Task 1:
For your Discussion this week, share at least THREE takeaways from the readings/video on organizational culture (200 word minimum)
Reading link:
https://hbswk.hbs.edu/item/to-change-your-companys-culture-dont-start-by-trying-to-change-the-culture
Video link:
Reading Materials:
Please see attached 3 files(What leader,Organizational power point and Schein org)
Task 2:
Write Comments For the below Two Posts
Post 1:
Hi All,
Culture, this is the most important term I had across three courses in my MBA program. According to the readings, Good leaders give good results and performance. Good leaders have strong culture in place which impacts the performance in any organization. Good leaders understand the past and present culture to create a successful culture going into future and to have successful business. Good leaders must walk the talk, meaning they must be role models for their employees to follow them, not just giving long lectures about the culture. Also, they must make wise decisions about investing in hiring employees whose core values are aligned with the team and the organization/group.
International Cultural differences is the topic I do have some personal experience regarding working in India Vs in America. With diverse workplaces nowadays it is becoming increasingly important to understand different cultures for the success of an organization. Everybody must invest some time to learn as much as possible about the cultures they are dealing with and to involve those who have a good understanding of the culture in making decisions where couture could be an issue.
According to the video “How to create a culture success” by Charles O’Reilly, I really believe in norms and values need to be invested in encouraging Adaptability in cultures among the members of the team/group by making them understand how important it is for everybody be involved and believe that their work is important, be initiative, feel free to explore, be creative, be recognized, rewarded appropriately (not financial incentives, which might actually work against the culture).
In the article “Organizational Culture”, I prefer the way the author mentioned that Understanding the Dynamics of Culture helps understand others point of view. This feels right in a lot of cases. How first perceived value of someone becomes shared value/belief of the group by receiving a success and that becomes a shared assumption when continues to succeed. That individual becomes the leader of the group and his values and beliefs become part of the culture of the group.
Dhatri Alla
Post 2:
The Organizational Culture and Leadership excerpt goes into depth about examples of culture in a workplace, what makes up a culture, a formal definition, levels, and various questions on culture. One point made on page 10 was about how culture and leadership are two sides of the same coin. It’s stated that neither of them can be defined without the other. For example, an organization can’t constitute a good leader or not without cultural norms and leaders are responsible for creating or managing culture. I find this true in my organization based on how are managers are judged based upon whether they follow our core values or not. The leadership team were also the ones that helped set these same core values as they embody them with their actions. Nobody is perfect but there is a balance there.
From the video, Charles O’Reilly: How to Create a Culture of Success, he makes the point of a leader needing to be “boring”. He elaborates as he means that they need to repeat some things over and over, especially when it comes to points on values and culture. A leader may embody this “cultural idea”, but it also needs to be pointed out consistently enough to make it valued.
Another point from this week’s readings is made from the HBR article on not trying to change culture. The idea is pointed out that cultural change more so just happens and needs to be experienced. It comes from a change in processes and actions over time. I find this to be true as well as I believed things like this can’t be forced. You can’t just say “x” is a part of our culture now and expect people to try to follow. It takes a leader to embody it, explain the importance of it, and get others on board as well.
Thanks,
Daniel
Organizational
Culture and
Leadership
Third Edition
Schein.ffirs 6/14/04 9:25 AM Page v
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Library of Congress Cataloging-in-Publication Data
Schein, Edgar H.
Organizational culture and leadership / Edgar H. Schein.—3rd ed.
p. cm.—(The Jossey-Bass business & management series)
Includes bibliographical references and index.
ISBN 0-7879-6845-5 (alk. paper)
1. Corporate culture. 2. Culture. 3. Leadership. I. Title. II. Series.
HD58.7.S33 2004
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1
T H E C O N C E P T O F
O R G A N I Z AT I O N A L C U LT U R E :
W H Y B O T H E R ?
Culture is an abstraction, yet the forces that are created in social
and organizational situations that derive from culture are powerful.
If we don’t understand the operation of these forces, we become vic-
tim to them. To illustrate how the concept of culture helps to illu-
minate organizational situations, I will begin by describing several
situations I have encountered in my experience as a consultant.
Four Brief Examples
In the first case, that of Digital Equipment Corporation (DEC), I
was called in to help a management group improve its communica-
tion, interpersonal relationships, and decision making. After sitting
in on a number of meetings, I observed, among other things, (1)
high levels of interrupting, confrontation, and debate; (2) exces-
sive emotionality about proposed courses of action; (3) great frus-
tration over the difficulty of getting a point of view across; and (4)
a sense that every member of the group wanted to win all the time.
Over a period of several months, I made many suggestions about
better listening, less interrupting, more orderly processing of the
agenda, the potential negative effects of high emotionality and con-
flict, and the need to reduce the frustration level. The group mem-
bers said that the suggestions were helpful, and they modified certain
aspects of their procedure; for example, they scheduled more time for
some of their meetings. However, the basic pattern did not change.
No matter what kind of intervention I attempted, the basic style of
the group remained the same.
Schein.c01 6/14/04 9:19 AM Page 3
In the second case, that of the Ciba-Geigy Company—a large
multinational chemical and pharmaceutical company located in
Basel, Switzerland—I was asked, as part of a broader consultation
project, to help create a climate for innovation in an organization
that felt a need to become more flexible in order to respond to its
increasingly dynamic business environment. The organization con-
sisted of many different business units, geographical units, and func-
tional groups. As I got to know more about these units and their
problems, I observed that some very innovative things were going
on in many places in the company. I wrote several memos that
described these innovations and presented other ideas from my own
experience. I gave the memos to my contact person in the company
with the request that he distribute them to the various geographic
and business unit managers who needed to be made aware of these
ideas.
After some months, I discovered that those managers to whom
I had personally given the memo thought it was helpful and on tar-
get, but rarely, if ever, did they pass it on, and none were ever dis-
tributed by my contact person. I also suggested meetings of managers
from different units to stimulate lateral communication, but found
no support at all for such meetings. No matter what I did, I could not
seem to get information flowing, especially laterally across divisional,
functional, or geographical boundaries. Yet everyone agreed in prin-
ciple that innovation would be stimulated by more lateral commu-
nication and encouraged me to keep on “helping.”
In the third example, Amoco, a large oil company that was
eventually merged with British Petroleum (BP), decided to cen-
tralize all of its engineering functions in a single service unit.
Whereas engineers had previously been regular parts of projects,
they were now supposed to sell their services to clients who would
be charged for these services. The engineers resisted violently and
many of them threatened to leave the organization. We were
unable to reorganize this engineering organization to fit the new
company requirements.
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In the fourth example, Alpha Power, an electric and gas utility
that services a large urban area, was faced with having to become
more environmentally responsible after the company was brought
up on criminal charges for allegedly failing to report the presence of
asbestos in a local unit that had suffered an accident. Electrical
workers, who took pride in their “heroic” self-image of keeping the
lights on no matter what, also held the strong norm that one did
not report spills and other environmental and safety problems if
such reports would embarrass the group. I was involved in a multi-
year project to change this self-image to one in which the “heroic”
model would be to report all safety and environmental hazards,
even if that meant reporting on peers—or bosses. All employees
were supposed to adopt a new concept of personal responsibility,
teamwork, and openness of communication. Yet no matter how
clear the new mandate was made, safety problems continued wher-
ever peer group relations were involved.
I did not really understand the forces operating in any of these
cases until I began to examine my own assumptions about how
things should work in these organizations and began to test whether
my assumptions fitted those operating in my clients’ systems. This
step—examining the shared assumptions in the organization or
group one is dealing with and comparing them to one’s own—takes
one into cultural analysis and will be the focus from here on.
It turned out that at DEC, an assumption was shared by senior
managers and most of the other members of the organization: that
one cannot determine whether or not something is “true” or “valid”
unless one subjects the idea or proposal to intensive debate; and fur-
ther, that only ideas that survive such debate are worth acting on,
and only ideas that survive such scrutiny will be implemented. The
group assumed that what they were doing was discovering truth,
and in this context being polite to each other was relatively unim-
portant. I became more helpful to the group when I realized this
and went to the flip chart and just started to write down the various
ideas they were processing. If someone was interrupted, I could ask
T H E C O N C E P T O F O R G A N I Z A T I O N A L C U L T U R E 5
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them to restate their point instead of punishing the interrupter. The
group began to focus on the items on the chart and found that this
really did help their communication and decision process. I had
finally understood and entered into an essential element of their cul-
ture instead of imposing my own.
At Ciba-Geigy I eventually discovered that there was a strong
shared assumption that each manager’s job was his or her private
“turf,” not to be infringed on. The strong impression was commu-
nicated that one’s job is like one’s home, and if someone gives one
unsolicited information, it is like walking into one’s home unin-
vited. Sending memos to people implies that they do not already
know what is in the memo, and that is potentially insulting. In this
organization managers prided themselves on knowing whatever
they needed to know to do their job. Had I understood this, I would
have asked for a list of the names of the managers and sent the
memo directly to them. They would have accepted it from me
because I was the paid consultant and expert.
At Amoco I began to understand the resistance of the engineers
when I learned that in their occupational culture there are strong
assumptions that “good work should speak for itself” and “engineers
should not have to go out and sell themselves.” They were used to
having people come to them for services and did not have a good
role model for how to sell themselves.
At Alpha Power I learned that all work units had strong norms
and values of self-protection that often overrode the new require-
ments imposed on the company by the courts. The groups had their
own experience base for what was safe and what was not, which
they were willing to trust, whereas the tasks of reporting environ-
mental spills and cleaning them up involved new skills that work-
ers were eventually willing to learn and collaborate on.
In each of these cases I initially did not understand what was
going on because my own basic assumptions about truth and turf
and group relations differed from the shared assumptions of the
members of the organization. And my assumptions reflected my
occupation as a social psychologist and organization consultant,
6 O R G A N I Z A T I O N A L C U L T U R E A N D L E A D E R S H I P
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while the group’s assumptions reflected in part their occupations as
electrical engineers, chemists, and electrical workers.
To make sense of such situations requires taking a cultural per-
spective; learning to see the world through cultural lenses; becom-
ing competent in cultural analysis—by which I mean being able to
perceive and decipher the cultural forces that operate in groups,
organizations, and occupations. Once we learn to see the world
through cultural lenses, all kinds of things begin to make sense that
initially were mysterious, frustrating, or seemingly stupid.
Culture: An Empirically Based Abstraction
Culture as a concept has had a long and checkered history. It has
been used by the layman as a word to indicate sophistication, as
when we say that someone is very “cultured.” It has been used by
anthropologists to refer to the customs and rituals that societies
develop over the course of their history. In the last several decades
it has been used by some organizational researchers and managers
to refer to the climate and practices that organizations develop
around their handling of people, or to the espoused values and
credo of an organization.
In this context, managers speak of developing the “right kind of
culture,” a “culture of quality” or a “culture of customer service,”
suggesting that culture has to do with certain values that managers
are trying to inculcate in their organizations. Also implied in this
usage is the assumption that there are better or worse cultures and
stronger or weaker cultures, and that the “right” kind of culture will
influence how effective the organization is. In the managerial liter-
ature there is often the implication that having a culture is neces-
sary for effective performance, and that the stronger the culture, the
more effective the organization.
