores why helping is so difficult in Western culture, and which won the 2013 business book of the year award from the Dept. of Leadership of the University of San Diego. He has just published Humble Consulting (2016), which revises the whole model of how to consult and coach, and is currently working with his son, Peter, on Humble Leadership (2017), which challenges our current theories of leadership and management. He continues to consult with various local and international organizations on a variety of organizational culture and career development issues, with special emphasis on safety and quality in health care, the nuclear energy industry, and the US Forest Service. An important focus of this new consulting is to focus on the interaction of occupational and organizational subcultures and how they interact with career anchors to determine the effectiveness and safety of organizations. He is the 2009 recipient of the Distinguished Scholar-Practitioner Award of the Academy of Management, the 2012 recipient of the Life Time Achievement Award from the International Leadership Association, the 2015 Lifetime Achievement Award in Organization Development from the International OD Network, and has an Honorary Doctorate from the IEDC Bled School of Management in Slovenia. Peter Schein is a strategy and OD consultant in Silicon Valley. He provides help to start-ups and expansion-phase technology companies. Peter’s expertise draws on over twenty years of industry experience in marketing and corporate development at technology pioneers. In his early career he developed new products and services at Pacific Bell and Apple Computer, Inc. (including eWorld and Newton). He led product marketing efforts at Silicon Graphics Inc., Concentric Network Corporation (XO Communications), and Packeteer (BlueCoat). He developed a deep experience base and passion for internet infrastructure as the web era dawned in the mid-1990s. Thereafter, Peter spent eleven years in corporate development and product strategy at Sun Microsystems. At Sun, Peter led numerous minority equity investments in mission-critical technology ecosystems. He drove acquisitions of technology innovators that developed into multi- million dollar product lines at Sun. Through these experiences developing new strategies organically and merging smaller entities into a large company, Peter developed a keen focus on the underlying organizational culture challenges that growth engenders in innovation-driven enterprises. Peter was educated at Stanford University (BA Social Anthropology, Honors and Distinction) and Northwestern University (Kellogg MBA, Marketing and Information Management, Top Student in Information Management). 17 Part One DEFINING THE STRUCTURE OF CULTURE To understand how culture works we need to differentiate two perspectives. The most obvious and immediate impulse is to look for culture content. What is the culture about, what are the key values that we need to understand, what are the rules of behavior? Different people have different biases and assumptions about what is important. In the current national context we see a great emphasis on the cultural content pertaining to the role of government, leadership, and management in deciding what is good for everyone and focusing on the values of individual freedom and autonomy. Another culture analysis might, however, say that this is totally irrelevant to what the values are around saving the planet and becoming environmentally responsible. A third person chimes in with the importance of family values and the threat to “our culture” of allowing civil marriage. Parents lament or praise the new values that their children are bringing into the culture, or are just plain puzzled about what this new “millennial” generation is all about. We have to watch our language lest we say something “politically incorrect” about racial or gender issues. The point is that culture content, the values we care about are all over the map. To make some sense of this variety, we have to look first at the structure of culture and develop a perspective on how to analyze the complex cultural landscape we encounter. In the next four chapters I will develop a “model” of the structure of culture. We will analyze several organizational cultures, illustrate how nested they are in larger cultural units. Chapter 1 gives a dynamic definition of culture. Chapter 2 describes the basic three-level model of the “structure” of culture that will be used throughout the rest of the book. In Chapter 3 this model is illustrated with Digital Equipment Corporation, a U.S. computer company that I encountered in its early growth period and in which I could, therefore, observe the growth and evolution of a culture. In Chapter 4 I describe Ciba-Geigy, an old Swiss- German chemical company, that illustrates some of the problems of a mature industry in a very different technology and the impact of national culture. In Chapter 5 I describe the Singapore Economic Development Board, which illustrates both a fusion of Western and Asian national cultures and an organization in the public sector. The cases are intended to highlight that cultures are learned patterns of beliefs, values, assumptions, and behavioral norms that manifest themselves at different levels of observability. 18 1 HOW TO DEFINE CULTURE IN GENERAL 19 The Problem of Defining Culture Clearly Culture has been studied for a long time by anthropologists and sociologists, resulting in many models and definitions of culture. Some of the ways that they have conceptualized the essence of culture illustrate the breadth as well as the depth of the concept. Most of the categories that follow refer primarily to macro cultures such as nations, occupations, or large organizations but some are also relevant to micro or subcultures. As you will see from the pattern of references, many researchers use several of these definitional categories, and they overlap to a considerable degree. Culture as we will see exists at many levels of “observabilty.” The categories are arranged roughly according to the degree to which you, as an observer, will be able to see and feel those cultural elements when you observe an organization or group. Observed behavioral regularities when people interact: The language they use along with the regularities in the interaction such as “Thank you” followed by “Don’t mention it,” or “How is your day going so far,” “Just fine.” Observed interaction patterns, customs, and traditions become evident in all groups in a variety of situations (e.g., Goffman, 1959, 1967; Jones, Moore, & Snyder, 1988; Trice & Beyer, 1993; Van Maanen, 1979). Climate: The feeling that is conveyed in a group by the physical layout and the way in which members of the organization interact with each other, with customers, or with other outsiders. Climate is sometimes included as an artifact of culture and is sometimes kept as a separate phenomenon to be analyzed (e.g., Ashkanasy, Wilderom, & Peterson, 2000; Schneider, 1990; Tagiuri & Litwin, 1968; Ehrhart, Schneider, & Macey, 2014). Formal rituals and celebrations: The ways in which a group celebrates key events that reflect important values or important “passages” by members such as promotion, completion of