A critical approach towards an integrative dynamic framework for understanding and managing organizational culture change 

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UU-PSY704 – Organizational Culture Management

Assignment 1: Brief & Guidelines

A. Description

Type: Academic Essay

Essay title: “A critical approach towards an integrative dynamic framework for understanding
and managing organizational culture change”

The emergence of organizational culture may not be fully understood based on the assumption
that the dominant values of an influential group of employees is what drives the prevailing
type of culture within an organization. In this module, the concept of cultural dynamics was
introduced in order to describe the ongoing processes involved in the way in which a system
of values is transformed into a stable type of organizational culture. An integrative dynamic
framework was recommended as an effective means of managing culture change and
organizational effectiveness.

In an academic essay format, identify the strengths and weaknesses of the recommended
framework in terms of its capability to establish a new type of organizational culture. In
your essay, you must focus on the following topics:

i. The dimensions of the concept of organizational culture which are relevant to the
framework

ii. The contextual approach to organizational culture which appears to be most
relevant to the framework

iii. An operational definition of organizational culture

iv. The role of the framework in helping us understand the relationship between culture
and organizational performance and between culture and organizational culture
management

v. The role of cultural dynamics and integrative cultural dynamics in
organizational culture change

vi. The relationship between organizational culture change and organizational

effectiveness in the context of the integrative dynamic framework

vii. The role of transformational integrative leadership behaviour in enhancing
organizational value

You are expected to follow faithfully the academic essay format, while utilising the APA

referencing system for your reference list. A minimum of 15 academic references must be used.

Furthermore, you are expected to support any arguments made with evidence from well-known

scientific journals or textbooks. It is preferable, yet optional, if you are able to collect some form of

data yourselves (primary data analysis). However, you are expected to utilise secondary data

provided in relevant research studies in such a way so to support key arguments and points raised in

your essay (secondary data analysis). This may involve either qualitative or quantitative data

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analysis or a combination of the two (mixed data analysis). Normally, qualitative data
analysis and quantitative data analysis are presented and discussed in a different way. You
should be mindful of properly treating available data.

It is important to note that, while you are developing arguments or clarifying points, case studies
or practical examples of specific organizations may be used to support such arguments.
However, you should ensure that this is publicly-disseminated information included in reports,
credible websites or organizational documents, which must be fully and properly referenced.

Finally, you should aim to close your essay with clear policy recommendations associated with
the ways in which modern organizations are capable of managing organizational culture change
effectively. For this reason, you must discuss indicators/outcomes, such as “performance”,
“productivity”, “effectiveness”, “organizational value”, etc.

Word Limit: 3000 words (absolute max word count: 3500)

Assessment task: Part I; 50% of the final module mark

Online Submission: End of week 4 (Sunday)

Time: By 11:59 p.m. (23:59 hours) UTC time at the latest.

Important Note: If you miss the deadline, UNICAF rules on late
submission/non-submission will come into effect.

B. Learning outcomes

Description of learning outcomes assessed:

1. Demonstrate an understanding of the different contextual approaches to organizational

culture, i.e. sociological, anthropological and psychological approaches.

2. Demonstrate an understanding of the definition of the concept of organisational culture
and its constituent elements, as well as the concept of organizational culture management.

3. Apply critical thinking in evaluating the role of culture in organizational life and,
especially, in the way in which organizational culture influences vital organizational
variables.

4. Critically describe and compare the different processes involved in cultural dynamics
and organizational culture change.

5. Apply analytical and critical thinking in assessing the practical value of the
recommended integrative dynamic framework for managing organizational culture
change and organizational effectiveness.

6. Demonstrate an understanding of the role of leadership in organizational culture
management in the context of the recommended integrative dynamic framework
for organizational culture change.

Please note the learning outcomes assessed in this assignment corresponds to the
learning outcomes (1) to (6) appeared in the “Module Specifications” document.

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C. Additional academic information

1. A complete and consistent reference list and proper in-text citation using the APA
referencing system are compulsory. Accurate referencing of scientific sources used is
crucial for an academic essay. Please make sure you are fully familiar with the APA
referencing system. Marks will be deducted for inaccurate referencing.

2. Theoretical evidence based on well-known scientific research should drive any arguments
you want to develop.

3. The requested maximum word count is an important guideline and must be

respected. This, essentially, means that you should train yourselves to write concisely
and succinctly.

4. Your assignment should be word processed; Times New Romans, Font size 12, 1.5 line
spacing and numbered pages (the ‘title’ page of your essay should be numbered but the
numbering should be hidden).

5. You are expected to follow the formal academic format of preparing an essay. Please find
all information you need about the widely-known academic format of essay writing
before starting to prepare your essay. This consists of a number of sections including an
introductory and closing sections (‘introduction’, ‘conclusions’). In the ‘introduction’,
you should ‘set-the-scene’, i.e. present the primary aim of your essay, your objectives, the
approach you will follow, the types of data you will utilise and, finally, briefly describe
the content of the sections that follow. In the ‘conclusions’, you are expected to ‘connect-
the-dots” between the different arguments developed in the essay, explain how your work
addressed the primary aim and objectives of your essay in combination with the seven
requested topics, i.e. points (i) to (vii) above and, finally, summarise the findings of your
work. You are not expected to comment on how your work satisfies the set of ‘learning
outcomes’, as described above, but if you feel this could improve the quality of your
‘conclusions’, you are free to do so. The overall number of sections depends solely on
your approach and the material you aim to present. However, you are expected to briefly
review relevant literature and address each and every point requested above. You are
encouraged to use ‘sub-sections’, if you feel they will improve the structure of your
essay. You have a degree of freedom in the way you want to title the sections in the main
body of your essay, but you must ensure that there is a logical sequence in the
presentation in order to strengthen readability. Your reference list should form the final
section of your essay.

6. Please note that ‘tables’, ‘graphs’ and ‘diagrams’ are very helpful in an academic essay
because they help improve comprehension. Those must be inserted within the main body
of your essay, but they are not calculated in the final word count. The same stands for any
‘appendices’ you may want to use and the reference list. Please note, it is not appropriate
to include important material in an appendix. Only additional analysis, more advanced
evidence or further discussion may be used to form an appendix.

7. You are expected to submit your essay using the Sumbission Link located in the suitable

‘Assignment Point’ in the description of the weekly material. Your submission will take
place via turnitin. Therefore, please make sure you are aware of plagiarism and academic

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misconduct regulations provided by UNICAF. Please note, you are responsible to
ensure you are fully informed about such important regulations.

8. Finally, as part of your commitment to maintaining confidentiality, anonymity and
privacy in any data utilised, it is important that you only use published data and
information. You may use the actual name of an organization, if it has become
known by the communication media or formal/informal publications. Please avoid
using names of individuals, unless those names appear in the public sphere (for
example, the name of an organisation’s CEO). If you aim to include primary data in
your work, you must ensure that an informed consent is going to be obtained by all
study participants and all ethics-related issues will be addressed and be properly
reported within the essay.

D. Procedural information

• This is an individual assignment. It is not group work.

• Relevant literature refers only to valid, credible, widely-accepted academic literature
based on scientific peer-reviewed journals, textbooks and monographs.

• The word count is 3000 words. There is always a degree of flexibility in the word count,
which is up to +/- 10%. This means that a final word count of 2700 or 3300 words will be
accepted. However, if you choose to utilize the maximum possible word count, i.e. 3500
words, there is no flexibility to go beyond that number.

• The marking of your assignment is anonymous. For this reason, please do not include your
name on the assignment cover sheet; you may only use your student number for
identification purposes.

• You are expected to be fully informed and familiarized with late submission and extension for
late submission request procedures. Please familiarise yourselves with such regulations. Last
minute accidents involving data loss, corrupted files, faulty laptops and so on can be avoided
by backing up your work regularly.

• Please note that your tutor is not expected to pre-assess an early draft of your assignment.
However, brief comments and feedback may be requested on short sections or if
you need general guidance about the structure and overall presentation of your work.

• The feedback is expected to enable you to acknowledge mistakes and weak points, which
may help you further develop your learning capability in the future.

E. Marking criteria

Assessment element Marking Weight

(%)

Presentation (General Presentation and APA referencing system) 10

Essay content, descriptive, analytical and critical analysis, brief

review of the literature, satisfaction of main aim and objectives, as
well as learning outcomes. 50

Essay structure and organization, information synthesis, coherence

of arguments and consistency of information/evidence presented. 30

Formal language for academic writing, clarity, accuracy,

information synthesis and punctuation 10

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International Journal of Business and Management July, 2009

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A Review of Study on the Competing Values Framework

Tianyuan Yu

Institute of Enterprise Management, School of Business, Sun Yat-Sen University

International Finance College, Beijing Normal University, Zhuhai Campus

Jin Feng Lu, Tangjiawan, Zhuhai 519085, China

Tel: 86-756-6126-600 E-mail: tianyuanyu@gmail.com

Nengquan Wu

Institute of Enterprise Management, School of Business, Sun Yat-Sen University

135Xin Gang Xi Lu, Guangzhou 510275, China

Tel: 86-20-8411-4155 E-mail: mnswnq@mail.sysu.edu.cn

Abstract

The Competing Values Framework (CVF) is one of the most influential and extensively used models in the area of
organizational culture research. Compared with other models and scales, the CVF and its matched scale OCAI have
better validity and reliability in the context of China, and are very convenient for practical operations. This article firstly
introduces the development of the CVF, and discusses the meanings and prerequisites of different culture types in the
CVF. Then the article briefly reviews some empirical studies using the CVF and OCAI, compares the CVF and OCAI
with other major organizational culture models and scales, and finally points out future research areas for CVF’s
application in China.

Keywords: Competing values framework, Organizational culture, Effectiveness

1. The development of the CVF

The Competing Values Framework (CVF) was initially based on research to identify indicators of organizational
effectiveness (Quinn and Rohrbaugh, 1983, p.363). Effectiveness is a central theme in the organizational literature
whereas its definition is perennially controversial. In a literature review Campbell (1977) identified 30 different criteria
of effectiveness. Quinn and Rohrbaugh (1983, p.365) held that the choices of particular criteria usually reflect personal
values about the appropriate emphases in the domain of effectiveness. They invited 52 organizational researchers to
order the criteria listed by Campbell (1977) and then derived three value dimensions: internal-external,
control-flexibility, means-ends. They integrated the third dimension into the other two ones and established the CVF, as
shown in Figure 1(Quinn and Rohrbaugh, 1983, p.369).

One may certainly argue that it is insufficient to measure organizational culture values by only two or three dimensions.
But CVF does not attempt to explore the panorama of organizational culture. Rather, it looks at the value dimensions
related to effectiveness. Moreover, this model can integrate most organizational culture dimensions proposed in the
literature.

2. The connotations of the CVF

2.1 The meanings of dimensions in the CVF

Figure 1 illustrates the CVF. The first value dimension is related to organizational focus, from an internal, micro
emphasis on the well-being and development of people in the organization to an external, macro emphasis on the
well-being and development of the organization itself. The second value dimension is related to organizational structure,
from an emphasis on stability to an emphasis on flexibility. Quinn and Rohrbaugh (1983, p.370) pointed out that these
two sets of competing values are recognized dilemmas in the organizational literature. For instance, Denison and
Mishra’s (1995, p.209) case study illustrated that employee involvement activities can lapse into insularity and have a
limited, or even negative impact on effectiveness, for the organization may overemphasize the internal integration and
neglect the adaptation to the external environment. Similarly, the differing viewpoints in considering order and control
versus innovation and change are at the heart of the most heated debates in sociology, political science, and psychology.

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While many social theorists have emphasized authority, structure, and coordination, others have stressed diversity,
individual initiative, and organizational adaptability.

The two dimensions of the CVF classify four models, each one containing a different set of effectiveness criteria. Quinn
and Rohrbaugh (1983, p.371) named the four models as the human relations model, open system model, rational goal
model, and internal process model, respectively. Quinn and Rohrbaugh (1983, p.375) suggested that to ignore criteria in
any of the models is to have only a partial view of performance. In the administrative world, an effective organization
may need to perform well on all four sets of criteria. However, at any given time there are likely to be tradeoffs between
the criteria.

Sjoberg(1967) noted that organizations are plagued by contradictory functional requirements that are associated with
the formation of mutually antagonistic arrangement that function to meet these requirements. Quinn and Cameron (1983,
p.376) furthered this argument. They expected that at certain thresholds, these conflicts might become particularly
exaggerated, often resulting in major reconfigurations of the coalitional structure and the dominant perceptions of what
is success. The authors believe that under such circumstances, there takes place organizational culture change.

2.2 The implications of the four organizational culture types in the CVF

The four effectiveness criteria models in the CVF are also called four organizational culture types. Based on former
organizational culture studies in the literature, Cameron and Quinn (2006, p.28) termed the four culture types as Clan,
Adhocracy, Market, and Hierarchy, respectively. The implications of each culture type are summarized as follows
(Cameron and Quinn, 2006, p.29-35):

2.2.1 The clan culture

The clan culture is full of shared values and common goals, an atmosphere of collectivity and mutual help, and an
emphasis on empowerment and employee evolvement. The authors contend that the clan culture is just the
organizational culture defined by Wilkins and Ouchi (1983, p.472-474), which can be developed under certain
conditions such as a relatively long history and stable membership, absence of institutional alternatives, thick
interactions among members, etc.

2.2.2 The adhocracy culture

The adhocracy culture is like a temporary institution, which is dismissed whenever the organizational tasks are ended,
and reloaded rapidly whenever new tasks emerge. The adhocracy culture is often found in such industries as filming,
consulting, space flight, and software development, etc.

2.2.3 The market culture

The market culture focuses on the transactions with the environment outside the organization instead of on the internal
management. The organizational goal is to earn profits through market competition. This concept originates from
Ouchi’s (1979, 1984) study on the market control system.

2.2.4 The hierarchy culture

The hierarchy culture has a clear organizational structure, standardized rules and procedures, strict control, and well
defined responsibilities. This concept can be traced to the image of “bureaucracy” in Weber’s (1947) early works on
modern organizational management.

3. Prerequisite conditions of different culture types in the CVF

3.1 Relationships between organizational culture types and control mechanisms

Ouchi (1979) described three fundamentally different mechanisms through which organizations can cope with the
problem of evaluation and control. The three were referred to as market, bureaucracy, and clan. In another research,
using an ethnographic paradigm, Ouchi defined the extension of organizational culture within the concept of clan and
drew attention to organizational features of “clans” (Wilkins and Ouchi, 1983). The authors term the clan mechanism as
a narrowly defined organizational culture. In the authors’ view, the CVF entirely covers the three control mechanisms
mentioned above, and studies the generalizable organizational characteristics which are determined by such factors as
task natures, industries, market environments, organizational structures, and control mechanisms, etc. Therefore, the
authors term the four culture types in the CVF as the broadly defined organizational culture. Ouchi (1979, p.837-840)
discussed the social and informational prerequisite conditions of each of the three control mechanisms (culture types).

3.1.1 The market mechanism

In a market mechanism, prices convey all of the information necessary for efficient decision-making. Given a
frictionless price mechanism, the firm can simply reward each employee in direct proportion to his contribution. Such a
mechanism requires a powerful information system (including accountants, computer experts, etc.) to price the labor or
evaluate their performance.

International Journal of Business and Management July, 2009

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3.1.2 The clan mechanism

When the transaction cost of pricing the labor is too high or when it is impossible to evaluate the performance (for
example, the work with high degree of complexity or uncertainty), the organization has to adopt the clan mechanism.
The clan mechanism demands a high organizational commitment which is obtained through internal socialization.

3.1.3 The bureaucratic mechanism

If the price requirements of a Market cannot be met and if the social conditions of the Clan are impossible to achieve,
the Bureaucratic mechanism becomes the preferred method of control. Its features include close supervision by the
superior and detailed rules and procedures, etc.

Ouchi (1979) argued that due to the high rates of turnover and a high degree of heterogeneity in modern society, the
bureaucratic and market mechanisms become dominant. On the other hand, with the increasing interdependency and
vagueness of technology, it gets more and more difficult to evaluate performance, forcing the organization to adopt the
clan mechanism. Indeed, Ouchi (1984, p.202) contended that no single mechanism would control an organization; a
large organization cannot succeed without a combination of teamwork and competition. This argument is consistent
with Cameron and Quinn’s (2006) view on the patterns of existence of the four culture types in the CVF.

3.2 Relationships between organizational culture types and organizational life cycles

There are close relationships between stages of development in organizational life cycles and the four culture types in
the CVF. Quinn and Cameron (1983) reviewed nine models of organizational life cycles that had been proposed in the
literature and derived a summary model of life cycle stages that integrates each of the nine models. This summary life
cycle model includes four stages: entrepreneurial stage, collectivity stage, formalization and control stage, and
elaboration of structure stage. Based on certain characteristics that typify organizations in different stages of
development, they hypothesized that certain criteria of effectiveness in the CVF are important in particular life cycle
stages but not in others. They also concluded that major criteria of effectiveness (thus with major organizational culture
types – the authors) change in predictable ways as organizations develop through their life cycles.

In the entrepreneurial stage – typified by innovation, creativity, and the marshalling of resources – the strongest culture
type appears to be the adhocracy culture. Organizations in the collectivity stage appear to be characterized by informal
communication and structure, a sense of family and cooperativeness among members, high member commitment, and
personalized leadership, which are associated with the clan culture. In the formalization stage, organizational stability,
efficiency of production, rules and procedures, and conservative trends typify organizations. Culture types appear to be
primarily the hierarchy culture and the market culture. In the fourth stage, elaboration of structure, the organization
monitors the external environment in order to renew itself or expand its domain. The adhocracy culture seems to receive
the most emphasis in this stage. A longitudinal case study made by Quinn and Cameron (1983) provided some evidence
to support the hypothesized relationships between life cycle stages and culture types, which demonstrated the potential
of the model in diagnosing and predicting organizational culture change.

4. Empirical studies using the CVF and OCAI

Based on the CVF, Cameron and Quinn (1999, 2006) developed a matched scale, the Organizational Culture
Assessment Instrument (OCAI, including 24 items). Nowadays, as Kwan and Walker (2004) noted, the CVF has
become the dominant model in the quantitative research on organizational culture. Numerous empirical studies have
been published testing the validity and reliability of the CVF and OCAI.

4.1 Studies testing the validity and reliability of the CVF and OCAI

Howard (1998) used a sample drawn from 10 U.S. organizations to test the validity of the CVF. A Q-sort and
multidimensional scaling analysis produced qualified support for a structure of organizational culture values consistent
with the CVF. Lamond (2003) presented the results of a study of 462 managers’ perceptions of their organizations and
concluded that the CVF is a useful measure in an Australian context. It is noteworthy that Denison and Mishra (1995)
used case studies and survey data to explore the relationship between organizational culture and effectiveness. The
results provided evidence for the existence of four cultural traits in the Theoretical Model of Culture Traits. The
dimensions and implications of the Theoretical Model of Culture Traits coincided with their counterparts in the CVF,
thus validated the CVF as a powerful measure of organizational culture. Denison and Mishra’s (1995:218-219)
quantitative research also confirmed the relationship between organizational effectiveness and the four culture types in
the CVF. Yet the Theoretical Model of Culture Traits is more complex than the CVF, and its sub dimensions have been
challenged by some researchers (e.g., Wang, et. al., 2006).

4.2 Studies on the relationships between organizational culture and other variables

There has been extensive international research using the CVF to investigate the influence of organizational culture on
organizational change initiatives and performance. For example, many published studies that deal with the
implementation of total quality management (TQM) almost exclusively acknowledge the importance of cultural factors

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on the success or failure of the venture. Sousa-Poza et. al. (2001) explored the impact of cross-cultural differences on
the implementation of TQM. Using the CVF to measure organizational culture, they found that in different regions
(USA, Switzerland and South Africa), several distinct relationships between the dimensions of the CVF and TQM
implementation exist. Al-Khalifa and Aspinwall (2001) investigated the relationship between organizational culture and
TQM implementation in one of the Arab countries, Qatar. The results indicated that many organizations in the country
were not characterized by just one culture type, but a mix of two, which did not match the cultural profile characteristics
that support TQM. Their assessment of the current organization culture profile, using the CVF, highlighted where
changes are needed to support a total quality approach.

The CVF are also used to examine the relationships between organizational culture and other key organizational
variables, such as job satisfaction. Lund (2003) looked at the impact of organizational culture types on job satisfaction
in a survey of marketing professionals in a cross-section of firms in the USA. The CVF was utilized as the conceptual
framework for analysis. The results indicated that job satisfaction was positively related to clan and adhocracy cultures,
and negatively related to market and hierarchy cultures. All these empirical studies have validated the CVF as a
powerful instrument to assess organizational culture.

4.3 Empirical studies using the CVF and OCAI in the context of China

To date, the CVF have been extensively applied in the context of China. For example, Deshpande and Farley (2004)
compared the impact of organizational culture on firm performance across several Asian countries, including China,
Hong Kong, India, Japan, Thailand and Vietnam. Kwan and Walker (2004) attempted to demonstrate that the CVF can
be used not only to represent the culture of an organization but also to serve as a basis upon which one organization can
be differentiated from others. Their empirical study in Hong Kong successfully confirmed the validity of the CVF as a
tool in differentiating organizations on the basis of the four culture types. Ralston et. al. (2006) raised the question and
provided empirical evidence regarding the status of the evolution of the state-owned enterprises in China today. They
compared the state-owned enterprises to domestic private-owned enterprises and foreign-controlled businesses in the
context of their organizational cultures. The results of their research partially support their hypothesis that the
state-owned enterprises of today have substantially transformed to approximate a configuration desired by the Chinese
government when it began the transformation a couple of decades ago to make them globally competitive. These
empirical studies all tested the validity and reliability of the CVF and OCAI in the Chinese context.

5. A comparison of CVF/OCAI to other major organizational culture models /scales

There remains considerable debate regarding the measurement and dimensions of organizational culture (e.g., Detert et.
al., 2000). Even so, Detert et. al. s (2000) integrative review of the literature identified eight common dimensions of
organizational culture: the basis of truth and rationality in the organization, the nature of time and time horizon,
motivation, stability vs. change/innovation, orientation to work/coworkers, isolation vs. collaboration, control vs.
autonomy, and internal vs. external. To date, researchers have developed a variety of models and scales to measure
organizational culture. Primary among these, besides the CVF and OCAI, are: the Theoretical Model of Culture Traits
(Denison and Mishra, 1995), which is conceptually similar to the CVF, and its matched scale, the Organizational
Culture Survey, including 6 items; the Organization Culture Inventory (Cooke and Rousseau, 1988), including 3
dimensions and 120 items; the Organizational Culture Profile (O’Reilly, Chatman and Caldwell, 1991), including 7
dimensions and 54 items; the Multidimensional Model of Organizational Cultures (Hofstede et. al., 1990), including 6
dimensions and 135 items; Values in Organizational Culture Scale (Zheng, 1990), including 9 dimensions.

Compared with the above models and scales, the CVF and its matched scale OCAI have the following advantages:

(1) Few dimensions but broad implications: The CVF includes only two dimensions whereas incorporates the essence
of the eight commonly accepted dimensions mentioned above into its structure (Ralston et. al., 2006). The two
dimensions of control vs. autonomy and internal vs. external are directly included in the CVF. Furthermore, three
dimensions (stability vs. change; orientation to work/coworkers; isolation vs. collaboration) are explicitly combined in
the theoretical model. In addition, the model also addresses, in principle, the other three organizational culture
dimensions.

(2) Empirically validated in cross-cultural research: A large amount of empirical studies have established the reliability
and validity of the CVF and OCAI (e.g., Howard, 1998; Ralston et. al., 2006).

(3) Most extensively applied in the context of China: Of the various organizational culture models, the CVF is the only
one that has been extensively used with Chinese and Asian samples (e.g., Deshpande and Farley, 2004; Kwan and
Walker, 2004).

(4) Most succinct: The questionnaire of OCAI includes only 24 items thus are very convenient for practical operations.

In summing up the study on the CVF, the authors conclude that the CVF and its matched scale OCAI are very suitable
for quantitative research in a Chinese context, especially for studies on organizational culture change and on

International Journal of Business and Management July, 2009

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identification of culture types related to organizational effectiveness. The CVF can also be used as a conceptual model
to do some qualitative research to explore the reason and process of organizational culture change. In addition, it is a
promising research field to study the prerequisite conditions of different culture types in the CVF and the relationships
between organizational culture and other variables such as organizational effectiveness, employee satisfaction, etc. in
the context of China. One may also expect to make a contribution towards modifying the CVF by doing such empirical
studies.

References

Al-Khalifa, K. N. and E. M. Aspinwall. (2001). Using the Competing Values Framework to Investigate the Culture of
Qatar Industries. Total Quality Management, 12(4), 417-428.

Cameron, K. and R. E. Quinn. (2006). Diagnosing and Changing Organizational Culture: Based on the Competing
Values Framework. Beijing: China Renmin University Press.

Cooke, R. and D. Rousseau. (1988). Behavioral Norms and Expectations: A Quantitative Approach to the Assessment of
Organizational Culture. Group and Organizational Studies, 13, 245-273.

Denison, D. R. and A. K. Mishra. (1995). Toward a Theory of Organizational Culture and Effectiveness. Organization
Science, 6(2), 204-223.

Deshpande, R. and J. U. Farley. (2004). Organizational Culture, Market Orientation, Innovativeness, and Firm
Performance: An International Research Odyssey. International Journal of Research in Marketing, 12(1), 3-22.

Detert, J. R., R. G. Schroeder, et. al. (2000). A Framework for Linking Culture and Improvement Initiatives in
Organizations. The Academy of Management Review, 25(4), 850-863.

Hofstede, G., B. Neuijen, et. al. (1990). Measuring Organizational Cultures: A Qualitative and Quantitative Study across
Twenty Cases. Administrative Science Quarterly, 35(2), 286-316.

Howard, L. W. (1998). Validating the Competing Values Model as a Representation of Organizational Cultures.
International Journal of Organizational Analysis, 6(3), 231-250.

Kwan, P. and A. Walker. (2004). Validating the Competing Values Model as a Representation of Organizational Culture
through Inter-Institutional Comparisons. Organizational Analysis, 12(1), 21-39.

Lamond, D. (2003). The Value of Quinn’s Competing Values Model in an Australian Context. Journal of Managerial
Psychology, 18(1/2), 46-59.

Lund, D. B. (2003). Organizational Culture and Job Satisfaction. Journal of Business and Industrial Marketing, 18(3),
219-236.

O’Reilly, C., J. Chatman, et. al. (1991). People and Organizational Culture: A Profile Comparison Approach to
Assessing Person-Environment Fit. Academy of Management Journal, 34, 487-516.

Ouchi, W. G. (1979). A Conceptual Framework for the Design of Organizational Control Mechanisms. Management
Science, 25(9), 833.

Ouchi, W. G. (1984). The M-Form Society: Lessons from Business Management. Human Resource Management, 23(2),
191-213.

Quinn, R. E. and J. Rohrbaugh. (1983). A Spatial Model of Effectiveness Criteria: Towards a Competing Values
Approach to Organizational Analysis. Management Science, 29(3), 363-377.

Quinn, R. E. and K. S. Cameron. (1983). Organizational Life Cycles and Shifting Criteria of Effectiveness: Some
Preliminary Evidence. Management Science, 29(1), 33-51.

Ralston, D. A., J. Terpstra-Tong, et. al. (2006). Today’s State-Owned Enterprises Of China: Are They Dying Dinosaurs
Or Dynamic Dynamos? Strategic Management Journal, 27(9), 825-843.

Sousa-Poza, A., H. Nystrom, et. al. (2001). A Cross-Cultural Study of the Differing Effects of Corporate Culture on
TQM in Three Countries. International Journal of Quality and Reliability Management, 18(7), 744-761.

Wang, Guoshun et. al. (2006). A study on organizational culture model: based on the improvement of Denison’s model
and an empirical study. China Soft Science magazine, 3, 145-150.

Wilkins, A. L. and W. G. Ouchi. (1983). Efficient Cultures: Exploring the Relationship between Culture and
Organizational Performance. Administrative Science Quarterly, 28(9): 468-481.

Zheng, Boxun. (1990). The Assessment of Organizational Culture Values. Chinese Journal of Psychology, 32, 31-49.

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Figure 1. Competing Values Framework (CVF)

Adapted from Quinn and Rohrbaugh (1983, p.369)

Control

Flexibility

Internal External

Human Relations Model (Clan) Open System Model (Adhocracy)

Internal Process Model (Hierarchy) Rational Goal Model (Market)

Means: Cohesion; morale

Ends: Human resource development

Means: Flexibility; readiness

Ends: Growth; resource acquisition

Means: Information management;

communication

Ends: Stability; control

Means: Planning; goal setting

Ends: Productivity; efficiency

Australian Journal of Management & Organisational Behaviour, 3(2), 91-99
© L. Willcoxson & B. Millett

THE MANAGEMENT OF ORGANISATIONAL CULTURE

Lesley Willcoxson & Bruce Millett

ABSTRACT

Culture is a term that is used regularly in workplace discussions. It is taken for granted that
we understand what it means. The purpose of this paper is to identify and discuss some of
the significant issues relating to the management of an organisation’s culture. As
organisational cultures are born within the context of broader cultural contexts such as
national or ethic groupings, the paper will commence by defining ‘culture’ in the wider
social context. This definition will subsequently form the basis for discussion of definitions
of organisational culture and the paradigms and perspectives that underpin these. The paper
will then discuss the issue of whether there is one dominant culture that typifies an
organisation, or whether an organisation is really a collection or sub-set of loosely bound
group identities. Finally, the paper identifies some implications for the management of
culture management and change.

KEYWORDS

Organisational culture, management, organisational change

INTRODUCTION

Culture is a term that is used regularly in workplace discussions. It is taken for granted that we
understand what it means. In their noted publication In Search of Excellence, Peters and
Waterman (1982) drew a lot of attention to the importance of culture to achieving high levels of
organisational effectiveness. This spawned many subsequent publications on how to manage
organisational culture (eg. Deal & Kennedy 1982; Ott 1989; Bate 1994).

If organisational culture is to be managed it helps first to be able to define it, for definitions of
culture influence approaches to managing culture. Defining organisational culture is, however,
not an easy task, for while there is general agreement about the components of culture as a broad
construct, there is considerable disagreement about:

! what constitutes organisational culture,
! whether the culture of a given organisation can ever be adequately described,
! whether culture management can ever be truly effective and, if so,
! which management strategies are most likely to succeed.

Lesley Willcoxson (e-mail: willcoxson@usq.edu.au) is a senior lecturer in the Faculty of Business, University of
Southern Queensland; Bruce Millett (e-mail: millet@usq.edu.au) is a senior lecturer in the Faculty of Business,
University of Southern Queensland. Bruce lectures in organisational change and development, organisational
behaviour, and strategic management.

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92

Despite the claims of some authors, there are no simple or right answers to these questions and, as
indicated previously, approaches to culture management are contingent upon the manager’s or
change agent’s conception of organisational culture.

The purpose of this paper is to identify and discuss some of the significant issues relating to the
management of an organisation’s culture. As organisational cultures are born within the context of
broader cultural contexts such as national or ethic groupings, the paper will commence by
defining ‘culture’ in the wider social context. This definition will subsequently form the basis for
discussion of definitions of organisational culture and the paradigms and perspectives that
underpin these. The paper will then discuss the issue of whether there is one dominant culture
that typifies an organisation, or whether an organisation is really a collection or sub-set of loosely
bound group identities. Finally, the paper identifies some implications for the management of
culture management and change.

CULTURE IN A BROADER SOCIAL CONTEXT

In its very broadest sense, culture serves to delineate different groupings of people on the basis of
the extent to which each group is perceived and perceives itself to share similar ways of seeing
and interacting with the animate, inanimate and spiritual world (Benedict 1934; Kluckhohn &
Strodtbeck 1961; Trompenaars 1993). Australian culture, for example, may thus arguably be
described as more similar to that of the United States of America than to that of Malaysia.

Cultures are based in history, developing over time as groups establish patterns of behaviour and
belief that seem effective in helping them to interpret and interact with the world in which they
find themselves. Australian ‘mateship’ behaviour, for example, served early male white settlers
in a harsh and sparsely populated world much better than the maintenance of the hierarchical
class distinctions typical of the world from which they had come. From such new, adaptive
patterns of behaviour arise new beliefs, such as a belief in egalitarianism. These new behaviours,
values and beliefs, together with the associated rituals, myths and symbols that arise to support
them, combine over time to establish and then to reinforce the core assumptions of the culture. In
addition to providing implicit guidelines for behaviour and the channelling of emotion (Trice &
Beyer 1993), cultures serve to give people a sense of belonging through collective identity and
thus break down the intrinsic isolation of the individual. It is also important to realise that culture
can also define differences between groups. Culture identifies particular groups by their
similarities as well as their differences.

Although cultures are dynamic to the extent that changed circumstances can lead to the
incorporation of new patterns of behaviour or ideologies, typically these are overlaid on existing
core assumptions and thus a culture may exhibit what seem to be complex ambiguities or
paradoxes (Trice & Beyer 1993) until such time new behavioural adaptations to the environment
give rise to a new belief system and set of core assumptions. This can be clearly seen in the case
of egalitarianism, a value that is probably associated with a core assumption that life should be
lived cooperatively, rather than competitively. While most Australians continue to proclaim
egalitarianism as an Australian value, under the changed circumstances of greater urbanisation

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93

and commercialisation of labour, they also now display enthusiasm for job or salary-related status
which tends to be associated with competitive behaviour. It may be that over time, as behaviours
and values move towards competitiveness, deeply held assumptions about the viability of
cooperative relationships will also shift to emphasise the greater viability of competitive
relationships.

DEFINING ORGANISATIONAL CULTURE

Like wider delineations such as national culture, an organisational culture may be generally
described as a set of norms, beliefs, principles and ways of behaving that together give each
organisation a distinctive character (Brown 1995). Like national cultures, organisational cultures
form and are transformed over time. There is broad agreement amongst writers that around the
time of its inception, an organisation responds to and reflects industry characteristics such as the
competitive environment and customer requirements, together with the wider community values
held by its employees, and also the values and behaviours of its founders or early leaders (eg.
Schein 1985; Ott 1989; Gordon 1991). What may happen some years from the time of inception,
however, is warmly debated, for at this point organisational culture writers and change agents
divide into separate camps formed on the basis of distinct paradigms and perspectives.

For writers and researchers who take an ‘anthropological’ stance, organisations are cultures (Bate
1994) describing something that an organisation is (Smircich 1983) and thus, like national
cultures, an organisation comprises:

1. a pattern of shared basic assumptions,
2. invented, discovered, or developed by a given group,
3. as it learns to cope with its problems of external adaptation and internal integration,
4. that has worked well enough to be considered valid, and, therefore,
5. is to be taught to new members of the group as the
6. correct way to perceive, think, and feel in relation to those problems (Schein 1991, p.

247).

In this paradigm, organisational culture is both defined and circumscribed by group parameters
(e.g. language, concepts, boundaries, ideology) and by normative criteria that provides the basis
for allocating status, power, authority, rewards, punishment, friendship and respect (Schein
1991). Culture determines what a group pays attention to and monitors in the external
environment and how it responds to this environment. Thus, as Bate (1994) notes, for those who
take an anthropological stance, organisational culture and organisational strategy are inextricably
linked and interdependent. Culture, in this paradigm, is not a separable facet of an organisation,
it is not readily manipulated or changed, and it is not created or maintained primarily by leaders.
Over time, early leaders’ beliefs and behaviours are likely to be translated into assumptions that
subsequently guide the organisation. Because these assumptions operate often at a sub-conscious
level and come to be shared by all organisation members, they are not easily displaced by new
organisational values and beliefs articulated by later leaders. Although the use of rewards or
sanctions may prompt changes in an employee’s behaviour to bring it into line with new stated

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values, it is usually a long time before these changes influence the deep assumptions held by
members entrenched in the culture.

When researchers seek to investigate organisational culture using an anthropological paradigm,
they tend to engage in ‘cultural audits’ which involve extensive observations of behaviour,
interviews and examination of organisation documents and other artefacts. While the data
collected is likely to provide a comprehensive overview of the distinct cultural features of a given
organisation (albeit that these are usually derived by the researcher), the amount of material to be
gathered and interpreted may render this method of organisational analysis time-consuming and
unwieldy.

For the writers described by Bate (1994) as ‘scientific rationalists’, organisational culture is but
one aspect of the component parts of an organisation, a facet that can be measured, manipulated
and changed as can organisational variables such as skills, strategy, structure, systems, style and
staff (Peters & Waterman 1982). In this paradigm, organisational culture is primarily a set of
values and beliefs articulated by leaders to guide the organisation, translated by managers and
employees into appropriate behaviours and reinforced through rewards and sanctions. ‘Scientific
rationalist’ writers thus tend to talk about culture as if it is a definable thing — the culture of the
organisation; the organisation has a service culture — and their strategies for change focus on
‘modular, design-and-build activity’ often related to structures, procedures and rewards (Bate
1994, p. 11).

They usually discuss organisational culture from the perspective of managers, rather than
workers, and often emphasise the leader’s role in creating, maintaining or transforming culture:
‘leaders help to shape the culture. The culture helps to shape its members … culture, then, stands
at the apex of the leader’s responsibility hierarchy’ (Hampden-Turner 1990, pp. 7, 9). In this
paradigm, ‘organisational culture’ is sometimes used interchangeably with ‘corporate culture’
which Linstead & Grafton Small (1992, p. 333) describe as

the term used for a culture devised by management and transmitted, marketed, sold or
imposed on the rest of the organization …; with both internal and external images … yet
also including action and belief — the rites, rituals, stories, and values which are offered
to organizational members as part of the seductive process of achieving membership and
gaining commitment.

When investigation of deeper distinctive characteristics of a particular organisational culture is
called for, researchers or consultants who subscribe to the scientific rationalist paradigm tend to
use survey instruments (such as those used by Hofstede et al. 1990 and Hofstede 1991). These
instruments bring to the surface factors which purport to be features of particular cultures, but
which are in actuality a quantitative summary of individuals’ responses to questions about how
they might behave in a limited set of situations which the researcher predicts will be useful for
highlighting cultural differences. In other words, the researcher determines what scenarios or
concepts should be used to describe the culture and then tests to see which of the scenarios or
concepts are accepted by the majority of respondents as most relevant to a given culture.

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ONE CULTURE OR MANY?

The discussion so far has focussed upon organisational culture as if all organisations have one
culture. But do they? Although some writers argue that organisational cultures are unitary and
integrated, others argue for the existence of pluralism or differentiated sub-cultures in the one
organisation, while yet others adopt a fragmented or anarchist perspective and claim that
‘consensus fails to coalesce on an organization-wide or subcultural basis, except in transient,
issue-specific ways’ (Frost et al. 1991, p. 8).
Again, as with the anthropological or scientific rationalist paradigm, there is no one demonstrably
right perspective, but the perspective adopted will certainly influence the change strategies used
and it may be that certain types of organisations are more likely to have a single, unitarist culture
whereas others are more likely to be pluralistic or anarchistic in nature.

Collins and Porras’ (1994, p. 8) study of visionary companies — Built to Last — provides a clear
example of an anthropological paradigm combined with a unitarist perspective in its claim that:

a visionary company almost religiously preserves its core ideology — changing it
seldom, if ever. Core values … form a rock-solid foundation and do not drift with the
trends and fashions of the day.

A unitarist perspective also underpins various category descriptions of organisational culture. For
example, Handy (1993) asserts that organisations exhibit either role, task, power or person-
orientated cultures. Change agents or writers who take a unitarist perspective generally argue for
change or maintenance of organisational culture through top-down leadership and organisation-
wide systems and programs. From the unitarist perspective, the essential unity of the organisation
makes it possible for the leader or leadership group to effectively control or alter organisational
direction. This sort of top-down organisational control may conceivably occur in transnational
companies, in which national or professional cultures arguably exert less influence, but many
writers or change agents perceive in most organisations the existence of sub-cultures which
militate against the effectiveness of top-down cultural leadership.

