Organisational culture and decision making: a case of consensus management

Organisational culture and decision making: a case of consensus management

Marcia V. Wilkof

School of BusinesslGraduate School of Management, Rutgers University, 15 19 Naudain Street, Philadelphia, PA 19 146, USA.

Abstract

This paper explores how a state-of-the-art concept, organizational culture, shapes decision making and consensus generating strategies used in the successful management of product development activities in high technology companies. Engineering development groups interact with many individuals and groups on a wide variety of very complex engineering, manufacturing, marketing and business issues. Much uncertainty exists around these issues because information that would allow for a decision to be made is often unknown or unknowable. Trade-offs are made continually resulting in a high degree of interdependence among development groups and others with whom they interact. Achieving a balance between controlling development activities on the one hand, and encouraging creativity and initiative on the other, is a complicated process.

This paper illustrates the role of organizational culture in product development using case material from a very successful US high technology company. ‘Consensus management,‘ a major cultural theme at ‘DW Enterprises,’ is a decision making style that involves everyone in the decision making process who might have relevant input. A cultural analysis reveals that the engineers developed specific techniques for generating consensus, and that these related as much to controlover participation in product development as to decision making.

INTRODUCTION

This paper explores the role organizational culture plays in decision making in the management of product development activities in a successful high technology company called DW Enterprises. A five-year clinical case study of the company’s Engineering Division resulted in a detailed description

R&D Management 19,2, 1989

and analysis of its organizational culture. One critical element of the culture, a consensus management decision making style, is the focus of this paper. To understand this style and its effect on performance, it is necessary to place it in the context of the Engineering Division’s culture. To this end, section two defines organizational culture and briefly describes how an organization’s culture is created and develops over time. The holistic research methodology that was used to identify, describe and analyse the Engineering Division’s culture is explained in section three, and the pattern model of its culture is presented in section four.

Section five focusses on consensus management as a critical cultural theme. A selective review of consensus management as an area of research is presented. Section six presents the findings, discussing how cultural themes related to DWs beginnings and the nature of its task led to the evolution of this decision making style and how the bases for power, influence and status at DW reinforced these themes and led to the development of specific techniques used to generate consensus. A list of these consensus generating techniques and the engineers’ definition of each is presented. The relationship between consensus management and organizational performance is explored using one example to illustrate how understanding an organization’s culture can be useful for organizational diagnosis and intervention. The example will illustrate that the consensus generating techniques were not simply used for generating consensus but also for controlling individual and group participation in the decision making process. Section seven presents the conclusions and implications.

Researchers and practitioners may benefit from understanding organizational culture’s effect on decision making in a high techno-

185

186

logy organization. It provides further insight into the specifics of managing organic organizations by highlighting the importance of a fit between culture and other organizational characteristics and by illustrating culture’s importance in organizational diagnosis and intervention. Studying organizational cultures is one way for us to learn to design organizations that are more oriented toward satisfying both human and organizational needs.

MARCIA L’. WILKOF

or budget,’ ‘the customer is always right.‘ This fundamental driving force is what I call an organization’s ‘basic operating principle‘ (Wilkof, 1982). The specific content or form of other organizational variables (e.g.. decision making, power, structure) and the company’s norms and values grow out of and are related to the basic operating principle. Together, they form the cultural pattern that, when understood, can be used to explain many aspects of the organization’s behaviour.

ORGANIZATIONAL CULTURE

Before going further, it is important to be clear about the definition of organizational culture used in this paper. Organizational culture is ( 1 ) that complexly interrelated whole of standardized, institutionalized and habitual ways of thinking, feeling and acting, and (2) the resulting symbols whose meaning is understood and shared to a greater or lesser degree by all members of an organization (cf., Burns & Stalker. 1961; Jaques, 1952; Kluckhohn, 1949; O’Toole, 1979; Pettigrew, 1979). An organization’s culture is created by its founder and hardened by success into custom (Business Week, October 27, 1980). It becomes collectively shared and publicly accepted by employees (Turner, 1971, Pettigrew, 1979) through various means, including the actions of the founder and managers, the recounting of myths and stories about important events in the life of the organization (e.g., Pettigrew. 1979. Wilkins & Martin, 1980), the use of particular- istic language and phrases (e.g., Smircich & Maxwell, 1980), the development and use of various regulatory mechanisms, the creation of status symbols (e.g., office characteristics, parking location). These are also the vehicles by which the culture is passed down to succeeding generations.

