CREATING A COLLECTIVE CORPORATE CULTURE:

A SMALL BUSINESS GUIDE TO MAXIMIZE PERFORMANCE

A Thesis Presented to the Faculty of the School of Education

University of San Francisco

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF ARTS

in

ORGANIZATION AND LEADERSHIP

by

Wendy Jones

December 14, 2012

CREATING A COLLECTIVE CORPORATE CULTURE: A SMALL BUSINESS GUIDE TO MAXIMIZE PERFORMANCE

In Partial Fulfillment of the Requirements of the

MASTERS OF ARTS

in

ORGANIZATION AND LEADERSHIP

by

Wendy Jones

UNIVERSITY OF SAN FRANCISCO

December 14, 2012

Under the guidance and approval of the committee, and approval by all the members, this thesis has been accepted in partial fulfillment of the requirements for the degree.

Approved

____________________________ ________________

Chairperson Date

____________________________ ________________

Committee Member Date

Acknowledgements

I would like to express my sincere gratitude to my family for their continued support and

enthusiasm as I pursued my degree. I would like to extend a heartfelt thank you to my mother,

father, stepmother, grandparents, siblings and especially, Brian. You have always believed in me

and given me that extra nudge to pursue my dreams. I would not have been able to accomplish

this without you and our pups by my side.

I would like to recognize the faculty and staff at USF for their guidance and support as I

made my way along this journey, specifically Dr. Mitchell for your insight and motivation. I

would like to extend a final appreciation to my group of fellow scholars; Ashley Hanson,

Jennifer Ta and Jane Hackman, without our cohort I might have given up a few times or stayed

in bed on those early Saturdays. Thank you all for the amazing wall of support and love.

Abstract

The purpose of this project was to determine which three traits of corporate culture are

positively related to increased firm performance. Once the three winning traits were determined,

based on reviewed studies and existing literature, a survey was created to measure the degree that

the three specific traits exist in a current corporate culture. The researcher then created a

reference guide to teach organizations how to adopt the three specific traits into their corporate

culture in order to maximize firm performance. The three winning traits that are positively

related to firm financial performance are collectivism, adaptability, and culture strength.

Table of Contents

Acknowledgements ii

Abstract iii

Table of Contents iv

List of Tables vi

List of Figures vii

Chapter I - Introduction 1Statement of Problem 2Background and Need 3Purpose of Project 5Project Objectives 6Limitations 6Ethical Considerations 7

Summary 8

Chapter II - Literature Review 9Introduction 9Defining Collectivism 10Defining Corporate Culture 14Measuring Corporate Culture 18Corporate Culture and Ideal Culture Traits for Predicting Success 24Measuring Performance 34Limitations of Reviewed Studies 36Chapter Summary 40

Chapter III - Methodology 41Research Design 41Instrumentation 42Developing the Survey 43Developing the Handbook 48Summary 65

Chapter IV - Handbook 66

Chapter V - Summary, Conclusion and Recommendations 93Summary 93Conclusion 94Recommendations 95Concluding Thoughts 97

References 98

Appendices 102Appendix A: Peer Reviewers Handout 103 Appendix B: Measuring Collectivism, Adaptability and Strength 104 in Your Corporate Culture Survey

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List of Tables

Table 1: Major Domain Descriptors of Individualism and Collectivism 17

Table 2: Peer Reviewers’ Demographics 48

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List of Figures

Figure 1: Denison's Organizational Culture Model 22

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CHAPTER I

Introduction

The Hay Group, a global management consulting firm, states that due to globalization,

climate change, demographic shifts and the rise of the digital lifestyle, organizations will be

required to adopt new policies and ways of thinking to remain successful. The Hay Group's

regional director, George Vielmetter states, "To thrive in the future, leaders will have to become

more nimble and adaptable, guiding organizations to revolutionize their cultures, structures,

systems and processes” (Hay Group Report, 2011, para. 2). One such organization that has

remained successful through global changes is Hewlett Packard (HP); they have been

consecutively ranked in the top 50 producing firms of Fortune 500 companies since 1988 ("CNN

Money", 2011). According to Leo Apotheker, “technology is a brutal business, if you don’t

innovate and reinvent yourself, you will become obsolete.” (Leo Apotheker as cited in Forster,

2011, p. 23). HP continuously reinvented itself in order to remain in the global technology race.

In the 70 years since HP was founded, the company has seen numerous mergers and law suits,

and has been led by a handful of deficient CEO's (Forster, 2011), but something has made this

company outlast its competitors and has kept HP among the top 50 producing firms. Researchers

agree that this is due to the corporate culture, known as The HP Way, which founders Dave

Packard and Bill Hewlett based all operations on (Forster, 2011; Kotter & Heskett, 1992;

Truskie, 1999). HP's success is attributed to their exemplary culture model, one that other

organizations, not just in the technology field, can learn from.

Organizational culture, also known as corporate culture, sets the tone for how an

organization will operate and often dictates the generally accepted rules for daily conduct.

Specific traits of corporate culture have been linked to varying degrees of financial success

(Gordon & DiTomaso, 1992; Kotter & Heskett, 1992). In the 1980's, the success of many

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Japanese companies raised attention of American firms seeking to be as effective. Several

researchers attributed the Japanese' success to certain humanistic values, "such as concern for the

well-being of employees and an emphasis on consensual decision making" (Wilderom, Glunk &

Maslowski, 2000, p. 195). Japanese corporate culture was defined as collective, where all

employees shared a concern for the greater good of the factory rather than their individual

achievements. Forsyth (2010) defined collectivism as a style "that emphasizes the primacy of the

group or community rather than each individual" (p. 67). The behaviors, values and assumptions

that make up the organization's culture have an impact on daily activities. Shared values and

beliefs about daily practices held by all organizational members can impact how effective, or

ineffective, the workplace is. HP was the subject of previous studies on corporate culture because

they possess a strong corporate model (Chaw & Kirkbride, 1987; Forster, 2011; Kotter &

Heskett, 1992). Japanese corporate culture in the 1980's, as well as The HP Way, are what

separated these organizations from lesser producing ones.

Statement of the Problem

The corporate culture of an organization may undermine strategy and performance if not

managed correctly. Executives, leaders and managers are interested in maximizing performance

and profits. Corporate policies and processes must be supported by a strong culture that is

aligned with the mission and vision statement of the organization to ensure success. New efforts

were undertaken in the last several decades by researchers and scholars to define and measure

corporate culture in order to determine the best practices in the workplace. A variety of industries

were studied, ranging from insurance firms to technology companies, in order to better

understand the components of a successful corporate culture. However, researchers do not agree

on the best tool for measuring corporate culture, or which combination of traits supports long-

term financial performance.

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Measuring and defining corporate culture is a difficult task due to the wide range of

definitions and parameters that exist for the term "culture". Corporate culture cannot be properly

managed and controlled by executives if they are unable to identify the term they are attempting

to manage. Researchers were challenged with the task to best define and measure corporate

culture, but not knowing which specific traits or characteristics to measure presented another

obstacle.

Researchers eventually identified a combination of culture characteristics to support the

hypothesis that specific traits are linked to positive organizational performance. However,

empirical evidence supporting the organizational culture-performance link vary in all aspects of

the research: from population size of the sample firms, number of respondents and ranks within

each firm, the performance measures, to the many different culture dimensions. Few studies

agreed which characteristics of corporate culture were related to sustained performance.

Only a handful of studies replicated previous research in order to confirm which culture

traits supported performance. However, once the specific traits were identified, organizations

were now faced with the problem of determining how to adapt their current culture to include the

winning traits. There are a multitude of instructional materials to educate managers on how to

become better leaders, but managers and leaders lacked a comprehensive guide instructing them

on how to adapt their current culture to include the winning traits.

Background and Need

Executives and managers of companies participating in mergers and acquisitions became

aware that opposing organizational cultures could have the ability to weaken performance and

sought out ways to employ cultural change to improve cooperation. "Under these pressures for

application, a variety of new efforts were undertaken to measure culture through survey research

and quantitative analysis. These efforts were closely associated with increasingly formal

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typologies of culture and the correlation of cultural `types' to specific organizational pathologies"

(Schulman, 2001, p. 238). According to Schulman (2001), less than half of all mergers met

intended financial expectations. Incompatible cultures prevented the successful combination of

two distinct cultures becoming one. In fact, organizations began performing culture audits to

determine compatibility before making a commitment (Truskie, 1999). Varying culture types

implies that there are strong cultures and weak cultures, as well as ineffective and effective

cultures. Aligning the right culture with the goals of the organization will ensure productivity

and support economic growth.

A variety of measurement tools exist to measure different aspects of culture and a range

of researchers presented solutions on how to best define and measure corporate culture. Most

researchers agree that performance is easily measured by financial parameters and that culture

can be measured by the degree that certain dimensions, or traits, are present within a culture

(Denison, 1990; Denison & Mishra, 1995; Gordon & DiTomaso, 1992; Kotter & Heskett, 1992;

Petty, Beadles, Lowery, Chapman, & Connell, 1995). The problem lies in that countless financial

parameters and culture dimensions exist.

One solution was to measure culture along the individualism-collectivism spectrum. The

many cultural dimensions included in past research, such as involvement, consistency,

adaptability, mission, strength of culture, teamwork and performance goals, inherently fall

somewhere along the collectivism-individualism scale. Although the United States is

traditionally individualistic in nature (Forsyth, 2010), 21st century corporate leaders are adopting

collectivist styles, such as team-based work with an emphasis on group goals rather than on

individual goals, into their corporate cultures because collective processes promote cooperation

and productivity, and prevents destructive conflict and opportunism (Denison, as cited in

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Sackman 2006; Goncalo & Staw, 2005; McGrath, 1997).

By identifying the advantages of a strong, collective culture, organizational leaders can

make an educated decision on which traits and culture dimensions to adopt into their corporate

culture. Significant questions arise from studies that demonstrate that certain culture traits lead to

stronger financial performance, such as which traits are more likely to lead to success and how to

implement these traits. This project reviewed the relationship between collectivism, adaptability

and culture strength and their impact on an organization's performance. Managing and

understanding corporate culture is another tool for managers to apply to ensure a firm's success.

While most empirical studies examined in this paper presented evidence that supported

why specific traits were positively related to sustained performance, specific guides and

instructions on how to adopt these traits were missing from the literature. Therefore, an extensive

review of scholarly writing on how to increase collectivism, adaptability and culture strength was

undertaken. Through specific activities and exercises, both in the workplace and out of the

workplace, managers and executives can implement steps to ensure their culture is operating at

maximum efficiency.

Purpose of the Project

The purpose of this project was to identify and validate the traits of corporate culture,

specifically those collective in nature that can be adopted to enhance firm performance. Through

a review of empirical studies on the corporate culture-organizational performance link, the

researcher identified which characteristics of corporate culture are related to sustained, or

increased, levels of profitability. The researcher then created a survey tool to measure the extent

that an existing corporate culture possessed elements of collectivism, adaptability, and the degree

of culture strength to determine which of the three traits were absent. Next, a handbook with

guidelines demonstrating how to implement these traits into a culture was developed. The

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theoretical foundation and framework for this study was grounded in Shulruf, Hattie and Dixon's

(2003) model of collectivism which defines the major domain descriptors of individualism and

collectivism. Shulruf et al. (2003) presented eight descriptors of collectivism: related, belong,

duty, harmony, advice, context, hierarchy and group. If an organization values the eight

descriptors and attempts to include them in their daily operations, then they can be said to have a

collective culture. Shulruf et al. (2003) created the Auckland Individualism Collectivism Scale

(AICS), a reliable survey tool that served as the reference for the survey.

After an extensive literature review, the researcher then created a handbook that

presented guidelines on how to create a corporate culture that embraces these characteristics. In

discovering which corporate culture characteristics are predictors of firm success, future

organizations can effectively make a decision on which corporate culture model best suits their

goals in order to be as successful as possible in their industry. The collectivism versus

individualism distinction has profound implications for the culture identity which organizations

develop and are defined by.

Project Objectives

The researcher created a measurement tool and a handbook to guide 21st century

organizations in creating a collective culture. The researcher answered the following questions to

aid in the creation of the survey and handbook:

1. How is corporate culture best defined and measured?

2. What traits of corporate culture are related to productivity and firm effectiveness?

3. How would an organization adopt these traits into their corporate culture?

Limitations

Several limitations of this project should be mentioned. The first limitation is in the

survey method; the quantitative method does not allow for in-depth discoveries on the

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underlying assumptions of employees surrounding beliefs, values and norms. In order to achieve

the most accurate description of an organization's culture, both quantitative and qualitative

methods should be combined (McMillan, 2012). In addition, the survey questions could prime

employees to be in a certain mind set, and therefore respond in a specific manner. Another

limitation is with the research design; the survey was not field tested for validity.

A third limitation of this study is that this project does not discuss the role of the leader in

the formation of a new corporate culture. Through the literature review, it became apparent that

possessing a strong leader was not one of the predominant traits that was linked to corporate

success. However, a strong leader is still essential to the process of altering the current culture.

The survey and handbook require that the leader of the organization be well prepared, respected,

experienced and capable of taking his or her organization into a new era. If the leader of the

organization is not considered effective, then an outside consultant or another manager would

need to implement the changes. Collins (2001) stated that great companies are lead by modest,

devoted leaders who strive to do better every day. Modest, competent leaders can lead their

organizations successfully. However, an ill prepared, incompetent leader could fail to properly

administer the survey or implement the activities laid out in the handbook, and therefore would

impact the efficiency of the survey and guide.

Ethical Considerations

When conducting the research for this project, the researcher adhered to established

ethical guidelines for conducting studies (McMillan, 2012). The local Internal Review Board

was not contacted because the scope of this project did not include interaction with or an

intervention with humans (McMillan, 2012). Neither the survey nor handbook were distributed

to participants; therefore, due to the lack of interaction, IRB approval was not required.

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However, risks to the peer reviewers were minimized by using aliases and ensuring

confidentiality. The purpose of the peer review was clarified to the reviewers, and the reviewers

were protected from any physical or mental discomfort, harm and danger. Participation as a peer

reviewer was also voluntary.

Summary

A firm can maximize their performance if their corporate culture emphasizes beliefs and

values that align with their corporate goals. Past research found a positive relationship between

certain traits of corporate culture, specifically collectivism, adaptability and culture strength, and

increased levels of profitability (Denison & Mishra, 1995; Gordon & DiTomaso, 1992; Jain,

1998; Kotter & Heskett, 1992). By adopting collective practices that support an adaptable and

strong culture, an organization can maximize their performance. Due to the fact that past

research did not agree on one universally accepted tool to measure corporate culture, the

researcher created a new tool, specifically aimed at measuring the degree of each of the three

winning traits: collectivism, adaptability and culture strength. The survey tool will allow

managers to determine which of the three traits are missing in their current culture. The

researcher then created a guide that managers can reference in order to learn how to adopt the

missing traits into their current culture.

In Chapter two, the researcher presented the published literature on research linking

corporate culture to performance, as well as reviewed studies that found a relationship between

specific traits and increased performance. Chapter three discussed the methodology and the

steps in creating the survey and the handbook. Chapter four presented the handbook. Finally,

chapter five discussed the summary, conclusion and recommendations for future research.

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Chapter II- Literature Review

Introduction

A great deal of the existing literature on corporate culture suggests that identifying the

cultural identity of an organization can be a key component in predicting the future success and

performance of that corporation (Denison, 1984; Denison & Mishra, 1995; Gordon & DiTomaso,

1992; Jain, 1998; Kotter & Heskett, 1992). A portion of the research in the 1980's was concerned

with developing the instruments to measure, as well as to define, corporate culture (Hui, 1988;

Wagner & Moch, 1986). Since the 1980’s, research shifted focus to explore the relationship

between corporate culture as a measure of future performance levels of an organization

(Denison, 1984; Gordon & DiTomaso, 1992; Kotter & Heskett, 1992), as well as updating the

established instruments to reflect the changing times (Shulruf et al., 2011). The literature review

will define collectivism, define corporate culture and review how corporate culture has been

measured in past research. Through the literature review, it will become apparent which traits of

corporate culture are ideal for predicting future success; this section will also review how

performance and success was previously measured. Finally, the chapter summary will review the

literature on culture as a predictor of firm performance.

Hofstede (1980) identified five dimensions of culture: power distance, uncertainty

avoidance, individualism, masculinity and long-term orientation. Several researchers argued that

the individualism-collectivism dimension is the most important distinguishing dimension among

cultures (Hui & Triandis, 1986; Triandis, 1995). The individualism-collectivism dimension

reflects the degree to which an individual is inclined towards team work and accommodating of

other's views. This dimension plays a role in conflict resolution more so than the other

dimensions.

Researchers recognized that corporate culture can be measured on degrees of collectivism

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or individualism, and that the degree to which an organization relates to either end of the

spectrum can assist in defining the corporate culture of that organization (Denison, 1984;

Goncalo & Staw, 2004; Gordon & DiTomaso, 1992). Several instruments for measuring

collectivism and individualism developed over the last several decades include: IND-COL (Hui,

1988), the Horizontal-Vertical Collectivism-Individualism scale (Singelis & Triandis, 1995),

Self-Construal Scale, or the SCS, (Singelis, 1994) and the Auckland Individualism and

Collectivism Scale, or the AICS (Shulruf et al., 2007). While all of these measurements were

applied to individuals across a variety of cultures, only a few were applied to individuals within a

single corporation in order to assign a level of collectivism or individualism to that organization.

The organizations involved in past studies on the subject included a variety of industries, from

insurance firms (Gordon & DiTomaso, 1992) to janitors and craftsman (Wagner & Moch, 1986).

It was speculated that HP’s exemplary corporate culture, The HP Way, was a predictor of the

company’s long-term success (Forster, 2011; Kotter & Heskett, 1992). Due to the ever-evolving

nature of technology and the intricacy of globalization, empirical studies on the transformation of

corporate culture will always have a valid place in the realm of research.

