Understanding How Organizational Culture Really Works

2 Copyright © 2011 by Human Synergistics International. All rights reserved. “Culture is “organizational personality” -- the underlying values, beliefs, and norms that govern the behavior of people as members of an organization.” Eric Flamholz, Ph.D., Anderson School of Management Culture is “the way we do things around here.” Marvin Bower, McKinsey & Company “... A more fruitful approach is to regard culture as the source of a family of concepts... symbol[s], language, ideology, belief, ritual, and myth.” Andrew M. Pettigrew, 1979 What is Organizational Culture?

3 Copyright © 2011 by Human Synergistics International. All rights reserved. Human Synergistics’ Definition As measured by the OCI ®, organizational culture refers to the behavioral norms and expectations that: a) guide the way people interact with one another and approach their work, and b) reflect shared values, beliefs, and other organizational factors.

4 Copyright © 2011 by Human Synergistics International. All rights reserved. ‘How Culture Works’ Model Outcomes (Effectiveness) Causal Factors (Levers for Change) Operating Culture (OCI Norms) The HS theoretical model explains the complex nature of culture and climate in organizations. Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Handbook of Organizational Culture and Climate, pp. 147 – 162, Copyright © 2000 by Sage Publications, Cooke, R.A. and Szumal, J.L.

5 Copyright © 2011 by Human Synergistics International. All rights reserved. How Culture Should Work Individual Group Organizational Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Norms Expectations (Current Culture) Outcomes (Effectiveness) Causal Factors (Levers for Change) Operating Culture (OCI Norms) Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Handbook of Organizational Culture and Climate, pp. 147 – 162, Copyright © 2000 by Sage Publications, Cooke, R.A. and Szumal, J.L.

6 Copyright © 2011 by Human Synergistics International. All rights reserved. How Culture Really Works Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Individual Group Organizational Norms Expectations (Current Culture) Structures Technology Skills/Qualities Systems Outcomes (Effectiveness) Causal Factors (Levers for Change) Operating Culture (OCI Norms) Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Handbook of Organizational Culture and Climate, pp. 147 – 162, Copyright © 2000 by Sage Publications, Cooke, R.A. and Szumal, J.L.

7 Copyright © 2011 by Human Synergistics International. All rights reserved. The Culture Disconnect Resources Demands Individual Motivation, Performance, Satisfaction, Stress Group Teamwork, Inter-unit Coordination, Unit-level Quality Organizational Org-level Quality, Customer Service Quality, External Adaptability Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Norms Expectations (Current Culture) Structures Roles, Influence, Decision-Making Technology Job Design, Complexity, Interdependence Skills/Qualities Leadership, Communication, Bases of Power Systems Selection. Training, Appraisal, Reinforcement, Goal setting Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Handbook of Organizational Culture and Climate, pp. 147 – 162, Copyright © 2000 by Sage Publications, Cooke, R.A. and Szumal, J.L.

8 Copyright © 2011 by Human Synergistics International. All rights reserved. Effects of Resources and Demands on How Culture Really Works Organizational resources and environmental demands play an important role in explaining inconsistencies among values and philosophies, operating cultures, and organizational effectiveness.  The magnitude of resources has a direct and positive impact on outcomes, whereas the magnitude of demands has a negative impact.  Organizations with vast resources and little competition are in an advantageous position to prosper relative to those with limited resources and operating in demanding environments. Cooke, R.A. and Szumal, J.L., Handbook of Organizational Culture and Climate, pp. 152,159, Copyright © 2000 by Sage Publications.

9 Copyright © 2011 by Human Synergistics International. All rights reserved. Defensive Misattribution of Success  The direct and indirect effects of resources and demands on outcomes explain why a subset of organizations with Defensive cultures nevertheless appear to be relatively effective.  Resources and demands account for the misattributions often made when organizations with dysfunctional cultures appear to be successful. Cooke, R.A. and Szumal, J.L., Handbook of Organizational Culture and Climate, pp , Copyright © 2000 by Sage Publications.

10 Copyright © 2011 by Human Synergistics International. All rights reserved. Defensive Misattribution of Success Resources Demands Individual Motivation, Performance, Satisfaction, Stress Group Teamwork, Inter-unit Coordination, Unit-level Quality Organizational Org-level Quality, Customer Service Quality, External Adaptability Norms Expectations (Current Culture) Structures Roles, Influence, Decision-Making Technology Job Design, Complexity, Interdependence Skills/Qualities Leadership, Communication, Bases of Power Systems Selection. Training, Appraisal, Reinforcement, Goal setting Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Cooke, R.A. and Szumal, J.L., Handbook of Organizational Culture and Climate, pp , Copyright © 2000 by Sage Publications.