important projects, and milestones (Trice & Beyer, 1993; Deal & Kennedy, 1982, 1999). Espoused values: The articulated, publicly announced principles and values that the group claims to be trying to achieve, such as “product quality,” “price leadership,” or “safety” (e.g., Deal & Kennedy, 1982, 1999). Many companies in Silicon Valley such as Google and Netflix announce their culture in terms of such values in all of their recruiting materials and in books about themselves (Schmidt & Rosenberg, 2014). Formal philosophy: The broad policies and ideological principles that guide a group’s actions toward stockholders, employees, customers, and other stakeholders such as the highly publicized “HP way” of Hewlett-Packard or, more recently, the explicit statements about culture in Netflix and Google (e.g., Ouchi, 1981; Pascale & Athos, 1981; Packard, 1995; Schmidt & Rosenberg, 2014). Group norms: The implicit standards and values that evolve in working groups, such as the particular norm of “a fair day’s work for a fair day’s pay” that evolved among workers in the Bank Wiring Room in the classic Hawthorne studies (e.g., Homans, 1950; Kilmann & Saxton, 1983). Rules of the game: These are the implicit, unwritten rules for getting along in the organization, “the ropes” that a newcomer must learn to become an accepted member, “the way we do things around here” (e.g., Schein, 1968, 1978; Van Maanen, 1976, 1979b; Ritti & Funkhouser, 1987; Deal & Kennedy, 1999). Identity and images of self: How the organization views itself in terms of “who we are,” “what is our purpose,” and “how we do things” (e.g., Schultz, 1995; Hatch, 1990; Hatch & Schultz, 2004). Embedded skills: The special competencies displayed by group members in accomplishing certain tasks, the ability to make certain things that get passed on from generation to generation without necessarily being articulated in writing (e.g., Argyris & Schon, 1978; Cook & Yanow, 1993; Peters & Waterman, 1982; Ang & Van Dyne, 2008). Habits of thinking, mental models, or linguistic paradigms: The shared cognitive frames that guide the perceptions, thoughts, and language used by the members of a group and are taught to new members in the socialization or “onboarding” process as it is now often called (e.g., Douglas, 1986; Hofstede, 1991, 2001, Hofstede, Hofstede, & Minkov, 2010; Van Maanen, 1979). Shared meanings: The emergent understandings that are created by group members as they 20 interact with each other where the same words used in different cultures can have very different meanings (e.g., Geertz, 1973; Smircich, 1983; Van Maanen & Barley, 1984; Weick, 1995; Weick & Sutcliffe, 2001; Hatch & Schultz, 2004). “Root metaphors” or integrating symbols: The ways that groups evolve to characterize themselves, which may or may not be appreciated consciously but become embodied in buildings, office lay-outs, and other material artifacts of the group. This level of the culture reflects the emotional and aesthetic response of members as contrasted with the cognitive or evaluative response (e.g., Gagliardi, 1990; Hatch, 1990; Pondy, Frost, Morgan, & Dandridge, 1983; Schultz, 1995). I have provided these many ways of defining culture to give you a sense that culture covers pretty much everything that a group has learned as it has evolved. When we look at macro cultures (e.g., nations or occupations) and want do describe their cultures, we need all of these specific concepts to capture their culture. However, in moving toward a usable definition of culture that you can apply to the organizations and groups that you will encounter and that you will want to decipher, we need a more integrative dynamic definition that highlights how culture forms and evolves in organizations, subcultures, and micro systems. The foregoing categories will help to define the content of a given culture, but defining them has to be a more dynamic holistic process. The reason for such a formal definition at this point is to forewarn you that you will find many groups of various sizes with different shared patterns that must be understood on their own terms. You will see articles about how to change or even create cultures that don’t agree with each other or that don’t make sense. This definition is deliberately focused on the general process of how any culture is learned and will evolve, but in practice you will have to focus on different elements of that formal definition to make sense of the particular organizational situation you encounter. So let’s expand on and explain the importance of each component of that definition in preparation for the more detailed analysis of these elements that occur later on in this book. A Dynamic Definition of Culture The culture of a group can be defined as the accumulated shared learning of that group as it solves its problems of external adaptation and internal integration; which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, feel, and behave in relation to those problems. This accumulated learning is a pattern or system of beliefs, values, and behavioral norms that come to be taken for granted as basic assumptions and eventually drop out of awareness. Accumulated Shared Learning The most important element of the definition is to note that culture is a shared product of shared learning (Edmondson, 2012). If you understand that culture is a shared product of shared learning, you will realize several important corollaries that make culture complex. To fully understand a given group’s culture, we will need to know what kind of learning has taken place, over what span of time, and under what kinds of leadership. Deciphering such history is impossible with preliterate culture, nations, and some occupations; however, with contemporary organizations and work groups, it is possible and fruitful to begin culture analysis with historical analysis. I will keep referring to “the group,” but I mean this to include organizations of all kinds as well. If learning is shared, all the group forces of identity formation and cohesion come into play in stabilizing that learning because it comes to define for the group who we are and what is our purpose or “reason to be.” The various components of what is learned then become a pattern of beliefs and values that give meaning to the daily activities and work of the group. If the group is successful in achieving its purpose and is internally well organized, it will come to take these beliefs and values along with the accompanying behavioral norms for granted and will teach them to newcomers as the way to think, feel, and behave. In many ways this can be thought of as the group’s sense of identity, which has both an external component of how the organization presents itself to the outside and an internal component of what its inner sense of itself is. Basic Taken-for-Granted Assumptions—The Cultural DNA 21 The earliest shared learning provides meaning and stability and becomes, in a sense, the cultural DNA: the beliefs, values, and desired behaviors that launched the group and made it successful. This early level of beliefs, values, and desired behavior becomes nonnegotiable and turns into taken-for- granted basic assumptions that subsequently drop out of awareness. Such assumptions come to be