Over time patterns of behaviour, norms, values, etc., emerge (Schall, 1983) as shared appreciations (Vickers, 1965) and become powerful themes. Usually one theme can be identified which describes the fundamental driving force for the company, the essence of its culture. This theme can be captured in a short phrase or paragraph; for example, ‘get ahead no matter who you have to step on,’ ‘quality is more important than schedule

METHOD

Over a five-year period, I conducted a clinical case study of the organizational culture of the Engineering Division of DW Enterprises. This study was based on the holist perspective that ‘human systems tend to develop a characteristic wholeness or integrity’ (Diesing, 1971: 137). The approach proceeds from the particular to the general by looking at a system as part of larger wholes (expansionism) and by understanding a system‘s relationship to other systems larger than and interfacing with itself (Ackoff, 1974; Van Gigch, 1974). Moreover, in an holistic analysis the account of the system under study should capture the system’s holistic quality:

As many of the concepts as possible should be derived from the subject matter itself, from the thinking of the people being studied; and the other concepts should at least not be foreign to their way of thinking (Diesing, 1971: 139).

The concepts should be related to other system concepts and to the system as a whole in as many richly connected ways as possible. An holistic research strategy is adopted in order to diagnose and develop an in-depth understanding of a social system.

For this clinical case study a variety of qualitative data were collected using several data collection techniques. Various sets of interviews were conducted with many different organizational members about a range of subjects including strategy formulation, product development, organizational structure, decision making, communication and organizational culture. Participant observation

RRD Management 19. 2. 1989

Organisational culture and decision making

was used when observing hallway conversa- tions and attending various kinds of meetings (e.g., technical design reviews. staff meetings, off-site meetings). Observant partickation occurred when particular events related to my relationship with the field site were documented and analysed to glean insights about the organization from personal experi- ences. Interventions (e.g.. norm census, responsibility charting) were used to gather data and raise employees' awareness of a situation. Archival data such as internal company reports, memoranda, letters. video tapes and articles from trade journals, business periodicals and newspapers were also reviewed.

The qualitative data were subjected to content analysis to develop an understanding of the Engineering Division's culture by identifying and analysing its powerful themes (Morey & Luthans, 19851, which encompass shared issues, concerns, patterns. tensions, etc.. that recur in different situations and parts of the organization. Themes are not necessarily obvious to organizational members since themes are embedded in lived reality and consequently taken for granted. They are. however. identified from the range of data collection techniques used. Descrip- tions of the themes and their interactions with each other were explored. In the process of identifying and describing themes, then, their interrelationships became evident. Next. a model was built by connecting the themes in a network or pattern. The model described the Engineering Division's culture and was then used to explore how culture affects organizational performance.

187

THE ENGINEERING DIVISION'S CULTlJRE

In the Engineering Division of DW Enter- prises six themes were identified. Each is briefly discussed below and the pattern model is depicted in Figure 1.

The company j . beginnings. At DW the founder had a belief that success is likely for the person who has a good product idea, a belief in scientific values, a view that excellence carries its own rewards, and a willingness to 'trust and gamble on

young, potentially powerful people' (internal memo from DW's founder). The founder attempted to implement an engineering concept that few people believed in, that a kind of high technology equipment could be made in a certain way. Not only did people believe it was not possible, most felt that if it were, there would be no market for the equipment. When the product was successful in the marketplace a strong belief in the primacy of engineering developed at DW.

The general attitude of highly valuing technical activities and undervaluing managerial and support functions is evidenced at an organizational level by the fact that for many years DW did not have a vice-president of marketing, personnel or planning. At the individual level, this attitude is also apparent. T o quote one employee, 'The worst thing to say about anyone is that they aren't technical enough, which then means that they aren't qualified for any job.' It is only recently that the importance of functions other than engineering is being overtly recognized and acknowledged by the engineering community.

