What Do We Know about Developing and Sustaining a Culture of Innovation L.

Aiman-Smith 2004

Organizational Culture

Organizational culture is a commonly held –in-the-mind framework of organizational members. This framework
contains basic assumptions and values. These basic assumptions and values are taught to new members as
the way to perceive, think, feel, behave, and expect others to behave in the organization. Edgar Schein (1999)
says that organizational culture is developed over time as people in the organization learn to deal successfully
with problems of external adaptation and internal integration. It becomes the common language and the
common background. So culture arises out of what has been successful for the organization.

More about Organizational Culture

Culture starts with leadership, is reinforced with the accumulated learning of the organizational members, and is
a powerful (albeit often implicit) set of forces that determine human behavior.

An organization’s culture goes deeper than the words used in its mission statement. Culture is the web of tacit
understandings, boundaries, common language, and shared expectations maintained over time by the
members.

Ways of looking at organizational culture originally come out of anthropology. Here are
some aspects of culture:

Historical: Culture is social heritage, or tradition, that is passed on to future generations

Behavioral: Culture is shared, learned human behavior, a way of life
Normative: Culture is ideals, values, or rules for living
Functional: Culture is the way people solve problems of adapting to the environment and living
together
Mental: Culture is a complex of ideas, or learned habits, for social control
Structural: Culture consists of patterned and interrelated ideas, symbols, or behaviors
Symbolic: Culture is based on arbitrarily assigned meanings that are shared by an organization

[Adapted from Bodley, (1996)]

Models of organizational culture

To really be able to characterize and “speak” an organization’s culture a person would need to be able to step
back objectively and do some critical observations and interviews. Various researchers have developed models
to characterize cultures, both qualitatively and quantitatively.

Hofstede probably started it all

Geert Hofstede is an engineer turned social scientist. After 10 years working as an engineer and manager in
Dutch industry, he returned to the university to study social psychology. His groundbreaking 1980 book,
Culture’s Consequences (reprinted afresh in 2001) grew out of his research within IBM from 1973 to 1978.
From what was at that time the world’s largest survey data base, Hofstede and his colleagues teased out
differences in the mental programs among over 115,000 IBMers across 50 nations, and laid the groundwork for
other scholars to adapt his work and use it to study organizations. Hofstede’s work identified five major
dimensions upon which country cultures differed:

1
 What Do We Know about Developing and Sustaining a Culture of Innovation L.Aiman-Smith 2004

• Power distance – how hierarchies and unequal power distribution is

viewed.

• Uncertainty avoidance – the extent to which people are comfortable

or uncomfortable with uncertainty and little structure.

• Individualism – this is the anchor at one end of two poles, where the
other anchor would be collectivism. This is the extent to which
individuals are supposed to be self-reliant and look after themselves,
versus being more integrated into a group.

• Masculinity or Femininity – the dimension that has probably caused

the most uproar. This dimension reflects hardness vs softness;
toughness vs tenderness in a culture.

• Long term or short term orientation – this has to do with the

culture’s members having a stance on delayed, or immediate,
gratification.

Hofstede noted in his writing that it is important to recognize that national culture and organizational culture are
different in nature. His research indicates that national culture mostly stems from consistency in values; while
organizational culture stems mostly from consistency in practices.

Piggybacking from Hofstede

Management researchers were quick to adapt Hofstede’s work and begin to investigate cultures inside
organizations. O’Reilly, Chatman, and Caldwell (1991) in some comparative work published that seven
dimensions could be used to compare across organizations.

Some Dimensions of Organizational Culture

• Innovation and risk taking – willing to experiment, take
risks, encourage innovation
• Attention to detail – paying attention to being precise
vs saying its “good enough for chopped salad”
• Outcome orientation – oriented to results vs oriented
to process
• People orientation – degree of value and respect for
people. Are people considered unique talents, or is
an engineer an engineer an engineer.
• Individual vs Team orientation – are individuals most
highly noted, or are collective efforts
• Aggressiveness -- taking action, dealing with conflict
• Stability – openness to change

A Composite Two-by-Two

Some researchers present a framework of culture characterized by two dimensions

• Internal focus (attending primarily to what is going on inside the organization) vs External focus
(attending primarily to what is going on outside the organization)

• Stability and control [interest in keeping things the same) vs Flexibility and discretion (interest in making
changes).