Those who take a pluralist perspective and recognise the existence within organisations of diverse
sub-cultures arising from factors such as professional affiliation, status, social or divisional
interactions, argue that organisational success springs from the effective leadership and
management of diversity, and that cultural change or maintenance efforts have to be undertaken
through programs specifically designed for different segments of the organisation. International
companies, with national subsidiaries tied to a parent company, often exhibit distinct cultures
interacting with the parent company culture, but so also do many nationally-based companies
where, for example, research and development divisions may form a sub-culture quite different
from that of marketing divisions. Public sector healthcare organisations such as Queensland
Health have long been subjected to cultural silos that have emerged from the development of
powerful professional groups such as medical and nursing associations.

Ogbonna & Wilkinson’s (1990) study of the effects of a supermarket cultural change program
(from a cost-minimisation to a customer-service focus) further demonstrates that, in some

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organisations, not only do distinct sub-cultures exist (supermarket checkout operators vs
managers), but that changes in training, rewards and structures may achieve change in the values
of one group (the managers) and only superficial behavioural changes in the other group (the
checkout operators). The checkout operators behaved in the way required but did this because
they were required to do so, rather than because they had personally come to believe in the
importance of better customer service.

Even more fragmentation in organisational cultures than is evidenced in the supermarket example
may result from recent changes in organisational configurations, such as the growth of project
work, network organisations or strategic alliances in which individuals from across an
organisation or from several separate organisations join together temporarily to undertake a
specific task. In such instances, the transient and diverse nature of the work grouping is clearly
unlikely to foster the formation of an organisation-wide culture or even a sub-culture. The
anarchist perspective argues that in any case, all organisations are comprised of individuals who
bring with them their own values and assumptions and thus there really can be no underlying
cultural unity at any level except on a transient basis (Frost et al. 1991). Such fragmentation may
be found even in traditionally structured firms for, in their study of twenty organisational cultures,
Hofstede et al. (1990, p. 311) found:

shared perceptions of daily practices to be the core of an organization’s culture ….
employee values differed more according to the demographic criteria of nationality, age,
and education than according to membership in the organization per se.

The anarchist perception of organisational culture implies the impossibility of effecting cultural
change through concerted change efforts, but it also highlights the centrality of effective
communication and management of diversity if the loosely-coupled organisation is to remain
functional and not break apart (Weick 1991). The question of whether there is one culture or
many operating within the organisational context is an important issue for managing culture. Each
of the three perspectives discussed above provide some valuable insights into addressing the
question.

IMPLICATIONS FOR CULTURE MANAGEMENT AND CHANGE

There exist two basic approaches to culture and, by implication, strategy: conforming
(maintaining order and continuity) and transforming (changing and breaking existing patterns)
(Bate 1994). As demonstrated by the subsequent poor performance of many of Peters and
Waterman’s (1982) so-called ‘excellent’ companies, the effectiveness of the chosen approach to
organisational culture and strategy at any given time is dependent upon contextual factors relating
to both the internal and the external environment (Bate 1994). Thus, context determines a culture
needs to be maintained or changed, but the strategies adopted are very much determined by the
paradigm and perspective subscribed to by the manager or change agent.

In dealing with the management of organisational culture, it is firstly necessary to identify as fully
as possible the attributes of the existing or new target culture — the myths, symbols, rituals,
values and assumptions that underpin the culture. Subsequently, action can be instigated in any of

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several key points of leverage (Allen 1985; Davis 1985; Trice & Beyer 1985; Kilman et al. 1986;
Schneider & Rentsch 1988):

! recruitment, selection and replacement — culture management can be affected by
ensuring that appointments strengthen the existing culture/s or support a culture shift;
removal and replacement may be used to dramatically change the culture;

! socialisation — induction and subsequent development and training can provide for
acculturation to an existing or new culture and also for improved interpersonal
communication and teamwork, which is especially critical in fragmented
organisational cultures;

! performance management/reward systems — can be used to highlight and encourage
desired behaviours which may (or may not) in turn lead to changed values;

! leadership and modelling — by executives, managers, supervisors can reinforce or
assist in the overturning of existing myths, symbols, behaviour and values, and
demonstrates the universality and integrity of vision, mission or value statements;

! participation — of all organisation members in cultural reconstruction or maintenance
activities and associated input, decision-making and development activities is essential
if long-term change in values, and not just behaviours, is to be achieved;

! interpersonal communication — satisfying interpersonal relationships do much to
support an existing organisational culture and integrate members into a culture;
effective teamwork supports either change or development in and communication of
culture; and

! structures, policies, procedures and allocation of resources — need to be congruent
with organisational strategy and culture and objectives.

The above constitute a number of many strategies and leverage points that can be used in
organisations to manipulate an organisation in terms of its overall culture and the sub-cultures
that are contained within. The management of culture is based on a sophisticated understanding
of the tacit and explicit aspects that make-up the existing culture.

CONCLUSION

What constitutes organisational culture and its perceived role in organisational success are
contested, resting on perceptions of culture either as a historically-based, change-resistant, deep
social system which underpins all organisational strategy and action, or as just one aspect of the
total organisational system, manipulable though surface structures such as rewards. The
paradigm adopted will determine which of the key points of leverage are deemed most likely to
achieve the desired outcome of cultural maintenance or change. The perspective adopted will
determine the focus of cultural change, development or maintenance activities, that is, whether
they are to involve the whole organisation, identified sub-cultures, or small cells brought together
for specific projects. There are no definitive answers to questions about the most appropriate way
to change or maintain an organisational culture in order to provide for success or, indeed, whether
change or maintenance is required in a given context — to answer these question is the essential
challenge facing the strategic leader.

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INSTRUCTIONAL COMMENTARY

From the above discussion, answer the following questions:

1. What definition of culture best reflects what you observe as going on in the organisations you

are familiar with?
2. Are the organisations you are familiar with more unitarist in terms of culture? Or pluralist? Or

anarchist?
3. Can you change organisational culture?
4. What particular strategies do you see as fundamental to changing culture?

REFERENCES

Allen, R. 1985, ‘Four Phases for Bringing About Cultural Change’, in Gaining Control of the

Corporate Culture, eds R. Kilmann, M. Saxton, R. Serpa, Jossey-Bass, San Francisco.

Bate, S. 1994, Strategies for Cultural Change, Butterworth Heinemann, Oxford.

Benedict, R. 1934, Patterns of Culture, Houghton Mifflin, Boston

Brown, A. 1995, Organisational Culture, Pitman Publishing, London.

Collins, J. & Porras, J. 1994, Built to Last, Century, London.

Davis, T. 1985, ‘Managing Culture at the Bottom’, in Gaining Control of the Corporate Culture,
eds R. Kilmann, M. Saxton, R. Serpa, Jossey-Bass, San Francisco.

Deal, T. E., & Kennedy, A. 1982 . Corporate Cultures: The Rites and Rituals of Corporate Life,
Addison-Wesley, Reading, MA.

Frost, P., Moore, L., Reis Louis, M., Lundberg, C., & Martin, J. (eds) 1991, Reframing
Organizational Culture, Sage, Newbury Park.

Gordon, G. 1991, ‘Industry Determinants of Organizational Culture’, Academy of Management
Review, vol 16, no. 2. pp. 396-415.

Hampden-Turner, C. 1990, Creating Corporate Culture, Addison-Wesley, Massachusetts.

Handy, C. 1993, Understanding Organizations, Penguin, London.

Hofstede, G., Neuijen, B., Dval Ohayv, D. & Sanders, G. 1990, ‘Measuring Organizational
Cultures: A Qualitative and Quantitative Study Across Twenty Cases’, Administrative Science
Quarterly, vol. 35, pp 286-316.

Hofstede, G. 1991, Cultures and Organizations, McGraw-Hill, London.

The Management of Organisational Culture Willcoxson & Millett

99

R. Kilmann, M. Saxton & R. Serpa, 1986, ‘Issues in Understanding and Changing Culture’,
California Management Review, vol. 28, no. 2, pp. 87-94.

Kluckhohn, C. & Strodtbeck, F. 1961, Variations in Value Orientations, Row Publishing, Illinois.

Linstead, S. & Grafton-Small, R. 1992, ‘On Reading Organizational Culture’, Organization
Studies, vol. 13, no. 3, pp 331-55.

Ogbonna, E. & Wilkinson, B. 1990, ‘Corporate Strategy and Corporate Culture: The View from
the Checkout’, Personnel Review, vol 19, no. 4., pp. 9-15.

Ott, J. S. 1989, The Organizational Culture Perspective, Brooks/Cole Publishing Company,
California.

Peters, T. & Waterman, R. 1982, In Search of Excellence, Harper & Row, Sydney.

Schneider, B. & Rentsch, J. 1988, ‘Managing Climates and Cultures: A Futures Perspective’, in
Futures of Organizations, ed. J. Hage, Lexington Books, Massachusetts.

Smircich L. 1983, ‘Concepts of Culture and Organisational Analysis’ Administrative Science
Quarterly, 28, 3, pp. 339-358.

Trice, H. & Beyer, J. 1993, The Cultures of Work Organizations, Prentice Hall, New Jersey.

Trice, H. & Beyer, J. 1985, ‘Using Six Organizational Rites to Change Culture’, in Gaining
Control of the Corporate Culture, eds R. Kilmann, M. Saxton, R. Serpa, Jossey-Bass, San
Francisco.

Trompenaars, F. 1993, Riding the Waves of Culture, Nicholas Brealey Publishing, London.

Weick, K. 1991, ‘The Vulnerable System: an Analysis of the Tenerife Air Disaster’, in Reframing
Organizational Culture, eds P. Frost, L. Moore, M. Reis Louis, C. Lundberg & J. Martin,
Sage, Newbury Park.

Vol.23, No. 1, January – March 1998 83

Organizational Culture in the Changing Environment
Deepti Bhatnagar and Leena Bhandaris

In the context of rapid changes taking place in the
economic and business environment in the country/
organizations need to transform themselves radically
in order to seize new opportunities. Arguing that
organizational culture is a crucial organizational
variable that can facilitate or impede the change
process/ this paper by Deepti Bhatnagar and Leena
Bhandari presents results of an empirical study.

The use of competing values framework showed
hierarchy to be dominant and market culture to be
weak in our organizations/ although there appeared
to be interesting differences between the private
sector/ the public sector/ and a government
department. Implications of these findings are
presented.
Deepti Bhatnagar is a Professor and Leena
Bhandari is an Academic Associate in the
Organizational Behaviour Area of the Indian
Institute of Management, Ahmedabad.

In the wake of increasing liberalization of the economy,
Indian organizations are facing unprecedented challenges.
The familiar world of continuity is fast giving way to
changes in task technology and the nature of doing
business. The dismantling of trade and geographic barriers,
wide ranging economic reforms combined with revolution
in communication and information technology is bringing
about a distinct shift in the nature of competition, customer
profiles and preferences. The heightened impact of global
trends and events on organizational performance is offering
a plethora of opportunities as well as risks. For responding
effectively to these multiple discontinuities in the
environment, organizations cannot depend on the
competencies and energy of the CEO or members of the top
management team alone. As the challenges are broad-
based, so should the organizational readiness be. Since the
wisdom and resources of a handful of members, no matter
how committed, is simply not adequate to deal with the
enormity of change, the involvement of a large number of
members has to be ensured. Organizational culture can be a
powerful vehicle for enlisting suitable member response.
An important question in today’s fast-changing
environment is what kinds of signals do managers in
contemporary Indian organizations receive about relative
organizational priorities, shared beliefs and perceptions,
valued goals, and organizationally-preferred methods of
achieving them. In other words, a key issue is: what are the
perceptions of managers today about salient dimensions of
organizational culture in which they operate ? An equally
important question is whether organizations need to review
the suitability of their culture to emerging organizational
challenges, and if need be, to work towards affecting
changes in the culture, so as to ensure congruence between
organizational culture and changing organizational tasks.
Since culture and related corporate realities interact to
influence performance (Sathe, 1985), organizations need to
be aware of these shared perceptions, and examine if these
perceptions are consistent with the objectives, strategies,
and tasks they have outlined for themselves. The present
study is addressed to the first of these issues, namely, the
diagnosis of organizational culture.

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84 Vikalpa

In the Indian context, an important question is whether
organizations in the public sector and government
departments have an organizational culture similar to the
culture obtaining in organizations in the private sector, or
whether there are major differences across sectors.
Historically, since the start of the national planning process
in the post-independent India, the debate about the relative
performance and contribution of public versus private
sector has attracted a lot of attention. In the recent past,
with the opening up of the Indian economy and concurrent
shift towards privatization, the interest in the economic
performance of the public sector has intensified. Without
diluting their social objectives, the public sector
organizations are increasingly expected to perform well
commercially also. As economic performance and market
orientation become buzz words for Indian organizations
irrespective of the kind of ownership, and since
organizational culture tends to influence organizational
performance, two important research issues are: Do
organizational cultures of Indian organizations reflect t hese
shifting concerns and challenges, and whether there are any
differences between organizations in the government,
public, and private sector along this significant
organizational variable. The present study explores these
issues.

Organizational Culture
Although the concept of organizational culture has
attracted the attention of the management scholars for over
two decades (dark, 1972; Pettigrew, 1973), of late there has
been a surge of studies exploring the relation between
organizational culture and other corporate variables
including performance (Louis, 1981; Sathe, 1985; Martin,
1992). Given the nebulous nature of the concept of
organizational culture, different scholars have tried to
define it differently. Schein (1990, p 111) defined
organizational culture as: “(a) a pattern of basic
assumptions (b) invented, discovered, or developed by a
given group (c) as it leams to cope with its problems of
external adaptation and integration (d) that has worked well
enough to be considered valid and, therefore, (e) is to be
taught to new members as the (f) correct way to perceive,
think, and feel in relation to those problems.” What is
interesting is Schein’s emphasis on, inter alia, the basic
assumptions held by a group in the process of the group
trying to cope with “external adaptation,” which is the main
trigger for our study. According to Schein (1985), culture
manifests itself at three fundamental levels. At the
observable level are artifacts; underneath artifacts lie
values; and underlying the values at the core are basic
assumptions. Arguing that Schein’s model did not
adequately capture the importance of

symbols and processes. Hatch (1993) extended Schein’s
conceptualization to include the processes of manifestation,
realization, symbolization, and interpretation as a part of
cultural dynamics. In an article presenting his views on
how culture should be defined and analysed, Schein (1990,
p 117) emphasized the importance of cultural analysis in
managing change: “Without such a concept we cannot
really understand change or resistance to change. The more
we get involved with helping organizations to design their
fundamental strategies, particularly in the human resource
area, the more important it will be to be able to help
organizations to decipher their own cultures…. Many
organizational change programs that failed probably did so
because they ignored cultural forces in the organizations in
which they were to be installed.” Thus, an examination of
organizational culture appears fundamental to
organizational change efforts.

Another approach to studying culture derives primarily
from cognitive organization theory (Weick, 1985). It
regards organizations as knowledge systems and views
organizational culture in terms of managerial information
processing. Quinn and his colleagues (Quinn and McGrath,
1985; Quinn and Rohrbaugh, 1983) proposed a Competing
Values Approach (CVA) to understand values individuals
hold for organizational performance. Proposing CVA as a
meta theory emerging out of empirical studies and
conceptual research, Quinn and McGrath (1985, p 317)
observed that CVA “assumes that all abstract knowledge is
organized around a consistent framework of perceptual
values and that the articulation of these values can do much
to further human understanding.” Just as information
processing takes place at the individual level, so does it
occur at the level of groups. In organizations, over a period
of time, groups of people develop collective belief systems
about social arrangements and the “appropriate” nature of
transactions. These transactions determine organizational
members’ identity, power, and satisfaction . Incorporating
beliefs about organizational purpose, criteria of
performance, location of authority, base of power,
leadership style, etc., Qu inn and McGrath (1985) proposed
four types of transactional systems or cultural forms,
namely, rational, ideological, consensual, and hierarchical
cultures with market, adhocracy, clan, and hierarchy
respectively as the dominant organizational forms. Posit ing
the concept of congruence, CVA suggests that when
environmental uncertainty and intensity are high,
“adhocracy” or developmental culture is the most
congruent form and idealistic prime mover is the congruent
leader. Figure 1 presents the four types of congruence.

Vol. 23, No. 1, January – March 1998 85

Figure 1: Four Types of Fit or Congruence

Environmental Condition Organizational Culture and Form Leadership Style

Source: Quinn and McGrath, 1985.

The major strength of this framework is that it combines two
dominant theoretical perspectives, namely, the systems structural
perspective with the transaction cost perspective. The CVA
analyses organizational cultures along two dimensions of a grid
framework (Quinn, 1988). The first dimension reflects the extent
to which an organization focuses its attention and energy on
internal versus external functioning. Thus, the X-axis represents
relative organizational emphasis on internal focus (including
smoot hing activities and integration) at one end and an external
orientation (including concern for competition and differentiation)
on the other. The second dimension represents control orientation
in an organization and runs from control to flexibility. Thus, the
Y-axis represents the range from organic processes (with em-
phasis on flexibility, spontaneity, and individuality), to
mechanistic processes (emphasizing control, stability, and order).
These two dimensions are combined to form four quadrants
repres enting four different organizational culture, namely, the
clan, adhocracy, hierarchy, and market. The Competing Values
Framework (CVF) is presented in Figure 2. The four kinds of
organizational culture as conceptualized in the CVF are briefly
outlined below.

Figure 2: Competing Values Framework

Flexibility and Individuality

The Clan Culture Adhocracy
Culture

Hierarchy
Culture

Market Culture

Stability and Control

Clan Culture: The upper left quadrant labelled as “clan”
combines high internal cohesion with concern for people.
This culture emphasizes teamwork, sensitivity, and
consensus. In this culture, workplace is regarded as one big
family. Participation of members is valued. Organizational
loyalty and tradition are the hallmarks of this culture.
Concern for people and

personal satisfaction are regarded as more important values
than financial and market related objectives.

Market Culture: The lower right quadrant labelled as
“market” is directly opposite to the clan culture, justifying
the terminology “competing values.” The market culture is
characterized by external orientation and stability. The
organization has a high result orientation. Goal
achievement is important. Leaders demand performance,
competitive stances, and achievement of objectives. In
other words, “winning” is an important organizational
value. Productivity is obtained through market mechanisms
such as competitive advantage and market leadership.
Adhocracy Culture: The upper right quadrant which
combines flexibility and spontaneity with external
orientation is termed as “adhocracy.” The accent is on risk
taking, adaptability, and innovation. The organization is
characterized by dynamism and experimentation so as to
keep pace with external challenges. Individual creativity
and initiative is valued. Initiative towards new markets,
new resources, and growth is encouraged.
Hierarchy Culture: Representing values competing with the
adhocracy culture is the hierarchy culture. The dominant
values are control, predictability, and consistency. Formal
rules and regulation, policy, direction, and surveillance are
used to maintain stability.

It is useful to remember that the term “adhocracy
culture” connotes a special meaning in this framework
which is akin to our understanding of “entrepreneurial
culture” in the Indian context. Since the term ‘adhocracy’ is
sometimes used in India to connote a ‘laissez faire’ culture
lacking consistency and long-term orientation, to eliminate
confusion, we have used the term “entrepreneurial culture”
interchangeably with adhocracy culture in our study.

The above archetypes represent four possible types of
cultures in an organization. Two or more cultures can exist
simultaneously within the same organization. But, the key
question is which of them is more characteristic of an
organization than the others.

High uncertainty-high intensity High

intensity-low uncertainty Low

uncertainty-low intensity Low intensity-

high uncertainty

Developmental culture (adhocracy)

Rational culture (market) Hierarchical

culture (hierarchy) Consensual culture

(clan)

Idealistic prime mover

Rational achiever

Empirical expert

Existential team builder

Internal
Orientation

External
Orientation

86 Vikalpa

The CVF has been used to serve a variety of
objectives from helping organizations to assess their
existing and desired cultures so as to bring about major
changes (Hooijberg and Petrock, 1993), to exploring the
relationship between corporate culture, customer
orientation, and innovativeness (Deshpande et a?,, 1993).
In the latter study, researchers probed the relationship
between business performance and organizational culture
in a competitive marketplace. It was hypothesized that
business performance would be ranked from highest to
lowest according to the following sequence: market
culture, adhocracy culture, clan culture, and hierarchical
culture (Deshpande et al., 1993, p 26). A study of 50
quadrads (double dyads) in Japanese firms lent support to
the above hypothesis:
market cultures were found to be associated with the best
performance, followed by adhocracy. Hierarchical culture
was associated with the lowest performance, followed by
clan. Thus, organizational preferences for external
positioning compared to internal positioning seemed to be
associated with superior performance.

Given the importance of organizational culture,
particularly in the context of increasing turbulence in the
environment, we decided to study the perceptions of
organizational cultures in three kinds of Indian
organizations: the private sector, the public sector, and a
central government department offering a basic public
service. We followed the CVF to identify domi nant
organizational cultures in these organiza tions.

Methodology
Sample
Our sample consisted of 169 respondents drawn from six
organizations, three from the private sector, two from the
public sector, and a government department which we refer
to as Organization ABC. The breakup of respondents
between the private sector, the public sector, and
Organization ABC was 68, 51, and 50 respectively.
Respondents were senior managers who attended in –
company programmes in which one of the researchers was
involved as faculty. Data were collected over seven in –
company programmes in the course of six months (two
programmes were for Organization ABC). Organizations
were predominantly from the service sector including
financial services (Two -one each from the public and the
private sector) and transport (Two -one each from the
public and the private sector). One out of six organizations
was engaged in manufacturing and one organization (a
government department) represented a public service
offered across the length and breadth of the country.

Though their designations varied, participants

broadly represented positions equivalent to general
managers and the next ‘lower level. As data on
organizational culture includes sensitive soft informa tion
about the organization, the study was confined to
programmes where rapport had been built between
participants and researchers. Participants were asked to fill
out a cultural diagnosis questionnaire to reflect their
authentic perceptions.

Respondents were promised that aggregate analysis
would be presented back to the group for a discussion of
their organization’s culture in a subsequent session in the
programme. To allay respondents’ misgivings about
possible identification, no informa tion was sought about the
respondents’ demographic profile. In each programme,
participants were asked to fill out the instrument in the
classroom without consulting others. As they were assured
that the exercise would be used for academic purposes such
as teaching and research, and that they could also get useful
insights into their organization’s culture, the participants
appeared enthusiastic about giving their thoughtful
responses. In each participant group, the presentation of the
results back to participants in a subsequent session on
organizational culture evoked serious discussions, details of
which are outside the scope of the present paper.

Instrument
A scale developed to diagnose the organizational culture
(Deshpande et al., 1993) was used.The scale was adapted
from Cameron and Freeman (1991) and Quinn (1988).The
scale contained four categories of descriptions including
dominant attributes of the organization, leadership styles,
bonding, and strategic emphasis. In each category, there
were four descrip tions labelled A, B, C, and D, each
representing one of the four organizational cultures
discussed above (viz. clan, adhocracy/ etc.). For each
category, respondents were asked to distribute 100 points
across the four descriptions to indicate the similarity of the
description to their organizational reality as it existed, and
NOT as they would like it to be. Respondents were asked to
use all the 100 points. However, in order to force them to
choose from competing descriptions, respondents were told
not to give identical points to two statements within the
same category. Addition of all four values for A items
across the four categories gave the score for clan culture;
likewise, the addition of all B, C, and D items separately
across the categories rendered the score for adhocracy,
hierarchy, and market respectively. The psychometric
properties of the instrument were satisfactory and are
reported elsewhere (Deshpande et al., 1993). In our study
for

Vnl. 23, No. 7, January – March 1998 87

testing the scale reliability in the Indian context, Cron-bach
Alpha Reliability Analysis was performed among the items
to provide a rationale for building the scale for further
statistical analysis.

The analysis showed that three culture dimensions,
namely, adhocracy, hierarchy, and market (with reliability
scores of .7185, .6530, .5549 respectively) adequately met
the standards for such research (Nunnally, 1967). Only one
culture dimension (clan) had a reliability score of less than
.50. Though clan cult ure (reliability score of .2818) has a
lower reliabilty coefficient, it has been retained in the
analysis for theoretical purposes because it is part of the
broader conceptual framework described previously
(Cameron and Freeman, 1991; Quinn, 1988).

Results and Discussion
At the first level of analysis, we wanted to know
aggregated ranks of the four organizational cultures. As we
did not have exactly comparable number of respondents
from the public and the private sector, weighted average
was computed to “Uminate the possibility of bias. Results
are presented in Table 1. As evident, the self-report
measure indicated the presence of all the four cultures.
Hierarchy emerged as the most dominant culture way ahead
of others in strength. Considerably weaker, but enjoying
rank 2, was clan. Market and adhocracy, with almost com-
parable scores, had ranks 3 and 4 respectively. A surprising
result was the weak mean value for market culture. At a
time when expressions like “market orientation” and
“customer focus” seem to represent dominant themes or
popular corporate mantras echoed alike in CEO speeches
and executive seminars, our study revealed that the market
culture occupied a low organizational priority, across the
sectors!

At the next level, we explored the diffe rences between
perceived culture in the private sector, the public sector,
and ABC. Tables 2a and 2b present the results. We found
sharp sectoral differences.

Though organizations from the private and the

Table 1: Organizational Culture at a Glance

Mean Values Rank n=169
Type of Organizational
Culture
Clan 229.8

2

Adhorcacy 211.9

4

Hierarchy 334.23

1

Market 215.62

3

Table 2a: Organizational Culture in Private Sector, Public
Sector, and ABC

Type of Orga-
nizational Culture

Private Sector Public Sector ABC

Mean Rank (S.D.) Mean Rank (S.D.I Mean Rank

Clan 99.63 2 83.34 3 92.04

(43.58)

(42.13)

(43.3)
Adhocracy 108.17

(39.89)
1 80.2 (38.2) 4 58.5 (38.2) 4

Hierarchy 94.43
(40.34)

4 144.23
(48.9)

1 179.02
(55.62)

1

Market 96.37
(39.1)

3 92.3 (40.2) 2 68.06
(35.13)

3

Table 2b: Mean Differences across the Three Sectors

Type of
Organizational
Culture

Between Private Sector and
Pulflic Sector

Between Public Sector
and ABC

Clan 2.14* 1.08

Adhocracy 3.78* 2..9*

Hierarchy 5.9* 3.32*

Market .55 3.23*

* Significant at .01.
public sector included in our study operated in comparable
industries and environment, there were major differences in their
most dominant (rank 1) and least dominant (rank 4) cultures.
Adhocracy or entrepreneurial culture signifying high initiative,
experimentation, and risk-taking emerged as the most dominant
culture in the private organizatioiis. In the public sector
organizations and the ABC, adhocracy was indeed the leas t
dominant culture (rank 4)!

In the public sector organization and ABC, the most dominant
culture was hierarchy which, significantly enough, was the weakest
culture (rank 4) in organizations in the private sector. As Table 2
shows, the private sector orga nizations on the one hand, and the
public sector organizations and ABC on the other, presented a
picture of stark contrast so far as the strongest and the weakest
cultures were concerned:
they were diametrically -opposite in terms of the perceived
importance of adhocracy and hierarchy. For the other two cultures
also, namely, clan and market, there were differences though not as
pronounced. Clan was the second dominant culture in the private
sector and ABC, and was third in the public sector. Market

88 Vikalpa

orientation enjoyed second rank in the public sector, but
third rank in the private sector and ABC. Thus, whereas for
adhocracy and hierarchy there were sharp differences
across sectors, for market orientation, the differences were
negligible: it enjoyed a low priority across the board. Our
results showed standard deviations to be on the higher side.
Large standard devia tions have been reported in other
studies of organizational cultures also. For example,
Deshpande et al., (1993) using the same insturment as used
in our study, found considerable standard deviations. Such
standard deviations indicate a certain dispersion of re –
sponse, and means need to be interpreted accordingly.

Organizational Culture: A Closer Look
In order to understand which factors led to sector-wise
differences in organizational culture, we carried out further
analysis. As the above results showed, for adhocracy and
hierarchy cultures, there was significant difference across
sectors. A pertinent next ques tion was, organizational
culture being a broad concept, whether the above
differences could be explored further to determine which
dimension/s of culture contributed significantly to the
sectoral differences. The four subcategories namely,
organizational attributes, leadership styles, bonding, and
strategic emphasis were analysed separately for adhocracy
and hierarchy — the two subcultures which presented the
maximum across-sector differences.

Adhocracy or Entrepreneurial Culture
Results of dimension-wise analysis for adhocracy culture
for the respondents from the private sector, the public
sector, and ABC are presented in Tables 3a and 3b.

An interesting result was that the respondents across
the board reported considerable strategic emphasis on
adhocracy. This suggests that irrespective of sector, their
organizations were perceived by the re spondents to be
emphasizing growth and acquiring new resources.
Readiness to meet new challenges was treated as being
important. Thus, the respondents seemed to have perceived
an unmistakable signal in their respective organizations
about the need to gear up internal resources so as to meet
environmental changes from a position of strength.
However, beyond this similarity, the other notable feature
was differences. It is evident from the table that differences
between the sectors in the dominant attributes of adhocracy
were statistically significant. This meant that respondents
from the private sector organizations perceived their
organizations to be much more dynamic and
entrepreneurial than respondents from the public

Table 3a: T ype of C •rganiz atio nal C ‘ultur e: Adhoc :racy

Prh •Mte Public ABC
Se, ctor Sector
Mean Rank Mean Rank Mean Rank
(S.D.) (S.D.)
Dominant 24.87 3 14.5 4 10.28 4
Attributes (13.4)

(12.5)

(10.2)

Leader 31.42 1 25.92 1 16.6 2
Style (16.6)

(18.3)

(15.4)

Bonding 23.5
(13.5)

4 14.7 (8.7) 3 10.9 (8.7) 3

Strategic
Emphasis

28.36
(12.9)

2 25.8 (14.8) 2 20.7
(16.6)

1

Table 3b: Mean Differences between the Three Sectors

Between Private and Public
Sectors (t Value)

Dominant Attributes 4.5*
Leader Style

2.2*

Bonding 7.4*
Strategic Emphasis 1

* Significant at .01.

sector organizations. Compared to their public sector
counterparts, the respondents from the private sector
organizations reported a lot more willingness among
people to stick their necks out and take risks, and the
differences were statistically significant at .01 level.
Likewise, for leader style, differences across the pri-
vate and the public sector were significant at .01 level.
Compared to the public sector, private sector respond-
ents believed much more strongly that the head of their
organization was considered to be an entrepreneur, an
innovator or a risk taker — in other words, a role
model in dynamism whom they could emulate.
Incidentally, among four cultural dimensions for
adhocracy, the leader style ranked as the strongest
dimension for the private sector respondents which
meant that leadership was seen as playing a pivotal
role in invoking the entrepreneurial culture in organi-
zations in the private sector. Bonding was another
dimension in which the two sectors differed signifi-
cantly: private sector respondents indicated a visible
organizational commitment in their companies to
innovation and development, which was perceived as
being much less by the respondents from public sector
organizations.

Between Public
Sector and ABC (t

Value)
1.9*

2.8*

2.2*

1.6

Vol. 23, No. 1, January – March 1998 89

Comparing these dimensions between the public sector
and ABC, we found statistically significant differences for
dominant attributes, leader style, and bonding which were
perceived as being markedly low by respondents from
ABC. Thus, in a sense, the public sector can be seen as
presenting a distinct midpoint in adhocracy or
entrepreneurial culture, particularly with regard to dominant
attributes, leader style, and bonding; the private sector and
ABC marked the high and the low ends of the adhocracy
continuum.

Hierarchy
The second type of culture in which across-sector
differences were significant was hierarchy. Results of our
analysis are presented in Tables 4a and 4b.

It is clear from these tables that, for all the dimensions
of organizational culture, namely, domi nant attributes,’
leader style, bonding, and strategic emphasis, respondents
from the public sector organizations reported a much
stronger hierarchy-dominated culture than respondents from
the private sector organizations. With the exception of
leader style, the same was true between respondents from
ABC and the public sector. The above differences were
statis –

Table 4a: Type of Organizational Culture: Hierarchy

Private Sector Public Sector ABC

Mean Rank (S.D.) Mean Rank (S.D.) Mean Rank

Dominant
Attributes

24.45 2 (15.8) 42.35 1 (18) 53.6
(21.8)

1

Leader Style 28.37 1 (15.9) 34.36 3 (19.5) 32.5
(18.9)

4

Bonding 16.42 4 (13.1) 32.62 4 (18.8) 50.42
(22.9)

2
Strategic
Emphasis

25.19 3 (14.5) 34.9 2 (16.6) 42.4
(24.1)

3

Table 4b: Mean Differences Between the Three Sectors

Bel and ‘•.ween Private
Public Sectors (t
Value)

Between Public Sector
and ABC (t Value)

Dominant Attributes 7.2* 2.8*

Leader Style 1.8* 0.7

Bonding 6* 4.5*

Strategic Emphasis 3.2* 1.8*

* Significant at .01.

tically significant at .01 level. To paraphrase these results,
in terms of dominant attributes, respondents from the public
sector organizations indicated much more strongly than
their counterparts from private organizations that their
organization was a very formalized and structured place
where established procedures generally governed what
people did. Regarding the dimension of bonding—
responding to the issue of what held the organization
together— participants from the public sector organizations
expressed a much stronger sentiment than the private sector
participants. According to them, what held the organization
together was formal rules and policies;
and, maintaining a smooth running institution was
important. Coming to strategic emphasis, again, re –
spondents from the public sector organizations indicated a
much stronger hierarchy orientation than their private sector
counterparts. The former group expressed a strong
agreement with the view that their organizations
emphasized permanence and stability, and efficient, smooth
operation was considered to be important.

There were significant differences in dominant
attributes, bonding, and strategic emphasis between
respondents from ABC and those from the public sector
organizations. The former reported a much stronger
emphasis on hierarchy in their organizational culture than
their counterparts from the public sector organizations.

Thus, the three kinds of organizations can be seen as
representing three distinct points on the hierarchy
continuum: ABC appeared to represent the highest and the
private sector organizations the lowest emphasis on
hierarchy with the public sector organizations falling in
between.

Discussion
Though all the four types of culture are present in
organizations, there are marked differences in their relative
strength. When data from all six organizations were pooled
together, hierarchy emerged as the pre dominant culture
form. Our study was focused on culture within
organizations, yet the overall domi nance of hierarchy
suggests possible influence of larger societal culture on
organizational culture. In a broad sense, the hierarchy
culture with its emphasis on control, power distance, and
consistency approximates some attributes of the larger
societal culture. Scholarly studies as well as popular
literature highlight the hierarchical nature of Indian society
where noticeable power distance characterizes formal and
informal relationships. Earlier studies of organizational
culture in Indian organizations have reported significant

90 Vikalpa

authority patterns influencing subordinate behaviour
(Kakar, 1971), and high power distance between different
employees (Hofstede, 1980). Despite the passage of several
decades since the above trends were reported and the fact
that the past few years have witnessed an accelerated rate
of technological, economic, and social change, more so in
the immediate environment of commercial organizations
where our respondents were situated, it seems that the
influence of societal culture persists. This dominance of
hierarchical culture in Indian organizations embedded as
thev are in the hierarchical national culture can be
compared with clan emerging as the dominant organi-
zational culture in Japanese firms whose national culture
also upholds clan as an important social unit (Deshpande et
al., 1993). Though the impact of national culture on
organizational culture was not the principal interest of our
study, our results at the first level of analysis coupled with
the results of the study of Japanese firms indicate such a
possibility which needs to be studied in future research.

Another striking finding we want to highlight is the
relatively weak market culture in organizations in the
public sector, the private sector, and government
department alike. High result orientation, competitive
spirit, and strong market orientation is not seen as a strong
and pervasive concern in our organizations. When we
comp are the low organizational emphasis on market
culture in our study of Indian organizations with a study of
Japanese firms, we find that, in the latter, market culture
enjoyed the second rank (Deshpande et al., 1993, p 3). The
relatively weak market orientation in Indian organizations
as brought out by our study should be a cause for worry
and a major area for culture change initiatives in our
organizations. If our findings could be generalized, then, in
the context of Indian industry’s aspirations to become
dominant global players, the relatively low concern for
market and customers becomes particularly worrisome.
Our study underscores the need to ask at the organization
level the tough question as to whether the company culture
with particular regard to ma rket orientation is congruent
with the global business environment in terms of
understanding markets and responding to customers’ needs.

Regarding the differences in organizational culture
between a government organization, the public, and the
private sector organizations, to some extent, the results
reported by us could be anticipated. However, it is the
magnitude of differences that is striking. Thus, the
relatively high importance of adhocracy signifying
dynamism, initiative, and risk-taking could be expected in
the private sector organi

zations as its relatively low importance in the public
sector and in the government. But our results show
adhocracy or entrepreneurial culture to be the most
dominant culture in the private and the weakest in the
public sector! This is a significant pointer towards the
desired direction for culture change at a time when there is
strong concern in some quarters to instil private sector-like
dynamism in the public sector organizations. In addition to
downsizing, reorganization, and other structural approaches
currently in vogue to lend competitive edge to
organizations, our results suggest that cultural interventions
can be used as a vehicle to communicate dominant
organizational priorities. Likewise, although at the
aggregate level, hierarchy emerged as the most dominant
culture, it appears to have its strongest hold in government
departments, followed by organizations in the public sector,
and is reported to be relatively weak in the private sector.
The debilitating effe ct of excessive hierarchy can be easily
seen in numerous Indian organizations. It saps managers of
their initiative and energy, stifles their drive for excellence,
and results in organizational inertia, inflexibility, and
plethora of missed opportunities. Clearly, excessive
hierarchy is inconsistent with today’s business environment
which expects organizations to respond fast and
dynamically to latest market challenges.

An interesting issue in examining organization culture
is the possible existence of different subcultures in different
parts of the same organization. For example, the marketing
department may need much greater emphasis on the ‘market’
culture than the production department where routinization
may lead to operational efficiencies. Such function-specific
cultural differences can be explored in future studies.

Concluding Remarks
Admittedly, the relatively small sample size was a
limitation of the study which can lead to questions about the
generalizability of our specific findings. However, if the
cultural patterns reported in this paper could be taken as
broadly indicative of the contemporary cultural realities of
organizations in the private sector, the public sector, and
government departments, it seems that there is an urgent
need to look into this important organizational variable. In
case organiza tional culture seems to be out of step with the
requirements of today’s business environment, as our study
appears to suggest, then this reality needs to be addressed.
Changing organizational culture is not easy, but as some
recent successful experiences (Hooijberg and Petrock,1993;
Kilmann, Saxton, and

Vol. 23, No. 1, January – March 1998 91

Serpa/1986) show, it is not impossible either. The use of
CVF can take managers beyond a single focus to
emphasize simultaneously greater member involvement,
more dynamism, more efficiency, and greater market
orientation. Studies documenting the use of CVF in
organizations to execute a transformational strategy for
changing organizational culture are beginning to appear.
The amenability of organizational culture to change
depends inter alia upon the pervasiveness and strength of
cultures: more pervasive and deep-rooted organizational
cultures may need that much stronger leadership
commitment, broad-based social energy, shared
willingness among members, and sustained effort for
change. But, the important point is the appreciation at the
corporate level that an examination of organizational
culture and its congru ence with organizational mission and
business environment needs to be included in the corporate
agenda for analysis, reflection, and active management. It
is hoped that the present study would spur organiza tions in
the private sector, the public sector, arid government
departments alike to discuss and evolve consensus about
the optimum combinations of clan, hierarchy, adhocracy,
and market cultures suitable for their unique business
requirements. Moving the organizational culture towards
that optimum combination would be the next major
challenge.

