THE ROLE OF ORGANIZATIONAL CULTURE AND ORGANIZATIONAL LEARNING
Contents
1. Organizational Culture
2. Organizational Learning
3. Goal Setting: Getting Specific
4. The organization
5. Methods of Cultural observation
6. Culturally Shaped organizational Goals
7. Change Programs and Organizational Performance Outcomes
8. References
Recent findings suggest that organizational culture and learning impact organizational performances. We report the results of an organizational change program focused upon strengthening further productivity in a public sector organization. The findings suggest that systematic and structured programs that include specific organizational goals, performance measures, performance feedback mechanisms, and incentives yield enhancements of targeted organizational performances. We present guidelines to promote organizational change and suggest that perceived collective efficacy plays an important role in changing organizational culture.
In good as well as bad economic times, doing well at work usually requires recognizing that most jobs are highly interdependent (Offermand & Gowing, 1990), involve decision making arising from group contexts based upon collective information (Pritchard, Jones, Roth, Stuebing, & Ekeberg, 1988), and often involve working in ambiguous social situations in which actions are selected from a limited set of alternatives with uncertain outcomes (Lipshitz, 1989). An important situational or contextual variable that appears to influence significantly the behaviors, beliefs, and values of organizational members is organizational culture which involves both individual member and organizational or group level learning (Schein, 1985, 1990).
Unfortunately, very few systematic studies have been conducted to determine the specific change processes and mechanism(s) that may mediate the impact of organizational culture upon a variety of organizational behaviors such as productivity, quality of performances, and decision making (Offermand & Gowing, 1990). We believe that organizational learning, goal setting, and self- and collective efficacies are central to the influence of organizational culture upon specific organizational performances. Accordingly, we begin with a brief review of the constructs of organizational culture, organizaticnal learning, and goal setting. Thereafter, we describe an organizational change program involving the application of these constructs and then present some suggested guidelines for changing organizations and enhancing targeted organizational performances.
Organizational Culture
Organizational culture has been defined as a set of processes that binds together members of an organization based upon "the shared and relatively enduring pattern of basic values, beliefs, and assumptions in an organization" (Sethia & Von Glinow, 1985, p. 403). Organizational culture allows an organization to address the ever changing problems of adaptation to the external environment and the internal integration of organizational resources, personnel, and policies to support external adaptation. According to Schein (1985,p. 9), organizational culture is "a pattern of basic assumptions . . . developed by a given group as it learns to cope with its problems of external adaptation and internal integration . . . taught to new members as the correct way to perceive, think, and feel in relation to those problems." In other words, organizational culture consists of shared behaviors, values, and beliefs that are learned by the members of an organization.
For most of us, the most poignant awareness of organizational culture usually arises when we perhaps inadvertently transgress some cultural code, norm, or belief even though culture is conveyed to us on an almost daily basis by organizational policies, standard operating procedures, organizational stories, and organizational ceremonies (Schein, 1985, 1990). Cultural awareness can be enhanced by systematic study of the culture and the organizational learning processes supporting the formation, maintenance, and modifications of the culture (Siehl & Martin, 1984). Such an awareness can facilitate systematic changes of organizational behavior which can lead to enhancements of a variety of organizational performances such as group productivity, collective efficiencies, and a sense of belonging and community (Davis, 1984; Deal & Kennedy, 1982; Kilmann, Saxton, Serpa, & Associates, 1985; ouch), 1981; Peters & Waterman, 1982; Sathe, 1985; Schein, 1985, 1990; Sethia & Von Glinow, 1985; Tichy, 1983; Wilkins & Ouchi, 1983).
To change systematically organization-wide behaviors, values, and beliefs shared by many diverse members of the organization, the focus needs to be upon systemic dynamics, that is, organizational culture. In general, a cultural change program is most likely appropriate if the problems confronting an organization are widespread, chronic, and have resisted prior focused interventions aimed at one or two units within the organization (Allen, 1985). Without first understanding and then changing organizational culture and learning strategies, organizations can remain stuck despite the use of focused and unrelated rather than shared interventions which span organizational units and key individuals. There is growing evidence that changing an organizational culture (Schein, 1985, 1990; Wilkins & ouch), 1983) involves changing organizational learning strategies (Foil & Lyles, 1985) and the systematic use of goal-setting strategies (Locke & Latham, 1990; Matsui, Kakuyama, & Onglatco, 1987).
