siop 2012 - contrasting culture strength and climate strength

Contrasting Culture Strength and Climate Strength: Perspectives from Leading Experts

Jennifer ChatmanUniversity of California, Berkeley

Daniel DenisonIMD & Denison Consulting

Maribeth KuenziSouthern Methodist University

Benjamin SchneiderCEB Valtera

Strength – A Long History

Different conceptualizations and operationalizations

Today’s Purpose◦ Discuss the Challenges and Controversies◦ Future Research◦ Implications for Practice

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Meet the Panel

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Jennifer Chatman

Cortese Distinguished Professor of ManagementHaas School of BusinessUniversity of California, Berkeley

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Psychologists have defined strong situations as those that induce uniform behavior, and are distinctive and observable (Kelley, 1967; Mischel, 1977)

We disagree.◦ Example: A transparent or opaque HR system could constitute an

equally strong situation, but the content of the norm would be different (transparency norm in first case, lack of candor and secrecy in the second)

◦ A culture’s strength is independent of it’s distinctiveness Secrecy at Apple – induces uniform behavior, unmistakable Agree to disagree at Intel, challenging the status quo at Aligent – norm

fosters highly variant, non-uniform behavior – do people agree about the value of “agree to disagree,” or do they disagree about everything including this norm?

Jenny ChatmanCulture Strength

Observers could misinterpret behavioral variation associated with norms like “challenging the status quo” or “agreeing to disagree” as a sign of weaker, less agreed-upon group norms, when in fact, the norm is strong but behavioral manifestations of the norm are highly variable.

Implications for culture research:◦ Relying on outsiders’ evaluations of culture content or strength can be

a problem (Kotter & Heskett, 1992)

◦ Norm can be deemed strong simply if members interpret it similarly and conform to it regularly (rather than it being distinctive or uniform), that is, people behaving non-uniformly is not necessarily evidence of a weak culture. Important distinction between uniformity and conformity.

Jenny Chatman: A Key Insight about Culture Strength

Strength in Culture & Climate Research

Daniel Denison

International Institute for Management DevelopmentLausanne, Switzerland

AdaptabilityPattern..Trends..Market

Translating the demands of the

business environment into action

“Are we listeningto the marketplace?”

MissionDirection..Purpose..Blueprint

Defining a meaningful long-term direction for the organization

“Do we know where we are going?”

InvolvementCommitment..Ownership

Responsibility

Building human capability, ownership, and responsibility

“Are our people alignedand engaged?“

ConsistencySystems…Structures…

Processes

Defining the valuesand systems that are the basis of a strong culture

“Does our systemcreate leverage?”

Dan Denison

9© 2012 The Corporate Executive Board Company. All Rights Reserved.

Benjamin Schneider - Climate Strength Research Paradox

Rests on a presumption of strength being a moderator, not a main effect—main effects are presumed to be a function of the level of the climate of interest, not variability in the climate of interest.

• Necessary to think this way since a negative climate can also be a strong one.

• Yet, some research on culture strength shows a positive relationship between strength and performance. – Likely due to the fact that strength was a perceptual variable and not a

statistical variable, and – The more positive a culture is the more likely people are to believe others

share their perception Rests on the presumption of variability since a moderator requires high variance

• Within units (teams, functions, departments. branches, etc.)• Between units in the variability within


Benjamin SchneiderClimate Strength Focus

Unit level climate strength as a moderator of climate level relationship.

Specifically, climate strength as a moderator of the service climate level –customer satisfaction level relationship.

Maribeth Kuenzi, Ph. D.

Assistant ProfessorDepartment of Management and OrganizationEdwin L. Cox School of BusinessSouthern Methodist University

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Question 1

How strength is defined and how it is measured varies, how do you define strength in your research? What are the “roots” of your view of the construct and what presumptions does it rest on?

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Culture Strength – A Combination of Agreement and Intensity About Norms Definition of strong culture:

◦ One in which members both agree about the relative importance or lack of importance of a specific set of norms and feel intensity about one or a few highly important norms.

◦ Intensity aspect is where culture strength and content need to be considered together

Strength is a combination of:

◦ Agreement – the extent to which members of a group or organization agreeabout norms.

◦ Intensity – the extent to which members care about those norms.

