Organizational Culture: A Meta-analysis of Structure, Consequences, and Relationship with Leadership

IMPORTANCE AND KEY CONTRIBUTION Organizational culture has long been thought to be an important construct for understanding people’s experience in the workplace (e.g., Margulies’, 1969). The construct is abstracted to... [ view full abstract ]

IMPORTANCE AND KEY CONTRIBUTION
Organizational culture has long been thought to be an important construct for understanding people’s experience in the workplace (e.g., Margulies’, 1969). The construct is abstracted to represent workers implicit assumptions about the workplace and guide people’s attitudes and behaviours at work. However, despite three decades of research on the construct, there are a number of unanswered questions regarding the constructs operationalization, its outcomes, and its relationship to leadership. The purpose of this meta-analysis is to explore the factor structure of the construct of organizational culture, with the purpose of clarifying how the construct should be modelled by future researchers. Further, the present meta-analysis aims to resolve inconsistent findings in the literature on organizational culture’s consequences and relationship to leadership.

THEORETICAL BASE
The present research draws on organizational culture, or a “pattern of shared basic assumptions learned by a group as it solved problems of external adaptation and internal integration...taught to new members as the correct way to perceive, think, and feel” (Schein, 2010, page 18). For the present purposes, we focused on O’Reilly, Chatman, and Caldwell’s (1991) organizational culture profile theory in an effort to reconcile and build on some of the theory’s fuzzier theoretical suppositions. The profile view of organizational culture states that organizations have a certain configuration of values that characterize them (O’Reilly et al., 1991); Culture is described and operationalized in terms of the degree to which certain attributes characterize the values of the organization, including aggressiveness, attention to detail, outcome orientation, respect/ support, rewards emphasis, innovative orientation, team-orientation, and decisiveness/ stability orientation. We further draw on regulatory focus theory, which states that people are motivated to minimize positive end-states (a promotion focus) or avoid undesirable end-states (a prevention focus) (Higgins, 1997; Higgins, Shah, & Friedman, 1997). In accordance with self-regulation theory, we posit that organizational culture can be understood as a reflective second-order construct where an organization is patterned a promotion or prevention focused, and that the prevention focused cultures have higher relationships to work outcomes.

RESEARCH QUESTIONS
The present research explores four research questions, namely: (1) Are the facets of organizational culture distinct constructs? (2) How is organizational culture best modelled? Does a self-regulatory second-order reflective model with asset constructs promotion and prevention focused culture best represent culture compared to alternative models? (3) What is the size of the relationship between organizational culture and work attitudes? (4) What is the size of the relationship between organizational culture and leadership?

FINDINGS
The present research will adopt a systematic meta-analytic approach (Hunter & Schmidt, 1982). A meta-analytic approach makes sense in this context to clarify the construct of organizational culture and investigate culture’s relationship to leadership and work attitudes in that it combines the results from multiple studies (total N = 153 independent samples).
Preliminary analyses tested alternative models of organizational culture to derive a better understanding of how culture should be operationalized. Three alternative models were tested based on recommendations provided by Diamantopoulous & Siguaw (2006). The second-order reflective model imposed a specific structure on the pattern of correlations among the first-order culture factor dimensions with preventative and promotive asset constructs. We estimated a formative model using traditional formative model assessment methods (i.e., constraining the loading of each first-order factor onto the second order construct, similar to adding together the scores on each first-order factor). Results showed that both the reflective model (CFI = .985, RMSEA = .095, AIC = 1205.729, PNFI = .267) and formative model (CFI = .968, RMSEA - .131, AIC = 2710.76, PNFI = .276) provided adequate fit. However, the reflective construct provided superior fit compared to the formative model. Further, the alternative constrained formative model did not provide adequate fit (CFI = .400, RMSEA = .429, AIC = 47362.12). Therefore, a second-order reflective operationalization of organizational culture is preferred.

Second, we tested each organizational culture dimensions predictive effects on work attitudes. Results showed that aggressiveness, attention-to-detail, respect, innovativeness, and team-orientation have a small effect on job satisfaction and leadership. Results showed that a stability oriented culture had small effect size on job satisfaction (ρ = .15) but medium effect size on affective commitment (ρ = .34). Further, a small effect size was found for a team-oriented culture predicting job satisfaction (ρ = .23) and affective commitment (ρ = .37). Similarly, a respect-oriented culture showed a medium effect size on both job satisfaction (ρ = .35) and affective commitment (ρ = .37). All effect sizes were below a threshold of .10 with most falling within the small effect size range, showing that, in general, organizational culture has relates to work outcomes and leadership though effects are small to moderate.

