Organizational culture and leadership schein 4th edition pdf

Question About Organization Culture

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MANAGEMENT/LEADERSHIP

EDGAR H. SCHEIN

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REGARDED AS ONE OF THE MOST INFLUENTIAL MANAGEMENT BOOKS of all time, this fourth and completely updated edition of Edgar Schein’s Organizational Culture and Leadership focuses on today’s complex business realities and draws on a wide range of contemporary research to demonstrate the crucial role of leaders in applying the principles of culture to achieve their organizational goals.

Edgar Schein explores how leadership and culture are fundamentally intertwined, and reveals key fi ndings about leadership and culture including:

• Leaders are entrepreneurs and the main architects of culture • Once cultures are formed they infl uence what kind of leadership is possible

If elements of the culture become dysfunctional, it is the leader’s responsibility to do something to speed up culture change.

In addition, the book contains new information that refl ects culture at different levels of analysis from national and ethnic macroculture to team-based microculture.

Praise for Prior Editions of Organizational Culture and Leadership

“Worth reading again and again and again.” —Booklist

“An organizational development pioneer uses an anthropolog- ical approach to address a leader’s role in shaping group and organizational dynamics.”

—Knowledge Management

“[Schein] is, to use an overworked word, a guru, the recognized expert in the fi eld.”

—Inside Business

EDGAR H. SCHEIN is Sloan Fellows Professor of Management Emeritus at the Sloan School of Management at the Massachusetts Institute of Technology. He is the author of numerous books, including Process Consultation Revisited, The Corporate Culture Survival Guide, Career Anchors, and most recently, Helping: How to Offer, Give and Receive Help.

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Organizational

Culture and Leadership

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Edgar H. Schein

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Organizational Culture and Leadership

Fourth Edition

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Copyright © 2010 by John Wiley & Sons, Inc. All rights reserved.

Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741—www.josseybass.com

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Library of Congress Cataloging-in-Publication Data has been applied for

ISBN 978-0-470-18586-5

Printed in the United States of America fourth edition

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The Jossey-Bass

Business & Management Series

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Contents

Preface to Fourth Edition ix

The Author xv

Part One: Organizational Culture and Leadership Defi ned

1. The Concept of Organizational Culture: Why Bother? 7

2. The Three Levels of Culture 23

3. Cultures in Organizations: Two Case Examples 35

4. Macrocultures, Subcultures, and Microcultures 55

Part Two: The Dimensions of Culture

5. Assumptions About External Adaptation Issues 73

6. Assumptions About Managing Internal Integration 93

7. Deeper Cultural Assumptions: What is Reality and Truth? 115

8. Deeper Cultural Assumptions: The Nature of Time and Space 125

9. Deeper Cultural Assumptions: Human Nature, Activity, and Relationships 143

10. Culture Typologies and Culture Surveys 157

11. Deciphering Organizational Cultures 177

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Part Three: The Leadership Role in Building, Embedding, and Evolving Culture

12. How Culture Emerges in New Groups 197

13. How Founders/Leaders Create Organizational Cultures 219

14. How Leaders Embed and Transmit Culture 235

15. The Changing Role of Leadership in Organizational “Midlife” 259

16. What Leaders Need to Know About How Culture Changes 273

Part Four: How Leaders Can Manage Culture Change

17. A Conceptual Model for Managed Culture Change 299

18. Culture Assessment as Part of Managed Organizational Change 315

19. Illustrations of Organizational Culture Changes 329

Part Five: New Roles for Leaders and Leadership

20. The Learning Culture and the Learning Leader 365

21. Cultural Islands: Managing Multicultural Groups 385

References 401

Index 415

On-line Instructor’s Guide is available at www.wiley.com/college/schein.

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ix

Preface to Fourth Edition

Organizational culture and leadership have both become very complicated topics. Over the past several decades, organizational culture has drawn themes from anthropology, sociology, social psychology, and cognitive psy- chology. It has become a fi eld of its own and has connected signifi cantly with the broader cultural studies that have been spawned by the rampant global- ism of recent times. The explosion of new tools in information technol- ogy and media transmission has made cultural phenomena highly accessible, and some of these phenomena are unique to the information age. Cultural variations around nation, ethnicity, religion, and social class have become highly visible through television and the Internet. Having a certain kind of culture, being a certain kind of culture, and wanting a certain kind of culture have been frequently referred to in the daily press. “ Command and control ” has become a cultural archetype even as clear descriptions of just what this means have become more elusive when we observe organizations carefully.