Researchers have supported some of these views by reporting
findings that cultural “strength” or certain kinds of cultures cor-
relate with economic performance (Denison, 1990; Kotter and
Heskett, 1992; Sorensen, 2002). Consultants have touted “culture
T H E C O N C E P T O F O R G A N I Z A T I O N A L C U L T U R E 7
Schein.c01 6/14/04 9:19 AM Page 7
surveys” and have claimed that they can improve organizational
performance by helping organizations create certain kinds of cul-
tures, but these claims are based on very different definitions of cul-
ture than what I will be arguing for here. As we will see, many of
these usages of the word culture display not only a superficial and
incorrect view of culture, but also a dangerous tendency to evalu-
ate particular cultures in an absolute way and to suggest that there
actually are “right” cultures for organizations. As we will also see,
whether or not a culture is “good” or “bad,” “functionally effective”
or not, depends not on the culture alone, but on the relationship
of the culture to the environment in which it exists.
Perhaps the most intriguing aspect of culture as a concept is
that it points us to phenomena that are below the surface, that are
powerful in their impact but invisible and to a considerable degree
unconscious. In that sense, culture is to a group what personality or
character is to an individual. We can see the behavior that results,
but often we cannot see the forces underneath that cause certain
kinds of behavior. Yet, just as our personality and character guide
and constrain our behavior, so does culture guide and constrain the
behavior of members of a group through the shared norms that are
held in that group.
To complicate matters further, one can view personality and
character as the accumulation of cultural learning that an individ-
ual has experienced in the family, the peer group, the school, the
community, and the occupation. In this sense, culture is within us
as individuals and yet constantly evolving as we join and create new
groups that eventually create new cultures. Culture as a concept is
thus an abstraction but its behavioral and attitudinal consequences
are very concrete indeed.
If an abstract concept is to be useful to our thinking, it should
be observable and also increase our understanding of a set of events
that are otherwise mysterious or not well understood. From this
point of view, I will argue that we must avoid the superficial models
of culture and build on the deeper, more complex anthropological
models. Culture as a concept will be most useful if it helps us to bet-
8 O R G A N I Z A T I O N A L C U L T U R E A N D L E A D E R S H I P
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ter understand the hidden and complex aspects of life in groups,
organizations, and occupations, and we cannot obtain this under-
standing if we use superficial definitions.
What Needs to Be Explained?
Most of us, in our roles as students, employees, managers, research-
ers, or consultants, work in and have to deal with groups and orga-
nizations of all kinds. Yet we continue to find it amazingly difficult
to understand and justify much of what we observe and experience
in our organizational life. Too much seems to be bureaucratic or
political or just plain irrational—as in the four cases that I described
at the beginning of this chapter.
People in positions of authority, especially our immediate
bosses, often frustrate us or act incomprehensibly; those we consider
the leaders of our organizations often disappoint us. When we get
into arguments or negotiations with others, we often cannot under-
stand how our opponents could take such ridiculous positions.
When we observe other organizations, we often find it incompre-
hensible that smart people could do such dumb things. We recog-
nize cultural differences at the ethnic or national level, but find
them puzzling at the group, organizational, or occupational level.
As managers, when we try to change the behavior of subordi-
nates, we often encounter resistance to change to an extent that
seems beyond reason. We observe departments in our organization
that seem to be more interested in fighting with each other than get-
ting the job done. We see communication problems and misunder-
standings between group members that should not be occurring
between reasonable people. We explain in detail why something dif-
ferent must be done, yet people continue to act as if they had not
heard us.
As leaders who are trying to get our organizations to become
more effective in the face of severe environmental pressures, we are
sometimes amazed at the degree to which individuals and groups in
the organization will continue to behave in obviously ineffective
T H E C O N C E P T O F O R G A N I Z A T I O N A L C U L T U R E 9
Schein.c01 6/14/04 9:19 AM Page 9
ways, often threatening the very survival of the organization. As we
try to get things done that involve other groups, we often discover
that they do not communicate with each other and that the level
of conflict between groups in organizations and in the community
is often astonishingly high.
As teachers, we encounter the sometimes mysterious phenom-
enon that different classes behave completely differently from each
other, even though our material and teaching style remains the
same. As employees considering a new job, we realize that compa-
nies differ greatly in their approach, even in the same industry and
geographic locale. We feel these differences even as we walk through
the doors of different organizations, such as restaurants, banks,
stores, or airlines.
As members of different occupations, we are aware that being a
doctor, lawyer, engineer, accountant, or other professional involves
not only the learning of technical skills but also the adoption of cer-
tain values and norms that define our occupation. If we violate some
of these norms we can be thrown out of the occupation. But where
do these come from and how do we reconcile the fact that each
occupation considers its norms and values to be the correct ones?
The concept of culture helps to explain all of these phenomena
and to normalize them. If we understand the dynamics of culture,
we will be less likely to be puzzled, irritated, and anxious when we
encounter the unfamiliar and seemingly irrational behavior of peo-
ple in organizations, and we will have a deeper understanding not
only of why various groups of people or organizations can be so dif-
ferent, but also why it is so hard to change them. Even more impor-
tant, if we understand culture better we will better understand
ourselves—better understand the forces acting within us that define
who we are, that reflect the groups with which we identify and to
which we want to belong.
Culture and Leadership
When we examine culture and leadership closely, we see that they
are two sides of the same coin; neither can really be understood by
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itself. On the one hand, cultural norms define how a given nation
or organizations will define leadership—who will get promoted,
who will get the attention of followers. On the other hand, it can
be argued that the only thing of real importance that leaders do is
to create and manage culture; that the unique talent of leaders is
their ability to understand and work with culture; and that it is an
ultimate act of leadership to destroy culture when it is viewed as
dysfunctional.
If one wishes to distinguish leadership from management or
administration, one can argue that leadership creates and changes
cultures, while management and administration act within a cul-
ture. By defining leadership in this manner, I am not implying that
culture is easy to create or change, or that formal leaders are the
only determiners of culture. On the contrary, as we will see, culture
refers to those elements of a group or organization that are most sta-
ble and least malleable.
Culture is the result of a complex group learning process that is
only partially influenced by leader behavior. But if the group’s sur-
vival is threatened because elements of its culture have become
maladapted, it is ultimately the function of leadership at all levels
of the organization to recognize and do something about this situa-
tion. It is in this sense that leadership and culture are conceptually
intertwined.
Toward a Formal Definition of Culture
When we apply the concept of culture to groups, organizations, and
occupations, we are almost certain to have conceptual and seman-
tic confusion, because such social units are themselves difficult to
define unambiguously. I will use as the critical defining characteris-
tic of a group the fact that its members have a shared history. Any
social unit that has some kind of shared history will have evolved a
culture, with the strength of that culture dependent on the length
of its existence, the stability of the group’s membership, and the
emotional intensity of the actual historical experiences they have
shared. We all have a commonsense notion of this phenomenon,
T H E C O N C E P T O F O R G A N I Z A T I O N A L C U L T U R E 11
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yet it is difficult to define it abstractly. In talking about organiza-
tional culture with colleagues and members of organizations, I often
find that we agree that “it” exists and that it is important in its
effects, but when we try to define it, we have completely different
ideas of what “it” is.
To make matters worse, the concept of culture has been the
subject of considerable academic debate in the last twenty-five
years and there are various approaches to defining and studying
culture (for example, those of Hofstede, 1991; Trice and Beyer,
1993; Schultz, 1995; Deal and Kennedy, 1999; Cameron and
Quinn, 1999; Ashkanasy, Wilderom, and Peterson, 2000; and Mar-
tin, 2002). This debate is a healthy sign in that it testifies to the
importance of culture as a concept, but at the same time it creates
difficulties for both the scholar and the practitioner if definitions
are fuzzy and usages are inconsistent. For the purpose of this intro-
ductory chapter, I will give only a quick overview of this range of
usage and then offer a precise and formal definition that makes the
most sense from my point of view. Other usages and points of view
will be further reviewed in later chapters.
Commonly used words relating to culture emphasize one of its
critical aspects—the idea that certain things in groups are shared or
held in common. The major categories of observables that are asso-
ciated with culture in this sense are shown in Exhibit 1.1.
All of these concepts relate to culture or reflect culture in that
they deal with things that group members share or hold in common,
but none of them can usefully be thought of as “the culture” of an
organization or group. If one asks why we need the word culture at
12 O R G A N I Z A T I O N A L C U L T U R E A N D L E A D E R S H I P
Exhibit 1.1. Various Categories Used to Describe Culture.
Observed behavioral regularities when people interact: the language they use,
the customs and traditions that evolve, and the rituals they employ in a wide
variety of situations (Goffman, 1959, 1967; Jones, Moore, and Snyder, 1988;
Trice and Beyer, 1993, 1985; Van Maanen, 1979b).
Group norms: the implicit standards and values that evolve in working
groups, such as the particular norm of “a fair day’s work for a fair day’s pay” that
Schein.c01 6/14/04 9:19 AM Page 12
T H E C O N C E P T O F O R G A N I Z A T I O N A L C U L T U R E 13
Exhibit 1.1. Various Categories Used to Describe Culture, Cont’d.
evolved among workers in the Bank Wiring Room in the Hawthorne studies
(Homans, 1950; Kilmann and Saxton, 1983).
Espoused values: the articulated, publicly announced principles and values
that the group claims to be trying to achieve, such as “product quality” or “price
leadership” (Deal and Kennedy, 1982, 1999).
Formal philosophy: the broad policies and ideological principles that guide a
group’s actions toward stockholders, employees, customers, and other stake-
holders, such as the highly publicized “HP Way” of Hewlett-Packard (Ouchi,
1981; Pascale and Athos,1981; Packard, 1995).
Rules of the game: the implicit, unwritten rules for getting along in the orga-
nization; “the ropes” that a newcomer must learn in order to become an
accepted member; “the way we do things around here” (Schein, 1968, 1978;
Van Maanen, 1979a, 1979b; Ritti and Funkhouser, 1987).
Climate: the feeling that is conveyed in a group by the physical layout and
the way in which members of the organization interact with each other, with
customers, or other outsiders (Ashkanasy, Wilderom, and Peterson, 2000;
Schneider, 1990; Tagiuri and Litwin, 1968).
Embedded skills: the special competencies displayed by group members in
accomplishing certain tasks, the ability to make certain things that gets passed
on from generation to generation without necessarily being articulated in writ-
ing (Argyris and Schön, 1978; Cook and Yanow, 1993; Henderson and Clark,
1990; Peters and Waterman, 1982).
Habits of thinking, mental models, and linguistic paradigms: the shared cogni-
tive frames that guide the perceptions, thought, and language used by the mem-
bers of a group and taught to new members in the early socialization process
(Douglas, 1986; Hofstede, 2001; Van Maanen, 1979b; Senge and others, 1994).
Shared meanings: the emergent understandings created by group members as
they interact with each other (as in Geertz, 1973; Smircich, 1983; Van Maanen
and Barley, 1984; Weick, 1995).
“Root metaphors” or integrating symbols: the ways in which groups evolve to
characterize themselves, which may or may not be appreciated consciously but
become embodied in buildings, office layout, and other material artifacts of the
group. This level of the culture reflects the emotional and aesthetic response of
members as contrasted with the cognitive or evaluative response (as in
Gagliardi, 1990; Hatch, 1990; Pondy, Frost, Morgan, and Dandridge, 1983;
Schultz, 1995).
Formal rituals and celebrations: the ways in which a group celebrates key
events that reflect important values or important “passages” by members, such
as promotion, completion of important projects, and milestones (as in Deal and
Kennedy, 1982, 1999; Trice and Beyer, 1993).
Schein.c01 6/14/04 9:19 AM Page 13
all when we have so many other concepts—such as norms, values,
behavior patterns, rituals, traditions, and so on—one recognizes
that the word culture adds several other critical elements to the con-
cept of sharing: structural stability, depth, breadth, and patterning
or integration.