very stable, serving as the source of later ways of doing things and elaborating the culture. What needs to be mentioned here is that these elements, learned early and composing the cultural DNA, are the source of the group’s stability and cannot be changed without changing the group altogether. This point has to be understood at the outset because culture-change programs can work only if they are consistent with the group’s cultural DNA. Solving Problems of External Adaptation and Internal Integration One of the most consistent findings of the study of groups and organizations is that leaders and members differentiate the “task” of the group from the question of “how we will organize and maintain ourselves as a group?” This arbitrary distinction has taken many forms, such as the “managerial grid,” which separately measures the degree of concern for task and of concern for people, leading to an “ideal” of maximizing both (Blake & Mouton, 1964, 1969; Blake, Mouton, & McCanse, 1989). In extensive studies of problem-solving groups, it was discovered that two kinds of leadership evolved and were necessary for long-range group performance: a task leader and a social- emotional leader who were usually different people within the group (Bales, 1958). Studies of effective organizations have always shown that successful performance and effective learning hinge on not separating these two dimensions, thinking instead in terms of “socio-technical systems,” in which the external and internal are at least aligned if not integrated. In business organizations, this issue has shown up in concern for a “scorecard” or a “double bottom line” that emphasizes the need for paying attention to both the economic health of the organization and the internal organizational health that allows it to function and maintain itself (Kaplan & Norton, 1992). One of the great dangers inherent in culture-change programs is to assume that strategy and the external adaptation issues are somehow separate from culture and to focus the desired culture changes just on the internal mechanisms by which a group makes life pleasant for itself. All the emphasis recently on analyzing which company to work for creates the risk that you will go to the best company but will be out of a job in a few years because that same company did not understand that its strategy was also part of its culture and failed to evolve that strategy according to the changing needs of the situation (Friedman, 2014). Solutions That Have Worked Well Enough to Be Considered Valid Groups are created for a purpose. We huddle together for safety or security or to get something done, and the group’s survival depends on the degree to which it accomplishes its purpose. Groups do not exist in isolation. To get something done requires some kind of action in the various environments in which the group is embedded. As the group acts, it gets feedback on whether or not it is accomplishing its purpose. If it succeeds and continues to succeed, the beliefs, values, and behavior patterns that launched the group will become taken for granted as the way to continue. With age and continued success, those beliefs and values will become part of the identity of the group and will automatically be taught to newcomers as “this is who we are, this is what we do, and these are our beliefs.” Whereas those values and beliefs might have been debated at the launching of the group, they become nonnegotiable and are treated as “assumptions” that new members are expected to adopt as the price of admission to the group. Perception, Thought, Feeling, and Behavior As a group grows, has success, and develops an identity, the shared learning process broadens from just the minimum behavior we need to agree on to get the job done to a language, a way to think, and a way to feel. When a company is founded, there will be a common interest focused on the technology, the product or service, and the occupational competencies required to perform. This means that some common ways of thinking and perceiving are present at the outset by the common decision to be a group and do something together. With success and further shared experience the group develops its own “jargon,” often expressed as shorthand and acronyms, forms of humor, and expressions that symbolize some of the essence of the shared experience. In Digital Equipment Corporation (DEC), a company that we will be referring 22 to frequently, the phrase “Do the right thing” symbolized the value of technical honesty, openness, and really solving the customer’s problems. In Apple the phrase was “Do your own thing,” which meant feel free to contribute in the best way you can but express yourself personally, which, at the time, meant “decorate your office any way you want, bring your pet to work, but do the job well.” We tend to think of culture as mostly behavioral (i.e., “This is how we do things around here”) and forget that with time and shared learning we come to share how we talk, what we perceive in our relevant environment, how we think about it, and what makes us feel good or bad. The longer the organization has existed, the more the thoughts and emotions of the members come to be alike. This process is most visible at the national level, where we find that subsidiaries of companies that move to new countries have great difficulty in functioning efficiently because of differences in language, thought, and emotional processes. In some companies the corporate culture is so strong and well embedded that the local offices in different countries look like and function exactly the same way as the headquarters organization. I was once asked to describe the culture of the Swiss-German company Ciba-Geigy to the U.S. subsidiary in New Jersey. I had studied this culture in Basel and gave my Basel speech in New Jersey, which elicited the shocked response: “My God, you have just described us perfectly!” What You Imply When You Use the Word Culture The concept of culture implies structural stability, depth, breadth, and patterning or integration that results from the fact that culture is for the group a learned phenomenon just as personality and character are for individuals learned phenomena. Structural Stability. Culture implies some level of structural stability in the group. When we say that something is “cultural,” we imply that it is not only shared but is also stable because it defines the group. I have referred to this as “basic assumptions” and cultural DNA. After we achieve a sense of group identity, which is a key component of culture, it is our major stabilizing force and will not be given up easily. Culture is something that survives even when some members of the organization depart. Cultural DNA is hard to change because group members value stability because it provides meaning and predictability. At the same time, the more surface elements of culture are defined by the interaction among the group members. The more ritualized of those interactions support the DNA and provide additional stability, but as new conditions arise and as new members with different beliefs, values, and norms enter the group, there will inevitably be both reinforcement and change as new solutions are invented for the problems of internal and