Organizational Culture & Leadership

by
Edgar H Schein
"Some are born great,
some achieve greatness,
and some have greatness thrust upon 'em"
Shakespeare, Twelfth Night
notes compiled by Ted Nellen
Oct 1997
Culture a phenomenon that surrounds us all
Culture helps us understand how it is created, embedded, de!eloped, manipulated,
managed, and changed
Culture defines leadership
"nderstand the culture to understand the organi#ation
Defining Organizational Culture
culture is customs and rights
good managers must work from a more anthropological model
$ach org has its own way and an outsider brings his%her baggage as obser!er
"nderstand new en!ironment and culture before change or obser!ation can be made
1 Obser!e beha!ior& language, customs, traditions
' (roups norms& standards and !alues
) $spoused !alues& published, publicly announced !alues
* +ormal ,hilosophy& mission
- .ules of the (ame& rules to all in org
/ Climate& climate of group in interaction
7 $mbedded skills&
0 1abits of thinking, acting, paradigms& Shared knowledge for sociali#ation
9 Shared meanings of the group
12 3etaphors or symbols&
Culture& norms, !alues, beha!ior patterns, rituals, traditions
Culture implies structural stability and Patterning and integration
Culture is the accumulated shared learning from shared history
' problems all groups must deal with&
1 sur!i!al, growth, and adaptation in en!ironment
' internal integration that permits functioning and adapting
Culture Formally Defined
A pattern of shared basic assumptions that the group learned as it solved its problems
of external adaptation and internal integration, that has wored well enough to be
considered valid and, therefore, to be taught to new members as the correct way you
perceive, thin, and feel in relation to those problems!
The problem of sociali#ation& teaching newcomers
The problem of beha!ior&
Can a large org ha!e one culture4 subcultures
Summary
culture e5plains incomprehensible, irrational
org with history has culture
Not e!ery group de!elops a culture
Once culture e5ists it determines criteria of leadership
6eaders should be conscious of culture otherwise it will manage them
Levels of Culture
Artifacts
on surface
sees
hears
feels
!isible products
6anguage
technology
products
creations
style& clothing, manners of address, myths, stories
easy to obser!e
difficult to decipher
symbols are ambiguous
,roblems in classification
Espoused alues
all group learning reflects original !alues
those who pre!ail influence group& the leaders
first begins as shared !alue then becomes shared assumption
social !alidation happens with shared learning
initially started by founder, leader and then assimilated
!asic Assumptions
e!ol!e as solution to problem is repeated o!er and o!er again
hypothesis becomes reality
to learn something new re7uires resurrection, ree5amination, frame breaking
Culture defines us&
what we pay attention to
what things mean
react emotionally
what actions to take when
humans need cogniti!e stability
defense mechanisms
3c(regor& if people are treated consistently in terms of certain basic assumptions, they
come e!entually to beha!e according to those assumptions in order to make their world stable
and predictable
different cultures make different assumptions about others based on own !alues etc& see
them with our eyes not theirs
third party may help sol!e differences between ' cultures
each new member comes with own assumptions
Culture of " orgs
Case study of ' distinct companies illustrating multile!el analysis of culture
One can best understand a system best by trying to change it
8ey is he looked at these two with his eyes, his culture, not theirs
6urk for awhile to understand culture
Dimensions of Culture
E#ternal Environments
de!elop a model of how assumptions arise and persist
identify issues groups faced from origin of group, if possible
group growth and culture formation are intertwined
essential elements&
mission and strategy
goals
3eans of de!eloping consensus, reaching goals
measurement
correction
$ission and strategy
