According to Heckscher, the notion of a strong organizational culture is not a new one, for it developed at least as early as the 1920s in opposition to the bureaucracies that had developed within most corporations. At that time,
‘‘corporate leaders began consciously structuring their organizations as communities, stressing values of loyalty and cooperation’’ (Heckscher, 1994, p. 30). Such considerations constitute the most fundamental elements of culture.8
So, organizational development, which is founded on the concept of a corporate culture, emerged primarily from the recognition of a higher level of requirements for the organization in its effort to cope effectively and efficiently with a new order of environmental change. This proved to be a capability that the bureaucracy could not achieve, for it had been designed and employed to be effective in a fairly static environment. Whereas
‘‘Cultures can be very stable over time, but they are never static’’ (Kotter &
Heskett, 1992, p. 7). And some problems of bureaucracy seem to be inherent even in those that are well managed. The top three among them are that people are responsible only for their own jobs, that bureaucracy fails at effectively controlling the ‘‘informal’’ organization (the systems for accomplishing work without encountering the formal bottlenecks inherent in bureaucratic structures), and that it does not manage processes effectively over time (Heckscher, 1994, pp. 20–23).
In general, the management strategy to move away from the use of power by authority as the lever for organizational change, which characterizes the bureaucratic hierarchy toward the use of peer influence as the means to that end, became the new standard. Peer influence was targeted because
‘‘ypeers do constitute strong influences on individual behavior, andya
process of change successfully initiated in a peer group may become self- energizing and self-reinforcing’’ (Katz & Kahn, 1966, p. 450). An ostensibly grassroots movement to identify and strengthen values held in common by peers as a way to move the entire organization through the onslaught of challenges posed by its environment holds very practical benefits for the organization: it reduces the frequent negative reaction to authority, it enhances communication throughout the organization, and it helps satisfy the need of employees to see their contribution to the greater enterprise. In short, ‘‘Culture as a social control mechanism is important because it offers several advantages over external control accomplished through rewards and sanctions’’ (Pfeffer, 1997, p. 123). But from the strict standpoint of corporate results, the single most significant contribution of the flatter or less rigid hierarchical organization is the greater quantity and higher quality of information that can be brought to bear on any issue.
‘‘The most important strength is that decisions result from a thorough ‘mixing’ of the intelligence found throughout the organization. For that reason one would expect the decisions to be better, especially in the long runyWe know that bureaucracies tend to become conservative and inward-focused, missing the implications of important changes.
The mixing of intelligence is the best mechanism for avoiding this dangery’’ and there is ‘‘the probability that an interactive structure is better for the creation of evolutionarily new forms.’’ (Heckscher, 1994, pp. 50–51)
And so, the nurturing of a corporate culture not just any culture, but a culture attuned to the advancement of the executive vision for the formal organization became the dominant management strategy in the 1980s. It was to be a strategy whereby everyone could become a winner. But the self- conscious nurturing of a corporate culture was a new and improved plan whose goal nonetheless remained that of maintaining control. Thus, instead of being controlled through manifest administrative force, the culture is managed through the less direct eliciting of ‘‘behavior consistent with cultural prescriptions’’ (Kunda, 1992, p. 218).John Kotter and James Heskett (1992) point out that the ideas embedded in a culture can originate anywhere in the organization, ‘‘But in firms with strong corporate cultures, these ideas often seem to be associated with a founder or other early leaders who articulate them as a ‘vision,’ a ‘business strategy,’ a ‘philosophy,’ or all three’’ (p. 7). In successful examples, the guiding principles come from the top.
Just as corporate culture is the nucleus of organizational development, values constitute the core of culture. Therefore, values figure foremost in molding the ethos of the workplace in an apparently less authority- and power-driven environment than is associated with the bureaucracy. This strategy is commonly called ‘‘reengineering.’’ As defined by Michael
Hammer and James Champy (1993), reengineering is ‘‘the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed’’ (p. 32). Reorganization to such an extent was unprecedented in the mid-20th-century America, but its complexities were recognized immediately to be complex, rife with ambiguities, and stressful for all. And its implications went deep, because this effort demanded the adoption of an entirely new perspective on the manner in which the organization functions and how it communicates internally.