The basic operating principle. DW has a well-developed basic operating principle to 'do the right thing out of a win- win perspective.' According to organizational members, 'doing the right thing' means that behaviour, attitudes and actions should be supportive of individual, organizational and customer or societal goals. A 'win-win perspective' means that individual, group and/or corporate success is not dependent o n some other party or parties failing. The founder coined this phrase which reflects his values upon which the company was founded: a scientific attitude and a basic trust of and belief in people. The specific content or form of other organizational variables (e.g., structure, decision making) and the company's norms and values grow out of and are related to the basic operating principle.

For example, employees are encouraged t o keep accepting more responsibility until they fail, then learn to understand that limitation and deal with it. Individuals are seldom fired. One of the norms engineers mentioned most frequently is that 'anyone can be rehabilitated.' Employees are always

188 MARCIA V. WILKOF

BASIC OPERATING PRINCIPLE

Do the right thing Win-win perspective

MANAGEMENT OF SCIENTIFIC AND TECHNICAL INFORMATION Verbal communication Information sharing

Figure I

COMPANY’S BEGINNINGS Successful engineering concept Scientific values Excellence carries its own rewards Basic trust of and belief in people Primacy of engineering

NATURE OF THE TASK

New technology Fun Interdependence among groups and people Uncertainty Change Unique case

DECISION MAKING Bottom-up flow of ideas Consensus generation

POWER, INFLUENCE, STATUS Peer recognition Technical competence Interpersonal skills Fight hard for what you believe in Fight in an above-board, fair, clean fashion

Pattern model of the Engineering Division’s culture

given an opportunity to find a successful niche for themselves in the organization. In interviews, people stressed that employees are encouraged to reach for a job at which they are not competent so that they can learn to manage it o r acczpt their limitation and work within it. According to one trade journal, employees take responsibility for their own work and, as long as they complete their tasks, they can generally decide for themselves how to accomplish them.

At the corporate level, there is a deep- seated belief that the market is big enough for all companies in this industry to succeed; therefore, the corporation’s efforts are clearly directed at producing quality products for its customers, rather than at undermining the competition. One high level executive recounted an incident from a product-related meeting attended by the president. A new employee who had just left a job with one of

DW’s competitors brought to the meeting product documents from the competitor that were relevant to the DW product under discussion. The employee offered the documents to those at the meeting. The president immediately interrupted, announced that he had a few things to say to the new employee and told everyone else to stay or leave the room. He then proceeded to state that DW has very talented people working for the company and that DW prides itself in developing quality products. He went on to tell the employee to destroy the competitor’s documents, never to bring illegal documents into the company again and never to offer them to any DW employee. He emphatically stated that DW does not conduct business in that fashion, that it produces quality products based solely on its employees’ own work.

The basic operating principle seems to be both a moral philosophy and a pragmatic

R&D Management 19.2, 1989

Organ iiatio nu1 culture and decision making 189 business attitude whose origin is the founder's belief in peoples' abilities and how best to utilize those abilities in accomplishing very complex tasks.

The nature 0.f the task. Product development proceeds through a product lifecycle that consists of three phases: idea generation, problem-solving and implementation. There are two major types of product development activities at DW. 'Typical' product development activities involve the design of a new stand-alone product requiring decision making and communications between the core product development group and many other enb' meer- ing and support groups. The development group is the centre of this activity, consulting with each of the relevant groups.

'Atypical' product development activities involve the development of new base technologies to be used by many future product developments or one part o f a system that requires some compatibility or standardization across a number of product groups (e.g.. power supply). In other words, they are product developments that have cross-product applications. 'Atypical' product development activities. require many more communication and decision making activities. Instead of the core development group consulring with others on various issues. all development groups have to negotiate design constraints to assure technical compatibility. This situation requires not only more communication and decision making (among development groups as well as support groups). but also different kinds of communication and decision making (e.g., negotiations not just consultations), than is normally required.

The core development group first identifies a list of project goals based on discussions with all relevant people and groups. The goals are then formally reviewed at a meeting of all interested stakeholders. Based on feedback the goals are modified and distributed to the relevant parties, feedback is again obtained, reviews are held and the process is repeated until consensus is reached on the goals. The same iterative process of broad participation aimed at reaching a consensus is followed for developing design specifications, building a bread-

board and prototype, and moving into volume production. However, consensus can be withdrawn at any time if relevant changes in technology, markets, manufacturing, etc., occur. Therefore, the development group spends much of its time maintaining consensus by staying in touch with relevant groups.