each new groups must de!elop shared concept to sur!i!e
what is the function Can be multifunctional
if in debate mission is reached then culture has de!eloped
culture e5ists when members share identity and mission
%oals
to achie!e consensus on goals group needs shared language and shared assumptions
mission can be timeless, but goals must ha!e end point
do not confuse assumptions of goals with assumptions of mission
$eans to Achieve %oals
need clear consensus on means to achie!e goals
goals can be ambiguous, but not how to achie!e them
3eans&
design of tasks
di!ision of labor
org structure
reward and incenti!e system
control system
info systems
skills, technology, and knowledge ac7uired to cope become part of culture of org
lack of consensus on who owns can cause difficulty
be aware of feelings about territory, property, turf
crowding is a problem
Changing is difficult because of internal 9property9
Consensus on means creates beha!ioral regularities
Once regularities in place, stability and patterns are in place
$easuring results
need consensus on how to e!aluate self
from top
trust self
use outsider
trust hard data
Correction& 'epair
consensus needed on how to affect change
change may be for growth not :ust to sol!e a problem
correcti!eness can ha!e great effect on culture, because it may 7uestion culture& mission
Summary
Culture is multidimensional, multifaceted
Culture reflects group;s efforts to cope and learn
$anaging (nternal (ntegration
$5ternal is important but so is internal relationships
$a)or (nternal (ssues*
1 Common 6anguage
' (roup boundaries for inclusion or e5clusion
) <istributing power and status
* <e!eloping norms of intimacy, friendship, and lo!e
- rewards and punishments
/ e5plaining the une5plainable& idealogy and religion
Common Language
to function as group must ha!e common language
conflict arises when two parties assume about the other without communicating
often creators create common language
common understanding begins with categories of action, gesture, and speech
%roups !oundaries
consensus of who is in and who is out
leader usually sets this, but group tests it
Orgs can ha!e three dimensions&
lateral mo!ement& from one task to the ne5t
!ertical mo!ement& from one rank to the ne5t
inclusionary& from outsider to insider
as org ages becomes more comple5&
indi! may belong to many le!els, depts,
Distri+ution of ,o-er and Status
1ow will influence, power, and authority be allocated4
all need to ha!e some power or know limits
who will grant power
power can be earned
or assigned
Developing 'ules
how to deal with authority and with peer
we use family model in new situations
Allocating 'e-ard and ,unishment
must ha!e system of sanctions for obeying and disobeying rules
E#plaining the .ne#plaina+le
facing issues not under control& weather, natural disaster
.eligion can pro!ide this
ideology too
myths, stories, legends help
Summary
$!ery group must learn to be a group
groups must reach consensus
'eality& /ruth& /ime& Space& Human 0ature& Activity&
'elationships
de!elop shared assumptions about more abstract, general, deeper issues
The deeper issues&
nature of reality and truth
nature of time
nature of space
nature of human nature
nature of human acti!ity
nature of human relationships
nature of reality and truth
what is real and how to determine reality
6e!els of .eality
external reality refers to that which is determined empirically, by ob:ecti!e tests,
=estern tradition ie S>T
social reality when groups reaches consensus on things
individual reality is self learned knowledge, e5perience, but this truth may not be
shared by others
1igh Conte5t%6ow Conte5t
low ? unidirectional culture, e!ents ha!e clear uni!ersal meanings
high ? mutual casualty culture, e!ents understood only in conte5t, meanings can !ary,
categories can change
3oralism@,ragmatism
pragmatist seeks !alidation in self
moralist seeks !alidation in a general philosophy, moral system, or tradition
A<ifferent bases for what is true&p 12'
1 ,ure dogma& based on tradition, it has always been this way
