SIOP 2012 presentation in which Daniel Denison presents as one of the leading experts on "Contrasting Culture Strength and Climate Strength"

1. Contrasting Culture Strength and
Climate Strength: Perspectives from
Leading Experts
Jennifer Chatman
University of California, Berkeley
Daniel Denison
IMD & Denison Consulting
Maribeth Kuenzi
Southern Methodist University
Benjamin Schneider
CEB Valtera

2. Strength – A Long History
 Different conceptualizations and
operationalizations
 Today’s Purpose
◦ Discuss the Challenges and Controversies
◦ Future Research
◦ Implications for Practice
2

3. Meet the Panel
3

4. Jennifer Chatman
Cortese Distinguished Professor of Management
Haas School of Business
University of California, Berkeley
4

5. Jenny Chatman
Culture Strength
 Psychologists have defined strong situations as those that
induce uniform behavior, and are distinctive and
observable (Kelley, 1967; Mischel, 1977)
 We disagree.
◦ Example: A transparent or opaque HR system could constitute an
equally strong situation, but the content of the norm would be
different (transparency norm in first case, lack of candor and
secrecy in the second)
◦ A culture’s strength is independent of it’s distinctiveness
 Secrecy at Apple – induces uniform behavior, unmistakable
 Agree to disagree at Intel, challenging the status quo at Aligent – norm
fosters highly variant, non-uniform behavior – do people agree about the
value of “agree to disagree,” or do they disagree about everything
including this norm?

6. Jenny Chatman: A Key Insight about
Culture Strength
 Observers could misinterpret behavioral variation
associated with norms like “challenging the status quo” or
“agreeing to disagree” as a sign of weaker, less agreed-
upon group norms, when in fact, the norm is strong but
behavioral manifestations of the norm are highly variable.
 Implications for culture research:
◦ Relying on outsiders’ evaluations of culture content or strength can be
a problem (Kotter & Heskett, 1992)
◦ Norm can be deemed strong simply if members interpret it similarly
and conform to it regularly (rather than it being distinctive or uniform),
that is, people behaving non-uniformly is not necessarily evidence
of a weak culture. Important distinction between uniformity and
conformity.

7. Strength in Culture & Climate Research
Daniel Denison
International Institute for Management Development
Lausanne, Switzerland

8. Dan Denison
Adaptability Mission
Direction..Purpose..Blueprint
Pattern..Trends..Market
Defining a meaningful
Translating the long-term direction
demands of the for the organization
business environment
into action “Do we know where
we are going?”
“Are we listening
to the marketplace?”
Consistency
Involvement Systems…Structures…
Processes
Commitment..Ownership
Responsibility
Defining the values
Building human capability, and systems that are the
ownership, and responsibility basis of a strong culture
“Are our people aligned “Does our system
and engaged?“ create leverage?”

9. Benjamin Schneider - Climate Strength Research Paradox
 Rests on a presumption of strength being a moderator, not a main effect—main
effects are presumed to be a function of the level of the climate of interest, not
variability in the climate of interest.
• Necessary to think this way since a negative climate can also be a strong
one.
• Yet, some research on culture strength shows a positive relationship between
strength and performance.
– Likely due to the fact that strength was a perceptual variable and not a
statistical variable, and
– The more positive a culture is the more likely people are to believe others
share their perception
 Rests on the presumption of variability since a moderator requires high variance
• Within units (teams, functions, departments. branches, etc.)
• Between units in the variability within
© 2012 The Corporate Executive Board Company. All Rights Reserved. 9

10. Benjamin Schneider
Climate Strength Focus
 Unit level climate strength as a moderator of climate level relationship.
 Specifically, climate strength as a moderator of the service climate level –
customer satisfaction level relationship.
© 2012 The Corporate Executive Board Company. All Rights Reserved. 10

11. Maribeth Kuenzi, Ph. D.
Assistant Professor
Department of Management and Organization
Edwin L. Cox School of Business
Southern Methodist University
11