Organizational Learning
Organizational learning is based upon individual learning which is then shared with other members of the organization by capturing the individual learning in organizational policies,.standard operating procedures, cultural norms, and organizational stories and ceremonies (Argyris & Schon, 1978; Jelinek, 1979). Lower level organizational learning is based upon repetition, routine, and takes "place in organizational contexts that are well understood and in which management thinks it can control situations" (Foil & Lyles, 1985, p. 807). In other words, lower level organizational learning involves the restructuring of norms without fundamentally changing existing cultural norms. Higher level organizational learning, in comparison, "aims at adjusting overall rules and norms rather than specific activities or behavior" (Foil & Lyles, 1985, p. 808). This kind of organizational learning specifically tries to create new skill development, new knowledge, new cultural norms, and new insights. Moreover, a key characteristic of higher level organizational learning is how an organization can unlearn previous behaviors, and the ability to develop new cognitive frameworks or interpretative schemes in confronting problems that are ambiguous or ill defined (Nystrom & Starbuck, 1984; Ventriss & Luke, 1988).
Recently, Tierney (1988) has suggested that the systematic study of organizational culture in public sector organizations such as universities can perhaps yield better understanding of management and performances in such organizations. Accordingly, the study of the cultural change processes of public organizations may well equip us to promote the development of specific shared goals which appear central to enhancements of specific organizational performances (Kellough, 1990)
Goal Setting: Getting Specific
There is now well established evidence that successful change programs whether focused at the individual or organizational level require the setting of specific and challenging goals. Recently, Locke and Latham (1990) have summarized almost five hundred research studies and concluded that (a) goals (desired outcomes) are immediate, although not the sole regulators of human action, (b) challenging goals (contextually defined) lead to greater effort and persistence than easy goals providing the goals are accepted by the participants, (c) specific goals yield higher levels of performance than vague nonquantitative goals such as "do your best," and (d) goal-setting effects are moderated by such factors as goal acceptance and commitment (public rather private commitment yields stronger adherence to and achievement of goals). These findings make plain that almost any organizational change program may well prove more effective if specific and challenging goals are set, goals are accepted by the participants, and public commitment to such goals is sought systematically. The organizational change program reported here involved these elements of goal setting in a public sector organization, namely, a university.
Fundamentally, institutions of higher education are intended to promote the systematic transmission of existing knowledge (undergraduate education) and the discovery of new knowledge, that is, graduate education and faculty scholarship (Lawson, 1984, 1985). We describe here an organizational change program which focused upon enhancing the productivity level of faculty scholarship employing cultural change strategies, organizational learning, and goal setting. The organizational change program involved (a) observing the then current culture, (b) crafting culturally shaped organizational goals, (c) creating specific change programs, (d) inviting participation and public commitment to specific goals by organizational members throughout the organization, and (e) reporting systematically goal-related performances to specific program participants as well as to the remaining members of the entire organization.
Although the present organizational change program arose from a single institution, recent studies indicate that case study methodology and findings are valuable for formulating program guide/ines and the mode/ing of specific organizational processes (Eisenhardt, 1989; Yin, 1981, 1984). Thus, the following focuses primarily upon processes for promoting organizational change rather than a detailed analysis of program outcomes which was precluded, in part, by the lack of baseline data for specific performances prior to the start of the change intervention as well as the scope of the change program.
The organization
The University was founded in 1791 and enjoys a strong tradition of excellent undergraduate education with an enrollment of approximately 10,000 students. In order of magnitude, the revenue side of the operating budget is derived from tuition and fees, sponsored research grant and contract income, state appropriation, and other miscellaneous sources, respectively. These enrollment and revenue patterns have endured over the past 25 years.
Methods of Cultural observation
The systematic observations of the organizational culture and learning experiences covered a ten-month period and yielded recommendations of four University-Wide Committees appointed by the President of the University. Each committee consisted of approximately nine persons (faculty and students) with each committee focusing upon one of the following primary domains of university activity, namely, undergraduate education, graduate education and research, student life, and outreach (rural and urban) programs. Each committee was charged to find out what the faculty, students, staff, and alumni saw as the present state of the University and to identify specific goals for the next five years for each of the above domains of university life. The committee observations were crafted from numerous and intensive interviews of key administrators, faculty, and students, formal and informal meetings with university members, and discussions with some members of the board of trustees, legislators, and other interested persons from outside the University. Systematic interview data was collected so as to discover widely held perspectives regarding behaviors values, and beliefs that most accurately described the current state of the organization and to inquire about what specific future goals these persons believed were necessary to enhance the overall effectiveness of the organization. Clearly, during this period the organization was permeated with a sense of inquiry about what it did and what specific goals needed to be set and attained over the subsequent five years to strengthen further the organization.
