Organizational Culture- The Social Inducement System

Richard W. Scholl, Professor of Management, University of Rhode Island

Revised: April 12, 2003

In the 1980's, we saw an increase in the attention paid to organizational culture as an important determinant of organizational success. Many experts began to argue that developing a strong organizational culture is essential for success. While the link between organizational culture and organizational effectiveness is far from certain, there is no denying that each organization has a unique social structure and that these social structures drive much of the individual behavior observed in organizations. This page focuses on the ways in which an organization's culture affects the behavior of its members. We will leave the question of the relationship between culture and effectiveness for another discussion.

What is organizational culture?
A single definition of organizational culture has proven to be very elusive. No one definition of organizational culture has emerged in the literature. One of the issues involving culture is that is defined both in terms of its causes and effect. For example, these are the two ways in which cultures often defined.

1. Outcomes- Defining culture as a manifest pattern of behavior- Many people use the term culture to describe patterns of cross individual behavioral consistency (CIBC). For example, when people say that culture is “The way we do things around here,” they are defining consistent way is in which people perform tasks, solve problems, resolve conflicts, treat customers, and treat employees.
2. Process- Defining culture as a set of mechanisms creating cross individual behavioral consistency- In this case culture is defined as the informal values, norms, and beliefs that control how individuals and groups in an organization interact with each other and with people outside the organization.

Both of these approaches are relevant to understanding culture. It is important to know on what types of behavior culture has greatest impact (outcomes) and how culture works to control the behavior of organizational members. We will address these two questions later in the module.

Functions of organizational culture

1. Behavioral control
2. Encourages stability
3. Provides source of identity

Liabilities of culture

1. Barrier to change and improvement
2. Barrier to diversity
3. Barrier to cross departmental and cross organizational cooperation
4. Barrier to mergers and acquisitions

Cultural Attributes (Kilmann, Saxton, & Serpa, 1986)

The Direction of impact is the course that culture is causing organizations to follow. Does culture influence behavior so that organizational goals are accomplished, or does culture push members to behave in ways that are counter to the formal mission and goals of the organization?

The Pervasiveness of impact is the degree to which the culture is widespread, or shared, among the members of a group

The Strength of impact is the level of pressure that culture exerts on the members in the organization, regardless of direction.

1. How strongly held or the social values?
2. How committed our members to the shared mental models?
3. How vigorously enforced other social norms?

What Types of Behavior Does Culture Control?
Using the outcome approach, cultures are described in terms of the following variables:

Innovation versus Stability- The degree to which organizational members are encouraged to be innovative, creative and to take risks.

Strategic versus Operational Focus- The degree to which the members of the management team focus on the long term big picture versus attention to detail.

Outcome versus Process Orientation- The degree to which management focuses on outcomes, goals and results rather than on techniques, processes, or methods used to achieve these results.

Task Versus Social Focus- The relative emphasis on effect of decisions on organizational members and relationships over task accomplishment at all costs

Team versus Individual orientation- The degree to which work activities are organized around teams rather than individuals

Customer Focus versus Cost Control- The degree to which managers and employees are concerned about customer satisfaction and Service rather than minimizing costs

Internal verses External Orientation- The degree to which the organization focuses on and is adaptive to changes in its environment

Basis for commitment of organizational members- What is the dominant source of motivation that characterize organizational members and on which managers focus? Is there a strong:

1. Instrumental Orientation- focus is on pay and equity
2. Status Orientation- focus is on titles, status symbols, allocation of credit and recognition
3. Internal Standard Orientation- focus is on achievement, challenge and individual growth
4. Goal Orientation- focus is on service to customers, clients, and quality

Power Distance- The psychological distance between organizational members at various levels. The degree of deference to authority, the rigidity of chain of command, and the formality of interaction.

Conformity versus Individuality- The degree to which individuality is encouraged and tolerated

Ad hockery versus Planning- Focus on emergent versus deliberate development of mission and strategy.

Centralized versus Decentralized decision making- The degree to lower level employees are encouraged to make and implement decisions without approval from top management

Cooperation versus Competition- Degree to which cooperativeness and team spirit is encouraged versus individual competition and political posturing

Cultural Control Mechanisms

How does organizational culture control the behavior of organizational members? If consistent behavioral patterns (CIBC) are the outcomes or products of a culture, what is it that causes many people to act in a similar manner? There are four basic ways in which a culture, or more accurately members of a reference group representing a culture, creates high levels of cross individual behavioral consistency. There are:

Social Norms

Social norms are the most basic and most obvious of cultural control mechanisms. In its basic form, a social norm is simply a behavioral expectation that people will act in a certain way in certain situations. Norms (as opposed to rules) are enforced by other members of a reference group by the use of social sanctions. Norms have been categorized by level.