We are also increasingly in an age of peril, especially from the potential dangers of rapidly increasing complexity in all of our technologies. And surprisingly, this also begins to focus us on culture. We are in danger of destroying our planet through indifference to the threat of global warm- ing; we have the capacity to genetically engineer various forms of life with unknown consequences; we have a major problem in our health care indus- try because of high rates of hospital - induced infections, raising the specter of possible bio threats; and we continue to depend on nuclear energy even as we dread nuclear weapons and fear nuclear accidents.

Suddenly we have become aware that the occupations that govern activities in these arenas are themselves cultures about which we know pre- cious little. We know, for example, that doctors strongly value autonomy and that this makes certain kinds of reforms in health care more diffi cult.

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We know that the “ executive culture ” values returns for the stockholders, which creates problems of social responsibility. We know that the culture of science values exploration and innovation even into ethically dangerous areas such as genetically engineering or cloning humans. Not surprisingly, the peril of further nuclear accidents has created in the nuclear industry a whole new set of concerns about the safety of this technology leading to a preoccupation with and effort to defi ne “ safety culture. ”

The impact of all of this on me as an author is to feel overwhelmed not only by the mass of research and consulting that all of this has spawned in the culture fi eld, but also by the growing diffi culty of making sense of the whole fi eld. What I have discovered is that our empirical knowledge of how different cultures interact, how different occupations defi ne tasks, and how multicultural teams function is growing rapidly and is beyond my scope to review systematically. But I have also realized that the basic conceptual model that I articulated in the fi rst three editions is still sound as a way of analyzing cultural phenomena. For this reason, much of the basic material in this fourth edition is similar to its counterparts in the third edition, but it has all been broadened and deepened to refl ect the trends I just referred to. I have also added in each chapter some brand new material to refl ect what we have learned in the culture fi eld and what new problems have arisen as the fi eld has broadened. And I have added some new chapters to refl ect some thinking about culture at different levels of analysis, from national and ethnic macroculture to team - based microculture. This broader per- spective reveals the need to think about a few cultural universals, issues that exist at every cultural level, and the need to evolve the concept of “ cultural islands ” to deal with the dilemma of how to create the ability to work together in very diverse multicultural groups.

What of leadership? Writings about leadership have also exploded, but we are not much clearer today than we were twenty - fi ve years ago about what is a good leader and what a leader should be doing. We have many proposals of what leaders should be and do, and different lists of “ core competencies ” or traits that leaders should exhibit. Part of the confusion derives from the fact that there is no clear consensus on defi ning who is a leader — the CEO, anyone at the head of a department, or anyone who takes the initiative to change things. Leadership as a distributed function is gaining ground, which leads to the possibility that anyone who facilitates progress toward some desired outcome is displaying leadership.

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I continue to believe that the most important way of staying focused in this sea of possibilities is to keep exploring how leadership and culture are fundamentally intertwined. I will continue to argue (1) that leaders as entrepreneurs are the main architects of culture, (2) that after cultures are formed, they infl uence what kind of leadership is possible, and (3) that if elements of the culture become dysfunctional, leadership can and must do something to speed up culture change.

I should also note that with the changes in technological complex- ity, especially in information technology, the leadership task has changed. Leadership in a networked organization is a fundamentally different thing from leadership in a traditional hierarchy. So we will have to examine care- fully how the interplay between culture and leadership is evolving as the world becomes more globally interconnected.

How Is This Book Different from the Second Edition of My 2009 Corporate Culture Survival Guide?

This fourth edition continues to be a general text that covers most aspects of corporate culture dynamics and their relationship to leadership. The Survival Guide is an updated practical roadmap for leaders and managers who want immediate guidance on how to think about culture manage- ment. This fourth edition continues to dig deeper into the theoretical and practical issues surrounding the culture fi eld. So, for example, the culture assessment process is presented as eight steps in the Guide and as ten steps in this edition because I have elaborated the rationale and broken down a couple of the steps into substeps. Some of the case materials are the same, but I included new cases for this fourth edition and kept the cases that make particularly important theoretical points. The student should read this book; the practicing manager should read the Guide .

How This Book Is Organized

In Part I , I will note that the culture and leadership fi eld has differenti- ated itself and can now be viewed from three different perspectives: the traditional scholar/researcher who is pursuing fundamental theory, the practitioner who is developing tools to help leaders and managers deal with the cultural issues they encounter, and the scholar/practitioner who

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is concerned about middle - level theory and the translation of that theory into concepts and tools that will help the practitioner even as he or she continues to inform theory.