Structural Stability
Culture implies some level of structural stability in the group.
When we say that something is “cultural,” we imply that it is not
only shared, but also stable, because it defines the group. Once we
achieve a sense of group identity, it is our major stabilizing force
and will not be given up easily. Culture survives even when some
members of the organization depart. Culture is hard to change
because group members value stability in that it provides meaning
and predictability.
Depth
Culture is the deepest, often unconscious part of a group and is,
therefore, less tangible and less visible than other parts. From this
point of view, most of the concepts reviewed above can be thought
of as manifestations of culture, but they are not the essence of what
we mean by culture. Note that when something is more deeply
embedded it also gains stability.
Breadth
A third characteristic of culture is that once it has developed, it
covers all of a group’s functioning. Culture is pervasive; it influences
all aspects of how an organization deals with its primary task, its var-
ious environments, and its internal operations. Not all groups have
cultures in this sense, but the concept connotes that when we refer
to the culture of a group we are referring to all of its operations.
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Patterning or Integration
The fourth characteristic that is implied by the concept of culture
and that further lends stability is patterning or integration of the
elements into a larger paradigm or “gestalt” that ties together the
various elements and that lies at a deeper level. Culture somehow
implies that rituals, climate, values, and behaviors tie together into
a coherent whole; this patterning or integration is the essence of
what we mean by “culture.” Such patterning or integration ulti-
mately derives from the human need to make our environment as
sensible and orderly as we can (Weick, 1995). Disorder or sense-
lessness makes us anxious, so we will work hard to reduce that anx-
iety by developing a more consistent and predictable view of how
things are and how they should be. Thus “organizational cultures,
like other cultures, develop as groups of people struggle to make
sense of and cope with their worlds” (Trice and Beyer, 1993, p. 4).
How then should we think about the “essence” of culture and
how should we formally define it? The most useful way to arrive
at a definition of something as abstract as culture is to think in
dynamic evolutionary terms. If we can understand where culture
comes from and how it evolves, then we can grasp something that
is abstract; that exists in a group’s unconscious, yet that has power-
ful influences on a group’s behavior.
How Does Culture Form?
Culture forms in two ways. In Chapter Four I will show how spon-
taneous interaction in an unstructured group gradually lead to
patterns and norms of behavior that become the culture of that
group—often within just hours of the group’s formation. In more
formal groups an individual creates the group or becomes its leader.
This could be an entrepreneur starting a new company, a religious
person creating a following, a political leader creating a new party,
a teacher starting a new class, or a manager taking over a new
department of an organization. The individual founder—whether
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an entrepreneur or just the convener of a new group—will have
certain personal visions, goals, beliefs, values, and assumptions
about how things should be. He or she will initially impose these on
the group and/or select members on the basis of their similarity of
thoughts and values.
We can think of this imposition as a primary act of leadership,
but it does not automatically produce culture. All it produces is
compliance in the followers to do what the leader asks of them.
Only if the resulting behavior leads to “success”—in the sense that
the group accomplishes its task and the members feel good about
their relationships to each other—will the founder’s beliefs and val-
ues be confirmed and reinforced, and, most important, come to be
recognized as shared. What was originally the founder’s individual
view of the world leads to shared action, which, if successful, leads
to a shared recognition that the founder “had it right.” The group
will then act again on these beliefs and values and, if it continues
to be successful, will eventually conclude that it now has the “cor-
rect” way to think, feel, and act.
If, on the other hand, the founder’s beliefs and values do not lead
to success, the group will fail and disappear or will seek other leader-
ship until someone is found whose beliefs and values will lead to suc-
cess. The culture formation process will then revolve around that
new leader. With continued reinforcement, the group will become
less and less conscious of these beliefs and values, and it will begin to
treat them more and more as nonnegotiable assumptions. As this
process continues, these assumptions will gradually drop out of
awareness and come to be taken for granted. As assumptions come
to be taken for granted they become part of the identity of the group;
are taught to newcomers as the way to think, feel, and act; and,
if violated, produce discomfort, anxiety, ostracism, and eventually
excommunication. This concept of assumptions, as opposed to beliefs
and values, implies nonnegotiability. If we are willing to argue about
something, then it has not become taken for granted. Therefore, def-
initions of culture that deal with values must specify that culture con-
sists of nonnegotiable values—which I am calling assumptions.
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In summary, we can think of culture as the accumulated shared
learning of a given group, covering behavioral, emotional, and cog-
nitive elements of the group members’ total psychological func-
tioning. For such shared learning to occur, there must be a history
of shared experience that, in turn, implies some stability of mem-
bership in the group. Given such stability and a shared history, the
human need for stability, consistency, and meaning will cause the
various shared elements to form into patterns that eventually can
be called a culture.
Culture Formally Defined
The culture of a group can now be defined as a pattern of shared basic
assumptions that was learned by a group as it solved its problems of exter-
nal adaptation and internal integration, that has worked well enough to
be considered valid and, therefore, to be taught to new members as the
correct way to perceive, think, and feel in relation to those problems.
I am not arguing that all groups evolve integrated cultures in
this sense. We all know of groups, organizations, and societies in
which certain beliefs and values work at cross purposes with other
beliefs and values, leading to situations full of conflict and ambigu-
ity (Martin, 2002). This may result from insufficient stability of
membership, insufficient shared history of experience, or the pres-
ence of many subgroups with different kinds of shared experiences.
Ambiguity and conflict also result from the fact that each of us
belongs to many groups, so that what we bring to any given group
is influenced by the assumptions that are appropriate to our other
groups.
But if the concept of culture is to have any utility, it should
draw our attention to those things that are the product of our
human need for stability, consistency, and meaning. Culture for-
mation is always, by definition, a striving toward patterning and
integration, even though in many groups their actual history of
experiences prevents them from ever achieving a clear-cut, unam-
biguous paradigm.
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If a group’s culture is the result of that group’s accumulated
learning, how do we describe and catalogue the content of that
learning? All group and organizational theories distinguish two
major sets of problems that all groups, no matter what their size,
must deal with: (1) survival, growth, and adaptation in their envi-
ronment; and (2) internal integration that permits daily function-
ing and the ability to adapt and learn. Both of these areas of group
functioning will reflect the larger cultural context in which the
group exists and from which are derived broader and deeper basic
assumptions about the nature of reality, time, space, human nature,
and human relationships. Each of these areas will be explained in
detail in later chapters.
At this point, it is important to discuss several other elements
that are important to our formal definition of culture.
The Process of Socialization
Once a group has a culture, it will pass elements of this culture on to
new generations of group members (Louis, 1980; Schein, 1968; Van
Maanen, 1976; Van Maanen and Schein, 1979). Studying what new
members of groups are taught is, in fact, a good way to discover some
of the elements of a culture; however, by this means one only learns
about surface aspects of the culture—especially because much of
what is at the heart of a culture will not be revealed in the rules of
behavior taught to newcomers. It will only be revealed to members
as they gain permanent status and are allowed into the inner circles
of the group in which group secrets are shared.
On the other hand, how one learns and the socialization pro-
cesses to which one is subjected may indeed reveal deeper assump-
tions. To get at those deeper levels one must try to understand the
perceptions and feelings that arise in critical situations, and one
must observe and interview regular members or “old-timers” to get
an accurate sense of the deeper-level assumptions that are shared.
Can culture be learned through anticipatory socialization or
self-socialization? Can new members discover for themselves what
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the basic assumptions are? Yes and no. We certainly know that one
of the major activities of any new member when she enters a new
group is to decipher the operating norms and assumptions. But this
deciphering can be successful only through the feedback that is
meted out by old members to new members as they experiment
with different kinds of behavior. In this sense, there is always a
teaching process going on, even though it may be quite implicit and
unsystematic.
If the group does not have shared assumptions, as will some-
times be the case, the new member’s interaction with old members
will be a more creative process of building a culture. But once
shared assumptions exist, the culture survives through teaching
them to newcomers. In this regard culture is a mechanism of social
control and can be the basis for explicitly manipulating members
into perceiving, thinking, and feeling in certain ways (Van Maanen
and Kunda, 1989; Kunda, 1992; Schein, 1968). Whether or not we
approve of this as a mechanism of social control is a separate ques-
tion that will be addressed later.
Behavior Is Derivative, Not Central
This formal definition of culture does not include overt behavior
patterns (although some such behavior—particularly formal ritu-
als—does reflect cultural assumptions). Instead, it emphasizes that
the critical assumptions deal with how we perceive, think about,
and feel about things. Overt behavior is always determined both by
the cultural predisposition (the perceptions, thoughts, and feelings
that are patterned) and by the situational contingencies that arise
from the immediate external environment.
Behavioral regularities can occur for reasons other than shared
culture. For example, if we observe that all members of a group
cower in the presence of a large, loud leader, this could be based on
biological, reflex reactions to sound and size, or on individual or
shared learning. Such a behavioral regularity should not, therefore,
be the basis for defining culture—though we might later discover
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that, in a given group’s experience, cowering is indeed a result of
shared learning and, therefore, a manifestation of deeper shared
assumptions. To put it another way, when we observe behavior reg-
ularities, we do not know whether or not we are dealing with a cul-
tural manifestation. Only after we have discovered the deeper layers
that I define as the essence of culture can we specify what is and
what is not an artifact that reflects the culture.
Can a Large Organization or
Occupation Have One Culture?
My formal definition does not specify the size of social unit to which
it can legitimately be applied. Our experience with large organiza-
tions tells us that at a certain size the variations among the sub-
groups is substantial, suggesting that it might not be appropriate to
talk of the culture of an IBM or a General Motors or Shell. In the
evolution of DEC over its thirty-five-year history one can see both
a strong overall corporate culture and the growth of powerful sub-
cultures that reflected the larger culture but also differed in impor-
tant ways (Schein, 2003). In fact, the growing tensions among the
subcultures were partly the reason why DEC as an economic entity
ultimately failed to survive.
Do Occupations Have Cultures?
If an occupation involves an intense period of education and
apprenticeship, there will certainly be a shared learning of attitudes,
norms, and values that eventually will become taken-for-granted
assumptions for the members of those occupations. It is assumed
that the beliefs and values learned during this time will remain sta-
ble as assumptions even though the person may not always be in a
group of occupational peers. But reinforcement of those assump-
tions occurs at professional meetings and continuing education ses-
sions, and by virtue of the fact that the practice of the occupation
often calls for teamwork among several members of the occupation,
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who reinforce each other. One reason why so many occupations
rely heavily on peer-group evaluation is that this process preserves
and protects the culture of the occupation.
Determining which sets of assumptions apply to a whole society,
or a whole organization, or a whole subgroup within an organization
or occupation, should be done empirically. I have found all kinds of
combinations; their existence is one reason why some theorists
emphasize that organizational cultures can be integrated, differenti-
ated, or fragmented (Martin, 2002). But for the purpose of defining
culture, it is important to recognize that a fragmented or differenti-
ated organizational culture usually reflects a multiplicity of subcul-
tures, and within those subcultures there are shared assumptions.
Are Some Assumptions More Important than Others?
As we will see when we examine some of our cases more closely,
organizations do seem to function primarily in terms of some core
of assumptions, some smaller set that can be thought of as the cul-
tural paradigm or the governing assumptions, or as critical “genes”
in the “cultural DNA.” For the researcher, the problem is that dif-
ferent organizations will have different paradigms with different
core assumptions. As a result, cultural typologies can be very mis-
leading. One could measure many organizations on the same core
dimensions, but in some of those organizations a particular dimen-
sion could be central to the paradigm, whereas in others its influ-
ence on the organization’s behavior could be quite peripheral.