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Strong Culture

Vacuous Beliefs Weak Culture

Warring Factions

Intensity

AgreementHigh Low

High

Low

2

4

6

9

2

4

6

9

Most Uncharacteristic Most Characteristic

Number of items per category

1 2 3 4 5 9876

Allocate 54 descriptors of culture (e.g., results-oriented, risk-taking, integrity) across 9 categories from most characteristic to least characteristic

Allocate 54 descriptors of culture (e.g., results-oriented, risk-taking, integrity) across 9 categories from most characteristic to least characteristic

Diagnosing Culture Using The Organizational Culture Profile (OCP)

(Chatman, 1989; 1991; O’Reilly, Chatman & Caldwell, 1991; Chatman & Jehn, 1994; Caldwell, Chatman & O’Reilly, 2008; Chatman, Caldwell, O’Reilly & Doerr, 2012)

Diagnosing Culture Using The Organizational Culture Profile (OCP)

(Chatman, 1989; 1991; O’Reilly, Chatman & Caldwell, 1991; Chatman & Jehn, 1994; Caldwell, Chatman & O’Reilly, 2008; Chatman, Caldwell, O’Reilly & Doerr, 2012)

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Innovative

Collaborative

Results‐Oriented

Integrity

Customer (Patient)‐Oriented

Detail‐Oriented

Transparency

• Frequent experimentation in all realms• Actively encourages risk‐taking and creative thought and action• Acts quickly and frequently scans for new opportunities• Rewards teamwork and cooperation• Discourages internal competition• Establishes low levels of aggression and conflict

• Sets and achieves concrete, aggressive performance goals• Favors action over calmness or contemplation

• Sets high ethical standards for all organizational members• Thinks and behaves with honesty and integrity

• Focuses on defining the customer and what the customer expects/desires• Spends a great deal of time listening to and interacting with customers• Pays close attention to what the market demands

• Maintains vigilance about performance specs, product quality, and analytical precision• “Dots every i and crosses every t”

• Shares information between individuals and units to best benefit the organization as a whole

• Discourages “political” behavior (activity intended to benefit one individual at the expense of the group)

Jenny Chatman: Typical Organizational Culture Norms

Innovative Collaborative Results-Oriented Integrity Customer-

OrientedDetail-

Oriented Transparency People-Oriented

All Companies(N=32) 5.24 4.24 6.19 6.28 6.21 5.40 4.45 4.71

All Hardware(N=18) 5.38 5.04 6.30 6.23 6.20 5.47 4.42 4.51

All Software(N=14) 5.06 5.51 6.04 6.33 6.24 5.31 4.49 4.96

Your Company* 6.59 ** 5.21 6.15 6.10 5.97 5.99 ** 3.60 ** 4.44 **

*Data on Your Company are based on survey responses from 53 current US employees as of Fall 2009.** Statistically significant at the level of 10% (p < 0.1).

SAMPLE Organizational Culture Comparison: One Company vs. All Participating CompaniesSAMPLE Organizational Culture Comparison: One Company vs. All Participating Companies

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Average: All Companies

Average: Hardware

Average: Software

Your Company

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8

66

29

18

82

9

1112

68

55

63

Dan DenisonOne Hundred Year Old Manufacturing Company


Benjamin Schneider Operationalize; roots

Operationalize: Standard deviation in unit members’ perceptions.

Roots: – Schneider and Bartlett (1970) worked on the issue via multi-dimension/multi-

rater approach anticipating the use of ICC and rwg

– Worked for years to get rid of variability within units so could legitimate aggregation. Then asked the question: What about the lingering variability within units?

Presumption: Unit climate requires a certain amount of consensus/agreement before it can be considered a unit attribute.

Maribeth KuenziWhat is Climate Strength?

Within-unit agreement/variability in perceptions of organizational climate◦ AD index (Burke et al., 1999) reversed in sign

◦ Coefficient of variation (Allison, 1978) - standard deviation of climate perceptions divided by mean level and reversed in sign

◦ Standard deviation

Types of climate strength? (Ostroff et al., 2003)◦ Agreement-based

◦ System-based

◦ Alignment-based

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Question 2

In your opinion, what are the pros and cons of these different approaches to the construct? How can we learn from differing perspectives and bridge these camps of organizational research?

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Can be appliedto any measure

Potential to create theory and method defining areas

where normative integration is most

important

Atheoretical.A methodological definition

of a content domain

Integration of what?No theory contrasting

diversity and integration

Pro

Con

Variance NormativeScores Integration

Dan DenisonAssessing “Strength”

Culture content is frequently confounded with culture strength:◦ Identifying culture in terms of content presumes that norms are viewed

similarly enough among members that they can be accurately represented as a single unified profile (e.g., weak culture can only be amenable to “meta” content descriptions such as “the culture is fragmented.” (Martin, 1992; Saffold, 1983).

◦ Strong and weak cultures do not have equivalently identifiable content: Strong culture organization can intensely value being results-oriented but an

equivalently low emphasis on being results oriented in a weak culture may derive either from lack of shared intensity about the norm (e.g., people don’t believe it’s important) or a lack of consensus about it (e.g., some in the organization value while others do not).

It is still possible and essential to differentiate between content and strength; culture strength should be assessed distinctly from content!

Jenny Chatman


Benjamin SchneiderPros and Cons

Pros: Anytime conceptually meaningful operationalizations are used we can learn from them—perceptions, standard deviations, rwg, or what have you.

Cons: It would be useful to have several studies in which the different forms of strength are simultaneously studied.