I have always written from this third perspective because I have had the good fortune of a variety of consulting experiences that provided rich clini- cal experience from which to build and test theory. What I have labeled “ Clinical Research ” argues that practical experiences where we are actually helping organizations to solve their problems provide multiple opportuni- ties to observe and inquire, leading to better concepts, models, and tools to be replicated in further experience.

Where social systems and human dynamics are involved, it is diffi cult to do experiments, and where cultural phenomena are involved, it is hard to gather credible data by survey methods, so I rely more on careful observation, group interviews, and focused inquiry with informants. As a scholar/practitioner, I rely on face validity and on the fact that feedback from readers and clients illuminates the complex phenomena that we are trying to understand. I also rely more on a version of “ replication. ” Would others see the same phenomena that I see if they were to enter the situation?

Part I defi nes culture and provides some examples and a model for how to think about culture as an abstraction. In Part II , I discuss the major dimensions along which you can analyze culture and review a few of the more salient culture typologies that are being used. In Part III , the focus shifts to leadership and the dynamics of how cultures begin, evolve, and change. Part IV deals with the dynamics of “ managed ” culture change by reviewing fi rst a general model of change, then a chapter on how to deci- pher and assess culture, and then a number of cases of organization/culture change. I close in Part V with two chapters that present the challenges of culture management as we see the world becoming more complex, net- worked, and multicultural. The concept of cultural islands and the use of dialogue are introduced as possible new approaches for leadership in a mul- ticultural world.

The main goal of this edition continues to be to clarify the concept of culture and its relationship to leadership, show how culture works, and enable students to explain organizational and occupational phenomena that might otherwise be puzzling and/or frustrating. With understanding,

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the student then also acquires the insight and tools needed to demonstrate leadership in creating, evolving, and changing culture.

An updated online Instructor’s Guide is available at www.wiley.com/ college/schein.

Acknowledgments

In preparing for this edition, I have been helped enormously by the anony- mous reviewers of the third edition that were recruited by Jossey - Bass. They provided a useful critique and many suggestions for how to improve the text and the basic message. I owe a special debt to Professor Joan Gallos, who not only reviewed my prior editions but also became very engaged in helping me sort out how to integrate the mass of new information that has become available in the past ten years.

As usual, it is my clients who were and continue to be the chief inspi- ration for the ideas and concepts I have developed. There is nothing as powerful as empirical observation for building models and theories of how things work. Where possible I will name the organizations and groups from which I learned or else use pseudonyms if confi dentiality is required. I am especially grateful to the many members of the Institute of Nuclear Power Operations, the Con Edison Company, and the group of hospital CEOs brought together by Mary Jane Kornacky and Jack Silversin.

Colleagues with whom to discuss these matters are essential to fi guring things out, so special thanks to Jean Bartunek, Michael and Linda Brimm, David Coghlan, Scott Cook, Dan Denison, Paul Evans, Marc Gerstein, Mary Jo Hatch, Grady McGonagill, Joanne Martin, John Minahan, Sophia Renda, Otto Scharmer, Majken Schultz, and John Van Maanen.

Finally, some special thanks need to go to a most unusual and valued colleague, Joichi Ogawa, who brought together a small group to represent very different approaches to the question of how to analyze and help organizations; Steve Bond, a Jungian therapist; David Calof, a systemic family therapist who works with organizations; Jon Stokes, a Tavistock - based organizational consultant who works from a psychoanalytic perspec- tive; and Hillel Zeitlin, a Sullivanian family therapist. This group met for several days in each of the past fi ve years and dug deeply into the question

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of what is an organization, what is culture, and how does one do “ therapy ” with an organization. The multiple perspectives used in the analysis of our various consulting cases have proved to be invaluable in reconceptualizing the material in this fourth edition. We did not solve the problem of integrat- ing Jung, Freud, family systems theory, and Lewin, but we had a wonderful time trying to do it and produced a short book called Organizational Therapy (2009).

Jan. 1, 2010 Edgar H. Schein Cambridge, MA

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The Author

Ed Schein was educated at the University of Chicago, at Stanford University where he received a master ’ s degree in psychology in 1949, and at Harvard University where he received his Ph.D. in social psychology in 1952. He was chief of the Social Psychology section of the Walter Reed Army Institute of Research while serving in the U.S. Army as captain from 1952 to 1956. He joined MIT ’ s Sloan School of Management in 1956 and was made a professor of Organizational Psychology and Management in 1964.