Third, we tested the relationship between leadership and organizational culture. Leadership had a small to moderate effect size with most culture dimensions (ρ range .20 to .32). However, the relationship between leadership and organizational culture was strong for a stability-oriented culture (ρ = .68) and an attention-to-detail culture (ρ = .67).

IMPLICATIONS
Findings show that the facets of organizational culture are largely separate but overlapping constructs and that organizational culture is best reflected as a second-order reflective model, in support of a self-regulatory view of organizational culture. Findings also support larger culture theory; as predicted, the dimensions of organizational culture relate to the outcomes of job satisfaction and affective commitment and have a moderate relationship to leadership.

The study aims to reconcile muddy operationalizations of the construct to support a multidimensional view of organizational culture. Namely, the construct organizational culture has been treated as single first-order construct (Schein, 2010) as a second-order multidimensional construct (e.g., Chatman & Jehn, 1994), and as typologies of distinct first-order forms (e.g., Lok & Crawford, 2004). The results of the present meta-analysis provide estimates of the true relations between the culture dimensions assessed by the Organizational Culture Profile (O’Reilly et al., 1991). Further, the results provide evidence that the dimensions are distinct facets of culture that should not be summed. Although the dimensions of organizational culture are similar and related, they do not represent a uni-dimensional construct. Further, results suggest that a multi-dimensional conceptualization of organizational culture should be modelled as a second-order reflective construct, rather than a formative construct. Given that much of the extant research on culture sums the dimensions or specifies the construct in a Frankenstein model (i.e., specifies reflective first-order indicators yet further specifies the second-order construct as formative such that outcomes are drawn from the latent construct, rather than the observed first order variables). These findings allow us to better evaluate the validity of the OCP’s conceptualization of organizational culture and how the constructs should be modelled in future research. Given that organizational culture has long been thought to be an important influencer on worker behaviour, understanding how the construct is ideally modelled is important for future testing of the construct.

Finally, there are inconsistent results in the literature as to whether organizational culture is a useful construct in explaining work attitudes, such as job satisfaction, turnover intent, and commitment. For instance, Lund (2003) found that certain culture types were related to job satisfaction and that certain types were not. The present study uses meta-analysis to produce aggregated effect size relationships between organizational culture, leadership, and work attitudes. Relatedly, the aggregated effect size of the relationship between leadership and culture has, to our knowledge, yet to be tested. We show that certain facets of culture may be engendered more strongly to leadership compared to others. Differentiating between prevention and promotion organizational cultures advances our understanding of what elements of culture (prevention; promotion) may be engendered and embedded more strongly by leaders.

REFERENCS

Chatman, J. A., & Jehn, K. A. 1994. Assessing the relationship between industry characteristics and organizational culture: how different can you be? Academy of Management Journal, 37: 522-553.

Diamantopoulos, A., & Siguaw, J. A. 2006. Formative versus reflective indicators in organizational measure development: A comparison and empirical illustration. British Journal of Management, 17(4): 263-282.

Higgins, E. T. 1997. Beyond pleasure and pain. American Psychologist, 52(12), 1280-1300.

Higgins, E. T., Shah, J., & Friedman, R. 1997. Emotional responses to goal attainment: strength of regulatory focus as moderator. Journal of Personality and Social Psychology, 72(3): 515-525.

Hunter, J. E., Schmidt, F. L., & Jackson, G. B. 1982. Meta-analysis: Cumulating research findings across studies (Vol. 4). United States: Sage Publications, Inc.

Lok, P., & Crawford, J. 2004. The effect of organisational culture and leadership style on job satisfaction and organisational commitment: A cross-national comparison. Journal of Management Development, 23(4): 321-338.

Lund, D. B. 2003. Organizational culture and job satisfaction. Journal of Business & Industrial Marketing, 18(3): 219-236.

O'Reilly, C. A., Chatman, J., & Caldwell, D. F. 1991. People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of Management Journal, 34(3): 487-516.

Margulies, N. 1969. Organizational culture and psychological growth. The Journal of Applied Behavioral Science, 5: 491-508.

Schein, E. H. 2010. Organizational culture and leadership (4th Edition). Jossey-Bass: United States.

Culture, Leadership; meta-analysis [ view full abstract ]

Culture, Leadership; meta-analysis