Defining Collectivism

According to research, US organizations are adopting more collective based practices in

the 21st century, thus requiring employees to understand how to meet the demands of a

cooperative environment (Day, Gronn, & Salas, 2006). A shift occurred, demanding

organizations adopt a collective mindset to productively work in this new environment, away

from traditional individualistic ways of thinking. Day et al. (2006) stated that the trend towards

forming collective identities in teams and recognizing more collective forms of leadership is

becoming more widespread. Research found that cooperative efforts reduce social loafing and

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increases cooperation, resulting in stronger identification with the work group (Denison, as cited

in Sackman, 2006; Goncalo & Staw, 2004). However, the researchers go on to state that

collectivist values can sometimes stifle creativity.

Collective members define themselves as part of the group, and they value harmony and

long-term relationships (Truskie, 1999). Members of collective groups feel like they belong and

share positive emotions such as closeness and acceptance. There is more concern for the

collective interests of the group. The foundation of the cooperative culture is "trust, caring for

one another, helping one another, and sharing" (Truskie, 1999, p. 8). Developing lasting

relationships is a concern for collective members. They are more focused on creating a safe,

friendly environment and maintaining a relationship than with immediately accomplishing tasks.

Interpersonal conflicts are dealt with openly and cooperatively. Collective team members value

information sharing and participative decision making. The practiced collective team realizes the

value in diverse opinions and constructively uses the differing viewpoints to add value to their

team. Collective teams form a bond with their organization and in return cooperative

organizations have a deep commitment to their members (Truskie, 1999). Collective members

value kindness and generosity, tend to be tactful and cooperative, and show concern for the

welfare of other group members.

Work groups that operate with collective tendencies are more effective than those that

value individualism (Denison, as cited in Sackman, 2006; Petty et al., 1995; Sheridan, 1992).

Researcher Swaidan (2012) used Hofstede's model of culture and Muncy and Vitell's (as seen in

Swaidan, 2012) consumer ethics model to prove that peopled who scored higher on the

collectivism dimension were more likely to hold higher ethical standards. The participants of

Swaidan's (2012) study were 761 African American consumers who received a written survey at

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different shopping centers. The researcher asked questions to determine the participant's cultural

description along the level of collectivism-individualism, masculinity, power distance and

uncertainty avoidance. Swaidan found significant differences in ethics between consumers who

scored high on Hofstede's cultural dimensions versus those who scored low. Swaidan (2012)

found that "consumers who are high in collectivism, high in uncertainty avoidance, low in

masculinity, and low in power distance reject questionable activities more than consumers who

are low in these areas" (p. 210). This study supported the hypothesis that people who measured

high in collectivism were more sensitive to ethical dilemmas. It follows that these individuals

would be more honest because they would be more likely to reject questionable activities.

Goncalo and Staw (2004) defined people in collectivistic cultures as those who "view the

self as inherently interdependent with the group to which they belong" (p. 97). In collective

cultures, the primary goal of the individual is to promote the interests of the group above all

personal wants and desires. "There is a greater emphasis on meeting a shared standard so as to

maintain harmony in one's relationship to the group" (Goncalo & Staw, 2004, p. 97). Individuals

in collective work groups are not motivated to gain attention by competing and standing out from

the group, but strive for self-improvement through the well being of the larger group. Degrees of

collectivism and individualism can vary within the same culture but across different social units.

The same can be said for the cultures adopted by organizations. An organization within an

individualistic society can adopt collective practices. Chatman and Jehn (as seen in Goncalo &

Staw, 2004) studied collective firms and found them to place greater emphasis on organization-

wide objectives rather than at the individual level, resulting in greater efforts for cooperation

among employees in achieving the collective goals.

Goncalo and Staw (2004) stated that creativity offers a competitive edge in business and

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should be encouraged. However, creative ideas are often novel ideas that may stray from the

group's original vision. Therefore, creativity can be viewed as deviant and receive negative

evaluations in a collective culture. To test the impact of collectivism on levels of creativity in

groups, Goncalo and Staw (2004) designed a study with 204 students from an American

University split into 68 groups with three members each. In the first part of the study, the group

participated in a survey that primed them for either a collective or individual mindset. In the

second part of the study, the group was asked to brainstorm as many solutions to a problem as

they could think of and were instructed to either be creative or practical. In the third stage of the

study, the group chose the most creative or practical solution. Blind coders were then asked to

rate each group on their degree of collectivism or individualism based on their survey responses

and their corresponding levels of creativity based on the number of divergent ideas generated in

part two of the study. Goncalo and Staw (2004) found that individualistic groups were more

creative when instructed to be. However, there was no difference in the number of generated

results for practical solutions between the collective and individual groups. According to

Goncalo and Staw’s (2004) study, collective work groups would be better suited for tasks

requiring practical, not creative, skills. Although collective groups result in greater cohesion and

commitment to group goals, when faced with a task that requires creativity, an organization

would benefit from adopting individualistic processes to successfully complete the task.

Summary

Collectivism has been defined in many ways; originally as a descriptor of a culture trait

by Hofstede (1980), it can now be applied as a descriptor of organizational culture. Collective

cultures, both globally and within an organization, operate more efficiently by placing the

group's goals above their own interests, thus accomplishing group-oriented tasks more

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effectively. Collective individuals are more sensitive to ethical dilemmas and are more

committed to their organization. Collective members value traits such as inclusion, harmony,

caring, trustworthiness, and seek to form lasting relationships with those around them. Jain

(1998) found that organizational cultures that were characterized by traits often associated with

collectivism, such as collective decision making, shared values and shared purpose, were among

the characteristics of high performing cultures.

Defining Corporate Culture

Corporate culture is often implicit and the norms that develop in the workplace can be

hidden to an outside view. Therefore measuring an intangible object became the task of

researchers. To develop a means of measuring the varying degrees of corporate culture, first

researchers had to define the terms they were set out to measure. Denison (1984) defined

“corporate cultures…as the set of values, beliefs, and behavior patterns that form the core

identity of an organization” (p. 5). Van den Berg and Wilderom (2004) preferred the term

organizational culture, rather than corporate, and defined the term as the shared perceptions of

work practices that can differ between levels, departments and organizations. Corporate culture

develops over time as organizations discover best practices for operations. The embedded culture

of the organization sets the tone for everyday decisions and processes, and is understood by all

employees. Through training, social learning, socialization and observations, new employees

begin to understand the culture that is shared among co-workers as they realize the behavior

patterns that are acceptable in the workplace.

The culture of an organization shares normative information; meaning and value are

placed with objects to reinforce the way people behave and think (Cooke & Rousseau, 1988).

Employees derive meaning from observed patterns in the work place. The development of a

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single culture is a top down process; the leader of the organization determines which values and

beliefs they wish to be present in their operations. Through the leader's behaviors and policies,

employees learn what is expected of them and how they will be rewarded for positive behavior

(Cooke & Rousseau, 1988).

Subcultures are a natural development due to the tendency for organizations to operate

across different departments and levels. Subcultures hold the same beliefs and values as the

dominant culture, but may have different practices for behavior (Cooke & Rousseau, 1988). A

production department often has a different culture from the sales department; the production

employees value technical efficiency and inter-dependency, whereas sales employees often value

fast paced output and individual profitability (Cooke & Rousseau, 1988). A leader who values

individualism and encourages individual goal setting will create a culture of competition among

his or her employees as each person is set out to accomplish their goals to maximize personal

gain.

While Hofstede (1980) differentiated among global cultures based on differences in

values, organizational culture was defined more among differences in practices (Hofstede, 2001;

Van den Berg & Wilderom, 2004). Several empirical studies defined corporate culture in terms

of the degree that the culture emphasizes individualism or collectivism in daily operations and

goal achievement (Shulruf et al., 2011; Wagner & Moch, 1986), other studies used descriptors of

individualism or collectivism to describe the corporation's identity (Denison, 1984; Gordon &

DiTomaso, 1992). Shulruf et al. (2011) associated "independence, goals, competition,

uniqueness, private, self-knowing, and direct communication" (p. 174) as relating to

individualism and "relatedness, belonging, duty, harmony, advice seeking, context dependent,

hierarchical, and group oriented" (p. 174) as relating to collectivism. Wagner and Moch (1986)

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differentiated between individualism and collectivism in the corporate world by defining

individualism as any action which "presumed the importance of self-interest... (and) cooperation

is motivated by the contingent satisfaction of personal interests" (p. 281). According to Wagner

and Moch (1986), performing a task in a group solely to earn an individual reward would not

constitute a collective environment. The researchers defined collectivism as "a condition in

which cooperation stems from the pursuit of interests shared among the members of a

collectivity" (Wagner & Moch, 1986, p. 282).

In their study on corporate culture, Gordon and DiTomaso (1992) rated participants on

levels of shared goals, decision making, communication, risk-taking, accountability, action

orientation, fairness of rewards, and development and promotion from within. Fundamentally,

the degree to which a person agrees with or feels strongly about the actions which fall in the

mentioned categories can determine if an individual's preferences tend to be more about their self

gain or more towards the collective group. If an individual values independence, competition and

prefers self sufficiency, they would rate high on the individualism scale. However, if the person

values a sense of belonging and harmony and enjoys being part of a group, they would rate

higher on the collectivism scale. Table 1 displays the key word descriptors reported by Shulruf et

al. (2003) when developing a new measurement tool for individualism and collectivism. They

used eight domains to describe collectivism and seven domains for the individualism descriptors.

The sample items were designed to be straight forward and not double ended. The eight

collectivism domains were based on established traits that define collectivism and were based on

Hofstede's (1980) culture model.

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Table 1

Major Domain Descriptors of Individualism and Collectivism (Shulruf et al., 2003)

Individualism

Domain name Description Sample Item

Independent Freedom, self-sufficiency, and control over one’s life

I tend to do my own thing, and others in my family do the same.

Goals Striving for one’s own goals, desires, and achievements

I take great pride in accomplishing what no one else can accomplish.

Compete Personal competition and winning It is important to me that I perform better than others on a task.

Unique Focus on one’s unique, idiosyncratic qualities

I am unique—different from others in many respects.

Private Thoughts and actions private from others

I like my privacy.

Self-know Knowing oneself; having a strongidentity

I know my weaknesses andstrengths.

Direct communicate

Clearly articulating one’s wants and needs

I always state my opinions very clearly.

Collectivism

Domain name Description Sample Item

Related Considering close others an integral part of the self

To understand who I am, you must see me with members of my group.

Belong Wanting to belong to and enjoy being part of groups

To me, pleasure is spending timewith others.

Duty The duties and sacrifices being agroup member entails

I would help, within my means, if a relative were in financial difficulty.

Harmony Concern for group harmony and that groups get along

I make an effort to avoid disagreements with my group

members.Advice Turning to close others for decision

helpBefore making a decision, I always

consult with others.Context Self changes according to context or

situationHow I behave depends on who I am

with, where I am, or both.Hierarchy Focus on hierarchy and status issues I have respect for the authority

figures with whom I interact.Group A preference for group work I would rather do a group paper or lab

than do one alone.

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Summary

Corporate culture is an implicit development overtime and thus presented a challenge to

define. Researchers defined organizational culture in terms of characteristics that the culture

possesses as well as in terms of the degree of individualism or collectivism present in the

organization. Different organizations were characterized by the values they hold as important, as

well as differences in daily practices. Due to the large database of traits, researchers have not

always agreed on the best definition of corporate culture. A reoccurring theme present in the

literature defines corporate culture as the accepted beliefs, values and norms that lead everyday

interactions and processes in the work place.

Measuring Corporate Culture

As there are a multitude of definitions of corporate culture, a generally accepted

framework does not exist to measure and compare cultures comprehensively (Wilderom et al.,

2000). Researchers studying organizational culture often combined existing tools of

measurement to create a new instrument to measure corporate culture specific to their study.

While there are a handful of reliable measurement tools that are known worldwide, such as

Cooke and Rousseau's (1988) Organizational Culture Inventory (OCI) and Denison's (as cited in

Sackman, 2006) Organization Culture Model, researchers become adept at combining methods

to produce new tools to measure corporate culture. Van den Berg and Wilderom (2004) asserted

that to enhance the opportunity for comparison between cultures, "one may better focus on the

degree of sharing certain aspects of employees’ day-to-day organizational work practices" (p.

573). Truskie (1999) stated that a culture can be measured by studying the organizations

artifacts, such as the dress code, workplace layout, the value of the members and their underlying

assumptions. While Truskie's (1999) first method was more time consuming and complicated, he

xxvii

stressed the L4 model assessment as a more viable option. The first step of the L4 Model was to

conduct interviews and discussions to determine the extent that leaders and members felt that the

elements of each of the four cultural patterns, cooperation, inspiration, achievement and

consistency, were present within their organization. Members stated the extent that each trait was

present on a Likert scale, from "a very great extent to a very little extent" (Truskie, 1999, p. 48).

The second step to Truskie's cultural assessment was to verify the cultural patterns reported by

employees. Mechanisms included reviewing "organizational design and structure, systems and

procedures, and programs and processes" (Truskie, 1999, p. 48). Leaders then compared steps

one and two to see if there was agreement between the sources. Truskie asserted that recognizing

which culture pattern was absent could assist the leader in creating a counterbalance strategy.

Researchers argued that quantitative descriptors of organizational culture are less

effective than qualitative methods involving observations, archived materials and field

experimentation (Van den Berg & Wilderom, 2004). However, Petty et al. (1995) asserted that

measuring culture is better done by combining qualitative and quantitative methods, through

descriptions and categories as well as through observations and questionnaires. Cooke and

Rousseau (1988) agreed that the best tool combines both methods as they are complimentary

approaches. Qualitative methods create rich descriptions of a particular phenomenon as

described by the members of the organization. Quantitative methods allow for cross sectional

comparisons and assessments (Cooke & Rousseau, 1988). The Repertory Grid Technique is one

such measurement tool that combined qualitative and quantitative methods (Krafft, as cited in

Sachman, 2006). This technique provides a framework for conditions that are needed for an

effective change program. However, the Repertory Grid Technique creates an individualized

picture for the surveyed organization and does not allow for generalizing across industries.

xxviii

Wagner and Moch (1986) used Breer and Locke’s 83-item questionnaire as a conceptual

basis to create their own hybrid instrument to measure the varying degrees of individualism-

collectivism in four non-academic organizations in a Midwestern University. Similar to Breer

and Locke (as seen in Wagner and Moch, 1986), the new instrument measured beliefs, values

and norms, but adjusted the items on the 7-point Likert scale questionnaire to include 34

questions. The questionnaire instructed participants to state their position on how their

organization handles every day interactions and processes in order to assign a degree of

individualism or collectivism to each organization. Wagner and Moch (1986) validated their

results by comparing expected values of inter-item correlations with the actual observed

correlations. This study found that many employees in the maintenance and craft associations

held individualistic values, but not necessarily individualistic beliefs and norms. However,

craftspeople viewed their association on the whole as more collective (Wagner & Moch, 1986).

Petty et al. (1995) combined quantitative and qualitative methods to develop a 55-item

survey to measure corporate culture. They first collaborated with employees to discover what

behaviors they believed should be occurring in their environment and were reflective of the

company's core values. Sackman's (2006) Culture Assessment also used employee focus groups

to determine defining characteristics of the existing culture. Petty et al. (1995) administered their

survey to 832 employees in 12 organizations in the electric utility industry; the same survey was

administered one year later to 842 employees in the same 12 organizations. The survey measured

culture along four dimensions: teamwork, trust and credibility, performance and common goals,

and organizational functioning (Petty et al., 1995). Sackman's (2006) data collection consisted of

interviews and workshops with top managers, analysis of documents, monitoring and informal

talks with all levels of employees. Petty et al. (1995) asked employees to rate their extent of

xxix

agreement on observed behavior representing the four dimensions, from strongly agree to

strongly disagree. Responses were averaged for each organization and compared to performance

data from year one and year two. Sackman's (2006) Cultural Assessment recognized areas in

need of improvement, and aided in creating an action plan. Like the Repertory Grid Technique,

the Cultural Assessment model does not allow for comparisons because the descriptors were

developed specifically for the surveyed organization.

Cooke and Rousseau's (1988) Organizational Culture Inventory, the OCI, is a self-

scoring, multilevel diagnosis tool based on 12 thinking styles. Cooke and Rousseau's (1988) 12

interpersonal and task-related styles are humanistic-helpful, affiliative, approval, conventional,

dependent, avoidance, oppositional, power, competitive, competence/ perfectionist, achievement,

and self actualizing. Surveyed participants were asked to rate the level that each behavior on the

scale would help them "fit in and meet expectations in their organization" (Cooke & Rousseau,

1988, p. 257). Like Denison's Organizational Culture Model (Denison, as cited in Sackman,

2006), the OCI is a circumplex model representing the degree that surveyed employees feel each

trait is important in their organization's processes. The extent that surveyed employees shared

consensus among the indexes suggests the strength of the culture; substantial member agreement

suggests a strong culture. A stronger culture would be indicative of employees who agree on the

same specific indexes that are key to fitting in and meeting expectations. The results of employee

perceptions were compared to the OCI of desired traits for the organization. The OCI assisted

managers in clarifying their future direction and expressing their vision for change.

Denison's Organizational Culture Model (Denison as cited in Sackman, 2006) is perhaps

one of the clearer and reliable methods for measuring culture. This method was used in over

6,000 organizations worldwide. Denison and his team found four traits that were consistently

xxx

associated with higher performing organizations: adaptability, mission, involvement and

consistency. Each trait was characterized by three indexes, resulting in a total of 12 indexes.

Denison (as cited in Sackman, 2006) created a 60-item survey to measure the extent that each of

the 12 indexes were present in a corporate culture. Responses were averaged to present an index

score, as seen in Figure 1; the numbers represent the percentage of surveyed companies who

scored lower than the subject company in each index. According to this sample, two of the three

measures for adaptability are low, customer focus and creating change, two of the three indexes

for involvement are low, and all three indexes for mission are below 50%. Capability

development, a trait of involvement, is the lowest scoring index, and organizational learning is

the highest. According to the Organizational Culture Model, there are a number of symptoms

present in this corporate culture that require attention to maximize organizational performance.