From 1968 to 1971, Schein was the undergraduate planning profes- sor for MIT, and in 1972, he became the chairman of the Organization Studies Group of the MIT Sloan School, a position he held until 1982. He was honored in 1978 when he was named the Sloan Fellows Professor of Management, a chair he held until 1990. He retired from MIT in 2006 and is currently professor emeritus.

Schein is the founding editor of Refl ections: The Society for Organizational Learning Journal (1999 – 2004), which is devoted to connecting academics, consultants, and practitioners around the issues of knowledge creation, dis- semination, and utilization.

He has been and continues to be a prolifi c researcher, writer, teacher, and consultant. Besides his numerous articles in professional journals, he has authored fourteen books, including Organizational Psychology (3rd ed., 1980), Career Dynamics (1978), Organizational Culture and Leadership (1985, 1992, 2004), Process Consultation Vol. 1 and Vol. 2 (1969, 1987, 1988), Process Consultation Revisited (1999), the Corporate Culture Survival Guide (1999, 2009), and a revision of his best - selling Career Anchors (2006), which has been widely used in career counseling and coaching. His book Process Consultation Revisited (1999) received the Members Choice Award of the

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xvi T H E A U T H O R

Organization Development Network, 2005. His most recent publication is Helping: How to Offer, Give, and Receive Help (2009).

Schein also wrote a cultural analysis of the Singapore Economic Development Board entitled Strategic Pragmatism (1997) and has pub- lished an extended case analysis of the rise and fall of Digital Equipment Corporation entitled DEC is Dead; Long Live DEC: The Lasting Legacy of Digital Equipment Corporation (2003). He was coeditor with the late Richard Beckhard of the Addison Wesley Series on organization development, which has published more than thirty titles since its inception in 1969.

His consultation focuses on organizational culture, organization devel- opment, process consultation, and career dynamics, and among his past and current clients are major corporations both in the United States and overseas, such as Alcoa, AMOCO, Apple, British Petroleum, Ciba - Geigy, Citibank, Con Edison, Digital Equipment Corporation, the Economic Development Board of Singapore, EssoChem Europe, Exxon, General Foods, Hewlett - Packard, ICI, Motorola, Procter & Gamble, Saab Combitech, Shell, Steinbergs, and the International Atomic Energy Agency (on the subject of “ safety culture ” ).

Schein has received many honors and awards for his writing, most recently the Lifetime Achievement Award in Workplace Learning and Performance of the American Society of Training Directors, February 3, 2000; the Everett Cherington Hughes Award for Career Scholarship from the Careers Division of the Academy of Management, August 8, 2000; the Marion Gislason Award for Leadership in Executive Development from the Boston University School of Management Executive Development Roundtable, December 11, 2002; the Lifetime Achievement Award of the Organization Development Network, 2005; and, most recently, the Distinguished Scholar - Practitioner Award of the Academy of Management, August 2009.

At the present, he serves on the boards of Massachusetts Audubon, Boston Baroque, and Cambridge at Home. He is also on the advisory board of the Institute for Nuclear Power Operations and the Environmental Safety Review Board of ConEdison in New York.

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Organizational

Culture and Leadership

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Part One

ORGANIZATIONAL CULTURE AND LEADERSHIP DEFINED

In Part I of this book, I will do three things: (1) Defi ne the concept of cul- ture, (2) show the intimate relationship between culture and leadership, and (3) show how both the study of culture and of leadership have evolved in the past decade. To fully understand this evolution, it is fi rst necessary to get a defi nition of culture that we can all agree on so that when I speak of the initiation, growth, and evolution of culture, you will know what I am referring to. Similarly we have to defi ne leadership because there are now so many defi nitions running around both in the academic and applied lit- erature, there are so many prescriptions of what a leader should be in terms of basic competencies and what a leader should do in terms of increasing the effectiveness of organizations, that the students and practitioner can ’ t possibly fi gure out what to believe and what to ignore.

