Organizational culture and leadership

www.josseybass.com

MANAGEMENT/LEADERSHIP

EDGAR H.

SCHEIN

ORGANIZATIONAL ORGANIZATIONAL

CULTURE CULTURE

AND

LEADERSHIP LEADERSHIP

AND LEADERSHIP AND LEADERSHIP

CULTURE CULTURE

ORGANIZATIONAL ORGANIZATIONAL

EDITION

4T H

FOURTH

EDITION SCHEIN

REGARDED AS ONE OF THE MOST INFLUENTIAL MANAGEMENT BOOKS of all time,

this fourth and completely updated edition of Edgar Schein’s Organizational Culture and

Leadership focuses on today’s complex business realities and draws on a wide range of

contemporary research to demonstrate the crucial role of leaders in applying the principles

of culture to achieve their organizational goals.

Edgar Schein explores how leadership and culture are fundamentally intertwined, and

reveals key fi ndings about leadership and culture including:

• Leaders are entrepreneurs and the main architects of culture

• Once cultures are formed they infl uence what kind of leadership is possible

If elements of the culture become dysfunctional, it is the leader’s responsibility to do

something to speed up culture change.

In addition, the book contains new information that refl ects culture at different levels of

analysis from national and ethnic macroculture to team-based microculture.

Praise for Prior Editions of Organizational Culture and Leadership

“Worth reading again and again and again.”

—Booklist

“An organizational development pioneer uses an anthropolog￾ical approach to address a leader’s role in shaping group and

organizational dynamics.”

—Knowledge Management

“[Schein] is, to use an overworked word, a guru, the

recognized expert in the fi eld.”

—Inside Business

EDGAR H. SCHEIN is Sloan Fellows Professor of Management Emeritus at the Sloan

School of Management at the Massachusetts Institute of Technology. He is the author of

numerous books, including Process Consultation Revisited, The Corporate Culture Survival

Guide, Career Anchors, and most recently, Helping: How to Offer, Give and Receive Help.

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Organizational

Culture and Leadership

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Edgar H. Schein

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Organizational

Culture and

Leadership

Fourth Edition

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Copyright © 2010 by John Wiley & Sons, Inc. All rights reserved.

Published by Jossey-Bass

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Library of Congress Cataloging-in-Publication Data has been applied for

ISBN 978-0-470-18586-5

Printed in the United States of America

fourth edition

HB Printing 10 9 8 7 6 5 4 3 2 1

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The Jossey-Bass

Business & Management Series

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vii

Contents

Preface to Fourth Edition ix

The Author xv

Part One: Organizational Culture

and Leadership Defi ned

1. The Concept of Organizational Culture: Why Bother? 7

2. The Three Levels of Culture 23

3. Cultures in Organizations: Two Case Examples 35

4. Macrocultures, Subcultures, and Microcultures 55

Part Two: The Dimensions of Culture

5. Assumptions About External Adaptation Issues 73

6. Assumptions About Managing Internal Integration 93

7. Deeper Cultural Assumptions: What is Reality and Truth? 115

8. Deeper Cultural Assumptions: The Nature of Time and Space 125

9. Deeper Cultural Assumptions: Human Nature, Activity,

and Relationships 143

10. Culture Typologies and Culture Surveys 157

11. Deciphering Organizational Cultures 177

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viii CONTENTS

Part Three: The Leadership Role in Building,

Embedding, and Evolving Culture

12. How Culture Emerges in New Groups 197

13. How Founders/Leaders Create Organizational Cultures 219

14. How Leaders Embed and Transmit Culture 235

15. The Changing Role of Leadership in Organizational “Midlife” 259

16. What Leaders Need to Know About How Culture Changes 273

Part Four: How Leaders Can Manage

Culture Change

17. A Conceptual Model for Managed Culture Change 299

18. Culture Assessment as Part of Managed Organizational Change 315

19. Illustrations of Organizational Culture Changes 329

Part Five: New Roles for Leaders and Leadership

20. The Learning Culture and the Learning Leader 365

21. Cultural Islands: Managing Multicultural Groups 385

References 401

Index 415

On-line Instructor’s Guide is available at www.wiley.com/college/schein.