external survival. Culture is both stable and dynamic, just as our body is stable if we think of the skeleton and skin and organs but constantly changing if we think of cells and the various bodily processes. The stable parts like our bones can change but not easily or rapidly unless extreme circumstances cause “breaks.” When companies go bankrupt or are taken over by a turnaround manager, the cultural DNA can be destroyed and a new organization can be launched. Depth. The basic assumptions of a culture are the deepest, often unconscious part of a group and are, therefore, less tangible and less visible. From this point of view, many of the definitions of culture that I reviewed focus too much on the visible manifestations of culture, but they are not the “essence” of what we mean by culture. This essence, best thought of as the cultural DNA, consists of the taken-for-granted, nonnegotiable beliefs, values, and behavioral assumptions. When something is more deeply embedded, that also lends stability. Breadth. A third characteristic of culture is that after it has developed, it covers all of a group’s functioning. Culture is pervasive and influences all aspects of how an organization deals with its primary purpose, its various environments, and its internal operations. As we have pointed out previously, the most common mistake is to limit the concept to the internal workings of the group while forgetting that culture also covers mission, strategy, structure, and basic operational processes. All of these have been the product of shared learning and will limit the kinds of changes the organization can make. 23 Patterning or Integration. The fourth characteristic that is implied by the concept of culture and that further lends stability is patterning or integration of the elements into a larger paradigm or “gestalt” that ties together the various elements at a deeper level. Culture implies that rituals, values, and behaviors are tied together into a coherent whole, and this pattern or integration is the essence of what we mean by “culture.” Such patterning or integration ultimately derives from the human need to make our environment as sensible and orderly as we can (Weick, 1995). Because disorder or senselessness makes us anxious, we will work hard to reduce that anxiety by developing a more consistent and predictable view of how things are and how they should be. “Organizational cultures, like other cultures, develop as groups of people struggle to make sense of and cope with their worlds” (Trice & Beyer, 1993, p. 4). However, we will also discover that within the cultural DNA one finds conflicting themes based on different things learned at different times and in different ways. Furthermore, as organizations evolve and develop subgroups, those subgroups develop their own subcultures, which may conflict with each other or with the larger “corporate culture.” As we will see, cultural dynamics can become very complicated. Taught to New Members: The Process of Socialization or Acculturation After a group has developed a culture, it will pass elements of this culture on to new generations of group members (Louis, 1980; Schein, 1968; Van Maanen, 1976; Van Maanen & Schein, 1979). Studying what new members of groups are taught is, in fact, a good way to discover some of the elements of a culture, but we learn about surface aspects of the culture only by this means. This is especially so because much of what is at the heart of a culture will not be revealed in the rules of behavior taught to newcomers. It will be revealed to members only as they gain permanent status and are allowed into the inner circles of the group, where group secrets then are shared. However, the way people learn and the socialization processes to which they are subjected may indeed reveal deeper assumptions. To reach those deeper levels, we must try to understand the perceptions and feelings that arise in critical situations, and we must observe and interview regular members or “old timers” to get an accurate sense of the deeper-level assumptions that are shared. Can culture be learned through anticipatory socialization or self- socialization? Can new members discover for themselves what the basic assumptions are? Yes and no. We certainly know that one of the major activities of any new member when she or he enters a new group is to try to decipher the operating norms and assumptions. But this deciphering will be successful only through experiencing the rewards and punishments that are meted out by long-standing members to new members as they experiment with different kinds of behavior. In this sense, there is always a teaching process going on, even though it may be quite implicit and unsystematic. If the group has not evolved to the point of having shared assumptions, as will sometimes be the case, the new members’ interaction with old members will be a more creative process of building a culture. But once shared assumptions exist, the culture survives through teaching those assumptions to newcomers. In this regard, culture is a mechanism of social control and can be the basis of explicitly manipulating members into perceiving, thinking, and feeling in certain ways (Van Maanen & Kunda, 1989; Kunda, 1992, 2006). Whether or not we approve of this as a mechanism of social control is a separate question that will be addressed later. Can Culture Be Inferred from Behavior Alone? Note that the definition of culture that I have given does not include overt behavior patterns, though some such behavior, especially formal rituals, would reflect cultural assumptions. Instead, this definition emphasizes that the shared assumptions deal with how we perceive, think about, and feel about things. We cannot rely on overt behavior alone, because it is always determined both by the cultural predisposition (i.e., the shared perceptions, thoughts, and feelings that are patterned) and by the situational contingencies that arise from the immediate external environment. Behavioral regularities can occur for reasons other than culture. For example, if we observe that all members of a group cower in the presence of a large and loud leader, this could be based on biological-reflex reactions to sound and size, individual learning, or shared learning. Such a behavioral regularity should not, therefore, be the basis for defining culture, though we might later discover that, in a given group’s experience, cowering is indeed a result of shared learning and therefore a manifestation of deeper shared assumptions. Or, to put it another way, when we observe 24 behavioral regularities, we do not know whether or not we are dealing with a cultural manifestation. Only after we have discovered the deeper layers that I am defining as the essence or DNA of culture can we specify what is and what is not an “artifact” that reflects the culture. Do Occupations Have Cultures? The definition provided previously does not specify the size or location of the social unit to which it can legitimately be applied. We know that nations, ethnic groups, religions, and other kinds of social units have cultures. I call these macro cultures. Our experience with large organizations also tells us that even globally dispersed corporations such as IBM or