' .e!ealed dogma& wisdom based on trust in the authority of wise men,
formal leaders, prophets, or kings
) Truth deri!ed by a 9rational@legal9 process
* Truth as that which sur!i!es conflict and debate
- Truth as that which works& let;s try it and test it
/ Truth as established by scientific method, borders on pure dogma
=hat is Bnformation4
Ato test for reality a group must determine what is information
ABnformation or data
nature of time
ATime is a fundamental symbolic category that we use for talking about the orderliness of
social life
ATime& not enough, late, on@, too much at one, lost time ne!er found again
Casic Time Orientation
Apast, present, future (ettysburg >ddress
AAOnly present counts for immediacy
AA,ast e5ists to show past glories, successes
AA+uture always with !ision, ideas
3onochronic and ,olychronic Time
Amonochronic one thing at a time
Apolychronic se!eral things done simultaneously 8ill two birds with one stone
,lanning Time and de!elopment Time
Aplanning time is linear, fi5ed, monochronic, closure
Adevelopmental time is limitless, as long as needed process world, open ended
<iscretionary Time 1ori#ons
Adeals with si#e and units, classes?** minutes, )* large
Aannually, 7uarterly, monthly, weekly, daily, hourly
Alength of time depended on work to be done ie research people would not get
closure
Adiffer by function and occupation and by rank
Temporal Symmetry and ,acing
Asubtle how acti!ities are paced
Time imposes social order
pacing, rhythms of life, se7uence, duration, symbolic
Time is critical because it is so in!isible, taken for granted
nature of space
comes to ha!e symbolic meanings
<istance and .elati!e ,lacement
Ahas both physical and social meaning
AAintimacy distance touchingD /9@109 too far
AApersonal distance 109@)29 nearD ';@*; too far soft !oice
AAsocial distance *;@7; nearD 7;@1'; too far
AApublic distance 1';@'-; nearD E'-; too far
Afeelings about distance ha!e biological roots
Awe use partitions, walls, sound barriers, etc
Aintrusion distance
Symbols of Space
Awho has what and how much
Asi#e may determine rank
Adecorating one;s office
Adesign of space reflects much
Cody 6anguage
Ause of gestures, body position
Awho do you sit ne5t to, a!oid, touch, bow to
Adeferring reinforces hierarchical relationship
nature of human nature
what are our basic instincts
what is inhuman beha!ior
good or bad intrinsic or learned4
self is compartmentali#ed& work, family, leisure
3aslow;s basic needs
human nature is comple5 and malleable
changes in life cycle as humans mature
humans can learn new things
nature of human activity
how humans act in relation to their en!ironment
/he Doing Orientation
Acontrolled by manipulation
Apragmatic orientation toward the nature of reality
Abelief in human perfectibility
AAgetting things done, let;s do somethingD Afocus; on task, on efficiency, on disco!ery
Aid with ,rometheus
Aid with >thena ? task
Aid with Feus ? building useful political relationships
/he !eing Orientation
Anature is powerful
Ahumanity is subser!ient
Akind of fatalism
cannot influence nature
become accepting and en:oy what one has
Athink in terms of adapting
!eing1in1!ecoming Orientation
Aharmony with nature
Ade!elop own capacity to achie!e perfect union with the en!ironment
Afocus on what person is rather than what can be accomplished
Aid with >pollo which emphasi#es hierarchy, rules, clear roles
Activity Orientation and 'ole Definition
Anature of work and the relationships between work, family, and personal concepts
Ain one work is primary
Ain another family is primary
Ain another self@interest is primary
Ain another integrated life@style is possible
Organization2Environment 'elations
Acan nature be sub:ugated
Anature harmoni#ed with
Adoes group !iew itself capable of dominating nature
Aor coe5isting with nature
nature of human relationships
make group safe, comfortable, and producti!e
must sol!e problems of power, influence, hierarchy
and intimacy, lo!e, peer relationship
(ndividual and %roupism
Aindi!idual competiti!e
Acooperati!e& group more important than indi!