To begin to unscramble these many trends, we need to create a larger conceptual map of the total territory and have a clear set of labels to iden- tify places on the map. The main topic of this book is organizational culture focused on all kinds of private, public, government, and nonprofi t organi- zations. When dealing with the private sector, we often call this “ corporate culture. ” But throughout this book, I will also be referring to national and

1

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ethnic cultures, which I will call macrocultures , and to the various occu- pational groups that make up organizations, which can best be thought of as subcultures . Occupations, such as medicine, law, and engineering, transcend organizations and, for some purposes, can also be thought of as macrocultures, but their main impact is in their operation as subcultures within organizations. There is also a growing interest in the cultures of small coherent units within organizations, units such as surgical teams or task forces that cut across occupational groups and are, therefore, different from occupational subcultures. This kind of organizational unit is increas- ingly being called a microsystem and would, therefore, have a microculture . These labels are summarized in Exhibit I.1 .

Conceptual Approach

My approach is observational and clinical, in the sense that I draw on both academic knowledge and my own lived experience (Schein, 1987a, 2008). For academic knowledge to be useful, it must illuminate experience and provide explanations for what we observe that puzzles or excites us. If expe- rience cannot be explained by what research and theorizing have shown so far, then the scholar/practitioner must develop his or her own concepts and, thereby, enhance existing theory. As we will see, the fi eld of culture provides many opportunities for the development of new concepts because it has not yet been studied enough in group, organizational, and occupa- tional domains to have spawned new theory. It is still an evolving fi eld. The implications of this approach for the student are that you should go out and experience cultures as you read about them. Visit different kinds of organizations, and see what you can observe for yourself.

Exhibit I.1. Categories of Culture.

Culture Category

Macrocultures Nations, ethnic and religious groups, occupations that exist globally

Organizational cultures Private, public, nonprofi t, government organizations

Subcultures Occupational groups within organizations

Microcultures Microsystems within or outside organizations

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Culture is both a “ here and now ” dynamic phenomenon and a coercive background structure that infl uences us in multiple ways. Culture is con- stantly reenacted and created by our interactions with others and shaped by our own behavior. When we are infl uential in shaping the behavior and values of others, we think of that as “ leadership ” and are creating the con- ditions for new culture formation. At the same time, culture implies stabil- ity and rigidity in the sense that how we are supposed to perceive, feel, and act in a given society, organization, or occupation has been taught to us by our various socialization experiences and becomes prescribed as a way to maintain the “ social order. ” The “ rules ” of the social order make it possible to predict social behavior, get along with each other, and fi nd meaning in what we do. Culture supplies us our language, and language provides mean- ing in our day - to - day life. Culture can be thought of as the foundation of the social order that we live in and of the rules we abide by. The culture of macrosystems such as societies is more stable and ordered because of the length of time they have existed. Organizational cultures will vary in strength and stability as a function of the length and emotional intensity of their actual history from the moment they were founded. Occupational cultures will vary from highly structured ones such as medicine to relatively fl uid ones such as management. Microcultures are the most variable and the most dynamic and, therefore, provide special opportunities to study culture formation and evolution.

The connection between culture and leadership is clearest in organi- zational cultures and microcultures. What we end up calling a culture in such systems is usually the result of the embedding of what a founder or leader has imposed on a group that has worked out. In this sense, culture is ultimately created, embedded, evolved, and ultimately manipulated by leaders. At the same time, with group maturity, culture comes to constrain, stabilize, and provide structure and meaning to the group members even to the point of ultimately specifying what kind of leadership will be accept- able in the future. If elements of a given culture become dysfunctional leaders have to surmount their own culture and speed up the normal evo- lution processes with forced managed culture change programs. These dynamic processes of culture creation and management are the essence of leadership and make you realize that leadership and culture are two sides of the same coin. The vast leadership literature will not be reviewed in this

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book, but the connection between culture and leadership will be pointed out in every chapter and will be highlighted in Parts III , IV , and V .

As we proceed into this fourth edition, the reader will note that much of the basic conceptual material remains the same, but the context within which it is presented and analyzed has changed considerably in the past seven years, and new material has been added to refl ect how organiza- tional culture as a domain has enlarged to encompass occupational sub- cultures, national/ethnic macrocultures, and a variety of microcultures. There are several reasons for this enlargement of the domain (as summa- rized in Exhibit I.2 ). First, all the occupations and disciplines by which the world works are getting more technical and more complex, leading to occupational cultures that are more highly differentiated and, therefore, use different languages and concepts. The immediate implication is that coordination among subcultures within organizations will become more diffi cult. Second, the explosion of information technology and the ensu- ing networking of the entire globe are changing the nature of how work is defi ned, how work is done, and how organizational boundaries are drawn. If the growth and evolution of culture is a function of human interaction, and if human interaction is undergoing fundamental changes, then culture formation and evolution will itself change in unknown ways.