If the total set of shared basic assumptions of a given organiza-
tional culture can be thought of as its DNA, then we can examine
some of the individual genes in terms of their centrality or potency
in forcing certain kinds of growth and behavior, and other genes in
terms of their power to inhibit or prevent certain kinds of behavior.
We can then see that certain kinds of cultural evolution are deter-
mined by the “genetic structure,” the kind of “autoimmune system”
that the organization generates, and the impact of “mutations and
hybridization.”
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Summary and Conclusions
In this chapter I introduced the concept of culture and have argued
that it helps to explain some of the more seemingly incomprehen-
sible and irrational aspects of what goes on in groups and organiza-
tions. The variety of elements that people perceive to be “culture”
was reviewed, leading to a formal definition that puts the emphasis
on shared learning experiences that lead, in turn, to shared, taken-
for-granted basic assumptions held by the members of the group or
organization.
It follows that any group with a stable membership and a history
of shared learning will have developed some level of culture, but a
group that has had either considerable turnover of members and
leaders or a history lacking in any kind of challenging events may
well lack any shared assumptions. Not every collection of people
develops a culture; in fact, we tend to use the term group rather
than, say, crowd or collection of people only when there has been
enough of a shared history for some degree of culture formation to
have taken place.
Once a set of shared assumptions has come to be taken for
granted, it determines much of the group’s behavior, and the rules
and norms are taught to newcomers in a socialization process that
is itself a reflection of culture. To define culture one must go below
the behavioral level, because behavioral regularities can be caused
by forces other than culture. Even large organizations and entire
occupations can have a common culture if there has been enough
of a history of shared experience. Finally, I noted that the shared
assumptions will form a paradigm, with more or less central or gov-
erning assumptions driving the system, much as certain genes drive
the genetic structure of human DNA.
Culture and leadership are two sides of the same coin, in that
leaders first create cultures when they create groups and organiza-
tions. Once cultures exist they determine the criteria for leadership
and thus determine who will or will not be a leader. But if elements
of a culture become dysfunctional, it is the unique function of lead-
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ership to be able to perceive the functional and dysfunctional ele-
ments of the existing culture and to manage cultural evolution and
change in such a way that the group can survive in a changing envi-
ronment.
The bottom line for leaders is that if they do not become con-
scious of the cultures in which they are embedded, those cultures
will manage them. Cultural understanding is desirable for all of us,
but it is essential to leaders if they are to lead.
A final note: from this point on I will use the term group to refer
to social units of all sizes—including organizations and subunits of
organizations—except when it is necessary to distinguish the type
of social unit because of subgroups that exist within larger groups.
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25
2
T H E L E V E L S O F C U LT U R E
The purpose of this chapter is to show that culture can be analyzed
at several different levels, with the term level meaning the degree to
which the cultural phenomenon is visible to the observer. Some of
the confusion surrounding the definition of what culture really is
results from not differentiating the levels at which it manifests itself.
These levels range from the very tangible overt manifestations that
one can see and feel to the deeply embedded, unconscious, basic
assumptions that I am defining as the essence of culture. In between
these layers are various espoused beliefs, values, norms, and rules of
behavior that members of the culture use as a way of depicting the
culture to themselves and others.
Many other culture researchers prefer the term basic values to
describe the concept of the deepest levels. I prefer basic assumptions
because these tend to be taken for granted by group members and
are treated as nonnegotiable. Values are open to discussion and peo-
ple can agree to disagree about them. Basic assumptions are so
taken for granted that someone who does not hold them is viewed
as a “foreigner” or as “crazy” and is automatically dismissed.
The major levels of cultural analysis are shown in Figure 2.1.
Artifacts
At the surface is the level of artifacts, which includes all the phe-
nomena that one sees, hears, and feels when one encounters a new
group with an unfamiliar culture. Artifacts include the visible
products of the group, such as the architecture of its physical
Schein.c02 6/14/04 9:19 AM Page 25
environment; its language; its technology and products; its artistic
creations; its style, as embodied in clothing, manners of address,
emotional displays, and myths and stories told about the organiza-
tion; its published lists of values; its observable rituals and cere-
monies; and so on.
The “climate” of the group is an artifact of the deeper cultural
levels, as is the visible behavior of its members. Artifacts also
include, for purposes of cultural analysis, the organizational pro-
cesses by which such behavior is made routine, and structural ele-
ments such as charters, formal descriptions of how the organization
works, and organization charts.
The most important point to be made about this level of the cul-
ture is that it is both easy to observe and very difficult to decipher.
The Egyptians and the Mayans both built highly visible pyramids,
but the meaning of pyramids in each culture was very different—
tombs in one, temples as well as tombs in the other. In other words,
observers can describe what they see and feel, but cannot recon-
26 O R G A N I Z A T I O N A L C U L T U R E A N D L E A D E R S H I P
Figure 2.1. Levels of Culture.
Strategies, goals,
philosophies
(espoused justifications)
Unconscious, taken-for-granted
beliefs, perceptions, thoughts,
and feelings. . .
(ultimate source of values and
action)
Underlying
Assumptions
Espoused Beliefs
and Values
Visible organizational
structures and processes
(hard to decipher)
Artifacts
Copyright © E. H. Schein. Not to be reproduced without permission of author.
Schein.c02 6/14/04 9:19 AM Page 26
struct from that alone what those things mean in the given group,
or whether they even reflect important underlying assumptions.
On the other hand, one school of thought argues that one’s own
response to physical artifacts such as buildings and office layouts can
lead to the identification of major images and root metaphors that
reflect the deepest level of the culture (Gagliardi, 1990). This kind
of immediate insight would be especially relevant if the organiza-
tion one is experiencing is in the same larger culture as the re-
searcher. The problem is that symbols are ambiguous, and one can
only test one’s insight into what something may mean if one has
also experienced the culture at the deeper levels of values and
assumptions.
It is especially dangerous to try to infer the deeper assumptions
from artifacts alone, because one’s interpretations will inevitably be
projections of one’s own feelings and reactions. For example, when
one sees a very informal, loose organization, one may interpret that
as inefficient if one’s own background is based on the assumption
that informality means playing around and not working. Or, alter-
natively, if one sees a very formal organization, one may interpret
that to be a sign of lack of innovative capacity, if one’s own experi-
ence is based on the assumption that formality means bureaucracy
and formalization.
Every facet of a group’s life produces artifacts, creating the prob-
lem of classification. In reading cultural descriptions, one often
notes that different observers choose to report on different sorts of
artifacts, leading to noncomparable descriptions. Anthropologists
have developed classification systems, but these tend to be so vast
and detailed that cultural essence becomes difficult to discern.
If the observer lives in the group long enough, the meanings of
artifacts gradually become clear. If, however, one wants to achieve
this level of understanding more quickly, one can attempt to ana-
lyze the espoused values, norms, and rules that provide the day-to-
day operating principles by which the members of the group guide
their behavior. This kind of inquiry takes us to the next level of cul-
tural analysis.
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Espoused Beliefs and Values
All group learning ultimately reflects someone’s original beliefs and
values, their sense of what ought to be, as distinct from what is.
When a group is first created or when it faces a new task, issue, or
problem, the first solution proposed to deal with it reflects some indi-
vidual’s own assumptions about what is right or wrong, what will
work or not work. Those individuals who prevail, who can influence
the group to adopt a certain approach to the problem, will later be
identified as leaders or founders, but the group does not yet have any
shared knowledge as a group because it has not yet taken a common
action in reference to whatever it is supposed to do. Whatever is pro-
posed will only be perceived as what the leader wants. Until the
group has taken some joint action and together observed the out-
come of that action, there is not as yet a shared basis for determin-
ing whether what the leader wants will turn out to be valid.
For example, in a young business, if sales begin to decline a man-
ager may say “We must increase advertising” because of her belief
that advertising always increases sales. The group, never having
experienced this situation before, will hear that assertion as a state-
ment of that manager’s beliefs and values: “She believes that when
one is in trouble it is a good thing to increase advertising.” What the
leader initially proposes, therefore, cannot have any status other
than a value to be questioned, debated, challenged, and tested.
If the manager convinces the group to act on her belief, and if
the solution works, and if the group has a shared perception of that
success, then the perceived value that advertising is good gradually
becomes transformed: first into a shared value or belief, and ulti-
mately into a shared assumption (if actions based on it continue to
be successful). If this transformation process occurs, group members
will tend to forget that originally they were not sure and that the
proposed course of action was at an earlier time just a proposal to be
debated and confronted.
Not all beliefs and values undergo such transformation. First of
all, the solution based on a given value may not work reliably. Only
those beliefs and values that can be empirically tested and that con-
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tinue to work reliably in solving the group’s problems will become
transformed into assumptions. Second, certain value domains—
those dealing with the less controllable elements of the environ-
ment or with aesthetic or moral matters—may not be testable at all.
In such cases, consensus through social validation is still possible,
but it is not automatic.
By social validation I mean that certain values are confirmed only
by the shared social experience of a group. For example, any given
culture cannot prove that its religion and moral system are superior
to another culture’s religion and moral system, but if the members
reinforce each others’ beliefs and values, they come to be taken for
granted. Those who fail to accept such beliefs and values run the
risk of “excommunication”—of being thrown out of the group.
Such beliefs and values typically involve the group’s internal rela-
tions; the test of whether they work or not is how comfortable and
anxiety-free members are when they abide by them. Social valida-
tion also applies to those broader values that are not testable, such
as ethics and aesthetics.
In these realms the group learns that certain beliefs and values,
as initially promulgated by prophets, founders, and leaders, “work”
in the sense of reducing uncertainty in critical areas of the group’s
functioning. And, as they continue to work, they gradually become
transformed into nondiscussible assumptions supported by articu-
lated sets of beliefs, norms, and operational rules of behavior. The
derived beliefs and moral and ethical rules remain conscious and are
explicitly articulated because they serve the normative or moral
function of guiding members of the group in how to deal with cer-
tain key situations, and in training new members how to behave. A
set of beliefs and values that become embodied in an ideology or
organizational philosophy thus can serve as a guide and as a way of
dealing with the uncertainty of intrinsically uncontrollable or diffi-
cult events. An example of such an ideology is Hewlett-Packard’s
The HP Way (Packard, 1995).
Beliefs and values at this conscious level will predict much of
the behavior that can be observed at the artifacts level. But if those
beliefs and values are not based on prior learning, they may also
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reflect only what Argyris and Schön (1978) have called “espoused
theories,” which predict well enough what people will say in a vari-
ety of situations but which may be out of line with what they will
actually do in situations in which those beliefs and values should, in
fact, be operating. Thus, a company may say that it values people
and that it has high quality standards for its products, but its record
in that regard may contradict what it says.
If the espoused beliefs and values are reasonably congruent with
the underlying assumptions, then the articulation of those values
into a philosophy of operating can be helpful in bringing the group
together, serving as a source of identity and core mission. But in
analyzing beliefs and values one must discriminate carefully be-
tween those that are congruent with underlying assumptions and
those that are, in effect, either rationalizations or only aspirations
for the future. Often such lists of beliefs and values are so abstract
that they can be mutually contradictory, as when a company claims
to be equally concerned about stockholders, employees, and cus-
tomers, or when it claims both highest quality and lowest cost.
Espoused beliefs and values often leave large areas of behavior
unexplained, leaving us with a feeling that we understand a piece
of the culture but still do not have the culture as such in hand. To
get at that deeper level of understanding, to decipher the pattern,
and to predict future behavior correctly, we have to understand
more fully the category of basic underlying assumptions.