2
 What Do We Know about Developing and Sustaining a Culture of Innovation L.Aiman-Smith 2004

Internally focused with Flexibility and Externally Focused with Flexibility and
Discretion Discretion
The emphasis on being open to change and
This type of organization has a sense of oriented to the outside world characterizes
cohesion, with goals that strongly shared. organizations in which innovation can thrive,
Inside, the organization may feel more ‘family indeed sometimes the innovativeness can run
like” than ‘business like.” Indeed, Cameron amuck. Cameron and Quinn call these
and Quinn call this a Clan Culture. Denison Adhocracy Cultures. Denison characterizes
tags this type of organization as having them as high Adaptability cultures.
Involvement of all employees.

Internally focused with Stability and Control Externally focused with Stability and
Control
This type of organization often relies on formal These types of organizations are concerned
structures, policies and procedures to keep about productivity, consistency, results, the
things running. An internal focus is on bottom line. These organizations are very clear
Consistency says Denison. Cameron and about their customers, and hence can be
Quinn named this type Hierarchy Culture. termed Market Cultures. Denison says these
organizations have a sense of external
Mission, combined with control, that can be
very successful.

For more info see Cameron and Quinn (1999) and Denison (1990)

Looking at Organizational Culture – Use both Qualitative and Quantitative

In academia the scholars interested in organizational culture have kept a small-fire war going for years
discussing the pros and cons of qualitative or quantitative ways of looking at culture. The qualitative camp
points out that the richness of perceptions and experience inside an organization are vital to deep
understanding, and they sniff that culture cannot be constrained to a two by two matrix or a list of dimensions.
On the other camp, quantitative researchers argue that managers need to have some hard data, and that the
drawbacks of getting slow, expensive, possibly unreliable (unique to the interpretation of the researcher)
qualitative information make the usefulness iffy at best.

The truth, of course, lies in the middle. Managers will be best served by both. Case studies, based on
observation and insider interviews, have a sense of reality and immediacy that captures the attention and
emotion. Observations of the components of culture, with discussion and analyses, offer ways to do qualitative
tracking over time. Having a method for obtaining quantitative data has the advantage of allowing managers to
put together more “hard data” analyses to look at culture as a component of management, and to track the
standardized captured components of culture longitudinally. Looking at an organization using data gathered in a
variety of methods, or triangulation, combines quantitative and qualitative data that allows managers to
capitalize on the advantages of quantitative methods as well as capturing a rich not-easily-quantified picture of
the organization.

Bringing in outside eyes, qualified academics or consultants, can be a helpful way for managers to begin to look
at the organizational culture. It is not the only way, however. People can engage in developmental processes
to help themselves recognize aspects of their own organizational culture.

Let’s start with Qualitative

A qualitative understanding can be developed by looking at organizational practices with a fresh set of eyes. To
begin to understand culture, put on an anthropologist’s hat and …

3
 What Do We Know about Developing and Sustaining a Culture of Innovation L.Aiman-Smith 2004

Observe Ask questions, like:

• What do offices look like? • Tell me the organizational creation
• How are people dressed? story
• Where do they eat lunch? • How do new people “learn the ropes” in
• How would you characterize the people the organization.
in the hall – formal or informal? • What gets noticed (and rewarded)?
Laughing, or serious? • Are some people on the “fast track,”
• What kinds of pictures, signs, jokes are and if so, how did they get there?
on walls? Listen for particular language • What are some taboos -- things people
should never do?
Notice the Features of Culture • If a team accomplishes something
• Ceremonies, Rites, and Rituals great, what happens?
• Stories and Myths • Describe the organization in three
• Heroes words
• Language • If the organization were an animal,
• Symbols what would it be?