An engineer described the situation as follows:

In general, the engineer's ultimate goal is to build 'neat' new machines. He wants to do what he wants to do - create some neat new gadget. However, because he does not have all the skills, expertise or resources to do it alone and because it is not quite so much fun to work alone, he enlists the involvement and cooperation of others. These others also have their own ideas to develop so now there is a situation where several people have to agree on what to do and how to do it. It is analogous to children deciding what game to play and what part each person will play in the game. The engineers begin a process aimed at deciding what gadget to build and how to build it. While the organization (management) does not decide what game to play or who will play what part, enough people have to be interested for resources to be committed to the project.

The management 0.f scientific arid technical injomiation (STI). Because of rapid technological and environmental changes, the ability to obtain, disseminate and utilize STI provides a strong competitive edge for any organization in DW's industry. DW meets this challenge through a sophisticated process of personal interaction utilizing electronic mail, verbal and face-to-face communication. Meetings and personal interactions are aimed not only at disseminating information, but also modify- ing i t and evaluating its applicability to relevant product development activities. Employees claim that when someone needs information it is more efficient to find a person knowledgable in the area than to use a written information management system, since by the time (if ever) most information is available in written form, it is out of date.

R X D Mui~ngen~er~ t 19. 2. 1989

190

They also claim that it is easier to find a relevant person than to do a literature search.

While employees believe that personal transfer of STI is effective, they also recognize that it is more difficult because of the company’s rapid growth and geographical decentralization. As people move from project to project, they work with many different individuals who are also moving from project to project. Information exchange, technical advice and design assistance are provided by employees across projects, geographical locations and hierarchical levels in the organization. Employees become involved in a very complex network of communication. They emphasize that information sharing is highly valued and strongly encouraged at a personal, group and corporate level. Consensus management seems to reinforce this verbal STI transfer process by involving all those people who have a stake in the issue. This style of management is strongly associated with DW’s culture which encourages individual autonomy, responsibility and entrepreneurship as well as collaboration and information sharing.

Decision making. The Engineering Division’s decision making style is participative and encourages a bottom-up flow of ideas aimed at generating consensus around all issues. Employees refer to this decision making style as consensus management which, according to them, means ‘getting no objections, the absence of sabotage or interference in an activity.’ Responsibilities are distributed. In the process of task completion, regardless of the stage in the product lifecycle or the specific task, to obtain what is believed to be the best choice under the circumstances, everyone who is thought to have relevant input participates in the decision making process and decisions are made collaboratively. Hence the management hierarchy exists primarily for administrative and record-keep- ing purposes. If a problem cannot be resolved, engineers talk of ‘going up to someone who owns us both’ until a consensus solution is developed. Employees are encouraged to make problems visible and resolve them. Consensus management is very

MARCIA V. WILKOF

popular and strongly supported, with people feeling that better decisions are made because of it.

Two examples will illustrate the impact of consensus management. First, an engineer recounted an extreme example of what the company sees as the advantage of consensus management:

There were two competing projects, one favoured and the other not. One was a downgrading of a big machine, the other an upgrading of a little one. Because a consensus could not be reached regarding which project should be stopped, both were allowed to proceed. It turned out, to almost everyone’s surprise, that the less favoured product made more money.

Second, according to engineers interviewed, it is not at all uncommon for the engineering vice president to chair a meeting where people from a cross section of the organization, including those ‘twelve levels below him,’ are in attendance. Because of the strong desire not to stifle individual engineering creativity and to ‘get the right answer,’ as one employee put it, openness and a bottom- up flow of ideas is painstakingly fostered. At these meetings, the vice president expects to hear from everyone and values everyone’s views.