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The dynamics of organizational identity
Mary Jo Hatch and Majken Schultz

A B S T R A C T Although many organizational researchers make reference to Mead’s

theory of social identity, none have explored how Mead’s ideas about

the relationship between the ‘I’ and the ‘me’ might be extended to

identity processes at the organizational level of analysis. In this article

we define organizational analogs for Mead’s ‘I’ and ‘me’ and explain

how these two phases of organizational identity are related. In doing

so, we bring together existing theory concerning the links between

organizational identities and images, with new theory concerning

how reflection embeds identity in organizational culture and how

identity expresses cultural understandings through symbols. We offer

a model of organizational identity dynamics built on four processes

linking organizational identity to culture and image. Whereas the pro-

cesses linking identity and image (mirroring and impressing) have

been described in the literature before, the contribution of this

article lies in articulation of the processes linking identity and culture

(reflecting and expressing), and of the interaction of all four pro-

cesses working dynamically together to create, maintain and change

organizational identity. We discuss the implications of our model in

terms of two dysfunctions of organizational identity dynamics: nar-

cissism and loss of culture.

K E Y W O R D S identity dynamics � identity processes � organizational culture �

organizational identity � organizational image � organizational
narcissism

9 8 9

Human Relations

[0018-7267(200208)55:8]

Volume 55(8): 989–1018: 026181

Copyright © 2002

The Tavistock Institute ®

SAGE Publications

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In a world of increased exposure to critical voices, many organizations find
creating and maintaining their identities problematic (Albert & Whetten,
1985; Cheney & Christensen, 2001). For example, the media is taking more
and more interest in the private lives of organizations and in exposing any
divergence it finds between corporate images and organizational actions. This
exposure is fed by business analysts who now routinely supplement economic
performance data with evaluations of internal business practices such as
organizational strategy, management style, organizational processes and
corporate social responsibility (Fombrun, 1996; Fombrun & Rindova,
2000). As competition among business reporters and news programs
increases, along with the growth in attention to business on the Internet, this
scrutiny is likely to intensify (Deephouse, 2000). In addition, when employ-
ees are also customers, investors, local community members and/or activists,
as they frequently are in this increasingly networked world, they carry their
knowledge of internal business practices beyond the organization’s bound-
aries and thus add to organizational exposure.

Exposure is not the only identity-challenging issue faced by organiz-
ations today. Organizational efforts to draw their external stakeholders into
a personal relationship with them allow access that expands their boundaries
and thereby changes their organizational self-definitions. For instance, just-
in-time inventory systems, value chain management and e-business draw sup-
pliers into organizational processes, just as customer service programs
encourage employees to make customers part of their everyday routines. This
is similar to the ways in which investor- and community-relations activities
make the concerns of these stakeholder groups a normal part of organiz-
ational life. However, not only are employees persuaded to draw external
stakeholders into their daily thoughts and routines, but these same external
stakeholders are encouraged to think of themselves and behave as members
of the organization. For example, investors are encouraged to align their
personal values with those of the companies to which they provide capital
(e.g. ethical investment funds), whereas customers who join customer clubs
are invited to consider themselves organizational members. Suppliers, unions,
communities and regulators become partners with the organization via
similar processes of mutual redefinition. Combined, these forces give stake-
holder groups greater and more intimate access to the private face of the firm
than they have ever experienced before.

One implication of increased access to organizations is that organiz-
ational culture, once hidden from view, is now more open and available for
scrutiny to anyone interested in a company. By the same token, increased
exposure means that organizational employees hear more opinions and judg-
ments about their organization from stakeholders (i.e. they encounter more

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images of their organization with greater frequency). Our departure point for
this article lies in the idea that the combined forces of access and exposure
put pressure on organizational identity theorists to account for the effects of
both organizational culture as the context of internal definitions of organiz-
ational identity, and organizational images as the site of external definitions
of organizational identity, but most especially to describe the processes by
which these two sets of definitions influence one another.

Following Hatch and Schultz (1997, 2000), we argue that organiz-
ational identity needs to be theorized in relation to both culture and image
in order to understand how internal and external definitions of organiz-
ational identity interact. In this article we model four processes that link
identity, culture and image (see Figure 1) – mirroring (the process by which
identity is mirrored in the images of others), reflecting (the process by
which identity is embedded in cultural understandings), expressing (the
process by which culture makes itself known through identity claims), and
impressing (the process by which expressions of identity leave impressions
on others). Whereas mirroring and impressing have been presented in the
literature before, our contribution lies in specifying the processes of
expressing and reflecting and in articulating the interplay of all four pro-
cesses that together construct organizational identity as an ongoing con-
versation or dance between organizational culture and organizational
images.

Hatch & Schultz The dynamics of organizational identity 9 9 1

Figure 1 The Organizational Identity Dynamics Model

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Defining organizational identity

Much of the research on organizational identity builds on the idea that
identity is a relational construct formed in interaction with others (e.g. Albert
& Whetten, 1985; Ashforth & Mael, 1989; Dutton & Dukerich, 1991). For
example, Albert and Whetten (1985: 273, citing Erickson, 1968) described
the process of identity formation:

. . . in terms of a series of comparisons: (1) outsiders compare the target
individual with themselves; (2) information regarding this evaluation is
conveyed through conversations between the parties (‘polite boy,’
‘messy boy’) and the individual takes this feedback into account by
making personal comparisons with outsiders, which then; (3) affects
how they define themselves.

Albert and Whetten concluded on this basis ‘that organizational identity is
formed by a process of ordered inter-organizational comparisons and reflec-
tions upon them over time.’ Gioia (1998; Gioia et al., 2000) traced Albert
and Whetten’s foundational ideas to the theories of Cooley (1902/1964),
Goffman (1959) and Mead (1934). While Cooley’s idea of the ‘looking glass
self’ and Goffman’s impression management have been well represented in
the literature that links organizational identity to image (e.g. Dutton &
Dukerich, 1991; Ginzel et al., 1993), Mead’s ideas about the ‘I’ and the ‘me’
have yet to find their way into organizational identity theory.

The idea of identity as a relational construct is encapsulated by Mead’s
(1934: 135) proposition that identity (the self):

. . . arises in the process of social experience and activity, that is,
develops in the given individual as a result of his relations to that
process as a whole and to other individuals within that process.

Here, Mead made clear that identity should be viewed as a social process and
went on to claim that it has two ‘distinguishable phases’, one he called the
‘I’ and the other the ‘me’. According to Mead (1934: 175):

The ‘I’ is the response of the organism to the attitudes of the others;
the ‘me’ is the organized set of attitudes of others which one himself
assumes. The attitudes of the others constitute the organized ‘me’, and
then one reacts toward that as an ‘I’.

In Mead’s theory, the ‘I’ and the ‘me’ are simultaneously distinguishable

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and interdependent. They are distinguishable in that the ‘me’ is the self a
person is aware of, whereas the ‘I’ is ‘something that is not given in the “me” ’
(Mead, 1934: 175). They are interrelated in that the ‘I’ is ‘the answer which
the individual makes to the attitude which others take toward him when he
assumes an attitude toward them’ (Mead, 1934: 177). ‘The “I” both calls out
the “me” and responds to it. Taken together they constitute a personality as
it appears in social experience’ (Mead, 1934: 178).

Although it is clear that Albert and Whetten’s (1985) formulation of
organizational identity is based in an idea similar to Mead’s definition of indi-
vidual identity, Albert and Whetten did not make explicit how the organiz-
ational equivalents of Mead’s ‘I’ and ‘me’ were involved in organizational
identity formation. Before turning to this matter, we need to address the
perennial question of whether individual-level theory can be generalized to
organizational phenomena.

Generalizing from Mead

In relation to the long-standing problem of the validity of borrowing
concepts and theories defined at the individual level of analysis and applying
them to the organization, Jenkins (1996: 19) argued that, where identity is
concerned:

. . . the individually unique and the collectively shared can be under-
stood as similar (if not exactly the same) in important respects . . . and
the processes by which they are produced, reproduced and changed are
analogous.

Whereas Jenkins took on the task of describing how individual identities are
entangled with collectively shared identities (see also Brewer & Gardner,
1996, on this point), in this article we focus on the development of identity
at the collective level itself, which Jenkins argued can be described by pro-
cesses analogous to those defined by Mead’s individual-level identity theory.

Jenkins (1996) noted that the tight coupling that Mead theorized
between the ‘I’ and the ‘me’ renders conceptual separation of the social
context and the person analytically useful but insufficient to fully understand
how identity is created, maintained and changed. Building on Mead, Jenkins
(1996: 20, emphasis in original) argued that:

the ‘self’ [is] an ongoing and, in practice simultaneous, synthesis of
(internal) self-definition and the (external) definitions of oneself offered
by others. This offers a template for the basic model . . . of the

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internal–external dialectic of identification as the process whereby all
identities – individual and collective – are constituted.

Jenkins then suggested that Mead’s ideas might be taken further by articu-
lating the processes that synthesize identity from the raw material of internal
and external definitions of the organization. The challenge that we take up
in this article is to find organizational analogs for Mead’s ‘I’ and ‘me’ and to
articulate the processes that bring them together to create, sustain and change
organizational identity. We begin by searching for ideas related to organiz-
ational identity formation processes in the organizational literature.

Drawing on work in social psychology (e.g. Brewer & Gardner, 1996;
Tajfel & Turner, 1979; Tedeshi, 1981) and sociology (Goffman, 1959), a few
organizational researchers have given attention to the processes defining
identity at the collective or organizational level. For example, as we explain
in more detail later, Dutton and Dukerich (1991) pointed to the process of
mirroring organizational identities in the images held by their key stake-
holders, whereas Fombrun and Rindova (2000; see also Gioia & Thomas,
1996) discussed the projection of identity as a strategic means of managing
corporate impressions. However, although these processes are part of identity
construction, they focus primarily on the ‘me’ aspect of Mead’s theory. Thus,
they do not, on their own, provide a full account of the ways in which Mead’s
‘I’ and ‘me’ (or Jenkins’ internal and external self-definitions) relate to one
another at the organizational level of analysis.

It is our ambition in this article to provide this fuller account using
analogous reasoning to explicate Mead’s ‘I’ and ‘me’ in relation to the
phenomenon of organizational identity and to relate the resultant organiz-
ational ‘I’ and ‘me’ in a process-based model describing the dynamics of
organizational identity. To address the question – How do the organizational
analogs of Mead’s ‘I’ and ‘me’ interact to form organizational identity? –
requires that we first specify the organizational analogs of Mead’s ‘I’ and
‘me’. We now turn our attention to this specification and invite you to refer
to Figure 2 as we explain what we mean by the organizational ‘I’ and ‘me’.

Organizational analogs of Mead’s ‘I’ and ‘me’

Dutton and Dukerich (1991: 550) defined organizational image as ‘what
[organizational members] believe others see as distinctive about the organiz-
ation’. In a later article, Dutton et al. (1994) restricted this definition of
organizational image by renaming it ‘construed organizational image’. Under
either label, the concept comes very close to Mead’s definition of the ‘me’ as
‘an organized set of attitudes of others which one himself assumes’. However,

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the images formed and held by the organization’s ‘others’ are not defined by
what insiders believe about what outsiders perceive, but by the outsiders’
own perceptions (their images), and it is our view that these organizational
images are brought directly into identity processes by access and exposure,
as explained in the introduction to this article.

It is our contention that the images offered by others (Jenkins’s external
definitions of the organization) are current to identity processes in ways that
generally have been overlooked by organizational identity researchers who
adopt Dutton and Dukerich’s definition of organizational image, though not
by strategy, communication or marketing researchers (e.g. Cheney & Chris-
tensen, 2001; Dowling, 2001; Fombrun & Rindova, 2000, to name only a
few). Specifically, what organizational researchers have overlooked is that
others’ images are part of, and to some extent independent of, organizational
members who construct their mirrored images from them. For this reason we
define organizational image, following practices in strategy, communication
and marketing, as the set of views on the organization held by those who act
as the organization’s ‘others’. By analogy, the organizational ‘me’ results
when organizational members assume the images that the organization’s
‘others’ (e.g. its external stakeholders) form of the organization. What
Dutton and Dukerich (1991) referred to as organizational image, and Dutton
et al. (1994) as construed organizational image, we therefore subsume into
our notion of the organizational ‘me’ as that which is generated during the
process of mirroring (see the discussion of mirroring in the following section
of the article).

Hatch & Schultz The dynamics of organizational identity 9 9 5

Figure 2 How the organizational ‘I’ and ‘me’ are constructed within the processes of the
Organizational Identity Dynamics Model

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Defining the ‘me’ of Mead’s theory in relation to organizational identity
is much easier than defining the ‘I’. By application of Mead’s theorizing, the
organizational ‘I’ must be something of which the organization is unaware
(otherwise it would be part of the organizational ‘me’) and ‘something that
is not given in the “me” ’. In addition, the ‘I’ must be responsive to the atti-
tudes of others. We believe that culture is the proper analogy to Mead’s ‘I’ in
that Mead’s descriptors of the ‘I’ fit the organizational culture concept quite
closely. First, organizational culture generally operates beneath awareness in
that it is regarded by most culture researchers as being more tacit than
explicit (e.g. Hatch & Schultz, 2000; Krefting & Frost, 1985). Second,
culture is not given by what others think or say about it (though these arti-
facts can be useful indicators), but rather resides in deep layers of meaning,
value, belief and assumption (e.g. Hatch, 1993; Schein, 1985, 1992; Schultz,
1994). And third, as a context for all meaning-making activities (e.g. Czar-
niawska, 1992; Hatch & Schultz, 2000), culture responds (and shapes
responses) to the attitudes of others.

For the purposes of this article, organizational culture is defined as the
tacit organizational understandings (e.g. assumptions, beliefs and values) that
contextualize efforts to make meaning, including internal self-definition. Just
as organizational image forms the referent for defining the organizational
‘me’, it is with reference to organizational culture that the organizational ‘I’
is defined.

The ‘conceptual minefield’ of culture and identity

As can be seen from the discussion above, culture and identity are closely
connected and the early literature on organizational identity often struggled
to explain how the two might be conceptualized separately. For example,
Albert and Whetten (1985: 265–6) reasoned:

Consider the notion of organizational culture. . . Is culture part of
organizational identity? The relation of culture or any other aspect of
an organization to the concept of identity is both an empirical question
(does the organization include it among those things that are central,
distinctive and enduring?) and a theoretical one (does the theoretical
characterization of the organization in question predict that culture will
be a central, distinctive, and an enduring aspect of the organization?).

Fiol et al. (1998: 56) took the relationship between culture and identity a step
further in stating that: ‘An organization’s identity is the aspect of culturally
embedded sense-making that is [organizationally] self-focused’. Hatch and

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Schultz (2000) in their examination of the overlapping meanings ascribed to
organizational culture and identity, stated that the two concepts are inex-
tricably interrelated by the fact that they are so often used to define one
another. A good example of the conflation of these terms comes from Dutton
and Dukerich (1991: 546):

. . . an organization’s identity is closely tied to its culture because
identity provides a set of skills and a way of using and evaluating those
skills that produce characteristic ways of doing things . . . ‘cognitive
maps’ like identity are closely aligned with organizational traditions.

The early conflation of concepts does not mean, however, that the two
concepts are indistinguishable, or that it is unnecessary to make the effort to
distinguish them when defining and theorizing organizational identity. Using
the method of relational differences that they built on Saussurean principles,
Hatch and Schultz (2000: 24–6) distinguished between identity and culture
using three dimensions along which the two concepts are differently placed
in relation to one another: textual/contextual, explicit/tacit and instru-
mental/emergent. They pointed out that although each of the endpoints of
these dimensions can be used to define either concept, the two concepts are
distinguishable by culture’s being relatively more easily placed in the con-
ceptual domains of the contextual, tacit and emergent than is identity which,
when compared with culture, appears to be more textual, explicit and instru-
mental.

Defining organizational identity in relation to culture and image

Reasoning by analogy from Mead’s theory, our position is that if organiz-
ational culture is to organizational identity what the ‘I’ is to individual
identity, it follows that, just as individuals form their identities in relation to
both internal and external definitions of self, organizations form theirs in
relation to culture and image. And even if internal and external self-
definitions are purely analytical constructions, these constructions and their
relationships are intrinsic to raising the question of identity at all. Without
recognizing differences between internal and external definitions of self, or
by analogy culture and image, we could not formulate the concepts of indi-
vidual or organizational identity (i.e. who we are vs. how others see us).
Therefore, we have taken culture and image as integral components of our
theory of organizational identity dynamics.

In the remainder of the article we argue that organizational identity is
neither wholly cultural nor wholly imagistic, it is instead constituted by a

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dynamic set of processes that interrelate the two. We now investigate these
processes and explain how they operate, first articulating them separately,
and then examining them as an interrelated and dynamic set.

Organizational identity processes and their dynamics

In this section we define the processes by which organizational identity is
created, maintained and changed and explain the dynamics by which these
processes are interrelated. In doing so we also explain how organizational
identity is simultaneously linked with images held by the organization’s
‘others’ and with cultural understandings. The processes and their relation-
ships with culture, identity and image are illustrated in Figure 2, which
presents our Organizational Identity Dynamics Model. The model diagrams
the identity-mediated relationship between stakeholder images and cultural
understandings in two ways. First, the processes of mirroring organizational
identity in stakeholder images and reflecting on ‘who we are’ describe the
influence of stakeholder images on organizational culture (the lighter gray
arrows in Figure 2). Second, the processes of expressing cultural under-
standings in identity claims and using these expressions of identity to
impress others describe the influence of organizational culture on the images
of the organization that others hold (the darker gray arrows in Figure 2).
As organizational analogs for the ‘I’ and the ‘me’, the links between culture
and image in the full model diagram the interrelated processes by which
internal and external organizational self-definitions construct organizational
identity.

Identity mirrors the images of others

In their study of the Port Authority of New York and New Jersey, Dutton
and Dukerich (1991) found that when homeless people congregated in the
Port Authority’s bus and train stations, the homeless problem became the
Port Authority’s problem in the eyes of the community and the local media.
Dutton and Dukerich showed how the negative images of the organization
encountered in the community and portrayed in the press encouraged the
Port Authority to take action to correct public opinion. They suggested that
the Port Authority’s organizational identity was reflected in a mirror held up
by the opinions and views of the media, community members and other
external stakeholders in relation to the problem of homelessness and the Port
Authority’s role in it. The images the organization saw in this metaphorical
mirror were contradicted by how it thought about itself (i.e. its identity). This

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led the Port Authority to act on behalf of the homeless in an effort to preserve
its identity and to change its organizational image.

On the basis of their study, Dutton and Dukerich (1991) claimed that
the opinions and reactions of others affect identity through mirroring, and
further suggested that mirroring operates to motivate organizational
members to get involved in issues that have the power to reduce public
opinion of their organization. Thus, Dutton and Dukerich presented a dis-
crepancy analysis, suggesting that, if organizational members see themselves
more or less positively than they believe that others see them, they will be
motivated by the discrepancy to change either their image (presumably
through some action such as building homeless shelters) or their identity (to
align with what they believe others think of them). These researchers con-
cluded that we ‘might better understand how organizations behave by asking
where individuals look, what they see, and whether or not they like the reflec-
tion in the mirror’ (1991: 551). In regard to defining the mirroring process
in terms that link identity and image, Dutton and Dukerich (1991: 550)
stated that:

. . . what people see as their organization’s distinctive attributes (its
identity) and what they believe others see as distinctive about the
organization (its image) constrain, mold, and fuel interpretations. . . .
Because image and identity are constructs that organization members
hold in their minds, they actively screen and interpret issues like the
Port Authority’s homelessness problem and actions like building drop-
in centers using these organizational reference points.

We argue that the mirroring process has more profound implications
for organizational identity dynamics than is implied by Dutton and
Dukerich’s discrepancy analysis. As we argued in developing our organiz-
ational analogy to Mead’s ‘me’, we believe that external stakeholder images
are not completely filtered through the perceptions of organizational
members (as Dutton & Dukerich, 1991 suggested in the quote above).
Instead, traces of the stakeholders’ own images leak into organizational
identity, particularly given the effects of access discussed in the introduction
to this article by which external stakeholders cross the organizational
boundary. Furthermore, in terms of the mirroring metaphor, the images
others hold of the organization are the mirror, and as such are intimately con-
nected to the mirroring process.

The notion of identity is not just about reflection in the mirroring
process, it is also about self-examination. In addition to describing mirror-
ing, the Port Authority case also showed how negative images prompted an

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organization to question its self-definition. In making their case that organiz-
ational identities are adaptively unstable, Gioia et al. (2000: 67) made a
similar point: ‘Image often acts as a destabilizing force on identity, frequently
requiring members to revisit and reconstruct their organizational sense of
self.’ As we have argued already, matters of organizational self-definition are
also matters of organizational culture.

Reflecting embeds identity in organizational culture

Organizational members not only develop their identity in relation to what
others say about them, but also in relation to who they perceive they are. As
Dutton and Dukerich (1991) showed, the Port Authority did not simply
accept the images of themselves that they believed others held, they sought
to alter these images (via the process of impressing others via identity expres-
sions, to which we will return in a moment). We claim that they did this in
service to a sense of themselves (their organizational ‘I’) that departed signifi-
cantly from the images they believed others held. In our view, what sustained
this sense of themselves as different from the images they saw in the mirror
is their organizational culture.

We claim that once organizational images are mirrored in identity they
will be interpreted in relation to existing organizational self-definitions that
are embedded in cultural understanding. When this happens, identity is rein-
forced or changed through the process of reflecting on identity in relation to
deep cultural values and assumptions that are activated by the reflection
process. We believe that reflecting on organizational identity embeds that
identity in organizational culture by triggering or tapping into the deeply held
assumptions and values of its members which then become closely associated
with the identity and its various manifestations (e.g. logo, name, identity
statements).

Put another way, we see reflexivity in organizational identity dynamics
as the process by which organizational members understand and explain
themselves as an organization. But understanding is always dependent upon
its context. As Hatch (1993: 686–7) argued, organizational culture provides
context for forming identities as well as for taking action, making meaning
and projecting images. Thus, when organizational members reflect on their
identity, they do so with reference to their organization’s culture and this
embeds their reflections in tacit cultural understandings, or what Schein
(1985, 1992) referred to as basic assumptions and values. This embedding,
in turn, allows culture to imbue identity artifacts with meaning, as was sug-
gested by Dewey (1934).

According to Dewey (1934), aspects of meaning reflectively attained

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gradually become absorbed by objects (cultural artifacts), that is, we come
to perceive objects as possessing those meanings experience adds to them. It
follows that when meanings are expressed in cultural artifacts, the artifacts
then carry that meaning from the deep recesses of cultural understanding to
the cultural surface. The meaning-laden artifacts of a culture thereby become
available to self-defining, identity-forming processes.

Following Dewey, we therefore further argue that whenever organiz-
ational members make explicit claims about what the organization is, their
claims carry with them some of the cultural meaning in which they are
embedded. In this way culture is embodied in material artifacts (including
identity claims as well as other identity artifacts such as logo, name, etc.) that
can be used as symbols to express who or what the organization is, thus con-
tributing culturally produced, symbolic material to organizational identity.
So it is that cultural understandings are carried, along with reflections on
identity, into the process of expressing identity.

Identity expresses cultural understandings

One way an organization makes itself known is by incorporating its organiz-
ational reflections in its outgoing discourse, that is, the identity claims
referred to above allow organizational members to speak about themselves
as an organization not only to themselves, but also to others. Czarniawska’s
(1997) narratives of institutional identity are an example of one form such
organizational self-expression could take. But institutional identity narratives
are only one instance of the larger category of cultural self-expression as we
define it. In more general terms, cultural self-expression includes any and all
references to collective identity (Brewer & Gardner, 1996; Jenkins, 1996).

When symbolic objects are used to express an organization’s identity,
their meaning is closely linked to the distinctiveness that lies within any
organizational culture. As Hatch (1993, following Ricoeur) explained, arti-
facts become symbols by virtue of the meanings that are given to them. Thus,
even though its meaning will be re-interpreted by those that receive it, when
a symbol moves beyond the culture that created it, some of its original
meaning is still embedded in and carried by the artifact. The explanation for
this given by Hatch rests in the hermeneutics of interpretation through which
every text (a category that includes symbolic objects and anything else that
is interpreted) is constituted by layered interpretations and thus carries (a
portion of) its history of meaning within it.

Based on the reasoning presented above, it is our contention that
organizational cultures have expressive powers by virtue of the grounding of
the meaning of their artifacts in the symbols, values and assumptions that

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cultural members hold and to some extent share. This connection to deeper
patterns of organizational meaning is what gives cultural explication of
assumptions in artifacts their power to communicate believably about
identity. Practices of expression such as corporate advertising, corporate
identity and design programs (e.g. Olins, 1989), corporate architecture (e.g.
Berg & Kreiner, 1990), corporate dress (e.g. Pratt & Rafaeli, 1997; Rafaeli
& Pratt, 1993), and corporate rituals (Rosen, 1988; Schultz, 1991), when
they make use of an organizational sense of its cultural self (its organizational
‘I’) as a referent, help to construct organizational identity through culturally
contextualized self-expression.

Part of the explanation for the power of artifacts to communicate about
organizational identity lies in the emotional and aesthetic foundations of
cultural expression. Philosophers have linked expression to emotion (e.g.
Croce, 1909/1995; Scruton, 1997: 140–70) and also to intuition (Colling-
wood, 1958; Croce, 1909/1995; Dickie, 1997). For instance, referring to
Croce, Scruton (1997: 148) claimed that when a work of art ‘has “expres-
sion,” we mean that it invites us into its orbit’. These two ideas – of emotion,
and of an attractive force inviting us into its orbit – suggest that organiz-
ational expressions draw stakeholders to them by emotional contagion or by
their aesthetic appeal. As Scruton (1997: 157) put it: ‘The expressive word
or gesture is the one that awakens our sympathy’. We argue that when stake-
holders are in sympathy with expressions of organizational identity, their
sympathy connects them with the organizational culture that is carried in the
traces of identity claims. That sympathy and connection with organizational
culture grounds the ‘we’ (we regard this ‘we’ as equivalent to the organiz-
ational ‘I’) in a socially constructed sense of belonging that Brewer and
Gardner (1996) defined as part of collective identity.

However, organizational identity is not only the collective’s expression
of organizational culture. It is also a source of identifying symbolic material
that can be used to impress others in order to awaken their sympathy by
stimulating their awareness, attracting their attention and interest, and
encouraging their involvement and support.

Expressed identity leaves impressions on others

In their work on corporate reputations, Rindova and Fombrun (1998)
proposed that organizations project images to stakeholders and institutional
intermediaries, such as business analysts and members of the press. In its
most deliberate form, identity is projected to others, for example, by broad-
casting corporate advertising, holding press conferences, providing infor-
mation to business analysts, creating and using logos, building corporate

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facilities, or dressing in the corporate style. Relating these projected images
to organizational identity, Rindova and Fombrun (1998: 60) stated:

Projected images reflect not only a firm’s strategic objectives but also
its underlying identity. Images that are consistent with organizational
identity are supported by multiple cues that observers receive in inter-
acting with firms.

Whereas strategic projection, or what others have called impression manage-
ment (Ginzel et al., 1993; Pfeffer, 1981), is a component of organizational
identity dynamics, Rindova and Fombrun (1998) also noted that projection
of organizational identity can be unintentional (e.g. communicated through
everyday behavior, gestures, appearance, attitude):

Images are not projected only through official, management-endorsed
communications in glossy brochures because organizational members
at all levels transmit images of the organization.

Thus, expressions of organizational culture can make important contri-
butions to impressing others that extend beyond the managed or intended
impressions created by deliberate attempts to convey a corporate sense of
organizational identity. This concern for the impressions the organization
makes on others brings us back from considerations of culture and its expres-
sions (on the left side of Figure 2) to concerns with image and its organiz-
ational influences (shown on the right side of Figure 2).

Of course there are other influences on image beyond the identity the
organization attempts to impress on others. For example, one of the deter-
minants of organizational images that lies beyond the organization’s direct
influence (and beyond the boundaries of our identity dynamics model) is the
projection of others’ identities onto the organization, in the Freudian sense
of projection. Assessments of the organization offered by the media and
business analysts, and the influence of issues that arise around events such as
oil spills or plane crashes, may be defined, partly or wholly, by the projec-
tions of others’ identities and emotions onto the organization (‘I feel bad
about the oil spill in Alaska and therefore have a negative attitude toward
the organization I hold responsible for the spill’). Thus, organizational efforts
to impress others are tempered by the impressions those others take from
outside sources. These external impressions are multiplied by the effects of
organizational exposure that were discussed in the introduction to this article
because increased exposure means more outside sources producing more
images to compete with those projected by the organization.

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The influences of others will be counted or discounted by the organiz-
ation when it chooses self-identifying responses to their images in the mir-
roring and reflecting processes that relate organizational image back to
organizational culture. Having made these connections between organiz-
ational culture, identity and image, we are now ready to discuss the model
of organizational identity dynamics shown in Figure 2 in its entirety.

The dynamism of organizational identity processes and the role
of power

The way that we have drawn the identity dynamics model in Figure 2 is
meant to indicate that organizational identity occurs as the result of a set of
processes that continuously cycle within and between cultural self-
understandings and images formed by organizational ‘others’. As Jenkins
(1994: 199) put it: ‘It is in the meeting of internal and external definitions
of an organizational self that identity . . . is created’. Our model helps to
specify the processes by which the meeting of internal and external defi-
nitions of organizational identity occurs and thereby to explain how
organizational identity is created, maintained and changed. Based on this
model, we would say that at any moment identity is the immediate result of
conversation between organizational (cultural) self-expressions and
mirrored stakeholder images, recognizing, however, that whatever is
claimed by members or other stakeholders about an organizational identity
will soon be taken up by processes of impressing and reflecting which feed
back into further mirroring and expressing processes. This is how organiz-
ational identity is continually created, sustained and changed. It is also why
we insist that organizational identity is dynamic – the processes of identity
do not end but keep moving in a dance between various constructions of
the organizational self (both the organizational ‘I’ and the organizational
‘me’) and the uses to which they are put. This helps us to see that organiz-
ational identity is not an aggregation of perceptions of an organization
resting in peoples’ heads, it is a dynamic set of processes by which an
organization’s self is continuously socially constructed from the interchange
between internal and external definitions of the organization offered by all
organizational stakeholders who join in the dance.

A word on power might be beneficial at this point. Power suffuses our
model in that any (or all) of the processes are open to more influence by those
with greater power. For example, the choice of which cultural material to
deliberately draw into expressions of organizational identity usually falls into
the hands of those designated by the most powerful members of the organiz-
ation, such as when top management names a creative agency to design its

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logo or an advertising firm to help it communicate its new symbol to key
stakeholders. When the powerful insist on the right to make final decisions
regarding logo or advertising, the effects of power further infiltrate the
dynamics of organizational identity. Another example, drawn from the other
side of Figure 2, is the power that may be exercised over conflicting views of
what stakeholder images mean for the organization’s sense of itself. If
powerful managers are unwilling to listen to the reports presented by market
researchers or other members of the organization who have less influence
than they do, the processes of mirroring and reflecting will be infiltrated by
the effects of power. Of course not only can the powerful disrupt organiz-
ational identity dynamics, they can just as easily use their influence to
enhance the dynamics of organizational identity by encouraging continuous
interplay between all the processes shown in Figure 2. In any case, although
we cannot explicitly model the effects of power due to their variety and com-
plexity, we mark the existence of these influences for those who want to apply
our work. We turn now to consideration of what happens when identity
dynamics are disrupted.

Dysfunctions of organizational identity dynamics

Albert and Whetten (1985: 269) proposed that disassociation between the
internal and external definitions of the organization or, by our analogy to
Mead, disassociation of the organizational ‘I’ and ‘me’, may have severe
implications for the organization’s ability to survive:

The greater the discrepancy between the ways an organization views
itself and the way outsiders view it . . ., the more the ‘health’ of the
organization will be impaired (i.e. lowered effectiveness).

Following their lead, it is our belief that, when organizational identity
dynamics are balanced between the influences of culture and image, a healthy
organizational identity results from processes that integrate the interests and
activities of all relevant stakeholder groups.

However, a corollary to Albert and Whetten’s proposition is that it is
also possible for organizational identity dynamics to become dysfunctional
in the psychological sense of this term. We argue that this happens when
culture and images become disassociated – a problem that amounts to
ignoring or denying the links between culture and images that the pressures
of access and exposure, addressed earlier, make so noticeable. In terms of the
Organizational Identity Dynamics Model, the result of such disassociations

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is that organizational identity may be constructed primarily in relation to
organizational culture or stakeholder images, but not to both (more or less)
equally. When this occurs, the organization is vulnerable to one of two dys-
functions: either narcissism or hyper-adaptation (see Figure 3).

Organizational narcissism

Within the Organizational Identity Dynamics Model the first dysfunction
emerges from a construction of identity that refers exclusively or nearly exclus-
ively to the organization’s culture with the likely implication that the organiz-
ation will lose interest and support from their external stakeholders. We believe
that this is what happened to Royal Dutch Shell when it ignored heavy criti-
cism from environmentalists, especially Greenpeace, who were concerned with
the planned dumping of the Brent Spar oilrig into the North Sea. Shell’s early
responses to Greenpeace were based in Shell’s engineering-driven culture. This
culture was insular and oriented toward the technical concerns of risk analysis
supported by scientific data provided by the British government. Shell’s framing
of the Brent Spar issue caused them to ignore the symbolic effects of dumping
the oilrig. The subsequent spread of negative images from activist groups to the
general public and to Shell customers exemplifies one effect of exposure in

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Figure 3 Sub-dynamics of the Organizational Identity Dynamics Model and their potential
dysfunctions

04hatch (ds) 1/7/02 12:17 pm Page 1006

which media generated and communicated images of activists tying themselves
to the oilrig were repeatedly sent around the world. Shell’s initial denials of
guilt and refusals to dialog with Greenpeace clearly fit the description of a dys-
functional identity dynamic: Shell’s identity in the crisis was embedded in a
culture that insulated the company’s management from shifting external
images, in this case shifting from bad to worse in a very short time.

As explained by Fombrun and Rindova (2000) this incident, along with
Shell’s crisis in Nigeria, provoked considerable self-reflection within Shell
(2000: 78). The reflection then led to their giving attention to two-way com-
munication and to their innovative Tell Shell program (an interactive website
designed to solicit stakeholder feedback). Shell’s subsequent careful moni-
toring of global stakeholder images of the corporation represents one of the
ways in which Shell sought to combat the limitations of its culture by giving
its stakeholders increased access to the company.

In terms of the Organizational Identity Dynamics Model, we claim that
dysfunctional identity dynamics, such as occurred in the case of Shell, result
when identity construction processes approach total reliance on reflecting
and expressing (shown in the left half of Figure 3). That is, organizational
members infer their identity on the basis of how they express themselves to
others and, accordingly, reflect on who they are in the shadow of their own
self-expressions. What initially might appear to be attempts at impressing
outsiders via projections of identity, turn out to be expressions of cultural
self-understanding feeding directly into reflections on organizational identity
that are mistaken for outside images. Even though organizational members
may espouse concern for external stakeholders as part of their cultural self-
expression processes (‘Our company is dedicated to customer service!’), they
ignore the mirroring process by not listening to external stakeholders and this
leads to internally focused and self-contained identity dynamics. As in the
case of Shell, we see that when companies ignore very articulate and media-
supported stakeholders, as did Shell for a substantial period, they will not be
able to accurately assess the impact of influential external images on their
identity or anticipate their lasting effect on their organizational culture.

Following Brown (1997; Brown & Starkey, 2000) we diagnosed the
condition of being unwilling or unable to respond to external images as
organizational narcissism. Based on Freud, Brown claimed that narcissism is
a psychological response to the need to manage self-esteem. Originally an
individual concept, Brown (1997: 650) justified its extension to organizations
on the basis of a collective need for self-esteem:

. . . organizations and their subgroups are social categories and, in
psychological terms, exist in the participants’ common awareness of

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their membership. In an important sense, therefore, organizations exist
in the minds of their members, organizational identities are parts of
their individual members’ identities, and organizational needs and
behaviors are the collective needs and behaviors of their members
acting under the influence of their organizational self-images.

Brown then defined narcissism in organizations as a psychological complex
consisting of denial, rationalization, self-aggrandizement, attributional
egotism, a sense of entitlement and anxiety. While noting that a certain
amount of narcissism is healthy, Brown (1997: 648) claimed that narcissism
becomes dysfunctional when taken to extremes:

Excessive self esteem . . . implies ego instability and engagement in
grandiose and impossible fantasies serving as substitutes for reality.

Or, as Brown and Starkey (2000: 105) explained:

. . . overprotection of self-esteem from powerful ego defenses reduces
an organization’s ability and desire to search for, interpret, evaluate,
and deploy information in ways that influence its dominant routines.

As Schwartz (1987, 1990) argued on the basis of his psychodynamic analysis
of the Challenger disaster, when taken to extremes, organizational narcissism
can have dire consequences.

In terms of the model presented in Figure 3, a narcissistic organiz-
ational identity develops as the result of a solipsistic conversation between
identity and culture in which feedback from the mirroring process is ignored,
or never even encountered. No real effort is made to communicate with the
full range of organizational stakeholders or else communication is strictly
unidirectional (emanating from the organization).

A related source of dysfunctional identity dynamics occurs when
organizations mistake self-referential expressions (i.e. culturally embedded
reflections on identity) for impressions projected to outsiders. Christensen
and Cheney (2000: 247) diagnosed this dysfunction as organizational self-
absorption and self-seduction leading to an ‘identity game’:

In their desire to be heard and respected, organizations of today partici-
pate in an ongoing identity game in which their interest in their sur-
roundings is often overshadowed by their interest in themselves.

They argue that organizations in their eagerness to gain visibility and

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recognition in the marketplace become so engaged in reflections about
who they are and what they stand for that they loose sight of the images
and interests of their external stakeholders. Instead, they act on tacit
assumptions based in their culture, such as that their stakeholders care
about the organization’s identity in the same way that they do.

Large corporations and other organizations have become so preoccu-
pied with carefully crafted, elaborate, and univocal expressions of their
mission and ‘essence’ that they often overlook penetrating questions
about stakeholder involvement.

Christensen and Askegaard (2001: 297) point out, furthermore, that organiz-
ational self-absorption is exacerbated by a

cluttered communication environment, saturated with symbols assert-
ing distinctness and identity. . . [where]. . . most people today only have
the time and capacity to relate to a small fraction of the symbols and
messages produced by contemporary organizations.

These researchers claim that stakeholders only rarely care about who the
organization is and what it stands for. When organizational members are
absorbed within self-referential processes of expressing who they are and
reflecting about themselves, external stakeholders simply turn their attention
to other, more engaging organizations. Their violated expectations of
involvement and of the organization’s desire to adapt to their demands then
cause disaffected stakeholders to withdraw attention, interest and support
from companies that they perceive to be too self-absorbed.

We find such self-absorption not only at the level of organizations such
as was illustrated by the Shell–Greenpeace case, but also at the industry level.
For example, we believe that industry-wide self-absorption is beginning to
appear in the telecommunications industry, where companies are constantly
struggling to surpass each other and themselves with ever more sophisticated
and orchestrated projections of their identity. While their actions seem to be
based on their belief that stakeholders care about their self-proclaimed dis-
tinctiveness, it would seem prudent to test these beliefs with the judicious use
of market research or some other means of connecting with the images of
organizational ‘others’.