Ahierarchy and tradition
,articipation and (nvolvement
$t#ioni;s theories&
1 coerci!e systems
members are alienated
e5it if can
peer relationship de!elops as defense ! authority
unions de!elop
' utilitarian systems
will participate
e!ol!e work groups
incenti!e system
) systems based on goal consensus between leaders and followers
morally in!ol!ed
identify with org
e!ol!e around tasks in support of org
>t a more specific le!el
autocratic
paternalistic
consultati!e%democratic
participati!e and power sharing
delegati!e
abdicati!e
Characteristics of 'ole 'elationships
,arson;s&
1 $motionally charged or emotionally neutral
' <iffuse or specific& like family or salesperson
) "ni!ersalistic or particularistic& broad or specific criteria
* >scription or achie!ement oriented& family connections or accomplishments
- self or collecti!ely oriented
Culture is not only deep it is wide and comple5
Culture comes to co!er all aspects of life
Ho- Leaders Create Org Cultures
mysterious& how does it happen4
Culture !eginnings and the (mpact of Founders as Leaders
spring from three sources&
1 beliefs, !alues, and assumptions of founders
' learning e5periences of group members
) new beliefs, !alues, and assumptions brought by new members
Bmpact of founder most important
Orgs do not form spontaneously or accidently
The process of culture formation is the process of creating a small group&
1 single person GfounderH has idea
' founder brings in one or more people and creates core group They share !ision and
belie!e in the risk
) founding group acts in concert, raises money, work space
* Others are brought in and a history is begun
Iones an e5ample of 9!isible management9
Culture does not sur!i!e if the main culture carriers depart and if bulk of members
lea!e
Smithfield started things and then left them to the members
3urphy of >ction& Total consensus had to be met Open office landscape
Ho- Founders2Leaders Em+ed and /ransmit Culture
6eader assumptions are 9taught9 to the group
Things tried out are leader imposed teaching
how do leaders get their ideas implemented4
sociali#ation
charisma
acting, by doing, e5uding confidence
Culture1Em+edding $echanisms
,rimary $mbedding 3echanisms
Secondary >rticulation and
.einforcement 3echanisms
=hat leaders pay attention to, measure, and control on a
regular basis
Organi#ation design and structure
1ow leaders react to critical incidents and organi#ational
crises
Organi#ational systems and
procedures
Obser!ed criteria by which leaders allocate scarce Organi#ational rites and rituals
resources
<eliberate role modeling, teaching, and coaching
<esign of physical space, facades,
and buildings
Obser!ed criteria by which leaders allocate rewards and
status
Stories, legends, and myths about
people and e!ents
Obser!ed criteria by which leaders recruit, select,
promote, retire, and e5communicate organi#ational
members
+ormal statements of organi#ational
philosophy, !alues, and creed
,rimary Em+edding $echanisms
called 9climate9 of the organi#ation
9Climate9 precedes e5istence of a group culture
.eturn to Culture@$mbedding 3echanisms Table
3hat Leaders ,ay Attention to& $easure& and Control
what leader systematically pays attention to communicates ma:or beliefs
what is noticed
comments made
casual 7uestions and remarks
becomes powerful if leader sees it and is consistent
Bf leader is unaware and inconsistent then confusion can ensue
consistency more important than intensity of attention
attention is focused in part by the kinds of 7uestions that leaders ask and how they set the
agendas for meetings
emotional reactions
important what they do not react to
.eturn to Culture@$mbedding 3echanisms Table
Leader 'eactions to Critical (ncidents and Organizational Crises
in crisis& how do they deal with it4
creates new norms, !alues, working procedures, re!eals important underlying
assumptions
Crises are especially important in culture creation
Crisis heighten an5iety, which moti!ates new learning
> crisis is what is percei!ed to be a crisis, and what is defined by leader
crisis about leader, insubordination, tests leader
.eturn to Culture@$mbedding 3echanisms Table
O+served Criteria for 'esource Allocation
how budgets are created re!eals leader assumption
what is acceptable financial risk4
how much of what is decided is all inclusi!e4 bottom up4 top down4
.eturn to Culture@$mbedding 3echanisms Table
Deli+erate 'ole $odeling& /eaching& and Coaching
own !isible beha!ior has great !alue for communicating assumptions and !alues to others
!ideo tape is good
informal messages are !ery powerful
.eturn to Culture@$mbedding 3echanisms Table
O+served Criteria for Allocation of 'e-ards and Status
3embers learn from their own e5perience with promotions, performance appraisals, and