1. Peripheral norms are general expectations that make interactions easier and more pleasant. Because adherence of these norms is not essential to the functioning of the group, violation of these norms general results in mild social sanctions.
2. Relevant norms encompass behaviors that are important to group functioning. Violation of these norms often results in non-inclusion in important group functions and activities
3. Pivotal norms represent behaviors that are essential to effective group functioning. Individuals violating these norms are often subject to expulsion from the group.

Why do individuals comply with social norms? What explains the variance among individuals with a group in the degree of compliance with norms, that is, why do some members comply with all norms, while others seem to ignore them?

1. Self-concept

1. Individuals more dominant in self-concept external source of motivation (those motivated primarily by means of acceptance, worth and status and other forms of external validation) would be most likely to comply with social norms. Since social sanctions involve the withholding of acceptance, these individual are most likely to comply.

2. Likewise, those characterized by high/week self-concepts would be more likely to comply with social norms than with those with strong self-concepts. Those with strong self-concepts or less likely to need the acceptance and other forms of affirmation contingent upon compliance with norms.

3. Identification- Individuals who identify with the group, that is to define their social identity in terms of the group, are more likely to comply with the group's norms.

2. Internalization of norms- One of the most powerful bases of compliance or conformity is internalization, that is, believing that the behavior dictated by the norm is truly the right and proper way to behave. Over time, many group members began to internalize pivotal and relevant norms. This represents the development of a cognitive schema?
3. High status members of a group are often exempt from peripheral norms, as are those with high amounts of what is called idiosyncratic credit. Idiosyncratic credit is generally awarded to group members who have contributed a lot to the group and have earned the freedom to violate the norms free from sanctions.

Shared Values
As a cultural control mechanism the keyword in shared values is shared. The issue is not whether or not a particular individual's behavior can best be explained and/or predicted by his or her values, but rather how widely is that value shared among organizational members, and more importantly, how responsible was the organization/culture in developing that value within the individual.
What is a value? Any phenomenon that is some degree of worth to the members of giving groups: The conception of the desirable that establishes a general direction of action rather than a specific objective. Values are the conscious, affective desires or wants of people that guide their behavior

How do values influences individual behavior?

1. Private/internal values- When individuals have internalized values, compliance with values is based on eliminating naked kids affect (e.g., guilt feelings) associated with noncompliance with values. For example, individuals internalizing the value of honesty, feel guilty when cheating or stealing. This negative affect state stops them from acting in a way inconsistent with their internalized value.
2. Public/espouse values- When we believe that everyone around us holds a certain value (social value), we often acting ways consistent with that value even though we don't personally hold that value. This is done to gain acceptance and support from the group.

How are values formed/developed within individuals? We like to think that our values are unique to us and an essential part of who we are. The critical question here is, how much of our values are derived from our reference group affiliation? We find that for most people, their values are generally consistent with the values of the reference group in which they were socialized. There are two kinds of values:

1. Instrumental values represent the “means” an individual prefers for achieving important “ends.”
2. Terminal values are preferences concerning “ends” to be achieved. When an individual can no long answer the question of “why” with “because...”, a terminal value has been reached. Terminal values are often formed when instrumental values become “internalized,” such that individuals no longer see the cause and effect relationship between the instrumental object and positive end state?
3. The affective components of values- Terminal values are actually affective in nature, while instrumental values are cognitive.

Shared Mental Models & Consensual Schema
What is a mental model? Going back to our discussion of theories and models, we defined a mental model or theory in use as a causal relationship between two variables. The belief structure of managers can be represented as a complex set of mental models, which they use for diagnosing problems and making decisions. During this course, you have explored many of your mental models about satisfaction and motivation, about pay and performance and about attitudes and behavior. In organizations with strong cultures, members of the organization began to share common mental models about employees, competition, customers, unions, and other important aspects of managerial decision-making. Mental models are often called basic underlying assumptions.
How does a mental model impact on the behavior of individual? Every time to make a decision is based on one more of our mental models. For example, if a manager believes that increasing satisfaction will increase employee performance, he or she is likely to do things that eliminates dissatisfaction among employees and work hard to increase their levels of satisfaction. When all managers of the organization share the same mental models or theories, they are likely to make very similar decisions when solving problems. This leads to a consistent way of doing things and solving problems in an organization.
What are cognitive schema? Cognitive schema are mental representations of knowledge. Cognitive scripts are types of schema involving action or the way to do something. Schema are generally enacted subconsciously, that is, we enact a script without much thought or deliberation. In other word cognitive scripts are like programs (like macros) we store and call upon when certain stimuli are present. We develop scripts over time by performing a certain task many times (like driving home from work). The first time we perform a task, we tend to think about every step and deliberate about the many alternative ways we can perform each step. Over time, as we learn the best way to perform the task, we “lock in” the script, or program, and do not think about each step again (unless we experience a significant problem). This is called direct schema development. In some cases, we do not go through this deliberate step by step learning process, we simply copy (or are told) how to perform a certain task from members of the reference group (culture). This is called indirect schema development. In either case, when schema become widely shared they are called consensual schema and they account for a large amount of cross individual behavioral consistency. For more on schema click HERE