Power, influence and status. At DW, power, influence and status are based on peer recognition, not hierarchical position. Peer recognition is based on perceived technical competence and interpersonal skills. While technical competence is the bottom line, it is a necessary but not sufficient condition for success at DW. Power, influence and status are also related to someone’s interpersonal skills, i.e., how well that person can influence people. In the process of generating consensus, engineers emphasize that it is important not to be intimidated by someone else’s status. Man- agers do not exercise close direct supervision over their employees. They act more as peers than as supervisors and they too obtain their influence from their expertise and interpersonal skill, not from their formal position. In fact, there is little respect for position per se.

Because of the importance of peer



recognition and coalition building, engineers talk about their need to maintain good relationships with many people in order to succeed. In the Engineering Division, employees indicated that they are strongly encouraged to do two things: (1) fight hard for what they believe in and (2) fight in an above- board, fair and clean fashion. Engineers cite the example of very successful people who are in demand, overworked and overcom- mitted. They explain that there is much hard selling to attract good people from one project to another. In the course of doing so, however, it is important not to alienate others; thus their norm that ‘body-snatching is okay, but don’t burn your bridges or abuse it.’ Engineers emphasize that people who ‘play dirty’ quickly find their credibility and status diminished. Underhanded behaviour is not tolerated. In some cases employees are no longer involved in any meaningful activities, but are ostracized or banished. In extreme cases employees are forced to leave the company because they are not trusted.

DW is meritocratically run. Engineers state that no action can be taken without the cooperation of, and what the employees call ‘buy-in’ from, enough other employees to generate a consensus on an issue. Given that power is not vested in positions per se, the power of individuals or groups changes, based in part on the circumstances and the situations. People must maintain and upgrade their technical competence and interpersonal skills.

191

sive coordination among a variety of groups (Thompson, 1967). For example, many highly complex technical and market oriented issues must be understood and resolved. Changes in the technology, market and/or competition are always possible. Trade-offs involving different engineering, manufacturing and marketing groups have to be made continually (e.g., ease of designing vs. ease of manufacturing vs. ease of maintaining) resulting in a high degree of interdependence among these groups. Throughout the product development process it is necessary to juggle their various desires and demands. This process is extraordinarily difficult. Much uncertainty exists around critical issues, which requires the organization to obtain information it does not already possess in order to perform its tasks (Galbraith, 1973). More importantly, information needed to understand and resolve many issues is not obtainable - no one possesses it. With the amount of task-related complexity, uncertainty, change and interdependency, each new product development activity is to some extent a unique case. DW manages this situation by decentralizing product development decision-making responsibility throughout the organization. This decentralization, however, does not carry singular authority, but rather requires all relevant levels and groups to be involved to arrive at decisions consensually.

Summary. DW is an organization that uses state-of-the- art technology to develop new products. It continuously deals with the complexity and uncertainty of technological advances as well as changes in customer demand and competitor behaviour. While the kinds of tasks that need to be performed during the various stages of product development are understood, the specific technical solutions often are not. Many work processes cannot be structured in a routinized, systematized or mechanized way (i.e., there is a high degree of task variability) and much of the work encountered is not predictable or easily analysable (i.e., there is a high degree of task difficulty) (Van de Ven, 1976). Tasks are reciprocally interdependent, requiring exten-

CONSENSUS MANAGEMENT

Organizations use consensus management in those areas where they believe it will lead to better performance, for example, in deter- mining strategy, in dealing with organizational change and in coping with uncertain, complex situations. While several literatures deal with consensus management, they do not identify specific ways that existing work groups achieve consensus on a day-to-day basis across a variety of situations.

The strategy literature looks at consensus decision making compared with, for example, devil’s advocacy or dialectical approaches in order to assess which style leads to better strategic decisions. The concern is with the amount of agreement by relevant parties about organizational goals and objectives,

RR-D Management 19,2, 1989

192

the means to attain the goals and objectives, environmental uncertainty, organizational strengths and weaknesses (Bourgeois, 1980; Bourgeois & Singh, 1983; Dess & Origer, 1987; DeWoot, Heyvaert, & Martou, 1977- 78; Grinyer & Norburn, 1977-78; Hrebiniak & Snow, 1982). Research focusses on whether or not a consensus exists and not so much on how the consensus is reached. Studies that do explore how consensus is reached (e.g., Brodwin & Bourgeois, 1984; Schweiger, Sandberg, & Ragan, 1986) generally look at structured processes that are focussed on specific problems instead of on day-to-day interactions among people and/or groups around the variety of issues that emerge over time.