Unilever have corporate cultures in spite of the obvious presence of many diverse subcultures within the larger organization. But it is not clear whether it makes sense to say that medicine or law or accounting or engineering has cultures. If culture is a product of joint learning leading to shared assumptions about how to perform and relate internally, we can see clearly that many occupations do evolve cultures. If there is strong socialization during the education and training period and if the beliefs and values learned during this time remain stable as taken-for-granted assumptions even though the person may not be in a group of occupational peers, then clearly those occupations have cultures. For most of the occupations that will concern us, these cultures are global to the extent that members are trained in the same way to the same skill set and values. However, we will find that the macro cultures, the nations and religions in which members of those occupations practice, also influence how the occupations are defined—that is, how engineering or medicine is practiced in a particular country. These variations make it that much more difficult to decipher in a hospital, for example, what is national, ethnic, occupational, or organizational. Where Does Leadership Come In? Leadership is the key to learning. Learning occurs when something expected is not happening and the individual or the group feels hungry, hurt, disappointed, or in some other way “disconfirmed.” If we are talking about culture formation, learning occurs through the leadership of a founder or entrepreneur who uses his or her personal power to demand some new behavior directed toward achieving some purpose. If the group gets into difficulty, it will again be leadership that will propose something new to try to get out of the difficulty. If the group is successful, the culture will define what is expected of its formal leaders. If the group then gets into difficulty again, formal leaders or other members of the group will demonstrate or demand some new behavior to solve the problem, which may evolve the culture. The learning mechanism will vary with the nature of the difficulty. If the group is not doing something that it should be doing, the leader provides it; and if the group succeeds, that behavior is reinforced and is eventually justified with the appropriate beliefs and values. If the group is doing something wrong that produces undesirable results, that behavior is punished by the other cultures in the environment and the group learns never to do that again. But again, the learning of something new or stopping something inappropriate will be mediated by leadership behavior. This will be explored further in the subsequent chapters. 25 Summary and Conclusions To summarize, the most useful way to arrive at a definition of something as abstract as culture is to think in dynamic evolutionary terms, to think of culture as what the group has learned in its efforts to survive, grow, deal with its external environment, and organize itself. If we can understand where culture comes from and how it evolves, we can grasp something that is abstract, that exists in a group’s unconscious, yet that has a powerful influence on a group’s behavior. Any social unit that has some kind of shared history will have gone through such a learning process and will have evolved a culture. The strength of that culture depends on the length of time, the stability of membership of the group, and the emotional intensity of the actual historical learning experiences they have shared. As we will see in the case examples, leadership is involved in the creation of the culture and at every stage of the organization’s growth and maturity. 26 Suggestions for Readers If you are a scholar or researcher, before you plunge into your research consider that you are about to study a complex, patterned, multifaceted human socio-technical system and decide what it is you are really trying to find out, what research method you will use, and how that research method might affect the system. If you are a student or potential employee, ask the recruiter about the history of the company and ask to meet some “old timers” to get their sense of how the company came to be. If you are a change leader, ask yourself the following question: If the group or organization I am trying to change has a learning history, what can I learn about that history before I begin to plan changes? If you are a consultant or helper who has been asked to build or change culture, be sure to ask the potential client what he or she has in mind and get as concrete a picture as possible of what problems the client is trying to solve before you agree to anything. 27 2 THE STRUCTURE OF CULTURE Culture in general can be analyzed at several different levels, with the term “level” meaning the degree to which the cultural phenomenon is visible to you as participant or observer. These levels range from the very tangible, overt manifestations that you can see and feel to the deeply embedded, unconscious, basic assumptions that we are defining as the essence of culture or its DNA. In between these layers are various espoused beliefs, values, norms, and rules of behavior that members of the culture use as a way of depicting the culture to themselves and others. The three major levels of cultural analysis are shown in Figure 2.1 Figure 2.1 The Three Levels of Culture 1. Artifacts Visible and feelable structures and processes Observed behavior — Difficult to decipher 2. Espoused Beliefs and Values Ideals, goals, values, aspirations Ideologies Rationalizations — May or may not be congruent with behavior and other artifacts 3. Basic Underlying Assumptions Unconscious, taken-for-granted beliefs and values — Determine behavior, perception, thought, and feeling 28 Three Levels of Analysis Artifacts—Visible and Feelable Phenomena We think of artifacts as the phenomena that you would see, hear, and feel when you encounter a new group with an unfamiliar culture. Artifacts include the visible products of the group, such as the architecture of its physical environment; its language; its technology and products; its artistic creations; its style, as embodied in clothing, manners of address, and emotional displays; its myths and stories told about the organization; its published lists of values; and its observable rituals and ceremonies. Among these artifacts is the “climate” of the group. Some culture analysts see climate as the equivalent to culture, but it is better thought of as the product of some of the underlying assumptions and is, therefore, a manifestation of the culture. Observed behavior routines and rituals are also artifacts, as are the organizational processes by which such behavior is made routine. Structural elements such as charters, formal descriptions of how the organization works, and organization charts also belong to the artifact level. The most important point to be made about this level of the culture is that it is both easy to observe and very difficult to decipher. The Egyptians and the Mayans both built highly visible pyramids, but the meaning of pyramids in each culture was very different—tombs in one, temples as well as tombs in the other. In other words, observers