We argue that organizational self-absorption parallels organizational
narcissism in that both give evidence of discrepancies between culture and
image. Instead of mirroring themselves in stakeholder images, organizational
members reflect on who they are based only in cultural expressions and this

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leads to organizational (or industrial) self-absorption and/or narcissism. In
the case of Shell, we believe that this explains the persistence with which Shell
ignored its external stakeholders and, by the same token, explains the depth
of Shell’s identity crisis when the external images were finally taken into
account (described by Fombrun & Rindova, 2000). The Shell example,
however, illustrates that organizational narcissism is rarely a static condition
for organizations. Narcissism or self-absorption might occur for periods
based in temporary disassociations between image and culture, but the
dynamics of organizational identity will either correct the imbalance or con-
tribute to the organization’s demise.

Hyper-adaptation

The obverse of the problem of paying too little attention to stakeholders is
to give stakeholder images so much power over organizational self-definition
that cultural heritage is ignored or abandoned. Just as a politician who pays
too much attention to polls and focus groups may lose the ability to stand
for anything profound, organizations may risk paying too much attention to
market research and external images and thereby lose the sense of who they
are. In such cases, cultural heritage is replaced by exaggerated market adap-
tations such as hyper-responsiveness to shifting consumer preferences. We
argue that ignoring cultural heritage leaves organization members unable to
reflect on their identity in relation to their assumptions and values and
thereby renders the organization a vacuum of meaning to be filled by the
steady and changing stream of images that the organization continuously
exchanges with its stakeholders. This condition can be described as the
restriction of organizational identity dynamics to the right side of the model
shown in Figure 3. Loss of organizational culture occurs when the processes
of mirroring and impressing become so all-consuming that they are disasso-
ciated from the processes of reflecting and expressing depicted in the left half
of Figure 3.

Alvesson (1990: 373) argued that ‘development from a strong focus on
“substantive” issues to an increased emphasis on dealing with images as a
critical aspect of organizational functioning and management’ is a ‘broad
trend in modern corporate life’. Although he did not define the shift from
‘substance to image’ as contributing to organizational dysfunction, we find
in his article evidence of the kind of self-contained identity dynamics depicted
on the right side of our model. According to Alvesson (1990: 377):

An image is something we get primarily through coincidental, infre-
quent, superficial and/or mediated information, through mass media,

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public appearances, from second-hand sources, etc., not through our
own direct, lasting experiences and perceptions of the ‘core’ of the
object.

According to Alvesson, the conditions under which image replaces substance
are produced by distance (geographical or psychological) from the organiz-
ation and its management, which in turn is created by organizational size and
reach, by its use of mass communication and other new technologies, and by
the abstractness of the expanding service sector of the globalizing economy.
When image replaces substance, ‘the core’ of the organization (its culture)
recedes into the distance, becoming inaccessible.

Alvesson’s thesis was that when managers become concerned with the
communication of images to stakeholders, their new emphasis replaces
strong links they formerly maintained to their organization’s cultural origins
and values and this ultimately leads them to become purveyors of non-
substantial (or simulated) images. In his view, such organizations become
obsessed with producing endless streams of replaceable projections in the
hope of impressing their customers. In relation to our model, Alvesson points
to some of the reasons why culture and image become disassociated, arguing
that image replaces culture in the minds of managers which leads to loss of
culture. However, although he states this as an increasingly ‘normal con-
dition’ for organizations, we conceptualize loss of culture as dysfunctional,
questioning whether companies can remain reliable and engaging to their
stakeholders over time without taking advantage of their culture’s substance.

We acknowledge that periods of loss of organizational culture may be
on the increase for many organizations as they become more and more
invested in ‘the culture of the consumer’. This position has been forcefully
argued by Du Gay (2000: 69) who claimed that: ‘the market system with its
emphasis on consumer sovereignty provides the model through which all
forms of organizational relations [will] be structured’. Following Du Gay we
argue that, when market concerns become influential determinants of the
internal structures and processes that organizations adopt, they will be
vulnerable to the loss of their organizational culture.

We find a parallel to the processes by which companies lose the point
of reference with their organizational culture in the stages of the evolution
of images that Baudrillard (1994) described in his book Simulacra and simu-
lation. In stage one, the image represents or stands in for a profound reality
and can be exchanged for the depth of meaning the image (or sign) represents.
In stage two, the image acts as a mask covering the profound reality that lies
hidden beneath its surface. In stage three, the image works almost alone, in
the sense that it masks not a profound reality, but its absence. Finally, in stage

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four, the image bears no relation whatsoever to reality. There is neither refer-
ence nor representation. The image becomes ‘its own pure simulacrum’. In
Baudrillard’s (1994: 5–6) words:

Such is simulation, insofar as it is opposed to representation. Represen-
tation stems from the principle of equivalence of the sign and of the
real (even if this equivalence is utopian, it is a fundamental axiom).
Simulation, on the contrary, stems from the utopia of the principle of
equivalence, from the radical negation of the sign as value, from the
sign as the reversion and death sentence of every reference. Whereas
representation attempts to absorb simulation by interpreting it as a
false representation, simulation envelops the whole edifice of represen-
tation itself as a simulacrum.

In our terms, stage four of the evolution of images, the relationship
between images and their former referents is broken – images no longer rep-
resent cultural expressions, but become self-referential attempts to impress
others in order to seduce them. As an example of this development, Eco
(1983: 44) offered his interpretation of Disneyland where you are assured of
seeing ‘alligators’ every time you ride down the ‘Mississippi’. Eco claimed
this would never happen on the real Mississippi rendering the Disney experi-
ence a ‘hyper-reality’.

Whereas Baudrillard used his argument to celebrate what Poster
called ‘the strange mixture of fantasy and desire that is unique to the late
twentieth century culture’ (Poster, 1988: 2) for us, Baudrillard’s argument
that reality gives way to hyper-reality is a way to understand the disasso-
ciation between culture (we claim culture is a referent) and image that
transforms identity into simulacrum. In terms of our Organizational
Identity Dynamics Model, identity is simulated when projections meant to
impress others have no referent apart from their reflections in the mirror,
that is, when the organizational culture that previously grounded organiz-
ational images disappears from view. In their attempt to manage the
impressions of others, organizational members take these images to be the
only or dominating source for constructing their organization’s identity.
This implies that images are taken by the organizational members to be the
organizational culture and it no longer occurs to them to ask whether image
represents culture or not.

In spite of the seductiveness of the seduction argument, we believe its
proponents go too far. It is our contention that access and exposure mitigate
against organizational identity as pure simulacra by re-uniting culture and

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images, or at least by spotlighting a lack of connection between cultural
expressions and projected images. Just as stakeholders will turn away from
extremely self-absorbed, narcissistic organizations, so we believe they will
find they cannot trust organizations whose identities are built on image alone.
On the margins, some organizations will thrive from the entertainment value
of having a simulated identity (what will they think of next?), but the need
to support market exchanges with trust will pull most organizations back
from pure simulacra.

Thus, for example, in their eagerness to please consumers, organiz-
ations may think they can credibly project any impression they like to con-
sumers, no matter what their past heritage holds. And, for a time, bolstered
by clever marketing they may get away with being unconcerned with their
past and what the company stood for a year ago to their employees or con-
sumers. But, at other times, market research-defined consumer preferences
will not overshadow the same stakeholders’ desires to connect with the
organization’s heritage. This happened when consumers protested the intro-
duction of New Coke in spite of the fact that the world’s most careful market
research had informed the company of a need to renew its brand. The
research led the Coca Cola Company to neglect the role played by cultural
heritage and underestimate its importance to consumers who saw the old
Coke as part of their lives. Other illustrations of organizations losing their
cultural heritage only to seek to regain it at a later time come from recent
developments in the fashion industry. Companies such as Gucci, Burberry
and most recently Yves Saint Laurent lost their cultural heritage in the hunt
for market share that led them to hyper-adaptation. But those same com-
panies have re-discovered (and to some extent re-invented) their cultural
heritage and this reconnection with their cultures has allowed them to re-
establish their once strong organizational identities.

As was the case with organizational narcissism, we are not arguing
that loss of culture is a permanent condition for organizations. Rather
culture loss represents a stage in identity dynamics that can change, for
example, either by the effects of organizational exposure or by giving stake-
holders greater access to the organizational culture that lies beyond the
shifting images of identity claims. Examples of such correctives are found,
for example, where companies create interactive digital communities for
their consumers to be used for impression management purposes, only to
discover that interactivity also raises expectations of access to the organiz-
ational culture and provokes many consumers to question the company
about the alignment between its projected images and its less intentional
cultural expressions.

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Conclusions

We began this article by pointing out how increasing levels of organizational
access and exposure to stakeholders contribute to the need to theorize about
organizational identity and how these current trends give theories of organiz-
ational identity dynamics enormous practical value. We then located the
academic theorizing about organizational identity in the works of Cooley,
Goffman and Mead, whose ideas are considered foundational to the social
identity theory on which most organizational identity research is based. In
this context, we developed organizational analogs to the ‘I’ and the ‘me’
proposed by Mead. On the basis of the reasoning derived from Cooley,
Goffman and Mead, and from others who have used their work to develop
organizational identity theory, we offered a process-based theory of organiz-
ational identity dynamics. We concluded with consideration of the practical
implications of our model by examining two dysfunctions that can occur in
organizational identity dynamics when the effects of access and exposure are
denied or ignored. We argued that these dysfunctions either leave the organiz-
ation with culturally self-referential identity dynamics (leading to organiz-
ational narcissism), or overwhelmed by concern for their image (leading to
hyper-adaptation).

We believe that this article contributes to organizational identity theory
in three important respects. First, finding analogs to Mead’s ‘I’ and ‘me’ adds
to our understanding of how social identity theory underpins our theorizing
about organizational identity as a social process. By defining these analogies
we claim to have made an important, and heretofore overlooked, link to the
roots of organizational identity theory. Second, the article provides a strong
argument for the much-contested claim that identity and culture not only can
be distinguished conceptually, but must both be considered in defining
organizational identity as a social process. Finally, by articulating the pro-
cesses that connect organizational culture, identity and image, we believe our
theory of organizational identity dynamics offers a substantial elaboration of
what it means to say that identity is a social process.

In a practical vein, it is our view that knowing how organizational
identity dynamics works helps organizations to avoid organizational dys-
function and thus should increase their effectiveness. Based on the impli-
cations we see in our model, organizations should strive to nurture and
support the processes relating organizational culture, identity and images. An
understanding of both culture and image is needed in order to encourage a
balanced identity able to develop and grow along with changing conditions
and the changing stream of people who associate themselves with the
organization. This requires organizational awareness that the processes of

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mirroring, reflecting, expressing and impressing are part of an integrated
dynamic in which identity is simultaneously shaped by cultural understand-
ings formed within the organization and external images provided by stake-
holders. This, in turn, requires maintaining an open conversation between
top managers, organizational members and external stakeholders, and
keeping this conversation in a state of continuous development in which all
those involved remain willing to listen and respond. We know that this will
not be easy for most organizations, however, we are convinced that aware-
ness of the interrelated processes of identity dynamics is an important first
step.

Acknowledgements

We would like to express our sincere appreciation for the helpful comments and
suggestions provided by Linda Putnam and three anonymous reviewers.

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Human Relations 55(8)1 0 1 8

Mary Jo Hatch (PhD, Stanford, 1985) is Professor of Commerce at the
McIntire School of Commerce, University of Virginia (USA). Her research
interests include organizational culture, identity and image; corporate
branding, and narrative and metaphoric approaches to management,
organizing and organization theory. Her publications appear in the
Academy of Management Review, Administrative Science Quarterly, European
Journal of Marketing, Harvard Business Review, Human Relations, Journal of
Business Ethics, Journal of Management Inquiry; Organization, Organization
Science, Organization Studies; and Studies in Cultures, Organizations and
Societies. Mary Jo sits on the editorial boards of Corporate Reputation
Review, Human Relations, and International Journal of Cross-Cultural Manage-
ment. Her textbook Organization theory: Modern, symbolic and postmodern
perspectives (1997) is available from Oxford University Press which also
published The expressive organization: Linking identity, reputation and the
corporate brand (2000), a book she co-edited with Majken Schultz and
Mogens Holten Larsen.
[E-mail: mjhatch@virginia.edu]

Majken Schultz is Professor at the Department of Intercultural Com-
munication and Management, Copenhagen Business School. Her interests
are located at the interface between organization theory, strategy and
marketing studies and include the interplay between organizational
culture, identity and image, corporate branding and reputation manage-
ment. She has worked with these topics both in theory and practice.
Majken has written several books and numerous articles in international
journals. Among others, she has published in Harvard Business Review,
Academy of Management Review, European Journal of Marketing, Corporate
Reputation Review, Journal of Management Inquiry, Organization Studies,
International Studies of Management and Organizations. She is co-editor of
The expressive organization: Linking identity, reputation and the corporate
brand (Oxford University Press, 2000; www.expressiveorganization.com).

04hatch (ds) 1/7/02 12:17 pm Page 1018

SAJEMS NS 12 (2009) No 3 343

Using the competing valUes framework (cvf)
to investigate organisational cUltUre in a

major private secUrity company

D Kokt

School of Entrepreneurship and Business Development,
Central University of Technology, Free State

CA van der Merwe

Information Management Unit, Central University of Technology, Free State

Abstract

The proliferation of crime, especially in the South African context, has placed considerable emphasis
on the private security industry. This has also increased fierce competition in the private security
domain with both national and international private security companies infiltrating the South
African market. Like public policing private security has an important role to play in combating
crime and other transgressions, with the exception that private security owes its existence to paying
customers. By using the Competing Values Framework (CVF) as conceptual guide, the researchers
are able to provide the managers of the company under investigation with insight on how their
cultural orientation affects their functioning and ultimately their competitive advantage.

Keywords: Organisational culture, Competing Values Framework (CVF), private security
JEL M14

1
Introduction

Understanding the prevailing organisational
culture is crucial for organisations operating in a
global environment. Organisations must keep up
with consumer demands in a constantly changing
political and economic climate and therefore
need to create and sustain an internal culture
that enables them to be competitive (Hansson
& Klefsjö: 2003:71; Taylor in Barker & Coy,
2004:4). Attaining a competitive advantage is
crucial, especially if organisations are seeking to
expand and/or launch new projects (De Brentani
& Kleinschmidt, 2004:309). The cultural
orientation of an organisation could aid in
attaining a competitive advantage, as it provides
guidelines that direct the behaviour of individual
members. These behavioural guidelines affect

and influence aspects such as quality and service
delivery to customers.

Organisational culture is a well researched
topic and the Competing Values Framework
(CVF) has been applied to numerous other
studies on organisational culture (see Al-
Khalifa & Aspinwall, 2001:417; Howard,
1998:231; Kriel, 2001; Le Grange, 1994; Van
der Post, 1997; Van Muijen, Koopman, De
Witte et al., 1999:551; Dellana & Hauser,
1999, 2000). It has however not been applied
to private security companies. This paper
reports the findings of an investigation into
a leading South African security company,
using the CVF to determine the dominant
culture of the organisation. It also reports the
implications of the dominant organisational
culture on the overall functioning of the
organisation.

344 SAJEMS NS 12 (2009) No 3

2
Private security in South Africa

The South African Police Service (SAPS) like its
counterparts worldwide, has struggled to come to
terms with not only acts of terrorism, but also high
levels of crime in general, as well as the changing
patterns of crime (Minnaar, 2005:85). Finding
solutions to these problems has influenced and
shaped the domain of private security in the
sense that the role of private security companies
has expanded and the value of security personnel
has increased in many sectors of the organisation
(Pillay, 2003:21). Private security has its roots
in public policing and could be defined as “the
protection of individuals, their property (assets)
and related interests against multiple risks such
as crime, fire, accidents, etc. by means of utilising
people and equipment” (Steenkamp & Potgieter,
2004:71). Bosch (1999:4) refers to private security
as “the attempts of individuals and organisations
to protect their assets from loss, harm or reduction
in value, due to criminality”. This is precisely the
focus of the company under investigation.

The rationale for an investigation into private
security is mainly due to an absence of research
in this important sector of the economy. National
and international crime has increased since the
1990s and it is an established fact that crime
currently poses a serious problem for South
Africa (Burger, 2006:105). With increased
levels of criminal activity and the public’s lack
of faith in public policing, the South African
private security industry has grown at breakneck
speed over the past 10-15 years. It has an annual
growth rate of between 10-15 per cent and has
an annual turnover of R50 billion (Olivier, 2009:
20). These figures show the seriousness of crime
prevention for South Africans and emphasise the
prominence of the industry. Within this context
and based on the authors’ research, the CVF will
be discussed and the findings presented.

3
The competing values framework

(CVF)

In an attempt to understand organisational
effectiveness, Quinn and Rohrbaugh (1983)

and Rohrbaugh (1981) empirically constructed
the competing values framework. With the
aid of academic experts they were able to
assess similarities across various measures
of effectiveness, using multidimensional
scaling. The framework integrates the different
perspectives on organisational effectiveness
and is mainly based on shared values in
organisational context (Scott, Mannion, Davies
& Marshall, 2003:928). It furthermore connects
the strategic, political and institutional aspects
of organisational life by organising patterns of
shared values, together with the assumptions
and interpretations that define organisational
culture (Denison & Spreitzer, 1991:3). This
makes the CVF one of the few cultural models to
allow comparison across different organisational
cultures. It has been acclaimed as one of the
forty most important models in the history of
business and has been used in more than one
thousand organisations to predict organisational
performance (Cameron & Quinn, 2006:23).

The performance indicators used in the analysis
of organisational effectiveness are based upon
the underlying values prevailing in a certain
organisation. The key assumption underlying
the competing values approach is that no single
goal exists in an organisation, but that a number
of competing values are held by the various
stakeholders, which could lead to different goals
and objectives. Cameron and Quinn (2006:46)
found that after applying the competing values
framework to thousands of organisations, most
organisations developed a dominant culture,
and in more than 80 per cent of organisations
one or more dominant cultural types can be
distinguished. If an organisation does not have
a dominant cultural type or if the four cultural
types are equally emphasised, organisations tend
to be unclear about their culture.

The CVF identifies three critical factors in
analysing organisational culture, namely 1) it
offers a descriptive content of organisational
culture, 2) it identifies dimensions aimed at
assessing similarities and differences across
organisational cultures, and 3) it suggests
tools and techniques for analysing culture in
organisations. Figure 1 illustrates the CVF.

Figure 1 further distinguishes two primary
dimensions that reflect preferences for structural

SAJEMS NS 12 (2009) No 3 345

control or flexibility, possessing either internal
or external constituents (Howard, 1998:234).
Crossing these two dimensions at their centres
produces four distinct organisational types.
Each of the quadrants is characterised by
certain objectives and/or preferred processes,
i.e. the means-end dimension. Each of the four

quadrants has a conceptual polar opposite
and each implies mutually exclusive values
(Al-Khalifa & Aspinwall, 2001:420; Øgaard
& Marnburg, 2005:23). The four types include
the hierarchical, the rational, group and
developmental cultures.

Figure 1
Competing Values Framework (CVF) of organisational culture

Source: Quinn (1988)

Predictability Order

* Measurement * Accomplishment
* Participation * Productivity
* Information * Profit/Impact
management

* Stability * Goal clarification
* Control * Direction
* Continuity * Decisiveness

Toward consolidation, equilibrium Toward maximising output, competitive
advantage

Towards decentralisation differentiation

Towards centralisation, integration

GROUP CULTURE DEVELOPMENTAL CULTURE

HIERARCHICAL CULTURE RATIONAL CULTURE

Spontaneity Flexibility

* Concern * Insight
* Commitment * Innovation
* Morale * Adaptation

Toward the development of Toward expansion,
Human resources transformation

* Discussion * External support
* Participation * Resource acquisition
* Openness * Growth

Toward internal maintenance Toward competitive
of the socio-technical system position

Internal focus External focus

346 SAJEMS NS 12 (2009) No 3

The four major culture types:

Hierarchical culture
The hierarchical culture represents the earliest
approach to organising in the modern era
and relates back to the work of German
sociologist Max Weber, who studied government
organisations in Europe in the early 1900s
(Boggs, 2004; Cameron & Quinn, 2006:38). The
major challenge for organisations at that stage
was to efficiently produce goods and services
for an increasingly complex society. Weber
subsequently introduced the seven classical
attributes of a bureaucracy, i.e. rules, hierarchy,
specialisation, meritocracy, separate ownership,
impersonality and accountability (Deshpandé
& Farley, 2003:5). These characteristics were
highly effective in accomplishing their purpose
and were adopted widely until the 1960s. The
classical attributes were regarded as ideal,
because the environment was stable and
tasks and functions could be integrated and
coordinated while uniform products and services
were maintained. This structure was mostly
adopted by major conglomerates like the Ford
Motor Company, as well as many government
agencies (Cameron & Quinn, 2006:38). The
hierarchical culture thus regards control and
internal focus as prominent. Information
management and communication serve as
mechanisms for achieving stability, control and
order (Øgaard & Marnburg, 2005:23).

Rational culture
During the late 1960s another form of organising
became popular mainly because organisations
were faced with new challenges. It is based
on the work of Oliver Williamson, Bill Ouchi
and their colleagues (Boggs, 2004; Cameron
& Quinn, 2006:39). This orientation promotes
a focus on the external environment rather
than the internal environment, and interaction
with outside constituencies such as suppliers,
customers, contractors, unions is emphasised.
The major focus falls on conducting economic
transactions. The core values characterising
this type of culture are competitiveness and
productivity, which should be achieved through
strong external positioning. Planning and
goal setting are essential for productivity and

efficiency (Deshpandé & Farley, 2003:5; Øgaard
& Marnburg, 2005:23).

Group culture
The group or clan culture represents the family-
type business and was developed following a
study of Japanese firms in the 1960s and 1970s.
This contrasted with the hierarchical and market
cultures of American companies (Ouchi, 1981). In
this culture type, flexible values and internal focus
are prominent (Deshpandé & Farley, 2003:5).
Shared values and goals, cohesion, participativeness
and individuality underlie this orientation, and
organisations with such a dominant culture are
more like extended families than economic entities
(Boggs, 2004; Cameron & Quinn, 2006:41).
This culture emphasises the flexibility of human
differences and provides an internal view of the
organisation. It furthermore stresses cohesion
and morale amongst members, which includes
aspects such as teamwork and employee
development (Øgaard & Marnburg, 2005:23).

Developmental (adhocracy) culture
As the developed world shifted from the
Industrial Age to the Information Age and
ultimately to the Knowledge Age, technology
organisations need to be more sensitive
and adaptive to an ever-changing business
environment (Boggs, 2004; Cameron & Quinn,
2006:43). Organisations need to consider the
impact of globalisation and adopt innovative and
pioneering activities to stay ahead of competitors
(Kinicki & Williams, 2006:102). It is for this
reason that the term ‘ad hoc’ was chosen for this
cultural type. The term implies temporariness
and emphasises the fact that reconfiguration
is often necessary when new situations arise
(Deshpandé & Farley, 2003:5). Flexibility,
adaptability and creativity are thus needed in
an environment where uncertainty, ambiguity
and information overload are rampant. This
type of culture emphasises readiness for change
as a means of growth, resource acquisition
and external support (Øgaard & Marnburg,
2005:23). This type of cultural orientation is
often found in aerospace, software development,
and filmmaking.

To summarise, each cultural type aims to
meet the demands of the particular constituent,

SAJEMS NS 12 (2009) No 3 347

and depending on the organisation some
values will be considered more dominant than
others. In this regard Quinn (1988) proposes
a balance among the competing values, while
pursuing apparently contradictory objectives
and structural imperatives. However, he
discourages over- or under-emphasis of any
of the approaches. This model does not
propose that organisations should be alike,
and recognises that the organisational profile
could be influenced by the industry in which
an organisation operates its public or private
mandate, and the stage of the lifecycle of the
organisation (Howard, 1998:235).

4
The organisational culture of a

leading private security company

Methodology

The company under investigation is one of the
main role players in the South African private
security industry. A survey was launched
that included the distribution of a structured
questionnaire to individuals in the following
geographical areas: Johannesburg, Pretoria,
Mpumalanga, the Free State/Northern Cape/

Lesotho, Western Cape/Boland, Eastern Cape,
and Kwa-Zulu Natal.

The questionnaire was based on the four
constituents of the CVF, structured in Likert-
scale options. As individuals in the population
were not equal in terms of operational level,
stratified random sampling was applied. This
sampling method ensured that the strata or
layers of the organisation were represented
in the sample (Salkind, 2006:91; Saunders,
Lewis & Thornhill, 2007: 221; Welman, Kruger
& Mitchell., 2005:61, L eedy & Ormrod,
2005:202). The three strata or layers in the
organisation under investigation were managers,
administration staff, and security staff. From a
population of 15,844 a sample of 20 per cent
(3,172 individuals) was drawn. The usable
responses yielded an overall response rate of
21 per cent (n=676).

Descriptive and Statistical Findings
This section provides tables and/or graphs that
illustrate the demographic composition of the
respondents.

Demographics

The organisation serves various sectors of
operation, as illustrated below.

Figure 2
Respondents’ sectors of operation in the organisation

348 SAJEMS NS 12 (2009) No 3

The organisation also operates in various geographical areas.

Figure 3
Respondents’ geographical areas of operation

Occupational Levels

Respondents occupy the following positions in
the organisation: 3,8 per cent administrative
staff, 81,6 per cent security staff and 10 per cent
management staff.

Gender

Seventy seven per cent of the respondents were
males and 18,7 per cent females.

Race

In the South African context race is an important
aspect. The racial composition of respondents
is illustrated below.

Figure 4
Respondents’ racial composition

SAJEMS NS 12 (2009) No 3 349

5
Determining the dominant culture

The average score of each respondent was
obtained regarding each question in the four
cultural group categories, respectively. The
means indicated in the graph below are actually
means of means i.e. means were calculated
over the specific questions, where the number

of questions differed per cultural group and
averaged over the respondents.

The most prominent cultural orientation
of each respondent was then ascertained by
considering the highest mean score for each
individual per cultural group. The organisational
culture profile of the organisation under
investigation is indicated below.

Graph1
Organisational culture profile of the organisation

Graph 1 indicates a mean score of 3.19 for the
Group Culture, 2.82 for the Developmental
Culture, 3.37 for the Hierarchical and 3.41 for
the Rational Culture.

A multivariate technique is used, that accounts
for the fact that the average scores per culture
group, as four variates, are not independent.
They were measured on the same respondents,
like ‘repeated measures’. The Hotelling T²
statistical test (see Rencher, 2002:140) was used,
with C matrix applied

= 1 -1 0 0
0 1 -1 0
0 0 1 -1

The test statistic is calculated as T² = 929.3805,
which yields a p-value of 0,0000. We conclude
that there is a highly significant (more than 99
per cent) difference in the mean culture scores
at the organisation under investigation.

As a subsequent procedure, the groups were
compared in pairs. These paired comparisons
also yielded significant mean differences (at
level 0,05 per cent) for each pair of cultural
groups. A smaller difference (still significant,
at level 0,05 per cent) between the mean scores
of the Rational and Hierarchical Culture groups
was found, which implies a close resemblance of
the company’s organisational culture for both
these groups.

350 SAJEMS NS 12 (2009) No 3

6
Conclusions

The statistical analysis of the data in this
investigation provides a new diagnostic tool for
applying the CVF in a specific organisational
setting, in this case a major private security
company. Being able to perform a quantitative
analysis of organisational culture is an issue that
is debated in organisational culture literature.
Some authors (like Ashkanasy, Wilderom &
Peterson, 2000:132; Chang, 2005:416; Martin,
1992) feel organisational culture should be
observed systematically and interpreted through
the application of quantitative methods.
Traditionally organisational culture research
relied on qualitative methods, like in-depth,
open-ended interviews and ethnographic
observations (Sriramesh, Grunig & Dozier,
1996:242). This investigation thus proves that
it is possible for organisational culture to be
statistically analysed and interpreted. Although
the conclusions in this section apply specifically
to the company under investigation, the
statistical methods could be applied to research
of similar companies within the industry.

The statistical analysis shows that the company
under investigation displays a prominent
Rational Culture. The second dominant cultural
orientation is the Hierarchical Culture. This
is an important conclusion as it supports the
literature section on the CVF (paragraph 3)
that most organisations display more than one
dominant organisational culture. The Rational
Culture is externally and the Hierarchical
Culture is internally oriented which means
that although the organisation is geared for
maximum output and competitive advantage it
also values consolidation and equilibrium in its
internal organisational structuring.

Consistent with the characteristics of a Rational
Culture (which involves a strong external
orientation, competitiveness, productivity,
and prominent external positioning), the
management of the company under investigation
has clear goals and direction and it is a decisive
decision maker. Given the fierce competition of
the private security environment, the company
projects a culture of maximum output and a
strong competitive advantage. The focus of

the Rational Culture orientation as ‘order’
is reflected in the external positioning of
the organisation. The company is part of an
international organisation and its operational
base covers all geographical areas of South
Africa. Continuous expansion is one of its key
strategies and new clients are continually being
added to their operational list. The company
has, for example also recently expanded its
operations into Cash Management Services.
It thus has an aggressive strategy in securing
new business and also in managing sites in a
productive and profitable way. These actions
typify the dominant Rational Culture.

The Hierarchical Culture is the second
dominant culture type and has a predominantly
internal focus, with stability, control and
continuity giving the workplace a predictable
character. This is reflected in the way the
company manages its sites. An important aspect
to remember in private security is that security
personnel usually operate on the premises of
a client, with a site manager or site supervisor
overseeing the operations. Depending on the
size of a site a site manager or a supervisor
could be appointed. To further oversee sites in
a particular geographical area, area managers
are appointed. The site manager/supervisor
plays an important role in conveying the
acceptable procedures to be followed on site.
All sites have site instructions, which are
negotiated with the client beforehand. The
company under investigation allows for a site
evaluation by the client on a monthly basis,
where expectations and problems can be
addressed. The site manager/supervisor also
handles all site-related problems; this includes
work-related and personal issues that security
personnel might experience. Occurrences (like
burglaries, armed robberies, and so forth) are
documented in an Occurrence Book on a daily
basis. The Occurrence Book is checked and
signed by the site manager (as well as the area
manager) and communicated to the client and
public police, if required. This demonstrates that
security personnel and site managers/supervisors
have clear procedures to follow on each site,
indicating a Hierarchical Culture. To summarise,
the company under investigation displays a clear
Rational / Hierarchical culture orientation. The

SAJEMS NS 12 (2009) No 3 351

combination of these two cultural orientations
provides a strong external positioning and order
and predictability in the organisation.

In attaining a competitive advantage, however,
organisations have to consider service delivery
and a people-oriented approach, the so-called
‘softer’ aspects. These ‘softer’ aspects are
accounted for in the Group and Developmental
Cultural orientations of the CVF and received
the lowest scores from the respondents in
the survey. The company therefore needs
to consider the implications of its cultural
orientation. If not, even its strong external
positioning could be compromised by its failure
to expand and transform the organisation in
attaining a sustained competitive advantage
in the future. This means the principles of the
Group and Developmental Cultures should
be incorporated into the organisation. This
could be done by implementing the following
recommendations:

• Participation and open discussion should
characterise the organisation. This should
apply to management, administrative
and security staff. As security staff do not
operate on the premises of the employer
it is critical that communication reach all
employees on all sites. It is crucial for the
area manager to visit the sites on a daily
basis to discuss problems and concerns
with site managers/supervisors and security
personnel. The site manager/supervisor
should also conduct weekly meetings to
assist security personnel with their duties.
Site managers/supervisors should also be
open to discuss work and personal problems
with employees. A monthly or even weekly
newsletter is a good way of communicating
not only work-related issues, but also the
personal achievements of employees.

• T h e r o l e o f t h e H u m a n Re s o u r c e s
Department is key in ensuring that employ-
ees are continuously trained and developed
and that their wage-related and other
administrative queries are adequately
addressed.

By implementing these ‘softer’ aspects into
the organisation’s culture, the company
under investigation could add to security

personnel not only feeling valued, but also
that their contributions make a difference in
the organisation. This is an inclusive way of
managing a security company and will result
in better service delivery to clients, impacting
positively on the competitive advantage of the
organisation, as a whole.

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Page 1 PSY704: Organizational Culture

Management

Week 3: The Role of Culture in Organizational Life

Learning Objectives:

1.1 Organizational culture and management

strategies

Many authors tried to identify the relationship between organizational culture and

management. Although it is frequently considered that organizational culture represents the

ideals, values and visions of the senior management team of an organization, this does not

imply that culture and management strategy are identical concepts within an

organization

(Alvesson & Berg, 1992). The definition provided in the previous reading implies that the

determinant driver of organizational culture lies with the values of the most influential groups

of employees. For this reason, it is plausible to assume that management ideology and its

potential impact on the expression of values is but one of the several expressions of

organizational culture. However, the question that arises at this point is to what extent

management controls culture or is adapted to it. In other words, is there definitive evidence

about the causal relationship between organizational culture and management?

Kilmann (1985) approached this question by focusing on what makes culture good, bad

or dysfunctional. He explained that, regardless of the definition of culture, social norms are the

most critical dimension of culture because those are responsible for organizational success.

Stated differently, he believed that social norms within the organization are responsible for

quality, efficiency, product reliability, customer service satisfaction, hard work, loyalty and

innovation. In this context, he asserted that senior managerial strategies are capable of shaping

• Understand the relationship between organizational culture and

management

strategies

• Understand the relationship between culture and organizational

performance

• Understand the meaning of organizational culture management

• Understand the perspective of culture as constraint (the emancipatory approach)

Page 2 PSY704: Organizational Culture Management

the set of social norms within an organization, which, in turn, may influence the behaviour of

the individuals who work for the organization.

Despite several disagreements with Kilmann’s approach – particularly with regard to the

assumption that social norms shape behaviour – there has been consensus on the possible

indirect impact of certain social norms directed by senior managers on organizational culture.

Therefore, following Kilmann’s argument, we may infer that management strategies are, in

fact, capable of shaping organizational culture – at least indirectly.

A second approach to the linkage between organizational culture and management was

offered by Pfeffer (1981). Pfeffer distinguishes between internal management control and

external or environmental control, such as the market forces. Similarly, he differentiated the

substantive outcomes of an organization, such as actions, measurable profits, salaries, budget

planning, etc. from the symbolic outcomes, such as attitudes, sentiments, values, norms,

perceptions or beliefs. In this context, Pfeffer asserts that management strategies may

significantly influence substantive outcomes, but they are much weaker in terms of influencing

symbolic outcomes. In other words, managerial decision-making and management style may

dramatically change tangible end-point outcomes, such as sales volume or profits, but they are

not equally capable of changing the employees’ system of beliefs or values. According to this

approach, external constraints and not managerial decisions may be responsible for the change

of symbolic outcomes. Some examples may be the degree of competition in securing a good

job, the level of unemployment, economic growth, etc. In fact, Pfeffer believes that if

managerial decisions aim to alter employees’ values or beliefs, they will be destined to fail

because the employees may perceive such strategies as a means of obscured oppression and

indirect control, serving corporate performance rather than inspiring the sense of commitment

and rapport. Therefore, Pfeffer believed that management is not as strong as Kilmann

suggested, in terms of shaping organizational culture.

Α third approach to the relationship between management and organizational culture is

provided by Schein – one of the most important authors in the field (Schein, 1985). Schein

argues that the departure point must be organizational culture and not management. He asserts

that culture, as a product of a shared system of values and beliefs, arises from a particular

group within an organization, and for this reason, it is extremely difficult to alter. Managers

should not focus on trying to change organizational culture, but rather on how to use it in order

to enhance substantive outcomes, such as profits, cost minimisation, etc. Stated differently,

Page 3 PSY704: Organizational Culture Management

Schein saw managerial decisions to be guided by culture and not the other way around. His

argument is that culture is very powerful on its own right and managers must try to perceive it

as an externally-defined diagnostic instrument, adapt to its requirements and utilise its main

principles in order to enhance operational integration, cooperation and coordination. In this

regard, culture is considered to be the strongest force according to which managers must adapt

to it in order to achieve organizational objectives.

Although the above commentary provided three different research perspectives offered

by three eminent authors in the field, we may conclude that there is no definitive evidence to

indicate whether management influences organizational culture or the other way around. Given

the second and third approaches, one could simply state that culture is a powerful concept,

abstract yet influential, and for this reason, any managerial strategies must always take it

seriously into account.

Page 4 PSY704: Organizational Culture Management

1.2 Organizational culture and performance

The impact of culture on organizational performance is unclear in the literature.

Although there is a lot of writing about this topic, only few empirical studies exist to enable us

to identify definitive valid evidence. For this reason, we will simply present the prevailing

perspectives on this topic.

The first perspective considers organizational culture to be extremely influential in

performance only if the employees of an organization consider organizational goals and long-

term business strategies to be reliable. Covey (1991) discussed the role of trustworthiness and

trust within an organization as the most important cultural means for influencing performance.

According to Covey, trustworthiness is a result of character and competence, whereas trust is

the actual act of believing in someone and having confidence in them. Following this

definition, organizational trustworthiness is both integrity and competence, as perceived by the

employees of an organization. If the organization manages to convince its employees about its

work ethos and principles, concrete beliefs about organizational trustworthiness and trust

would follow. In other words, if managers invest in cultivating a principle-

centred

management style, they may be capable of directly influencing organizational values, and

hence, organizational culture. This, in turn, would inspire a sense of commitment and

motivation to all individuals of the organization leading to enhanced collective performance

(Brown, 1995). Finally, stronger performance would ensure managers that the principle-

centred approach to their management strategies was correct and they would want to sustain it.

The linkage between organizational values and performance through principle-centred

management is shown in Figure 3.1.

Figure 3.1 The impact of Organizational Culture on Performance

Principle-

centred
management

Organizational values

(work, ethos, integrity,

competence, etc.)

Organizational

culture

Performance Commitment,
Motivation

Page 5 PSY704: Organizational Culture Management

However, there are authors who found that the reverse relationship exists, i.e. good

performance drives organizational culture (Calori & Sarnin, 1991). The evidence suggested

that very good performance and organizational success create a strong and homogeneous

culture associated with the best “way of doing things”. In other words, if an organization

achieves the predicted set of objectives, it will be difficult for its employees to question its

work ethos, operational practices and managerial strategy. Therefore, a set of values will arise

reflecting successful performance, and, although such values may not necessarily be entirely

understood, they will be fully accepted. In this way, performance determines orientations,

principles, beliefs and values, and, hence, culture, which in turn further enhances performance.

This is due to the fact that employees perceive this type of culture to be directly associated

with prior performance and they are motivated to achieve tangible outcomes themselves.

This perspective towards the relationship between organizational culture and

performance was criticised as exertion of indirect managerial control (Wilkins & Ouchi, 1983).

However, both of the above perspectives were repeatedly empirically validated by other

authors in the field.

At this point, it is important to remind the reader that culture is an abstract concept, also.

This means that it involves dimensions and aspects which might not have been captured in our

operational definition. In other words, empirical studies may not necessarily cover everything

about the relationship between organizational culture and performance. Therefore, if we are

not able to observe certain aspects of culture, we should not expect to have a definitive

conclusion about its causal relationship with performance.

Perhaps for this reason, other perspectives towards organizational culture and

performance appeared to more practical, i.e. with apparent links to practical

organizational

decision-making. For example, Wilkins & Ouchi (1983) considered organizational culture to

be a contingency tool and a regulatory mechanism. The authors suggested that certain

management strategies and styles may facilitate culture formation, which could be

intentionally used as a means of enhancing performance and efficiency. They believe that, in

complex organizational settings, where bureaucracy and market appear to be inadequate

control mechanisms, organizational culture may be utilised as a means of decision-making in

order to cultivate a sense of ‘belonging’ and strengthen motivation. Indeed, if senior managers

refer to the shared values and perceptions of the employees and the organization, as a whole,

Page 6 PSY704: Organizational Culture Management

employees with a strong emotional awareness towards their values would appear to be adamant

about the importance of remaining committed to the organizational objectives.