Figure 1. Denison's Organizational Culture Model (Denison, as cited in Sackman, 2006)

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Unlike Wagner and Moch (1986), who applied an existing tool to measure corporate

culture, Shulruf et al. (2011) attempted to identify the most efficient tool for measuring

individualism and collectivism. Shulruf et al. (2011) performed reliability tests on existing

measurement instruments to establish the most reliable test to adapt to organizations, rather than

individuals. The researchers assessed the existing instruments before choosing the AICS

developed by Shulruf et al. (2007) as the most reliable, and therefore most appropriate to use in

organizations when measuring degrees of individualism or collectivism. Shulruf et al. (2011)

pointed out the faults in the other established measurements of individualism and collectivism;

the IND-COL (Hui, 1988) did not have high levels of reliability (α ~.60), reliability could not be

replicated in the SCS (Singelis, 1994), and the researches stated that the Horizontal-Vertical

Collectivism-Individualism scale (Singelis & Triandis, 1995) had been widely used but an

acceptable level of reliability had not been reported. The AICS had the highest level of

reliability, α >.70 (Shulruf et al., 2011). Across the varying tools to measure collectivism or

individualism, the instruments required individuals to rate how much they agree with, or

associate with, domains relating to either collectivism or individualism. The results were either

reported for the individual or generalized to a larger group or organization.

Summary

There are a multitude of measurement tools to measure an existing corporate culture.

Several well respected and valid tools include the OCI, Denison's Organizational Culture Model

and the AICS. While qualitative methods of measuring culture, such as surveys, are easily

accessible and financially feasible, researchers agreed that in order to develop a rich, clear

description of the culture, a combination of qualitative and quantitative methods should be used.

Through surveys, interviews, observations and focus groups, researchers can develop both a

xxxii

description of the perceived culture, as well as a description of the actual culture.

Corporate Culture and Ideal Culture Traits for Predicting Success

Once corporate culture was defined and researchers possessed a reliable tool to measure

the differences in corporate culture, researchers then moved to detecting a relationship between

corporate culture as a predictor of performance. Denison and Mishra (1995) combined both

quantitative and qualitative measurements in their study on the culture-performance link. They

examined 764 organizations and CEO perceptions to link involvement and adaptability as

indicators of organization effectiveness (Denison & Mishra, 1995). They first performed case

studies involving five firms in order to identify the four most dominant traits that are linked to

effectiveness. A quantitative study was then used to analyze the degree to which the CEO’s in

the 764 organizations felt their corporation’s culture exemplified each trait. Finally, Denison and

Mishra noted the corresponding financial performance of each organization. Denison and Mishra

(1995) found that the level to which organizations possess certain traits can predict profitability,

specifically involvement, consistency, adaptability and mission. Involvement and consistency

had the strongest positive relation to performance, but varied on the effectiveness of short and

long-term duration.

Corporate culture was one of Joyce, Nohria and Roberson's (2003) primary traits for

business success in their 4+2 Model. They maintained that a performance oriented culture was

the best indicator for firm performance. In their study involving 40 industries, companies that

possessed and excelled in each of the four primary traits, strategy, execution, culture and

structure, and at least two of the secondary traits, talent, innovation, leadership, and mergers and

partnerships, were 90% more likely to be considered a winning company (Joyce et al., 2003).

Winning companies outperformed the competition in every financial measure from total return to

xxxiii

shareholders, sales, assets, operating income and return on invested capital during both the first

and second five-year periods. In the decade-long study, investors in the winning companies "saw

their money multiply nearly tenfold, with total return to shareholders of 945 percent" (Joyce et

al., 2003, p. 15). Joyce et al. found that there is a winning combination of traits that a successful

organization must possess; when a company lacked any one of the four primary or two

secondary traits, the researchers saw the organization's stocks and financial measures plummet.

Joyce et al. (2003) discovered the 4+2 model traits through empirical research based on

surveys, in-depth studies and extensive data collection. However, the researchers did not find a

correlation between the different categories of culture; the winning companies did not consider

themselves predominantly hierarchal, cooperative, or competitive. Winning cultures were instead

defined by four mandates: inspiring all to do their best, rewarding achievement with praise and

pay, creating a challenging and satisfying work environment and establishing and abiding by

clear company values (Joyce et al., 2003). Winning companies "constantly sought to design and

support a culture that promoted high levels of individual and team performance, and that held

employees, not just managers, responsible for corporate success" (Joyce et al., 2003, p. 137). The

researchers found that the ideal culture nurtured feelings of loyalty towards employee teams and

the company as a whole. Although the winning organizations might not have defined themselves

as collective, they possessed and valued collective tendencies.

Collectivism

Denison (as cited in Sackman, 2006) stated that effective companies build their

organizations around teams and one of the four traits linked to effective organizations was

involvement. The involvement trait was measured by three indexes, one of which was team

orientation, defined as "value placed on working cooperatively toward common goals for which

xxxiv

all employees feel mutually accountable. The organization relies on team effort to get work

done" (Denison, as cited in Sackman, 2006, p.14). The degree that organizations utilize team

work and other collective practices was related to increased performance across a variety of

industries. Denison (as cited in Sackman, 2006) found that involvement was positively linked to

short and long-term performance.

In the two year correlational study performed by Petty et al. (1995) between

organizational culture and performance, the researchers discovered that team work was

positively related to organizational performance. The items associated with teamwork were those

behaviors which included "sharing information, helping others with their work, seeking ways to

help the work group meet its goals, involving those affected by a course of action, sharing

resources, making sacrifices for the good of the group, and being rewarded for working as a

team" (Petty et al., 1995, p. 488). While the other three dimensions, trust and credibility,

organizational functioning, and employee safety and health, also proved to have a positive

correlation to performance in year one, only team work was positively related to performance at

both time periods.

Truskie asserted that the ideal culture is well defined, balanced and combines the positive

elements from family, social institutions, the scientific community and the military/law

establishments. In Truskie's (1999) L4 Model for an organizational leadership strategy, the

positive elements of family included collective practices, such as caring, sharing and teamwork.

According to Truskie (1999), “a balanced culture exerts positive influence on the behaviors of its

employees" (p. 6). The collective practices, those related to the family element, need to be

present for a culture to be considered balanced. Truskie (1999) asserted that a culture that

possessed a combination of each of the four units would have the best chance for success.

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In Sheridan's (1992) study involving six international accounting companies, he found

that cultures varied among firms belonging to the same parent company and that firms that

valued team work experienced higher employee retention rates. Three of the six firms were

characterized by a culture that valued interpersonal relationship principles of team orientation

and respect for people. The other three firms were characterized by having work task values of

details and stability (Sheridan, 1992). Sheridan's (1992) report stated, "Professionals hired in the

firms emphasizing the interpersonal relationship values stayed 14 months longer than those hired

in the firms emphasizing the work task values" (p. 1050). For the accounting firms, Sheridan

estimated the loss at $9,000 to replace en employee who had been with the firm for one year but

to replace an employee who had been with the firm for three years or more, the loss rose to

$47,000. The cost to organizations due to low employee retention is substantial; to decrease this

loss, firms are encouraged to adopt cultures that value team orientation and respect for people.

Adaptability

Researchers Kotter and Heskett (1992), Touminen, Rajala and Moller (2004), and Smith

(2002) found adaptability to be a strong predictor of firm success. Smith (2002) referred to

adaptability as organizational change, what he defined as "any intentional change in the way the

organization does business that affects the strategic position of the organization vis-à-vis its

competition" (p. 26). Touminen et al. (2004) referred to adaptability as a firm's ability to

capitalize on changing market and technological opportunities. Firms are required to adapt their

processes after a variety of events, including mergers, acquisitions, business expansion,

development of new technology systems, process improvement, and restructuring or downsizing

of firm size. A firm's ability to successfully adapt to changes in their environment is extremely

difficult; Smith (2002) cited a 30% success rate for organizational change programs among 140

xxxvi

organizations. An organization's ability to adapt to changes in their internal and external

environment, whether strategically planned or forced, is positively correlated to high financial

returns (Smith, 2002). The firms that successfully implemented and followed through with their

change programs showed increased profitability over a ten-year period (Smith, 2002).

Touminen et al. (2004) conducted a study with 140 managing directors from 142 firms

through a questionnaire that measured the degree of their firm's adaptability and innovativeness.

"The adaptability construct was operationalized by using previous measurement items, such as

deployed mode of technology, customer intimacy and competitor emphasis, structural

arrangements and managerial systems in combination with variables developed for this inquiry"

(Touminen et al., 2004, p. 498). The researcher's survey contained 23 items, based on a five-

point Likert-type scale ranging from poor to excellent. The 23 items presented an overall

perception of degree of adaptability for each firm as reported by their managing directors. The

researchers found that adaptability had a strong positive correlation with a high level of

innovativeness (Touminen et al., 2004). Customer relationships and technology sharing were the

two strongest factors of adaptability that influenced the degree of firm innovativeness. The

researchers suggested the need for a longitudinal study to replicate the correlation between

adaptability and innovativeness. Roi (2006) also found a positive, significant relationship

between firms with adaptive cultural norms and net income performance, r =.355, .373. Roi's

participants consisted of 271 executives from 94 corporations; his study measured net income

growth over a ten-year period.

Denison (1984) used a survey type index to collect data on corporate culture that

permitted him to hypothesize which traits supported sustained performance across industries.

Denison’s survey technique allowed individual employee perceptions to characterize the general

xxxvii

culture of each organization. Denison’s (1984) instrument questionnaire, the Survey of

Organizations, was created to measure culture along four dimensions: involvement, consistency,

adaptability and mission. Denison’s questionnaire was distributed to 43,747 participants across

34 companies in 25 industries. The responses of the questionnaires were averaged in order to

assign a single score for the entire organization in each of the four indexes.

Gordon and DiTomaso (1992) measured adaptability and stability in insurance

organizations by measuring participant-reported answers on levels of action/orientation and

innovation/ risk taking. They found that "industries perform best when their culture fosters

adaptability rather than stability" (Gordon & DiTomaso, 1992, p. 794). Koberg and Chusmir

(1987) also found that innovative culture was positively related to job satisfaction and negatively

related to the propensity to leave among a survey of 165 managers. Innovative cultures were

described as creative work environments where challenge and risk taking were the norm.

Additionally, according to Koberg & Chusmir (1987), ambitious employees thrived in an

innovative environment.

Culture Strength

Companies with strong cultures outperform organizations with weak cultures (Deal &

Kennedy, 1982; Kotter & Heskett, 1992; Gordon & DiTomaso, 1992; Sorenson, 2002). Roi

(2009) defined a strong culture as one "where most managers share a set of consistent values and

practices for conducting business" (p. 19). One of the earlier studies on culture strength,

performed by Deal and Kennedy (1982), examined 80 companies over six months and found that

the 18 with strong cultures were uniformly outstanding performers. They also found that strong

cultures inspired loyalty. Of the outstanding organizations, Deal and Kennedy (1982) found that

all had a "rich and complex system of values that were shared by the employees" (p. 14). In their

xxxviii

research, Deal and Kennedy (1982) found that strong cultures allow employees to understand

exactly what is expected of them. They estimated that a company with a strong culture could

gain up to two hours of productivity per employee per day. Strong cultures remove much of daily

uncertainties that employees suffer from because they "provide structure and standards and a

value system in which to operate" (Deal & Kennedy, 1982, p. 16). Deal and Kennedy (1982)

also asserted that a strong corporate culture is the key to corporate success.

Similar to Denison and Mishra (1995), who studied the phenomenon of culture strength

as a predictor of performance across a variety of organizations, Kotter and Heskett (1992)

performed a ten-year long study involving 207 US public firms in 18 industries to explore this

relationship. The researchers hypothesized that the presence of a strong culture, represented by

the degree to which the members of a firm all share the beliefs and values which constitute their

culture, should be associated with higher goal alignment among organizational members and

promote an unusual level of motivation among employees. Kotter and Heskett (1992) collected

data from the top six officers or managers of the firms rather than employees across ranks and

used both quantitative and qualitative measurements. The researchers administered

questionnaires to their participants who used a self-report method to define their organization's

culture. To confirm the reliability of their measurement tool, Kotter and Heskett (1992) used a

more qualitative approach by interviewing 22 select organizations of the original 207 firms in

order to validate their results. They found a positive correlation between perceived culture

strength and long-term economic performance during the ten-year study. However, it was noted

that stronger correlations existed when the corporate culture stressed the importance of

adaptability and change. Kotter and Heskett (1992) found that strong culture played such a

significant role in the lasting performance of an organization that 90-95% of the firms in their

xxxix

study failed to have a strong enough corporate culture that enhanced economic performance.

Sorenson (2002) tested the hypothesis that strong cultures can be a reliable predictor of

firm performance using the data that Kotter and Heskett (1992) collected. Sorenson used

performance data from the COMPUSTAT database and measured performance on the yearly

return on invested capital for the three years following Kotter and Heskett's (1992) original

study. Sorenson (2002) discovered that widespread agreement regarding acceptable work

behaviors and values increased behavioral consistency and resulted in higher firm performance.

Although Sorenson confirmed that organizations with strong cultures are more likely to

experience positive financial growth, he found that in volatile markets, strong cultures did not

outperform weak ones. Sorenson (2002) did not differentiate between management levels, but

asserted that a strong culture is one where the norms and values are widely shared and strongly

held throughout the organization and across all hierarchal levels. Sorenson (2002) claimed that

strong cultures prosper from "enhanced coordination and control within the firm, improved goal

alignment between the firm and its members, and increased employee effort" (p. 71). Sorenson

(2002) asserted that strong cultures enhance the reliability of firm performance as long as

organizational routines are consistent and the processes are well adapted to change in order to

meet the demands of the environment. If heterogeneity in beliefs exists within the culture, then

employees will spend more time debating their options for behavior and task accomplishment

rather than achieving their goals (Sorenson, 2002).

Gordon and DiTomaso (1992) investigated the degree that culture strength and culture

values predicted performance in 11 US Insurance companies. Unlike Denison (1984), who

included participants across industries, researchers Gordon and DiTomaso (1992) concentrated

on one field over a five-year period. Similar to Kotter and Heskett (1992) who surveyed

xl

managers, Gordon and DiTomaso (1992) examined the questionnaire responses of participants

from the top four-to-five levels of management in 11 insurance firms. The researchers used

Hofstede's (1990) measurement of organizational culture, but adapted it slightly to construct the

measurement specifically for an organization rather than the individual. Comparable to Kotter

and Heskett (1992), Gordon and DiTomaso (1992) measured culture strength on the consistency

of answers and level of agreement among the managers on types of values that define their

organization. Gordon and DiTomaso (1992) found that strong cultures, those in which managers

closely agreed on values and practices, were related to high financially performing firms. Gordon

and DiTomaso (1992) reported that, "the greater the culture strength, the stronger the firm's

financial performance will be in subsequent years" (p. 787). Of the 11 participant organizations,

the more consistent responses of strong culture were positively related to organizational

performance. Strong cultures offer the support and tools that allow employees to work at

maximum efficiency, as well as guide lower level decision making to align with corporate goals.

Denison (1984) only reported the results of two of the 22 indexes measured in his study,

organizations of work index and decision making practices, and the resulting predictions they

presented on the long-term success of the participant corporations. Both index terms refer to

management systems, and both are better predictors of long-term success than the other 20

indexes measured (Denison, 1984). Organizations with employees who reported having a well-

organized work environment experienced significantly higher return on investments, often twice

as high as the companies with the lowest level of organized work environment. The results of

decision making practices had a similar, positive correlation; however it was more gradual over

time. The degree that a company possessed a higher organized work index, as well as consistent

decision making practices directly related to the strength of their culture. Overall, the system-

xli

level attitudes were the best predictors of performance, specifically long-term performance

(Denison, 1984).

Although Denison (1984), Gordon and DiTomaso (1992), Kotter and Heskett (1992), and

Sorenson (2002) found culture strength to be positively related to financial performance, Van

den Berg and Wilderom (2004) argued that culture strength is too limited a variable because it

only hints at employee consensus. When the majority of employees value the same behaviors

and practices in their organization, that organization can be said to possess a strong culture.

Cooke and Rousseau (1988) suggested that the absence of a strong culture was a disadvantage.

"We believe that the absence of strong or consistent norms is an attribute of change or

instability" (Cooke & Rousseau, 1988, p. 251).

Summary

Researchers agreed on three ideal traits that when present in an organization's culture are

reliable means to predicting the firm's future success. Collective practices, such as team work,

increased performance across multiple time periods, not solely at one point in time (Petty et al.,

1995). Denison (as cited in Sackman, 2006) found that more effective organizations embraced

involvement tendencies, characterized by collective practices, which were also positively linked

to short and long-term performance. Collective organizations experienced higher employee

retention rates than less collective organizations from the same parent company (Sheridan,

1992). Adaptability was the second trait that was positively linked to organizational

performance. An organization's ability to adapt to changes was related to higher financial returns

(Smith, 2002). Adaptability had a strong positive association with a high level of innovativeness

and net income performance, and was positively related to job satisfaction (Koberg & Chusmir,

1987; Roi, 2006; Touminen et al., 2004). Culture strength was the third trait that was positively

xlii

related to organization performance. Strong cultures outperform organizations with weak

cultures; employees from strong cultures are more loyal to their organization and experience

more productivity throughout the work day (Deal & Kennedy, 1982). Strong cultures are

positively related to long-term economic performance (Gordon & DiTomaso, 1992; Kotter &

Heskett, 1992; Sorenson, 2002).