Third, with globalization of both private sector and public sector orga- nizations, multicultural groups will do more work that will involve multiple macrocultures. To understand how an organization such as a merger or joint venture that cuts across several macrocultures can begin to function, we will need to have a much better understanding of the dynamics of microsys- tems. We have as yet relatively little understanding of how to quickly train a multi - national multi - occupational project team such as a United Nations health team going into a disaster area in an underdeveloped country.

Exhibit I.2. Forces Infl uencing Culture Studies.

• Increasing technological/scientifi c complexity of all functions • Global networking through information technology • More multicultural organizations through mergers and joint ventures • More organizational concern about global warming and sustainability

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But a study of organizational culture should provide some guidance on how to think about and implement such training.

Fourth, the crisis around global warming, climate change, and sustain- ability will infl uence all levels of culture that have been identifi ed. Not only will this bring into being whole new sets of organizations whose mis- sion will be intimately connected to these global issues, but private sec- tor organizations will increasingly have to consider how environmental responsibility will have to be worked into the concept of core mission and how this will be expressed culturally.

To summarize, understanding culture at any level now requires some understanding of all of the levels. National, ethnic, occupational, orga- nizational, and microsystem issues are all interconnected. In Chapter One , we focus on organizational culture and provide examples of why it is important to understand this aspect of the broad cultural domain. In Chapter Two , the general concept of culture is analyzed structurally to highlight that culture is a complex phenomenon that operates at several different levels of observability. Chapter Three illustrates this complexity by describing the cultures of two organizations, and Chapter Four shows how these organizations are infl uenced by their location in macrocultures.

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T H E C O N C E P T O F O R G A N I Z AT I O N A L C U LT U R E : W H Y B O T H E R ?

Culture is an abstraction, yet the forces that are created in social and orga- nizational situations deriving from culture are powerful. If we don ’ t under- stand the operation of these forces, we become victim to them. Cultural forces are powerful because they operate outside of our awareness. We need to understand them not only because of their power but also because they help to explain many of our puzzling and frustrating experiences in social and organizational life. Most importantly, understanding cultural forces enables us to understand ourselves better.

What Needs to Be Explained?

Most of us in our roles as students, employees, managers, researchers, or consultants work in and have to deal with groups and organizations of all kinds. Yet we continue to fi nd it amazingly diffi cult to understand and jus- tify much of what we observe and experience in our organizational life. Too much seems to be “ bureaucratic, ” “ political, ” or just plain “ irrational. ” People in positions of authority, especially our immediate bosses, often frus- trate us or act incomprehensibly, and those we consider the “ leaders ” of our organizations often disappoint us.

When we get into arguments or negotiations with others, we often can- not understand how our opponents could take such “ ridiculous ” positions. When we observe other organizations, we often fi nd it incomprehensible that “ smart people could do such dumb things. ” We recognize cultural differences at the ethnic or national level but fi nd them puzzling at the group, organizational, or occupational level. Gladwell (2008) in his popu- lar book Outliers provides some vivid examples of how both ethnic and

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organizational cultures explain such anomalies as airline crashes and the success of some law fi rms.

As managers, when we try to change the behavior of subordinates, we often encounter “ resistance to change ” at a level that seems beyond reason. We observe departments in our organization that seem to be more inter- ested in fi ghting with each other than getting the job done. We see com- munication problems and misunderstandings between group members that should not be occurring between “ reasonable ” people. We explain in detail why something different must be done, yet people continue to act as if they had not heard us.

As leaders who are trying to get our organizations to become more effective in the face of severe environmental pressures, we are sometimes amazed at the degree to which individuals and groups in the organization will continue to behave in obviously ineffective ways, often threatening the very survival of the organization. As we try to get things done that involve other groups, we often discover that they do not communicate with each other and that the level of confl ict between groups in organizations and in the community is often astonishingly high.

As teachers, we encounter the sometimes - mysterious phenomenon that different classes behave completely differently from each other even though our material and teaching style remains the same. If we are employees considering a new job, we realize that companies differ greatly in their approach, even in the same industry and geographic locale. We feel these differences even as we walk in the door of different organizations such as restaurants, banks, stores, or airlines.