Along the same lines, Brown (1995) argued that the key to good performance is an

organizational culture which is, by its very nature, adaptive. In other words, if culture is

capable of changing according to organizational goals, practical decision-making strategies,

risk-taking decisions, expansion strategies, etc., then it is the only type of culture that can

become a long-term driver of performance. Brown did warn about the fact that certain

organizations may not necessarily be responsive to change because they may consider it to be

identical to instability, low cost-efficiency, risky substantive outcomes and a loss of sense of

direction. Indeed, as we will see in the next readings organizational change is not always

desirable, particularly for small scale organizations with very purpose-specific operations and a

clientele with very specific characteristics and consumption goals.

Page 7 PSY704: Organizational Culture Management

1.3 Organizational culture management

In the previous sections of this reading, the lack of empirical evidence that would allow a

definitive causal relationship between organizational culture and management or performance

revealed, once again, the complex nature of organisational culture.

Many authors found that the key ingredient of the success of the most influential

companies in the world is their organizational culture (O’ Reilly et al., 1994; Cameron &

Quinn, 2006). These companies invested in the fact that, although management strategy,

market presence and technology are important factors to success, organizational culture is what

reduces collective uncertainties and creates social order, collective identity and continuity.

Indeed, many authors recognized the powerful impact of organizational culture on the long-

term effectiveness of organizations (Cameron & Ettington, 1988; Denison, 1990). For

example, Kotter & Heskett (1992) interviewed 75 financial analysts, whose job was to identify

the most influential factors of long-term financial success of many industries and corporations.

All acknowledged culture as a critical factor for financial success and only one analyst

mentioned that organizational culture had little or no impact on firm

performance.

Furthermore, the impact of organizational culture on individuals is well-documented in

the literature (Ostroff & Kozlowski, 1992). As stated in the previous reading, the formation of

culture, based on the ‘competing values framework’, suggested that only when individual

values match the shared values of representative groups of employees, are we able to

characterise the emerging culture. In other words, senior managers must recognise that

organizational culture is intimately tied to the values of individual employees. Therefore, they

cannot be indifferent about any psychological aspects associated with the formulation of an

individual value system and long-held beliefs or perceptions.

The above information indicates the importance of managing organizational culture in

modern organizations. Given the fact that culture emerges as the result of an active, yet not

always apparent, negotiation between employees, it is reasonable to expect that it will not be

an unchanged entity. Therefore, senior managers must be able to employ effective ways of

diagnosing cultural inconsistencies with developing organizational goals in order to be able to

effectively manage either the potential upcoming change or the preservation of the well-

established type of organizational culture. For this reason, they must be receptive to align

managerial behaviour, at any point in time, with the existing or new cultural conditions, be

ready to employ effective, coherent and cohesive leadership strategies, diagnose and

Page 8 PSY704: Organizational Culture Management

implement staff training and development needs timely, impose more suitable communication

mechanisms if needed, identify new ways of communicating and articulating issues and

problems to the employees, etc. In other words, appropriate short-term management strategies

could sustain the existing culture or adapt to the changes imposed by the new prevailing

culture, so that the prevailing organizational culture is solidified and well-established in the

long-term. Figure 3.2 summarises the importance of short-term management strategies in

solidifying long-term organizational culture.

Figure 3.2 The importance of managing

organizational culture

However, there is another perspective associated with the management of organizational

culture, which is often ignored. Many researchers pointed out that modern organizations are

their own culture. In other words, the organization itself is the dominant culture. In this

context, there is no point assuming that managing people’s behaviour or inspiring a sense of

collective identity would lead to a different type of culture. Instead, organizational culture

follows the nature and operational goals of the organization itself and it is, therefore, expected

to be embraced by its employees, regardless of whether or not its associated values adequately

match the system of values of the majority of the individuals who work for the organization.

Instead, the focus is on how to better describe organizational procedures and strategies, so that

employees are more effective in finding ways of ameliorating potential differences with their

own system of values, in order to, ultimately, fully accept the culture that adequately represent

the organization they work for.

Organizational
culture

(long-term)

Observed

inconsistencies

Short-term

Management

strategies for

preserving or

changing

culture

Sustained or changed

organizational culture

(short-term)

Page 9 PSY704: Organizational Culture Management

The above two perspectives remind us of the debate presented in the reading of Week 1,

referring to the causal relationship between culture and society. Indeed, if we perceive an

organization to either be its own culture or represent the dominant values of its people, then

senior managers are expected to consider very different factors in each of the two cases, while

trying to manage organizational culture. Despite the fact that the predominant paradigm of

organizational culture, as stated previously, recognizes that society derives culture and not the

other way around, there are some common factors in the two perspectives. Following the same

line of argument, the two perspectives about the organization having or being its own culture

are also characterised by significant common factors. These factors are considered to be

significant because they concern the people of the organization, and, for this reason, they are

mostly psychologically-driven. Therefore, in an attempt to explore ways in which a particular

organization manages culture, we should aim to focus on those common factors.

In the next reading, we will try and to identify which psychologically-driven factors may

be necessary in order to more effectively manage organizational culture. Further details about

the need for organisational culture change within the context of cultural dynamics will be

presented in the same reading. Furthermore, in the reading of Week 5, we will try to

understand how cultural dynamics could be ‘positively-manipulated’ by people-centred

effective leadership with the view to enhance the management of organizational culture and its

potential change.

Page 10 PSY704: Organizational Culture Management

1.4 Organizational culture as constraint: An emancipatory approach

The discussion in the previous section implied that organizational culture management

means managing change. However, this is not necessarily the case. We mentioned change as,

perhaps, the most important aspect of organizational culture management nowadays, but there

is another important dimension of this. This is associated with how to maintain the prevailing

culture in such as way so that adjustments may still occur, but without changing the deep fabric

of culture (preservation, maintenance).

Despite the different approaches to culture, most authors agree on the fact that the

attempt to preserve organizational culture may have pervasive effects on substantive

organizational outcomes, such as sales revenues and profits. Although the idea of stable

cultural values may sound attractive to most people, it is also an idea which may prevent them

from exploring alternative ways of perceiving their social reality.

Indeed, since organizational culture constructs the boundaries within which the

employees interact in their everyday life (social integration), then it is reasonable to expect that

it would also limit the processing of information associated with the perception of human

capability (Krefting & Frost, 1985). For example, cultural assumptions about gender,

careerism, affluent consumption, technocracy, equality or professional development generate

some well-defined meanings, which may be seen as the ‘freezing’ of social reality. If people

subordinate themselves to existing norms, values and patterns, they are naturally refrained

from considering alternative ways of perceiving themselves as social beings. Stated differently,

a homogeneous organizational culture may indeed lead to a smooth social integration allowing

for collective performance to thrive, but it may also become the very factor that could prevent

individuals from critically exploring the reasons for believing in this type of culture; reasons

for questioning certain aspects of the existing culture; and even reasons for considering

alternative ways of how to live their organizational or personal life.

Page 11 PSY704: Organizational Culture Management

Fugure3.3 summarises the main points of this perspective.

Figure 3.3 Organizational culture as constraint

A very representative example are the cultural perceptions associated with gender.

Broadly shared cultural perceptions usually associate men with high-profile instrumental jobs,

career commitment and professional development and women with low-profile jobs and

supportive, non-demanding roles. Despite the fact that this is a social stereotype, if the gender-

related statistics of an organization somehow preserve it, it is easy to understand why

ambitious women within the same organization might be discouraged from pursuing high-

profile jobs or men within the organization might be enabled to take for granted career

progression. As stated above, culture may indeed prevent employees from exploring their

individual ideas towards their organizational life or exploring alternative avenues of

professional advancement. On the example of gender, certain employees may feel that it is

unfair for gender inequality to continue, but the nature of the organizational culture formation

won’t allow them to do anything about it.

Conventionally, the majority of organizations would present themselves as ‘neutral’ in

terms of gender. However, as Mills (1988) described, it is difficult for this assertion to be

Homogeneous

organizational
culture

Smooth social

integration within the

organization

Enhanced

collective

performance

Barriers to exploring
alternative

perceptions of social
reality

Page 12 PSY704: Organizational Culture Management

sustained. Mills suggested that gender discrimination exists in a number of overt ways, such as

low pay or low authority status, but also in a number of covert ways, such as combining

women with images of domesticity and sexuality. The purpose is to constraint female

opportunity and further cultivate the stereotype that wants women to be less powerful in

market terms than men. Again, this stereotype is cultivated not in any conspicuous or

formalised way. However, it constitutes a common secret that easily infiltrates organizational

culture, which, in turn, establishes and further reproduces it.

Another example in which culture appears as constraint is formal hierarchy. An

organization with a very strong commitment towards hierarchy could enhance performance

because hierarchy rejects substandard performance, while strengthening the opportunities for

result-oriented, efficient performance. However, this may also hinder autonomous thinking,

expressiveness and creativity. Alvesson (2003) provides a very good example about formal

hierarchy and its impact on organizational culture: the case of Pepsi Cola.

According to Alvesson, the former vice president of Pepsi provided a written account

about the company’s exaggerated focus on strict formal hierarchy. He explained that

employees would feel pressurised to do their outmost, working hard while giving little

consideration to other values, such as social rapport and work-life balance. The competition,

both internal and external, was really fierce and that did not allow employees to professionally

develop themselves, reflect on their performance or cooperate in a creative and “less-

intimidating” way with others. Furthermore, loyalty was a key factor. All employees were

expected to be extremely loyal, which means that they were not allowed to question working

habits, the working conditions and environment, remuneration packages or, indeed, the well-

established cultural values of the company.

Alvesson implies that the approach followed at Pepsi organization was best characterised

by an almost totalitarian ideology towards organizational life. This ideology was so harsh that

it often compromised people’s creativity and self-esteem, giving advantage to the most

aggressively-competitive employees, who would not necessarily be the brightest or the most

capable ones. More importantly, this ideology was internalised by the employees as the

prevailing corporate culture for which they could do nothing about, in terms of changing it.

The perception was that they needed to simply tolerate it because it was imposed from the top

management team and it was not up to them to change it. Ultimately, many employees were

Page 13 PSY704: Organizational Culture Management

feeling demotivated and, in the medium and longer-term, they were feeling vulnerable and

unable to think critically or reflect on how to develop themselves professionally.

We characterised this approach to organizational culture as “emancipatory”. The reason

was to demonstrate that employee-driven organizational culture does have another dimension

of forward-looking, eye-opening professional development and it is capable of enhancing the

sense of professional ‘fulfilment’. However, this dimension may often be hidden due to the

capacity of manager-driven culture to obscure it. In other words, organizational culture may

provide the mechanism which would allow employees to develop their own autonomous and

independent way of thinking, performing and progressing within the organization.

If we wanted to take this one step further, we could say that this dimension is largely

hidden due to the fact that Western type organizations present cultural values as fully

representative of the system of values representing employees, while, at the same time,

dissociating employees from the emergence of culture itself. In this context, culture is indeed a

constraint as there is an inherent risk of compromising critical and autonomous thinking,

creativity and, even, self-progression. Surely, through shared visions, ideals, values and norms

employees may feel united and collectively conscious. Some sense of direction and order is

necessary, too. But, there is absolutely no need for this to be achieved alongside the risk of

compromising critical operational values, such as work ethos, healthy competition, self-

development, social integration, constructive cooperation and meaningful, person-centred

performance.

Page 14 PSY704: Organizational Culture Management

1.5 Concluding remarks

We started this reading with three different perspectives about the relationship between

management and organizational culture, as follows:

(1) Management decisions are capable of influencing organizational culture (Kilmann,

1985).

(2) Management decisions are not capable of influencing organizational culture in a

significant way (Pfeffer, 1981).

(3) Organizational culture is capable of altering management decisions and strategies

and not the other way around (Schein, 1985).

Subsequently, the relationship between organizational culture and performance was

explored. Once again, the causal relationship was unclear as certain authors demonstrated the

impact of organizational culture on performance and other authors showed that the opposite

could also occur. What appeared to be a key factor was the so-called principle-centred

management, i.e. the management style which pays attention to the principles and values

representing the employees of the organization and the organization, as a whole. Indeed,

regardless of the direction of the causal relationship, common values and principles appear to

be instrumental in understanding the relationship between organizational culture and

performance.

Our efforts to better understand the relationship between organizational culture and

management or performance revealed the important role of the key topic of this module, the

organizational culture management. Given that organizational culture is tied to the values of

individual employees, it was reasonable to expect that managing culture would be an

extremely important activity for modern organizations. The most common way of

understanding the management necessity of organizational culture is the potential change of

culture in order to always represent the values of the majority of the employees who work for

the organization. However, the preservation of the existing culture is also another way of

approaching this topic, which does not require change or adaptation, and, yet, it is often

ignored.

The reading closed with an alternative way of exploring the role of culture in

organizational life, i.e. organizational culture as constraint. For the purposes of this module,

Page 15 PSY704: Organizational Culture Management

this advanced topic was kept at a very preliminary analysis, but it was used to indicate that a

fully-defined homogeneous culture could, perhaps, strengthen collective performance within

the organization, but this may be achieved at the expense of other critical factors for

professional and personal development of the employees, such as alternative way of

understanding social reality or exploring ways of career progression and everyday living.

In the next reading, we will be introducing the concept of cultural dynamics, which will

enable us to present the inevitability of organizational culture change and adaptation.

Page 16 PSY704: Organizational Culture Management

Reading tips:

– In this reading, you are required to study topics, which are presented in the literature

in very different ways. For example, a prominent author found that organizational

culture may influence performance, but some other author found that performance

may, in fact, be responsible for change in organizational culture. Given these

different perspectives, you must be careful about how you choose additional

scientific papers and articles relevant to the topic. I would always choose the most

cited papers in well-known journals and aim to keep a balanced number of readings

for all different perspectives. This would give you a fairly representative idea about

the topic.

– In this reading we presented – for the first time – the key term organizational culture

management. It is important to remind yourselves about the continuity factor stated

before, i.e. the gradual approach followed throughout the module. Therefore, it is

always a good idea to refresh your memory on key topics explored in previous

readings before proceeding to study every next reading (you could do this by

focusing on key definitions/concepts/models or, simply, on the “concluding remarks”

of each reading). For example, before aiming to read the section about

organisational culture management, I consider it a good idea to refresh your memory

on the operational definition of organizational culture, as presented in the reading of

Week 2.

Page 17 PSY704: Organizational Culture Management

1.6 References

Alvesson, M. (2003). Understanding organizational culture, 2nd ed. London, United

Kingdom: Sage.

Alvesson, M. & Berg, A. P-O. (1992) Corporate Culture and Organizational Symbolism: An

Overview. De Gruyter Studies in organization.

Brown, A. (1995). Organisational Culture. London: Pitman Publishing. Cited in Senior, B.

1997. Organisational Change. London: Pitman Publishing.

O’Reilly, C. A., Chatman, J., & Caldwell, D. F. (1991). People and organizational culture: a

profile comparison approach to assessing person-organizational fit. Academy of Management

Journal, 34(3), 487–516.

Calori, R. & Sarnin, P. (1991) Corporate Culture and economic performance: A French study.

Organization Studies, 12 (1) (1991), pp. 49-74.

Cameron, K.S. and Ettington, D.R. (1988) The conceptual foundations of organizational

culture. Higher Education: Handbook of Theory and Research, (356-396). New York:

Agathon.

Cameron, K., & Quinn, R. E. (2006). Diagnosing and Changing Organizational Culture. The

Jossey-Bass Business & Management Series. Addison-Wesley, Reading, MA, USA.

Cameron, K. S., & Quinn, R. E. (2011). An Introduction to changing organizational culture:

Based on the competing values framework. Diagnosing and Changing Organizational Culture,

1–12.

Covey S.R. (1991) Principle-centered Leadership. Simon & Schuster, New York, USA.

Denison, D. R. (1990). Corporate Culture and Organizational Effectiveness. New York John

Wiley Sons.

Kilmann, R. H., Saxton, M. J., Serpa, R., and Associates. (1985). Gaining control of the

corporate culture. San Francisco: Jossey-Bass.

Kotter, J. P., & Heskett, J. L. (1992). Corporate culture and performance. Administrative

Science Quarterly, 47(1), 214.

Krefting, L.A. and Frost, P.J. (1985). Untangling webs, surfing waves, and wildcatting: A

multiple metaphor perspective on managing organisational culture. In: Frost, P. J., Moore, L.

F., Louis, M. R., Lundberg, C. C. and Martin, J. (eds) Organizational Culture, Sage, London.

https://espace.library.uq.edu.au/view/UQ:294945

Page 18 PSY704: Organizational Culture Management

Mills, A. J. (1988). Organization, Gender and Culture. Gendering and Organizational Analysis.

Organization studies, 9(3), 351-369.

Ostroff, C., & Kozlowski S. W. (1992). Organizational socialization as a learning process: The

role of information acquisition. Personnel Psychology, 45, 849–874.

Pfeffer, J. (1981). Power in organizations. Marshfield, MA: Pitman.

Schein, E. H. (1985). Organizational Culture and Leadership. Jossey-Bass, San Francisco,

USA, 1–464.

Wilkins, A., & Ouchi, W. (1983). Efficient culture: Exploring the relationship between culture

and organizational performance. Administrative Science Quarterly, 28, 468–481.

Page 19 PSY704: Organizational Culture Management

Week 2: Defining Organizational Culture

Learning Objectives:

• Identify the limitations of the sociological and anthropological approaches

to

organizational culture

• Understand the psychological approach to organizational culture

• Present the mechanisms in which psychological processes influence

culture formation (Social identity theory, Social representation theory)

• Identify an operational definition of organizational culture

1.1 The limitations of the sociological and anthropological approaches to

organizational culture

In the previous reading, the complexity of culture was evident in the way prominent

authors constructed theoretical models in order to understand certain aspects of culture. There

seems to be a consensus among those authors about the realization that organisational culture

requires interpretation and deciphering. For this reason, we identified three different contextual

approaches towards the concept of organizational culture, i.e. the sociological approach, the

anthropological approach and the psychological approach. The purpose was to identify

different aspects of organizational culture following valid theoretical frameworks in an attempt

to reduce the dimensions of the concept to a manageable level. Those aspects were identified

gradually based on the different dimensions each approach highlighted.

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Table 2.1 presents such aspects for the sociological and the anthropological approaches.

Approach Dimensions of the concept of Associated aspect

organizational culture

– Decision-making structures
Sociological within the organization

– Performance and continuing – Social interaction (employee

professional development as a social being within the

– External influences and internal organization)

social networking – Performance, leadership,

– Collective mind collective action

– Cohesive actions

– Leadership style

– Interpersonal relationships

Anthropological – Shared system of values, beliefs, – Power distance

behaviours, customs and ideas (organisation-driven vs

– The ‘trading-off’ process in expertise-driven), i.e. the

defining common values extent to which power

– Predominant culture influences the ‘trading-off’

– Individual preferences; yet, process

collective purpose – The complex nature of

interpersonal relationships

Table 2.1 The different aspects of organizational culture – Part I
– The sociological and anthropological approaches –

The sociological and anthropological approaches to organizational culture indicated that,

although culture is multi-layered in its manifestations, it is also characterised by a simple

system of shared values and collective beliefs and understandings. Therefore, the question that

arises is whether or not employees’ participation in social groups and the way in which they

interact with other individuals within the organization are important means of understanding

how they see themselves, as well.

However, it seems obvious that the sociological and anthropological approaches appear

to be inadequate to answer the above question. For this reason, we will now turn focus on the

psychological approach to organizational

culture.

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1.2 The psychological approach to organizational culture

However, at the same time, the two approaches appeared to be inadequate to explain.

These are issues on which psychological theory may help us understand.

The necessity to examine organizational culture in the psychological context arose from

the realization that both the sociological and anthropological models of organizational culture

involved aspects of subjective human perceptions and behaviour, which cannot be explained

by the mechanics presented in those models. For example, how exactly shared values and

collective beliefs develop within an organization or, indeed, how those get transmitted or

negotiated between individuals, i.e. how the ‘trading-off’ process mentioned in the previous

reading operates?

Schneider’s model implied that different emotions guide the employees’ behavior and

the development of interpersonal relationships within an organization. Therefore, if we aimed

to try and understand those emotions and the associated psychological processes involved,

would, perhaps, allow us to answer the above questions and understand how different types of

organizational culture emerge.

Quinn & Rohrbaugh (1983) were the first authors who tried to understand culture

formation through the psychological framework of competing values (‘The competing values

framework’). In this section, we make use of the psychological model of organizational

culture, which was developed based on the “the competing values framework”, as the main

means of understanding the contribution of the psychological approach to defining the concept

of organizational culture. If we accept the basic premise of Schneider’s model (Schneider,

1994), i.e. the ‘trading-off’ process, we will be in a position to understand how the

predominant culture profile is gradually emerging within an organization. Stated differently,

“the competing values framework” might help us understand the mechanics of ‘trading-off’

values in the process of culture formation.

“The competing values framework” presents organizations in a continuum of four core

values, as follows: flexibility, stability, differentiation and integration. These values represent

opposite or competing assumptions. Therefore, each continuum represents a core value,

which is opposite of the core value at the other end of the continuum.

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The framework is schematically presented in Figure 2.1.

Flexibility

Internal focus External focus

Control

Figure 2.1 The Competing Values Framework

(Reproduced by Quinn and Rohrbaugh, 1983)

Cameron & Quinn (2011) utilized the “Competing values framework” in order to

devise an organizational culture model, which would allow a deeper understanding of the

mechanics involved in ‘trading-off’ values during the culture formation.

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The model is presented in Figure 2.2 below.

Flexibility and Discretion

Clan culture
Adhocracy

(collaborate)

culture (create)

Internal External
Focus and Focus and

Integration Differentiation

Hierarchy Market culture

culture (control) (compete)

Stability and Control

Figure 2.2 Cameron & Quinn’s Psychological Model of Organizational Culture

(Reproduced by Cameron & Quinn, 2011)

The hierarchy culture emerges as the result of a stable environment, which permits tasks

and functions to integrate and coordinate, products continue to be produced uniformly and jobs

are under control. The emphasis here is on productivity and efficiency and, for this reason,

consistent and systematic problem-solving attitude is paramount. This type of culture exists in

formalized and highly-structured working environments, such as large corporations and

government agencies.

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Taking the above description one step further, we are able to observe that the hierarchy

culture may involve the emotion of self-deprecation or self-doubt of the employees of an

organization with this particular culture. This is due to the fact that the core value of this

highly-structured environment is control, which prevents employees from pursuing state-of-

the-art activities of professional development or, indeed, exploring advanced skills and new

areas of their expertise. As a result, the psychological process involved could be reluctance

and resistance to the existing culture. Indeed, Cameron & Quinn (2011) stated that under the

influence of the hierarchy culture, the decision-making processes and the management and

leadership styles are characterised by control and accountability only and there is no actual

concern about innovation or human development.

On the contrary, the clan culture is formed by the value of collaboration. The focus is

still on internal consistency and integration of working roles, but success is defined in terms of

the organization’s concern for people and their professional development. Both the

management and leadership styles are characterised by a flexible, friendly, team-oriented

approach capable of inspiring loyalty and dedication to the overall effort. Furthermore, the

employees participate in the decision-making processes of the organization and they have the

flexibility and discretion to pursue specific goals of their professional development with the

support of their managers, who act as mentors. Examples of this type of culture includes

family businesses and charity organizations.

The clan culture invests in empowering the employees of an organization and, therefore,

the possible emotions involved in the process of accepting or rejecting this type of culture are

satisfaction, self-confidence and fulfilment. To this end, the associated psychological process

could be compliance/concurrence with the predominant culture profile of the

organization.

At the other end of the continuum, we have the market culture and the adhocracy

culture, which involve external focus, i.e. focus on influential factors outside the organization,

and differentiation, i.e. excellence based on competition rather than collaboration and

cooperation.

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The market culture understands the highly-competitive environment and it applies a

results-oriented management and leadership styles driven by the key value of competition. The

emphasis is on how to utilise stable environment and controlling procedures in order to

increase productivity, results and profits and differentiate the organization from its key

competitors. The market culture evokes the emotion of assertiveness, self-confidence, pride

and decisiveness. This type of culture is quite intense and, as result, emotions may reach

dangerously high levels in such an extremely competitive environment. Nonetheless, the

possible psychological process involved is motivation because market culture encourages the

management team to generously reward additional effort and unexpectedly positive outcomes.

In other words, although competition may be easily exaggerated, it could also become the main

reason for the motivation of employees to be kept strong and consistent.

However, the adhocracy culture involves a set of values and beliefs formed to serve a

temporary objective and they are subjected to change. For this reason, they may also be

flexible, adaptable and dynamic. Under this type of culture, the employees of an organization

are flexible to pursue their professional development goals and they have established support

in order to do so. Furthermore, the management and leadership styles are visionary, innovative

and risk-oriented. The idea is to focus internally on how to integrate working roles and

services by allowing adequate flexibility to the employees in order to develop themselves

professionally. In the medium term and longer term, this would allow experimentation,

creativity and innovation to thrive, and the organization to differentiate itself from its key

competitors by applying cutting-edge knowledge to produce unique and original products and

services (Yu & Wu, 2009). Therefore, the most influential value here is creativity.

In this context, the adhocracy culture inspires a sense of commitment to the organization

because, although the organization pays attention to results and outcomes, it also allows the

employees to develop themselves professionally. Therefore, we could deduce the possible

emotional feelings associated with this type of culture, such as feeling content, gratified,

fulfilled, inspired, ambitious and capable to perform. Although there is risk involved, the sense

of commitment is strong due to the flexible environment and the discretion allowed to the

employees. As a result, this sense of commitment is also the psychological process involved in

such a dynamic type of culture, which is gradually developing by the employees of the

organization.

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Table 2.2 presents the psychological approach to organisational culture provided by

Cameron & Quinn (2011) with the key value, the type of working environment, the possible

emotions/feelings and the psychological process involved in each of the four types of

organizational culture included in the model.

Type of Possible Possible

Culture working Key value emotions/ psychological

environment feelings process

involved involved

Hierarchy Highly- Control Self- Reluctance/

structured deprecation, resistance

self-doubt

Clan Flexible, Collaboration Satisfaction,

friendly self-confidence, Compliance/con

fulfilment currence

Market Highly- Competition Assertiveness,

competitive self-confidence, Motivation

pride,

decisiveness

Adhocracy Flexible, Fulfilment,

adaptable, Creativity ambition, Commitment

dynamic inspiration,

gratification

Table 2.2 The main elements of Cameron & Quinn’s Psychological model of
Organisational Culture

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1.3 Further discussion on the psychological approach to organizational culture

Cameron & Quinn’s psychological model of organizational culture revealed different

psychological processes involved in culture formation, such as reluctance, compliance,

motivation and commitment. Furthermore, the model showed that employees’ participation in

specific social groups does provide information about the way in which employees reflect

upon themselves. In other words, employees are driven by their emotional needs to classify

people into different categories or groups as a way of ‘understanding’ how they could interact

with them. For example, employees may approach a colleague with significant technical

expertise with respect, but never consider him/her as “one of us”. Similarly, they may feel the

need to assign a superior-subordinate dimension to the interaction with their line manager,

despite the fact that they are working together in a friendly manner every single day because

they perceive this interaction as potentially threatening to their future working life.

However, Cameron & Quinn’s model highlighted the need of every individual to seek

positive sources of self-esteem. Indeed, most employees would perceive their participation in a

social group as a means of deriving some pride or self-esteem. In other words, they perceive

their ‘sense of belonging’ to a particular social group as an important representation of the

values that characterised them as individuals. According to Tajfel & Turner (1979), this is the

main premise of social identity theory.

At this point, we should note that there is adequate evidence that supports the association

between the employees’ participation in a social group and social, as well as personal, self-

esteem (Hayes & Lemon, 1991). Social self-esteem is simply the esteem at group level, which

holds the shared collective self-image of the members of that group. On the other hand,

personal self-esteem is the esteem enjoyed by the individual, which normally arises from the

individual’s perceptions about their worth; not necessarily as an employee but as an individual,

more generally.

The fact that evidence exists to support both associations indicates how strong of an

influence the employees’ participation in a social group could be. Stated differently, the way in

which an average employee perceives his/her own individual values and beliefs depends on the

way in which his/her participation in a particular social group within an organisation influences the

development of those individual values. Therefore, we could finally infer that both the

PSY704: Organizational Culture Management Page 9

employees’ personal self-esteem and social self-esteem are shaped by the intergroup

discrimination, i.e. the extent to which common values of members of the same group

differentiate them from members of other groups. This is indeed a very powerful

psychological process, which plays an important role in the ‘trading-off’ process of values.

Moscovici (1984) explained that this psychological process is exactly the driver towards

a specific type of organizational culture. He named this process social representation theory.

The main premise of this theory is the notion that members of the same group assign

ideological value to their participation in that group and, for this reason, they perceive their

social identity as members of the group as reflection of their own individual identity. In this

way, the mechanism that shapes common identity involves the symbolic value of the common

interpretation of shared values and beliefs, shared views of the world, shared perspectives

about organizational growth or change or, indeed, shared decision-making for action or

inaction.

A question still remains unanswered: “how exactly the predominant culture emerges?”.

We stated previously that there is a ‘trading-off’ process of values, which determines the

dominant culture profile within an organization. It is important to add that this process occurs

not only between members of the same group but also between different groups. The

difference is that members of the same group are trying to find common ground and define the

culture type that represents the whole group (in-group ‘trading-off’), whereas discussions

between members of different groups aim to make clear the differences between the values that

represent them (intergroup ‘trading-off’). Nonetheless, the representative culture for the whole

organization will emerge as the dominant culture of a particular group, following an intergroup

‘trading-off’ process of values. This process normally involves intense organised or random

discussions and negotiations through which individuals try to justify or rationalise their own

preferences for certain values and groups try to identify ways in which certain individuals

could adjust and adapt in order to accept the dominant system of values, i.e. the dominant

culture. This is indeed the ideological function of the social representation theory (Moscovici,

1984), which allows employees to not simply adopt certain values, but to discuss and adapt

those values until they can be fully integrated into their own cognitive framework. Surely, a

central nucleus of the dominant system of values does not change, but peripheral elements may

be adapted and be adjusted in order to satisfy all members of all groups (Jodelet, 1991).

Ultimately, the predominant culture must represent everyone, in one way or another. However,

PSY704: Organizational Culture Management Page 10

this does not mean that the differences between the sets of values among different groups

would suddenly be disappeared.

Table 2.3 summarises the key aspects derived from the psychological approach and

its associated dimensions.

Approach Dimensions of the concept of Associated aspect

organizational culture

– Assigning meanings to individual – Emotion-driven

values and beliefs interpretation of values

Psychological – Subjectivity (perceptions and – Psychological processes

behaviour) influencing the ‘trading-off’

– A personal sense of ‘belonging’ process in defining common

values and the predominant

culture

Table 2.3 The different aspects of organizational culture – Part II

– The psychological approach –

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1.4 An operational definition of organizational culture

Based on the information presented in Tables 2.1-2.3 and following Hofstede’s seven

characteristics described in the previous reading, we are now able to derive an operational

definition of organizational culture, as follows:

Culture is the collective programming of the mind that distinguishes the members of one

group or category of people from others based on shared values, beliefs and assumptions

about how to behave, interact, perform, lead and make decisions.

This definition of organizational culture will be used throughout this module. However,

it is important to note that, since there is no widely-acceptable definition of culture, we

should always remain focused on the seven characteristics of organizational culture, as

described by Hofstede in the previous reading (Hofstede et al., 1990). Indeed, the elusive

nature of culture leads to the conclusion that the value of any definition will not be as

important as the knowledge of a set of broadly-accepted fundamental characteristics of

culture.

In order to fully understand the practical meaning of the definition, we redirect focus to

some variables, which, evidently, are associated with organizational culture. Although there

are many such variables in the literature, we will examine the relationship between

organizational culture and the psychological variables which were most frequently associated

with organizational culture in the literature (Alvesson, 2002). Thus, in the next reading, we

will examine the possible relationship between organizational culture and performance,

leadership and management. This exploration is also consistent with the dimensions of

culture identified in Tables 2.1 and 2.3 (second column), which, in turn, led to the derivation

of the operational definition of organizational culture.

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1.5 Concluding remarks

The limitations of the sociological and anthropological approaches to organizational

culture led to the conclusion that a psychological approach was necessary in order to better

understand the concept and aim to derive an operational definition of organizational culture.

Indeed, the most representative model of the psychological approach, offered by

Cameron & Quinn (2011), utilised the “competing values framework” and presented four

different types of organizational culture. The model combined elements from the sociological

and anthropological approaches, while paying attention to significant psychological

processes, such as reluctance, compliance, motivation and commitment.

Cameron & Quinn’s model was subsequently utilised in order to derive further insights

into the ‘trading-off process’ of values, described in the previous reading. According to this

model, the employee of an organization would perceive their participation in a particular social

group as an important representation of the values that characterise them as individuals. This

was essentially the main premise of social identity theory, which also revealed the strong

relationship between the employees’ participation in social groups and their personal and

social perception of self-esteem.

The second insight arose from Moscovici’s social representation theory, which was also

associated with Cameron & Quinn’s model of organizational culture. According to this theory,

both the ‘trading-off’ process between members of the same group and between members of

different groups, and hence, the emergence of the predominant culture, are based on the

premise that the set of shared values and beliefs are not fixed and there is a degree of flexibility

in terms of adapting and adjusting those in order to, ultimately represent, in one way or

another, all individuals of the organization. This is a difficult process, which involves

discussions and negotiations through which individuals try to justify their preferences and

groups try to defend their representative values.

The gradual methodological way followed in the current and previous readings allowed

us to derive an operational definition of organizational culture, based on the three contextual

approaches, which will be used throughout the module in order to discuss more complex

topics.

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Reading tips

– In this reading, we referred many times to the importance of choosing the most representative

models of organizational culture. This is easier said than done. In order to produce the reading

of this week, we needed to go through a careful selection of models and choose the one which

appears to be most-frequently cited by prominent authors in the field. Therefore, when

studying, make sure that you consult additional sources, so that you are familiar with the

existence of alternative models of organizational culture. This will help you dramatically during

the preparation of your assignments.

– Please make sure that you dedicate time to observe the ‘continuity’ of the readings. For

example, this weeks’ reading depends on the previous week’s reading and the derivation of

the definition of organizational culture emerged as the gradual result of material included in

both readings. For this reason, it is imperative that you start reading the material from

beginning to end, without aiming to choose certain readings only, because this would

seriously compromise your ability to understand the material.

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1.6 References

Alvesson, M. (2003). Understanding organizational culture, 2nd ed. London, United
Kingdom: Sage.

Cameron, K. S., & Quinn, R. E. (2011). An Introduction to changing organizational culture:
Based on the competing values framework. Diagnosing and Changing Organizational Culture,
1–12.

Hayes, N. J. & Lemon, N. (1990) Stimulating Positive Cultures in Growing Companies.

Leadership & Organisational Change Management, 11(7) 17-21.

Hofstede, G., Neuijen, B., Ohayv, D. D., & Sanders, G. (1990). Measuring Organizational

Cultures: A qualitative and quantitative study across twenty cases. Administrative Science

Quarterly, 35(2), 286–316. https://doi.org/10.2307/2393392.

Jodelet, D. (1991) Madness and Social Representations (trans. T. Pownall), Hemel Hempstead:

Harvester Wheatsheaf.

Moscovici, S. (1984) The phenomenon of social representations In: R.M. Farr & S. Moscovici

(eds) Social Representations Cambridge: Cambridge University Press.

Quinn, R. E., & Rohrbaugh, J. (1983). A Spatial Model of Effectiveness Criteria: Towards a
Competing Values Approach to Organizational Analysis. Management Science, 29(3), 363–
377. https://doi.org/10.1287/mnsc.29.3.363

Schneider, W. (1994) The Reengineering Alternative: A Plan for Making Your Current Culture

Work. Burr Ridge, IL: Irwin Professional Publishing.

Tajfel, H. & Turner, J. C. (1979) An Integrative Theory of Intergroup Conflict In: W.G. Austin

& S. Worchel (eds) The Social Psychology of Intergroup Relations. Monterey, Cal:

Brooks/Cole

Yu, T. & Wu, (2009). A review of study on the competing values framework. International

Journal of Business and Management, 4(7), 37-42.

PSY704: Organizational Culture Management Page 15

https://espace.library.uq.edu.au/view/UQ:294945

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Page 1 PSY704: Organizational Culture Management

Week 4: Cultural Change in Organizations

Learning Objectives:

1.1 The need for organizational culture change

Every author in organizational culture agrees that change is not optional, its velocity will

increase exponentially in the next 10 years and its influence is both ubiquitous and

unpredictable (Hannah, et al., 2003). Indeed, technological and information advancements

created an environment intolerant of status-quo for every modern organization. If an

organization decides to ignore the necessity of change, market forces will simply render it

unviable. Therefore, the challenge for modern organizations is how to succeed in connecting

change with organizational effectiveness.

Quinn (2000) suggested that if we want to ensure that change is managed in such a way so

to increase effectiveness, one needs to firstly identify the nature of organizational change.

Stated differently, we must first seek to understand the characteristics of the intended change

and, subsequently, try to device and implement different strategies of managing it. Quinn

mentioned three versions of organizational change, which have been repeatedly validated by

many authors, as follows:

(i) Change as a grand technocratic project

(ii) Change as an organic social movement, and

(iii) Change as the re-framing of everyday life

The three approaches are not contradictory. In fact, it is often the case that more than one

of those approaches may be in operation in real-time organizational change.

• Understand that need for organizational culture change

• Understand the concept of cultural dynamics

• Understand the processes involved in the most representative model of

organizational cultural dynamics

Page 2 PSY704: Organizational Culture Management

In the first case, organizational change is considered to be a large-scale cultural

transformation from a particular situation to a new, more profitable and prosperous one. The

senior management team is considered to be responsible for initiating the change, as well as

identifying the new cultural form needed. The practical aspects primarily involve the planning

and resource re-allocation, but also a series of highly-demanding decisions that must be taken.

Those decisions should cover the following:

– Evaluation and analysis of the status quo culture situation

– Identification of strategic future goals

– Evaluation and analysis of the expected form of the new culture situation

– Analysis of the observed discrepancies between ‘what is desired’ and ‘what exists’

– Development of a plan for achieving the cultural transformation

– Implementation of the plan for cultural transformation

– Evaluation of the magnitude of change needed (containing cultural change or

continuing the efforts for further change)

The most common means for achieving cultural change could involve traditional

expansion-related tools, such as new recruitment strategies, new performance appraisal

systems, promotion of people who share key values of the new culture, etc. Furthermore, other

management-related tools may also be used, such as a new leadership style which

communicates the new cultural values to the majority of employees, new forms of

interpersonal socialization or new training programmes of continuing professional

development.

Although the above means for achieving change may seem to be very reasonable, it is

important to consider the operational definition of organizational culture, as defined in the

reading of Week 2. I reproduce it below for convenience:

“Culture is the collective programming of the mind that distinguishes the members of one

group or category of people from others based on shared values, beliefs and assumptions

about how to behave, interact, perform, lead and make decisions.”

This definition may not involve the word change, but it does refer to the ‘collective

programming of the mind’ in the sense of collective consciousness about a specific set of

values, norms or beliefs. This, by its very nature, cannot be a fixed entity. Given that cultural

values are defined in relation to societal ideologies and acceptable patterns of behaviour, it is

Page 3 PSY704: Organizational Culture Management

reasonable to assume that those values will be changing in order to ensure that, at any given

period of time, they will be representing the majority of the employees of the organization.