When a company is taking its first steps toward reengineering, no one really knows exactly where it is heading; no one really knows exactly what it will become; no one really even knows which aspects of the current company will change, let alone precisely how. The vision is what a company believes it wants to achieve when it is done, and a well-drawn vision will sustain a company’s resolve throughout the stress of the reengineering process. (Hammer & Champy, 1993, p. 154)
The foundation of corporate culture is constructed of the values held formally and promulgated throughout the organization. In fact, according to JeffreyPfeffer (1997, p. 121), some researchers have defined culture as a form of organizational control exercised through shared values, while he and Charles O’Reilly conclude from their collaborative research that
‘‘A value that is the basis for a set of norms or expectations about what are the appropriate attitudes and behaviors can act as a powerful social control system. This is what organizational culture really is: a social control system in which shared expectations guide people’s behavior’’ (O’Reilly & Pfeffer, 2000, p. 238).
Of course, the work of any organization is performed by individuals, working together, to be sure, but individuals. So, just as the values of the organizational leadership are adopted by the collective workforce, they must be adopted by each individual in that workforce.9‘‘For a person to succeed in any organization, he or she has to understand what is really important to that firm its values y The policies and practices of the company signal clearly what is valued and important’’ (O’Reilly & Pfeffer, 2000, p. 233).
The literature of organizational development is comprised of studies of a number of aspects of the change effort it entails, chief among which are leadership and several essential values: motivation and commitment, learning, flexibility, risk-taking, and participation. The most relevant research findings are summarized respectively in the following paragraphs.
Leadership
‘‘The single most visible factor that distinguishes major cultural changes that succeed from those that fail is competent leadership at the top’’ (Kotter &
Heskett, 1992, p. 84). By diminishing the importance of structured authority and power in the organization, the intensity of management supposedly gives way to the prominence of leadership. A useful distinction between the functions of management and leadership is proffered by JohnKotter (1990, pp. 103–105), who describes the responsibility of management as coping with the many complexities of daily business, and the responsibility of leadership as orchestrating deeper change. The two functions are not mutually exclusive, of course, but they bear quite distinctive emphases that highlight the differences between the reengineered organization and the bureaucracy. It is clear that the replacement of the bureaucracy with a flatter, less clearly defined organizational structure introduces a less visible order. But, ‘‘Structureless does not mean leaderless’’ (Hammer, 2001, p. 145). And what permits this ambiguity to work well is the likelihood that some in the organization are as much driven to follow as others are to lead.
Most of these descriptive elements seem very positive, of course, because they are consciously determined to improve both corporate competitiveness and the prospects of the individual in the organization. To accomplish these goals requires that they be presented in the most favorable light and certainly without a hint of threat. As will be shown, however, experience with corporate culture as a control mechanism reveals an underlying perspective on management that is no less negative than the image projected by the bureaucratic forms of control and may even lend it a slightly insidious slant on the engineered environment. In 1956, when the memory of the tight bureaucracy was still fresh to make valid comparisons between that form of organization and the nascent reengineered forms and when leadership and management were held in the same few hands, William Whyte wrote inThe Organization Manthat, ‘‘No one wants to see the old authoritarian return, but at least it could be said of him that what he wanted primarily from you was your sweat. The new man wants your soul’’ (Whyte, 1956, p. 327; cited byKunda, 1992, p. 15).
Motivation and Commitment
The elusive goal of management has long been that of motivating employees using one or both of two routes. Both, however, too often prove to be less
than satisfactory. The bureaucratic organization relies on motivational forces such as financial reward, promotion, and sanction that are extrinsic to the individual, while post-bureaucratic theory endeavors to nurture motivation that is intrinsic to the individual through peer influence and an apparent broad distribution of power. The latter is based on the hardly disputable theory that people are driven from within as well as from without and internal motivations were believed to be of greater duration.10 According to an analysis of the literature on this debate conducted by Judy Cameron and David Pierce (2002), ‘‘A prominent view states that rewards and reinforcement decrease a person’s intrinsic motivation to engage in an activity’’ (p. 11). This assessment is well supported by Chris Argyris (1999), a leading scholar in the field of organizational behavior for more than a half century, who concluded that ‘‘Individuals whose commitment and motivation are external depend on their managers to give them the incentive to work’’ (p. 237).Cameron and Pierce (2002), however, take the debate a step further by arguing that the relevant research has not resulted in a discrediting of extrinsic motivation through reward, but rather that ‘‘it has revealed conditions under which a negative effect of promised reward will occur, and, inadvertently, it has revealed several conditions that result in positive effects of rewards’’ (p. 194). The baby need not be thrown out with the bath water.