Measuring Performance

Studies on the relationship between corporate culture and performance used a variety of

measurements for performance, often employing methods that are specific to the surveyed

industry. Several researchers performed longitudinal studies ranging from two-year to ten-year-

long studies. Denison (1984) measured performance in organizations with a variety of financial

ratios, such as return on investment (ROI) and equity and sales, and averaged the figures over six

years. Sorenson (2002) also measured performance on both return on invested capital and ROI,

as well as return on sales (ROS) and net income growth. Denison (1984) recognized that

financial ratios were not always the best indicator of corporate performance, but settled on

income/investment and income/sales ratio as measures of performance. The financial ratios were

used to predict performance for the five years following the distribution of Denison's (1984)

questionnaire. Kotter and Heskett (1992) used return on investment like Denison (1984), but also

averaged the yearly increase in net income and yearly increase in stock price. Researchers

Gordon and DiTomaso’s (1992) study measured performance in an unusual method because of

the "unique ownership structure" (p. 790) of the insurance firms which ruled out using traditional

measures of performance, such as ROI and ROS. Rather, the researchers measured performance

based on growth of assets and growth of premiums over six years. The tools for measuring

performance in the mentioned studies were organization-specific; a single tool could not

xliii

generalize performance across industries.

In their study of 12 organizations, Petty et al. (1995) used a summary of five objective

measures for performance: operations, customer accounting, support services, marketing and

employee safety and health. Participant companies received a score out of 1,000 in each category

as well as a combined overall financial score. All five measures were developed internally in

each company for the purpose of evaluation, not by the researchers, and prohibited generalizing

to other organizations. A strength of this study was that Petty et al. (1995) correlated the data for

each of the five categories at two points in time, approximately one year apart.

In their study of 160 companies from 40 different industries, over a ten-year period,

1986-1996, Joyce et al. (2003) measured performance by total return to shareholders, TRS. The

researchers compared the TRS of the participant companies against the TRS of other firms

within the same industry. The researchers found that "an individual organization's TRS

sometimes reflects not its own performance so much as the state of its industry" (Joyce et al.,

2003, p. 9). To compare organizations within the same industry, the researchers ensured that

participant organizations were roughly similar in their size, scope, financial numbers, TRS and

future prospects.

According to Wilderom et al. (2000), multidimensional performance measurements,

including nonfinancial and perceptual indicators are the most effective means to measure

performance. Purely financial ratios, such as ROI, return on sales, and return on equity, while

being easily accessible, are not the most effective measures for performance (Wilderom et al.,

2000). Due to the lack of consistency in accounting measures, as well as their proneness to

manipulation, Wilderom et al. (2000) suggested using multidimensional measures that address

all stakeholders. According to this approach, "an organization is considered effective if it

xliv

balances the competing claims of various relevant organizational stakeholders and thus ensures

their continuing cooperation" (Wilderom et al., 2000, p. 203). Financial performance is only one

measurement of firm effectiveness and is only an indicator of short-term performance, whereas

stakeholder satisfaction is viewed as an indicator of long-term performance (Wilderom et al.,

2000).

Summary

Researchers used a variety of financial ratios to measure the performance of

organizations. Several studies measured performance at one point in time, others measured it

over a span of five or ten years. However, researchers agreed that organizations may strive for

more than financial gain. Therefore, to accurately measure performance, both financial and

multidimensional measurements should be used. These include return on investment, return on

invested capital, return on sales, net income growth, and total return to shareholders. Measuring

stakeholder satisfaction in accordance with financial ratios will present the most accurate

measurements of firm performance.

Limitations of Reviewed Studies

There are several limitations of the studies discussed in the literature review. Studies

which failed to find a link between organizational culture and performance are underrepresented

in this review. Several factors in each reviewed study pointed to problems with generalization.

There were issues with construct validity of defining and measuring culture and performance and

the inclusion of intraorganizational participants who were not representative of the entire

organizational culture. Additionally, both the independent variable, corporate culture, and the

outcome variable, organizational performance, were defined by different terms across the studies

leaving less room for generalization. Gordon and DiTomaso (1992) did not specify how many

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managers were involved within the top four-to-five levels of management, only the mean number

of participants from each firm was reported. Both Gordon and DiTomaso (1992) and Kotter and

Heskett (1992) used the opinions of managers or CEO’s in order to define the corporate culture

of each participant organization. It is crucial to recognize that the views of managers do not

always represent the views of the entire employee population. In order to achieve an accurate

depiction of corporate culture which can be generalized to the entire organization, a random

sample of all employees across all hierarchal divisions would supply the most precise description

(McMillan, 2010; Wilderom et al., 2000).

Additionally, as Gordon and DiTomaso (1992) recognized, their study measured

corporate culture at one single point in time, but evaluated the performance over a five-year

span, from 1982-1987. Likewise, Kotter and Heskett (1992) measured the performance of their

sample firms over 10 years, but only accounted for the corporate culture measured at one point in

the 10 years. Neither study considered the possibility of the corporate culture of the participant

organizations changing over the span of their research. The nature of advancement in industries

and technological progress dictates that organizations grow and change over time. Additionally,

the variables measured in Gordon and DiTomaso’s (1992) study were specific to short-term

company performance predictors. These variables have not been proven to have long-term effect

on performance, suggesting more research would be needed to validate the results. The reviewed

studies also lacked consensus if the dimensions found to be positively related to firm

performance stood true for short-term or long-term performance.

While Truskie (1999) presented four types of dominate cultures, he stated that the leaders

must find an adaptive balance among the four: cooperation pattern, consistent pattern,

achievement and inspiration pattern. "Not one culture can lead to long-term success for the

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organization" (Truskie, 1999, p. 13). The ideal corporate culture is one that combines degrees of

individualism and collectivism to meet the needs of the employees and align goals with the

mission and value statement. Truskie (1999) stated that not one culture trait is more beneficial to

the organization, but the ideal model adopts the positive elements from each of the inspiration,

achievement, cooperation and consistent cultures. Truskie went on to state that adopting just one

of the four traits is simply a strategy for short-term success or change.

Although the reviewed studies argued that collective work practices will lead to a more

profitable organization, Truskie (1999) claimed other traits must be present in the culture as well.

"Organizations that strive to achieve integrated and balanced cultures are more successful, more

adaptive, and thus better able to sustain over longer time periods than organizations whose

cultures are incomplete and out of balance" (Truskie, 1999, p. 21). A culture that values

collectivism and does not include other traits can become unbalanced. Management by

committee can occur, leaders may hesitate when making decisions before consulting a team, or

the leaders can be viewed as indecisive. Too much attention can be placed on creating a team or

committee to deal with every new situation, thus taking away time spent on creating solutions

(Truskie, 1999).

Another limitation to this study lies in the possibility that when in work groups members

may fall prey to what is known as the Ringlemann Effect (Forsyth, 2010). According to Forsyth

(2010), members have a tendency to become less productive when working with others. Creating

a collective work group may not always be the best option. Several studies found that

collectivism can inhibit certain characteristics that a firm might want present in their corporate

culture (Goncalo & Staw, 2004). When a leader desires creativity from his employees, a

collective team operates below par compared to other teams that are not as collective in nature.

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Therefore, it is up to the leaders of an organization to choose when to adopt collective tendencies

to maximize performance.

Denison (as cited in Sackman, 2006) referred to a significant limitation in the

contradiction between adaptable yet consistent processes. Values and behaviors are at the surface

of corporate culture; traits impacting both can be measured and compared. However, underlying

assumptions and beliefs of employees are much harder to compare and form generalizations

about. Truskie (1999) asserted that the challenge to creating a strong, adaptive, collective culture

is to balance opposing forces. This allows the firm to remain adaptive and utilize the strengths of

opposing strategies. An organization must remain consistent with policies and practices, but have

the self awareness to understand when adoption of new practices would maximize profits.

According to Deal and Kennedy (1982), "strong cultures are not only able to respond to an

environment but they also adapt to diverse and changing circumstances" (p. 195). Strong,

consistent cultures adjust to new challenges and change by referring to their values and

established rituals which continue to guide their actions towards a successful path. Achieving

this balance between opposing strategies is a key challenge to an experienced leader.

A final limitation is that the reviewed studies neglected to state to what degree the beliefs

and values must be shared among all employees in order for the culture to be considered strong.

The distinction is unclear, whether having 50% agreement among employees constitutes a strong

culture or if that number must be above 85%. This holds true for the other dimensions; at what

point is a company adaptable, or strong enough, or collective enough for it to operate at

maximum performance? The reviewed studies failed to build upon previous research in order to

determine the most accurate and appropriate measurement of culture and performance, therefore

the studies leave room for further research in this area.

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Chapter Summary

Across 30 years of research, corporate culture was defined in many ways using a

multitude of descriptors. Whether it was defined in terms of individualism or collectivism, or by

the characteristics that are present in work group processes, empirical research found that the

degree to which employees identify with either individualism or collectivism is a significant

predictor of the firm’s future success. Goncalo and Staw (2004) found that “organizations should

adopt collectivistic values because they promote cooperation and productivity” (p. 96). Kotter

and Heskett (1992) linked the strong corporate culture to HP’s lasting productivity from the start

of the corporation through the late 1990's. One can infer that the creation of a strong corporate

culture, one with collective practices and high in adaptability, will allow the organization to

experience increased effectiveness and higher productivity.

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Chapter III- Methodology

Introduction

In order to further develop or improve one's corporate culture, an organization would

benefit from adopting certain practices that have been known to support firm success. Empirical

research supports the hypothesis that an organization’s corporate culture, specifically a strong

culture which emphasizes adaptability and contains elements of collectivism, can be a strong

predictor of the future performance of a firm (Denison, 1984; Denison & Mishra, 1995; Gordon

& DiTomaso, 1992; Kotter & Heskett, 1992). Therefore, a firm that wishes to experience long-

term profitability would benefit from adopting a corporate culture that incorporates these

elements.

Previous research recognized that the established tools to collect data on corporate culture

and performance involved both qualitative methods, such as open-ended questionnaires and

employee focus groups to determine the specific culture of an organization, as well as

quantitative methods such as tracking financial measurements (Denison, 1984; Gordon &

DiTomaso, 1992). After reviewing the advantages of each method, the researcher carefully

selected the research design and instrumentation based on design appropriateness to answer the

research questions. The following research questions were addressed in this study:

1. How is corporate culture best defined and measured?

2. What traits of corporate culture are related to productivity and firm effectiveness?

3. How would an organization adopt these traits into their corporate culture?

Research Design

This project developed a survey for United States-based small to medium organizations

that seek to maximize their firm's performance. Using research and development design, a 35

item questionnaire and accompanying handbook was created to guide corporations in adopting a

l

more collective and successful corporate culture. The survey questionnaire was designed to

measure the existing culture to determine if a company lacked elements of collectivism,

adaptability and culture strength and would benefit from adopting new policies and practices.

The final stage of the project was to create a handbook that would offer executives, leaders and

scholars an applicable tool to refer to in order to maximize their current corporate culture. The

handbook was created to answer research question #3, how would an organization adopt these

traits into their culture. Neither the survey nor handbook were field tested due to time and

funding limitations; although the survey was peer reviewed for ease of use and comprehension.

Both instruments bridge the gap in literature on the culture-performance link. The decisions

regarding the development of the handbook and survey are discussed in the following sections.

Instrumentation

The non-experimental research utilized for this project could be classified as analytical.

The corporate culture-performance link was investigated by analyzing documents, records, and

other research to determine the best means of answering the research questions. The most

effective way to measure corporate culture, as revealed in the literature review, is through

qualitative and quantitative methods. Quantitative methods of collecting data to measure

corporate culture are less expensive and can cover large sample populations. Quantitative

methods also allow the possibility for generalization and comparison across industries and tend

to allow greater objectivity (McMillan, 2012). Qualitative methods, such as employee interviews

and observations are more costly and require a greater amount of time to collect data. Therefore,

to ensure ease of use by executives or leaders in an organization, a quantitative survey, titled

"Measuring Collectivism, Adaptability and Strength in Your Corporate Culture Survey", was

created for this project. The next step involved extensive research, this included defining traits

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that an organization would want to incorporate into their culture, and determining when a

corporation needed to update their current culture. Next, the researcher developed a preliminary

survey and requested peer feedback for accuracy and appropriate fit. Finally, preliminary product

revisions were made based on the reviewer's feedback.

Based on the literature review, a respected and reliable tool to measure culture is the

AICS. A comprehensive tool does not currently exist that measures collectivism, adaptability and

culture strength, thus requiring the adaptation of standardized tools. After reviewing the

established tools to measure culture, the researcher combined the AICS and Shulruf's et al.

(2003) model of collectivism to create a new survey tool to measure the degree of collectivism,

adaptability and strength present in a culture. This survey accomplished the project objectives by

creating a tool to best measure the three traits of corporate culture that were linked to higher

financial performance.

The second phase of instrumentation was the creation of the handbook, "Creating a

Collective Corporate Culture: A Small Business Guide to Maximize Performance". The

handbook was designed to be a resource guide for executives to refer to in order to ensure their

current culture was operating at maximum efficiency. The handbook entailed extensive research

on how to adopt the three traits that contribute to increased firm performance, as well as which

activities and exercises could be implemented in the workplace to increase the level of

collectivism, adaptability and culture strength.

Developing the Survey

The purpose and objective of the survey was to measure three specific traits of corporate

culture, collectivism, adaptability and strength, as these traits have the strongest predictors of

financial performance (Denison, 1984; Gordon & DiTomaso 1992; Kotter & Heskett, 1992). The

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target population of the survey was small businesses with fewer than 1,500 employees.

According to Kraft and Roth (as seen in Sackman, 2006) medium sized enterprises are the most

profitable based on the OASIS (Organizational and Strategy Information Service) model of

culture that compares market environment and organization strategy with various performance

measures, such as ROI. Kraft and Roth (as seen in Sackman, 2006) stated that "the highest

profitability would be expected for small enterprises (<1,500)" (p.10) due to less bureaucracy

and fewer hierarchy levels, resulting in less political intrigues. Therefore, the survey was

designed for use in businesses with fewer than 1,500 employees.

The questions were worded carefully to be clear, understandable and unbiased

(McMillan, 2012). The survey was designed to be aesthetically pleasing, using at least 10-point

font. The survey included directions for executives administering the survey, as well as

instructions for participants taking the survey. The directions were clear to prevent any

ambiguity of where or how to respond, and what to do when complete with the survey. The

survey included less than 40 items to prevent participant fatigue, and to help ensure at least a

70% response rate, a rate which McMillan (2012) states is adequate to allow for generalizing.

Self-report surveys permit employees to report on their perceptions of reality, which leads itself

to internal credibility because employees are more likely to accept the results of the survey

(Ashansky, Broadfoot, & Falkus, 2000).

The survey included questions about daily operations in the work place, values, behaviors

and other relevant questions in order to assign a level of individualism or collectivism at the

corporate level. Ashansky et al. (2000) stated that "organizational culture may be rooted in

perceived practices" (p. 133), therefore the survey was designed to measure the perceptions of

employees from all hierarchal levels of the organization. The survey was predominantly

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designed based on the AICS; the researcher reviewed the items from the AICS that corresponded

to collectivism and modeled the collectivism items on the survey after the AICS dimensions

(Shulruf et al., 2007). The AICS was used as a reference for the survey because it boasted the

highest level of reliability, α >.70, was used across a range of populations, and the test is

publically available (Shulruf et al., 2011). The researcher also reviewed the Principle Component

Analysis of Adaptability Survey created by Tuominen et al. (2004). The adaptability items on the

survey were modeled after the Principle Component Analysis of Adaptability Survey (Tuominen

et al., 2004), but were adapted to specifically measure innovation and change programs, rather

than product-specific items.

By using reliable and established measurement tools for collectivism and adaptability as a

basis for the survey the researcher attempted to establish validity for the questionnaire

(McMillan, 2010). As the survey was not field tested for use, the reliability of the created survey

was not applicable; however the validity of the inferences created from the instrument was strong

based on the fact that the items are comparable to the items from standardized instruments. It can

be expected that scores from the created instrument will correlate highly with the AICS as a

measurement of collectivism, resulting in construct validity (McMillan, 2012). The created

survey is therefore an appropriate and reasonable instrument to evaluate the degree that a culture

possesses collective, adaptable and strong traits. All ten peer reviewers stated that the survey

adequately appeared to measure the target variables, resulting in face validity. Based on the fact

that the survey measured the three traits that an organization needs to be effective, the survey is

considered an effectiveness profiling instrument (Ashansky et al., 2000).

Although several studies used managers’ perceptions of work practices to determine the

current culture (Gordon & DiTomaso, 1992; Kotter & Heskett, 1992), in order to achieve the

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most accurate representation of the current culture, the survey was designed to measure a range

of employees at different hierarchal levels in the organization. The survey was intended to be

distributed via paper or electronically. The survey was designed to offer executives the

opportunity to measure the degree of consensus among employees on daily practices, beliefs and

values that are observable and reportable.

The survey items that measure each of the three traits were adapted from existing

instruments for measuring each aspect of culture (Shulruf et al., 2007; Tuominen et al., 2004).

Fifteen items measured collectivism (1, 2, 4, 5, 8, 10, 13, 15, 16, 17, 18, 22, 24, 26, 33); items 1,

13, 17 and 22 measured employee's perceived opinion that their organization sets group goals

and emphasized team work. Items 10, 24 and 22 measured perceived collective efficacy in the

workplace, and items 18 and 26 measured the perceived level of esprit de corps present in the

organization's culture. Ten items measured perceived adaptability of the organization (3, 6, 11,

14, 19, 21, 23, 27, 30, 34). Items 6, 21 and 34 measured the degree that employees felt that their

organization and leaders initiate a proper change program; items 11, 14, 21 and 30 measured the

degree that employees perceived that their organization and leaders encourage utilizing

innovative technology in the workplace. Ten items measured culture strength (7, 9, 12, 20, 25,

28, 29, 31, 32, 35). Items 9, 12 and 25 measured the employee's perceived level that their leaders

and organization are consistent with all processes, and items 7 and 29 measured the perceived

degree that the mission statement aligns with their individual and group goals. Each item is rated

on a 5-point Likert scale. The Likert scale is one of the more widely used response scales on

surveys (McMillan, 2010). Items measuring each of the three main traits, collectivism,

adaptability and culture strength, were randomized to minimize respondent bias.