11 Copyright © 2011 by Human Synergistics International. All rights reserved. The Culture Bypass  The culture bypass accounts for inconsistencies among values and philosophies, operating culture, and organizational effectiveness.  Certain organizations adopt strategies that revolve around special resources, proprietary technologies, or standardized products that provide a competitive advantage (e.g. cost).  The technologies, systems, and structures put in place are intended to bypass culture by directly controlling members’ behaviors. Cooke, R.A. and Szumal, J.L., Handbook of Organizational Culture and Climate, pp. 160, Copyright © 2000 by Sage Publications.

12 Copyright © 2011 by Human Synergistics International. All rights reserved. The Culture Bypass Norms Expectations (Current Culture) Individual Motivation, Performance, Satisfaction, Stress Group Teamwork, Inter-unit Coordination, Unit-level Quality Organizational Org-level Quality, Customer Service Quality, External Adaptability Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Resources Demands Structures Roles, Influence, Decision-Making Technology Job Design, Complexity, Interdependence Skills/Qualities Leadership, Communication, Bases of Power Systems Selection. Training, Appraisal, Reinforcement, Goal setting Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Sage Publications Copyright © Handbook of Organizational Culture and Climate, pp , Cooke, R.A. and Szumal, J.L.

13 Copyright © 2011 by Human Synergistics International. All rights reserved. How Effective Cultures Work Individual Group Organizational Norms Expectations (Current Culture) Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Structures Technology Skills/Qualities Systems Operating Culture (OCI Norms) Outcomes (Effectiveness) Causal Factors (Levers for Change) Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Sage Publications Copyright © Handbook of Organizational Culture and Climate, Cooke, R.A. and Szumal, J.L.

14 Copyright © 2011 by Human Synergistics International. All rights reserved. Differentiating Culture from Climate Based on perceptions Based on shared beliefs Past or present focusedFuture focused “How things are around “What’s expected (or valued) here”around here” Example: In this Example: People in this organization, people are organization are expected or rewarded in proportion implicitly required to compete to the excellence of theirrather than cooperate job performance Short-term implications Long-term implications Easier to changeHarder to change Most managers focus only on this But outcomes are more reliably predicted by this Climate Culture Janet L. Szumal and Robert. A. Cooke, Climate versus culture: An experiential case study, 2003 Team and Organizational Development Sourcebook, Mel Silberman and Pat Philips (Eds) (copyright © 2003 by Mel Silberman).

Said Another Way.... What you see & hear... The Iceberg, above the Waterline What you don’t see & hear... Under the Waterline What is...  Allowed  Rewarded  Ignored  Condemned Copyright © 2011 by Human Synergistics International. All rights reserved.

16 Copyright © 2011 by Human Synergistics International. All rights reserved. Where Culture and Climate Fit in the ‘How Culture Works’ Model Culture (OCI) Climate (OEI) Individual Group Organizational Outcomes (Effectiveness) Causal Factors (Levers for Change) Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Structures Technology Skills/Qualities Systems Norms Expectations (Current Culture) Operating Culture (OCI Norms) Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Cooke, R.A. and Szumal, J.L., Handbook of Organizational Culture and Climate, Copyright © 2000 by Sage Publications.

17 Copyright © 2011 by Human Synergistics International. All rights reserved. Organizational Culture Inventory ®  The Organizational Culture Inventory ®, or OCI ®, is a reliable and valid measure of organizational culture that distinguishes effective organizations from those that are less effective.  The OCI provides a common language for discussing culture, data for understanding its impact, and a framework for implementing cultural change.  OCI results are presented on the HS Circumplex model and provide two pictures of culture—”what is expected” and “what is preferred”. Adapted from Human Synergistics 2008 Catalog, pp 56-57, Copyright © 2008 Human Synergistics International. All Rights Reserved.

18 Copyright © 2011 by Human Synergistics International. All rights reserved. OCI ® and OCI ® Ideal OCI ® Measures behavioral norms and expectations—what it takes for you and people like yourself to “fit in” and meet expectations in your organization. Also measures outcomes associated with culture that provide insights into the need for cultural change. OCI ® Ideal Measures shared values—beliefs about the behaviors that should be expected to maximize your organization’s effectiveness. Also measures organizational readiness for change.