discussions with the boss
what is rewarded or punished is a message
actual practice, what happens as opposed to what is written or said
if something is to be learned their must be a reward system setup to insure it
.eturn to Culture@$mbedding 3echanisms Table
O+served Criteria for 'ecruitment& Selection& ,romotion& 'etirement& and
E#communication
adding new members is !ery telling because it is unconsciously done
also who doesn;t get promoted says something
.eturn to Culture@$mbedding 3echanisms Table
Secondary Articulation and 'einforcement $echanisms
Bn young org design, structure, architecture, rituals, stories, and formal statements are
cultural reinforcers, not culture creators
once an org stabili#es these become primary and constrain future leaders
These are cultural artifacts that are highly !isible but hard to interpret
=hen org is in de!elopmental stage, the leader is dri!ing force >fter a while these will
become the dri!ing forces for ne5t generation
These secondary mechanisms will become primary in 3idlife or mature orgs
.eturn to Culture@$mbedding 3echanisms Table
Organization Design and Structure
Organi#ing org has more passion than logic
+ounders ha!e strong ideas about how to organi#e
build a tight hierarchy that is highly centrali#ed
strength in people so decentrali#ed
negotiated solutions G3urphyH
1ow stable structure should be is !ariable
some stick to original setup
some constantly rework
<esign
some articulate why this way
some not aware of why this way
structure and design can be used to reinforce leaders assumptions
.eturn to Culture@$mbedding 3echanisms Table
Organizational Systems and ,rocedures
.outines most !isible parts of life in org& daily, weekly, monthly, 7uarterly, annually
(roups members seek this kind of order
they formali#e the process of 9paying attention9
systems and procedures gi!e consistency
inconsistency allows for subcultures
.eturn to Culture@$mbedding 3echanisms Table
'ites and 'ituals of the Organization
rites and rituals may be central in deciphering as well as communicating the cultural
assumptions
they can be powerful reinforcers too
they are only !iews of a limited portion of org so be careful
.eturn to Culture@$mbedding 3echanisms Table
Design of ,hysical Space& Facades& and !uildings
!isible features
symbolic purposes
may con!ey philosophy
open office means openness
.eturn to Culture@$mbedding 3echanisms Table
Stories A+out (mportant Events and ,eople
>s history de!elops, stories e!ol!e
stories reinforce assumptions
6eaders can;t control stories about themsel!es
"sing stories to decipher org has its problems& Jalidity
.eturn to Culture@$mbedding 3echanisms Table
Formal Statements of Organizational ,hilosophy& Creeds& and Charters
formal statements only highlight a small portion of the assumptions
Only reflect what is a!ailable for public consumption
Cannot be !iewed as definitions of the org
.eturn to Culture@$mbedding 3echanisms Table
Summary and Conclusion
1ow leaders embed the assumptions into and create culture
1ow they get others to share assumptions
,rimary mechanisms used to embed in ongoing manner
Secondary more subtle, more ambiguous, more difficult to control, yet can be powerful
reinforcements of primary
3echanisms con!ey culture content to newcomers
secondary become primary in time
new leaders becoming cultural change agents as org matures declines
.eturn to Culture@$mbedding 3echanisms Table
Organizational $idlife
culture growth and change
Cultural dynamics are ultimately a reflection of group dynamics
as groups mature they de!elop subgroups
leadership and cultural dynamics
1 founding and de!elopment stage
founder ownership
nothing to with age or si#e
can be old but in de!elopmental stage
' organi#ational midlife
shift in ownership
at least two generations of leaders
nothing to do with age or si#e
) organi#ational maturity and decline
all taken for granted
if en!ironment shifts and can;t adapt& dead
3ust consider degree of relati!ity To society e!erything is a subgroup Bn a company it is
the macrocosm and all else under is microcosm Bt is who considers self macrocosm
$a)or !ases of Differentiation Creation of subcultures
1 +unctional%occupational differentiation
' (eographical decentrali#ation
) <ifferentiation by product, market, or technology
* 9<i!isioni#ation9
- <ifferentiation by hierarchical le!el
/ 3ergers and ac7uisitions
7 Ioint !entures, strategic alliances, multiorgani#ational units
0 Structural opposition groups
Functional Differentiation
subcultures are a product of culture of the function
production hires people in manufacturing
finance hires accountants
like minded stay with like minded
$ach function is a blend of founder and occupational function