Among the many hurdles encountered in developing a greater degree of intrinsic motivation throughout the organization, according to Chris Argyris (1999), is one posed by managers who ‘‘embrace the language of intrinsic motivation but fail to see how firmly mired in the old extrinsic world their communications actually are’’ (p. 236). The leadership may not be entirely on board during the voyage from the bureaucratic environment to the culture-oriented environment, and this is at a time when today’s employees need to have ‘‘as much intrinsic motivation and as deep a sense of organizational stewardship as any company executive’’
(p. 238). Evidently, what is needed is more of a synergistic balance in extrinsic and intrinsic motivation, for it is not simply that either source of motivation fails to supply the desired result. ‘‘Instead, more effort needs to be devoted to the effective management of rewards in applied settings’’
(Cameron & Pierce, 2002, p. 232), as intrinsic motivation is nurtured.
‘‘Effective’’ is the operative adjective, but the reader is left to assume it means being especially sensitive to the particular nature of the influence that is generated by extrinsic reward when it is employed within the culture- driven organization.
Learning
In a dynamic environment, learning is considered essential to the success of the organization, for it is part and parcel of adaptation and innovation.
David Garvin (1993, p. 80) describes the elements behind this notion, characterizing the learning organization as ‘‘an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights’’.11 He goes on to demonstrate the dependence of continuous improvement on the learning organization, discusses various other definitions of the learning organization, and even lays out a strategy for linking concepts of the learning organization to practical management. But, thwarting the learning organization in the research analyzed by Chris Argyris are once again those pesky extrinsic motivations that in essence are the executive’s promises. ‘‘Once employees base their motivation on extrinsic factors they are much less likely to take chances, question established policies and practices, or explore the territory that lies beyond the company vision as defined by management’’ (Argyris, 1999, p. 236). And these attitudes figure among the primary features of the learning organization, which is the ultimate model of choice in the post- bureaucratic environment.
Activation of the learning spirit begins with the individual, but that individual must function within the right kind of environment, one in which the structural, attitudinal, and behavioral trappings, including the unwritten rules of the organization, are conducive to learning. The quality of the organizational environment makes it more or less likely ‘‘that crucial issues will be addressed or avoided, that dilemmas will be publicly surfaced or held private, and that sensitive assumptions will be publicly tested or protected’’ (Argyris & Scho¨n, 1996, p. 28). In summary, fundamental to the learning organization is the understanding among its members that a reasoned inquiry is acceptable to and even encouraged by the organization at no jeopardy to the inquiring member. Trust is the key element in such an environment.
Flexibility
Just as the literature of organizational development touts flexibility of individual responsibilities as a key conduit to the learning organization and, therefore, to the strong corporate culture, it also is a goal expressed by
employees. Flexibility offers the individual a break from routine and an opportunity for self-realization through a more broadening experience. But, in spite of the positive intentions behind this condition for both the organization and its individual members, flexibility can be viewed from competing perspectives.
In the revolt against routine, the appearance of a new freedom is deceptive. Time in institutions and for individuals has been unchained from the iron cage of the past, but subjected to new, top-down controls and surveillance. The time of flexibility is the time of a new power. Flexibility begets disorder, but not freedom from restraint.
(Sennett, 1998, p. 59)
And, when pushed to the extreme, flexibility can become merely a tolerance for fragmentation of the work experience in one’s life and the development of
‘‘a capacity to let go of one’s past’’ (Sennett, 1998, p. 63). For the leadership, the balance required to maintain a healthy culture hinges on being flexible with regard to most practices, but inflexible in matters of core adaptive values (Kotter & Heskett, 1992, p. 148).
Risk-Taking
Argyris (1999, p. 108) places risk-taking fairly high on his list of requirements for success in tomorrow’s organizations. Employee risk is closely aligned to trust in the leadership and is central to the strategy of teamwork, which is addressed below. Under the negative rubric ‘‘The Sins of Hierarchy,’’ Perrow (1986, pp. 29–30)describes the organizational climate that surrounds risk-taking in the authority-driven bureaucracy, which clearly discourages such initiatives, much to the contrary of the spirit of post-bureaucratic organizations. In fact, not only is risk-taking essential to post-bureaucratic success, the capacity for it no longer is expected just within the executive leadership. ‘‘The willingness to risk, however, is no longer meant to be the province only of venture capitalists or extraordinarily adventurous individuals. Risk is to become a daily necessity shouldered by the masses y The theory is that you rejuvenate your energies by taking risks, and recharge continually’’ (Sennett, 1998, p. 80). ‘‘The mathematics of risk offer no assurances, and the psychology of risk-taking focuses quite reasonably on what might be lost’’ (Sennett, 1998, p. 82). The willingness to take calculated risks and the trust implied in that willingness are fundamental attributes, if not defining attributes, of a culture-driven organization.