Maribeth KuenziPros and Cons of Climate Strength

Interesting to consider asking about climate strength rather than relying solely on a statistical method

If we look at climate strength at the organizational-level, how do we differentiate this from culture strength?

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Question 3

What are the major points of misunderstanding or confusion with this construct? What is most important for those interested in this construct to understand?

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Strong culture increases consistency in performance (Sorensen, 2002):◦ Consensus & endorsing organizational values promotes social control◦ Goal clarity derived from strong culture reduces uncertainty◦ Motivation enhanced through feelings of freely chosen action

Strong cultures induce cognitive and behavioral uniformity (Nemeth & Staw, 1989)◦ Groups tolerate less deviation as cohesion among members intensifies (Kaplan et

al., 2009)◦ Strong norms induce people to choose (or affirm) dominant perspective (Forster

et al., 2005)

As such, strong culture organizations may be less able to modify behavior when environment changes (Sorensen, 2002), and are less likely to foster creativity (Nemeth & Staw, 1989)

BUT – what if strong culture emphasizes non-uniform behavior? Reason why culture can’t always be assessed by outsiders or subjectively

Jenny Chatman - Paradox: Strong Culture Increases Consistency But May Also Reduce Firm’s Ability to Adapt to Different Environments

Dan DenisonConfusion?

Strength is not always a good thing…


Benjamin SchneiderMisunderstandings and Confusion

Strength is a moderator, not a main effect

Studying strength presents a major paradox: Can study it only when there is poor consensus within units and differences in consensus between units

Maribeth KuenziPoints of Confusion with Climate Strength

Measurement of climate ◦ Measured differently◦ Referent makes a difference (Klein et al., 2001) I versus we Unit vs organization

◦ What percent of the group do we need to be able to calculate climate strength?◦ How do we deal with the issue that we require

agreement for aggregation?◦ Is there a lack of agreement because there is no

climate or a “negative” climate which is not reflected in measures?

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Question 4

What are the gaps in culture or climate literature in terms of strength? What should future research in this area be focused on?

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Maribeth KuenziFuture Research for Climate Strength

Operationalization and measurement of climate strength

Climates not existing or just not strong? Negative versus positive climates Interaction of climates and what role climate

strength plays in which becomes dominant Does the level (e.g., org versus unit) matter? Longitudinal research and climate change Darkside of strong climates

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Strong culture is not necessarily a disadvantage in turbulent environments, in contrast to Sorensen, (2002)

Instead, whether culture strength is an advantage or disadvantage depends on culture content

Specifically firms with strong cultures that emphasize and foster innovation perform better, are more demonstrably innovative, and enjoy a stronger reputation than those that emphasize innovation less.

Back to Kotter and Heskett (1992) BUT with focused study in one industry and based on insider perceptions

Jenny Chatman - Results from current study of 60 of the largest high technology firms: Assessed culture in 2008 and predicted financial performance in 2011 (Chatman, O’Reilly, Caldwell & Doerr)

We were unable to find any studies that have used both methods. How can we tell the relative value if there is no research on the topic?

Our experience with reviewers on a recent paper on culture strength indicates that even at top journals, there are reviewers who will argue hard that “strength”can only be measured by variance scores.

One of our papers, currently under review shows that assessments of normative integration are actually better predictors of organizational outcomes

How do you study diversity when variance is the measure of strength?

Dan DenisonGaps


Benjamin SchneiderGaps—Effects on External Perception Strength

Overall QualityWEC .38SEC .24

EfficiencyWEC .53SEC .31

SecurityWEC .40SEC .30

CompetenceWEC .32SEC .26

RelationshipWEC .31SEC .22 WEC = Weak Employee Climate

SEC = Strong Employee Climate

Question 5

How can practitioners benefit from this stream of research? What type of organizational initiatives could be most benefitted by this stream of research?

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Benjamin SchneiderUse of Strength Research

If lousy, be weak; if positive, be strong

Thomas’s English Muffin model: All in the nooks and crannies

For change, begin with climate

For change—keep what is truly valued and useful

Structural change is not enough: Change the nature of the people who gain entry—but not too different

Organizations have no choice about whether a culture forms or not, only whether norms support strategy and ultimately improve performance - or constrain it.

Culture is too important to leave to chance. Managers might usefully consider cultivating a culture in

which people agree and care about strategically relevant behaviors and innovation and adaptation over time.

Jenny ChatmanA Few Practical Implications

Be careful when you use the word “strength” with organizations. It has two meanings, so be clear which one you mean.

When organizations use the word “strength,” ask questions so that you are sure what they mean.

Be clear that normative integration around positive traits is most likely to impact effectiveness. Being consistently bad is worse than being randomly bad.

Dan DenisonGuidelines for Practice

Maribeth KuenziPractical Implications for Climate Strength Research

Provide guidance on….◦ benefits and shortcomings of strong climates◦ alignment of climates to goals◦ how to manage multiple climates◦ how to develop strong climates◦ how to change strong climates

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Question & Answer

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