Basic Underlying Assumptions
When a solution to a problem works repeatedly, it comes to be
taken for granted. What was once a hypothesis, supported only by
a hunch or a value, gradually comes to be treated as a reality. We
come to believe that nature really works this way. Basic assump-
tions, in this sense, are different from what some anthropologists
called “dominant value orientations” in that such dominant orien-
tations reflect the preferred solution among several basic alterna-
tives, but all the alternatives are still visible in the culture, and any
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given member of the culture could, from time to time, behave ac-
cording to variant as well as dominant orientations (Kluckhohn
and Strodtbeck, 1961).
Basic assumptions, in the sense in which I want to define that
concept, have become so taken for granted that one finds little vari-
ation within a social unit. This degree of consensus results from
repeated success in implementing certain beliefs and values, as pre-
viously described. In fact, if a basic assumption comes to be strongly
held in a group, members will find behavior based on any other
premise inconceivable. For example, a group whose basic assump-
tion is that the individual’s rights supersede those of the group mem-
bers would find it inconceivable that members would commit suicide
or in some other way sacrifice themselves to the group even if they
had dishonored the group. In a capitalist country, it is inconceivable
that one might design a company to operate consistently at a finan-
cial loss, or that it does not matter whether or not a product works.
In an occupation such as engineering, it would be inconceivable to
deliberately design something that is unsafe; it is a taken-for-granted
assumption that things should be safe. Basic assumptions, in this
sense, are similar to what Argyris has identified as “theories-in-
use”—the implicit assumptions that actually guide behavior, that
tell group members how to perceive, think about, and feel about
things (Argyris, 1976; Argyris and Schön, 1974).
Basic assumptions, like theories-in-use, tend to be noncon-
frontable and nondebatable, and hence are extremely difficult to
change. To learn something new in this realm requires us to resur-
rect, reexamine, and possibly change some of the more stable por-
tions of our cognitive structure—a process that Argyris and others
have called “double-loop learning,” or “frame breaking” (Argyris et
al., 1985; Bartunek, 1984). Such learning is intrinsically difficult
because the reexamination of basic assumptions temporarily desta-
bilizes our cognitive and interpersonal world, releasing large quan-
tities of basic anxiety.
Rather than tolerating such anxiety levels, we tend to want to
perceive the events around us as congruent with our assumptions,
T H E L E V E L S O F C U L T U R E 31
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even if that means distorting, denying, projecting, or in other ways
falsifying to ourselves what may be going on around us. It is in this
psychological process that culture has its ultimate power. Culture as
a set of basic assumptions defines for us what to pay attention to,
what things mean, how to react emotionally to what is going on,
and what actions to take in various kinds of situations. Once we
have developed an integrated set of such assumptions—a “thought
world” or “mental map”—we will be maximally comfortable with
others who share the same set of assumptions and very uncomfort-
able and vulnerable in situations where different assumptions oper-
ate, because either we will not understand what is going on, or,
worse, we will misperceive and misinterpret the actions of others
(Douglas, 1986).
The human mind needs cognitive stability; therefore, any chal-
lenge or questioning of a basic assumption will release anxiety and
defensiveness. In this sense, the shared basic assumptions that make
up the culture of a group can be thought of at both the individual
and the group level as psychological cognitive defense mechanisms
that permit the group to continue to function. Recognizing this con-
nection is important when one thinks about changing aspects of a
group’s culture, for it is no easier to do that than to change an indi-
vidual’s pattern of defense mechanisms. As was pointed out in Chap-
ter One, we can also think of culture at this level as the group’s
DNA, so if new learning or growth is required, the genes have to be
there to make such growth possible and the autoimmune system has
to be neutralized to sustain new growth. In any case, the two keys
to successful culture change are (1) the management of the large
amounts of anxiety that accompany any relearning at this level and
(2) the assessment of whether the genetic potential for the new
learning is even present.
To illustrate how unconscious assumptions can distort data,
consider the following example. If we assume, on the basis of past
experience or education, that other people will take advantage of
us whenever they have an opportunity, we expect to be taken
advantage of and we then interpret the behavior of others in a way
32 O R G A N I Z A T I O N A L C U L T U R E A N D L E A D E R S H I P
Schein.c02 6/14/04 9:19 AM Page 32
that coincides with those expectations. We observe people sitting
in a seemingly idle posture at their desk and interpret their behav-
ior as “loafing” rather than “thinking out an important problem.”
We perceive absence from work as “shirking” rather than “doing
work at home.”
If this is not only a personal assumption but also one that is
shared and thus part of the culture of an organization, we will dis-
cuss with others what to do about our “lazy” workforce and institute
tight controls to ensure that people are at their desks and busy. If
employees suggest that they do some of their work at home, we will
be uncomfortable and probably deny the request because we will fig-
ure that at home they would loaf (Bailyn, 1992; Perin, 1991).
In contrast, if we assume that everyone is highly motivated and
competent, we will act in accordance with that assumption by
encouraging people to work at their own pace and in their own way.
If someone is discovered to be unproductive in such an organiza-
tion, we will make the assumption that there is a mismatch between
the person and the job assignment, not that the person is lazy or
incompetent. If the employee wants to work at home, we will per-
ceive that as evidence of his wanting to be productive even if cir-
cumstances required him to be at home.
In both cases there is the potential for distortion, in that the cyn-
ical manager will not perceive how highly motivated some of the
subordinates really are, and the idealistic manager will not perceive
that there are subordinates who are lazy and who are taking advan-
tage of the situation. As McGregor noted many decades ago, such
assumptions about “human nature” become the basis of manage-
ment and control systems that perpetuate themselves because if peo-
ple are treated consistently in terms of certain basic assumptions,
they come eventually to behave according to those assumptions in
order to make their world stable and predictable (McGregor, 1960).
Unconscious assumptions sometimes lead to ridiculously tragic
situations, as illustrated by a common problem experienced by
American supervisors in some Asian countries. A manager who
comes from an American pragmatic tradition assumes and takes it
T H E L E V E L S O F C U L T U R E 33
Schein.c02 6/14/04 9:19 AM Page 33
for granted that solving a problem always has the highest priority.
When that manager encounters a subordinate who comes from a
different cultural tradition, in which good relationships and pro-
tecting the superior’s “face” are assumed to have top priority, the fol-
lowing scenario has often resulted.
The manager proposes a solution to a given problem. The sub-
ordinate knows that the solution will not work, but his unconscious
assumption requires that he remain silent because to tell the boss
that the proposed solution is wrong is a threat to the boss’s face. It
would not even occur to the subordinate to do anything other than
remain silent or, if the boss were to inquire what the subordinate
thought, to even reassure the boss that they should go ahead and
take the action.
The action is taken, the results are negative, and the boss,
somewhat surprised and puzzled, asks the subordinate what he
would have done. When the subordinate reports that he would
have done something different, the boss quite legitimately asks why
the subordinate did not speak up sooner. This question puts the sub-
ordinate into an impossible double bind because the answer itself is
a threat to the boss’s face. He cannot possibly explain his behavior
without committing the very sin he was trying to avoid in the first
place—namely, embarrassing the boss. He may even lie at this point
and argue that what the boss did was right and only “bad luck” or
uncontrollable circumstances prevented it from succeeding.
From the point of view of the subordinate, the boss’s behavior
is incomprehensible because it shows lack of self-pride, possibly
causing the subordinate to lose respect for that boss. To the boss, the
subordinate’s behavior is equally incomprehensible. He cannot
develop any sensible explanation of his subordinate’s behavior that
is not cynically colored by the assumption that the subordinate at
some level just does not care about effective performance and there-
fore must be gotten rid of. It never occurs to the boss that another
assumption—such as “one never embarrasses a superior”—is oper-
ating, and that, to the subordinate, that assumption is even more
powerful than “one gets the job done.”
34 O R G A N I Z A T I O N A L C U L T U R E A N D L E A D E R S H I P
Schein.c02 6/14/04 9:19 AM Page 34
If assumptions such as these operate only in an individual and
represent her idiosyncratic experience, they can be corrected more
easily because the person will detect that she is alone in holding a
given assumption. The power of culture comes about through the
fact that the assumptions are shared and, therefore, mutually rein-
forced. In these instances probably only a third party or some cross-
cultural education could help to find common ground whereby both
parties could bring their implicit assumptions to the surface. And
even after they have surfaced, such assumptions would still operate,
forcing the boss and the subordinate to invent a whole new com-
munication mechanism that would permit each to remain congru-
ent with his or her culture—for example, agreeing that, before any
decision is made and before the boss has stuck his neck out, the sub-
ordinate will be asked for suggestions and for factual data that would
not be face threatening. Note that the solution has to keep each
cultural assumption intact. One cannot in these instances simply
declare one or the other cultural assumption “wrong.” One has to
find a third assumption to allow them both to retain their integrity.
I have dwelled on this long example to illustrate the potency of
implicit, unconscious assumptions and to show that such assump-
tions often deal with fundamental aspects of life—the nature of time
and space, human nature and human activities, the nature of truth
and how one discovers it, the correct way for the individual and the
group to relate to each other, the relative importance of work, fam-
ily, and self-development, the proper role of men and women, and
the nature of the family. These assumptions form the core cultural
content as will be discussed in Chapters Seven, Eight, and Nine.
We do not develop new assumptions about each of these areas
in every group or organization we join. Members of any new group
will bring their own cultural learning from prior groups, from their
education, and from their socialization into occupational commu-
nities, but as the new group develops its own shared history, it will
develop modified or brand-new assumptions in critical areas of its
experience. It is those new assumptions that make up the culture of
that particular group.
T H E L E V E L S O F C U L T U R E 35
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Any group’s culture can be studied at these three levels—the
level of its artifacts, the level of its espoused beliefs and values, and
the level of its basic underlying assumptions. If one does not deci-
pher the pattern of basic assumptions that may be operating, one
will not know how to interpret the artifacts correctly or how much
credence to give to the articulated values. In other words, the es-
sence of a culture lies in the pattern of basic underlying assump-
tions, and once one understands those, one can easily understand
the other more surface levels and deal appropriately with them.
Summary and Conclusions
Though the essence of a group’s culture is its pattern of shared, basic
taken-for-granted assumptions, the culture will manifest itself at the
level of observable artifacts and shared espoused beliefs and values.
In analyzing cultures, it is important to recognize that artifacts are
easy to observe but difficult to decipher and that espoused beliefs and
values may only reflect rationalizations or aspirations. To understand
a group’s culture, one must attempt to get at its shared basic assump-
tions and one must understand the learning process by which such
basic assumptions come to be.
Leadership is originally the source of the beliefs and values that
get a group moving in dealing with its internal and external prob-
lems. If what leaders propose works, and continues to work, what
once were only the leader’s assumptions gradually come to be shared
assumptions. Once a set of shared basic assumptions is formed by
this process, it can function as a cognitive defense mechanism both
for the individual members and for the group as a whole. In other
words, individuals and groups seek stability and meaning. Once
achieved, it is easier to distort new data by denial, projection, ra-
tionalization, or various other defense mechanisms than to change
the basic assumption. As we will see, culture change, in the sense
of changing basic assumptions is, therefore, difficult, time-con-
suming, and highly anxiety-provoking—a point that is especially
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Schein.c02 6/14/04 9:19 AM Page 36
relevant for the leader who sets out to change the culture of the
organization.