For this reason, the use of new organizational symbols becomes an important means of

accomplishing organizational change. For example, certain actions, such as the use of meetings

in a ritual way or the managers’ references to specific topics, may be used to indicate what is

important in this cultural change. Similarly, the use of very specific language, such as

intentional slogans, stories or expressions, or the use of material objects, such as logos, dress

code or corporate architecture, etc., may also be used to familiarise individuals with the new

cultural values or to highlight the areas of expected change.

In the second approach, organizational culture change is considered to be an organic,

necessary social movement arising from within the organization and it is not imposed from the

senior managers. Groups within the organization revise their thinking, valuing and giving

meaning to ‘phenomena’, spontaneously, and they decide to follow the flow of new emerging

ideas, which eventually lead to the adaptation or change of certain values and beliefs. These

groups could be employees, who are able to understand the new ideas originating in society at

large, or certain groups of people whose external influence of the organization is significant.

For example, a group of the organization’s customers, a group of the organization’s major

competitors, etc. The most important point in this approach is the differentiation between a

moderate adaptation and a major change of the existing culture. The former is usually the

result of external pressures to adjust to new working conditions, such as new technological

equipment, new working relations, new management strategies, etc. The latter is the result of

institutional pressure to change long-held beliefs, ideas and values.

The third approach is the re-framing of everyday life. This approach adopts the view that

organizational culture may change through the re-framing of certain meanings or values by an

influential actor, either a senior manager or an influential employee. This re-framing concerns

the way in which certain values are perceived or the different meanings assigned to them. The

actor engaged in everyday re-framing influences people he/she interacts with, and these

people, in turn, influence other people they interact with. This may lead to a chain-effect of

cultural re-framing, which is, ultimately, translated into organizational cultural change. To this

end, organizational culture change becomes an ongoing informal activity involving

pedagogical leadership in which an actor exercises a subtle influence though the re-negotiation

of meaning (Alvesson, 2003).

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It is important to note that the three approaches have only been briefly presented in order

to place emphasis on the complexity associated with organizational culture change. Indeed, all

three approaches imply that, in order to effectively manage organizational change, a

sophisticated framework is necessary to guide relevant strategies and operations. For this

reason, the concept of cultural dynamics will be presented in the next section. Further

discussion on the theoretical and practical aspects of the management of organizational culture

will be discussed in the reading of Week 5. The discussion will aim to utilise key aspects of

cultural dynamics.

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1.2 Cultural dynamics

The idea of cultural dynamics arose from the realization that the emergence of

organizational culture may not be fully understood based on the assumption that the dominant

values of an influential group of employees is transformed into a type of culture. The concept

of cultural dynamics refers not only to the final outcome of the emerging culture, but also the

processes involved in terms of the way in which a system of values is transformed into a stable

type of culture and its potential change. In other words, cultural dynamics reveal the dynamic

nature of culture by investigating not only the starting point and the final outcome, but the

intermediate processes, as well.

Hatch & Schultz (2002) provided a very helpful model of cultural dynamics in

organizational culture, which attempted to explain the evolutionary and dynamic nature of

culture. The model is considered to be the most representative framework for understanding

the notion of cultural dynamics in the literature.

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This model is presented in Figure 4.1 below.

Manifestations Realization

CULTURE

Interpretation Symbolization

Figure 4.1 The Cultural Dynamics Model

The first thing we can observe in Figure 4.1 is the four processes associated with the

emergence of culture. According to the model of cultural dynamics, organizational culture

cannot be described as a static gradual process. The emergence of culture occurs while four

different processes are in operation, as follows: manifestation, realization, symbolization and

interpretation. These processes involve interactions between cultural assumptions, values,

artifacts and symbols, which continuously operate in specific ways leading to the emergence of

a stable culture, but also the creation of its inherent change when the time and conditions are

appropriate. In this context, cultural change is simply the repetition of the four processes with a

different content and different interactions between assumptions, values, artifacts and symbols.

Therefore, if we are able to understand the functionality involved in the emergence of culture

using the cultural dynamics model, we will also be able to understand the dynamics underlying

organizational culture change.

values

Artifacts Assumptions

Symbols

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It is important to mention that none of the four prementioned processes may be perceived

as a ‘stand-alone’ instrumental mechanism. Each process requires the other three processes in

order to be meaningful. Stated differently, all four processes are inter-related and their inter-

dependence is responsible for the understanding of the dynamic nature of culture. Below, the

four different processes are described, in turn.

The manifestation process refers to the way in which cultural assumptions reveal

themselves in the emotions, perceptions and cognitions of organizational members. In other

words, manifestation is the process in which intangible assumptions are translated into

recognizable values by the individuals of the organization. This process may occur in two

different ways, as follows: (i) through the potential influence of assumptions on values; and (ii)

through the effects of value recognition on cultural assumptions. The two ways are discussed

in further detail below.

(i) Influence of cultural assumptions on values (proactive manifestation)

Cultural assumptions about certain values create expectations to individuals about the

importance of those values in their working and personal life. These expectations, in turn, are

capable of influencing people’s perceptions, thoughts and feelings about things they like or

dislike about the organization, which they associate with those values. In this way, cultural

assumptions may easily influence the way in which people within the organization perceive

certain values. For example, if the cultural assumption is that employees within an organization

are lazy, the expectations would be that this is a factor of hindering successful performance.

The perception of laziness, as well as the negative thoughts and feelings about its possible

effects, could easily be translated into a cultural value of controlling laziness. Furthermore, the

realization that laziness may compromise the magnitude of possible effort exerted by

employees would indicate that the value set effort-autonomy must be replaced by the value set

effort-control. Therefore, an initial assumption of laziness may easily transform the significant

value of autonomy into the value of control.

(ii) Influence of values on cultural assumptions (retroactive manifestation)

When individuals within the organization are conscious of the dominant value system of

the organization, they are able to recognize and personalize those values, i.e. they are able to

identify elements of those values that manifest themselves in their everyday working and

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personal life. In this case, there is an ongoing alignment between values and their

corresponding cultural assumptions. Similarly, there is an ongoing re-affirmation of the

cultural assumptions from which the values emerged.

However, there are occasions in which new values are imported either by the senior

management team or by external influences, such as a group of competitors. In that case, the

new values would lead the re-alignment of the cultural assumptions in order to reflect not only

the old, but also, the new values. The crucial point is that this re-alignment will only occur if

the new imported values are perceived to be ‘compatible’ with the existing culture, otherwise

the manifestation process will dismiss them. If, for example, the new values are perceived to

belong in another type of culture, the manifestation process would simply ignore them. This

retroactive manifestation process is considered to be more important than the proactive one

simply because it either solidifies existing culture or facilitates cultural change through the

clarification and reaffirmation of the cultural assumptions (Kunda, 1992).

The realization process refers to the transformation of expectations into social or

material reality and the maintenance or change of existing values through the production of

artifacts, such as rituals, organizational stories, humour and symbolic physical objects. There

are two ways in which this realization process takes place, as follow: (i) through the

transformation of values into artifacts; and (ii) through the re-affirmation of values by artifacts.

We will examine both of those processes in further details below.

(i) Transformation of values into artifacts (proactive realization)

The realization process gives substance to the expectations created through the

manifestation process. In other words, the realization process facilitates an activity whose

outcomes allow expectations and the associated values to be materialized, i.e. be represented in

some form of artifacts. Such activities could include the production of objects, such as

organizational reports, newsletter, buildings, etc. or the engagement in organizational events,

such as meetings, award banquets, etc. In the example of laziness mentioned before, artifacts,

such as time clocks, daily productivity reports, performance meetings and visually-accessible

offices are compatible with the value of controlling laziness. Stated differently, the expectation

that laziness must not interfere with the performance process and the associated value of

controlling lazy behavior are materialized via the introduction of those artifacts (tangible

outcomes).

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(ii) Re-affirmation of values by artifacts (retroactive realization)

In this case, artifacts that are materialized through a clear system of values are used to

re-affirm those values and their expectations. It is important to mention that we are referring to

the values representing the existing culture and not the values of a different culture. However,

if there are values imported from a different culture, the realization process would take into

account the artifacts produced by that culture in order to challenge the existing values and

associated expectations. If those new values are absorbed by the existing culture, then artifacts

will facilitate the re-alignment of values, which, in turn, will re-align the necessary

assumptions. However, if the new values are dismissed by the existing culture, there won’t be

a need for a realization process to take place because the new values will be dismissed at the

manifestation level.

For example, if an organization introduces radical innovation plans and unusual strategic

goals, there may be resistance by the employees of the organization to accept them. However,

if a group of employees started examining the new plans and goals in a thorough way and

found many positive aspects associated with the working environment and working schedule

of each employee, then the initial resistance might not last. In this case, the generated artifacts

could be the minutes of strategy meetings, organizational reports of expected medium and

long-term performance, pilot research studies for the upcoming changes, etc. The retroactive

realization process occurs if these artifacts are powerful enough to be accepted by the

employees of the organization; in which case, the artifacts would be capable of re-aligning the

established values in such a way so to fully absorb the new values into the existing

organizational culture. Similarly, older artifacts would be in an ongoing interaction with

existing values in order to ensure that there is a constant alignment between produced artifacts

and existing values.

The symbolization process involves the interaction between artifacts and symbols.

Organizational symbols involve the corporate logo, slogans, stories, actions and non-actions,

corporate architecture, visual images or metaphors (Gioia, 1986). A symbol is considered to

be anything that represents a conscious or unconscious association with some wider, normally

abstract concept or meaning (Dandridge, et al., 1980). According to Cohen (1985), symbols do

not simply represent something, they also allow those who employ them to supply part of the

meaning of the symbol. The symbolization process occurs in two different ways, as follows: (i)

The role of artifacts in finalizing the meaning of symbols; and (ii) The role of symbols in

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enhancing awareness of the literal meaning of artifacts. Further details about each one of those

alternative avenues are provided below.

(i) The role of artifacts in finalizing the meaning of symbols (prospective

symbolization)

The artifacts, once materialized through the realization process, retain an objective form

and a literal meaning. The process of symbolization aims to provide the context beyond the

literal domain, i.e. the symbolic meaning of the artifacts, which is usually developed from

experiences. For example, if the senior management team of an organization decides to offer a

bouquet of roses on Mother’s day to every mother who works for the organization, the gesture

has two meanings. Firstly, the bouquet has the literal meaning of a bundle of flowers.

Secondly, it also has a symbolic meaning, which could be an expression of appreciation.

However, subjective and figurative associations allow the recipient to supply part of the

meaning of the bundle of roses. Stated differently, such associations may influence the

perceptions of every mother-employee in terms of how much value they assign to the same

bouquet of roses. In other words, every mother-employee could assign a different symbolic

meaning based on past experiences with such symbolic gifts, how significant her friends

consider such gestures, how consistent such a gesture may be with the substance of

appreciation based on the everyday performance, career goals, the professional review process,

etc.

(ii) The role of symbols in enhancing awareness of the literal meaning of

artifacts (retrospective symbolization)

The generated symbols are not simply the result of a well-accepted additional meaning

of a particular artifact, i.e. the surplus meaning which goes beyond the literal meaning. The

same is true for the subjective value assigned by every person within the organization for the

same artifact. This symbolic value of the artifacts will depend on the individual’s recognition

of the artifacts’ symbolic form, and not simply their objective form. Therefore, symbols are

capable of enhancing people’s awareness of the literal meaning of artifacts because the

symbolic value reinforces the literal value of an artifact. For example, let’s consider the artifact

to be a desk of each employee within the organization. The senior managers were given large

and impressive desks while junior employees were given small and rather ordinary desks. If

the well-accepted view were that professional advancement and recognition is associated with

a better and larger desk, then the symbolic value assigned to every desk would be different.

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The important point is that, once the proactive symbolization takes place, each employee

perceives the literal value of the desk to be different compared to the value assigned before the

symbolization process. Stated simply, each employee ceases to see each desk as an object

because he/she now considers its symbolic value. In other words, the literal meaning and value

of every desk is significantly enhanced due to the symbolic meaning attached to it.

When the symbolic meaning is attached to the artifact, it is considered to be culturally-

significant because it is capable of shaping the adaptation process of the cultural assumptions

associated with certain existing values, or indeed the embrace of new values. This is happening

through the process of interpretation, which we examine next.

The interpretation process involves the subjective interpretation of symbols, once

established. We mentioned before that each individual within the organization perceives the

value of every symbol differently. There is a well-accepted symbolic value in the sense that all

people of the organisation attach a similar value to that symbol. In the example of a desk, all

employees would consider the impressive, large desk of the CEO of the organization to be of a

much higher symbolic value compared to the value assigned to medium-ranked managers or

entry-level consultants. Indeed, this part of the symbolic value is still subjective, but it is

agreed upon as an unspoken rule, rather than a conscious agreement, between all individuals of

the organization.

In addition to that, there is a subjective symbolic value assigned by each individual of

the organization separately. This particular part of the symbolic value, by definition, differs

according to how each individual perceives the symbol for his/her own situation and working

circumstances within the organization. In other words, the symbol permits a subjective

interpretation and provides scope for interpretive manoeuvre by those who use it. This process

is, essentially, a second-order experience of symbolization – with prospective symbolization

being the first-order experience. It is also called the hermeneutic perspective (Wilson, 1987).

The hermeneutic perspective suggests that the interpretation process involves the

dynamic movement, back and forth, between cultural assumptions and generated symbols.

There are two ways to consider this interaction, as follows: (i) Symbols are capable of

enhancing the meaning of cultural assumptions; and (ii) Cultural assumptions are capable of

altering the meaning of symbols.

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(i) Symbols are capable of enhancing the meaning of cultural assumptions

(prospective interpretation)

In the prospective interpretation, symbols are considered as capable means of reflecting,

enhancing or revising the meaning of cultural assumptions. This is due to the fact that symbols

are reconstructed to reflect the surpluss meaning of artifacts they now carry and allow for a

subjective interpretation to take place by each individual within the organization. In other

words, prospective interpretation capitalises on the new experience of added symbolic meaning

to certain artifacts and aims to challenge pre-established assumptions by either confirming or

revising them. In the latter case, the symbolic meaning provides a new way of understanding

cultural assumptions, and for that reason, the initially-established assumptions are revised

accordingly. Stated differently, the interpretation process makes it possible for culture to

absorb newly-symbolized content into its core or seek for different assumptions, which may

drive the formation of new values, and, gradually, the development of a new type of culture.

(ii) Cultural assumptions are capable of altering the meaning of symbols

(retrospective interpretation)

The cultural assumptions imply “already known” knowledge, which plays an

instrumental role in shaping the ultimate type of the prevailing culture within an organization.

To this end, the new value attached to symbols through the symbolization process is

considered to be “new” knowledge in terms of the newly-established understanding of

artifacts, and hence, values. The retrospective interpretation reconstructs the meaning of

symbols. It occurs when “already known” knowledge comes to re-examine the meaning of

symbols in order to check whether they conform or not with the pre-established broader

cultural frame of the organization. The process may lead to alter the understanding of symbolic

meaning leading to the re-examination of artifacts and values, or simply confirm that the

“new” knowledge provided is largely compatible with the organization’s existing cultural

assumptions, which are treated as a reference point.

At this point, it is important to remind ourselves of the retroactive manifestation process,

which involves the potential influence of established values on shaping and refining cultural

assumptions. The process involved the reconfirmation of existing culture or the reinforcement

of cultural change through the clarification and reaffirmation of cultural assumptions. At the

same time, the prospective interpretation process involves the possible reconfirmation of the

existing culture or indeed, the possible addition of new cultural knowledge and, hence,

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initiation of cultural change, through the subjective interpretation of symbols. Therefore, it is

easy to observe the possible intersection of the retroactive manifestation process with the

prospective interpretation process. In case the two processes collide, the ultimate type of

culture will reflect the influence exerted by the process with the highest impact. However, if

the two processes move to the same direction, the influence on the ultimate type of culture will

be stronger.

Overall, the prevailing culture of the organization must reflect the dynamic influence of

all four processes mentioned above. These processes operate in a bi-directional way,

essentially forming eight different ‘movements’ in constant motion. Therefore, it is not easy to

predict how exactly the ultimate type of organizational culture will be formed. Nonetheless, the

cultural dynamics model allowed us to observe the different dynamic mechanical ‘movements’

and understand the explanations provided, which have now come full circle.

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1.3 Α note on the dynamic nature of culture formation

Although the cultural dynamics model offered a new perspective of organizational

culture, it is important to revisit the meaning of the term dynamic.

In order to understand the dynamic nature of culture formation, we reproduce Figure 4.1

in a slightly different manner. In Figure 4.2, the four processes, which involve the forward and

backward models of operation (overall, eight processes) are represented via two different

wheels. Wheel (a) represents the clockwise (forward) movement of the operation and Wheel

(b) represents the anti-clockwise (backward) movement of the operation.

Wheel (a): The clockwise operation of Wheel (b): The anti-clockwise operation of

the Cultural Dynamics Model the Cultural Dynamics Model

Figure 4.2 The mechanics of the Cultural Dynamics Model

We mentioned before that, although the four processes occur separately, they are all

interconnected. In other words, culture emerges as the result of the overall outcome of all those

processes. The dynamism of the model is further understood if we picture the clockwise

operated wheel (forward movement) forming one wheel within which the anti-clockwise

operated wheel (backward movement) turns. Therefore, the dynamic nature of culture

formation is assessed only through the simultaneous counter-action of the two wheels.

Cultural

Dynamics

(forward

operation)

Cultural
Dynamics

(backward

operation)

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This clarification about the dynamic nature of culture formation is useful not only

because it helps us comprehend the complexity associated with culture formation, but also

because it provides an instrumental vehicle on which we can explore organizational cultural

change and the associated management approaches to the emergence of new types of

organizational culture. These topics will be presented in the next week’s reading.

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1.4 Concluding remarks

In previous readings, we explored the significant role of culture on organizational life. We

discussed the relationship between culture and management and between culture and

performance, which allowed us to start drawing the picture of organizational culture

management. However, it was not the maintenance of the existing culture that was revealed to

be demanding and challenging, but rather the management of cultural change, regardless of

whether the necessity of change was initiated by the organization itself or by external forces.

In this reading, we aimed to understand the introductory aspects of the different approaches

to the management of cultural change. Change was presented as a technocratic project, as an

organic social movement or simply, as the re-framing of everyday life. The three approaches

have a complementary character and, when taken together, they allow us to better understand

the operational definition of organizational culture provided in Week’s 2 reading.

Τhe realization that cultural change is characterised by a significant degree of complexity

led us to the introduction of the very important concept of cultural dynamics. This concept

emphasized the importance of the different processes taking place during cultural maintenance

or cultural change. In other words, it was important to escape the traditional static approach

towards organizational culture and adopt the cultural dynamics model, as a representative

framework for understanding the dynamic nature of culture. The dynamism of this model was

based upon the realization that different processes, such as manifestation, realization,

symbolization and interpretation, are in constant motion allowing simultaneous bi-directional

interactions between cultural assumptions, values, artifacts and symbols. This framework

allowed us to understand that organizational culture emerges as the final outcome of a number

of complex processes, which are directly influenced by the system of values of the most

influential group within the organization. Stated differently, we are now in a position to

observe that, although the most representative system of values may influence the prevailing

type of organizational culture, other processes interact with this system before the ultimate

type of culture emerges. This mechanism is repeated during the ongoing maintenance of

culture or indeed during the formulation of management strategies for dealing with the change

of organizational culture. The philosophy of cultural dynamics is that if we are able to

understand the mechanics leading to the initial emergence of organizational culture, we will be

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able to observe and understand the mechanics of the re-emergence of culture, i.e. the

emergence of a new type of prevailing culture associated with organizational change.

The topics covered in this reading allow us to start exploring cultural change through the

lens of the psychological model presented in Week’s 2 reading (Figure 2.2). If you recall, the

model was based on the competing values framework, whose dynamic character we will now

be able to explore and comprehend.

With the knowledge acquired from the cultural dynamics model (Figure 4.1), we will

consider both the theoretical and empirical aspects of cultural change and the potential

management strategies associated with it. These issues will be explored in the next reading.

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Reading Tip

– In this reading, we presented the cultural dynamics model. In order to be able to

understand the mechanics of the model, i.e. the different ‘movements in motion’, we

needed to imagine the model as two different wheels moving towards a different

direction. This model indicated how complex organizational culture is in terms of both

as a concept and as an organizational variable. For these reasons, it is now important

that you start engaging with empirical studies in organizational culture. Theoretical

studies provide the basic knowledge about the emergence of change of organizational

culture, but only empirical studies will allow you to see how these outcomes occur in

practice. Please do not confine yourselves within the narrow scope of the recommended

textbook of this module. It is important to explore additional resources, namely

scientific journals focusing on empirical research.

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1.5 References

Alvesson, M. (2003). Understanding organizational culture, 2nd ed. London, United

Kingdom: Sage.

Gioia, D. A. (1986). Symbols, scripts, and sensemaking. In H. P. Sims (Ed.), The thinking

organization: 49-74. San Francisco: Jossey-Bass.

Cohen, A. P. (1985). The symbolic construction of community. London: Tavistock Publications

& Ellis Horwood Ltd.

Dandridge, T. C., Mitroff, I., & Joyce, W. F. (1980). Organizational Symbolism: A Topic To

Expand Organizational Analysis. Academy of Management Review, 5(1), 77–82.

Hannan, M. T., Pólos, L., & Carroll, G. R. (2003). Cascading Organizational Change.

Organization Science, 14(5), 463–482.

Hatch, M. J., & Schultz, M. (2002). The Dynamics of Organizational Identity. Human

Relations, 55(8), 989–1018.

Kunda, G. (1992). Engineering culture: Control and commitment in a high-tech corporation.

Philadelphia: Temple University Press.

Quinn, Robert E. (2000). Change the World. San Francisco: Jossey-Bass.

Wilson, T. P. (1987). Sociology and the mathematical method. In A. Giddens & J. Turner

(Eds.), Social theory today: 383-404. Stanford CA: Stanford University Press.

https://espace.library.uq.edu.au/view/UQ:294945

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Page 1 PSY704: Organizational Culture Management

Week 1: Introduction to Organizational Culture

Learning Objectives:

1.1 The importance of

organizational

culture

A number of research studies found sufficient evidence to suggest that organizations do

have cultural properties and it would be unreasonable to assume that those may not interfere

with the management and leadership processes of any organization (Baker, 1980; Cameron &

Quinn, 2011; Peters & Waterman, 1982). However, in organizational theory literature, culture

was treated as an concept and as a contingency factor with a varying and little

understood incidence on the functioning of organizations (Crozier, 1964; Child 1981).

Since the year 2000, the concept of organizational culture has aroused considerable

interest not because of the abstract notion of its potential impact, but rather due to its direct

association with organizational change. Nowadays, no organization would aim for constancy,

sameness, or status quo given the highly-interconnected world we live in. Stability is often

considered to be stagnation rather than steadiness, and organizations that aspire to be dynamic

players in the international market understand the importance of embracing the business of

change and transition. The association of the broad meaning of ‘change’ with the concept of

organizational culture has become the primary reason why the latter has received particular

attention. If culture somehow intervenes in the process of organizational change, no

organization would ever be indifferent about it.

• Understand the different dimensions of the concept of organizational culture

• Identify the most useful contextual approaches to organizational culture

• Assess the contribution of each approach to the conceptualisation of

organizational culture

• Be familiarised with the most representative models of organizational culture

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Despite the fact that most senior organizational members might not necessarily consider

the aspect of culture to be critical for performance or success, they would, perhaps, all agree on

the fact that the ideas, perceptions and beliefs, which usually guide the way people think, feel,

value or act must be of a cultural nature. Indeed, many senior managers presume that culture is

simply a stenographic cue for a set of values, norms or beliefs, which dominate working

environments, and there does not seem to be a direct link with the functions, structures or the

evolutionary processes of an organization. To this end, only if organizational culture interfered

with the process of change would organizations pay attention to it.

However, as we will find out in the next sections, the perception that organizational

culture simply interferes with change is, at least, superficial. Culture has been combined with a

number of critical organizational variables, such as efficiency, productivity, adaptation,

integration, decision-making, leadership and strategic management (Peters & Waterman,

1982). For example, Van Maanen and Barley (1985) found that the dissonance between an

organization’s value system and its other operational systems was solely responsible for the

reduction of efficiency. Similarly, Schein’s work (1990) identified another problematic link, as

follows: if organizational culture is not congruent with the socio-structural system of the

organization, severe operational dysfunctions may arise. In other words, if the type of the

dominant culture within an organization does not facilitate the social networks formed among

the individuals of the organization, the organization’s performance will deteriorate. Therefore,

the concept of organizational culture is more complex than we initially thought.

In the last thirty years or so, culture studies attempted to define the concept of

organizational culture in such a way so as to be capable of reflecting some form of shared

meaning, interpretations, values or norms. The idea was simply based on the fact that culture

has traditionally been combined with common characteristics, shared ways of thinking, shared

ways of acting or behaving or common assumptions and beliefs that drive people’s decision-

making processes. But, the concept of culture involves many different constituent elements,

which are not easily comprehensible and, as such, they cannot be represented by the

assumption of shared meanings and shared values.

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For example, culture may refer to a system of values within the organization. If we

assume that values are symbolic interpretations of reality, which provide meanings for social

actions and standards of social behavior within an organization, it is also reasonable to expect

that they will represent tangible expressions of specific ideologies (Mummendey & Schreiber,

1984). At the same time, in cultural dynamics, the actual meaning of those values may not

necessarily be linked with a specific ideology, but it would rather arise from the interaction

among the employees of the organization. Stated differently, although culture may be

associated with specific ideologies, its actual meaning is expected to be derived from the way

in which the employees of an organization interact with one another in the same social context

for a prolonged period of time. This example reveals the complexity associated with the

conceptualization of organizational culture. The concept involves many different elements

such as beliefs, values, norms, symbols, rituals, ideologies, etc., which render it

multidimensional.

Hofstede et al (1990) recommended seven characteristics associated with the concept of

‘culture’ in an attempt to narrow down its multiple dimensions. These characteristics were

assessed to be very inclusive and their comprehensiveness was confirmed in the literature

(Deal & Kennedy, 2000). Therefore, we may use them in order to, gradually, identify the most

important dimensions involved in the concept of organizational culture, with the ultimate aim

to derive a definition of the concept. This will, subsequently, allow us to examine the more

specific concept of organizational culture management. The seven characteristics offered by

Hofstede et al. appeared, as follows:

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1. Culture is holistic and refers to phenomena that cannot be reduced to single individuals.

Therefore, culture involves a larger group of individuals.

2. Culture is a socially-constructed phenomenon; culture is a human product and is shared

by people belonging to various groups. Different groups create different cultures, so it is not

human nature that dictates culture.

3. Culture is historically related; it is an emergent phenomenon and is conveyed through

traditions and customs.

4. Culture is inert and difficult to change; people tend to hold on to their ideas, values and

traditions.

5. Culture is soft, vague and difficult to catch; it is genuinely qualitative and does not lend

itself to easy measurement and classification

6. Terms such as ‘myth’, ‘ritual’, ‘symbols’ and similar anthropological terms are

commonly used to characterize culture.

7. Culture most commonly refers to ways of thinking, values and ideas of things rather than

the concrete, objective and more visible part of an organization.

The above characteristics indicate that the concept of organizational culture is, indeed,

multi-dimensional. We will utilize the above characteristics in order to identify the most

important contextual approaches to organizational culture. Such approaches normally provide

different perspectives of organizational culture and, as such, they could reveal the most

important dimensions of the concept.

Firstly, according to Hofstede et al (1990), culture involves a larger group of individuals

and it is a socially-constructed phenomenon. Therefore, a sociological approach to the process

of conceptualizing organizational culture seems necessary. Secondly, the humanistic values of

the people, who work and lead the organization, suggest that an anthropological approach

would enhance our understanding about the constituent elements of organizational culture.

Along the same lines, it seems reasonable to expect that a psychological approach to the

understanding of organizational culture may shed light on factors pertinent to the emotions of

the people who work for an organization, which are not so apparent. Indeed, there is largely a

consensus between the most prominent authors in the field about the fact that, although

different groups of individuals with common ways of thinking and common values and beliefs

are able to construct different types of organizational culture, only by deciphering the relevant

psychological processes experienced by each individual could we enable ourselves to

understand the ‘culture formation process’ (Cameron & Quinn, 2011).

Page 5 PSY704: Organizational Culture Management

We believe that the three approaches mentioned above would, adequately, cover all

different points raised in the seven characteristics provided by Hofstede et al (1990). The

description of each of the three approaches is provided in the next sections. The first week’s

reading closes with some final remarks.

Page 6 PSY704: Organizational Culture Management

1.2 The Sociological approach to organizational culture

In an effort to understand the concept of organizational culture, it is important to first

explore the more general perspective of the concept, as discussed by sociologists.

Sociologists were the first to develop detailed theories on culture in the late 19th century

(Lane, 1992). They approached culture as the objective causal outcome of a social reality and

aimed to identify the underlying social structures and processes responsible for the formation

of culture. In sociological terms, the concept of organizational culture was directly associated

with the decision-making processes of an organization. Different authors provided different

theoretical models in an attempt to understand how organizational culture emerges from the

social reality of different groups of employees. Below, we present two of the most influential

sociological models of organizational culture.

Harrison (1972) defined 4 organizational ideologies according to the different structures

of decision-making processes within an organization, as follows: power-orientation, role-

orientation, task-

orientation

and person-orientation. A power-oriented organization is an

organization that tries to dominate its environment and vanquish all opposition, whereas a role-

oriented organization pays attention to legitimacy and legality. In other words, a power-

oriented organization exerts its power on a personal level, whereas a role-oriented organization

maintains highly-formalised procedures in order to apply this power. On the other hand, a

task-oriented organization focuses on a superordinate goal, and all actions and activities must

be evaluated in terms of their contribution to that goal. Authority is only gained through

knowledge and competence and if authority impedes achievement, it may be swept away. At

the other end of the spectrum, is the person-oriented ideology. A person-oriented organization

focuses only on serving the needs of its members, i.e. the organization is a device through

which its members can meet needs that they could not, otherwise, satisfy by themselves.

Authority of the power-oriented or role-oriented ideology is discouraged and the employee is

supported and valued as a human being and not only as a cog in a machine. For this reason, a

person-oriented organization is, perhaps, the most capable in terms of forming effective ways

of trust development between the organization and its employees.

Page 7 PSY704: Organizational Culture Management

Figure 1.1 provides Harrison’s organizational culture model.

Figure 1.1. Harrison’s Sociological Model of Organizational Culture

(reproduced by Harrison, 1972).

Harrison’s model of organizational culture provides a very intuitive framework towards

the understanding of organizational culture. This is due to the fact that the model reveals the

importance of the underlying mechanisms of the decision-making processes involved in the

everyday operations of an organization; and, as a result, in the predominant culture that guides

the different social interactions. For this reason, many research studies employed this model as

the departure point of their investigations.

However, many authors utilised Harrison’s model in order to re-examine his main causal

hypothesis that the employees of an organization are responsible for the formation of the

culture characterising that organization. Perhaps, the most influential sociological model that

opposes Harrison’s main hypothesis was offered by Deal and Kennedy (2000). These authors

believed that organizational culture is shaped by outside influences and not by the

organization’s employees.

Role

orientation

Person

(support)

orientation

Power

orientation

Task

(achievement)

orientation

Page 8 PSY704: Organizational Culture Management

The model is demonstrated in Figure 1.2.

Fast Feedback

Low Risk High Risk

Slow Feedback

Figure 1.2. Deal and Kennedy’s Sociological Model of Organizational Culture

(reproduced by: Deal & Kennedy, 2000)

The process culture refers to the performance of an organization’s employees, which is

characterised by both slow feedback and low risk. Stated differently, this organizational culture

appreciates the way in which employees successfully complete a task, rather than what they

actually do in order to achieve that. Since there is little or no feedback, employees find it hard

to assess their performance. This, essentially, suggests that there is no actual professional

development (low employment risk) and the main purpose is to protect system’s integrity. A

few examples of this type of organizational culture include banks, insurance companies,

utilities, pharmaceutical companies, financial-service organizations, large departments of

governments, etc.

Work hard/Play

hard culture

Bet-Your-

Company

culture

Process culture

Tough
guy/Macho/
Stars culture

Page 9 PSY704: Organizational Culture Management

The work hard/play hard combination was associated with low employment risk but

intensive and fast feedback. In this organizational culture, what matters is effective team work

and, for this reason, there is a low employment risk. However, this effectiveness is normally

achieved through the advancement of the employee’s performance through fast and meaningful

feedback in the context of his/her purpose-specific continuing professional development. Some

examples may be found in the automotive distributors, real estate companies, retail stores,

mass consumer-sales

companies, etc.

On the right-hand side of Figure 1.2, we can observe forms of organizational culture

with employment conditions of high risk. The tough-guy/macho/star culture focuses on the

individual employee and his/her performance. The feedback is intensive and fast and the stakes

are high in each activity, i.e. an employee’s performance would determine the continuation or

not of his/her employment contract. Although continuing professional development is

important, the individual employee is requested to act quickly and decisively. Therefore, there

is no actual support for gradual professional development as the feedback provision process

occurs in the context of intense internal and external competition. Examples of this culture

include construction companies, cosmetics, advertising, management consulting, publishing,

etc.

Finally, the bet-your-company culture is characterised by slow feedback but high risk of

employment. In this culture, the future of the company itself is at stake because, instead of

providing intensive feedback and keep evaluating employees’ performance, managers aim to

effectively utilise their employees’ capabilities in order to identify the best possible strategies

of decision-making in the long-term. The oxymoron here is that, although the idea is to invest

in developing the company’s employees in order to ensure the longevity and future success of

the company, this is actually happening without aiming for constant progression in the

employees’ performance. For example, according to this culture, the feedback, although slow

and persistent, should be utilised in advancing specialised skills according to a pace, which the

employees themselves feel comfortable with. However, such a strategy may very well

jeopardise the future of the company; the very objective managers were trying to initially

secure! Obviously, this strategy is also risky for the employees themselves because the

company, by risking its viability, is indirectly risking the jobs of its employees, also. Typical

examples of this type of culture are computer-design companies, investment banks, capital

goods, etc.

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It is easy to observe that all four types of organizational culture offered by Deal &

Kennedy (2000) were developed based on the assumption that the driving force of culture

formation is a combination of external influences and not the employees of the organization.

Whether is system’s integrity (process culture), performance (work hard-play hard culture),

competition (tough guy culture) or future success (bet-your-company culture), employees do

not actively contribute to the development of the organizational culture.

The two sociological models described above revealed a critical debate between

sociologists with regard to the causal relationship between culture and society. In other words,

do people create a specific type of organizational culture or is the broader societal culture,

which involves key actors of a particular industry, responsible for the formation of

organizational culture? This is not a settled debate. Many authors generated alternative to Deal

& Kennedy’s models indicating that certain key actors and key external influences may,

indeed, shape an organization’s culture and the employees’ influence may not be as significant

as initially thought (Schein, 1990). Some examples of those key actors/external influences

could be the organization’s type of products, competitors, customers, technologies,

government influences, etc.

At the same time, a large segment of the literature in organizational culture makes use of

a key similarity between the Harrison’s model and the Deal & Kennedy’s model of

organizational culture. This is simply the fact that, regardless of how the organizational

culture was formed, its development would depend upon the effectiveness of the interpersonal

relationships between the employees and key members of the management team of an

organization. This particular perspective of organizational culture could not be served by the

sociological approach because the nature of interpersonal relationships requires us to redirect

focus on the individual. For this reason, the next sections will offer individual-centred

approaches to organizational culture, i.e. the anthropological approach and the psychological

approach.

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1.3 The anthropological approach to organizational culture

One of the most important authors in social anthropology, who developed extensive

theories of culture, is Emile Durkheim. Durkheim (1961) did not believe that organizations

could form their own culture, separate from the people who work for them. Instead, he

suggested that everyday interactions between employees would normally lead to a process of

trading-off particular values and the “norm values” would gradually emerge and be perceived

as organizational culture. However, Durkheim’s perception that culture is always associated

with moral order, cohesion and humanistic values made him appear a romantic of the past

without a pragmatic approach to the formation of organizational culture. Yet, once influential

sociological models on organizational culture had been published, Durkheim’s ideas seemed

highly-relevant again. The main reason was the realization of many theorists that social

solidarity, as a prerequisite for culture formation, is much more than simply the mere

aggregation of individual sentiments. To put it differently, Durkheim’s micro-sociological

approach to the importance of emotions involved in interpersonal relationships within an

organization revealed that those emotions may be the key anthropological factor of

organizational culture formation. To this end, emotions, sentiments, rituals, beliefs and

perceptions were all recognized as key factors of

culture formation.

But, how exactly Durkheim’s anthropological approach helped the argument of effective

interpersonal relationships in the formation of organizational culture? Although Durkheim

never discussed culture in a purely organizational context, his contemporaries interpreted his

work in this way. They claimed that Durkheim believed in strong interpersonal relationships

between both employees among themselves and between employees and employers, and this

observation alone was extremely important. According to this argument, for organizations to

reach peak performance, they must develop a sense of a collective purpose and a sense of

“belonging” in an enterprise community that is bound together by informal, yet clearly-

defined, rules, a consistent system of beliefs and a set of values that are capable of

transcending different socio-demographic or economic characteristics.

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This approach to organizational culture was very close to the work of social

anthropologist Edward B. Tylor, who viewed culture as the “complex whole which includes

knowledge, belief, art, law, morals, custom, and any other capabilities and habits acquired by

man as member of society” (Tylor, 1871). Indeed, Durkheim followed Tylor in demonstrating

that individual employees are not able to shape the culture of an organization and, for that

reason, culture emerges as an entity greater than the sum of each employee’s contribution to its

formation. However, in order for this to be achieved, the values and beliefs of each individual

employee must not only be respected, but, also, be manifested in any interpersonal

relationships of that particular employee with colleagues or senior managers, and be

adequately represented in any attempt to culture formation. In other words, the Durkhemian

perspective towards organizational culture was based upon the assumption that, if the values

held by each employee were adequately represented, it would be possible to identify shared

goals, values, beliefs, symbols and ideologies and, hence, a common purpose and identity.

This, in turn, would naturally lead to the emergence of a common working culture.

The most prominent author, who capitalized on Durkheim’s ideas, was William

Schneider. Schneider (1994) attempted to unify the sociological perspectives of Harrison

(1972) and Deal & Kennedy (2000) by identifying their anthropological dimensions using the

Durkhemian approach to organizational culture, as described above. Schneider’s model of

organizational culture describes the ways in which different types of interpersonal relationships

within an organization could lead to different types of organizational culture. Schneider

presented this differentiation as fully-dependent upon a very specific system of beliefs,

expectations, symbols, rituals, work ethos, broader societal values and a specific sense of

moral justice.

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Schneider’s model is shown in Figure 1.3.

Actuality

Personal Impersonal

Possibility

Figure 1.3. Schneider’s Anthropological Model of Organizational Culture

(reproduced by Schneider, 1994)

Collaboration

culture

Competence

culture

Cultivation

culture

Control culture

Page 14 PSY704: Organizational Culture Management

Schneider described cultivation culture as the result of a personal commitment and

dedication to a common purpose that is perceived as highly possible to be achieved (personal,

possibility). He believes that people-driven interpersonal relationships characterise this type of

culture. For this reason, the sense of fulfilment, which usually accompanies the pursuit of

common organizational goals, is based on a shared understanding of humanistic values, beliefs

and attitudes. For example, employees with shared ideas about spirituality, work ethos or

morality may easily cultivate trust among themselves, and, through meaningful and respectful

interpersonal interaction, their common purpose would drive culture formation. This type of

culture involves empowering employees and inspiring them to want to serve the organization’s

objectives, and, professionally, continue developing themselves in order to more effectively

respond to their roles. It fosters self-expression, willingness to grow, shared decision-making

and maximisation of the potential of each employee’s competences. Typical examples involve

religious enterprises, artistic organizations, symphony orchestras, theatres, etc.