12. Question 1
How strength is defined and how it is measured
varies, how do you define strength in your
research? What are the “roots” of your view of
the construct and what presumptions does it rest
on?
12

13. Culture Strength – A Combination of Agreement
and Intensity About Norms
 Definition of strong culture:
◦ One in which members both agree about the relative importance or lack of importance of a
specific set of norms and feel intensity about one or a few highly important norms.
◦ Intensity aspect is where culture strength and content need to be considered together
 Strength is a combination of:
◦ Agreement – the extent to which members of a group or organization agree
about norms.
◦ Intensity – the extent to which members care about those norms.
High Agreement
Low
High Strong Culture Warring Factions
Intensity
Low Vacuous Beliefs Weak Culture
13

14. Diagnosing Culture Using
The Organizational Culture Profile (OCP)
(Chatman, 1989; 1991; O’Reilly, Chatman & Caldwell, 1991; Chatman & Jehn, 1994; Caldwell,
Chatman & O’Reilly, 2008; Chatman, Caldwell, O’Reilly & Doerr, 2012)
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9 9
Number of items
6 6 per category
4 4
2 2
1 2 3 4 5 6 7 8 9
Most Uncharacteristic Most Characteristic
Allocate 54 descriptors of culture (e.g., results-oriented,
risk-taking, integrity) across 9 categories from most
characteristic to least characteristic

15. Jenny Chatman: Typical Organizational Culture Norms
• Frequent experimentation in all realms
Innovative • Actively encourages risk‐taking and creative thought and action
• Acts quickly and frequently scans for new opportunities
• Rewards teamwork and cooperation
Collaborative • Discourages internal competition
• Establishes low levels of aggression and conflict
Results‐ • Sets and achieves concrete, aggressive performance goals
• Favors action over calmness or contemplation
Oriented
• Sets high ethical standards for all organizational members
Integrity • Thinks and behaves with honesty and integrity
Customer • Focuses on defining the customer and what the customer expects/desires
(Patient)‐Oriented • Spends a great deal of time listening to and interacting with customers
• Pays close attention to what the market demands
Detail‐ • Maintains vigilance about performance specs, product quality, and analytical precision
Oriented • “Dots every i and crosses every t”
• Shares information between individuals and units to best benefit the organization as a
Transparency whole
• Discourages “political” behavior (activity intended to benefit one individual at the
expense of the group)

16. SAMPLE Organizational Culture Comparison:
One Company vs. All Participating Companies
9.0
8.0
7.0
6.0
5.0
4.0 Average: All Companies
Average: Hardware
3.0
Average: Software
2.0 Your Company
1.0
Results- Customer- Detail- People-
Innovative Collaborative Integrity Transparency
Oriented Oriented Oriented Oriented
All Companies
5.24 4.24 6.19 6.28 6.21 5.40 4.45 4.71
(N=32)
All Hardware
5.38 5.04 6.30 6.23 6.20 5.47 4.42 4.51
(N=18)
All Software
5.06 5.51 6.04 6.33 6.24 5.31 4.49 4.96
(N=14)
Your
6.59 ** 5.21 6.15 6.10 5.97 5.99 ** 3.60 ** 4.44 **
Company*
*Data on Your Company are based on survey responses from 53 current US employees as of Fall 2009.
** Statistically significant at the level of 10% (p < 0.1).