The final step in the design of the survey was to create the "Scoring the Collectivism,

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Adaptability, and Strength in Your Corporate Culture Survey", located in Appendix B. The

scoring the survey handout was designed to be used in connection with the survey. It clearly

states how to add up scores for all participants to determine the degree that each trait is present in

an organization's culture. If the average scores for each trait falls in the medium, low or

nonexistent category, then managers are encouraged to consult the handbook to learn what

exercises to implement in the workplace to raise the degree of each trait.

Once the first draft of the survey was completed, it was then reviewed by a peer review

panel comprised of ten individuals for ease of comprehension, appropriate content and overall

opinion. The reviewers were selected through convenience sampling and had to meet certain

criteria; they needed to have at least two years work experience in a corporate or small business

setting. The peer reviewers were not required to possess expertise in collectivism because the

survey was designed to be appropriate for organizations that lack knowledge about collectivism,

adaptability and culture strength. The ten peer reviewers were asked via email to review the

assessment for content validity, on relevancy, if the survey had adequate means to measure each

of the three traits, for clear and comprehensive language, and were asked if any of the questions

were leading or biased. The Peer Reviewer Handout is located in Appendix A. The reviewers

responded to three open-ended questions to discover the strengths, weaknesses and areas in need

of improvement for the survey. The reviewers were also asked to review the "Scoring the

Survey" handout for accuracy and ease of comprehension.

On the basis of the reviewer's comments, revisions to the survey were made. Reviewers

suggested bolding or italicizing certain sections of the survey to ensure the format was

aesthetically pleasing. Peer Reviewer #2 suggested defining "esprit de corps" in question #26;

however, it was not mentioned by any other peer reviewers. Therefore, the researcher maintained

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the verbiage used in item # 26. Both peer reviewers # 2 and # 3 suggested having a "not

applicable" option as a response to each item. Reviewer # 3 also suggested offering open-ended

questions to allow the respondents to elaborate or clarify their responses. However, because the

purpose of the survey was meant to be used in a corporate setting by an employee who would not

necessarily be trained in analyzing responses, the open-ended options were omitted. Table 2

displays the peer reviewers' demographics, including their occupation and the number of years of

work experience.

Table 2: Peer Reviewers' Demographics

Occupation Number of Years in Current position

Peer Reviewer # 1 Administration 4

Peer Reviewer # 2 Sales Administration 5

Peer Reviewer # 3 Vet Technician Supervisor 7

Peer Reviewer # 4 Loan Officer 5

Peer Reviewer # 5 Office Manager 4

Peer Reviewer # 6 Sales Representative 2

Peer Reviewer # 7 Office Manager 4

Peer Reviewer # 8 Web Developer 5

Peer Reviewer # 9 Project Manager 4

Peer Reviewer # 10 Administrative Assistant 3

Developing the Handbook

Once final revisions to the survey were completed and organizations had a tool to

evaluate and measure the degree that each of the three traits were present in their culture, a

lvii

handbook was created to guide the organization in understanding why incorporating these traits

was crucial to their success, as well as how to go about the process. The creation of the handbook

involved researching the need for each trait and learning how to adopt these new traits into the

existing culture. An extensive literature review, scholarly articles, published books and

dissertations were used to collect the information.

The creation of a corporate culture is a top down process; a leader sets the tone and

examples for the values, beliefs, and processes that he or she desires to be present in the

organization (Van den Berg & Wilderom, 2004). Applicants are attracted to a certain

organizational model; employees who are high in person-organization fit will remain with the

organization and are more likely to contribute to the organization's success (Goodman &

Syvantek, 1999). Employees low in organizational fit, those whose values differ from the

corporate culture they are a part of, suffer in contextual and task performance (Goodman &

Syvantek, 1999). To maximize performance, person-organization fit and employee retention, a

leader must ensure applicants share the values and beliefs that are inherent in the organization's

culture. The handbook, "Creating a Collective Corporate Culture: A Small Business Guide to

Maximize Performance", was designed to be applicable to all industries; Collins (2001) stated

that good to great companies can emerge in any industry, as long as the organization employs the

correct strategies that are proven to support sustained profitability.

How to increase collectivism.

Denison (1990), Petty et al. (1995), Sheridan (1992), and Truskie (1999) found

collectivism and collective tendencies to be positively related to firm performance. There are

three steps to increase collectivism in an organization's culture. The first step is to emphasize

team work as a means to accomplish goals and to reward team goals, not individual goals. The

lviii

second step is to increase collective efficacy among groups and departments. The third step to

increase collectivism is to increase synergy and esprit de corps among employees.

The first step to increase collectivism is to set group goals, not individual goals, and

emphasize team work. Working in groups is a universal characteristic across all societies

(Forsyth, 2010). Groups fulfill the need for positive, enduring relationships with others. By

organizing company processes into work groups, a manager is setting the tone for an inclusive

and collective identity to form among group members. Groups tend to value the traditions and

ideologies that are shared by the majority of the members (Forsyth, 2010). Team practices should

create an environment where members avoid disagreement, respect authority and are encouraged

to compromise. When the processes of the group encourage collective tendencies, the members

are more likely to cooperate, rather than compete with their co-workers, and are also more likely

to create long lasting relationships (Forsyth, 2010).

Collectivistic group norms are informal rules and expectations adopted by group

members that encourage and regulate the performance of behaviors that include placing

greater priority on the achievement of team goals, working closely with team members on

team tasks, placing team member needs above individual needs during task performance,

relying on teammates to perform their parts of the team task, performing one’s own

duties in fulfillment of the team’s overall goals, demonstrating concern for the team’s

performance, and accepting responsibility for the team’s outcomes. (Celani & Tasa,

2010, p. 1)

Group and team based work creates a degree of interdependency that leads to a more

collective environment (Forsyth, 2010). Interdependents put the needs of the group before their

own. "They are respectful of other members of their groups, and they value their membership in

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groups, their friendships, and traditions" (Forsyth, 2010, p. 74). When forming a work team to

accomplish a task, managers should offer team based compensation. Team based compensation

can be in addition to regular wages and treated as a bonus. Each team member, including senior

staff, should receive the same percentage based on the performance of the team (Truskie, 1999).

Collins (2001) suggested that compensation be used to keep the right members on the team, not

necessarily to motivate the "right" behaviors from the wrong people. If companies offer rewards

based on self-interest, then employees will tend to be more individualistic, only look out for their

individual interests and will also be less productive (Benkler, 2011). Joyce et al. (2003) found

that winning teams rewarded achievement with pay for performance, but also with

acknowledgement and public recognition.

Teaching members to refer to the team as "us" or "we" encourages the individuals to view

themselves as part of the in-group, which will also increase their commitment to the team's goals

(Forsyth, 2010). Benkler (2011) insisted that organizations need "systems that rely on

engagement, communication, and a sense of a common purpose and identity" (p. 79).

Recognizing group achievements, removing rigid chains of command and teaching conflict

resolution techniques to the group will ensure teams are operating at maximum output. Further,

ensuring team behavior is part of performance appraisals is crucial; employees must understand

their performance as a team member is part of their employee evaluation (Truskie, 1999). A

leader can also provide company gear and clothing for team members to wear and reward

employees who embrace their logos. Team members who physically look similar will find it

easier to identify with the larger group.

Collins (2009) found that one of the five steps to creating great, not just good, companies

was to get the right people on the team. Collins (2001) asserted that the right people must be on

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the team and in the correct roles for the team to operate effectively. In fact, in his study on

Fortune 500 companies that transformed from good to great companies, Collins (2001) found

that the 11 successful companies first hired the right people to comprise their teams before

figuring out where to take the organization. If the CEO or leaders ensure the team is composed of

the right people, then team members will already be highly self-motivated and capable. The

challenge with work groups is to avoid social loafing by ensuring each member carries their own

weight. Collective groups can become unproductive groups if the leader does not adequately

train the group and ensure that the team is comprised of the best members for the job. While a

manger wants to ensure each individual member identifies with their group, the identity of the

individual member must not be lost in the identity of the group. To avoid a loss of individual

identity, Plas (as seen in Truskie, 1999) asserted the following:

Values like individualism that undergird contemporary diversity ideas can subvert

attempts to implement successful community strategies. [She] recommends that work

communities be structured—like a sports team—with a specific role for each member.

This role specialization enables each member to make unique contributions and permits

the personal recognition needed to satisfy the individualist spirit that typifies most

Americans. (p. 49)

The second step to increase collectivism within a corporate culture is to increase

collective efficacy among members; this involves implementing diversity training to bring

attention to the positive contributions of group members who may be viewed as outsiders.

Collective efficacy and cohesion is the physical attraction and identification of members to the

group; when a group is high in cohesion, they are more likely to experience an elevated level of

collective efficacy (Boyt, Lusch, & Mejza, 2005). Collective efficacy is the belief among the

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majority of group members that their team is capable of successfully completing all tasks

(Forsyth, 2010). When members believe that they are part of a successful team they are more

dedicated and committed to achieving the group's goals, and possess more motivation to do what

it takes to accomplish the goals. Groups high in collective efficacy experience greater member

satisfaction and possess less individualistic tendencies.

Work groups should have norms that stress productivity; the degree of success

experienced by the group is positively correlated to their level of collective efficacy. Groups high

in collective efficacy often lead to synergy (Forsyth, 2010). As the degree of collectivism

increases within the organization, so will the degree of productivity of the work groups; the cycle

continues as the success of the group increases cohesion and results in more collective

tendencies. "Features of the organizational context, such as...degree of collectivism in the

organizational culture...will increase the probability that team-based approaches will be

successful" (Forsyth, 2010, p. 375). A team high in collective efficacy will implement more

collective practices. Collective efficacy also results from team members sharing a sense of

ownership in the success of their team. Inspiring a sense of ownership among employees is

expected in a collective environment (Joyce et al., 2003). Ownership can be encouraged by

distributing portions of employee's income in the form of shares. Empowered employees are

more likely to identify with the company and are more committed to achieving the organization's

goals.

Diversity training is another key component to creating a more collective organization.

When individuals view their contributions as more important than those of their co-workers, an

in-group out-group bias can occur (Forsyth, 2010; Dyer, Dyer, & Dyer, 2007). A manager must

create a culture that values and respects the talents of the individual employees. Members of a

lxii

group are more likely to undervalue the contributions of members from the out-group. "If the

organization's culture encourages collectivistic values and minimizes distinctions based on tenure

and status, then diverse teammates tend to behave more cooperatively then they would in more

traditional organizations" (Forsyth, 2010, p. 365).

To avoid an in-group out-group bias from creating a void in an organization, a manger

should support positive contact, create superordinate goals and encourage decategorization

(Forsyth, 2010). Creating positive contact promotes different groups to interact collaboratively

and encourages personal interaction. Creating superordinate goals results in opposing groups

relying on the other to help them achieve their own goals. A leader must encourage

decategorization of group members and a recategorization to combine conflicting departments or

groups into a larger single team (Forsyth, 2010). The recategorization increases the cohesion

between departments and results in higher collectivism as more employees place their group

goals above their own for the greater good of the organization.

The third step to increase collectivism in corporate culture is to increase synergy and

esprit de corps among groups and employees. Synergy occurs when the group as a whole is

greater than the sum of its parts (Forsyth, 2010). The group is able to collectively achieve a goal

that the individual members would have been unable to accomplish on their own. "Synergy also

becomes more likely when the group members are highly motivated to find the correct solution"

(Forsyth, 2010, p. 303). In a group setting, valuing each opinion and taking the time to hear each

view results in a larger pool of ideas, allowing each member to contribute to a solution that the

individuals would not have found on their own. "By combining their knowledge, insights, and

ideas, groups often make better decisions than would have been made by the group members

acting independently. Positive synergy resulting from group decisions may well include the

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generation of more ideas, more creative solutions, increased acceptance of the decision by group

members, and increased opportunity for the expression of diverse opinions" (DuFrene, 2010,

para. 5). Synergy will not simply occur by combining employees into teams. A manager must

ensure that the team values each member’s contributions. Harmony and cooperation will not

occur automatically; a team would benefit from participating in team building to set a strong

foundation for synergy to occur.

A final way to increase collectivism in a corporate culture is to increase the esprit de

corps among employees. Esprit de corps is different from collective efficacy and cohesion in that

it is "an individual level phenomenon resulting from one's interaction in a group" (Boyt et al.,

2005, p. 689). Organizational esprit de corps occurs when individual employees share a strong

desire and interest for the success of the company, as well as "enthusiastically shares the values

and goals of an organization" (Boyt et al., 2005, p. 690). The increase of esprit de corps results

in several positive behaviors, as well as a more collective mindset. There is a new vitality in the

department, with more chatting and bonding between employees and less complaining. Members

who possess this feeling of unity and enthusiasm for their group more often help other team

mates or co-workers, protect the organization, make constructive suggestions, and spread

goodwill among the organization (Boyt et al., 2005; Forsyth, 2010). When esprit de corps is

present in a work group, members experience higher job satisfaction, compliance with group

norms, increased cohesion, show more helping behavior and are more productive (Boyt et al.,

2005). Esprit de corps is a positive affective tone that encourages solidarity among members of

the organization. Esprit de corps creates a work environment that is not solely based on a

monetary exchange, but also fulfills a social exchange. More fulfilling and collective

environments develop when social exchange relationships trump economic exchange (Boyt et

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al., 2005).

To increase corporate solidarity and esprit de corps, corporate leaders must maintain

high performance standards and lead their organizations competently (Boyt et al., 2005).

Leaders must also ingrain a sense of trust among employees to encourage esprit de corps. Trust

encourages employees to take risks and place faith in their leaders and co-workers. Managers

must build confidence and faith in the organization's ability to be successful. A manager should

share a common, higher purpose that will motivate the team, as well as lead by example (Boyt et

al., 2005). A leader seeking change should promote greater esprit de corps through brown bag

lunches, social events outside of work, and holiday parties (Northouse, 2007). Scheduling

quarterly events such as an annual family day encourages members to view their organization

positively and increases the level of esprit de corps (Truskie, 1999).

A manager must also care for their employees and show their appreciation through group

rewards, recognition and positive reinforcements (Martin, 2007).When morale and esprit de

corps is high, employees are more likely to maintain a collective positive outlook and have faith

in their organization's ability to succeed. Deal and Kennedy (1982) referred to culture solidarity

builders as play, ritual and ceremony. Play is the creative side of corporate life, the purpose of

which is to relieve tension; ceremony is a cultural extravaganza to help the company celebrate a

milestone or a team member. Rituals guide behavior, but are more than just habits of action, they

"give meaning to action and bring order to the chaos" (Deal & Kennedy, 1982, p. 62). An

organization's recognition rituals could include a grand festival with all employees present and a

stage where exemplary employees receive gifts and praise. Play, rituals and ceremony all

contribute to creating and sustaining corporate solidarity. Deal and Kennedy (1982) found that

some of the strongest cultures elevated their ceremonies to an extravagant level. The festivities

lxv

serve to "educate, motivate, inspire and entertain" (Deal & Kennedy, 1982, p. 74) employees.

How to increase adaptability.

Denison (as cited in Sackman, 2006), Denison and Mishra (1995), Gordon and DiTomaso

(1992), and Kotter and Heskett (1992) established that adaptability was a strong predictor of firm

growth. According to Denison (as cited in Sackman, 2006) adaptable organizations transform the

demands of the environment into action. "Recent studies clearly show that, in a complex and

turbulent market environment, adaptability is one of the key prerequisites for a good business

performance" (Tuominen et al., 2004, p. 495). The ability to alter one's culture or processes

offers a sustainable competitive advantage as the firm finds a fit with the changing environment.

There are two steps to increase the adaptability of the organization. The first step is to initiate a

proper change program. The second step is innovate the interior environment.

Leaders must initiate a proper change program by getting people on board, as well as

balancing tradition and innovation. "Top management is encouraged to become aware of the

current culture and then change that culture by developing explicit statements of value, by

building consensus, by the reinforcement of these values via managerial behavior and reward

systems, and by the socialization of the members of the organization" (Petty et al., 1995, p. 128).

Roi (2006) found that companies that "apply adaptive change leadership practices and values are

more likely to realize long term financial success" (p. 63). Change leaders are those who focus

on employees, shareholders and customers. The ability for a leader to manage all three

stakeholders during a change in corporate culture or practices leads to greater financial

performance (Kotter & Heskett, 1992; Roi, 2006).

By reviewing team performance, leaders can assess if any aspect needs to be modified in

order to allow the team to perform at its maximum potential. Dyer et al. (2007) stated that

lxvi

engaging in team building allows change to occur in the context, composition or competencies of

the team in order to improve team performance. Authors Kotter and Schlesinger (2008)

suggested three steps to manage change in teams successfully: analyze situational factors,

determine the optimal speed of change and consider methods for managing resistance.

Kotter and Schlesinger (2008) stated that most organizations must "undertake moderate

organizational changes at least once a year and major changes every four to five" ( p. 2). Most

efforts to introduce change encounter problems and severe resistance; as a result managers must

follow the three steps Kotter and Schlesinger (2008) suggested in order to make the change go

smoothly. Due to misunderstandings or lack of trust, employees can misinterpret the specifics of

what a manager is trying to change. As Dyer et al. (2007) stated, most conflict arises out of one

party violating the expectations of another party. When expectations are not shared, one party

might inadvertently violate them. Similarly, if the expectations of change are not shared among

the organization, employees could raise more resistance and prevent the change from occurring.

Kotter and Schlesinger (2008) offered suggestions on how to deal with change, including using

education and communication, participation and involvement, facilitation and support,

negotiation and agreement, manipulation, and explicit and implicit coercion. It is the leader's

responsibility to analyze the situation to determine the best means for dealing with change.

The leader is vital in convincing company members that the change program is a smart

endeavor, and that all personnel will benefit from the change. Helping employees develop a new

mind set is critical to the success of change programs. Employees will resist change because of

self interests, misunderstandings, and inherent limited tolerance for change (Truskie, 1999).