The organizational change literature actually encourages participative management aimed at achieving consensus. Early studies by Lewin, Coch and French, Bavelas and Homans highlighted the potential effectiveness of participative management. Findings from these studies indicated that participation leads to more significant behavioural changes than would be found from authoritarian or laissez-faire leadership styles; significant productivity increases occur when employees are involved creatively in the change process and have some ownership of the change; significant productivity changes occur when employees are involved in the decision making processes; and participation is most effective when done with a group (Selsky & Wilkof, 1976). The applied Lewinian theorists advocate the active participation of the client in all phases of a planned change effort (Argyris, 1967; Beckhard, 1969; Bennis, 1969; Benne & Birnbaum, 1969; Miles, el al., 1966) for several reasons. For example, participation aimed at generating consensus increases the quantity and quality of ideas; lowers the organization’s resistance to change (Lippitt, et al., 1958; Argyris, 1967); increases ownership of the change effort and generally results in longer-lasting and more effective solutions (Schein, 1969). The focus, however, is generally on discrete decision making or problem solving meetings around circum- scribed issues. And the basic assumption of the participative management literature is that management ‘allows’ employees to participate on certain issues under specified terms. The understanding is that partici-

MARCIA c’. WILKOF

pation is management’s prerogative and its willingness to allow participation can be withdrawn at any time. They do not deal with a situation where consensus management is institutionalized, where the organization’s culture embodies norms that pre- clude token or delegated participation.

The organization design literature states that there is a good fit between an organic form of organization and turbulent environ- ments and that a participative management style is appropriate for an organic organization (cf., Burns & Stalker, 1961; Bennis & Slater, 1968: Kanter, 1983; Lawrence & Lorsch, 1967). Consensus management is used when ‘work is by its very nature complex, unpredictable, and often competitive’ (Mintz- berg, 1979: 450). Organizations whose central purpose is to innovate must bring together relevant specialists who are able to combine their expertise and deal with constantly changing conditions to continually develop successful new products or services. Because each project innovation is unique, ‘the rules that govern the actions of various professionals, as they perform their tasks, are far from extensive, or clearly stated or clearly binding’ (Strauss, et al.. 1963: 151). ‘A measure of order is maintained in the face of inevitable changes (derivable from sources both external and internal to the organization)’ through the use of negotiations to coordinate and control behaviour (Strauss, et al., 1963: 148). Mintzberg (1979) calls these organizations ‘adhocracies’ and quite accur- ately describes their consensus decision making style:

Everyone gets into the act. First are all the managers who must be consulted - .functional managers, project managers, liaison managers. Then there are all the specialists who believe their point of view should be represented in the decision. A meeting is called, probably to schedule another meeting, eventually to decide who should participate in the decision. Then those people settle down to the decision process. The problem is defined and redefined, ideas for its solution are generated and debated, alliances build and fall around different solutions, and eventually everyone settles down to hard bargain- ing about the favoured one. Finally, a

RXD Management 19. 2. 1989


decision emerges - that in itself is an accomplishment - although it is typically late and will probably be modified later. All of this is the cost of having to find a creative solution to a complex, ill-structured problem (Mintzberg, 1979: 463-464).

Consensus decision making is embedded in the organically designed organization. These organizations are made up of inter- disciplinary groups where professionals from different backgrounds contribute various kinds of expertise to the overall effort, which results in a loose-knit collegial organization, managed meritocratically with few written restrictions and little or no hierarchy. DW is an example of this form of organization.

193 internal problems began to surface. Respon- sibilities were not well laid out. Employees perceived the president as being dictatorial; only he had the ability to approve an activity. In response to the situation, the president set down several key policies. First, no one could give advice or tell others what to do. Each person had hidher own responsibility and budget to report on every month. Second, everyone had to sell hidher own ideas. Third, the president would no longer have a budget: the corporate budget would now be the sum of the product line budgets. Corporate plans would be the employees’ plans and their responsibility. Finally, to avoid the complaint that employees could not operate within these policies because resources were unknown, the president instituted a temporary hiring freeze. The president still believed that ‘most of the problems to be solved were too complex for any one person to understand so people were encouraged to work together to get a job done’ (internal DW document). Emphasis was given to committee work, as it ‘provided a forum to introduce a number of ideas and also provided a certain formality for people to clarify their thinking’ (internal DW document). The president later attributed a doubling of profits and a change in the perception of him as a dictator to these actions.