• Ceremonies, Rites and Rituals – These are regular events that teach people about the culture, and
maintain a sense of seasonal order. Think about quarterly site meetings; any rites and rituals
associated with being promoted, annual sales meetings.
• Stories and Myths – Organizations develop narratives to explain and teach. Common examples are
stories told by managers about successes, failures, high visible actions. Stories usually have a basis in
reality; myths can be fictitious, but so indicative of the culture that people tell and retell them anyway.
• Heroes – Organizations develop internal heroic figures.
• Language – Organizations develop acronyms, metaphors, proverbs, and jargon that have specific
meaning inside.
• Symbols – Signs, company logos, the way offices look, the type of clothing that is allowed are all
symbolic reflectors of a culture.

Let’s touch on Quantitative

The most common method for quantitatively capturing culture information is through the use of survey
assessments. A number of consulting firms offer services related to such surveys. Before choosing to develop
a relationship with a consulting firm, it is important to examine their credentials in terms of academic grounding,
validity and reliability of the instrument, and their experience and knowledge of this type of assessment.

On the other hand, if an organization has a knowledgeable internal research group, using the Organizational
Culture Assessment Instrument (OCAI) developed by Cameron and Quinn (1999) would provide useful and
valid information. Another often used assessment is the Organizational Culture Index (OCI ) developed by
Robert Cooke and Clayton Lafferty. This assessment uses questions about behavioral norms, falling into 12
factors. Cooke and his associates have developed a circumplex plotting process, which then categorizes the
organization as being one of three types: Constructive, Passive/Defensive, and Aggressive/Defensive.

Because of their deep knowledge of the area, and their expertise with research, Daniel Denison’s consulting firm
would certainly be a good group to at least talk with (http://www.denisonculture.com/culture/culture_main.html).
Another often called upon consulting group is Human Synergistics (http://www.humansyn.com/) which uses the
OCI and other assessments developed by Cooke and Lafferty.

Both of these consulting firms have a large database against which they will compare any client’s scores. That
may or may not fit the particular questions of an organization. A more useful, but tougher task, would be
developing some connections between the outputs of a survey and the need for innovation within the
organization.

Innovation is the development and introduction of a new idea and transforming that idea into a product, process,
object, or service. We would likely all agree that innovation is the life-force of an organization. So a culture of

4
 What Do We Know about Developing and Sustaining a Culture of Innovation L.Aiman-Smith 2004

innovation means an organization would hold internal assumptions, values, and management practices that
foster developing new ideas into products, processes, objects, and services.

References

Bodley, J. (1996) Cultural Anthropology: Tribes, States, and the Global System. Mountain View, CA: Mayfield
A fascinating introductory to anthropology.

Cameron, K. & Quinn, R. (1999). Diagnosing and changing organizational culture. Reading: Addison-Wesley.
These authors developed their organizational culture framework using a theoretical model of "Competing
Values." This framework refers to a matrix looking at whether an organization has a predominant internal or
external focus and whether it strives for flexibility and individuality or stability and control. The framework also
uses six dimensions of culture that Cameron and Quinn discuss. By using their assessment the "Organizational
Culture Assessment Instruments” organizations generate an organizational culture profile, and are categorized
into one of four dominant culture types (clan, adhocracy, market, and hierarchy).

Denison, D. (1990). Corporate culture and organizational effectiveness. New York: Wiley
This book gives a brief overview of the literature and research studies up to about 1988, and includes
discussions of Denison’s model and some questions and frameworks he uses in his ongoing research and
consulting. He includes a number of well-written case studies comparing and contrasting organizations and
their cultures.

Hofstede, G. (1991). Culture and organizations: Software of the mind. London: McGraw-Hill
The “condensed version” of the 1980 Culture’s consequences, with special orientation toward practical use of
the information.

Hofstede, G. (2001). Culture’s consequences. 2nd edition. Thousand Oaks, CA: Sage
The updated classic.

O’Reilly, C., Chatman, J., & Caldwell, D. (1991). People and organizational culture: A profile comparison
approach to assessing person-organization fit. Academy of Management Journal, 34:487-516.

Schein, E. (1999). The corporate culture survival guide. San Francisco: Jossey Bass.
Edgar Schein, the MIT professor who could be viewed as the grandfather of organizational culture research,
presents a lucidly written and compelling book on corporate culture. He discusses corporate culture on three
levels--behaviors, values, and shared assumptions--and shows how each factors into developing and sustaining
an organizational culture.