Organizational Maturity and Potential Decline

Continued success creates two organizational phenomena that make cul­ture change more difficult: (1) Many basic assumptions become more strongly held, and (2) organizations develop espoused values and ideals about themselves that are increasingly out of line with the actual assump­tions by which they operate. If the internal and external environments remain stable, strongly held assumptions could be an advantage. However, if there is a change in the environment, some of those shared assumptions can become a liability, precisely because of their strength.

If an organization has had a long history of success based on certain assumptions about itself and the environment, it is unlikely to want to chal­lenge or reexamine those assumptions. Even if the assumptions are brought to consciousness, the members of the organization are likely to want to hold on to them because they justify the past and are the source of their pride and self-esteem. Such assumptions now operate as filters that make it dif­ficult for key managers to understand alternative strategies for survival and renewal. For example, DEC understood very well that the computer market had shifted toward commodities that could be built cheaply and efficiently by using components from other organizations, but to take this path would have required both a whole different approach to manufacturing and the abandonment of the company’s commitment to the fun and excitement of technical innovation. It was easier to rationalize that continued growth and innovation would solve the cost problems.

As an organization matures, it also develops a positive ideology and a set of myths about how it operates. The organization develops a self-image, an organizational “face” so to speak, that will be built around the best things they do. Organizations, like individuals, have a need for self-esteem and pride so it is not unusual for them to begin to claim to be what they aspire to be, while their actual practices are more responsive to the realities of getting their primary task accomplished. Espoused values therefore come to be, to varying degrees, out of line with the actual assumptions that have evolved out of successful daily practices and with some of the assumptions that evolve in the various subcultures.

For example, an organization ’s espoused values may be that it takes individual needs into consideration in making geographical moves; yet its basic assumption may be that “employees are resources to be man­aged like any other resource,” and “anyone who refuses an assignment is disloyal and should be taken off the promotional list.” An organization’s espoused value may be that when it introduces new products, it uses ratio­nal decision-making techniques based on market research; yet its basic assumption may be that “if our engineers like it, it must be good,” as was the assumption within DEC. An organization may espouse the value of teamwork, but all of its practices may be strongly individualistic and com­petitive as was the case in the computer division of HP. An organization may espouse concern for the safety of its employees, but its practices may be driven by assumptions that they must keep costs down to remain com­petitive, leading to the subtle encouragement of unsafe practices as was the case in BP leading up to the Texas City explosion. If, in the history of the organization, nothing happens to expose these incongruities, myths may grow up that support the espoused values, thus even building up reputations that are out of line with reality. The most common example in the 1990s was the myth in many companies that they would never lay anybody off, and, in 2009, the myth that the banks, the financial companies, and the auto companies could survive the consequences of the housing bubble bursting.

It is the growing strength of culture and the illusion that the espoused values are actually how the organization operates that makes culture change so difficult in a mature company. Most executives will say that nothing short of a “burning platform,” some major crisis, will motivate a real assess­ment and change process.

Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4^th edition.