can describe what they see and feel but cannot reconstruct from that alone what those things mean to the given group. If you are entering a new culture, you will observe lots of things that may or may not make sense to you, and you will not have the insight to figure them out without asking insiders some questions. It is especially dangerous to try to infer the deeper assumptions from artifacts alone, because your interpretations will inevitably be projections of your own cultural background. For example, when you see a very informal, loose organization, you may interpret that as “inefficient” if your own background is based on the assumption that informality means playing around and not working. Alternatively, if you see a very formal organization, you may interpret that to be a sign of “lack of innovative capacity,” if your own experience is based on the assumption that formality means bureaucracy and standardization. If you live in the group long enough, the meanings of artifacts gradually become clear and people explain to you “why we do it that way.” If, however, you want to achieve this level of understanding more quickly, you must ask insiders why they do what they do? You will then get what we are calling the espoused beliefs and values. Espoused Beliefs and Values All group learning ultimately reflects someone’s original beliefs and values—his or her sense of what ought to be, as distinct from what is. When a group is first created or when it faces a new task, issue, or problem, the first solution proposed to deal with it reflects some individual’s own assumptions about what is right or wrong, what will work or will not work. Those individuals who prevail, who can influence the group to adopt a certain approach to the problem, will later be identified as leaders or founders, but the group does not yet have any shared knowledge as a group because it has not yet taken a common action in reference to whatever it is supposed to do. Whatever is proposed will be perceived only as what the leader wants. Until the group has taken some joint action and together observed the outcome of that action, there is not as yet a shared basis for determining whether what the leader wants will turn out to be valid. For example, if sales begin to decline in a young business, a manager may say, “We must increase advertising” because of her belief that advertising always increases sales. The group, never having experienced this situation before, will hear that assertion as a statement of that manager’s beliefs and values: “She believes that when one is in sales trouble it is a good thing to increase advertising.” What the leader initially proposes, therefore, cannot have any status other than a value to be questioned, debated, challenged, and tested. If the manager convinces the group to act on her belief and the solution works, then the perceived value that “advertising is good” gradually becomes transformed, first into a shared value or belief and ultimately into a shared assumption (if actions based on it continue to be successful). If this transformation process occurs, group members will 29 usually forget that originally they were not sure and that the proposed course of action was, at an earlier time, just a proposal to be debated and confronted. Not all beliefs and values undergo such transformation. First of all, the solution based on a given value may not work reliably. Only those beliefs and values that can be empirically tested and that continue to work reliably in solving the group’s problems will become transformed into assumptions. Second, certain value domains—those dealing with the less controllable elements of the environment or with aesthetic or moral matters—may not be testable at all. In such cases, consensus through social validation is still possible, but it is not automatic. Third, the strategy and goals of the organization may fall into this category of espoused beliefs in that there may be no way of testing them except through consensus, because the link between performance and strategy may be hard to prove. Social validation means that certain beliefs and values are confirmed only by the shared social experience of a group. For example, any given culture cannot prove that its religion and moral system are superior to another culture’s religion and moral system, but if the members reinforce each others’ beliefs and values, they come to be taken for granted. Those who fail to accept such beliefs and values run the risk of “excommunication,” of being thrown out of the group. The test of whether they work or not is how comfortable and anxiety-free members are when they abide by them. In these realms, the group learns that certain beliefs and values, as initially promulgated by prophets, founders, and leaders, “work” in the sense of reducing uncertainty in critical areas of the group’s functioning. Moreover, as they continue to provide meaning and comfort to group members, they also become transformed into non-discussible assumptions even though they may not be correlated with actual performance. The espoused beliefs and moral or ethical rules remain conscious and are explicitly articulated because they serve the normative or moral function of guiding members of the group as to how to deal with certain key situations as well as in training new members how to behave. Such beliefs and values often become embodied in an ideology or organizational philosophy, which then serves as a guide to dealing with the uncertainty of intrinsically uncontrollable or difficult events. If the beliefs and values that provide meaning and comfort to the group are not congruent with the beliefs and values that correlate with effective performance, we will observe in many organizations espoused values that reflect the desired behavior but are not reflected in observed behavior (Argyris & Schon, 1978, 1996). For example, a company’s ideology may say that it values people and that it has high quality standards for its products, but its actual record in that regard may contradict what it says. In U.S. organizations, it is common to espouse teamwork while actually rewarding individual competitiveness. Hewlett-Packard’s highly touted “The HP way” (Packard, 1995) espoused consensus management and teamwork, but in its computer division, engineers discovered that to get ahead they had to be competitive and political. So in analyzing espoused beliefs and values, you must discriminate carefully among those that are congruent with the underlying assumptions that guide performance, those that are part of the ideology or philosophy of the organization, and those that are rationalizations or only aspirations for the future. Often espoused beliefs and values are so abstract that they can be mutually contradictory, as when a company claims to be equally concerned about stockholders, employees, and customers, or when it claims both highest quality and lowest cost. Espoused beliefs and values often leave large areas of behavior unexplained, leaving us with a feeling that we understand a piece of the culture but still do not have the entire culture in hand. To get at that deeper level of understanding, to decipher the pattern, and to predict future behavior correctly, we have to understand more fully the category of basic assumptions. Taken-for-Granted Underlying Basic Assumptions When a solution to a problem works repeatedly, it comes to be taken for granted. What was once a hypothesis, supported only by a hunch or a value, gradually comes to be treated as a reality. We come to believe that nature really works this way. Basic assumptions, in this sense, are different from what some anthropologists have called “dominant value orientations,” in that such dominant orientations reflect the preferred solution among several basic alternatives, but all the alternatives are still visible in the culture, and any given member of the culture could, from time to time, behave according to variant as well as dominant orientations (Kluckhohn & Strodtbeck, 1961). In the United States, the preferred solution is clearly individualism, but teamwork as a means to an end is accepted. 