The general findings of the University-Wide Committees indicated that the 1970s and early 1980s were seen by most organizational members as the beginning of a downward spiral for the University and the faculty much like that reported for many other institutions of higher education during this period (Bowen & Schuster, 1986). Thus, immediately prior to the introduction of the organizational change programs the organizational culture was perhaps best described as consisting of a pattern of shared perspectives suggesting that the faculty needed to assume a more central role in shaping the future of the organization. Furthermore, many organizational members from faculty, administrative, and student sectors believed academic and scholarly goals must be the guiding force shaping the organizational agenda. Lastly, almost all members wanted to see the organization achieve the goals of a firmer and better integration between undergraduate and graduate education coupled with a strong emphasis upon research and scholarship.
As part of the translation of the University-Wide Committee observations into specific organizational change programs, the President charged appropriate Deans to develop, in consultation with their faculties, action plans for the next five years based upon organizational goals included in the University-Wide Committee reports appropriate for their areas of responsibility. The action plans were developed from further systematic consultation of the faculty, students, and appropriate administrators so as to reflect widely accepted and shared values and beliefs rather than those of only a single focused group of organizational members. Each action plan included first the specific goals of the change program, specific activities to achieve these goals, feedback measures of targeted performances, and incentives for performances from resource reallocations within the Dean's area of responsibility to be matched, in part, by one-time bridging funds from the central administration.
The above period from cultural observations to full implementation of the goal and learning-induced change programs spanned approximately a two-year period. We now present a summary of specific organizational goals, targeted programs to facilitate innovative organizational learning, and some specific goal-related outcomes focused upon the graduate education and research domain of the university.
Culturally Shaped organizational Goals
The results of the University-Wide Committee on Graduate Education and Research identified three specific organizational goals to be achieved over a five-year period.
Goal I - University-Wide Cooperative Programs for Research and Scholarship. Many persons saw the need for incentive programs requiring the faculty from different disciplines to work together in a systematic and cooperative fashion to advance a variety of research and scholarly programs. Following extensive discussions and planning three new university-wide programs were crafted to move the University toward this organizational goal. These new programs, the University Committee on Research and Scholarship (UCRS),! the Research Advisory Council (RAC), and the University Scholars program (US), were the primary research and graduate education change programs none of which had previously existed at the University.
Goal II - Establishment of New Graduate Programs. The organizational goal of creating a limited number of new graduate programs, especially interdisciplinary programs, emerged from the committee data which was further informed by debate in forums inside and outside of the University (Lawson, 1984, 1985).
To move in the direction of this goal, the executive committee of the graduate college worked closely with appropriate departments, the faculty senate, and the office of the Vice President for Academic Affairs following prescribed new academic program guidelines developed by these parties. The major outcome shaped by these new policies was the establishment of six new masters and two new doctoral programs over a span of five years based upon resource reallocations rather than the infusion of new additional resources compared to the prior ten-year period which saw the establishment of only two masters programs and the elimination of one doctoral program.
Goal III - Diversifying and Strengthening the Graduate Student Body. The final major organizational goal arising from the observations of the then current organizational culture stressed the importance of diversifying the graduate student body by increasing the number of -U.S. multicultural and international graduate students.
The implementation of numerous recruitment programs for U.S. multicultural and international graduate students resulted in enrollment increases of 30% and 125% respectively over the five-year program period for these targeted student groups. Most of these changes arose from the focused efforts of a small group of university-wide administrators and faculty committed to this goal which today continues with a mix of institutional and outside funding. The persons who initiated the early recruitment and retention programs have now moved into other positions, however the programs, after twelve years of existence. continue to flourish and appear to be part of the current organizational culture.
Change Programs and Organizational Performance Outcomes
This section deals with organizational outcomes arising from specific change programs to enhance faculty research and scholarship. The three primary change programs, all of which were new to the university, shared the common elements of (a) systematic public presentation of specific data about organizational outcomes whenever possible. (b) promotion of cooperation between members of different academic disciplines, and (c) reallocation of resources based primarily upon faculty decision making.