Truskie claimed that employees and organizations travel through five stages during a change

model. Employees start in a pre-contemplative stage where they see nothing wrong with the

lxvii

status quo. In stage two, they become aware that a problem exists and are in what Truskie calls

contemplation. During this stage employees weigh the pros and cons of different solutions, but

members are not completely committed to change. The third stage, preparation, allows members

to adopt new practices or behaviors and make plans to take action in the near future. Stage four is

action. The major challenge to step four is for members to maintain the new behavior or

processes indefinitely. The fifth stage is maintenance, where the organization takes steps to

prevent a relapse to old behaviors or practices. Many change plans fail because leaders do not

ensure that their members are in the proper stage before moving forward. Employees might resist

the new practices that encourage team work if they are still in the contemplative stage. Leaders

must help employees move through each stage before reaching the action stage. To help

members move from the pre-contemplative to contemplative stage an outside consultant or

leader could present a training seminar to help members understand the direction of the firm.

During this program, members become engaged in self-evaluation and evaluation of the firm to

understand the problem areas. Members are asked their opinions and suggestions to achieve

directional goals.

The second step to increase a firm's adaptability is innovate the environment by updating

technology systems, and encouraging organizational learning. Innovation is a characteristic of

high performing organizational cultures (Jain, 1998). "How a company reacts to technological

change is a good indicator of its inner drive for greatness versus mediocrity" (Collins, 2001, p.

162). Great companies are driven by the desire to turn unrealized potential into greatness.

Managers can innovate the work environment by introducing pioneering devices that remove

burdens from their employees. By introducing small innovative changes that aid employees in

their everyday positions, employees become accustomed to accepting innovations because they

lxviii

understand the value they bring. This process minimizes anxiety associated with change as

employees gradually accept the idea that the innovative changes will help them fulfill their

responsibilities.

Managers can also enhance firm innovativeness through technology management and

increasing employees' involvement in strategic market planning (Tuominen et al., 2004).

Encouraging employee involvement when deciding on new technology to introduce into the

workplace or making strategic decisions increases their commitment to the change program.

"Adaptability in terms of searching and utilizing the newest technology is critical to performing

well in technologically turbulent environments" (Tuominen et al., 2004, p. 505). What set

winning organizations apart from their competitors was their ability to excel in industry

transforming innovations (Joyce et al., 2003). Winning organizations were eager to adopt

innovative ideas and to create a technological breakthrough that could transform their industry.

Innovation is one of the four secondary areas of management practices that Joyce, et al.

(2003) stated was a key to sustained business success. Although the risks and financial burdens

are high with innovation, an organization's willingness to undertake the endeavor shows their

commitment to rise above and beyond their competitors. Winning organizations did not just

improve upon old products, but introduced groundbreaking, disruptive technologies (Joyce et al.,

2003). Winning companies also used breakthroughs to advance internal and external goals.

Technology should accelerate change, not cause it; adapting to new technology should

not occur through a revolutionary process, but through a gradual transformation (Collins, 2001).

Collins (2001) suggested the crawl, walk, run approach to adopting new technology. First, a

company should slowly approach the new concept and think how the advancement could help

them improve performance. Next, the company can begin to walk by finding ways to incorporate

lxix

the new technology into daily operations. The steps should be thoroughly evaluated, with a

conscious pursuit of understanding all consequences before adopting the new processes. The last

step is to run with the new concept, once the organization has figured out how to harness the new

technology to set them in a forward motion (Collins, 2001). Carefully selected technology should

be used as a tool to accelerate momentum (Collins, 2001). If the technology will not support the

organization in becoming the best in their industry, then it should not be adopted. The successful

culture thinks about technology differently, does not shy away out of the fear of the unknown,

but is driven to be bigger and better and understand that which they do not (Collins, 2001).

Encouraging and supporting organizational learning is the final step in creating an

adaptable organization. In organizational learning, "the organization receives, translates, and

interprets signals from the environment into opportunities for encouraging innovation, gaining

knowledge, and developing capabilities" (Denison, as cited in Sackman, 2006, p. 16).

Organizational learning can take the form of training seminars to teach the use of a new product

or team-based learning to help employees maximize their productivity when working in groups.

Organizational learning benefits the employees who are asked to participate in the new training

experience, as well as co-workers who work with the employee. Learning opportunities

introduce new concepts, practices and innovative ideas into a stagnant workplace. Encouraging

organizational learning in the workplace allows managers to send the message that they reward

employees who are invested in their own future, and who want to participate in opportunities to

increase their contribution in the workplace.

How to increase culture strength.

Deal and Kennedy (1982), Gordon and DiTomaso (1992) and Kotter and Heskett (1992)

found a relationship between strong cultures and positive firm performance. Culture strength is

lxx

the extent that the perceived culture is similar, understood, and adopted across all divisions and

levels of the organization, as well as the strength of bonds linking individuals to the larger group

(Forsyth, 2010). Managers may perceive a high degree of collectivism among their subordinates,

but the subordinates may in fact be employing individual practices to accomplish their goals. To

measure culture strength, employees from a variety of management and non-management levels

can be given a survey to measure degrees of work practices and work place beliefs; their

responses can then be compared across groups within the organization.

Negative conflict is kept at a minimum in organizations with a strong and balanced

culture. The goal for leaders is to integrate appropriate characteristics to achieve a strong culture

(Truskie, 1999). According to Deal and Kennedy (1982), “a strong culture has almost always

been the driving force behind continuing success in American business" (p. 5). Deal and

Kennedy (1982) stated that any organization can acquire a strong culture, as long as the leaders

can recognize the deficiencies in the current culture and then adapt it to fit the needs of their

environment. When an organization has a weak culture, confusion and conflict occur (Banton,

2002). Employees may become confused on policies and will muddle the goals of the

corporation with their own goals, resulting in personal financial motivations trumping those of

the work groups. "Strong culture companies care about all of their people and take pains to see

they are all treated appropriately" (Deal & Kennedy, 1982, p. 130). To increase culture strength

an organization can take two steps, the first is to reiterate the corporate mission statement, and

the second is to be consistent with all processes throughout the organization.

To increase the strength of the culture, leaders and managers must first re-iterate the

corporate mission statement and ensure that group goals are aligned with the vision and mission

statements. Possessing a mission statement is the fourth trait that Denison (as cited in Sackman,

lxxi

2006) found linked to organizational performance, and was the strongest predictor for return on

assets of all cultural traits (Denison & Mishra, 1995). When members of an organization share a

set of core values, employees have a clear set of expectations (Denison, as cited in Sackman,

2006). The mission statement provides a clear sense of purpose and direction, as well as

expresses a vision for the future of the organization. A strong mission statement allows an

organization to "shape current behavior by envisioning a desired future state" (Denison, as cited

in Sackman, 2006, p. 16). The Organizational Culture Model measures mission by three

indexes: strategic direction and intent, goals and objectives, and vision (Denison, as cited in

Sackman, 2006). Leaders should abide by the three indexes when updating their current mission

statement to ensure the goals of team members are aligned with the mission of the organization.

Establishing and abiding by clear company values is one of the characteristics that

winning cultures possessed in Joyce's et al. (2003) 4 + 2 model for success. In a strong culture,

employees are more likely to make choices that support the values they were taught to uphold. A

leader can reinforce the mission statement and core values by incorporating them into daily

communications, such as memos and emails. Posting the mission and vision statement in

multiple locations will ensure that employees are reminded of these values. This can also be done

by instructing employees and managers to read the statements annually and sign a written

confirmation that they received the information (Joyce et al., 2003).

Truskie (1999) stated that a well defined, balanced and integrated culture utilizes

employees who know and believe in the vision of the organization and who are emotionally

committed to the core values. The values and mission statement may be well communicated to

employees, but the content may be too abstract, broad, or too general. The leaders must

reformulate organizational direction using SMART goals, goals that are specific, measureable,

lxxii

attainable, realistic and timely. When employees are involved in creating the mission statement

they are more likely to feel committed to the goals of the organization. Truskie (1999) also stated

that organizational direction must be clear, concise and current in order to be compelling. The

mission, vision and business plan should be easy to understand and should clearly identify the

direction of the firm. The statements should "translate into meaningful words relating to the work

roles and responsibilities of all members of the organization" (Truskie, 1999, p. 66). The mission

and vision should be brief enough that employees and stakeholders can remember it. According

to Deal and Kennedy (1982), shared values impact performance in three ways, managers and

employees will "give extraordinary attention to whatever matters are stressed in the corporate

value system,... down-the line managers make marginally better decisions because they are

guided by their perception of the shared value ... and people simply work a little harder because

they are dedicated to the cause" (p. 33).

The second step to achieve a strong culture is to be consistent with all processes

throughout all levels. According to Denison (as cited in Sackman, 2006) consistent and well

integrated organizations are more effective. Consistency is one of the four traits that has a

positive impact on organizational performance and will lead to a stronger shared culture

according to Denison's Organizational Cultural Model (Denison, as cited in Sackman, 2006).

Consistent organizations develop an internal governance system that is agreed upon by managers

and subordinates that creates a clear list of "do's" and "don'ts". Employees from consistent

organizations are more committed to their positions, and the consistency acts a "powerful source

of stability" (Denison, as cited in Sackman, 2006, p. 14).

In addition to cooperation, consistency is one of the four models that Truskie (1999)

included in his L4 Strategy to obtain a balanced culture. The leader should set clear objectives

lxxiii

and targets, implement standard operating procedures, establish standards and rules, ensure

consistency in treatment of employees and in the communication chain of command (Truskie,

1999). Collins (2001) found that establishing a consistent culture was one of the five steps to

achieving a great company; "the good-to-great companies built a consistent system with clear

constraints, but they also gave people freedom and responsibility within the framework of that

system " (p. 125). Strong cultures communicate to their employees exactly how they are

expected to behave, through constant standards and procedures. Providing employees with

consistent modes of action and practices, and consistently rewarding them for adhering to the

established practices reinforces the positive behavior, resulting in a more organized and cohesive

work environment.

Summary

Using research and development, the researcher created a survey tool to measure the

degree of collectivism, adaptability and culture strength in an organization's culture. The peer

review panel established the validity of the created instrument. The “Measuring Collectivism,

Adaptability and Strength in Your Corporate Culture Survey" bridged the gap in the existing

literature on the culture-performance link because it presented the opportunity to measure all

three of the traits that were found to increase firm productivity. The responses of the survey will

allow managers to determine which of the three traits are absent in their culture. The researcher

then created a handbook, presented in chapter four, to guide managers in taking steps to adopt

more effective practices into their culture.

lxxiv

Chapter IV- Handbook

Creating a Collective Corporate Culture:

A Small Business Guide to

Maximize Performance

Corporate Culture

Values

Beliefs

Norms

Organization Practices

Rituals

Power Structures

75

Table of Contents

Introduction

Who Should Use This Guide? 68

When Should This Guide Be Used? 68

How to Increase Collectivism 70

Set Group Goals and Emphasize Team Work 70

Increase Collective Efficacy Among Members 72

Increase Esprit de Corps 73

Collectivism Activity 1 76

Collectivism Activity 2 77

Collectivism Activity 3 78

How to Increase Adaptability 79

Initiate Proper Change Programs 79

Innovate Interior Environment 81

Adaptability Activity 1 84

Adaptability Activity 2 85

How to Increase Culture Strength 86

Re-iterate Mission Statement 86

Be Consistent With All Processes 88

Culture Strength Activity 1 89

Culture Strength Activity 2 90

76

References 91

Creating a Collective Corporate Culture: A Small Business Guide to Maximize Performance

"Leaders can help their organizations become more effective and achieve superior long-term results by establishing an integrated, balanced organizational culture"

(Truskie, 1999, p. 78)

Corporate Culture is the shared philosophy of values and beliefs that guide everyday processes and interactions. Does your company emphasize team work as a means to accomplish goals, or does it encourage individual work and personal accomplishments? Creating a collective corporate culture that supports the goals of the mission and vision statements allows for congruency in the workplace and will result in more satisfied and productive employees.

Who should read this: Managers of all levels, Human Resources directors, scholars interested in corporate culture, entrepreneurs who desire to create a strong, collective corporate culture, and employees who want to operate more efficiently. While culture change is initially instigated by top management, anyone can educate themselves on how to create a more profitable and successful culture.

When should this guide be used: First, hand out the survey tool. Next, reference "Scoring the Survey", if the score for any of the three traits falls below the optimum score, then consult this handbook on how to adapt your current culture.

This handbook should not replace a code of conduct or an employee handbook. It is to be used to adapt current practices and create a more collective and successful corporate culture.

What types of organizations should use this guide: Awareness is the first step in recognizing when an organization is operating below par. Creating a strong, collective and adaptive culture requires examination, reflection and adaptation (Truskie, 1999). The following handbook is for organizations that are not yet in a crisis, and have ample time to take less radical steps towards a rebalance move. If performance and financial levels are adequate, but are not operating at full potential, a rebalance is more appropriate.

According to Petty, Beadles, Lowery et al., (1995) "the starting point in guiding

employees’ behavior and performance is a formal statement of management

philosophy and key values, supported by actual managerial practice" (p. 487).

77

The DILEMMA

What happens in an acquisition or merger and two opposing cultures attempt to combine? What does the resulting company look like? It will most likely be an imbalanced culture with employees who are confused about every day practices.

The SOLUTION

Provide a random sample of both companies' employees with the Culture Survey. Once the manager is aware of which winning trait(s) are missing in the current culture, then refer to this guide to implement the activities from the section that requires more attention.

After implementing activities:

Company A is

described as...

Company B is

described as...

Innovative

Adaptive

Collectivists

Strong Culture

Indiviudalists

Culture C is described as...

A Strong Culture

Adaptive

Collective

78

HOW TO INCREASE COLLECTIVISM

Collectivism and collective tendencies are positively related to firm performance. There are three

steps to increase collectivism in an organization. The first step is to emphasize team work as a

means to accomplish goals and to reward team accomplishments. The second step is to increase

collective efficacy among groups and departments. The third step to increase collectivism is to

increase synergy and esprit de corps among employees.

1. Set group goals, not individual goals, and emphasize team work. Working in

groups is a universal characteristic across all societies (Forsyth, 2010). Groups fulfill the need for

positive, enduring relationships with others. By organizing company processes into work groups,

a manager is setting the tone for an inclusive, collective identity to form between group

members. Groups tend to value the traditions and ideologies that are shared by the majority of

the members. The process of interacting on a team creates an environment where members avoid

disagreement, respect authority and are encouraged to compromise. When the processes of the

group encourage collective tendencies, the members are more likely to cooperate, rather than

compete with their co-workers, and are also more likely to create long-lasting relationships

(Forsyth, 2010).

Group and team-based work creates a degree of interdependency that leads to a more

collective environment (Forsyth, 2010). Interdependents put the needs of the group before their

own. When forming a work team to accomplish a task, leaders should encourage employees to

view themselves as part of a larger group identity, and offer team based compensation. Team

based compensation can be in addition to regular wages and treated as a bonus. Each team

member, including senior staff, should receive the same percentage based on the performance of

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the team (Truskie, 1999). Collins (2001) suggested that compensation be used to keep the right

members on the team, not necessarily to motivate the "right" behaviors from the wrong people. If

companies offer rewards based on self interest then people will tend to be more individualistic

and only look out for their own interests, and will also be less productive (Benkler, 2011). Joyce

et al. (2003) found that winning teams rewarded achievement with pay for performance, but also

with acknowledgement and public recognition.

Teaching members to refer to the team as "us" or "we" encourages the individuals to view

themselves as part of the in-group, which also increases their commitment to the team's goals.

Recognizing group achievements, removing rigid chains of command and teaching conflict

resolution techniques to the group ensures your teams operate at maximum efficiency. Further,

ensuring team behavior is part of performance appraisals is crucial; employees must understand

their performance as a team member is part of their employee evaluation (Truskie, 1999). A

leader can also provide company gear and clothing for team members to wear and reward

employees who embrace their logos. Team members who physically look similar will find it

easier to identify with the larger group.

Collins (2001) found that one of the five steps to creating great, not just good, companies

was to get the right people on the team. Collins (2001) asserted that the right people must be on

the team and in the correct roles for their skill level for the team to operate effectively. If the

CEO or leaders ensure the team is composed of the right people with the right skill sets, then

team members will already be highly self-motivated and capable. Collective groups can become

unproductive groups if the leader does not adequately train the group and ensure that the team is

composed of the best members for the job. While a manger wants to ensure each member

identifies with their group, the identity of the individual member must not be lost in the identity

80

of the group.

2. Increase collective efficacy among members, this involves implementing diversity

training to call attention to the positive contributions of group members who may have

once been viewed as outsiders. Collective efficacy and cohesion is the physical attraction and

identification of members to the group (Boyt, Lusch, & Mejza, 2005). Collective efficacy is the

belief among the majority of group members that their team is capable of achieving the group's

goals and successfully completing all tasks (Forsyth, 2010). When members believe that they are

part of a successful team, they are more dedicated and committed to achieving the group's goals,

and possess more motivation to do what it takes to accomplish the goals. Groups high in

collective efficacy experience greater member satisfaction and possess less individualistic

tendencies.

Work groups should have norms that stress productivity; the degree of success

experienced by the group is positively correlated to the level of collective efficacy. Groups high

in collective efficacy often lead to synergy (Forsyth, 2010). As the degree of collectivism

increases within the organization, so will the degree of productivity of the work groups; the cycle

continues as the success of the work group increases cohesion and results in more collective

tendencies. Collective efficacy also results from team members sharing a sense of ownership in

the success of their team. Inspiring a sense of ownership among employees is expected in a

collective environment (Joyce et al., 2003). Ownership can be encouraged by distributing

portions of employee's income in the form of shares. Empowered employees are more likely to

identify with the company and are more committed to achieving the organization's goals.

Diversity training is another key component to creating a more collective organization.

When individuals view their contributions as more significant than those of their co-workers, an

81

in-group out-group bias can occur (Forsyth, 2010; Dyer et al., 2007). A manager must create a

culture that values and respects the talents of individuals because members of the in-group are

more likely to undervalue the contributions of members from the out-group.