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ix

Preface to Fourth Edition

Organizational culture and leadership have both become very complicated

topics. Over the past several decades, organizational culture has drawn

themes from anthropology, sociology, social psychology, and cognitive psy￾chology. It has become a fi eld of its own and has connected signifi cantly with

the broader cultural studies that have been spawned by the rampant global￾ism of recent times. The explosion of new tools in information technol￾ogy and media transmission has made cultural phenomena highly accessible,

and some of these phenomena are unique to the information age. Cultural

variations around nation, ethnicity, religion, and social class have become

highly visible through television and the Internet. Having a certain kind of

culture, being a certain kind of culture, and wanting a certain kind of culture

have been frequently referred to in the daily press. “ Command and control ”

has become a cultural archetype even as clear descriptions of just what this

means have become more elusive when we observe organizations carefully.

We are also increasingly in an age of peril, especially from the potential

dangers of rapidly increasing complexity in all of our technologies. And

surprisingly, this also begins to focus us on culture. We are in danger of

destroying our planet through indifference to the threat of global warm￾ing; we have the capacity to genetically engineer various forms of life with

unknown consequences; we have a major problem in our health care indus￾try because of high rates of hospital - induced infections, raising the specter

of possible bio threats; and we continue to depend on nuclear energy even

as we dread nuclear weapons and fear nuclear accidents.

Suddenly we have become aware that the occupations that govern

activities in these arenas are themselves cultures about which we know pre￾cious little. We know, for example, that doctors strongly value autonomy

and that this makes certain kinds of reforms in health care more diffi cult.

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x PREFACE TO FOURTH EDITION

We know that the “ executive culture ” values returns for the stockholders,

which creates problems of social responsibility. We know that the culture

of science values exploration and innovation even into ethically dangerous

areas such as genetically engineering or cloning humans. Not surprisingly,

the peril of further nuclear accidents has created in the nuclear industry a

whole new set of concerns about the safety of this technology leading to a

preoccupation with and effort to defi ne “ safety culture. ”

The impact of all of this on me as an author is to feel overwhelmed not

only by the mass of research and consulting that all of this has spawned in

the culture fi eld, but also by the growing diffi culty of making sense of the

whole fi eld. What I have discovered is that our empirical knowledge of how

different cultures interact, how different occupations defi ne tasks, and

how multicultural teams function is growing rapidly and is beyond my scope

to review systematically. But I have also realized that the basic conceptual

model that I articulated in the fi rst three editions is still sound as a way of

analyzing cultural phenomena. For this reason, much of the basic material

in this fourth edition is similar to its counterparts in the third edition, but it

has all been broadened and deepened to refl ect the trends I just referred to.

I have also added in each chapter some brand new material to refl ect what

we have learned in the culture fi eld and what new problems have arisen

as the fi eld has broadened. And I have added some new chapters to refl ect

some thinking about culture at different levels of analysis, from national

and ethnic macroculture to team - based microculture. This broader per￾spective reveals the need to think about a few cultural universals, issues

that exist at every cultural level, and the need to evolve the concept of

“ cultural islands ” to deal with the dilemma of how to create the ability to

work together in very diverse multicultural groups.

What of leadership? Writings about leadership have also exploded, but

we are not much clearer today than we were twenty - fi ve years ago about

what is a good leader and what a leader should be doing. We have many

proposals of what leaders should be and do, and different lists of “ core

competencies ” or traits that leaders should exhibit. Part of the confusion

derives from the fact that there is no clear consensus on defi ning who is

a leader — the CEO, anyone at the head of a department, or anyone who

takes the initiative to change things. Leadership as a distributed function is

gaining ground, which leads to the possibility that anyone who facilitates

progress toward some desired outcome is displaying leadership.

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PREFACE TO FOURTH EDITION xi

I continue to believe that the most important way of staying focused

in this sea of possibilities is to keep exploring how leadership and culture

are fundamentally intertwined. I will continue to argue (1) that leaders as

entrepreneurs are the main architects of culture, (2) that after cultures are

formed, they infl uence what kind of leadership is possible, and (3) that if

elements of the culture become dysfunctional, leadership can and must do

something to speed up culture change.

I should also note that with the changes in technological complex￾ity, especially in information technology, the leadership task has changed.

Leadership in a networked organization is a fundamentally different thing

from leadership in a traditional hierarchy. So we will have to examine care￾fully how the interplay between culture and leadership is evolving as the

world becomes more globally interconnected.

How Is This Book Different from the Second Edition of

My 2009 Corporate Culture Survival Guide?

This fourth edition continues to be a general text that covers most aspects

of corporate culture dynamics and their relationship to leadership. The

Survival Guide is an updated practical roadmap for leaders and managers

who want immediate guidance on how to think about culture manage￾ment. This fourth edition continues to dig deeper into the theoretical and

practical issues surrounding the culture fi eld. So, for example, the culture

assessment process is presented as eight steps in the Guide and as ten steps

in this edition because I have elaborated the rationale and broken down a

couple of the steps into substeps. Some of the case materials are the same,

but I included new cases for this fourth edition and kept the cases that

make particularly important theoretical points. The student should read

this book; the practicing manager should read the Guide .