17. Dan Denison
One Hundred Year Old Manufacturing Company
68
29 12 11
18 9
12
55
8
66 63
82

18. Benjamin Schneider
Operationalize; roots
 Operationalize: Standard deviation in unit members’ perceptions.
 Roots:
– Schneider and Bartlett (1970) worked on the issue via multi-dimension/multi-
rater approach anticipating the use of ICC and rwg
– Worked for years to get rid of variability within units so could legitimate
aggregation. Then asked the question: What about the lingering variability
within units?
 Presumption: Unit climate requires a certain amount of consensus/agreement
before it can be considered a unit attribute.
© 2012 The Corporate Executive Board Company. All Rights Reserved. 18

19. Maribeth Kuenzi
What is Climate Strength?
 Within-unit agreement/variability in perceptions of
organizational climate
◦ AD index (Burke et al., 1999) reversed in sign
◦ Coefficient of variation (Allison, 1978) - standard deviation of
climate perceptions divided by mean level and reversed in sign
◦ Standard deviation
 Types of climate strength? (Ostroff et al., 2003)
◦ Agreement-based
◦ System-based
◦ Alignment-based
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20. Question 2
In your opinion, what are the pros and cons of
these different approaches to the construct? How
can we learn from differing perspectives and
bridge these camps of organizational research?
20

21. Dan Denison
Assessing “Strength”
Potential to create theory
Can be applied and method defining areas
Pro to any measure where normative
integration is most
important
Integration of what?
Atheoretical. No theory contrasting
A methodological definition diversity and integration
Con of a content domain
Variance Normative
Scores Integration

22. Jenny Chatman
 Culture content is frequently confounded with culture
strength:
◦ Identifying culture in terms of content presumes that norms are viewed
similarly enough among members that they can be accurately represented
as a single unified profile (e.g., weak culture can only be amenable to
“meta” content descriptions such as “the culture is fragmented.” (Martin,
1992; Saffold, 1983).
◦ Strong and weak cultures do not have equivalently identifiable content:
 Strong culture organization can intensely value being results-oriented but an
equivalently low emphasis on being results oriented in a weak culture may derive
either from lack of shared intensity about the norm (e.g., people don’t believe it’s
important) or a lack of consensus about it (e.g., some in the organization value
while others do not).
 It is still possible and essential to differentiate between content
and strength; culture strength should be assessed distinctly from
content!

23. Benjamin Schneider
Pros and Cons
 Pros: Anytime conceptually meaningful operationalizations are used we can
learn from them—perceptions, standard deviations, rwg, or what have you.
 Cons: It would be useful to have several studies in which the different forms of
strength are simultaneously studied.
© 2012 The Corporate Executive Board Company. All Rights Reserved. 23

24. Maribeth Kuenzi
Pros and Cons of Climate Strength
 Interesting to consider asking about
climate strength rather than relying solely
on a statistical method
 If we look at climate strength at the
organizational-level, how do we
differentiate this from culture strength?
24

25. Question 3
What are the major points of misunderstanding
or confusion with this construct? What is most
important for those interested in this construct
to understand?
25

26. Jenny Chatman - Paradox: Strong Culture Increases
Consistency But May Also Reduce Firm’s Ability to Adapt
to Different Environments
 Strong culture increases consistency in performance (Sorensen, 2002):
◦ Consensus & endorsing organizational values promotes social control
◦ Goal clarity derived from strong culture reduces uncertainty
◦ Motivation enhanced through feelings of freely chosen action
 Strong cultures induce cognitive and behavioral uniformity (Nemeth & Staw,
1989)
◦ Groups tolerate less deviation as cohesion among members intensifies (Kaplan et
al., 2009)
◦ Strong norms induce people to choose (or affirm) dominant perspective (Forster
et al., 2005)
 As such, strong culture organizations may be less able to modify behavior
when environment changes (Sorensen, 2002), and are less likely to foster
creativity (Nemeth & Staw, 1989)
 BUT – what if strong culture emphasizes non-uniform behavior?
 Reason why culture can’t always be assessed by outsiders or subjectively

27. Dan Denison
Confusion?
Strength is not always a good thing…

28. Benjamin Schneider
Misunderstandings and Confusion
 Strength is a moderator, not a main effect
 Studying strength presents a major paradox: Can study it only when there is
poor consensus within units and differences in consensus between units
© 2012 The Corporate Executive Board Company. All Rights Reserved. 28