As members of different occupations, we are aware that being a doctor, lawyer, engineer, accountant, or manager involves not only learning technical skills but also adopting certain values and norms that defi ne our occupation. If we violate some of these norms, we can be thrown out of the occupation. But where do these come from and how do we recon- cile the fact that each occupation considers its norms and values to be the correct ones? How is it possible that in a hospital, the doctors, nurses, and administrators are often fi ghting with each other rather than collaborating to improve patient care? How is it possible that employees in organizations report unsafe conditions, yet the organization continues to operate until a major accident happens?

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The concept of culture helps to explain all of these phenomena and to “ normalize ” them. If we understand the dynamics of culture, we will be less likely to be puzzled, irritated, and anxious when we encounter the unfamiliar and seemingly irrational behavior of people in organizations, and we will have a deeper understanding not only of why various groups of people or organizations can be so different but also why it is so hard to change them.

Even more important, if we understand culture better, we will under- stand ourselves better and recognize some of the forces acting within us that defi ne who we are. We will then understand that our personality and character refl ect the groups that socialized us and the groups with which we identify and to which we want to belong. Culture is not only all around us but within us as well.

Five Personal Examples

To illustrate how culture helps to illuminate organizational situations, I will begin by describing several situations I encountered in my experiences as a consultant.

DEC

In the fi rst case, Digital Equipment Corporation (DEC), I was called in to help a management group improve its communication, interpersonal relationships, and decision making (Schein, 2003). DEC was founded in the middle 1950s and was one of the fi rst companies to successfully introduce interactive computing, something that today we take completely for granted. The company was highly successful for twenty - fi ve years but then developed a variety of diffi cul- ties, which led to its sale to the Compaq Corporation in 1996. I will be referring to the DEC story many times in this book.

After sitting in on a number of meetings of the top management, I observed, among other things: (1) High levels of interrupting, confrontation, and debate, (2) excessive emotionality about proposed courses of action, (3) great frustration over the diffi culty of getting a point of view across, (4) a sense that every member of the group wanted to win all the time, and (5) shared frustration that it took forever to make a decision that would stick.

Over a period of several months, I made many suggestions about better listening, less interrupting, more orderly processing of the agenda, the potential negative effects of high emotionality and confl ict, and the need to reduce the frustration level. The group members said that the suggestions were helpful, and they modifi ed certain aspects of their procedure, such as lengthening some of their meetings. However, the basic pattern did not change. No matter what kind of intervention I attempted, the basic style of the group remained the same. How to explain this?

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Ciba - Geigy

In the second case, I was asked, as part of a broader consultation project, to help create a cli- mate for innovation in an organization that felt a need to become more fl exible to respond to its increasingly dynamic business environment. This Swiss Chemical Company consisted of many different business units, geographical units, and functional groups. It was eventually merged with the Sandoz Company and is today part of Novartis.

As I got to know more about Ciba - Geigy ’ s many units and problems, I observed that some very innovative things were going on in many places in the company. I wrote several memos describing these innovations, added other ideas from my own experience, and gave the memos to my contact person in the company with the request that he distribute them to the various business unit and geographical managers who needed to be made aware of these ideas.

After some months, I discovered that those managers to whom I had personally given the memo thought it was helpful and on target, but rarely, if ever, did they pass it on, and none were ever distributed by my contact person. I also suggested meetings of managers from dif- ferent units to stimulate lateral communication but found no support at all for such meetings. No matter what I did, I could not seem to get information fl owing laterally across divisional, functional, or geographical boundaries. Yet everyone agreed in principle that innovation would be stimulated by more lateral communication and encouraged me to keep on “ helping. ” Why did my helpful memos not circulate?

Cambridge - at - Home

This third example is quite different. Two years ago I was involved in the creation of an organiza- tion devoted to allowing people to stay in their homes as they aged. The founding group of ten older residents of Cambridge asked me to chair the meetings to design this new organization. To build strong consensus and commitment, I wanted to be sure that everyone ’ s voice would be heard even if that slowed down the meetings. I resisted Robert ’ s Rules of Order in favor of a consensus building style, which was much slower but honored everyone ’ s point of view. I discovered that this consensus approach polarized the group into those who were comfortable with the more open style and those who thought I was running the “ worst meetings ever. ” What was going on here?