The University Committee on Research and Scholarship (UCRS). The UCRS consisted of four study sections each staffed by five senior faculty from the overarching domains of the biological, medical, physical, and social sciences, and humanities. The four chairpersons of the study sections met as a group with the Associate Vice President for Research to make institutional funding decisions on faculty research proposals based on study section recommendations. More importantly they worked as a group to calibrate more finely the criteria for funding across the myriad of disciplines, to promote scholarly linkages between investigators, and to discuss overall research directions of the University. A distinctive feature of this program was active and shared decision making involving a variety of faculty and appropriate administrators.
Over five fiscal years, the UCRS annually reviewed 57.8 applications, funded 42 of 58 applications (72% hit rate), and awarded $96,500. In turn, subsequent applications to external funding agencies by funded UCRS investigators yielded a hit rate of 61% (compared to an institutional rate of approximately 38%) and a return of $5.38 of sponsored research income for each institutional dollar invested by the UCRS in specific research projects. in addition. 248 papers, 196 periodical articles, 20 books, and 37 chapters in books (all refereed publications) were produced by the above UCRS awards.
Inasmuch as this was an entirely new program, there was no baseline data to compare outcomes from this program to prior institutional programs although the rate of participation by faculty increased markedly from one year to the next. The majority of the UCRS members were senior faculty and active researchers and almost all UCRS awards were made to new faculty most of whom were not yet externally funded. Thus, established senior faculty were mentoring junior and/or transitional faculty by means of the UCRS process.
The Research Advisory Committee (RAC). The RAC, an entirely new change program to the university, was patterned after the University Committee on Research and Scholarship in terms of promoting interactive decision making by the faculty across three advisory groups, yet it was different from the UCRS. Although the RAC consisted of three advisory groups, each with five senior faculty members, chairpersons of each advisory group (The Life Sciences, The Physical and Applied Sciences, and The Social Sciences and Humanities) were the primary figures in this program. This group was so constructed to concentrate in the hands of a few faculty from diverse corners of the University a fair amount of power to focus further organizational learning upon university-wide research and graduate programs.
The RAC was further designed to capitalize on interdisciplinary linkages without regard to the structural organization of the University (i.e., colleges and departments). In short, resources tracked research and graduate educational functions rather than flowing exclusively through the structural channels of the University (Lawson, 1985). Recognizing this important design feature of the RAC, which in some cases was perceived as a potential threat to the influence of some of the Deans of the other colleges, the RAC managed a portfolio of two funds, namely, the Unit fund and the University fund. The Research Advisory Council distributed to the Deans of the colleges by means of the Unit fund a portion of $120,000/year which was directly related to the proportion of the total indirect funds earned the prior year by the Unit (i.e., the college or school) for sponsored external research grants and contracts.
In order to distribute research resources even more widely throughout the University, independent of prior sponsored research income, the RAC solicited multidisciplinary research equipment proposals from faculty regardless of their collegiate or departmental affiliation. Such proposals included three to ten faculty whose research requirements involved multi-user equipment, and carried a request for $25,000 to $100,000 compared to the UCRS proposals requesting from $3,0OO to $8,0OO. An important feature of this program is the shared actions and outcomes involving a variety of faculty from different disciplines.
Once again, like the UCRS, there was a formal peer review of all proposals with final funding decisions made collectively by chairpersons of the advisory groups and the Associate Vice President for Research.
During four fiscal years, the RAC reviewed annually approximately 13.5 applications, funded 23 of 54 applications over the four years, (42% hit rate), and awarded $352,280. A further requirement of RAC funding was that the principal investigators had to submit, within two years of the award, an application to an external funding source to advance the institutionally funded research program. This resulted in awards totalling approximately $1.1 million (mostly equipment) or a return of $3.12 of sponsored research income for each institutional dollar invested in a RAC project. Although not as tightly coupled as the above outcome, sponsored research income to the University went from $24.7 to $32.4 million over a four-year period even though national competition for federal funds increased dramatically during this period (Strobe!, 1986). Lastly, the Research Advisory Council provided the ground work for development of a five-year proposal to the National Science Foundation (NSF), Experimental Program to Stimulate Competitive Research (EPSCOR), which resulted in an award of approximately $5 million for a broad range of research projects and moved the institution closer to the goal of university-wide emphasis upon research and graduate education (Strobel, 1986).
Inasmuch as the RAC was an entirely new change program, there was no baseline data to compare outcomes from this program to prior institutional programs although the rate of participation by faculty increased markedly from one year to the next. The RAC served to bring together faculty from different departments and disciplines by supporting transdisciplinary research projects. As a consequence, the RAC introduced new transdisciplinary research opportunities for faculty who had strong and, in most cases, externally funded although disciplinary specific research projects.