9thought words9 G<ouglasH functions ha!e own nomenclature which makes interaction
tough sometimes
with org growth subcultures become stable and well articulated
.otating a young manager through all dept is a training for top position
sometimes huge gulfs between two functional subcultures based on communications gaps
brings di!ersity which is needed based on functions
creates problems
teaching culture to new members becomes harder
.eturn to 3a:or Cases of <ifferentiation
%eographical Differentiation
creation of subcultures to break into se!eral geographical units
6ogic&
need to get near customers and needs are different
take ad!antage of local labor costs
cost sa!ings on being near raw material
use of local market
geographic subcultures adopt local culture
who runs geo subculture& local or home4
as orgs mature geo units may take o!er functions
communications may break down between host and unit
.eturn to 3a:or Cases of <ifferentiation
Differentiation +y ,roduct& $ar4et& or /echnology
technologies change as org matures
product changes
customers change
.eturn to 3a:or Cases of <ifferentiation
Divisionization
decentrali#ation
di!isional subculture
.eturn to 3a:or Cases of <ifferentiation
Differentiation +y Hierarchical Level
hard to coordinate large numbers of people
solution is to create more layers in bureaucracy
isolated teams ha!e own subculture
comple5 mental e7uations to make decisions
competence of org
financial risk
degree to financial self@sufficiency
Top@management cultures ? similar in structure
will be defined by the tasks to be done
.eturn to 3a:or Cases of <ifferentiation
$ergers and Ac5uisitions
culture and subculture crucial
mergers is a blending
ac7uisition& smaller becomes subculture
problem in both& no shared history
one will feel inferior, threatened, angry, defensi!e
rarely checked& philosophy, origins, ? cultural mismatch
understand cultural risks
clash of assumptions ? disaster
=hy4
not aware of own culture
not aware of other culture
do not history
.eturn to 3a:or Cases of <ifferentiation
6oint entures& Strategic Alliances&and Other $ultiorganizational Enterprises
Culture issues can cause failure
know other culture
each party may feel inappropriate to bring their feelings out in the open
ignorance of another culture results in crisis
.eturn to 3a:or Cases of <ifferentiation
Structural Opposition %roups
subgroups de!elop as opposing other groups
some groups are deliberately countercultural& unions
racial, gender, etc groups form subcultures
.eturn to 3a:or Cases of <ifferentiation
Summary and Conclusions
.emember to integrate subcultures
be sensiti!e to subcultures
Cuilding an effecti!e org is a matter of meshing by encouraging e!olution of common
goals, common language, common procedures to sol!e common problems
.eturn to 3a:or Cases of <ifferentiation
Evolution of Culture and Leadership
Culture Change
how culture e!ol!es in organi#ations
problem of culture change in declining orgs
culture change in midlife and mature orgs
when approaching e!olution change depends on where one stands
Dynamics of Culture Change and Leadership in 7oung Organizations
Bn a mature org harder to change things Old dogs new tricks
Dynamics of Change
all systems attempt to maintain e7uilibrium and ma5imi#e autonomy
Coping, growth, and sur!i!al all in!ol!e maintaining the integrity of the system
e!olution of culture is a way a group preser!es its integrity and autonomy,
differentiates itself from en!ironment, and pro!ides itself with identity
.nfreezing
moti!ation to change
) processes must be present to generate moti!ation&
enough disconfirming data to cause serious discomfort and dise7uilibrium
connection of disconfirming data to important goals and ideals causing anxiety and"or
guilt
enough psychological safety& ha!ing enough sense of identity and integrity to go
ahead with change
<isconfirming data shows that goals aren;t being met or some of processes aren;t being met
Sales are off
complaints are up
high turno!er of employees
Bf change threatens my whole self, B will deny the need for change Jelcro theory here
most will ignore disconfirming data or ratioanil#e it away
called strategiec myopia& when strategies that do not fit leaders prefi5ed ideas are ignored
hearing something and denying it,
Bf can;t figure out what to do, ignore it
once group is in pain they will listen to disconfirming info
Cognitive 'estructuring
Once unfro#en many different paths can be followed
trial and error
imitation of role models
This will pro!ide new learning to core assumptions retooling
3ost change processes emphasi#e need for beha!ior change
can be coerced but will not last once pressure is off "SS.
'efreezing
Once new beha!ior and core is fi5ed
=ill stay like this until disconfirmation starts it again