Amoco

In the fourth example, Amoco, a large oil company that was eventually acquired by British Petroleum, decided to centralize all of its engineering functions into a single service unit. Whereas engineers had previously been regular full - time members of projects, they were now supposed to “ sell their services ” to clients who would be charged for these services. The engi- neers would now be “ internal consultants ” who would be “ hired ” by the various projects. The engineers resisted this new arrangement violently, and many of them threatened to leave the organization. Why were they so resistant to the new organizational arrangements?

Alpha Power

In the fi fth example, Alpha Power, an electric and gas utility that services a major urban area, was faced with becoming more environmentally responsible after being brought up on criminal

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charges for allegedly failing to report the presence of asbestos in one of its local units that suffered an accident. Electrical workers, whose “ heroic ” self - image of keeping the power on no matter what, also held the strong norm that one did not report spills and other environmental and safety problems if such reports would embarrass the group. I was involved in a multi - year project to change this self - image to one where the “ heroic ” model was to report all safety and environmental hazards even if that meant reporting on peers and even bosses. A new concept of personal responsibility, teamwork, and openness of communication was to be adopted. Reporting on and dealing with environmental events became routine, but no matter how clear the new mandate was, some safety problems continued if peer group relations were involved. Why? What could be more important than employee and public safety?

How Does the Concept of Culture Help?

I did not really understand the forces operating in any of these cases until I began to examine my own assumptions about how things should work in these organizations and began to test whether my assumptions fi tted those operating in my client systems. This step of examining the shared assumptions in an organization or group and comparing them to your own takes us into “ cultural ” analysis and will be the focus from here on.

It turned out that in DEC, senior managers and most of the other mem- bers of the organization shared the assumption that you cannot determine whether or not something is “ true ” or “ valid ” unless you subject the idea or proposal to intensive debate. Only ideas that survive such debate are worth acting on, and only ideas that survive such scrutiny will be implemented. The group members assumed that what they were doing was discovering truth, and, in this context, being polite to each other was relatively unim- portant. I become more helpful to the group when I realized this and went to the fl ip chart and just started to write down the various ideas they were processing. If someone was interrupted, I could ask him or her to restate his or her point instead of punishing the interrupter. The group began to focus on the items on the chart and found that this really did help their com- munication and decision process. I had fi nally understood and accepted an essential element of their culture instead of imposing my own. By this intervention of going to the fl ip chart, I had changed the microculture of their group to enable them to accomplish what their organizational culture dictated.

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In Ciba - Geigy, I eventually discovered that there was a strong shared assumption that each manager ’ s job was his or her private “ turf ” not to be infringed on. The strong image was communicated that “ a person ’ s job is like his or her home, and if someone gives unsolicited information, it is like walking into someone ’ s home uninvited. ” Sending memos to people implies that they do not already know what is in the memo, which is seen to be potentially insulting. In this organization, managers prided themselves on knowing whatever they needed to know to do their job. Had I understood this aspect of their culture, I would have asked for a list of the names of the managers and sent the memo directly to them. They would have accepted it from me because I was the paid consultant and expert.

In my Cambridge meetings, different members had different prior expe- riences in meetings. Those who had grown up with a formal Robert ’ s Rules of Order system on various other nonprofi t boards were adamant that this was the only way to run a meeting. Others who had no history on other boards were more tolerant of my informal style. The members had come from different subcultures that did not mesh. In my human relations train- ing culture, I had learned the value of involving people to get better imple- mentation of decisions and was trying to build that kind of microculture in this group. Only when I adapted my style to theirs was I able to begin to shape the group more toward my preferred style.

In Amoco, I began to understand the resistance of the engineers when I learned that their assumptions were “ good work should speak for itself, ” and “ engineers should not have to go out and sell themselves. ” They were used to having people come to them for services and did not have a good role model for how to sell themselves.

In Alpha, I learned that in the safety area, all work units had strong norms and values of self - protection that often over - rode the new require- ments imposed on the company by the courts. The groups had their own experience base for what was safe and what was not safe and were willing to trust that. On the other hand, identifying environmental hazards and cleaning them up involved new skills that workers were willing to learn and collaborate on. The union had its own cultural assumption that under no conditions would one “ rat out ” a fellow union member, and this applied especially in the safety area.

In each of these cases, I initially did not understand what was going on because my own basic assumptions about truth, turf, and group relations

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differed from the shared assumptions of the members of the organization or group. And my assumptions refl ected my “ occupation ” as a social psycholo- gist and organization consultant, while the group ’ s assumptions refl ected in part their occupations and experiences as electrical engineers, chemists, nonprofi t organization board members, and electrical workers.