"If the organization's culture encourages collectivistic values and minimizes distinctions based on tenure and status, then diverse teammates tend to behave more cooperatively then

they would in more traditional organizations" (Forsyth, 2010, p. 365).

To avoid an in-group out-group bias from creating a void in an organization, a manger

should create positive contact, create superordinate goals and encourage decategorization

(Forsyth, 2010). Creating positive contact promotes different groups to interact collaboratively

and encourages personal interaction. Creating superordinate goals results in opposing groups

relying on the other to help them achieve their own goals. A leader must encourage

decategorization of group members and a recategorization to combine conflicting departments or

groups into a larger single team (Forsyth, 2010). The recategorization increases the cohesion

between departments and results in higher collectivism as more employees place their group

goals above their own for the greater good of the organization.

3. The third step to increase collectivism in corporate culture is to increase synergy

and esprit de corps among groups and employees. Synergy occurs when the group as a whole

is greater than the sum of its parts (Forsyth, 2010). The group is able to collectively achieve a

goal that the individual members would have been unable to accomplish on their own. "Synergy

also becomes more likely when the group members are highly motivated to find the correct

solution" (Forsyth, 2010, p. 303). In a group setting, valuing each opinion and taking the time to

hear each view results in a larger pool of ideas, allowing each member to contribute to a solution

that the individuals would not have found on their own. "By combining their knowledge,

82

insights, and ideas, groups often make better decisions than would have been made by the group

members acting independently. Positive synergy resulting from group decisions may well

include the generation of more ideas, more creative solutions, increased acceptance of the

decision by group members, and increased opportunity for the expression of diverse opinions"

(DuFrene, 2010, para. 5). For synergy to occur, a manager must ensure that the team values each

member’s contributions. A team would benefit from participating in team building to set a strong

foundation for synergy to occur.

A final way to increase collectivism in a corporate culture is to increase the esprit de

corps among employees. Esprit de corps is different from collective efficacy and cohesion in that

it is "an individual level phenomenon resulting from one's interaction in a group" (Boyt, Lusch,

& Mejza, 2005, p. 689). Organizational esprit de corps occurs when individual employees share

a strong desire and enthusiasm for the success of the company, as well as "enthusiastically shares

the values and goals of an organization" (Boyt et al., 2005, p. 690). The increase of esprit de

corps results in several positive behaviors, as well as a more collective mindset. There is a new

vitality in the department, with more chatting and bonding between employees and less

complaining. Members who possess this feeling of unity and enthusiasm for the group more

often help other team mates or co-workers, protect the organization, make constructive

suggestions, and spread goodwill among the organization (Forsyth, 2010; Boyt et al., 2005).

When esprit de corps is present in a work group, members experience higher job satisfaction,

compliance with group norms, increased cohesion, show more helping behavior, and are more

productive (Boyt et al., 2005). Esprit de corps is a positive affective tone that encourages

solidarity among members of the organization. Esprit de corps creates a work environment that is

not solely based on a monetary exchange, but also fulfills a social exchange. More fulfilling and

83

collective environments develop when social exchange relationships trump economic exchange.

An organization that experiences esprit de corps will produce happier and more motivated

employees (Boyt et al., 2005).

To increase corporate solidarity and esprit de corps, corporate leaders must maintain

high performance standards and lead their organizations competently (Boyt et al., 2005).

Leaders must also ingrain a sense of trust among employees to encourage esprit de corps. Trust

encourages employees to take risks and place faith in their leaders and co-workers. Managers

must build confidence and faith in the organization's ability to be successful. A manager should

share a common, higher purpose that will motivate the team, as well as lead by example (Boyt et

al., 2005). A leader seeking change should promote greater esprit de corps through brown bag

lunches, social events outside of work, and holiday parties (Northouse, 2007). Scheduling

quarterly events such as an annual family day encourages members to view their organization

positively and increases the level of esprit de corps (Truskie, 1999).

A manager must also care for their employees and show their appreciation through group

rewards, recognition and positive reinforcements (Martin, 2007).When morale and esprit de

corps is high, employees are more likely to maintain a collective positive outlook and have faith

in their ability to succeed. Deal and Kennedy (1982) referred to culture solidarity builders as

play, ritual and ceremony. Play is the creative side of corporate life, the purpose of which is to

relieve tension, ceremony is a cultural extravaganza to help the company celebrate a milestone or

a team member. Rituals guide behavior, but are more than just habits of action, they "give

meaning to action and bring order to the chaos" (Deal & Kennedy, 1982, p. 62). Play, rituals and

ceremony all contribute to creating and sustaining corporate solidarity. Deal and Kennedy (1982)

found that some of the strongest cultures elevated their ceremonies to an extravagant level. The

84

festivities serve to "educate, motivate, inspire and entertain" (Deal & Kennedy, 1982, p. 74).

Collectivism Activity 1

Skills Achieved: Increasing Team Performance, Achieving Team Commitment and Trust

How to Maximize Team Performance

Source: Dyer et al. (2007)

1. Form a team of highly qualified, diverse individuals

2. Inform the team that their bonus depends on the success of the team

3. Determine goal(s) or problems of the group

4. Encourage the team to gather data through surveys, interviews and data sharing

5. Summarize data, determine priorities, and determine which issues can be solved by the team

6. Develop action plans and specific roles for each member

7. Ensure commitment by all members to the action plan; implement the changes

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8. Evaluate results and determine areas still in need of improvement, set future goals for continued success

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Collectivism Activity 2

Skills Achieved: Team Building, Collective Efficacy, Synergy, Collaboration

The Appreciative Inquiry Approach to Team Building

Source: Dyer et al. (2007)

Directions: Ask team members to fill out this form and then share their responses with the group

1. Think of a time when you were on a hugely successful team, a time that you felt energized, fulfilled, and the most effective- when you were able to accomplish even more than you imagined. What made it such a good team? Tell the story about the situation, the people involved, and how the team achieved its breakthrough.______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

2. Without being humble, what was it about you that contributed to the success of the team? Describe in detail these qualities and what you value about yourself that enables team success.______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

3. It is one year from today and out team is functioning more successfully that any of you imagined. What are we doing, how are we working together differently, what does this success look like and how did we make it happen?______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

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Collectivism Activity 3

Skills achieved: Diversity Awareness

Classification Game

Source: Huddle (2012)

Time Required: 10-15 minutes

The classification game can be a quick icebreaker or a more complex activity. Before splitting

the room into teams of four, explain the concept of “pigeon-holing someone,” which means

classifying someone as something or stereotyping someone. It should be made clear that this type

of classification is subjective and unhelpfully judgmental. Instruct the participants to introduce

themselves to those in their team and quickly discuss some of their likes, dislikes, etc. After the

introductions, reveal to the teams that it will be their job to discover how they should classify

themselves- as a team- into two or three subgroups by using criteria that contains no negative,

prejudicial, or discriminatory judgments. Examples of these subgroups can include night owls

and morning people, pineapple pizza lovers and sushi lovers, etc. This exercise encourages co-

workers to get to know each other better and enables them to collectively consider the nature of

all individuals within the team.

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HOW TO INCREASE ADAPTABILITY

Adaptability is a strong predictor of firm growth; adaptable organizations transform the

demands of the environment into action. "Recent studies clearly show that, in a complex and

turbulent market environment, adaptability is one of the key prerequisites for a good business

performance" (Tuominen et al., 2004, p. 495). The ability to alter one's culture or processes

offers a sustainable competitive advantage as the firm finds a fit with the changing environment.

There are two steps to increase the adaptability of the organization. The first step is to initiate a

proper change program. The second step is innovate the interior environment.

1. Leaders must initiate a proper change program by getting people on board, as

well as balancing tradition and innovation. "Top management is encouraged to become aware

of the current culture and then change that culture by developing explicit statements of value, by

building consensus, by the reinforcement of these values via managerial behavior and reward

systems, and by the socialization of the members of the organization" (Petty et al., 1995, p. 128).

Roi (2006) found that companies that "apply adaptive change leadership practices and values are

more likely to realize long-term financial success" (p. 63). Change leaders are those who focus

on employees, shareholders and customers. The ability for a leader to manage all three

stakeholders during a change in corporate culture or practices leads to greater financial

performance (Kotter & Heskett, 1992; Roi, 2006).

By reviewing team performance, leaders can assess if any aspect needs to be modified in

order to allow the team to perform at its maximum potential. Dyer et al. (2007) stated that

engaging in team building allows change to occur in the context, composition or competencies of

the team in order to improve team performance. Authors Kotter and Schlesinger (2008)

suggested three steps to manage change in teams successfully: analyze situational factors,

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determine the optimal speed of change and consider methods for managing resistance.

Kotter and Schlesinger (2008) stated that most organizations must "undertake moderate

organizational changes at least once a year and major changes every four to five" ( p. 2). Most

efforts to introduce change encounter problems and severe resistance; as a result managers must

follow the three steps Kotter and Schlesinger (2008) suggested in order to make the change go as

smoothly as possible. Due to misunderstandings or lack of trust, employees can misinterpret the

specifics of what a manager is trying to change. As Dyer et al. (2007) stated, most conflict arises

out of one party violating the expectations of another party. When expectations are not shared,

then one party might inadvertently violate them. Similarly, if the expectations of change are not

shared among the organization, employees could raise more resistance and prevent the change

from occurring. Kotter and Schlesinger (2008) offered suggestions on how to deal with change,

including using education and communication, participation and involvement, facilitation and

support, negotiation and agreement, manipulation and co-optation, and explicit and implicit

coercion.

The leader is vital in convincing company members that the change program is a smart

endeavor, and that all personnel will benefit from the change. Helping employees develop a new

mind set is critical to the success of change programs. Employees will resist change because of

self interests, misunderstandings, and inherent limited tolerance for change (Truskie, 1999).

Truskie claimed that employees and organizations travel through five stages during a change

model. Employees start in a pre-contemplative stage where they see nothing wrong with the

status quo. In stage two, they become aware that a problem exists and are in what Truskie calls

contemplation. During this stage, employees weigh the pros and cons of different solutions, but

members are not completely committed to change. The third stage, preparation, allows members

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to adopt new practices or behaviors, and make plans to take action in the near future. Stage four

is action. The major challenge to step four is for members to maintain the new behavior or

processes indefinitely. The fifth stage is maintenance, where the organization takes steps to

prevent a relapse to old behaviors or practices. Many change plans fail because leaders do not

ensure that their members are in the proper stage before moving forward. Employees will resist

the new practices if they are still in the contemplative stage. Leaders must help employees move

through each stage before reaching the action stage. To help members move from the pre-

contemplative to contemplative stage an outside consultant or leader could present a training

seminar to help members understand the direction of the firm. During this program, members

become engaged in self-evaluation and evaluation of the firm to understand the weaker areas.

Members are asked their opinions and suggestions to achieve directional goals.

2. The second step to increase a firm's adaptability is it innovate the environment by

updating technology systems. "How a company reacts to technological change is a good

indicator of its inner drive for greatness versus mediocrity" (Collins, 2001, p. 162). Great

companies are driven by the desire to turn unrealized potential into greatness. Managers can

innovate the work environment by introducing pioneering devices that remove burdens from

their employees. By introducing small innovative changes that aid employees in their everyday

positions, employees become accustomed to accepting innovations because they understand the

value they bring. This process minimizes anxiety normally associated with change programs as

employees gradually accept the idea that the innovative changes will help them fulfill their

responsibilities.

Managers can also enhance firm innovativeness through technology management and

increasing employees' involvement in strategic market planning (Tuominen et al., 2004).

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"Adaptability in terms of searching and utilizing the newest technology is critical to performing

well in technologically turbulent environments" (Tuominen et al., 2004, p. 505). What set

winning organizations apart from their competitors was their ability to excel in industry

transforming innovations (Joyce et al., 2003). Winning organizations were eager to adopt

innovative ideas and to create a technological breakthrough that could transform their industry.

Innovation is one of the four secondary areas of management practices that Joyce, et al.

(2003) stated was a key to sustained business success. They stressed the importance of making

innovations that were industry transforming. Although the risks and financial burdens are high

with innovation, an organization's willingness to undertake the endeavor shows the company's

commitment to rise above and beyond their competitors. Winning organizations did not just

improve upon old products, but presented groundbreaking, disruptive technologies (Joyce et al,

2003). Winning companies also used breakthroughs to advance internal and external goals.

Technology should accelerate change, not cause it; adapting to new technology should

not occur through a revolutionary process, but through a gradual transformation (Collins, 2001).

Collins (2001) suggested the crawl, walk, run approach to adopting new technology. First, a

company should slowly approach the new concept and think how the advancement could help

them do what they do better. Next, the company can begin to walk by finding ways to

incorporate the new technology into daily operations. The steps should be thoroughly evaluated,

with a conscious pursuit of understanding all consequences before adopting the new processes.

The last step is to run with the new concept once the organization has figured out how to harness

the new technology to set them in a forward motion (Collins, 2001). Carefully selected

technology should be used as a tool to accelerate momentum. If the technology will not support

the organization in becoming the best in their industry, then it should not be adopted (Collins,

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2001). The successful culture thinks about technology differently, does not shy away out of the

fear of the unknown, but is driven to be bigger and better and understand that which they do not

(Collins, 2001).

Adaptability Activity 1

Skills Achieved: Initiating a Proper Change Program, Achieving Employee Commitment

Embracing Change in the Workplace

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Adapted from Dyer et al. (2007)

1st step- Recognize an imbalanceAre our work teams operating below par? ________________________________

Are any of the following symptoms present in our work teams?

Loss of production or output

Continued unexplained increase in costs

Increase in complaints from members

Complaints from users or customers Evidence of conflict

Confusion about assignments Apathy or lack of interest

Lack of initiative or imagination

Poor decision making Negative reactions to

manager

2nd step- Conduct survey with employees

Ask employees the above questions to discover what areas they feel require attention.

3rd step- Examine which area requires more attention

Which of the above symptoms were the most common?

Form focus groups comprised of employees representing a sample of all levels of the organization to brainstorm solutions to remedy each symptom. Have each focus group share their solutions with the larger group.

4th step- The leader starts consistently thinking about the mental image of what the culture should look like.

Share the ideas from the brainstorm section with the organization. Express what symptoms were bringing production down and how the solution(s)

will remedy the problem(s). Encourage employees to embrace the new ideas and changes. Implement new ideas in the work place. Reflect on how successful the changes were. Adapt changes as needed or revisit Step 3.

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Adaptability Activity 2

Skills: Increasing Innovation

How to Adopt Innovative Technology

Source: Collins (2001)

Crawl

First, a company should slowly approach the new concept and think how the advancement can help them do what they do better.

Walk

Next, the company can begin to walk by finding ways to tie in the new technology to daily operations. The steps should be calmly thought out, with a deliberate pursuit of understanding all consequences before adopting the new processes.

Run

The last step is to run with the new concept, once the organization has figured out how to harness the new technology to set them in a forward motion.

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HOW TO INCREASE CULTURE STRENGTH

Culture strength is the extent that the perceived culture is similar, understood, and

adopted across all divisions and levels of the organization, as well as the strength of bonds

linking individuals to the larger group (Forsyth, 2010). Managers may perceive a high degree of

collectivism among their subordinates, but the subordinates may in fact be employing individual

practices to accomplish their goals. A strong culture does not develop over night; the goal for

leaders is to develop a strong, balanced culture by integrating appropriate characteristics

(Truskie, 1999). Any culture can acquire a strong culture, as long as the leaders can recognize

the deficiencies in their current culture and then adapt it to fit the needs of their environment.

Negative conflict is kept at a minimum in organizations with a strong and balanced

culture. When an organization has a weak culture, confusion and conflict occur (Banton, 2002).

Employees may become confused on policies and will muddle the goals of the corporation with

their own goals. When this occurs, personal goals based on financial motivations may trump

those of the work groups. To increase culture strength, an organization can take two steps, the

first is to reiterate the corporate mission statement, and the second is to be consistent with all

processes throughout the organization.

1. Leaders and managers must re-iterate the corporate mission statement, and

ensure that goals are aligned with the vision and mission statements. When members of an

organization share a set of core values, employees have a clear set of expectations (Denison, as

cited in Sackman, 2006). The mission provides a clear sense of purpose and direction, as well as

expresses a vision for the future of the organization. A strong mission statement allows an

organization to "shape current behavior by envisioning a desired future state" (Denison, as cited

in Sackman, 2006, p. 16). In a strong culture, employees are more likely to make choices that

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support the values they were taught to uphold. A leader can reinforce the mission statement and

core values by incorporating them into daily communications, such as memos and emails.

Posting the mission and vision statement in multiple locations will ensure that employees are

reminded of these values. This can also be done by instructing employees and managers to read

the statements annually and sign a written confirmation that they received the information (Joyce

et al., 2003).

Truskie (1999) stated that a well defined, balanced and integrated culture utilizes

employees who know and believe in the vision of the organization and who are also emotionally

committed to the core values. The values and mission statement may be well communicated to

employees, but the content may be too abstract, broad, or too general. The leaders must

reformulate organizational direction using SMART goals, goals that are specific, measureable,

attainable, realistic and timely. When employees are involved in creating the mission statement,

they are more likely to feel committed to the goals of the organization. Truskie (1999) also stated

that organizational direction must be clear, concise and current in order to be compelling. The

mission, vision and business plan should be easy to understand and should clearly define the

direction of the firm. The mission and vision should be brief enough that employees and

stakeholders can remember it. According to Deal and Kennedy (1982), shared values impact

performance in three ways, managers and employees will "give extraordinary attention to

whatever matters are stressed in the corporate value system,... down-the line managers make

marginally better decisions because they are guided by their perception of the shared value ... and

people simply work a little harder because they are dedicated to the cause" (p. 33).