30 Basic assumptions, in the sense defined here, have become so taken for granted that you find little variation within a social unit. This degree of consensus results from repeated success in implementing certain beliefs and values, as previously described. In fact, if a basic assumption comes to be strongly held in a group, members will find behavior based on any other premise inconceivable. For example, in a group whose basic assumption is that the individual’s rights supersede those of the group, members find it inconceivable to commit suicide or in some other way to sacrifice themselves to the group even if they had dishonored the group. In a capitalist country, it is inconceivable that someone might design a business organization to operate consistently at a financial loss or that it does not matter whether or not a product works. In an occupation such as engineering, it is inconceivable to deliberately design something that is unsafe; it is a taken-for-granted assumption that things should be safe. Basic assumptions, in this sense, are similar to what Argyris and Schon (1996) identified as “theories-in-use”—the implicit assumptions that actually guide behavior, that tell group members how to perceive, think about, and feel about things. Basic assumptions, like theories-in-use, are generally non-confrontable and non- debatable and hence are extremely difficult to change. To learn something new in this realm requires us to resurrect, reexamine, and possibly change some of the more stable portions of our cognitive structure, a process that Argyris and others have called “double-loop learning,” or “frame breaking” (Argyris & Schon, 1974, 1996). Such learning is intrinsically difficult because the reexamination of basic assumptions temporarily destabilizes our cognitive and interpersonal world, releasing large quantities of basic anxiety. Rather than tolerating such anxiety levels, we tend to want to perceive the events around us as congruent with our assumptions, even if that means distorting, denying, projecting, or in other ways falsifying to ourselves what may be going on around us. It is in this psychological process that culture has its ultimate power. Culture as a set of basic assumptions defines for us what to pay attention to, what things mean, how to react emotionally to what is going on, and what actions to take in various kinds of situations. After we have developed and integrated a set of such assumptions, we will have created a “thought world” or “mental map.” We will then be most comfortable with others who share the same set of assumptions and very uncomfortable and vulnerable in situations where different assumptions operate because either we will not understand what is going on, or, worse, we will misperceive and misinterpret the actions of others (Douglas, 1986; Bushe, 2009). Culture at this level provides its members with a basic sense of identity and defines the values that provide self-esteem (Hatch & Schultz, 2004). Cultures tell their members who they are, how to behave toward each other, and how to feel good about themselves. Recognizing these critical functions makes us aware why “changing” culture is so anxiety provoking. To illustrate how unconscious assumptions can distort data, consider the following example. If we assume, on the basis of past experience or education, that other people will take advantage of us whenever they have an opportunity, we expect to be taken advantage of, and we then interpret the behavior of others in a way that coincides with those expectations. If we assume that it is human nature to be basically lazy, and if we observe people sitting in a seemingly idle posture at their desk, we will interpret their behavior as “loafing” rather than “thinking out an important problem.” We will perceive absence from work as “shirking” rather than “doing work at home.” If this is not only a personal assumption but also one that is shared and thus part of the culture of an organization, we will discuss with others what to do about our “lazy” workforce and institute tight controls to ensure that people are at their desks and busy. If employees suggest that they do some of their work at home, we will be uncomfortable and probably deny the request because we will figure that at home they would loaf (Bailyn, 1992; Perin, 1991). In contrast, if we assume that everyone is highly motivated and competent, we will act in accordance with that assumption by encouraging people to work at their own pace and in their own way. If we see people sitting quietly at their desks, we will assume that they are thinking or planning. If someone is discovered to be unproductive in such an organization, we will make the assumption that there is a mismatch between the person and the job assignment, not that the person is lazy or incompetent. If employees want to work at home, we will perceive that as evidence of their wanting to be productive. In both cases, there is the potential for distortion, in that the cynical manager will not perceive how highly motivated some of the subordinates really are, and the idealistic manager will not perceive that there are subordinates who are lazy and are taking advantage of the situation. As McGregor 31 (1960) noted many decades ago, such assumptions about “human nature” become the basis of management and control systems that perpetuate themselves because if people are treated consistently in terms of certain basic assumptions, they come eventually to behave according to those assumptions to make their world stable and predictable. Unconscious assumptions sometimes lead to ridiculously tragic situations, as illustrated by a common problem experienced by U.S. supervisors in some Asian countries. A manager who comes from a U.S. pragmatic tradition assumes and takes it for granted that solving a problem always has the highest priority. When that manager encounters a subordinate who comes from a cultural tradition in which good relationships and protecting the superior’s “face” are assumed to have top priority, the following scenario has often resulted. The manager proposes a solution to a given problem. The subordinate knows that the solution will not work, but his unconscious assumption requires that he remain silent because to tell the boss that the proposed solution is wrong is a threat to the boss’s face. It would not even occur