Participation and Teamwork
As shared values constitute the foundation of the corporate culture, so broad organizational participation and teamwork are the means of implementing and building upon that culture. According to Heckscher (1994, p. 46), ‘‘there is strong evidence beyond general impressions that participatory systems have been spreading during the past 30 years, and that the shift has been accelerating.’’ That one phenomenon may provide the single most telling reflection of a large-scale trend in organi- zational change.
A quarter century ago, Tom Peters and R. H. Waterman co-authored a now-well-known analysis of the management of successful corporations, titledIn Search of Excellence. It broke nonfiction sales records at the time of its publication. On the 20th anniversary of the book’s publication, John Newstrom (2002) assessed the astonishing success of the Peters and Waterman’s work, and found its importance to reside in the impetus it gave to a two-decade flurry of management activity in which ‘‘readers began searching in both the academic and practitioner literature for practical answers to important questions – but only if they were based on substantive, careful research as guided by solid theory’’ (p. 56).12It is of particular note thatIn Search of Excellenceidentified the key success factor in business to be what the book describes as the ‘‘theory of chunks’’:
ysimply getting one’s arms around almost any practical problem and knocking it off—nowyThe small group is the most visible of the chunking devices. Small groups are, quite simply, the basic organizational building blocks of excellent companiesythe small group is critical to effective organizational functioning. (Peters & Waterman, 1982, p. 126)
Today we refer to these chunks or subcultures as teams. They are understood to constitute a formalized method of structuring broad participation in the organizational decision-making required of planning and problem solving.13In reviewing relevant research literature for his essay on the value of drawing more fully on the knowledge and expertise found throughout any organization, Jeffrey Pfeffer observes that ‘‘Organizing people into self-managed teams is a critical component of virtually all high performance management systems. Numerous articles and case examples as well as rigorous, systematic studies attest to the effectiveness of teams as a principle of organization design’’ (Pfeffer, 1998, p. 74). And Heide von Weltzein Hoivik (2002, p. 7) finds that the autonomy of ‘‘communally mediated control’’ can even foster motivation and commitment.
With few apparent exceptions, teams are found to offer several advantages over the rigid hierarchical authority of bureaucracy.14 They substitute peer-based for hierarchical control of work, and frequently are more effective. Teams permit employees to pool their ideas to come up with better and more creative solutions to problems. And, ‘‘perhaps most importantly,yteams permit removal of layers of hierarchy and absorption of administrative tasks previously performed by specialists, avoiding the enormous costs of having people whose sole job it is to watch people watch people who watch other people do the work’’ (Pfeffer, 1998, p. 77).
But uniformity is not to be found in the scholarly assessment of the relative displacement of authority by participation in the organization. For example, ‘‘There have been thousands of studies of the productivity effects of participatory organization, the vast majority of which have claimed significant improvements. Few, however, have established even basic credibility’’ (Heckscher, 1994, p. 45). And, ‘‘Team work is widely touted as a necessary and achievable component of the post-bureaucratic organi- zation. Recent empirical work, however, has found that the transition to teams is slow and painful and the outcomes far less impressive than is commonly thought’’ (Donnellon & Scully, 1994, p. 64).
The principal reason behind such mixed messages about the value of structured participation is not so much the idea that participation as a strategy is at fault, but rather that its mode of implementation too often is faulty. Recalling an earlier theme about reward in the mixing of bureaucratic and post-bureaucratic systems, participation seems to fall short of expectation when it is applied in an environment that continues much of the old bureaucratic structure. For example, Anne Donnellon and Maureen Scully (1994, p. 64) trace the problem specifically to the meritocratic basis for reward; Heckscher (1994, p. 46) andKatz and Kahn (1966, p. 401) to the apparent anathema of participation and authority; and Richard Sennett (1998) to the sense of irony instilled in the employee as a ‘‘consequence of living in flexible time, without standards of authority and accountability’’
(p. 143). So, the sticking point in broad organizational participation is not so much participation per se, but rather the conflict of systems, each of which contains elements of value to the desired results, but which when harnessed together often prove disappointing. And there remains the seemingly inescapable conflict encountered by individuals who accept compromise that requires them to support wholly a recommendation to which they are only partly committed, because it is their team’s recommendation.15
In a few sweeping strokes, this is the outline of organizational development centered on culture.16As noted previously in several instances,