The most central issue for leaders, therefore, is how to get at the
deeper levels of a culture, how to assess the functionality of the
assumptions made at that level, and how to deal with the anxiety
that is unleashed when those levels are challenged.
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- Organizational Culture and Leadership
Contents
Preface
The Author
Part One: Organizational Culture and Leadership Defined
1. The Concept of Organizational Culture: Why Bother?
2. The Levels of Culture
3. Cultures in Organizations: Two Case Examples
4. How Culture Emerges in New Groups
Part Two: The Dimensions of Culture
5. Assumptions About External Adaptation Issues
6. Assumptions About Managing Internal Integration
7. Deeper Cultural Assumptions About Reality and Truth
8. Assumptions About the Nature of Time and Space
9. Assumptions About Human Nature, Activity, and Relationships
10. Cultural Typologies
11. Deciphering Culture
Part Three: The Leadership Role in Culture Building, Embedding, and Evolving
12. How Leaders Begin Culture Creation
13. How Leaders Embed and Transmit Culture
14. The Changing Role of Leadership in Organizational “Midlife”
15. What Leaders Need to Know About How Culture Changes
16. A Conceptual Model for Managed Culture Change
17. Assessing Cultural Dimensions: A Ten-Step Intervention
18. A Case of Organizational (Cultural?) Change
19. The Learning Culture and the Learning Leader
References
Index
What leaders need to know about
organizational culture
D. D. Warrick
Graduate School of Business, University of Colorado, Colorado Springs, 1420 Austin Bluffs Parkway,
Colorado Springs, CO 80918, U.S.A.
Business Horizons (2017) 60, 395—404
Available online at www.sciencedirect.com
ScienceDirect
www.elsevier.com/locate/bushor
KEYWORDS
Organizational culture;
Culture building;
Organizational
leadership;
Organizational values;
Leadership influence
Abstract A major factor in the success of an organization is its culture. Organiza-
tional culture can significantly influence the performance and effectiveness of a
company; the morale and productivity of its employees; and its ability to attract,
motivate, and retain talented people. Unfortunately, many leaders are either
unaware of the significant impact culture can have, are aware but overwhelmed
by the extensive and sometimes conflicting information available on culture, or are
not well informed about how to build and sustain cultures effectively. This article
integrates the most consistent findings that leaders need to know about culture and
what they can do to build strong, successful cultures that bring out the best in people.
Developing organizational culture requires far more than talk about culture and
emphasis on its importance. In order to achieve the best results, culture develop-
ment requires leaders who see it as one of their key tasks and who understand the
importance of aligning organization strategies and decision making with cultural
ideals.
# 2017 Kelley School of Business, Indiana University. Published by Elsevier Inc. All
rights reserved.
1. Culture matters
Culture has been the long-time focus of anthropol-
ogists as they seek to understand different groups
around the globe. However, it has been only recent-
ly that organizational researchers have begun to
discover the close links between culture, the per-
formance of organizations, and the behavior and
attitudes of people in organizations. Culture is
E-mail address: dwarrick@uccs.edu
0007-6813/$ — see front matter # 2017 Kelley School of Business, I
http://dx.doi.org/10.1016/j.bushor.2017.01.011
recognized as such a significant factor in the success
of organizations that Fortune’s annual 100 Best
Companies To Work For report is based primarily
on information employees anonymously report
about their workplace culture (Levering, 2016).
Culture is increasingly becoming a concern of
skilled leaders. Tony Hsieh, the CEO of Zappos,
has said, “At Zappos, our belief is that if you get
the culture right, most of the other stuff–—like great
customer service, or building a great long-term
brand, or passionate employees and customers–—will
happen naturally on its own” (Hsieh, 2010, p. 152).
ndiana University. Published by Elsevier Inc. All rights reserved.
http://crossmark.crossref.org/dialog/?doi=10.1016/j.bushor.2017.01.011&domain=pdf
http://dx.doi.org/10.1016/j.bushor.2017.01.011
http://www.sciencedirect.com/science/journal/00076813
mailto:dwarrick@uccs.edu
http://dx.doi.org/10.1016/j.bushor.2017.01.011
396 D.D. Warrick
Lou Gerstner, the former chairman of IBM said,
“Culture isn’t just one aspect of the game–—it is
the game. In the end, an organization is no more
than the collective capacity of its people to create
value” (Gerstner, 2002, p. 182). Former CEO of Wells
Fargo, John Stumpf, made a similar point about the
importance of culture when he said, “It’s about the
culture. I could leave our strategy on an aeroplane
seat and have a competitor read it and it would not
make any difference” (Guerrera, 2008). Later in
this article, we will see how even in cases like Wells
Fargo (where culture is highly valued), leadership
decisions that are not carefully considered in
terms of the cultural implications can override the
intended culture.
Even if leaders recognize the importance of cul-
ture, they are unlikely to be aware of the research
indicating the significant role culture can play in an
organization’s success or failure, or they do not
have the training or knowledge of what it takes
to build successful cultures. Because of this, the
close relationship between leading and managing an
organization well and achieving a winning culture
escapes many leaders. It is the purpose of this
article to help leaders develop a better understand-
ing of culture, the advantages of having healthy
cultures, the costs of having unhealthy cultures,
and what is involved in building and sustaining
strong cultures.
2. Understanding organizational
culture
Many definitions are available to describe cul-
ture. Formally, culture can be defined as “the
[predominant] beliefs, values, attitudes, behaviors,
and practices that are characteristic of a group of
people” (Warrick, 2015, p. 4). In defining culture,
Edgar Schein, a leading authority in the study of
organizational culture, uses the word group to de-
scribe social units of all sizes (Schein, 1992). In
other words, the term group could pertain to a
whole organization or any group of people of any
size such as a country, sports team, symphony, or
family. The point is that groups of people, regard-
less of group size, are likely to form specific cul-
tures. Organization researchers typically use the
term organizational culture in a broad sense to refer
to the culture of a whole organization or any unit of
people working together within the organization.
In practical terms, organizational culture de-
scribes the environment in which people work and
the influence it has on how they think, act, and
experience work (Warrick, Milliman, & Ferguson,
2016). Cultures can differ significantly within and
between organizations. They can bring out the best
in people and create excellent environments for
people to work in or they can bring out the worst
in people and create dysfunctional environments
filled with stress and tension.
3. The impact of organizational
culture on performance and other
factors
Especially in the late 1980s and thereafter, studies
on organizational culture began to provide convinc-
ing evidence that culture can have a significant
influence on performance, morale, job satisfaction,
employee engagement and loyalty, employee atti-
tudes and motivation, turnover, commitment to
the organization, and efforts to attract and retain
talented employees (e.g., Denison, 1990; Fisher,
2000; Marcoulides & Heck, 1993; Rollins & Roberts,
1998; Weiner, 1988).
One study in particular began to catch the atten-
tion of leaders. John Kotter and James Heskett
(1992) published an 11-year evaluation of company
cultures. They found that over an 11-year period,
companies with healthy cultures had a 682% average
increase in sales versus 166% for comparable com-
panies without such healthy cultures. Similarly,
Kotter and Heskett found that these companies with
healthy cultures saw stock increases of 901% versus
74% for comparable companies. Since then, other
studies have identified the characteristics of high
and low performance cultures (see Daft, 2015;
Kilmann, Saxton, & Serpa, 1985; Lussier & Achua,
2016; Rosenthal & Masarech, 2003; Weiss, 2011). A
summary of common themes from these studies is
shown in Table 1. What becomes evident in studying
the themes is that, to a large degree, healthy
cultures are the result of effective leadership and
management whereas unhealthy cultures are the
result of ineffective leadership and management.
4. Is culture primarily the cause or
result of organization practices?
Some culture experts believe that culture is the
cure for many organizational problems. In this view,
the main remedy for problems at General Motors,
the Veterans Administration, the government, and
many other organizations is to fix the culture.
Others believe that culture is the result of organi-
zational practices and an outcome rather than
a cause. Among these are Lorsch and McTague
(2016, p. 98), who proposed that “cultural change
is what you get after you’ve put new processes or
Table 1. Characteristics of high and low performance cultures
High Performance Cultures Low Performance Cultures
Leaders are skilled, admired, and build organizations
that excel at results and at taking excellent care of their
people and their customers
Leaders provide minimal leadership, are not trusted and
admired, and do little to engage and involve their people
Clear and compelling vision, mission, goals, and strategy Vision, mission, goals, and strategy are unclear, not
compelling, not used, or do not exist
Core values drive the culture and are used in decision
making
Core values are unclear, not compelling, not used, or do
not exist
Committed to excellence, ethics, and doing things right Lack of commitment to excellence, questionable ethics,
and a reputation for doing what is expedient rather than
what is right
Clear roles, responsibilities, and success criteria, and
strong commitment to engaging, empowering, and
developing people
Unclear roles and responsibilities and little interest in
fully utilizing and developing the capabilities and
potential of people
Positive, can-do work environment Negative, tense, stressful, and/or resistant work
environment
Open, candid, straightforward, and transparent
communication
Guarded communication, reluctance to be open and
straightforward, and consequences for saying things
leaders do not want to hear
Teamwork, collaboration, and involvement are the norm Top-down decision making with minimal teamwork,
collaboration, and involvement
Emphasis on constant improvement and state-of-the-art
knowledge and practices
Slow to make needed improvements and behind times in
knowledge and practices
Willingness to change, adapt, learn from successes and
mistakes, take reasonable risk, and try new things
Poorly planned change, resistance to change, minimal
learning from successes and mistakes, and either risk
averse or risk foolish
Source: Adapted from Warrick (2016)
What leaders need to know about organizational culture 397
structures in place to tackle tough business
challenges like reworking an outdated strategy or
business model. The culture evolves as you do that
important work.”
Each stance presented above possesses an ele-
ment of truth, in both that culture significantly
affects how an organization is run and organization
practices significantly affect organizational cul-
ture. In other words, both are important, both
affect the other, and both need attention to achieve
the best results. Strong cultures cannot be achieved
without running an organization well and running
an organization well requires efforts on the part
of leaders in building and sustaining culture.
5. Insights about culture of which
leaders need to be aware
For leaders to sort through and make sense of the
many culture articles and books could be a daunt-
ing, complex, and at times confusing process.
Therefore, an effort is made here to summarize
some of the consistent findings about organizational
culture of which leaders need to be aware. The
point of making leaders aware of the many factors
that can influence culture is not to preoccupy them
with concerns about culture but rather to make
them better informed and discerning about key
factors and decisions that can either build and
sustain culture or adversely affect it.
5.1. The influence of leaders in shaping
culture
Although many factors influence culture, organiza-
tional cultures primarily reflect their leaders. Lead-
ers influence culture through their strategies,
practices, values, leadership style, and example
(Steers & Shim, 2013). The impact of leaders on
culture is particularly influential at the top level.
Tony Hsieh was the primary architect of the Zappos
culture (Warrick et al., 2016). Jeff Immelt was able
to make significant changes in the culture of IBM
(Brady, 2005). Tim Cook has reinforced the positive
aspects of the Apple culture and has made changes
that have improved the Apple culture (Tyrangiel,
2012). Although culture is often thought to be
resistant to change, Alan Mulally was able to change
the culture of a struggling Ford Motor Company and
398 D.D. Warrick
transform the performance of Ford in a relatively
short time span (Hoffman, 2012).
The examples mentioned above are positive
examples of a leader’s influence on culture.
However, it should be pointed out that leaders
can also create unhealthy cultures. An ineffective
leader, a leader who is not a good fit for a desired
culture, or even a good leader who makes bad
decisions that impact an organization’s culture
can tear down or damage a culture that took decades
to build.
