In a young organization, design, structure, architecture, rituals, stories, and formal statements are cultural reinforcers, not culture creators. Once an organization has matured and stabilized, these same mechanisms come to be constraints on future leaders. But in a growing organization, these six mechanisms are secondary because they work only if they are consistent with the primary mechanisms discussed previously. When they are consistent, they begin to build organizational ideologies and thus to formalize much of what is informally learned at the outset. If they are inconsistent, they will either be ignored or will be a source of internal conflict.
All these secondary mechanisms can be thought of as cultural artifacts that are highly visible but may be difficult to interpret without insider knowledge obtained from observing leaders’ actual behaviors. When an organization is in its developmental phase, the driving and controlling assumptions will always be manifested first and most clearly in what the leaders demonstrate through their own behavior, not in what is written down or inferred from visible designs, procedures, rituals, stories, and published philosophies. However, as we will see later, these secondary mechanisms can become very strong in perpetuating the assumptions even when new leaders in a mature organization would prefer to change them.
1. Organizational Design and Structure
As I have observed executive groups in action, particularly first – generation groups led by their founder, I have noticed that the design of the organization—how product lines, market areas, functional responsibilities, and so on are divided up—elicits high degrees of passion but not too much clear logic. The requirements of the primary task—how to organize to survive in the external environment—seem to get mixed up with powerful assumptions about internal relationships and with theories of how to get things done that derive more from the founder’s background than from current analysis. If it is a family business, the structure must make room for key family members or trusted colleagues, cofounders, and friends. Even in publicly held companies, the organization’s design is often built around the talents of the individual managers rather than the external task requirements.
Founders often have strong theories about how to organize for maximum effectiveness. Some assume that only they can ultimately determine what is correct; therefore, they build a tight hierarchy and highly centralized controls. Others assume that the strength of their organization is in their people and therefore build a highly decentralized organization that pushes authority down as low as possible. Still others, like Olsen, believe that their strength is in negotiated solutions, so they hire strong people but then create a structure that forces such people to negotiate their solutions with each other—creating, in the process, a matrix organization. Some leaders believe in minimizing interdependence to free each unit of the organization; others believe in creating checks and balances so that no one unit can ever function autonomously.
Beliefs also vary about how stable a given structure should be, with some leaders seeking a solution and sticking with it, while others, like Olsen, were perpetually redesigning their organization in a search for solutions that better fit the perceived problems of the ever-changing external conditions. The initial design of the organization and the periodic reorganizations that companies go through thus provide ample opportunities for the founders and leaders to embed their deeply held assumptions about the task, the means to accomplish it, the nature of people, and the right kinds of relationships to foster among people. Some leaders are able to articulate why they have designed their organization the way they have; others appear to be rationalizing and are not really consciously aware of the assumptions they are making, even though such assumptions can sometimes be inferred from the results. In any case, the organization’s structure and design can be used to reinforce leader assumptions but rarely does it provide an accurate initial basis for embedding them because structure can usually be interpreted by the employees in a number of different ways.
2. Organizational Systems and Procedures
The most visible parts of life in any organization are the daily, weekly, monthly, quarterly, and annual cycles of routines, procedures, reports, forms, and other recurrent tasks that have to be performed. The origins of such routines are often not known to participants or, sometimes, even to senior management. But their existence lends structure and predictability to an otherwise vague and ambiguous organizational world. The systems and procedures thus serve a function similar to the formal structure in that they make life predictable and thereby reduce ambiguity and anxiety. Though employees often complain of stifling bureaucracy, they need some recurrent processes to avoid the anxiety of an uncertain and unpredictable world.
Given that group members seek this kind of stability and anxiety reduction, founders and leaders have the opportunity to reinforce their assumptions by building systems and routines around them. For example, Olsen reinforced his belief that truth is reached through debate by creating many different kinds of committees and attending their meetings. Steinberg reinforced his belief in absolute authority by creating review processes in which he would listen briefly and then issue peremptory orders. Ciba-Geigy reinforced its assumptions about truth deriving from science by creating formal research studies before making important decisions. Alpha Power reinforced its assumptions about the inherent danger of delivering electricity, gas, and steam by writing hundreds of procedures for how to do things and providing constant training and monitoring to ensure compliance.
Systems and procedures can formalize the process of “paying attention” and thus reinforce the message that the leader really cares about certain things. This is why the president who wanted management development programs helped his cause immensely by formalizing his quarterly reviews of what each subordinate had done. Formal budgeting or planning routines are often adhered to less to produce plans and budgets and more to provide a vehicle to remind subordinates what to pay attention to.
If founders or leaders do not design systems and procedures as reinforcement mechanisms, they open the door to historically evolved inconsistencies in the culture or weaken their own message from the outset. Thus, a strong CEO who believes, as Olsen did, that line managers should be in full control of their own operation must ensure that the organization’s financial control procedures are consistent with that belief. If he allows a strong centralized corporate financial organization to evolve and if he pays attention to the data generated by this organization, he is sending a signal inconsistent with the assumption that managers should control their own finances. Then one subculture may evolve in the line organization and a different subculture in the corporate finance organization. If those groups end up fighting each other, it will be the direct result of the initial inconsistency in design logic, not the result of the personalities or the competitive drives of the managers of those functions.
3. Rites and Rituals of the Organization
Some students of culture view the special organizational processes of rites and rituals as central to deciphering as well as communicating cultural assumptions (Deal and Kennedy, 1982, 1999; Trice and Beyer, 1984, 1985). Rites and rituals are symbolic ways to formalize certain assumptions and are, therefore, important artifacts to observe. However, their lessons are not always easy to decipher, so I do not consider them to be primary embedding mechanisms. Instead, they might be considered important reinforcers of key cultural assumptions if those assumptions are made clear by the primary embedding mechanisms.