These initial policies reinforced the basis upon which the company was founded, i.e., the belief in scientific values, that excellence carries its own rewards and that people should be trusted. The policies created a vehicle for the expression of the basic operating principle to ‘do the right thing’ out of a win-win perspective. People were encouraged to be open and helpful, to volunteer for jobs, to trust others and to cooperate. Broad experience was encouraged, though balanced with the objective that people stay in an area ‘long enough to live with their mistakes.’ The basis of power, influence and status (technical competence and interpersonal skills) was strengthened by giving everyone responsibility for his/her own activities, by requiring each person to sell hidher ideas and by emphasizing committee work where activities were public. Because people had to sell their ideas, cooperation and participation were

FIND IN G S

The early behaviour of the founder or founding group greatly influences the development of an organization’s culture. At DW, the founder had been associated with academia, believed in the potential of the product, brought his scientific values to the company and believed strongly that excellence carries its own rewards. According to one trade journal,

To (the president), the dividing line between engineering and science is faint at best, and his view of science is the old- fashioned one of a discipline in which excellence carries its own rewards. The unspoken implication is that it’s not such a big step then from the right engineering solution to economic success - that it does not require arcane additional skills or breaks that could just as easily go the other way. Neither (the president) nor any other (DW) manager is naive enough to believe that profitable sales follow inevit- ably on good design, but they do seem convinced there is something very natural about the sequence.

Employees describe DW during its early years as ‘a tribe whose chief would call everyone together around the campfire to discuss issues and make decisions. Everyone participated in decision making’ (internal DW document). When DW reached about $15 million in sales, they recount how

R&D Managetnenr 19, 2, 1989

194

encouraged. Decision making, power and influence were located where the information and expertise existed. Consensus management was strongly encouraged and supported.

MARCIA V. WILKOF

the way engineers at DW talk about decision making. The definitions are those of the engineers at DW:

Consensus through exhaustion. This tactic for generating consensus is used when an issue has been hashed and rehashed over a period of time and one party finally gets so tired or decides they have better things to do that they do not want to spend any more time and just shut up about the issue at hand.

Consensus through pruning. This tactic consists of cutting down (pruning) the list of influential people among whom consensus by agreement is attempted. This is a tactic to avoid getting many people in the consensus group by not telling many; thus, those who do not know will not or cannot object. This tactic is risky, because when people finally find out they may upset the consensus. The goal is to have enough influential people on board so that when others find out they go along with the project, often out of consensus through expertise.

Consensus through expertise. This form occurs when certain (or enough) technically respected people believe in a course of action, so that others either lend their support or at least do not interfere with or sabotage the action. It occurs when people do not want to invest the time and energy in figuring out something for themselves. They will agree if credible others say the situation, solution or whatever is acceptable.

Consensus through destruction of credibii- ity. This tactic consists of rendering someone non-influential by calling that person’s credibility into question so that s/he will shut up, or so that others will stop listening to him/her. The two major ways of calling someone’s credibility into question are by bringing up mistakes made on past projects or by demonstrating in front of many others that s/he is wrong on a whole set of points or issues.

Consensus through ignoring. This tactic occurs when one does not want to listen to someone else or some other group. The hope is that the people or group in question are not influential and/or will tire of fighting over the issue and give up.

Consensus through exchange. This form occurs when at least two people or groups

Consensus generating techniques

Consensus management at DW, according to the employees, means ‘getting no objections, the absence of sabotage or interference in an activity.’ Consensus in this sense does not necessarily mean that everyone has the same strategy, idea, opinion or solution. It simply means that employees will not sabotage the activity, but instead will allow some amount of time for the issue to resolve itself, prove itself, destroy itself, etc. (Wilkof, 1982: 61 -62). (This definition is consistent with Schein (1969) 1.