The University Scholars Program (US). The US Program, another change program, focused upon ceremonies and rituals, providing a rich opportunity for organizational story telling, all of which can be critical for changing organizational culture and learning processes (Martin, 1982; Morgan, 1988; Trice & Beyer, 1984,1985).
Briefly the program honored a faculty member in each of four broad areas of inquiry accommodated by the four study sections of the University Committee on Research and Scholarship (UCRS). This program allowed faculty members "to be prophets in their own land" inasmuch as many of the faculty recognized in this program had also received numerous honors and recognition from national and international societies although the ceremonial experiences were not shared with their local colleagues with whom they spend a significant portion of their professional lives.
The annual rituals of the university-wide reception for University Scholars and a university dinner during which the nominators and colleagues of each of the four University Scholars shared stories about each scholar provided excellent opportunities for the University community to share the celebration of one of their own as well as themselves (Trice & Beyer, 1984, 1985). Without these activities, the University was missing an excellent opportunity to bind together members of the organization in a rite of enhancement and to provide stories that might then become pan of the saga and mythology of the University (Clark, 1972; Martin, 1982).
Lastly, and perhaps most importantly, all of the above three incentive programs are still active today twelve years after their inception. Furthermore, few of the specific individual faculty and administrators who originated and participated in the early. years of these programs are involved now because they have gone on to other activities or have left
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There is a growing body of research that beliefs of efficacy have varied and robust psychological effects. Such beliefs direct choice of careers, and increasing efficacy enhances faculty research productivity (Betz & Hackett, 1981; Taylor, Locke, Lee, & Gist, 1984) as well as levels of motivation (Bandura & Cervone, 1983). Persons with stronger perceived self-efficacy tend to set higher goals for themselves (Taylor et al.,1984) and to exhibit a much firmer commitment to them than persons with weaker self-efficacy (Latham & Locke, 1986; Locke, Shaw, Saari, & Latham, 1981; Mento, Steel, & Karren, 1987). As an extension of these findings we suggest that strong organizational cultures stressing innovation and change enhance not only perceived self-efficacy but also perceived collective efficacy, that is, an organizational member's assessment of the capability of the organization to execute specific performances.
Recently, Wood and Bandura (1989) found that persons who operated under a cognitive set that their organization was controllable in a computer simulation of managerial decision making in a manufacturing firm maintained a stronger sense of managerial efficacy, set higher organizational goals, and achieved much higher levels of group performance than did persons who were led to believe that their organization was difficult to change. We propose that members of an organization develop beliefs not only about their own personal efficacy within the organization but also beliefs about the collective efficacy of the organization as well. We believe that if persons perform well over a consistent period of time and observe others around them performing at high levels of goal attainment within the organization there then may well develop a belief not only in personal but also co/lective efficacy which is strengthened by the public feedback of specific enacted collective performances. We suggest that the specific organizational change programs described here provided systematic performance feedback that could be focused at the individual as well as the group or collective levels. We suggest further that this performance feedback served to modulate the efficacy levels of direct program participants about their own and collective efficacies, and, most interestingly, may have influenced indirectly other members' sense of collective efficacy to the extent that they were aware of organizational performance levels associated with the above change programs.
An organizational culture that provides shared information about specific and challenging goals, performance standards, incentives, and performance feedback can influence performance and efficacy beliefs at the individual (micro) and organizational (macro) levels (Matsui et al. 1987). In the presence of an organization-wide culture, a leader with strong perceived self-efficacy can perhaps also have a significant influence upon perceived collective efficacy because of the robust modeling (expressed through actions and espoused beliefs about the organization) which can then be carried by socialization and cultural change programs (Kilmann et al., 1985; Peters & Waterman, 1982; Sathe, 1985; Schein, 1985, 1990; Tchy, 1983).
In summary, it appears as if an organizational culture that promotes high levels of performance by specific and challenging goals, performance measures, incentives, and performance feedback mechanisms can lead to enhanced performances at the individual and organizational levels with such enhancements possibly mediated by perceived self- and collective efficacies. We are now engaged in directly testing this proposition in a variety of public and private sector organizations.
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Requests for reprints should be sent to Robert B. Lawson, Department of Psychology, John Dewey Hall, University of Vermont, Burlington, VT 05405-0134.
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ROBERT B. LAWSON and CURTIS L. VENTRISS University of Vermont