The collaboration culture is based upon purely effective synergy. It may not necessarily

lead to empowerment, inspiration or continuing professional development, but it always

ensures effective team work, personal dedication, contribution to the common objective and

trust development among all members of the organization. This type of culture engenders a

positive, people-driven, affective and emotional interpersonal relationship among its members

leading to a collaborative effort towards a clearly-understood common goal. The personal

element is based on the belief to the overall effort and the participative leadership of the senior

managers. The actuality element is based on the fact that the organizational objectives are quite

predetermined in this culture and they are based upon a clearly-defined strategy, which, in turn,

is formulated from externally-generated evidence. In this regard, there is no flexibility in

exploring possibilities and alternative opportunities or investing in inspiring new ideas. Typical

examples of collaborative organizational culture include family-owned and family-operated

businesses; service organizations, such as healthcare organizations, nursing services or

hospitals; entertainment and many personal service companies.

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At the other end of the spectrum, Schneider presented two types of impersonal cultures,

i.e. the control culture and the competence culture. The control culture was defined as one that

is characterised by objectivity, i.e. what counts is empiricism and systematic examination of

externally-validated facts. The type of interpersonal relationships that govern this culture is

based upon the exercise of control through strict hierarchy, methodical and task-driven

management and an authoritative/directive leadership style. This is a type of culture which,

essentially, transforms interpersonal relationships into highly-impersonal and detached

interactions with a purely rational and non-emotional approach towards the pursuit of the

organizational objectives (actuality). The main strategy is to impose a system of beliefs and

values according to which compliance and adherence to a set of predetermined rules is the only

secure way towards achieving organizational goals. In this regard, this type of culture emerges

through the acceptance of domination and subordination as effective human management

procedures. Anything subjective or emotional is perceived to be potentially harmful to the

organization. Typical examples of this type of organizational culture involves military/defense

organizations, manufacturing companies, energy companies, resource companies, commodity

companies, etc.

The final type of organizational culture, according to Schneider’s model, is the

competence culture. This type of culture is based upon the achievement motive (McClelland,

1961), according to which accomplishing more and doing better than others essentially reflects

a need to compete against a standard of excellence. In this context, feeling superior or the best

is fully acceptable in this culture and it is, in fact, fully-rewarded. This culture invests in

interpersonal relationships, which are characterised by impersonal expertise exchange rather

than meaningful human interactions. Competence culture emerges as the result of self-

confident experts, who are functioning independently and their shared understanding of the

common objectives is only formulated through rational and analytical approaches. However,

there are no concrete externally-defined standards because expertise and competence provide

the right to creativity and, in this regard, exploring alternative possibilities is plausible and

desirable. Following Schneider’s description: “This culture gains its uniqueness by combining

possibility with rationalism. What might be and the logic for getting there are what count”

(Schneider, 1999, p. 65). A competence culture values competition for its own sake, although it

may not necessarily be more competitive than other core cultures. Typical examples are

universities and research & development organizations, think tanks, consulting firms,

accounting firms and engineering construction firms.

Page 16 PSY704: Organizational Culture Management

In conclusion, the Schneider’s model of organizational culture agrees with Harrison’s

model in terms of the fact that society drives culture and not the other way around. However,

Schneider agreed with both Harrison (1972) and Deal & Kennedy (2000) in terms of the fact

that the key predictor of each type of organizational culture remains the interpersonal

relationships between the people of the organization. Indeed, the four types of culture

presented by Schneider (1994) indicated that the different types of interpersonal relationships

are the driving force to culture formation and the different managerial or leadership style fully

depends on the effectiveness of such relationships.

As our exploration evolves, it is not difficult to observe that, while the sociological

approach to organizational culture offered a sensible way of understanding the way in which

different social structures (internal social networks or external influences) create culture, the

anthropological approach came to complete this rationale by providing information about the

means through which organizational culture usually emerges from groups with a shared system

of beliefs and shared ways of thinking, i.e. the relationships between the people of the

organization.

Moreover, Schneider explained that, in most organizations more than one type of

cultures emerge and the predominant culture would be determined from the willingness and

motivation of the employees of an organization to accept a different set of beliefs or values, if

a given percentage of colleagues already share those. According to Granovetter (1978), whose

work followed Durkheim’s ideas to organizational culture, it is important to understand the

deeply personal way in which each individual employee assesses values and beliefs and is

ready to trade-off certain values and beliefs in order to enjoy a sense of ‘belonging’ to a

community he/she is able to identify with. Therefore, this ‘trading-off’ process is what lies

beneath each employee’s decision-making process that drives his/her decision to accept or

reject a particular type of culture.

Page 17 PSY704: Organizational Culture Management

This realization is summarized in Figure 1.4, which depicts the ‘culture formation

process’ implied by Durkheim (1961) and utilized by Schneider (1994). The individual

employee considers carefully his/her system of values and he/she is willing to search for

commonalities with other employees in order to acknowledge the set of shared values and

beliefs. Subsequently, the employee recognizes alternative systems of values within different

groups of other employees, and he/she must consider those in order to identify the group of

employees with whom he/she can best identify with.

Nonetheless, even within the identified set of shared values, there are specific values

he/she can accept and other values that he/she cannot accept. For this reason, there is a mental

process taking place in which the employee is ‘trading-off’ competing values, i.e. he/she is

accepting or rejecting values according to whether or not those are expected to facilitate

effective team work and strengthen his/her sense of “belonging”. The predominant culture, i.e.

the prevailed type of culture within the organization, will emerge as the outcome of this

‘trading-off’ process of all individuals involved. However, it is important to state that the

individual values of each employee must be adequately represented in the predominant culture

according to how the employee himself/herself perceives this representation; otherwise, the

eventual type of culture won’t be maintained.

The ‘culture creation process’, as described above, suggests that we must seek a

psychological approach to organizational culture, so that psychological processes involved in

culture formation may be recognized and be identified. Given the fact that the psychological

approach is expected to combine elements of the other two approaches, it was deemed

necessary to include it in the next week’s reading.

System of values

Trading-off process: acceptance/rejection of values

Figure 1.4 The ‘Culture formation process’

Shared values Predominant culture

Individual

values
Adequate representation

Page 18 PSY704: Organizational Culture Management

1.4 Concluding Remarks

The evidence identified in this reading suggest that the concept of organizational culture

is very important because of it influences the development of management and leadership

strategies and it plays a critical role in organizational change. In spite of this, the concept

itself is complex and multidimensional. This indicates that there is no easy way to define

organizational culture.

In order to narrow down the dimensions of this concept, we depended on a set of well-

accepted characteristics, which helped us identify three different alternative approaches

towards the understanding of organizational culture. Those were as follows: the sociological

approach, the anthropological approach and the psychological approach.

The sociological approach presented two alternative models of organizational culture.

Although both models were based upon intuitive frameworks, they differ on a very critical

point, i.e. the causal relationship between culture and society. One model assumed that the

employees of the organization are responsible for culture formation, whereas the other model

assumed that only external influences, such as customers’ needs, competitors’ goals, etc., drive

culture formation.

The anthropological approach capitalised on the two prominent sociological models, but

it assumed that only society and, hence, employees, may influence the culture formation of a

particular organization. However, the most representative model of this approach focused on

the ways in which interpersonal relationships within an organization could lead to different

types of organizational culture. This model described the way in which interpersonal

relationships could influence the willingness of a particular employee to accept or reject

specific values in order to ensure that he/she feels comfortable within the organization. This

process was named the ‘trading-off process’. Although, this process was often based on

competing values, the anthropological approach did not allow for the development of a specific

theoretical framework which would strengthen our understanding about it.

Finally, given the fact that the psychological approach is expected to capitalise on the

sociological and anthropological approaches, it was deemed necessary to explore it separately.

In other words, we expect the psychological approach to directly guide the derivation of an

operational definition of organizational culture. For this reason, the psychological approach

will be presented in the next week’s reading.

Page 19 PSY704: Organizational Culture Management

Nonetheless, the two contextual approaches presented above were used to identify the

most representative models of organizational culture, which helped us assess the contribution

of each approach in understanding the concept of organizational culture. Therefore, the two

approaches reduced the dimensions of the concept and allowed us to identify the most

important aspects of it.

We are now ready to proceed with the psychological approach, which combines

elements of the other two approaches with the ultimate goal to derive an operational definition

of the concept of organizational culture. This will take place in the next reading.

Page 20 PSY704: Organizational Culture Management

Reading tips

– The content of this module drawn upon a number of scientific disciplines due to the nature

of organizational culture, such as psychology, sociology, anthropology, management

science, behavioural sciences, etc. For this reason, you may need to refer to a number of

scientific papers apart from the main textbook that accompanies the module. Do not restrict

attention to the scientific discipline of psychology. Your search strategy should, first and

foremost, be guided by the topic you want to explore further and not by the main

discipline, i.e. the discipline which engages with this topic much more frequently and

thoroughly than others.

– There are different types of papers according to the goals of your study. For example, if

you are trying to gain more clarity on technical concepts, such as organizational culture,

you should refer to ‘literature reviews’, which present the academic debates between

different authors and the different approaches followed. However, if you need to locate

more information about a particular theoretical model, then you should search for papers

involving the description about how those models were developed. Finally, if you want to

identify evidence about the credibility of a particular model, you should turn focus on

empirical studies, which involve the collection and analysis of primary data.

– Make sure you dedicate adequate time in order to identify the key authors of each topic you

want to study further.

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1.5 References

Baker, E. L. (1980). Managing organizational culture. Management Review.

https://doi.org/Article

Cameron, K. S., & Quinn, R. E. (2011). An Introduction to changing organizational culture:

Based on the competing values framework. Diagnosing and Changing Organizational

Culture, 1–12.

Child, J. (1981). Culture, contingency and capitalism in the cross-national study of

organizations. Research in Organizational Behavior, 3, 303–356. Retrieved from

http://linkinghub.elsevier.com/retrieve/pii/S0191308509000124

Crozier, M. (1964). The Bureaucratic Phenomenon. Frontiers A Journal of Women Studies.

https://doi.org/10.2307/2391417

Durkheim, E. (1961) [1915]) The Elementary Forms of the Religious Life. New York: Collier.

Deal, T. E., & Kennedy, A. A. (1983). Corporate cultures: The rites and rituals of corporate

life: Addison-Wesley, 1982. ISBN: 0-201-10277-3. $14.95. Business Horizons, 26(2), 82–85.

https://doi.org/http://dx.doi.org/10.1016/0007-6813(83)90092-7

Deal T. E. and Kennedy, A. A. (2000) Corporate Cultures: The Rites and Rituals of Corporate

Life, Harmondsworth, Penguin Books, 1982; reissue Perseus Books, 2000.

Granovetter, M. S. (1978). Threshold Models of Collective Behavior. American Journal of

Sociology, 83(6), 1420–1443. https://doi.org/10.1086/226707

Harrison, R. (1972). Understanding your organization’s character. Harvard Business Review.

Retrieved from http://bschool.pepperdine.edu/masters-degree/organization-

development/content/parttwo-chapterten

Hofstede, G., Neuijen, B., Ohayv, D. D., & Sanders, G. (1990). Measuring Organizational

Cultures: A qualitative and quantitative study across twenty cases. Administrative Science

Quarterly, 35(2), 286–316. https://doi.org/10.2307/2393392

Lane, R. (1992). Political Culture: Residual Category or General Theory? Comparative

Political Studies, 25(3), 362–387. https://doi.org/10.1177/0010414092025003004

McClelland, D. C. (1961). The achieving society. Princeton, NJ: Van Nostrand.

Mummendey, A., & Schreiber, H.-J. (1984). Social comparison, similarity and ingroup

favouritism – A replication. European Journal of Social Psychology, 14(November 1982),

231–234. https://doi.org/10.1002/ejsp.2420140211

https://doi.org/Article

http://linkinghub.elsevier.com/retrieve/pii/S0191308509000124

https://doi.org/10.2307/2391417

https://doi.org/http:/dx.doi.org/10.1016/0007-6813(83)90092-7

https://doi.org/10.1177/0010414092025003004

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Piereson, S. (1983). In Search of Excellence: Lessons from America’s Best-Run Companies.

By Thomas J. Peters and Robert H. Waterman, Jr. New York: Harper & Row, 1982. NASSP

Bulletin, 67(466), 120–121. https://doi.org/10.1177/019263658306746628

Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109–119.

https://doi.org/10.1037/0003-066X.45.2.109

Schneider, W. (1994) The Reengineering Alternative: A Plan for Making Your Current Culture

Work. Burr Ridge, IL: Irwin Professional Publishing.

Tylor, Edward B. 1958 [1873, 1871]. The Origins of Culture and Religion in Primitive

Culture, Volumes I and II of the 1873 edition of Primitive Culture. New York: Harper &

Brothers.

https://doi.org/10.1037/0003-066X.45.2.109

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Page 1 PSY704: Organizational Culture Management

Week 5: An Integrative Framework for Understanding

Organizational Culture Change

Learning Objectives:

5.1 Introduction to the dynamics of culture change

Culture change in organizations is often taken for granted as it is neither an easily

comprehensible process nor could it be perceived as a tangible outcome like other qualitative

variables, such as performance, integration or rapport. Therefore, it is important for every

organization to adopt a particular theoretical framework, which would allow the planning and

implementation of a potential culture change, once the necessity for change has been

established. In the reading of Week 2, we referred to the ‘competing values framework’ (CVF)

as the most representative psychological model of organizational culture in the literature

(Cameron & Quinn, 2006). Indeed, the CVF was chosen because it offers an organizational

culture taxonomy, which is widely used in the literature (Ostroff, et al. 2003). However, the

theory underpinning the CVF suggests that different culture types are associated with

indicators of organizational effectiveness as a function of basic cultural assumptions, values

and structures.

Having presented the model of cultural dynamics in Week 4’s reading, we are now enabled

to explore the dynamics associated with cultural change, which involve the gradual integration

of ‘competing values’ and their corresponding culture types, as depicted in the CVF. The

• Understand the dynamics of culture change

• Understand the applicability of the ‘competing values framework’ in the

understanding of culture change

• Explore an integrative dynamic framework for organizational culture change

Page 2 PSY704: Organizational Culture Management

approach will aim to capitalise on the four processes involved in the cultural dynamics model

of organizational culture, i.e. manifestation, realization, symbolization and interpretation.

5.2 Understanding cultural change using the ‘competing values framework’

According to the CVF, ‘trading-off’ values is an essential mechanism towards the

formation of organizational culture. The way in which the most influential group of individuals

within the organization accepts certain values and rejects others becomes the driving force

towards the formation of the prevailing culture type within the organization. To this end, when a

different ‘trading-off’ process of values seems more appropriate according to the changing

beliefs of the members of that group, culture change presents itself as an organic necessity.

Stated differently, when the prioritization of values changes, the CVF offers a way to observe

and explore the emergence of a new culture type (please refer to Week’s 2 reading and Figure

2.1 in order to remind yourselves of the CVF).

Therefore, the CVF is used in order to diagnose and initiate culture change. In order to

identify what needs to change within an organization, a specific diagnostic instrument may also

be used. Such an instrument will help reveal aspects of the organization’s culture that cannot be

identified or be articulated, otherwise, by the senior members of the management team.

Although there is no consensus in the literature as to what sort of diagnostic instrument may be

most effective, in this regard, the Organizational Culture Assessment Instrument (OCAI), was

repeatedly found to be a valid and reliable tool for diagnosing the necessity of cultural change

(Cameron & Quinn, 1999). For this reason, we adopt the OCAI for the purposes of this reading

in an attempt to explore the dynamics underlying the emergence of a new culture profile within

an organization. The OCAI is a six-step instrument which starts with the diagnosis of the

necessity for change, moves on to the designing of a cultural change strategy and ends-up with

the implementation of cultural change. The OCAI is presented in Figure 5.1. The worksheet for

scoring the OCAI is provided in Figure 5.2.

Page 3 PSY704: Organizational Culture Management

Figure 5.1 The Organizational Culture Assessment Instrument (OCAI)

1. Dominant Characteristics Now Preferred

A

The organization is a very personal place. It is like an extended family.

People seem to share a lot of themselves.

B

The organization is a very dynamic entrepreneurial place. People are

willing to stick their necks out and take risks.

C

The organization is very results oriented. A major concern is with

getting the job done. People are very competitive and achievement

oriented.

D

The organization is a very controlled and structured place. Formal

procedures generally govern what people do.

Total

2. Organizational Leadership Now Preferred

A

The leadership in the organization is generally considered to exemplify

mentoring, facilitating, or nurturing.

B

The leadership in the organization is generally considered to exemplify

entrepreneurship, innovating, or risk taking.

C

The leadership in the organization is generally considered to exemplify a

no-nonsense, aggressive, results-oriented focus.

D

The leadership in the organization is generally considered to exemplify

coordinating, organizing, or smooth-running efficiency.

Total

3. Management of Employees Now Preferred

A

The management style in the organization is characterized by teamwork,

consensus, and participation.

B
The management style in the organization is characterized by individual

risk-taking, innovation, freedom, and uniqueness.

Page 4 PSY704: Organizational Culture Management

C

The management style in the organization is characterized by hard-

driving competitiveness, high demands, and achievement.

D

The management style in the organization is characterized by security of

employment, conformity, predictability, and stability in relationships.

Total

4. Organization Glue Now Preferred

A

The glue that holds the organization together is loyalty and mutual trust.

Commitment to this organization runs high.

B

The glue that holds the organization together is commitment to

innovation and development. There is an emphasis on being on the

cutting edge.

C

The glue that holds the organization together is the emphasis on

achievement and goal accomplishment. Aggressiveness and winning

are common themes.

D

The glue that holds the organization together is formal rules and

policies. Maintaining a smooth-running organization is important.

Total

5. Strategic Emphases Now Preferred

A

The organization emphasizes human development. High trust,

openness, and participation persist.

B

The organization emphasizes acquiring new resources and creating new

challenges. Trying new things and prospecting for opportunities are

valued.

Page 5 PSY704: Organizational Culture Management

C

The organization emphasizes competitive actions and achievement.

Hitting stretch targets and winning in the marketplace are dominant.

D

The organization emphasizes permanence and stability. Efficiency,

control and smooth operations are important.

Total

6. Criteria of Success Now Preferred

A

The organization defines success on the basis of the development of

human resources, teamwork, employee commitment, and concern for

people.

B

The organization defines success on the basis of having the most

unique or newest products. It is a product leader and innovator.

C

The organization defines success on the basis of winning in the

marketplace and outpacing the competition. Competitive market

leadership is key.

D

The organization defines success on the basis of efficiency.

Dependable delivery, smooth scheduling and low-cost production are

critical.

Total

Page 6 PSY704: Organizational Culture Management

Figure 5.2 A Worksheet for Scoring the OCAI

NOW Scores

1A 1B

2A 2B

3A 3B

4A 4B

5A 5B

6A 6B

Sum (total of A responses) Sum (total of B responses)

Average (sum divided by 6) Average (sum divided by 6)

1C 1D

2C 2D

3C 3D

4C 4D

5C 5D

6C 6D

Sum (total of C responses) Sum (total of D responses)

Average (sum divided by 6) Average (sum divided by 6)

Page 7 PSY704: Organizational Culture Management

PREFERRED Scores

1A 1B
2A 2B
3A 3B
4A 4B
5A 5B
6A 6B
Sum (total of A responses) Sum (total of B responses)
Average (sum divided by 6) Average (sum divided by 6)

1C 1D
2C 2D
3C 3D
4C 4D
5C 5D
6C 6D
Sum (total of C responses) Sum (total of D responses)
Average (sum divided by 6) Average (sum divided by 6)

In order to understand the dynamic aspects of culture change, an integrative framework

involving the combination of the cultural dynamics model (Hatch & Schultz, 2002) and the

‘competing values framework’ (Cameron & Quinn, 2006) will be explored. The exploration

involves the following three stages:

(i) Diagnosing the necessity for culture change;

(ii) Employing the CVF in order to understand the preferred culture profile for the

future; and

(iii) Exploring an integrative dynamic framework in cultural change

These stages and their combined operation are described in the next section.

Page 8 PSY704: Organizational Culture Management

5.3 Culture change using an integrative dynamic framework

(i) Diagnosing the necessity for cultural change

Τhe first stage of culture change involves the identification of a set of individuals within

the organization who have experience, not only on a particular division but also on the overall

operation of the organization. These individuals will form the change team and they must

generate a consensual view of the current and preferred organizational culture in terms of

certain representative characteristics associated with the values of the organization, a purpose-

specific perspective about organizational leadership, the management strategy of employees,

the principles that hold the organization together (organizational ‘glue’), strategic emphases

and criteria of success.

The interesting part of this stage is the encouragement of experienced employees to

participate in the decision-making process of the organization and the effort made in order to

discuss controversial topics and aim to reach a consensus on those. For example, aspects

associated with management strategies and behaviours, the growth trajectory, rituals and

symbols, etc. (Denison & Spreitzer, 1991). This process is expected to enable the participants

to identify potential problems with the existing culture, such as the lack of consistency with

technological innovation, ongoing societal values, ethical dilemmas; the lack of clarity on the

growth or expansion strategy, etc. The identification of those problems will essentially form

the basis for establishing the necessity of change.

In addition to the above, the same group of individuals need to consider the preferred

culture for the future. They must consider aspects associated with the future vision of the

organization in terms of success prospects, current trends in the sector, productivity, growth

and performance, areas of underdevelopment, customers’ expectations, competitors’ strategies,

the future prospect as an influential player in the industry, etc. The comparison between the

“current culture” and the “preferred culture” profiles will provide the information needed in

order to diagnose the necessity, or lack thereof, for change.

Page 9 PSY704: Organizational Culture Management

(ii) Employing the CVF in order to understand the preferred culture profile for
the future

Having established the necessity for change, the group of people, who get together in order

to discuss organizational culture change (change team), is ready to understand what potential

changes will and will not mean for the organization. In order to explore this aspect, we employ

the CVF, as portrayed in Figure 2.1 (Week’s 2 reading). We reproduce it here for convenience

(Figure 5.3).

Flexibility and Discretion

Internal External

Focus and Focus and

Integration Differentiation

Stability and Control

Figure 5.3 Cameron & Quinn’s Psychological Model of Organizational Culture

(The Competing Values Framework (CVF))

(Reproduced by Cameron & Quinn, 2011)

Clan culture

(collaborate)

Market culture

(compete)

Hierarchy

culture (control)

Adhocracy
culture (create)

Page 10 PSY704: Organizational Culture Management

Firstly, the change team must utilise the OCAI in order to derive average scores for each of

the six major topics covered in the instrument (refer to Figures 5.1 and 5.2). Subsequently,

those scores will be used in order to plot the current and preferred culture profiles

schematically using the CVF (refer to Figure 5.3). Once the graph is completed, the team must

compare the two profiles and decide which type of culture (out of the four available) must be

emphasized or de-emphasized. In other words, the comparison would start revealing the details

of the organizational necessity to change based on the identification of new cultural directions.

In this respect, the team must attempt to understand those details and aim to agree upon what it

means, and what it does not mean, placing additional emphasis or reducing existing emphasis

on a particular type of culture.

It should be obvious by now that this stage of culture change silently involves the (implicit)

comparison of the ‘trading-off’ processes between values associated with the existing culture

and values associated with the preferred culture for the near future. Aspects to consider include

specific attributes of each type of culture; the set of symbols or values that, although they

belong to a different than the preferred type of culture, are still important for the organization

and must somehow be preserved; the set of assumptions, values, artifacts and symbols

characterising the new culture profile, etc. Nonetheless, the implied ‘trading-off’ process will

initiate a debate among the members of the change team in order to reach a consensus on the

key factors which would define the change of the organizational culture. The aim is to create a

broad consensual vision about what the preferred culture and its representative attributes will

be.

Furthermore, the ‘trading-off’ process and the resulting debate are expected to help the

change team identify certain core characteristics of the organization, which are associated with

its history and uniqueness, and aim to preserve those. It is important to note that, although such

characteristics may be falling within a less-emphasised quadrant of the CVF (refer to Figure

5.3), they must still be preserved as indicative of the organization’s corporate character.

However, the characteristics of the preferred culture for the future must not be simply

identified and be recognised through lists and change strategies. They must also be

communicated to the employees of the organization using a familiar means of communication.

One powerful means of communication, which is often used in cultural change is story telling.

The change team must identify two or three incidents or events that illustrate the key

characteristics they want to permeate the future organizational culture and aim to communicate

those using eloquent stories. To achieve this, the change team will aim to hear all different

Page 11 PSY704: Organizational Culture Management

stories associated with the core characteristics of the new culture in order to decide which ones

actually articulate and convey the preferred attitudes and values of the new culture.

Subsequently, the team must reflect upon and derive lessons from those stories, which could,

in turn, be presented as moral messages to the employees of the

organization.

(iii) Exploring an integrative dynamic framework in culture change

So far, we employed the CVF, which allowed us to identify the details of the preferred

culture for the future and, perhaps, the more effective way in which the new elements of

culture may be communicated to the employees of the organization. However, we are yet to

identify an action plan and an implementation plan of cultural change. In order to do this, we

return to the cultural dynamics model, presented in Week 4’s reading (Figure 4.1). The

approach we are going to follow is to attempt to integrate the scores derived from the OCAI

with the CVF outcomes provided by the previous stage and the mechanics of culture re-

emergence offered by the cultural dynamics model. We call this approach an integrative

dynamic framework.

Firstly, a strategic action plan must be devised to guide actions and behaviours associated

with cultural change. The action plan must involve the following three questions:

1. What should we do more of?

2. What should we start?

3. What should we stop?

The idea of those questions is to guide the decisions which must be taken in order to identify

the particular details associated with the actions to be taken. For this reason, in order to

delineate the details of the new culture profile, it is important to be able to recognise what

should be started, what should be stopped or what should be continued in terms of policies,

strategies or decision-making procedures. For example, the new cultural profile might require

new ethical policies to be introduced; wasteful, redundant, non-value-adding or attention-

deflecting activities to be terminated; certain new symbols, metaphors and rituals to be

introduced in order to represent the new culture; new processes or systems to be redesigned;

new means of communicating effectively the new cultural values to be devised; etc.

Τhe three questions must be carefully considered in the context of the OCAI’s six

themes, as specified in Figure 5.1 above, i.e. the dominant characteristics of the new culture,

the organizational leadership, the management strategies of the employees, the organizational

Page 12 PSY704: Organizational Culture Management

‘glue’, the strategic emphases and the criteria of success. These six themes must guide the

answers to the three questions stated above. Furthermore, the answers to the questions must be

sought for all four types of culture specified in the CVF, i.e. the clan culture, the adhocracy

culture, the hierarchy culture and the market culture.

However, it is by no means easy to ensure the validity and applicability of the final

action plan. The following aspects were proposed by Cameron & Quinn (2006) and they are

considered to be meaningful ways in terms of deriving actionable points associated with

cultural change:

(a) Identification of small wins. It is important to find something easy to change, change it and

celebrate it with all the employees of the organization. This will inspire a spirit of trust and

help cultivate belief in the new culture type.

(b) Generate social support. Making the effort to listen to the views of those who will be

affected by the upcoming change is critical. It is meaningful to allow them space and time

to have their voice heard, feel understood and valued by the people who will be leading the

cultural change within the organization.

(c) Design follow-up and accountability. An action plan without specific time frames for the

different stages of cultural change might cause anxiety and insecurity. Therefore, it is

important to develop mechanisms for ensuring that all individuals involved in cultural

change will follow through on commitments and assignments within specific time frames,

so that change actually occurs timely.

(d) Provide information. In the absence of information, people involved with the process of

cultural change might make up their own. Therefore, it is important to aim to provide

information on a regular basis.

(e) Devise measures. The different stages of cultural change must be accompanied by certain

measures/indicators based on a specified set of criteria and specific data analysis methods.

For this reason, any data analysis must be associated with a clearly-defined data collecting

mechanism, so that people have access to the primary data associated with change.

(f) Create readiness. As discussed previously, change will most certainly be accompanied by

a degree of resistance – at least in the beginning. For this reason, it is important that all

individuals of the organization are aware of the possible advantages of the future cultural

profile, potential disadvantages of the current culture, the identified gaps between current

performance and potential future performance without the change, availability of resources

Page 13 PSY704: Organizational Culture Management

for implementing change and the upcoming rewards mechanism associated with the

achievement of specific cultural change milestones.

(g) Explanations. Providing explanations to the people involved with cultural change or those

who will be directly affected by it is necessary in order to alleviate stress and reduce

resistance. Sometimes, senior managers believe it is not necessary to provide a lot of

explanations as a means of circumventing possible anxiety associated with upcoming

changes. However, research in communication indicates that this is not the right strategy

because lack of explanation actually reinforces resistance to change (Chan & Lin, 2007).

(h) Celebrate the past. The transition from the existing culture to the future culture might

invite certain questions about “what went wrong” that instigated the change. Therefore, it is

necessary to communicate the positive aspects of the previous culture, whose impact could

be reinforced with the introduction of the new culture. Similarly, it would be meaningful to

criticise the negative aspects of the current culture, whose impact could be reduced with the

introduction of the new culture. By linking the past, present and future in terms of the

prospect of cultural development to enable better and more effective organizational

performance is expected to help people who may be sceptical with cultural change.

(i) Change the symbols. In the previous reading, we discussed the importance of symbols in

terms of embracing a particular culture. Therefore, it is highly-meaningful to identify new

symbols that will signify the new culture and offer people a means of interpreting values

and artifacts associated with it. This is expected to enable the individuals of the

organization to start building a collective consciousness around the set of values that

characterise a common professional identity.

(j) Focus on processes. Cultural change requires time. For this reason, emphasis must be

given to the different processes involved in cultural change. For example, core business

processes, such as designing, manufacturing, delivering, advertising, etc. must be changed.

Similarly, processes associated with the professional development of employees must also

be emphasized, such as the recruitment process, the appraisal process, the system of

rewarding performance, etc.

The above list is by no means exhaustive. However, it indicates the usefulness of an action

plan in terms of ‘translating’ the complexity associated with cultural change into a set of

clearly-defined activities.

In the final step of the integrative framework, the actionable points must be

implemented. Therefore, an implementation plan seems necessary. The implementation plan,

Page 14 PSY704: Organizational Culture Management

must be designed around the different aspects of cultural dynamics associated with cultural

change. These are identified below:

(i) The ‘trading-off’ process of values

The process to determine what cultural change may mean in practice involve emphasizing

and de-emphasising characteristics of certain culture types. In the context of the CVF, this

means moving from one quadrant to the other in Figure 5.3. However, such movements do not

imply complete acceptance of a new culture type or complete abandonment of another culture

type. The cultural dynamics involved in the underlying ‘trading-off’ process of values may,

indeed, lead to many interactive regressions among the different quadrants, in Figure 5.3, and,

hence, among the different types of culture and the different degrees of flexibility, stability,

differentiation and integration. This indicates that cultural change is a highly-complicated

process in which individuals of the organization try to identify what change actually means in

terms of common values. This, in turn, acts as an influence on the ‘acceptance’ or ‘rejection’

processes of certain values.

Ultimately, a specific culture type, represented by only one specific quadrant, will be

determined designating the prevailing culture type of the organization following change. In

other words, the elements of the new culture type will manifest themselves through the cultural

dynamics interactions, i.e. through the new wave of the processes of manifestation, realization,

symbolization and interpretation.

(ii) The personalization of change

Culture change cannot occur without the personal involvement, commitment and active

support of the individuals of the organization. This is called the personalization process and it

may be achieved in four different ways, as follows:

– Learning: clarifying the principles on which change will be based

– Contributing to the action plan: helping put together change-related actionable points

– Supporting others: helping others understand the possible impact of change

– Monitoring: helping clarify the key criteria of success

In practice, the above ways were proven to be very effective mechanisms for creating

readiness for change. This is simply because such mechanisms are multi-faceted and they

allow individuals to experience change from many different perspectives/roles. For example,

as learners, as contributors, as supporters or as evaluators of change. As a result, the

personalization process enables each employee to identify behaviours and competencies

Page 15 PSY704: Organizational Culture Management

associated with the new culture that require development or improvement; something that, in

turn, is expected to help reduce resistance to cultural change among the individuals of the

organization.

It is important to note that the personalization process, as described above, suggests that a

series of changing concepts and entities will be occurring simultaneously. Therefore, the

personalization process is a very dynamic process, whose ultimate outcome, in terms of each

individual’s degree of commitment, resistance, acceptance, involvement, etc., cannot be easily

predicted. Waterman, et al. (1980) recommended the “seven S model” to help us understand

the dynamic character of the personalization process, as follows:

– Change of structure

– Change of symbols

– Change of systems

– Change of staff

– Change of strategy

– Change of leadership style

– Change of managerial skills

The personalization process requires not only for all seven ‘S’, as described above, to be

pursued simultaneously, but also be aligned and be coordinated in order to facilitate change.

The reader must be in a position to observe the consistency of the OCAI with the dynamic

nature of cultural change, by now. Please refer to Figure 5.3. It is easy to check that both of the

processes associated with cultural dynamics, as mentioned above, i.e. the ‘trading-off’ process

and the personalization process are adequately covered by the six major themes included in the

instrument.

Page 16 PSY704: Organizational Culture Management

5.4 Concluding remarks

In this reading, we introduced an integrative dynamic framework in order to understand

organizational culture change. The presentation started with a short introduction to cultural

change and the organizational culture assessment instrument (OCAI). The OCAI was utilised

in order to elicit measurements for six topics involved in current culture and preferred culture,

as well as in the process of cultural change. Those topics were as follows: the characteristics of

the culture, leadership, management of employees, organizational ‘glue’, strategic emphases

and key criteria for success. The OCAI was used because it is widely considered to be a valid

and reliable instrument for assessing organizational culture.

Subsequently, three different stages were applied in order to generate the integrative

dynamic framework for culture change. The first stage involved the diagnosis of the necessity

of cultural change, which occurred through the comparison between the current and preferred

culture profiles. If the two profiles were identified to be very different, the necessity for change

appeared almost certain. The second stage involved the derivation of the dynamic form of the

‘competing values framework’ (CVF) by using the OCAI scores in order to plot the ‘current’

and ‘preferred’ culture profiles of the organization and the knowledge of the four different

types of culture represented within the CVF. This schematic representation allowed us to

compare specific elements associated with the current and preferred culture types and

recognize the trajectory to be followed going forward.

Finally, in the third stage, the integrative framework was constructed. Firstly, an action

plan was devised in order to carry-out cultural change. Subsequently, an implementation plan

was sought after through two dynamic processes associated with culture change, as follows:

the (implicit) ‘trading-off’ process of values and the personalization process of culture change.

Finally, all different pieces of the integrative framework were added together, i.e. the OCAI,

the CVF and the ‘cultural dynamics’ model. The ultimate framework allowed for the different

dynamic (back-and-forth) interactions among cultural assumptions, values, artifacts and

symbols to occur. Such interactions were expected to clarify the characteristics of the new

culture type. The framework was named “an integrative dynamic framework for culture

change” exactly because it allowed us to observe the continuous dynamic interactions occurred

during the emergence of a new organizational culture type.

In the next reading, we will return to the integrative framework and provide an example to

demonstrate, in practice, the demanding nature of culture change. We will then discuss the

Page 17 PSY704: Organizational Culture Management

importance of individual change in cultural dynamics and the role of emotional intelligence in

organizational culture change.

Page 18 PSY704: Organizational Culture Management

Reading Tips

– The reading of this week is significantly more demanding compared to the other

readings. This is due to the inductive nature of the material. For this reason, it is

important that you first understand the 3 different parts of the integrative framework

before you proceed to understand the dynamic interactions involved in the proposed

framework. In order to achieve this, please refer to the papers in which prominent

authors in the field proposed those parts (OCAI, CVF, cultural dynamics model).

– It is important to start exploring the practical aspects of cultural change, at this point.

Therefore, you should dedicate some time in order to identify and read empirical

studies associated with culture change. This will enable you to make the most of the

example that is going to be presented in next week’s reading.

Page 19 PSY704: Organizational Culture Management

1.5 References

Cameron, K.S. and Quinn, R. E. (1999) Diagnosing and Changing Organizational Culture.
Reading, MA: Addison Wesley.

Cameron, K. s., & Quinn, R. E. (2006). Diagnosing and Changing Organizational Culture.

The Jossey-Bass Business & Management Series, San Franscisco, CA.

Cameron, K. S., & Quinn, R. E. (2011). An Introduction to changing organisational culture:

Based on the competing values framework. Diagnosing and Changing Organisational Culture,

1–12.

Chang, S. E., Lin, C.-S. S., Ho, C. B., Knapp, K. J., Marshall, T. E., Rainer, R. K., & Lin, C.-S.

S. (2007). Exploring organizational culture for information security management. Industrial

Management and Data Systems, 107(3), 438–538.

Denison, D. R., & Spreitzer, G. M. (1991). Organizational culture and organizational

development: A competing values approach. Research in Organizational Change and

Development, 5, 1-21.

Hatch, M. J., & Schultz, M. (2002). The dynamics of organizational identity. Human

Relations, 55(8), 989–1018.

Ostroff, C., Kinicki, A. J., & Tamkins, M. M. (2003). Organizational culture and climate.

Handbook of Psychology, Volume 12, Industrial and Organizational Psychology, 565–587.

Waterman, R. Jr., Peters, T. and Phillips, J.R. (1980). Structure Is Not Organisation. Business

Horizons, 23,3, 14-26.

Page 20 PSY704: Organizational Culture Management

Organizational Culture
Edgar H. Schein

I I I I II I I

I

ABSTRACT: The concept of organizational culture has
received increasing attention in recent years both from
academics and practitioners. This article presents the au-
thor’s view of how culture shouM be defined and analyzed
if it is to be of use in the field of organizational psychology.
Other concepts are reviewed, a brief history is provided,
and case materials are presented to illustrate how to an-
alyze culture and how to think about culture change.

To write a review article about the concept of organiza-
tional culture poses a dilemma because there is presently
little agreement on what the concept does and should
mean, how it should be observed and measured, how it
relates to more traditional industrial and organizational
psychology theories, and how it should be used in our
efforts to help organizations. The popular use of the con-
cept has further muddied the waters by hanging the label
of”culture” on everything from common behavioral pat-
terns to espoused new corporate values that senior man-
agement wishes to inculcate (e.g., Deal & Kennedy, 1982;
Peters & Waterman, 1982).

Serious students of organizational culture point out
that each culture researcher develops explicit or implicit
paradigms that bias not only the definitions of key con-
cepts but the whole approach to the study of the phe-
nomenon (Barley, Meyer, & Gash, 1988; Martin & Mey-
erson, 1988; Ott, 1989; Smircich & Calas, 1987; Van
Maanen, 1988). One probable reason for this diversity of
approaches is that culture, like role, lies at the intersection
of several social sciences and reflects some of the biases
of eachwspecifically, those of anthropology, sociology,
social psychology, and organizational behavior.

A complete review of the various paradigms and
their implications is far beyond the scope of this article.
Instead I will provide a brief historical overview leading
to the major approaches currently in use and then de-
scribe in greater detail one paradigm, firmly anchored in
social psychology and anthropology, that is somewhat in-
tegrative in that it allows one to position other paradigms
in a common conceptual space.

This line of thinking will push us conceptually into
territory left insufficiently explored by such concepts as
“climate,” “norm,” and “attitude.” Many of the research
methods of industrial/organizational psychology have
weaknesses when applied to the concept of culture. If we
are to take culture seriously, we must first adopt a more
clinical and ethnographic approach to identify clearly the
kinds of dimensions and variables that can usefully lend
themselves to more precise empirical measurement and

Sloan School of Management,
Massachusetts Institute of Technology

I I [ Illll

hypothesis testing. Though there have been many efforts
to be empirically precise about cultural phenomena, there
is still insufficient linkage of theory with observed data.
We are still operating in the context of discovery and are
seeking hypotheses rather than testing specific theoretical
formulations.