5.2. Dominant cultures and subcultures
When using the term organization to describe the
whole of a company or institution, it is important to
recognize that while organizations are likely to
have an overriding dominant culture that defines
them, they are also likely to have a number of
subcultures in various parts of the organization
that stray from the dominant culture (Martin
& Meyerson, 1988). The dominant culture at
Southwest Airlines encourages employees to coop-
erate with one another, take great care of custom-
ers, and have fun. However, within Southwest
Airlines there are likely to be some departments
or teams where the culture differs from the
dominant culture. Fortunately, even in unhealthy
dominant cultures, there may be pockets of excel-
lence where there are healthy cultures.
5.3. Visible and invisible factors that
define culture
Culture can be viewed on two levels (Schein, 1992).
There is a visible level that can be observed by
artifacts such as dress, office layout, office design,
and emphasis on technology. Artifacts could also
include leadership style, the nature of the work
environment, how people are treated, and how
decisions are made and get implemented. There
is also an invisible level characterized by expressed
values, underlying assumptions, and deep beliefs.
Expressed values are consciously held convictions,
clearly stated or practiced, that influence the
behavior of group members. For example, the
expressed values of the U.S. Army are loyalty, duty,
and selfless service (Crandall, 2007). These values
influence the behavior of soldiers at all levels.
Another example may be the expressed value:
“It is important to take great care of our people
and our customers.” This sentiment will create a
different culture than that of an organization with
the dominant value: “What we really care about is
maximizing bottom line results, no matter what it
takes to get there.”
5.4. The impact of traditions and group
dynamics
Leaders need to know the past and present history
of the groups they lead. Group histories will provide
insight into the traditions and dynamics that should
be sustained and those that need to change. Tradi-
tions are practices that have become common to a
group over a period of time. A group, for example,
may have a history of great teamwork, group in-
volvement in the decision making process, high-
level performance, and strong group loyalty. On
the other hand, a group might have a history of
minimal teamwork, leader-driven decision making
with little team involvement, and satisfaction with
good but not great performance. The dynamics of a
group describe its interactions and practices in
terms of how people relate and get things done.
Groups may be very cohesive and work well togeth-
er to get tasks done effectively and efficiently.
However, they may also be characterized by a
number of dysfunctional or ineffective dynamics.
5.5. Key internal and external
circumstances that may influence culture
There are a number of internal and external circum-
stances that can affect culture. Internal circum-
stances could include such things as organizational
structures, processes, systems, budgets, and lead-
ership styles; as well as changes in leadership, team
members, budgets, or other key internal decisions.
External circumstances could include situations
such as an economic recession, government regu-
lations, major lawsuits that damage the reputation
or resources of a group, acquisition by another
company, or an unexpected catastrophe.
5.6. Valued and devalued behaviors
The types of behaviors that are valued and devalued
influence the shaping of an organizational culture
significantly. People respond to behaviors, good or
bad, that are valued and rewarded, while they avoid
behaviors that are not valued or rewarded or are
devalued. Understanding this makes it important
for leaders to be discerning about the desired be-
haviors and the behaviors they are actually moti-
vating in their subordinates. For some leaders, a
careful examination of the reward system may
reveal that rewarded behaviors encourage self-
serving actions and discourage teamwork or that
going the extra mile goes unnoticed or unrewarded.
An example of how leadership decisions can have
a significant impact on culture involves the high-
profile Wells Fargo case. CEO John Stumpf allowed
What leaders need to know about organizational culture 399
the company to become overly sales oriented, and a
focus on incentives resulted in aggressive tactics to
meet sales targets. Over a 5-year period, 2+ million
accounts were opened without customer authoriza-
tion by employees who were willing to practice
unethical behavior to benefit from the sales incen-
tives. Once the practices were uncovered, Stumpf
announced a number of actions and remedies
to address the issues; however the consequences
have been far reaching. Wells Fargo was fined
$185 million by the Consumer Financial Protection
Bureau (CFPB) and Stumpf forfeited over $41 million
in unvested equity awards and resigned. Clearly, it
is important for leaders to evaluate the perfor-
mance management and reward systems as well
as their own decisions to ensure that these are
aligned with the desired culture.
5.7. Influential members
One or more influential group members can have a
significant positive or negative influence on the
culture of a group. There are group members who
bring out the best in others and contribute to a
positive work environment and there are those who
impact groups in negative ways. At the wound
center of a major medical center that I am familiar
with, Fridays are called “Valentino days” by the
staff. This is because on Fridays, Dr. Valentino is
there and he is known for treating all of the nurses
and staff like valued team members and for being
caring and uplifting. Wouldn’t we all like to be
known for creating Valentino days? Understanding
the impact that influential people can have on
culture makes it important for leaders to carefully
select the right people who are a fit with the desired
culture and to correct or deal with behaviors that
undermine the culture of groups.
5.8. Strong cultures and weak cultures
The term strong culture describes cultures that
have a significant influence on the behaviors and
practices of employees. In strong cultures, there is
a clear understanding of what the cultural values
and norms are. The term weak culture is used to
describe cultures where the norms and practices
are not well known or are confusing, inconsistent,
or not reinforced. Weak cultures are difficult
to work in because expectations are unclear and
there is little consistency in practices throughout
the organization. Strong cultures are generally
associated with much higher performance than
weak cultures (Jin, Drozdenko, & DeLoughy, 2013;
Mushtaq, Ahmad, & Tanveer, 2013). An exception to
this occurs when the culture is strong but unhealthy.
In addition to observing the strength of the culture,
leaders need to be observant of the types of
behaviors and attitudes a culture is driving and
whether they are desirable or undesirable.
5.9. Understanding international cultural
differences
With the existence of myriad multinational orga-
nizations, so many leaders involved in international
business, and virtual teams with members from
around the world, taking into account international
cultural differences is becoming increasingly impor-
tant for the success of organizations. Imposing one’s
own cultural values and practices may not be suc-
cessful in cultures that have a history of doing things
differently. Euro Disney experienced substantial
losses in its first 2 years of operation at least
partially due to a lack of understanding of cultural
differences in Europe. To begin with, the name Euro
Disney turned out to be a hindrance, as Europeans
associated “Euro” with the continental money unit
rather than a coverall term for European. As a
result, the amusement park’s name essentially
translated as “Dollar Disney.” Disney also ignored
the necessity to provide kennels in a culture where
people often travel with dogs, creating problems for
potential guests. Another issue arose in cultural
dining differences, as Disney’s plastic utensils failed
to impress guests who take great pride in the
culinary experience.
The key for leaders, just as would be the case in
understanding different domestic cultures, is to
take the time to learn as much as possible about
the cultures they are dealing with and to involve
those who have a good understanding of the culture
in making decisions where culture could be an
issue. McDonald’s restaurants operate in more than
100 countries. While McDonald’s headquarters is
U.S.-based, the company entrusts local operations
to managers from the countries in which they
operate.
5.10. The vulnerability of culture
Cultures are like precious and prized treasures
when they are strong, healthy, and driving the right
behaviors. They are among the greatest assets an
organization can have. However, they are vulnera-
ble assets that can be damaged or lost if leaders are
not aware of their value and are not keeping watch
over possible culture-changing practices, attitudes,
threats, or events.
There are many variables that can impact culture
and may need to be dealt with and managed to
avoid possible cultural damage. For example,
Table 2. Guidelines for building and sustaining
cultures
1. Make strategy and culture important leadership
priorities
2. Develop a clear understanding of the present
culture
3. Identify, communicate, educate, and engage
employees in the cultural ideals
4. Role model desired behaviors
5. Recruit and develop for culture
6. Align for consistency between strategy and
culture
7. Recognize and reward desired behaviors and
practices
8. Use symbols, ceremonies, socialization, and
stories to reinforce culture
9. Appoint a culture team
10. Monitor and manage the culture
400 D.D. Warrick
changes in culture can occur because of budget
cuts, rapid market changes, economic downturns,
natural disasters, compromises in adhering to core
values, and especially changes in ownership, lead-
ership, or leadership practices. It will be interesting
to see if changes will occur in the well-documented
and acclaimed culture of Zappos now that the
primary architect of the culture, Tony Hsieh, has
introduced Holacracy (a self-management organi-
zational system marketed by HolacracyOne). Holac-
racy is essentially a boss-less, self-managed form
of organization design. The Wall Street Journal
(Silverman, 2015) reported that since the introduc-
tion of Holacracy, Zappos said that about 14% of its
roughly 1,500 employees decided to leave because
the new organizational system was not for them.
Previously, Zappos had been known for exception-
ally low turnover.
5.11. Successes and Challenges
In general, success is likely to unite and instill pride
in a group and make a culture stronger. Therefore,
celebrating and communicating successes can build
culture. While success typically strengthens cul-
ture, leaders need to be sensitive to the impact
of success as it could also lead to complacency,
overconfidence, and possible erosion of positive
cultural norms. Marginal or declining results tend
to undermine positive cultural norms. During chal-
lenging times, it is important for leaders to make
efforts to maintain strong cultural norms and to turn
difficulties into opportunities. For observant lead-
ers, difficulties, setbacks, and challenges can be
used to unite and build culture as people rally and
bond together to face the challenges.
6. Guidelines for building and
sustaining organizational cultures
Culture can be built by design or default. In other
words, culture can either be built in a purposeful
way or left to chance. Leaders play a key role in
building and sustaining cultures. To build culture by
design takes intelligent and focused work. CEOs
such as Bill Gates of Microsoft, Herb Kelleher (for-
merly) of Southwest Airlines, and Jeff Bezos of
Amazon have all been known for their emphasis
on culture and willingness to take specific
culture-building actions. Often, other leaders
mistakenly think that by talking a lot about culture,
posting cultural values on walls, passing out books
on culture, and placing cultural values on coffee
mugs, the desired culture will happen.
There are also leaders who pay little attention to
culture and may do so at a high cost. While there are
many payoffs and advantages to having a healthy,
high-performance culture, there are also many
potential costs to neglecting culture or having a
less than desirable culture. It is estimated that 60%
of all mergers fail to achieve their anticipated goals
or fail altogether because of cultural differences
that were not dealt with (Hellriegel & Slocum,
2011). Unhealthy cultures are also likely to have
a negative impact on many other factors such as
performance, morale, motivation, teamwork, cus-
tomer relations, service, and loyalty. In some cases,
unhealthy cultures have been a significant contrib-
utor to the failure of organizations. Table 2 summa-
rizes 10 guidelines leaders can use in building and
sustaining organizational cultures.
6.1. Make strategy and culture important
leadership priorities
Leaders throughout an organization need to under-
stand the importance of strategy and culture in
building a successful organization and to make both
a top priority in their decision making and practices.
It is especially important for the top level leader to
set the example for making strategy and culture
important. The vision, mission, core values, design,
plans, systems, and processes of an organization,
along with the practices and decisions of leaders,
begin to shape the culture. The more leaders are
able to create strategies that achieve the desired
results while also creating a great place to work and
conduct business, the more likely that a healthy
culture will be the result. A poorly run organization
will not result in a healthy and vibrant culture no
matter how much the leaders may talk about the
What leaders need to know about organizational culture 401
importance of culture and spend time trying to build
a healthy culture.