to the subordinate to do anything other than remain silent or, if the boss were to inquire what the subordinate thought, he might even reassure the boss to go ahead and take the action rather than challenge the boss. The action is taken, the results are negative, and the boss, somewhat surprised and puzzled, asks the subordinate what he would have done or would he have done something different. This question puts the subordinate into an impossible double bind because the answer itself is a threat to the boss’s face. He cannot possibly explain his behavior without committing the very sin he was trying to avoid in the first place—namely, embarrassing the boss. He may even lie at this point and argue that what the boss did was right and only “bad luck” or uncontrollable circumstances prevented it from succeeding. From the point of view of the subordinate, the boss’s behavior is incomprehensible because to ask the subordinate what he would have done shows lack of self-pride, possibly causing the subordinate to lose respect for that boss. To the boss, the subordinate’s behavior is equally incomprehensible. He cannot develop any sensible explanation of his subordinate’s behavior that is not cynically colored by the assumption that the subordinate at some level just does not care about effective performance and therefore must be gotten rid of. It never occurs to the boss that another assumption—such as “you never embarrass a superior”—is operating, and that, to the subordinate, that assumption is even more powerful than “you have to get the job done.” If assumptions such as these operate only in an individual and represent his or her idiosyncratic experience, they can be corrected more easily because the person will detect that he or she is alone in holding a given assumption. The power of culture comes about through the fact that the assumptions are shared and, therefore, mutually reinforced. In these instances, probably only a third party or some cross-cultural experiences could help to find common ground whereby both parties could bring their implicit assumptions to the surface. Even after they have surfaced, such assumptions would still operate, forcing the boss and the subordinate to invent a whole new communication mechanism that would permit each to remain congruent with his or her culture— for example, agreeing that, before any decision is made and before the boss has stuck his or her neck out, the subordinate will be asked for suggestions and for factual data that would not be face threatening. Note that the solution has to keep each cultural assumption intact. We cannot, in these instances, simply declare one or the other cultural assumption “wrong.” We have to find a third assumption to allow them both to retain their integrity. We have dwelled on this long example to illustrate the potency of implicit, unconscious assumptions and to show that such assumptions often deal with fundamental aspects of life—the nature of time and space; human nature and human activities; the nature of truth and how we discover it; the correct way for the individual and the group to relate to each other; the relative importance of work, family, and self-development; the proper role of men and women; and the nature of the family. Broader assumptions about human nature often derive from the larger culture in which the organization is embedded or from occupational units that cut across organizations. In the United States, the assumption that meetings are a waste of time derives very much from our pragmatic rugged individualism,which works both against group and team work and immediately types meetings as something to be avoided, even as complex tasks become more interdependent and require more meetings. The Metaphor of the Lily Pond 32 We can summarize this three-level model with a metaphoric lily pond. The blossoms and the leaves on the surface of the pond are the “artifacts” that we can see and evaluate. The farmer who has created the pond (the leadership) announces what he expected and hoped for in the way of leaves and blossoms and will provide publicly accepted beliefs and values to justify the outcome. The farmer may or may not be consciously aware that the outcome is really a result of how the seeds, the root system, the quality of the water in the pond, and the fertilizers he put in combined to create the blossoms and leaves. This lack of awareness of what actually produces the results may not matter if the announced beliefs and values are congruent with how the leaves and blossoms turned out. Figure 2.2 The Lily Pond as a Metaphor for Levels of Culture Source: Artwork by Jason Bowes - Human Synergistics However, if the observer notes a discrepancy between what the farmer claims and what actually comes up as blossoms, they will both have to examine what is present in the water and in the root system. And if they want different color blossoms, painting them a different color will not work; they will have to examine how to change the seeds, the water quality, the fertilizer—that is, the invisible DNA of the pond. Leaders who want to change culture cannot do so by painting the blossoms or pruning the leaves. They have to locate the cultural DNA and change some of that. Given this structural model one can analyze any culture, or, for that matter, any individual’s cultural identity. Let’s look briefly at how this would apply at the individual or group micro-system level and then in subsequent chapters apply it to organizations and larger cultural units. The Individual from a Cultural Perspective The individual as a cultural entity can be analyzed in terms of artifacts, espoused beliefs and values, and underlying basic assumption. We all carry within us assumptions about the state of the world and about the correct ways to engage in relationships. Some of those assumptions about relationship have come to be taken for granted and fall into the realm of the unconscious because we learned early some of the basic rules of how to get along in different kinds of situations. These assumptions and rules derive from the macro culture in that every society has learned from its own history what level of communication and openness is workable for people to get along. All societies (i.e., macro cultures) evolve rules of etiquette, good manners, and tact that specify what is or is not appropriate to say in any given situation. Most of us are, therefore, walking repositories of rules that were taught to us when young and that represent early layers of cultural socialization. We learn as part of our acculturation into the family that in the interests of getting along with each other, it is important to withhold some of our perceptions and feelings because to say them out loud might hurt or offend others. And if we hurt others, that permits them to hurt us back, which makes social life generally too dangerous. We learn that some of these things can be said to friends and even more can be said to intimates. However, the basic assumptions about why you cannot say certain things remain below consciousness, and the process by which you learned them is probably

Organizational Culture and Leadership Fifth Edition PDF

Document Details

Tags

Related

Summary

Full Transcript

Upgrade to continue