A H i s t o r i c a l N o t e

Organizational culture as a concept has a fairly recent
origin. Although the concepts of “group norms” and
“climate” have been used by psychologists for a long time
(e.g., Lewin, Lippitt, & White, 1939), the concept of
“culture” has been explicitly used only in the last few
decades. Katz and Kahn (1978), in their second edition
of The Social Psychology of Organizations, referred to
roles, norms, and values but presented neither climate
nor culture as explicit concepts.

Organizational “climate,” by virtue of being a more
salient cultural phenomenon, lent itself to direct obser-
vation and measurement and thus has had a longer re-
search tradition (Hellriegel & Slocum, 1974; A. P. Jones
&James, 1979; Litwin & Stringer, 1968; Schneider, 1975;
Schneider & Reichers, 1983; Tagiuri & Litwin, 1968).
But climate is only a surface manifestation of culture,
and thus research on climate has not enabled us to delve
into the deeper causal aspects of how organizations func-
tion. We need explanations for variations in climate and
norms, and it is this need that ultimately drives us to
“‘deeper” concepts such as culture.

In the late 1940s social psychologists interested in
Lewinian “action research” and leadership training freely
used the concept of “cultural island” to indicate that the
training setting was in some fundamental way different
from the trainees” “back home” setting. We knew from
the leadership training studies of the 1940s and 1950s
that foremen who changed significantly during training
would revert to their former attitudes once they were back
at work in a different setting (Bradford, Gibb, & Benne,
1964; Fleishman, 1953, 1973; Lewin, 1952; Schein &
Bennis, 1965). But the concept of”group norms,” heavily
documented in the Hawthorne studies of the 1920s,
seemed sufficient to explain this phenomenon (Homans,
1950; Roethlisberger & Dickson, 1939).

In the 1950s and 1960s, the field of organizational
psychology began to differentiate itself from industrial
psychology by focusing on units larger than individuals
(Bass, 1965; Schein, 1965). With a growing emphasis on
work groups and whole organizations came a greater need
for concepts such as “system” that could describe what
could be thought of as a pattern of norms and attitudes

February 1990 • American Psychologist
Colrytight 1990 by the American Psycht/ogical Association, Inc. 0003-066X/90/S00.75
Vol. 45, No. 2, 109–119

109

that cut across a whole social unit. The researchers and
clinicians at the Tavistock Institute developed the concept
of “socio-technical systems” (Jaques, 1951; Rice, 1963;
Trist, Higgin, Murray, & Pollock, 1963), and Likert (1961,
1967) developed his “Systems 1 through 4” to describe
integrated sets of organizational norms and attitudes. Katz
and Kahn (1966) built their entire analysis of organiza-
tions around systems theory and systems dynamics, thus
laying the most important theoretical foundation for later
culture studies.

The field of organizational psychology grew with the
growth of business and management schools. As concerns
with understanding organizations and interorganizational
relationships grew, concepts from sociology and anthro-
pology began to influence the field. Cross-cultural psy-
chology had, of course, existed for a long time (Werner,
1940), but the application of the concept of culture to
organizations within a given society came only recently
as more investigators interested in organizational phe-
nomena found themselves needing the concept to explain
(a) variations in patterns of organizational behavior, and
(b) levels of stability in group and organizational behavior
that had not previously been highlighted (e.g., Ouchi,
1981).

What has really thrust the concept into the forefront
is the recent emphasis on trying to explain why U.S.
companies do not perform as well as some of their coun-
terpart companies in other societies, notably Japan. In
observing the differences, it has been noted that national
culture is not a sutficient explanation (Ouchi, 1981; Pas-
cale& Athos, 1981). One needs concepts that permit one
to differentiate between organizations within a society,
especially in relation to different levels of effectiveness,
and the concept of organizational culture has served this
p u ~ well (e.g., O’Toole, 1979; Pettigrew, 1979; Wilkins
& Ouchi, 1983).

As more investigators and theoreticians have begun
to examine organizational culture, the normative thrust
has been balanced by more descriptive and clinical re-
search (Barley, 1983; Frost, Moore, Louis, Lundberg, &
Martin, 1985; Louis, 1981, 1983; Martin, 1982; Martin,
Feldman, Hatch, & Sitkin, 1983; Martin & Powers, 1983;
Martin & Siehl, 1983; Schein, 1985a; Van M a a e n &
Barley, 1984). We need to find out what is actually going
on in organizations before we rush in to tell managers
what to do about their culture.

I will summarize this quick historical overview by
identifying several different research streams that today
influence how we perceive the concept of organization~
culture.

Survey Research

From this perspective, culture has been viewed as a prop-
erty of groups that can be measured by questionnaires
leading to Likert-type profiles (Hofstede, 1980; Hofstede

Correspondence concerning this article should be addressed to Edgar
H. Sehein, Sloan School of Management, Massachusetts Institute of
Teehnolngy, 77 Massachusetts Ave., Cambridge, MA 02139.

& Bond, 1988; Kilmann, 1984; Likert, 1967). The prob-
lem with this approach is that it assumes knowledge of
the relevant dimensions to be studied. Even if these are
statistically derived from large samples of items, it is not
clear whether the initial item set is broad enough or rel-
evant enough to capture what may for any given orga-
nization be its critical cultural themes. Furthermore, it
is not clear whether something as abstract as culture can
be measured with survey instruments at all.

Analytical Descriptive

In this type of research, culture is viewed as a concept
for which empirical measures must be developed, even if
that means breaking down the concept into smaller units
so that it can be analyzed and measured (e.g., Harris &
Sutton, 1986; Martin & Siehl, 1983; Schall, 1983; Trice
& Beyer, 1984; Wilkins, 1983). Thus organizational sto-
ries, rituals and rites, symbolic manifestations, and other
cultural elements come to be taken as valid surrogates
for the cultural whole. The problem with this approach
is that it fracfionates a concept whose primary theoretical
utility is in drawing attention to the holistic aspect of
group and organizational phenomena.

Ethnographic

In this approach, concepts and methods developed in so-
ciology and anthropology are applied to the study of or-
ganizations in order to illuminate descriptively, and thus
provide a richer understanding of, certain organizational
phenomena that had previously not been documented
fully enough (Barley, 1983; Van Maanen, 1988; Van
Maanen & Barley, 1984). This approach helps to build
better theory but is time consuming and expensive. A
great many more cases are needed before generalizations
can be made across various types of organizations.

Historical

Though historians have rarely applied the concept of cul-
ture in their work, it is clearly viewed as a legitimate aspect
of an organization to be analyzed along with other factors
(Chandler, 1977; Dyer, 1986; Pettigrew, 1979; Westney,
1987). The weaknesses of the historical method are similar
to those pointed out for the ethnographic approach, but
these are often offset by the insights that historical and
longitudinal analyses can provide.

Clinical Descriptive

With the growth of organizational consulting has come
the opportunity to observe in areas from which research-
ers have traditionally been barred, such as the higher levels
of management where policies originate and where reward
and control systems are formulated. When consultants
observe organizational phenomena as a byproduct of their
services for clients, we can think of this as “clinical” re-
search even though the client is defining the domain of
observation (Schein, 1987a). Such work is increasingly
being done by consultants with groups and organizations,
and it allows consultants to observe some of the systemic
effects of interventions over time. This approach has been

110 February 1990 • American Psychologist

labeled “organization development” (Beckhard, 1969;
Beckhard & Harris, 1977, 1987; Bennis, 1966, 1969;
French & Bell, 1984; Schein, 1969) and has begun to be
widely utilized in many kinds of organizations.

The essential characteristic of this method is that
the data are gathered while the consultant is actively
helping the client system work on problems defined by
the client on the client’s initiative. Whereas the researcher
has to gain access, the consultant/clinician is provided
access because it is in the client’s best interest to open up
categories of information that might ordinarily be con-
cealed from the researcher (Schein, 1985a, 1987a).

The empirical knowledge gained from such obser-
vations provides a much needed balance to the data ob-
tained by other methods because cultural origins and dy-
namics can sometimes be observed only in the power
centers where elements of the culture are created and
changed by founders, leaders, and powerful managers
(Hirschhorn, 1987; Jaques, 1951; Kets de Vries & Miller,
1984, 1986; Sehein, 1983). The problem with this method
is that it does not provide the descriptive breadth of an
ethnography nor the methodological rigor of quantitative
hypothesis testing. However, at this stage of the evolution
of the field, a combination of ethnographic and clinical
research seems to be the most appropriate basis for trying
to understand the concept of culture.

Definition of Organizational Culture
The problem of defining organizational culture derives
from the fact that the concept of organization is itself
ambiguous. We cannot start with some “cultural phe-
nomena” and then use their existence as evidence for the
existence of a group. We must first specify that a given
set of people has had enough stability and common his-
tory to have allowed a culture to form. This means that
some organizations will have no overarching culture be-
cause they have no common history or have frequent
turnover of members. Other organizations can be pre-
sumed to have “strong” cultures because of a long shared
history or because they have shared important intense
experiences (as in a combat unit). But the content and
strength of a culture have to be empirically determined.
They cannot be presumed from observing surface cultural
phenomena.

Culture is what a group learns over a period of time
as that group solves its problems of survival in an external
environment and its problems of internal integration.
Such learning is simultaneously a behavioral, cognitive,
and an emotional process. Extrapolating further from a
functionalist anthropological view, the deepest level of
culture will be the cognitive in that the perceptions, lan-
guage, and thought processes that a group comes to share
will be the ultimate causal determinant of feelings, atti-
tudes, espoused values, and overt behavior.

From systems theory, Lewinian field theory, and
cognitive theory comes one other theoretical premise–
namely, that systems tend toward some kind of equilib-
rium, attempt to reduce dissonance, and thus bring basic
categories or assumptions into alignment with each other

(Durkin, 1981; Festinger, 1957; Hebb, 1954; Heider, 1958;
Hirschhorn, 1987; Lewin, 1952). There is a conceptual
problem, however, because systems contain subsystems,
organizations contain groups and units within them, and
it is not clear over what range the tendency toward equi-
librium will exist in any given complex total system.

For our purposes it is enough to specify that any
definable group with a shared history can have a culture
and that within an organization there can therefore be
many subcultures. If the organization as a whole has had
shared experiences, there will also be a total organizational
culture, Within any given unit, the tendency for integra-
tion and consistency will be assumed to be present, but
it is perfectly possible for coexisting units of a larger sys-
tem to have cultures that are independent and even in
conflict with each other.

Culture can now be defined as (a) a pattern of basic
assumptions, (b) invented, discovered, or developed by a
given group, (c) as it learns to cope with its problems of
external adaptation and internal integration, (d) that has
worked well enough to be considered valid and, therefore
(e) is to be taught to new members as the (f) correct way
to perceive, think, and feel in relation to those problems.

The strength and degree of internal consistency of
a culture are, therefore, a function of the stability of the
group, the length of time the group has existed, the in-
tensity of the group’s experiences of learning, the mech-
anisms by which the learning has taken place (i.e., positive
reinforcement or avoidance conditioning), and the
strength and clarity of the assumptions held by the
founders and leaders of the group.

Once a group has learned to hold common assump-
tions, the resulting automatic patterns of perceiving,
thinking, feeling, and behaving provide meaning, stability,
and comfort; the anxiety that results from the inability
to understand or predict events happening around the
group is reduced by the shared learning. The strength
and tenacity of culture derive, in part, from this anxiety-
reduction function. One can think of some aspects of
culture as being for the group what defense mechanisms
are for the individual (Hirschhorn, 1987; Menzies, 1960;
Schein, 1985b).

The Levels of Cul tu re
In analyzing the culture of a particular group or organi-
zation it is desirable to distinguish three fundamental lev-
els at which culture manifests itself: (a) observable arti-
facts, (b) values, and (c) basic underlying assumptions.

When one enters an organization one observes and
feels its artifacts. This category includes everything from
the physical layout, the dress code, the manner in which
people address each other, the smell and feel of the place,
its emotional intensity, and other phenomena, to the more
permanent archival manifestations such as company re-
cords, products, statements of philosophy, and annual
reports.

The problem with artifacts is that they are palpable
but hard to decipher accurately. We know how we react
to them, but that is not necessarily a reliable indicator

February 1990 • American Psychologist 111

of how members of the organization react. We can see
and feel that one company is much more formal and
bureaucratic than another, but that does not tell us any-
thing about why this is so or what meaning it has to the
members.

For example, one of the flaws of studying organi-
zational symbols, stories, myths, and other such artifacts
is that we may make incorrect inferences from them if
we do not know how they connect to underlying as-
sumptions (Pondy, Boland, & Thomas, 1988; Pondy,
Frost, Morgan, & Dandridge, 1983; Wilkins, 1983). Or-
ganizational stories are especially problematic in this re-
gard because the “lesson” of the story is not clear if one
does not understand the underlying assumptions be-
hind it.

Through interviews, questionnaires, or survey in-
strumeuts one can study a culture’s espoused and doc-
umented values, norms, ideologies, charters, and philos-
ophies. This is comparable to the ethnographer’s asking
special “informants” why certain observed phenomena
happen the way they do. Open-ended interviews can be
very useful in getting at this level of how people feel and
think, but questionnaires and survey instruments are
generally less useful because they prejudge the dimensions
to be studied. There is no way of knowing whether the
dimensions one is asking about are relevant or salient in
that culture until one has examined the deeper levels of
the culture.

Through more intensive observation, through more
focused questions, and through involving motivated
members of the group in intensive self-analysis, one can
seek out and decipher the taken-for-granted, underlying,
and usually unconscious assumptions that determine
perceptions, thought processes, feelings, and behavior.
Once one understands some of these assumptions, it be-
comes much easier to decipher the meanings implicit in
the various behavioral and artifactual phenomena one
observes. Furthermore, once one understands the under-
lying taken-for-granted assumptions, one can better un-
derstand how cultures can seem to be ambiguous or even
self-contradictory (Martin & Meyerson, 1988).

As two case examples I present later will show, it is
quite possible for a group to hold conflicting values that
manifest themselves in inconsistent behavior while having
complete consensus on underlying assumptions. It is
equally possible for a group to reach consensus on the
level of values and behavior and yet develop serious con-
flict later because there was no consensus on critical un-
derlying assumptions.

This latter phenomenon is frequently observed in
mergers or acquisitions where initial synergy is gradually
replaced by conflict, leading ultimately to divestitures.
When one analyzes these examples historically one often
finds that there was insufficient agreement on certain basic
assumptions, or, in our terms, that the cultures were ba-
sically in conflict with each other.

Deeply held assumptions often start out historically
as values but, as they stand the test of time, gradually
come to be taken for granted and then take on the char-

acter of assumptions. They are no longer questioned and
they become less and less open to discussion. Such avoid-
ance behavior occurs particularly if the learning was based
on traumatic experiences in the organization’s history,
which leads to the group counterpart of what would be
repression in the individual. If one understands culture
in this way, it becomes obvious why it is so difficult to
change culture.

Deciphering the “Content” of Culture
Culture is ubiquitous. It covers all areas of group life. A
simplifying typology is always dangerous because one may
not have the fight variables in it, but if one distills from
small group theory the dimensions that recur in group
studies, one can identify a see of major external and in-
ternal tasks that all groups face and with which they must
learn to cope (Ancona, 1988; Bales, 1950; Bales & Cohen,
1979; Benne & Sheats, 1948; Bennis & Shepard, 1956;
Bion, 1959; Schein, 1988). The group’s culture can then
be seen as the learned response to each of these tasks (see
Table I).

Another approach to understanding the “content”
of a culture is to draw on anthropological typologies of
universal issues faced by all societies. Again there is a
danger of overgencralizing these dimensions (see Table
2), but the comparative studies of Kluckhohn and Strodt-
beck (196 I) are a reasonable start in this direction.

If one wants to decipher what is really going on in
a particular organization, one has to start more induc-
tively to find out which of these dimensions is the most
pertinent on the basis of that organization’s history. If
one has access to the organization one will note its artifacts
readily but will not really know what they mean. Of most
value in this process will be noting anomalies and tl~ngs
that seem different, upsetting, or difficult to understand.

If one has access to members of the organization one
can interview them about the issues in Table I and thereby
gee a good roadmap of what is going on. Such an interview
will begin to reveal espoused values, and, as these surface,
the investigator will begin to notice inconsistencies be-
tween what is claimed and what has been observed. These
inconsistencies and the anomalies observed or felt now
form the basis for the next layer of investigation.

Pushing past the layer of espoused values into un-
derlying assumptions can be done by the ethnographer
once trust has been established or by the clinician if the
organizational dieut wishes to be helped. Working with
motivated insiders is essential because only they can bring
to the surface their own underlying assumptions and ar-
ticulate how they basically perceive the world around
them.

To summarize, if we combine insider knowledge
with outsider questions, assumptions can be brought to
the surface, but the process of inquiry has to be interactive,
with the outsider continuing to probe until assumptions
have really been teased out and have led to a feeling of
greater understanding on the part of both the outsider
and the insiders.

I 12 February 1990 • American Psychologist

II ̧ I ] II I

I I

Tab le 1
The External and Internal Tasks Facing All Groups

External adaptatk)n tasks Internal integration tasks

Developing consensus on:

1. The core mission, functions, and primary tasks of the
organization vis-&-vis its environments.

2. The specific goals to be pursued by the organization.
3. The basic means to be used in accomplishing the

goals.
4. The criteria to be used for measuring results.
5. The remedial or repair strategies if goals are not

achieved.

Developing consensus on:

1. The common language and conceptual system to be used,
including basic concepts of time and space.

2. The group boundaries and criteria for inclusion.
3. The criteria for the allocation of status, power, and

authority.
4. The criteria for intimacy, friendship, and love in different

work and family settings.
5. The cdteria for the allocation of rewards and punishments.
6. Concepts for managing the unmanageabie–ideology and

religion.

Note. Adapted from Organizational Culture and Leadership (pp. 52, 56) by E. H. Schaln, 1985, San Francisco: Jossey-Bass. Copyright 1985 by Jossey-Bass.
Adapted by permission.

I

Two Case E x a m p l e s

It is not possible to provide complete cultural descriptions
in a short article, but some extracts from cases can be
summarized to illustrate particularly the distinctions be-
tween artifacts, values, and assumptions. The “Action
Company” is a rapidly growing high-technology manu-
facturing concern still managed by its founder roughly
30 years after its founding. Because of its low turnover
and intense history, one would expect to find an overall
organizational culture as well as functional and geo-
graphic subcultures.

A visitor to the company would note the open office
landscape architecture; a high degree of informality; fre-
netic activity all around; a high degree of confrontation,
conflict, and fighting in meetings; an obvious lack of status
symbols such as parking spaces or executive dining rooms;
and a sense of high energy and emotional involvement,
of people staying late and expressing excitement about
the importance of their work.

If one asks about these various behaviors, one is told
that the company is in a rapidly growing high-technology
field where hard work, innovation, and rapid solutions
to things are important and where it is essential for ev-
eryone to contribute at their maximum capacity. New
employees are carefully screened, and when an employee
fails, he or she is simply assigned to another task, not
fired or punished in any personal way.

If one discusses this further and pushes to the level
of assumptions, one elicits a pattern or paradigm such as
that shown in Figure 1. Because of the kind of technology
the company manufactures, and because of the strongly
held beliefs and values of its founder, the company op-
erates on several critical and coordinated assumptions:
(a) Individuals are assumed to be the source of all in-
novation and productivity. (b) It is assumed that truth
can only be determined by pitting fully involved individ-
uals against each other to debate ideas until only one idea
survives, and it is further assumed that ideas will not be

implemented unless everyone involved in implementation
has been convinced through the debate of the validity of
the idea. (c) Paradoxically, it is also assumed that every
individual must think for himself or herself and “do the
right thing” even if that means disobeying one’s boss or
violating a policy. (d) What makes it possible for people
to live in this high-conflict environment is the assumption
that the company members are one big family who will
take care of each other and protect each other even if
some members make mistakes or have bad ideas.

Once one understands this paradigm, one can un-
derstand all of the different observed artifacts such as the
ability of the organization to tolerate extremely high de-
grees of conflict without seeming to destroy or even de-
motivate its employees. The value of the cultural analysis
is that it provides insight, understanding, and a roadmap
for future action. For example, as this company grows,
the decision process may prove to be too slow, the indi-
vidual autonomy that members are expected to exercise
may become destructive and have to be replaced by more
disciplined beha,bior, and the notion of a family may break
down because too many people no longer know each other
personally. The cultural analysis thus permits one to focus
on those areas in which the organization will experience
stresses and strains as it continues to grow and in which
cultural evolution and change will occur.

By way of contrast, in the “Multi Company,” a 100-
year-old mnltidivisional, multinational chemical firm, one
finds at the artifact level a high degree of formality; an
architecture that puts great emphasis on privacy; a pro-
liferation of status symbols and deference rituals such as
addressing people by their titles; a high degree of politeness
in group meetings; an emphasis on carefully thinking
things out and then implementing them firmly through
the hierarchy; a formal code of dress; and an emphasis
on working hours, punctuality, and so on. One also finds
a total absence of cross-divisional or cross-functional
meetings and an almost total lack of lateral communi-
cation. Memos left in one department by an outside con-

February 1990 ° American Psychologist 113

Table 2
Some Underlying Dimensions of Organizational
Culture

Dimension Questions to be answered

1. The organization’s
relationship to its
environment

2. The nature of human
activity

3. The nature of reality
and truth

4. The nature of time

5. The nature of human
nature

6. The nature of human
relationships

7. Homogeneity vs.
diversity

Does the organization perceive
itself to be dominant,
submissive, harmonizing,
searching out a niche?

Is the “correct” way for
humans to behave to be
dominant/pro-active,
harmonizing, or passive/
fatalistic?

How do we define what is true
and what is not true; and
how is truth ultimately
determined both in the
physical and social world?
By pragmatic test, reliance
on wisdom, or social
consensus?

What is our basic orientation in
terms of past, present, and
future, and what kinds of
time units are most relevant
for the conduct of daily
affairs?

Are humans basically good,
neutral, or evil, and is
human nature perfectible or
fixed?

What is the “correct” way for
people to relate to each
other, to distribute power
and affection? Is life
competitive or cooperative?
is the best way to organize
society on the basis of
individualism or groupism?
Is the best authority system
autocratic/paternalistic or
collegial/participative?

Is the group best off if it is
highly diverse or if it is
highly homogeneous, and
should individuals in a group
be encouraged to innovate
or conform?

Note. Adapted from Organizational Culture and Leadership (p, 86) by E. H.
Schein, 1985, San Francisco: Jossey-Bass. Copyright 1985 by Jossey*Bass.
Adapted by permission.

III I I

sultant with instructions to be given to others are almost
never delivered.

The paradigm that surfaces, if one works with in-
siders to try to decipher what is going on, can best be
depicted by the assumptions shown in Figure 2. The
company is science based and has always derived its suc-
cess from its research and development activities. Whereas

Figure 1
The Action Company Paradigm

Indiv. is Source
of Good Ideas

I
Every Person Must
Think for Himself
or Herself and
“Do the Right Thing”

. . . . I

Truth is Discovered
Through Debate
& Testing (Buy-In)

1 We are One Family Who Will Take Care of Each Other
“truth” in the Action Company is derived through debate
and conflict and employees down the line are expected
to think for themselves, in the Multi Company truth is
derived from senior, wiser heads and employees are ex-
pected to go along like good soldiers once a decision is
reached.

The Multi Company also sees itself as a family, but
its concept of a family is completely different. Whereas
in the Action Company, the family is a kind of safety net
and an assurance of membership, in the Multi Company

Figure 2
The Multi Company Paradigm

ScientificResearch (
I is Source of Truth [ – ~ [
I and Good Ideas ]

I …. /
Truth and Wisdom
Reside in Those Who L ~
Have More Education I v l
& Experience ] I

I I

The Mission is to
Make a Better World
Through Science and
“Important” Products

The Strength of the Org.
is in the Expertness
of Each Role Occupant.
A Job is One’s Personal
“Turf”

/
We are One Family and Take Care of
Each Other, but a Family is a Hierarchy
and Children Have to Obey

/
There is Enough Time;
Quality, Accuracy, and
Truth Are More Impt.
Than Speed

\
Indiv. and Org. Autonomy
are the Key to Success
so Long as They Stay
Closely Linked to “Parents”

II II III I I I III

114 February 1990 • American Psychologist

it is an authoritarian/paternalistic system ofeliciting loy-
alty and compliance in exchange for economic security.
The paradoxical absence of lateral communication is ex-
plained by the deeply held assumption that a job is a
person’s private turf and that the unsolicited providing
of information to that person is an invasion of privacy
and a potential threat to his or her self-esteem. Multi
Company managers are very much on top of their jobs
and pride themselves on that fact. If they ask for infor-
mation they get it, but it is rarely volunteered by peers.

This cultural analysis highlights what is for the Multi
Company a potential problem. Its future success may
depend much more on its ability to become effective in
marketing and manufacturing, yet it still treats research
and development asa sacred cow and assumes that new
products will be the key to its future success. Increasingly
the company finds itself in a world that requires rapid
decision making, yet its systems and procedures are slow
and cumbersome. To be more innovative in marketing it
needs to share ideas more, yet it undermines lateral com-
munication.

Both companies reflect the larger cultures within
which they exist in that the Action Company is an Amer-
ican firm whereas the Multi Company is European, but
each also is different from its competitors within the same
country, thus highlighting the importance of understand-
ing organizational culture.

Cultural Dynamics: How Is Culture Created?
Culture is learned; hence learning models should help us
to understand culture creation. Unfortunately, there are
not many good models 0fhow groups learn–how norms,
beliefs, and assumptions are created initially. Once these
exist, we can see clearly how leaders and powerful mem-
bers embed them in group activity, but the process of
learning something that becomes shared is still only par-
tially understood.

Norm Formation Around Critical Incidents

One line of analysis comes from the study of training
groups (Bennis & Shepard, 1956; Bion, 1959; Schein,
1985a). One can see in such groups how norms and beliefs
arise around the way members respond to critical inci-
dents. Something emotionally charged or anxiety pro-
ducing may happen, such as an attack by a member on
the leader. Because everyone witnesses it and because
tension is high when the attack occurs, the immediate
next set of behaviors tends to create a norm.

Suppose, for example, that the leader counterattacks,
that the group members “concur” with silence or ap-
proval, and that the offending member indicates with an
apology that he or she accepts his or her “mistake.” In
those few moments a bit of culture has begun to be cre-
a t ed – the norm that “we do not attack the leader in this
group; authority is sacred.” The norm may eventually
become a belief and then an assumption if the same pat-
tern recurs. If the leader and the group consistently re-
spond differently to attacks, a different norm will arise.
By reconstructing the history of critical incidents in the

group and how members dealt with them, one can get a
good indication of the important cultural dements in
that group.

Identification With Leaders

A second mechanism of culture creation is the modeling
by leader figures that permits group members to identify
with them and internalize their values and assumptions.
When groups or organizations first form, there are usually
dominant figures or “founders” whose own beliefs, values,
and assumptions provide a visible and articulated modd
for how the group should be structured and how it should
function (Schcin, 1983). As these beliefs are put into
practice, some work out and some do not. The group
then learns from its own experience what parts of the
“founder’s” belief system work for the group as a whole.
The joint learning then gradually creates shared assump-
tions.

Founders and subsequent leaders continue to at-
tempt to embed their own assumptions, but increasingly
they find that other parts of the organization have their
own experiences to draw on and, thus, cannot be changed.
Increasingly the learning process is shared, and the re-
suiting cultural assumptions reflect the total group’s ex-
perience, not only the leader’s initial assumptions. But
leaders continue to try to embed their own views of how
things should be, and, if they are powerful enough, they
will continue to have a dominant effect on the emerging
culture.

Primary embedding mechanisms are (a)what leaders
pay attention to, measure, and control; (b) how leaders
react to critical incidents and organizational crises; (c)
deliberate role modeling and coaching; (d) operational
criteria for the allocation, of rewards and status; and (e)
operational criteria for recruitment, selection, promotion,
retirement, and excommunication. Secondary articula-
tion and reinforcement mechanisms are (a) the organi-
zation’s design and structure; (b) organizational systems
and procedures; (c) the design of physical space, facades,
and buildings; (d) stories, legends, myths, and symbols;
and (e) formal statements of organizational philosophy,
creeds, and charters.

One can hypothesize that as cultures evolve and
grow, two processes will occur simultaneously: a process
of differentiation into various kinds of subcultures that
will create diversity, and a process of integration, or a
tendency for the various deeper elements of the culture
to become congruent with each other because of the hu-
man need for consistency.

Cultural Dynamics: Preservation
Through Socialization
Culture perpetuates and reproduces itsdfthrough the so-
cialization of new members entering the group. The so-
cialization process really begins with recruitment and se-
lection in that the organization is likely to look for new
members who already have the “right” set of assumptions,
beliefs, and values. If the organization can find such pre-
socialized members, it needs to do less formal socializa-

February 1990 • American Psychologist 115

tion. More typically, however, new members do not “know
the ropes” well enough to be able to take and enact their
organizational roles, and thus they need to be trained and
“acculturated” (Feldman, 1988; Ritti & Funkhouser,
1987; Schein, 1968, 1978; Van Maanen, 1976, 1977).

The socialization process has been analyzed from a
variety of perspectives and can best be conceptualized in
terms of a set of dimensions that highlight variations in
how different organizations approach the process (Van
Maanen, 1978; Van Maanen & Schein, 1979). Van Maa-
nen identified seven dimensions along which socialization
processes can vary:

I. Group versus individual: the degree to which the
organization processes recruits in batches, as in boot
camp, or individually, as in professional offices.

2. Formal versus informal: the degree to which the
process is formalized, as in set training programs, or is
handled informally through apprenticeships, individual
coaching by the immediate superior, or the like.

3. Self-destructive and reconstructing versus selfien-
hancing: the degree to which the process destroys aspects
of the self and replaces them, as in boot camp, or enhances
aspects of the self, as in professional development pro-
grams.

4. Serial versus random: the degree to which role
models are provided, as in apprenticeship or mentoring
programs, or are deliberately withheld, as in sink-or-swim
kinds of initiations in which the recruit is expected to
figure out his or her own solutions.

5. Sequential versus disjunctive: the degree to which
the process consists of guiding the recruit through a series
of discrete steps and roles versus being open-ended and
never letting the recruit predict what organizational role
will come next.

6. Fixed versus variable: the degree to which stages
of the training process have fixed timetables for each stage,
as in military academies, boot camps, or rotational train-
ing programs, or are open-ended, as in typical promo-
tional systems where one is not advanced to the next
stage until one is “ready.”

7. Tournament versus contest: the degree to which
each stage is an “elimination tournament” where one is
out of the organization if one fails or a “contest” in which
one builds up a track record and batting average.

Socialization Consequences
Though the goal of socialization is to perpetuate the cul-
ture, it is clear that the process does not have uniform
effects. Individuals respond differently to the same treat-
ment, and, even more important, different combinations
of socialization tactics can be hypothesized to produce
somewhat different outcomes for the organization (Van
Maanen & Schein, 1979).

For example, from the point of view of the organi-
zation, one can specify three kinds of outcomes: (a) a
custodial orientation, or total conformity to all norms
and complete learning of all assumptions; (b) creative in-
dividualism, which implies that the trainee learns all of
the central and pivotal assumptions of the culture but

rejects all peripheral ones, thus permitting the individual
to be creative both with respect to the organization’s tasks
and in how the organization performs them (role inno-
vation); and (c) rebellion, or the total rejection of all as-
sumptions. If the rebellious individual is constrained by
external circumstances from leaving the organization, he
or she will subvert, sabotage, and ultimately foment rev-
olution.

We can hypothesize that the combination of social-
ization techniques most likely to produce a custodial ori-
entation is (1) formal, (2) self-reconstructing, (3) serial,
(4) sequential, (5) variable, and (6) tournament-like.
Hence if one wants new members to be more creative in
the use of their talents, one should use socialization tech-
niques that are informal, self-enhancing, random, dis-
junctive, fixed in terms of timetables, and contest-like.

The individual versus group dimension can go in
either direction in that group socialization methods can
produce loyal custodially oriented cohorts or can produce
disloyal rebels ifcountercultural norms are formed during
the socialization process. Similarly, in the individual ap-
prenticeship the direction of socialization will depend on
the orientation of the mentor or coach.

Efforts to measure these socialization dimensions
have been made, and some preliminary support for the
above hypotheses has been forthcoming (Feldman, 1976,
1988; G. R. Jones, 1986). Insofar as cultural evolution is
a function of innovative and creative efforts on the part
of new members, this line of investigation is especially
important.

Cu l tu ra l Dynamics : N a t u r a l Evolu t ion

Every group and organization is an open system that exists
in multiple environments. Changes in the environment
will produce stresses and strains inside the group, forcing
new learning and adaptation. At the same time, new
members coming into the group will bring in new beliefs
and assumptions that will influence currently held as-
sumptions. To some degree, then, there is constant pres-
sure on any given culture to evolve and grow. But just as
individuals do not easily give up the elements of their
identity or their defense mechanisms, so groups do not
easily give up some of their basic underlying assumptions
merely because external events or new members discon-
firm them.

An illustration of “forced” evolution can be seen in
the case of the aerospace company that prided itself on
its high level of trust in its employees, which was reflected
in flexible working hours, systems of self-monitoring and
self-control, and the absence of time clocks. When a
number of other companies in the industry were discov-
ered to have overcharged their government clients, the
government legislated a system of controls for all of its
contractors, forcing this company to install time clocks
and other control mechanisms that undermined the cli-
mate of trust that had been built up over 30 years. It
remains to be seen whether the company’s basic assump-
tion that people can be trusted will gradually change or
whether the company will find a way to discount the el-

116 February 1990 • American Psychologist

fects of an artifact that is in fundamental conflict with
one of its basic assumptions.

Differentiation
As organizations grow and evolve they divide the labor
and form functional, geographical, and other kinds of
units, each of which exists in its own specific environ-
ment. Thus organizations begin to build their own sub-
cultures. A natural evolutionary mechanism, therefore,
is the differentiation that inevitably occurs with age and
size. Once a group has many subcultures, its total culture
increasingly becomes a negotiated outcome of the inter-
action of its subgroups. Organizations then evolve either
by special efforts to impose their overall culture or by
allowing dominant subcultures that may be better ~0~pted
to changing environmental circumstances to become
more influential.

Cultural Dynamics: Guided Evolution and
Managed Change
One of the major roles of the field of organization devel-
opment has been to help organizations guide the direction
of their evolution, that is, to enhance cultural elements
that are viewed as critical to maintaining identity and to
promote the “unlearning” of cultural elements that are
viewed as increasingly dysfunctional (Argyris, Putnam,
& Smith, 1985; Argyris & Schon, 1978; Beckhard & Har-
ris, 1987; Hanna, 1988; Lippitt, 1982; Walton, 1987).
This process in organizations is analogous to the process
of therapy in individuals, although the actual tactics are
more complicated when multiple clients are involved and
when some of the clients are groups and subsystems.

Leaders of organizations sometimes are able to over-
come their own cultural biases and to perceive that ele-
ments of an organization’s culture are dysfunctional for
survival and growth in a changing environment. They
may feel either that they do not have the time to let evo-
lution occur naturally or that evolution is heading the
organization in the wrong direction. In such a situation
one can observe leaders doing a number of different
things, usually in combination, to produce the desired
cultural changes:

1. Leaders may unfreeze the present system by
highlighting the threats to the organization if no change
occurs, and, at the same time, encourage the organization
to believe that change is possible and desirable.

2. They may articulate a new direction and a new
set of assumptions, thus providing a clear and new role
model.

3. Key positions in the organization may be filled
with new incumbents who hold the new assumptions be-
cause they are either hybrids, mutants, or brought in from
the outside.

4. Leaders systematically may reward the adoption
of new directions and punish adherence to the old direc-
tion.

5. Organization members may be seduced or
coerced into adopting new behaviors that are more con-
sistent with new assumptions.

6. Visible scandals may be created to discredit sa-
cred cows, to explode myths that preserve dysfunctional
traditions, and destroy symbolically the artifacts asso-
ciated with them.

7. Leaders may create new emotionally charged rit-
uals and develop new symbols and artifacts around the
new assumptions to be embraced, using the embedding
mechanisms described earlier.

Such cultural change efforts are generally more
characteristic of “midlffe'” organizations that have become
complacent and ill adapted to rapidly changing environ-
mental conditions (Schein, 1985a). The fact that such
organizations have strong subcultures aids the change
process in that one can draw the new leaders from those
subcultures that most represent the direction in which
the organization needs to go.

In cases where organizations become extremely
maladapted, one sees more severe change efforts. These
may take the form of destroying the group that is the
primary cultural carrier and reconstructing it around new
people, thereby allowing a new learning process to occur
and a new culture to form. When organizations go bank-
rupt or are turned over to “turnaround managers,” one
often sees such extreme measures. What is important to
note about such cases is that they invariably involve the
replacement of large numbers of people because the
members who have grown up in the organization find it
difficult to change their basic assumptions.

Mergers and Acquisitions

One of the most obvious forces toward culture change is
the bringing together of two or more cultures. Unfortu-
nately, in many mergers and acquisitions, the culture
compatibility issue is not raised until after the deal has
been consummated, which leads, in many cases, to cul-
tural “indigestion” and the eventual divestiture of units
that cannot become culturally integrated.

To avoid such problems, organizations must either
engage in more premerger diagnosis to determine cultural
compatibility or conduct training and integration work-
shops to help the meshing process. Such workshops have
to take into account the deeper assumption layers of cul-
ture to avoid the trap of reaching consensus at the level
of artifacts and values while remaining in conflict at the
level of underlying assumptions.

The Role of the Organizational Psychologist
Culture will become an increasingly important concept
for organizational psychology. Without such a concept
we cannot really understand change or resistance to
change. The more we get involved with helping organi-
zations to design their fundamental strategies, particularly
in the human resources area, the more important it will
be to be able to help organizations decipher their own
cultures.

All of the activities that revolve around recruitment,
selection, training, socialization, the design of reward sys-
tems, the design and description of jobs, and broader is-
sues of organization design require an understanding of

February 1990 • American Psychologist 117

how organiza t iona l cu l ture influences present funct ion-
ins. M a n y organiza t ional change p r o g r a m s tha t failed
p robab ly d id so because they ignored cul tura l forces in
the organizat ions in which they were to be instal led.

I na smuch as cu l ture is a d y n a m i c process wi th in
organizat ions, i t is p robab ly s tudied best by act ion re-
search methods , tha t is, me thods tha t get ” ins iders” in-
volved in the research and tha t work th rough a t t empts
to ” in te rvene” (Argyris et al., 1985; F rench & Bell, 1984;
Lewin, 1952; Schein, 1987b). Unt i l we have a bet ter un-
de rs tand ins o f how cul ture works, i t is p robab ly best to
work with qual i ta t ive research approaches that combine
field work me thods f rom e thnography with in terview and
observat ion me thods f rom cl inical and consul t ing work
(Schein, 1987a).

I do no t see a un ique role for the t rad i t iona l indus-
t r i a l /o rganiza t iona l psychologist , bu t I see great potent ia l
for the psychologist to work as a t e am m e m b e r wi th col-
leagues who are more e thnographica l ly or iented. The
par t icu la r skill tha t will be needed on the par t o f the
psychologist will be knowledge o f organizat ions and o f
how to work with them, especial ly in a consul t ing rela-
t ionship. Organiza t iona l cu l ture is a complex phenome-
non, and we should no t rush to measure things unt i l we
unders tand bet ter wha t we are measur ing.

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