It is also important for leaders to identify the
type of culture that is likely to achieve the best
results and to ensure that the strategy and desired
culture are aligned to reinforce and strengthen one
another. Culture can be defined by core values or
by identifying cultural ideals. Zappos defined the
desired culture through its core values (Hsieh, 2010,
p. 154), which are:
1. Deliver Wow Through Service
2. Embrace and Drive Change
3. Create Fun and a Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships
7. Build a Positive Team and Family Spirit
8. Do More with Less
9. Be Passionate and Determined
10. Be Humble
Zappos recruits people with these values in mind,
trains all employees on the values, and uses the
values in decision making. Culture can also be
defined by identifying cultural ideals such as: de-
veloping knowledgeable and empowered employ-
ees at all levels; decentralizing decision making;
emphasizing collaboration, cooperation, and team-
work in getting things done; striving for simplicity in
how things get done; and encouraging open, candid,
two-way communication.
Walt Disney was a master at creating a winning
strategy and making the Disney culture a high pri-
ority. The wholesome family values that he es-
poused and even the job titles that he used,
renaming engineers “imagineers,” helped shape
the Disney culture that, along with a winning strat-
egy, has made the Disney organization so successful
(Dumaine, 1990).
6.2. Develop a clear understanding of the
present culture
In building culture, leaders need to understand the
present culture so the strengths can be reinforced
and any weaknesses, inconsistencies, and gaps be-
tween the desired culture and the present culture
can be identified and addressed. There are many
ways to develop an understanding of the present
culture. Certainly observing and experiencing
the culture can provide insights. There may also
be available information regarding the present or
desired culture. Another option can be to use stan-
dardized culture questionnaires, create question-
naires to fit the cultural ideals, or interview a cross-
section of people or focus groups regarding how
they view the culture or culture changes. There are
many questionnaires available for evaluating cul-
ture. One of the best researched questionnaires is
the Denison Organizational Culture Survey (Denison
& Neale, 1996). In groups such as companies with
numerous departments, it may be helpful to evalu-
ate the overall dominant culture of the company as
well as the culture of each department.
6.3. Identify, communicate, educate, and
engage employees in the cultural ideals
To build a strong culture purposely, the desired
cultural values need to be identified and made
known. As mentioned previously, such values are
typically identified through the core values of an
organization or by identifying specific cultural
ideals. Once identified, it is best to avoid flashy
campaigns and programs to promote cultural val-
ues, which can be gimmicky and may create unrea-
sonable expectations. It is, however, helpful to
educate group members on the cultural ideals, find
ways to communicate and reinforce the importance
of building a strong culture, and to involve employ-
ees in making needed changes to operate more
consistently with the cultural ideals.
In efforts to make changes in an existing culture,
one of the most effective ways is to use important
initiatives such as a significant change in strategy,
reorganizations, mergers, or the accomplishment of
a major objective as an opportunity to emphasize
important cultural values. For example, successful-
ly accomplishing an initiative may create an oppor-
tunity to build a stronger emphasis on the cultural
values of teamwork and collaboration.
6.4. Role model desired behaviors
The example of leaders is one of the strongest
shapers of culture. How leaders behave and get
things done, the actions that they take, the values
and beliefs that they hold, and the changes they are
personally willing to make all set the example for
others to follow (Gehman, Treviño, & Garud, 2013).
For leaders to model the desired behaviors, walk
and talk must be consistent (Kottke & Pelletier,
402 D.D. Warrick
2013). For example, a leader who emphasizes good
stewardship while taking an exorbitant salary will
have little credibility.
6.5. Recruit and develop for culture
Recruiting and training for culture at all levels of an
organization is essential to sustaining the desired
culture. Culture fit should be as important in the
hiring process as skills and experience. Hiring
for culture requires well-designed recruitment, se-
lection, orientation programs, and training and
development opportunities to hone the desired
cultural behaviors and practices in new and current
employees.
6.6. Align for consistency between
strategy and culture
When leaders pay attention to both strategy and
culture in their planning and decision making, mak-
ing sure that both are aligned to support one anoth-
er, they are in a position to develop culture by
design and not leave it to chance. Evaluating the
implications of decisions for an organization’s strat-
egy and culture should become a natural part of a
leader’s decision-making process. Decisions, for
example, that may save on cost while undermining
cultural values that emphasize quality and excel-
lence are likely to have the effect of weakening the
desired culture.
6.7. Recognize and reward desired
behaviors and practices
Another way to build culture is to value, recognize,
and reward behaviors that support the desired cul-
ture. Leaders can make all kinds of statements
about the type of culture they desire, but ultimate-
ly employees will respond to the behaviors that they
see valued, recognized, and rewarded. As men-
tioned previously, this requires leaders to be aware
of the behaviors they are actually reinforcing. Some
scholars attribute the crash of the NASA space
shuttle Columbia and the explosion in space of
the Challenger to a change in NASA’s culture from
rewarding space safety and technical brilliance to a
reward system that valued efficiency and the reuse
of space shuttles. NASA’s motto of “faster, better,
and cheaper” emphasized meeting schedules and
avoiding cost overruns (Mason, 2004).
6.8. Use symbols, ceremonies,
socialization, and stories to reinforce
culture
Symbols, ceremonies, socialization, and stories are
all terms used to communicate the idea that leaders
should look for opportunities to reinforce the de-
sired culture (Deal & Kennedy, 1982).
6.8.1. Symbols
Symbols can be actions, objects, or events that
communicate meaning. For example, a new CEO
was asked to choose the vehicle that he wanted to
drive. Knowing that the other executives common-
ly drove luxury cars, he chose a mid-size Chevro-
let. Although he never said a word about why he
chose a much more modest car, he sent a strong
message about desiring a culture in which leaders
were good stewards and did not try to set them-
selves apart from the rest of the employees.
6.8.2. Ceremonies
Ceremonies are planned activities that are mean-
ingful to employees. Examples include award
and promotion ceremonies and celebrations for
achieving goals. Ceremonies reinforce specific be-
haviors and values. Mary Kay Cosmetics Company
holds elaborate awards ceremonies that include
rewards from gold and diamond pins to pink
Cadillacs that reinforce specific behaviors and
values.
6.8.3. Socialization
Socialization is another important part of building
culture. Socialization includes socializing people
into the culture by making clear the kinds of be-
haviors and attitudes that will help them succeed
and providing opportunities for people to socialize,
bond, and become more cohesive as a group (Feld-
man, 1981). The more people interact and get to
know one another, the more likely the cultural
values will be shared and strengthened.
6.8.4. Stories
Stories are narratives that reinforce the cultural
values. There is a widely told story about Nordstrom
in which an associate listened to a customer com-
plain about the performance of his automobile tires
and gave him a refund on the tires even though
Nordstrom does not sell tires. The story reinforces
the company’s zeal for customer service and a no-
questions-asked return policy.
6.9. Appoint a culture team
Given the important role culture plays in the suc-
cess and future of an organization, it can be helpful
to appoint a cross-functional and cross-level culture
team (Warrick, 2002). The team should include at
least one member of the senior leadership team so
there will be an advocate for culture at the top.
Possible tasks for the culture team could be:
What leaders need to know about organizational culture 403
� Monitor the culture throughout the organization
and keep the senior leadership team informed
about the culture and any significant changes.
� Advise the senior leadership team on ways to
build, reinforce, and make changes to the cul-
ture.
� Become students of information on organization-
al culture and help leaders implement ways to
strengthen the culture.
Like all ongoing committees, it is important to give
the culture team a meaningful role and to not turn a
good thing into busywork with too many meetings
and activities.
6.10. Monitor and manage the culture
It would be wise for organizations to assess their
culture at least on an annual basis. Leaders need to
know if the culture is moving in the right or wrong
direction and if potentially influential events are
affecting the culture negatively so they can respond
proactively. Organizational cultures are reasonably
stable and can be difficult to change. However, as
discussed previously, they can also be vulnerable to
events such as downsizing, natural disasters, or
changes in leadership. As pointed out above, assess-
ing the culture can be an important function of a
culture team.
7. Summary of key insights about
organizational culture
To reinforce how important it is that leaders under-
stand and build culture purposefully, several key
insights of which leaders should be aware are sum-
marized here:
� Culture matters. Culture can have a significant
influence on what goes on in organizations, how
things are done, how the organization is experi-
enced by employees and customers, and the
competitive advantage or disadvantage of orga-
nizations. It is important for leaders to under-
stand that there is a significant body of research
indicating that it pays to build strong cultures and
that there can be many tangible and intangible
costs to leaving cultural development to chance
or to having weak or toxic cultures.
� Building and managing culture is an important
role of leaders. Leaders have many goals.
Certainly at the top of the list is achieving the
desired results. However, in their efforts to
achieve results, leaders sometimes become pre-
occupied with numbers, improving revenue, cut-
ting costs, and trying to manage their way to
success. In doing so, they may overlook the im-
portance of building healthy organizations with
strong cultures as an important ingredient in
achieving the best results. Leaders need to see
the importance of understanding, building, and
sustaining strong cultures to their leadership
roles.
� Culture is built by design or default. In whole
organizations or groups within organizations, as
time goes on culture begins to evolve whether it
is developed purposely or left to chance. Leaving
culture to chance is a risky gamble and at best is
likely to result in organizational underperform-
ance. Building culture by design requires a sound
strategy for running a healthy, high performance
organization, being clear on the type of culture
that best fits the strategy, aligning all parts of the
strategy and culture to reinforce one another,
considering strategy and culture in the decision-
making process, and making needed changes in
both while assuring that they stay aligned.
� Hire for culture starting at the top. Organiza-
tions need to make hiring, training, and promot-
ing for culture fit a top priority. This is
particularly important when it comes to top level
leaders. The highest level leader will have a
significant influence in shaping culture, as will
others in top level positions. Even only one hire of
a top level leader who is not a fit with the desired
culture or who does not understand what it takes
to build a strong culture can damage or destroy a
culture that took years to build.
8. Conclusion
It is important that leaders consider understand-
ing, building, and sustaining culture as part of
their leadership roles and that they be better
trained in how to build healthy cultures and align
culture and strategy. An abundance of research
makes it clear that building strong cultures can
play a significant role in the success of organiza-
tions and that, conversely, neglecting cultures can
have many costs to organizations and their em-
ployees, customers, and stakeholders. Making cul-
tural training and effective culture management a
high priority for leaders can be a high payoff
investment and can have a significant influence
on the success and competitive advantage of an
organization.
404 D.D. Warrick
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- What leaders need to know about organization culture
1 Culture matters
2 Understanding organizational culture
3 The impact of organizational culture on performance and other factors
4 Is culture primarily the cause or result of organization practices?
5 Insights about culture of which leaders need to be aware
5.1 The influence of leaders in shaping culture
5.2 Dominant cultures and subcultures
5.3 Visible and invisible factors that define culture
5.4 The impact of traditions and group dynamics
5.5 Key internal and external circumstances that may influence culture
5.6 Valued and devalued behaviors
5.7 Influential members
5.8 Strong cultures and weak cultures
5.9 Understanding international cultural differences
5.10 The vulnerability of culture
5.11 Results
6 Guidelines for building and sustaining organizational cultures
6.1 Make strategy and culture important leadership priorities
6.2 Develop a clear understanding of the present culture
6.3 Identify, communicate, educate, and engage employees in the cultural ideals
6.4 Role model desired behaviors
6.5 Recruit and develop for culture
6.6 Align for consistency between strategy and culture
6.7 Recognize and reward desired behaviors and practices
6.8 Use symbols, ceremonies, socialization, and stories to reinforce culture
6.8.1 Symbols
6.8.2 Ceremonies
6.8.3 Socialization
6.8.4 Stories
6.9 Appoint a culture team
6.10 Monitor and manage the culture
7 Summary of key insights about organizational culture
8 Conclusion
References
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