How This Book Is Organized

In Part I , I will note that the culture and leadership fi eld has differenti￾ated itself and can now be viewed from three different perspectives:

the traditional scholar/researcher who is pursuing fundamental theory, the

practitioner who is developing tools to help leaders and managers deal

with the cultural issues they encounter, and the scholar/practitioner who

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xii PREFACE TO FOURTH EDITION

is concerned about middle - level theory and the translation of that theory

into concepts and tools that will help the practitioner even as he or she

continues to inform theory.

I have always written from this third perspective because I have had the

good fortune of a variety of consulting experiences that provided rich clini￾cal experience from which to build and test theory. What I have labeled

“ Clinical Research ” argues that practical experiences where we are actually

helping organizations to solve their problems provide multiple opportuni￾ties to observe and inquire, leading to better concepts, models, and tools to

be replicated in further experience.

Where social systems and human dynamics are involved, it is diffi cult

to do experiments, and where cultural phenomena are involved, it is

hard to gather credible data by survey methods, so I rely more on careful

observation, group interviews, and focused inquiry with informants. As a

scholar/practitioner, I rely on face validity and on the fact that feedback

from readers and clients illuminates the complex phenomena that we are

trying to understand. I also rely more on a version of “ replication. ” Would

others see the same phenomena that I see if they were to enter the situation?

Part I defi nes culture and provides some examples and a model for how

to think about culture as an abstraction. In Part II , I discuss the major

dimensions along which you can analyze culture and review a few of the

more salient culture typologies that are being used. In Part III , the focus

shifts to leadership and the dynamics of how cultures begin, evolve, and

change. Part IV deals with the dynamics of “ managed ” culture change by

reviewing fi rst a general model of change, then a chapter on how to deci￾pher and assess culture, and then a number of cases of organization/culture

change. I close in Part V with two chapters that present the challenges of

culture management as we see the world becoming more complex, net￾worked, and multicultural. The concept of cultural islands and the use of

dialogue are introduced as possible new approaches for leadership in a mul￾ticultural world.

The main goal of this edition continues to be to clarify the concept

of culture and its relationship to leadership, show how culture works, and

enable students to explain organizational and occupational phenomena

that might otherwise be puzzling and/or frustrating. With understanding,

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PREFACE TO FOURTH EDITION xiii

the student then also acquires the insight and tools needed to demonstrate

leadership in creating, evolving, and changing culture.

An updated online Instructor’s Guide is available at www.wiley.com/

college/schein.

Acknowledgments

In preparing for this edition, I have been helped enormously by the anony￾mous reviewers of the third edition that were recruited by Jossey - Bass. They

provided a useful critique and many suggestions for how to improve the

text and the basic message. I owe a special debt to Professor Joan Gallos,

who not only reviewed my prior editions but also became very engaged in

helping me sort out how to integrate the mass of new information that has

become available in the past ten years.

As usual, it is my clients who were and continue to be the chief inspi￾ration for the ideas and concepts I have developed. There is nothing as

powerful as empirical observation for building models and theories of how

things work. Where possible I will name the organizations and groups from

which I learned or else use pseudonyms if confi dentiality is required. I am

especially grateful to the many members of the Institute of Nuclear Power

Operations, the Con Edison Company, and the group of hospital CEOs

brought together by Mary Jane Kornacky and Jack Silversin.

Colleagues with whom to discuss these matters are essential to fi guring

things out, so special thanks to Jean Bartunek, Michael and Linda Brimm,

David Coghlan, Scott Cook, Dan Denison, Paul Evans, Marc Gerstein,

Mary Jo Hatch, Grady McGonagill, Joanne Martin, John Minahan, Sophia

Renda, Otto Scharmer, Majken Schultz, and John Van Maanen.

Finally, some special thanks need to go to a most unusual and valued

colleague, Joichi Ogawa, who brought together a small group to represent

very different approaches to the question of how to analyze and help

organizations; Steve Bond, a Jungian therapist; David Calof, a systemic

family therapist who works with organizations; Jon Stokes, a Tavistock -

based organizational consultant who works from a psychoanalytic perspec￾tive; and Hillel Zeitlin, a Sullivanian family therapist. This group met for

several days in each of the past fi ve years and dug deeply into the question

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