29. Maribeth Kuenzi
Points of Confusion with Climate Strength
 Measurement of climate
◦ Measured differently
◦ Referent makes a difference (Klein et al., 2001)
 I versus we
 Unit vs organization
◦ What percent of the group do we need to be able to
calculate climate strength?
◦ How do we deal with the issue that we require
agreement for aggregation?
◦ Is there a lack of agreement because there is no
climate or a “negative” climate which is not reflected
in measures?
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30. Question 4
What are the gaps in culture or climate literature
in terms of strength? What should future research
in this area be focused on?
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31. Maribeth Kuenzi
Future Research for Climate Strength
 Operationalization and measurement of climate
strength
 Climates not existing or just not strong?
 Negative versus positive climates
 Interaction of climates and what role climate
strength plays in which becomes dominant
 Does the level (e.g., org versus unit) matter?
 Longitudinal research and climate change
 Darkside of strong climates
31

32. Jenny Chatman - Results from current study of 60 of the
largest high technology firms: Assessed culture in 2008 and
predicted financial performance in 2011 (Chatman, O’Reilly,
Caldwell & Doerr)
 Strong culture is not necessarily a disadvantage in
turbulent environments, in contrast to Sorensen, (2002)
 Instead, whether culture strength is an advantage or
disadvantage depends on culture content
 Specifically firms with strong cultures that emphasize
and foster innovation perform better, are more
demonstrably innovative, and enjoy a stronger
reputation than those that emphasize innovation less.
 Back to Kotter and Heskett (1992) BUT with focused
study in one industry and based on insider perceptions

33. Dan Denison
Gaps
 We were unable to find any studies that have used both
methods. How can we tell the relative value if there is
no research on the topic?
 Our experience with reviewers on a recent paper on
culture strength indicates that even at top journals,
there are reviewers who will argue hard that “strength”
can only be measured by variance scores.
 One of our papers, currently under review shows that
assessments of normative integration are actually better
predictors of organizational outcomes
 How do you study diversity when variance is the
measure of strength?

34. Benjamin Schneider
Gaps—Effects on External Perception Strength
Overall Quality
WEC .38
SEC .24
Efficiency
WEC .53
SEC .31
Security
WEC .40
SEC .30
Competence
WEC .32
SEC .26
Relationship
WEC .31
SEC .22 WEC = Weak Employee Climate
SEC = Strong Employee Climate
© 2012 The Corporate Executive Board Company. All Rights Reserved. 34

35. Question 5
How can practitioners benefit from this stream of
research? What type of organizational initiatives
could be most benefitted by this stream of
research?
35

36. Benjamin Schneider
Use of Strength Research
 If lousy, be weak; if positive, be strong
 Thomas’s English Muffin model: All in the nooks and crannies
 For change, begin with climate
 For change—keep what is truly valued and useful
 Structural change is not enough: Change the nature of the people who gain
entry—but not too different
© 2012 The Corporate Executive Board Company. All Rights Reserved. 36

37. Jenny Chatman
A Few Practical Implications
 Organizations have no choice about whether a culture
forms or not, only whether norms support strategy and
ultimately improve performance - or constrain it.
 Culture is too important to leave to chance.
 Managers might usefully consider cultivating a culture in
which people agree and care about strategically relevant
behaviors and innovation and adaptation over time.

38. Dan Denison
Guidelines for Practice
 Be careful when you use the word “strength” with
organizations. It has two meanings, so be clear which
one you mean.
 When organizations use the word “strength,” ask
questions so that you are sure what they mean.
 Be clear that normative integration around positive
traits is most likely to impact effectiveness. Being
consistently bad is worse than being randomly bad.

39. Maribeth Kuenzi
Practical Implications for Climate Strength
Research
 Provide guidance on….
◦ benefits and shortcomings of strong climates
◦ alignment of climates to goals
◦ how to manage multiple climates
◦ how to develop strong climates
◦ how to change strong climates
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40. Question & Answer
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