Social Identities
The establishment of one's identity is a matter of individual choice and acceptance of that choice by the reference group. This implies that individuals select among their variety of social identities (high school kids selecting among jocks, preppies, boarders, and a host of other identities). Likewise, members of these established reference groups act to either affirm or disaffirm these social identities of individuals. Existing members can accept or reject individuals from these groups based on the degree to which they comply with norms and behave in ways consistent with the shared values of the group. The important point is that to understand/predict one's behavior, it is important to understand the identity to which the individual claims.
How does the social identity of an individual impact his or her behavior? Once an individual establishes his or her social identity they often word hard to affirm and reinforce this identity in the minds of others.  This requires behaving in way consistent with the expectations of others with respect to this identity or role.
How does a culture control behavior through social identities? What is the relationship between organizational culture and social identities? Members of a reference group representing a culture does three things to establish social identities:

A. A culture establishes a set of roles (social identities)

B. A culture establishes a set of role expectations (traits, competencies, & values) associated with each identity

C. A culture establishes the status or value/worth to the reference group of each social identity.  This tends to establish the attractiveness of an identity/role to members (Think of how the status of firefighters and police officers has recently increased).

How is Culture Developed, Reinforced, and Changed?
It is often said in organizations that, “we need to change the culture around here.”  What is usually meant is that someone desires a behavioral change.  In other words, then defining the culture by its results (see: What Types of Behavior Does Culture Control). What they mean is that they want to change a behavioral pattern such as employees to paying more attention to customers, or that they want managers to come to meetings on time, or some other set of behaviors. While these patterns of behavior can be changed by changing the organization's structure (rule, regulations, rewards systems), changing these behaviors through culture involves changing the underlying mechanisms that drive these behavioral patterns: namely norms, social values, identify structure, or mental model. Since these underlying culture control mechanisms are often taken for granted and subconscious in nature, they are difficult to change. Changing structure by changing a rule and its enforcement mechanism is rather simple when compared to changing a social value. Culture is resistant to change because many of the cultural control mechanism become internalized in the minds of organizational members, that is what makes culture such strong control mechanism. Changing culture often means that members have to change their entire social identify. Sometimes the statuses of various roles or identities change causing even more resistance on the part of high status role holders.
While changing behavior by changing structure may have more appeal because it appears easier, in many cases this type of change is not successful because managers have not changed the underlying culture and they find that the culture and structure are in conflict. So how can a manager attempt to change culture. While it is difficult, the key lies in symbolic action, that is, dealing with important symbols of values, norms and assumptions. Here are some general guidelines:

Changing Social Values

1. Role Modeling- People look to leaders for queues about what is important in an organization. The most important thing a leader can do is act in a manner consistent with the desired social value. When it comes to instilling culture values, “do as a say not as I do” does not work very well. When organizational members observe a leader making a personal sacrifice for a value, it sends a strong message that this value is important.
2. Culture is often transited through stories and myths that extol certain virtues held to be important to the organization. These stories are told in informal setting as well as published in company newsletters.
3. In reacting to crises, leaders can sent strong messages about values and assumptions. When a leader supports new values in the face of crisis, when emotions often run high, he or she communicates that this value is very important.
4. In addition to motivating behavior directly, a reward system can send powerful messages regarding what is important. For example, about 15 years two faculty members being evaluated for full professor were denied promotion. What was interesting is that both of these faculty members won the university wide Outstanding Teaching award. This sent a message to the rest of us that teaching was not valued and only research productivity is really valued.
5. Important and public decisions also communicate the importance of certain values. If the first thing to be cut in budget crunches is training, it sends the message the training is not valued. The criteria for allocation of resources often becomes what is valued in an organization. For example, budgets are determined by steady past performance it sends a different message than if they were determined by past innovation and risk taking.
6. Leaders communicate the importance of values by what they praise and what they criticize. It is important to pay attention to what is said.
7. Social values are often changed through the selection process. As new members are hired and effort is made to hire new members that hold the new value.

Changing Mental Model and Basic Assumptions

1. In most cases, individuals making decisions and solving problems do not question their basic assumptions (underlying mental models). They simply use them, without thinking, and arriving at a decision or solution to their problem. If the solution does not work, they mostly likely question the inputs to their decision and attempt to make a better decision next time. This is called single loop learning.

2. In some cases, the individual or group actually begins to question the basic assumptions and models underlying the decision. This is called double loop learning. It is through double loop learning that changes in shared mental models take place. When attempting to change the shared mental models of a group, it is important to take time out from the day to day problem solving process to outline, challenge, and agree on changes to the shared mental model.

References

Kilmann, R. H., Saxton, M. J., & Serpa, R. 1986. Issues in understanding and changing culture. California Management Review, 28: 87-94.