19 Copyright © 2011 by Human Synergistics International. All rights reserved. Three General Types of Cultures Constructive cultures promote effective goal setting and achievement, growth and learning, and teamwork and collaboration. Passive/Defensive cultures lead to conformity, rigidity, and lack of team member accountability and initiative. Aggressive/Defensive cultures lead to internal competition, management by exception, and short-term emphasis as opposed to long-term effectiveness. Adapted from Human Synergistics 2008 Catalog, pp 55-57, Copyright © 2008 Human Synergistics International. All Rights Reserved.

20 Copyright © 2011 by Human Synergistics International. All rights reserved. Organizational Effectiveness Inventory ®  The Organizational Effectiveness Inventory ®, or OEI, is a reliable and valid measure of effectiveness outcomes at the individual, group, and organizational levels.  The OEI also measures the causal factors which become the levers for change and development.  Used together, the OCI and OEI provide a comprehensive picture of the organization’s culture, the factors leading to and reinforcing that culture, and the outcomes of culture. Adapted from Human Synergistics 2008 Catalog, pp 59-61, Copyright © 2008 Human Synergistics International. All Rights Reserved.

21 Copyright © 2011 by Human Synergistics International. All rights reserved. Measuring the Model Components Norms Expectations (Current Culture) Assumptions Espoused Values (Ideal Culture) Philosophy Mission Goals Strategies Individual Group Organizational Structures Technology Skills/Qualities Systems Outcomes (Effectiveness) Causal Factors (Levers for Change) Operating Culture (OCI Norms) Research and development by Robert A. Cooke, Ph.D. Copyright © 1997, 2011 by Robert A. Cooke, Ph.D., Human Synergistics International. All Rights Reserved. Handbook of Organizational Culture and Climate, pp. 147 – 162, Copyright © 2000 by Sage Publications, Cooke, R.A. and Szumal, J.L.

22 Copyright © 2011 by Human Synergistics International. All rights reserved. Measuring Espoused Values with the OCI ® Ideal Historical Ideal OCI (N=560) Based on 560 members of 56 organizations Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © by Human Synergistics International. All Rights Reserved.  The OCI Ideal inventory creates a vision of the preferred culture. Members respond to the survey in terms of what should be expected.  Members are asked to identify the behavioral styles that would promote their own motivation and performance, maximize the contributions of diverse subgroups and help reach organizational goals. Adapted from Human Synergistics 2008 Catalog, pp 64, Copyright © 2008 Human Synergistics International. All Rights Reserved.

23 Copyright © 2011 by Human Synergistics International. All rights reserved. Measuring Causal Factors (Levers for Change) with the OEI ® The OEI measures these causal factors that lead to and reinforce cultural norms: The organization’s mission and philosophy Organizational structures Systems Technologies Skills and qualities of members When in alignment with values, these factors lead to an operating culture that is similar to the Ideal. When out of alignment, they lead to a Defensive operating culture that is “disconnected” from the Ideal. Structures Roles Influence Decision-Making Technology Job Design Complexity Interdependence Skills/Qualities Leadership Communication Bases of Power Systems Selection Training Appraisal Reinforcement Goal setting Adapted from Human Synergistics 2008 Catalog, pp 64, Copyright © 2008 Human Synergistics International. All Rights Reserved.

24 Copyright © 2011 by Human Synergistics International. All rights reserved. Measuring the Operating Culture with the OCI ® Current Research and development by Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D. Copyright © by Human Synergistics International. All Rights Reserved. The OCI Current provides a picture of the operating culture in terms of “how things are done around here” and “what’s expected” of members. Behavioral norms and expectations have a direct bearing on the functioning of organizations and are causally related to outcomes. OCI results promote change by revealing the Defensive and counterproductive behaviors the organization is inadvertently reinforcing, as well as the negative impact of these behaviors on individual and organizational performance. Adapted from Human Synergistics 2008 Catalog, pp 64, Copyright © 2008 Human Synergistics International. All Rights Reserved.

25 Copyright © 2011 by Human Synergistics International. All rights reserved. Measuring Outcomes (Effectiveness) with the OEI ®  Operating culture determines outcomes at the individual, group, and organizational levels.  Strong norms for Constructive behaviors lead to desirable outcomes, such as individual motivation, performance, job satisfaction, teamwork, quality of work relations, and quality of customer service.  Strong expectations for Defensive behaviors, especially Passive behaviors, lead to less desirable outcomes. Individual Motivation Performance Satisfaction Stress Group Teamwork Inter-unit Coordination Unit-level Quality Organizational Org-level Quality Customer Service Quality External Adaptability Adapted from Organizational Effectiveness Inventory™ Copyright © 1997, 1995 Human Synergistics/Center for Applied Research, Inc. All Rights Reserved.