In DEC, for example, the monthly “Woods meetings” devoted to important long-range strategic issues were always held off-site in highly informal surroundings that strongly encouraged informality, status equality, and dialogue. The meetings usually lasted two or more days and involved some joint physical activity such as a hike or a mountain climb. Olsen strongly believed that people would learn to trust each other and be more open with each other if they did enjoyable things together in an informal setting. As the company grew, various functional groups adopted this style of meeting as well, to the point where periodic off-site meetings became corporate rituals with their own various names, locales, and informal procedures.
In Ciba-Geigy, the annual meeting always involved the surprise athletic event that no one was good at and that would therefore equalize status. The participants would let their hair down, try their best, fail, and be laughed at in a good-humored fashion. It was as if the group were trying to say to itself, “We are serious scientists and business people, but we also know how to play.” During the play, informal messages that would not be allowed in the formal work world could be conveyed, thus compensating somewhat for the strict hierarchy.
In Alpha Power, the values of teamwork, especially in environmental, health and safety activities, were symbolized by monthly “Way we work” special lunches attended by three or four teams that had been nominated for outstanding achievements and senior management. Each team was asked to tell the entire group what they had accomplished and how they had done it. Group photographs then published in the house organ served as additional reward and publicity. In addition the company had all kinds of prizes for safety performance.
You can find examples of ritualized activities and formalized ritual events in most organizations, but they typically reveal only very small portions of the range of assumptions that make up the culture of an organization. Therein lies the danger of putting too much emphasis on the study of rituals. You can perhaps decipher one piece of the culture correctly, but you may have no basis for determining what else is going on and how important the ritualized activities are in the larger scheme of things.
4. Design of Physical Space, Facades, and Buildings
Physical design encompasses all the visible features of the organization that clients, customers, vendors, new employees, and visitors encounter. The messages that can be inferred from the physical environment, as in the case of structure and procedures, potentially reinforce the leader’s messages, but only if they are managed to accomplish this (Steele, 1973, 1986; Gagliardi, 1990). If they are not explicitly managed, they may reflect the assumptions of architects, the organization’s planning and facilities managers in the organization, local norms in the community, or other subcultural assumptions. Often the architecture also reflects macroculture assumptions in that buildings have to fit the style of the community in which they exist.
DEC chose to locate itself initially in an old woolen mill to emphasize frugality and simplicity. What the visitor experienced visually in this organization was an accurate reflection of deeply held assumptions, and one indicator of this depth was that the effects were reproduced in the offices of this organization all over the world.
Ciba – Geigy strongly valued individual expertise and autonomy. But because of its assumption that the holder of a given job becomes the ultimate expert on the area covered by that job, it physically symbolized turf by giving people privacy. In both companies, physical arrangements were not incidental or accidental physical artifacts. They reflected the basic assumptions of how work gets done, how relationships should be managed, and how to arrive at truth.
5. Stories About Important Events and People
As a group develops and accumulates a history, some of this history becomes embodied in stories about events and leadership behavior (Allan, Fairtlough and Heinzen, 2002; Martin and Powers, 1983; Neuhauser, 1993; Wilkins, 1983). Thus, the story—whether it is in the form of a parable, legend, or even myth—reinforces assumptions and teaches assumptions to newcomers. However, because the message to be found in the story is often highly distilled or even ambiguous, this form of communication is somewhat unreliable. Leaders cannot always control what will be said about them in stories, though they can certainly reinforce stories that they feel good about and perhaps can even launch stories that carry desired messages. Leaders can make themselves highly visible to increase the likelihood that stories will be told about them, but sometimes attempts to manage the message in this manner backfire because the story may reveal inconsistencies and conflicts in the leader.
Efforts to decipher culture from collecting stories encounter the same problem as the deciphering of rituals—unless we know other facts about the leaders, we cannot always correctly infer what the point of the story is. If we understand the culture, then stories can be used to enhance that understanding and make it concrete, but it is dangerous to try to achieve that understanding in the first place from stories alone.
For example, two stories told about Ken Olsen state that when he first saw the IBM PC he said, “Who would ever want a computer in their home?” and, on another occasion, “I would fire the engineer who designed that piece of junk.” These stories send strong messages about Olsen’s prejudices, but it turns out that only one of the stories is correctly interpreted. Olsen did think the PC was less elegant than what he would have wanted to produce, but his remark about computers in the home was in the context of computers controlling everything in the home. This remark was made at a time when fears of computers taking over all functions in our lives was very real, as viewers of the film 2001: A Space Odyssey will recall. Olsen welcomed computers in his home as work and play stations but not as mechanisms for organizing and controlling daily activities. Unfortunately, the story was often told to show that Olsen did not accurately perceive the growing use of home computers, the opposite of what he believed and encouraged.
6. Formal Statements of Philosophy, Creeds, and Charters
The final mechanism of articulation and reinforcement to be mentioned is the formal statement—the attempt by the founders or leaders to state explicitly what their values or assumptions are. These statements typically highlight only a small portion of the assumption set that operates in the group and, most likely, will highlight only those aspects of the leader’s philosophy or ideology that lend themselves to public articulation. Such public statements have a value for the leader as a way of emphasizing special things to be attended to in the organization, as values around which to rally the troops, and as reminders of fundamental assumptions not to be forgotten. However, formal statements cannot be viewed as a way of defining the organization ’s culture. At best they cover a small, publicly relevant segment of the culture—those aspects that leaders find useful to publish as an ideology or focus for the organization. What I have called espoused values as the middle level of cultural definition is reflected in this category.
Source: Schein Edgar H. (2010), Organizational Culture and Leadership, Jossey-Bass; 4th edition.