2. The second step to achieve a strong culture is to be consistent with all processes

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throughout all levels. According to Denison (as cited in Sackman, 2006) consistent and well

integrated organizations are more effective. Consistency is one of the four traits that has a

positive impact on organizational performance and will lead to a stronger shared culture

(Denison, as cited in Sackman, 2006). Consistent organizations develop an internal governance

system that is agreed upon by managers and subordinates that creates a clear list of "do's" and

"don'ts". Employees from consistent organizations are more committed to their positions, and the

consistency acts as a "powerful source of stability" (Denison, as cited in Sackman, 2006, p. 14).

The leader should set clear objectives and targets, implement standard operating

procedures, establish standards and rules, ensure consistency in treatment of employees and a

consistency in the communication chain of command (Truskie, 1999). Employees who perceive

fairness in treatment between themselves and their co-workers are more likely to respect the

values of the organization. Strong cultures communicate to their employees exactly how they are

expected to behave through constant standards and clear constraints. Providing employees with

consistent modes of action and practices, and consistently rewarding them for adhering to the

established practices reinforces the positive behavior, resulting in a more organized and cohesive

work environment.

Culture Strength Activity 1

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Skills achieved: Determining Consensus on Employee Operations

Determining Your Culture Strength Through Employee Agreement

Source: Dyer et al. (2007)

Confirmation- Disconfirmation Process. Group members summarize how they view themselves and their own work performance- their strengths and areas that need improvement. Others are asked to confirm or disconfirm the person's diagnosis. This will provide an idea of the degree of consensus among employees.

Management Profile. Each person presents the profile of his or her effectiveness from previously gathered data. The group confirms or disconfirms the profile.

99

Culture Strength Activity 2Skills achieved: Aligning Goals with the Corporate Mission Statement

Individual Goals and Our Mission Statement

Directions: Distribute to individuals quarterly, discuss responses within work teams.

1. What are my individual work goals?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. What are the goals of my group?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3. List at least three of the organization's core values:__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4. Paraphrase the organization's mission statement:__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

5. How do my individual goals help the organization achieve our mission statement?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

6. How do my group's goals help achieve the organization's mission statement?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

7. Are my co-workers helping achieve the organization's goals as well?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

100

Handbook References

Banton, M. (2002). A study of corporate culture and its relationship to the financial performance of an organization. (Doctoral dissertation). Retrieved from Proquest Dissertations and Thesis. H Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University.

Benkler, Y. (2011). The unselfish gene. Harvard Business Review, 89(7), 77- 85.

Boyt, T., Lusch, R., & Mejza, M. (2005). Theoretical models of the antecedents and consequences of organizational, workgroup, and professional esprit de corps. European Management Journal, 23(6), 682-701.

Collins, J. (2001). Good to great: Why some companies make the leap..and others don't. New York, NY: Harper Business.

Deal, T., & Kennedy, A. (1982). Corporate cultures: The rites and rituals of corporate life. Reading, MA: Addison-Wesley.

DuFrene, D.D. (2012). History of synergy, individuals and synergy. Retrieved from http://www.referenceforbusiness.com/management/Str-Ti/Synergy.html#b

Dyer, W.G., Dyer, W., & Dyer, J.H. (2007). Team building: Proven strategies for improving team performance. San Francisco, CA: Jossey-Bass.

Forsyth, D.R. (2010). Group Dynamics. Belmont, CA: Wadsworth Publishing.

Huddle. (2012). Building teamwork. Retrieved from http://www.huddle.com/blog/building-teamwork-10-quick-and-easy-team-building-exercises-for-improving-communication-and-problem-solving-skills-part-1/

Jain, A.K. (1998). Corporate excellence. New Delhi, India: PK Publishers.

Joyce, W., Nohria, N., & Roberson, B. (2003). What really works: The 4+2 formula for sustained business success. New York, NY: Harper Business.

Kotter, J.P. & Heskett, J.L. (1992). Corporate culture and performance. New York: Free Press; New York: Maxwell Macmillan International.

Kotter, J.P. & Schlesinger, L.A. (2008). Choosing strategies for change. Harvard Business Review, 86(7), 2008.

Martin, R. (2007). The secrets of morale and cohesion. Retrieved from http://www.alcera.ca/en/newsletters/leaders-edge-newsletter-january-2007.php

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Northouse, P.G. (2007). Leadership: Theory and practice (5th ed.). Thousand Oaks, CA: Sage Publications.

Petty, M.M., Beadles, I.N.A., Lowery, C.M., Chapman, D.F., & Connell, D.W. (1995). Relationships between organizational culture and organizational performance. Psychological Reports, 76, 483–492.

Roi, R.C. (2006). Leadership, corporate culture, and performance. (Unpublished doctoral dissertation). Retrieved from Proquest Dissertations University of San Francisco, CA.

Sackman, S.A. (2006). Assessment, evaluation, improvement: Success through corporate culture. Gutersloh, Germany: Bertelsmann Stiftung.

Truskie, S.D. (1999). Leadership in high performance organizational cultures. Westport, CT: Quorum Books.

Tuominen, M., Rajala, A., & Moller, K. (2004). How does adaptability drive firm innovativeness? Journal of Business Research, 57(5), 495-506.

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Chapter V- Summary, Conclusion and Recommendations

Introduction

The purpose of this project was to create a survey tool to evaluate the current state of a

corporation's culture and then create a handbook to guide a corporation in implementing more

effective practices into their culture. The corporate beliefs and values of an organization have

credibility as predictors of the firm's success. In order to enhance performance, an organization

would benefit from achieving a strong culture with a combination of collective and adaptable

practices. Research and development, including preliminary testing and revision, was used to

create the survey questionnaire. The creation of the handbook consisted of research and

planning, resulting in a final survey and handbook. The extensive literature review validated the

need to adapt the current culture of an organization.

Summary

Three traits are related to sustained firm performance; when an organization encourages

collective practices, increases their degree of adaptability and shares a strong culture, they are

more likely to experience positive stakeholder satisfaction, employee retention and higher

profits. The researcher created a survey tool to measure the degree that each of the winning traits

exist in an organization's culture. Once managers collect the survey responses, they can then

refer to the "Creating a Collective Corporate Culture: A Small Business Guide to Maximize Firm

Performance" to learn what types of exercises and practices to implement in the workplace. The

survey and handbook are not meant to be a complete answer to achieving perfect organizational

performance, but rather a tool to help achieve a more balanced and effective culture.

Although the United States values individual contributions, collective practices such as

team work result in higher productivity in the work place. With the globalization of the

workplace comes the need for unique and untraditional means to accomplish tasks. The

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untraditional team may include members across time zones who communicate solely through

electronic sources or via web cams. Collaborating with fellow employees and accomplishing

goals set for the group results in an all around more successful and fulfilling environment. The

survey and handbook will empower managers with a means to create successful teams, both of

the traditional and not so traditional sorts. Learning to work with different personalities, from

different generations, and across different medias is the new task for team members to master.

Conclusion

Researchers agree that organizational performance is attributable to organizational

culture. Performance can be maximized by adapting an existing culture to include more effective

processes. Specifically, cultures that adopt collective tendencies and encourage employees to

hold their organization in high regard will flourish. The three research questions were answered

through the process of this project.

How is corporate culture best defined and measured? Corporate culture can be defined

by varying degrees of collectivism or individualism, as well as by a large multitude of defining

characteristics. However, the individualism-collectivism distinction acts as an effective and

accurate means of categorizing corporate culture. Culture can be measured through a variety of

questionnaires to determine where a company stands on the collectivism-individualism spectrum.

Using a combination of existing measurement tools, a survey was created to measure the degree

of collectivism, level of adaptability, and strength of an organization's culture. The next step in

the process of evaluating and increasing corporate culture effectiveness would be to test the

survey for reliability and implement the activities laid out in the Guide into existing businesses.

What traits of corporate culture are related to productivity and firm effectiveness? The

literature review presented three dominant traits and dimensions that were continually related to

104

firm effectiveness and financial success. Collective tendencies, such as team based work, a firm's

ability to adapt to changing internal and external environments, and the strength of the shared

culture are all positively related to firm effectiveness. Although all three traits were found to be

positively related to firm effectiveness, a study on the combined effect the three have on culture

is missing from the literature. The next step would be to perform a study to measure the degree

that the combination of collectivism, adaptability and culture strength increase an organization's

financial earnings and stakeholder satisfaction.

How would an organization adopt these traits into their corporate culture? An

organization can take several steps to adopt collectivism, adaptability and strength into their

current culture. Using the "Creating a Collective Corporate Culture: A Small Business Guide to

Maximize Performance", 21st century organizations now have a tool to help them achieve a

more collective corporate culture in order to maximize their organization's performance.

Recommendations

The results of the survey and guide can assist contemporary companies in creating a more

profitable and effective corporate culture. Between technological advances, volatile markets, and

mergers and acquisitions, organizational cultures are forced to adopt new practices to remain in a

competitive market. By adopting the specific traits outlined in this review an organization can

maximize their firm's performance. Most empirical studies on the culture-performance link found

a correlation between specific corporate traits and profitability; however the existing research

lacked studies that concentrated solely on collectivism, adaptability and strength. This project

closed the gap by determining which three traits were most strongly related to enhanced and

sustained performance. This project presented a unique opportunity to measure the current state

of one's culture in order to determine which areas need improvement. Once the manager is aware

105

of the areas in need of change, they can refer to the guide in order to adopt certain practices to

enhance their profitability. Understanding how the three core traits, collectivism, adaptability and

culture strength, can improve performance is a valuable asset to managers and leaders seeking to

strengthen their organization's culture.

The implications of this project apply to both scholars and corporate members. Scholars

may apply this information to existing bodies of knowledge on corporate culture to better

understand the relationship between culture and firm performance. Learning to work in teams

effectively is yet another skill to master at the educational level, especially given that these skills

will be required in future employment. Given the evidence that collective team practices result in

more satisfied employees, one can infer that the same positive responses would be experienced

in an educational setting. Organizational development executives and leaders can apply this

information as a practical application to enhance firm performance, as well as understand how

their current culture can impact their performance. Learning to be an effective team member, as

well as learning to effectively manage teams is a valuable skill for corporate members of all

ranks.

Based on the results of this project, there are several recommendations for further

research. First, the created survey tool could be tested for validity. The survey was peer reviewed

for use and clarity, but further research to field test the survey would determine how valid the

tool is to measure collectivism, adaptability and strength. Additionally, adding another

measurement tool, such as employee observation, in addition to the survey, would present a more

accurate description of the current corporate culture, and allow for data triangulation (McMillan,

2012). Finally, for further research, the guidebook could be peer reviewed for ease of use and

clarity, as well as appropriateness. Additional reviewers as well as field testing would establish

106

validity of the survey and the guidebook, and would reinforce their value to scholars and

corporate members.

Concluding Thoughts

This project allowed the researcher to create a survey and handbook to contribute to the

corporate culture and performance link. The process of reviewing established literature on the

subject was enlightening and aided in the formation of the research questions. There was a large

gap in the existing literature on the culture-performance link; previous studies neglected to

discover the combined impact of the winning traits on an organization's performance. This

project presented evidence why collectivism, adaptability and strength are the winning

combination of traits for corporate culture.

During the process, the researcher practiced time management, research skills, and

commitment to complete the project. Although the researcher did not apply collective practices

while accomplishing all of the goals of the project, interactions with others through the peer

review process and advisor input was a collaborative effort. The researcher shared the project

objectives with the peer reviewers; when the reviewers aided the researcher in achieving the

goals, the collaborative efforts enhanced the experience. When the researcher experienced

satisfaction and camaraderie when accomplishing the goals with a team, it solidified the

discovery that collective practices result in more productive work groups. The researcher

experienced firsthand the collectivism-individualism distinction. However, the complete process

of research and development was a fulfilling experience that opened up a new array of research

questions to guide the researcher's future interest in corporate culture. It is the researcher's desire

that the survey and handbook eventually be field tested and found to significantly impact the

effectiveness of an organization's culture.

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Benkler, Y. (2011). The unselfish gene. Harvard Business Review, 89(7), 77- 85.

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Appendices

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APPENDIX A

Dear Peer Reviewer,

Thank you for taking the time to review this survey. Please read through each survey item and review the survey using this form. The survey will be used for organizations to conduct an evaluation of their current culture to determine if they are incorporating the three factors shown to increase profitability: collectivism, adaptability and culture strength.

Yes NoAre the questions appropriate for the purpose of the survey?

Are the questions relevant for the purpose of the survey?

Do the questions adequately have a means to measure collectivism?

Do the questions adequately have a means to measure adaptability?

Do the questions adequately have a means to measure culture strength?

Is the writing clear and comprehensive?

Does the order make sense?

Does "Scoring the Survey" seem appropriate?

Does "Scoring the Survey" have clear instructions?

Are any questions biased or leading?

Open Ended Questions:What are strengths of the format?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

What are weaknesses of the format/ content?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

What suggestions do you have for improvement?__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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APPENDIX B

Measuring Collectivism, Adaptability and Strength in Your Corporate Culture Survey

Directions to Distributers: Select a random population of employees to take the survey; a relatively large sample would provide the most accurate results. Distribute surveys, notifying participants that responses will help inform what areas of the culture need improvement. Ask participants to return the survey anonymously by dropping it off at a box in front of the HR department.

Directions to participants: Please circle your response to each of the below statements. When complete, please submit the survey anonymously to the drop box in front of the HR department.

Strongly Somewhat Neither agree Somewhat Stronglydisagree disagree nor disagree agree agree

1 2 3 4 5

1. I prefer to work with co-workers to accomplish a difficult task, rather than by myself. 1 2 3 4 5

2. I make an effort to avoid disagreements with my group members. 1 2 3 4 5

3. Employees are encouraged to apply innovative ideas. 1 2 3 4 5

4. Finding solutions for product problems increases cooperation between departments. 1 2 3 4 5

5. People in this company are rewarded for outperforming one another. 1 2 3 4 5

6. Our leaders ask our opinions before making changes to our daily operations. 1 2 3 4 5

7. Employees have a clear sense of the mission and values that guide their work. 1 2 3 4 5

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8. Before making a decision, I always consult with others. Strongly Somewhat Neither agree Somewhat Strongly disagree disagree nor disagree agree agree 1 2 3 4 5

9. The employees in my department are consistently treated equally. 1 2 3 4 5

10. My team can accomplish any task we are given. 1 2 3 4 5

11. Our company invests in improving the knowledge and skills of our employees. 1 2 3 4 5

12. We apply a clear and consistent set of values to govern the way we do business. 1 2 3 4 5

13. Our leaders regularly celebrate team accomplishments. 1 2 3 4 5

14. Our leaders are attentive at addressing the changing needs of employees. 1 2 3 4 5

15. Our leaders recognize an individual's contributions to the success of projects. 1 2 3 4 5

16. People here tend to avoid conflict and work hard to keep relationships pleasant. 1 2 3 4 5

17. Our departments collaborate closely with one another. 1 2 3 4 5

18. There is team spirit throughout the company. 1 2 3 4 5

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19. Our current production technology is based on new technology. Strongly Somewhat Neither agree Somewhat Strongly disagree disagree nor disagree agree agree 1 2 3 4 5

20. I am constantly reminded of our organization's vision statement and goals. 1 2 3 4 5

21. When introducing changes to our workplace, our leaders always inform us first. 1 2 3 4 5

22. Our leaders foster collaboration by promoting cooperative goals and trust building.

1 2 3 4 5

23. We are normally the first in our industry to adopt new technology.

1 2 3 4 5

24. I am more successful working in a group than by myself.

1 2 3 4 5

25. I share the same values and beliefs about daily operations with our leaders. 1 2 3 4 5

26. Our company lacks an ‘‘esprit de corps’’. 1 2 3 4 5

27. Our leaders encourage employees to speak up when change in daily operations is needed. 1 2 3 4 5

28. I have a clear sense of purpose and direction at work. 1 2 3 4 5

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29. My goals are aligned with helping our company achieve our vision. Strongly Somewhat Neither agree Somewhat Strongly disagree disagree nor disagree agree agree 1 2 3 4 5

30. We are encouraged to use a variety of technology to communicate with co-workers and customers, such as tablets, email, smart phones, and other online media. 1 2 3 4 5

31. If my co-worker and I were to ask our supervisor a similar question, we would receive similar answers. 1 2 3 4 5

32. I am constantly reminded of our organization's mission statement. 1 2 3 4 5

33. My team members generate diverse ideas that I would not normally think of. 1 2 3 4 5

34. My co-workers and I tend to groan when we hear our managers are changing something at work. 1 2 3 4 5

35. We have a strong culture at work. 1 2 3 4 5

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Scoring the "Collectivism, Adaptability and Strength in Your Corporate Culture Survey"

Every "Strongly agree" response = 5 pointsEvery "Somewhat agree" response = 4 points Every "Neither agree nor disagree" response = 3 points Every "Somewhat disagree" response = 2 points Every "Strongly disagree" response = 1 point

Except: Question #5: "Strongly disagree" response = 5 points, "Strongly agree" = 1 pointQuestion #26: "Strongly disagree" response = 5 points, "Strongly agree" = 1 pointQuestion #34: "Strongly disagree" response = 5 points, "Strongly agree" = 1 point

To determine the degree of Collectivism, add up the scores for the following items: 1, 2, 4, 5, 8, 10, 13, 15, 16, 17, 18, 22, 24, 26, 33

57-75 = High collectivism

37-56 = Medium collectivism, consult handbook

16-36 = Low collectivism, consult handbook

1-15 = High individualism, consult handbook

To determine the degree of Adaptability, add up the scores for the following items: 3, 6, 11, 14, 19, 21, 23, 27, 30, 34

40-50 = High adaptability

30-39 = Medium adaptability, consult handbook

20-29 = Low adaptability, consult handbook

1-19 = Not adaptable, consult handbook

To determine the degree of Culture Strength, add up the scores for the following items: 7, 9, 12, 20, 25, 28, 29, 31, 32, 35

40-50 = Strong culture strength

30-39 = Medium culture strength, consult handbook

20-29 = Low culture strength, consult handbook

1-19 = Very low culture strength, consult handbook