According to the engineers, the most desirable situation is to generate agreement, which ranges in meaning from mutual understanding to binding obligation. This consensus by agreement means that everyone shares the same view of the action that should be taken in a certain situation. It is generated through reasonable, logical argu- ments, whether based on technical, market, strategic, political or other issues. When consensus by agreement is not achieved, any one of a number of other tactics for generating consensus is attempted. During the five years I was engaged in action research with DW, I heard engineers talk about ways to generate consensus and observed their use. A list of the terms the engineers used and their definitions of these terms were compiled. When the same terms were heard and seen repeatedly and no new ones were mentioned, I showed just the list (not the definitions) to several engineers who were asked to define them. The definitions given by the engineers matched the ones I had heard over time. The list was then shown to other engineers. Everyone who was shown the list agreed with it, and actually articulated which techniques each person used best, which that person used most frequently and which he or she should ‘brush-up on to add to the repertoire.’

Both the concept of consensus manage ment as used here and the types of consensus generating techniques described below reflect

R&D Management 19,2. 1989


agree that neither party will create problems for the other’s project.

Consensus through sidetracking. This form is accomplished by getting a person who has been critical of the project interested in other projects, thus eliminating him/her from the consensus group. This tactic is used with people whose technical expertise is not particularly well respected.

Consensus through flattery. This tactic is implemented by elevating someone’s influence so that s/he is no longer critical of a project. This is accomplished by diverting hidher attention to a small, insignificant issue, elevating hidher influence vis-ri-vis that issue and thus increasing hidher positive visibility in the company. Hidher gratitude for getting positive exposure prevents him/ her from being overtly critical of the project or other issues. This tactic is also used with people whose technical expertise is not particularly well respected.

Consensus through co-opting. This tactic consists of making a person who has been critical of a project a member of the project team. The purpose is to change criticism from a destructive to a constructive form. Because that person is now a member of the project team, he or she feels more ownership for the problem and feels that the criticism applies to that person’s own work as well as the work other team members are doing. This form of consensus generation is used with people whose technical expertise is either respected very highly or at least somewhat respected.

Consensus through threat. This form, when it works at all, only works in a superior- subordinate relationship. It usually operates implicitly and infrequently. In essence it is agreement obtained through fear of a poor performance review, a lesser raise or a loss of job. This tactic does not work well because people can usually find a job somewhere else at DW and are almost never fired.

195

they had enough support from others that those others would not try to stop what they were doing. After observing participative decision making and the use of the consensus generating techniques over a long period of time it became clear that all groups involved tried to participate in the same way on all issues. This situation, called ‘undifferentiated participation’ (Wilkof, 1982), required significant amounts of time and often generated significant conflict. While the attitudes and behaviours that strongly support consensus management developed when DW was founded and were appropriate and manage- able at that time, they had become dys- functional because they had not been modified to fit DW’s current situation.

Having developed an understanding of DW’s goals, tasks, structure, environment, culture, etc. the positive aspects of consensus management were apparent. Having identified the consensus generating techniques and undifferentiated participation, however, the negative aspects of consensus management were suggested. This was a situation where understanding an organization’s culture could be used to analyse organizational performance. It would provide a useful perspective for diagnosis and intervention by focussing on the dynamic and historical aspects of organizational behaviour.

1 observed DW engineers using the consensus generating techniques during the idea generation and problem-solving stages of the product lifecycle for all product- related decisions except budgetary ones. The engineers discussed and/or tried different technical solutions or modifications until

Cultural diagnosis, intervention and performance

An organization’s culture is created by its founders and moulded over time by people and events. As there are changes in the organization’s tasks, environment, size and membership, certain patterns of behaviour, norms, values, etc., that were established earlier may no longer be functional but may remain operative nonetheless. By using an holistic research strategy to understand these patterns, their origin and history, an outsider can begin to see how the various aspects of the organization’s culture impact upon each other. These aspects can then be compared with current organizational characteristics to identify areas of congruence and conflict. Where there is congruence the system’s energy can be focussed on constructive activity. Where there is conflict, the system’s

R& D Management 19.2. 1989

196

energy is diverted from attention to major organizational goals and the organization’s performance is diminished.

Once the areas of congruence and conflict are identified, it becomes clearer what interventions or changes should be made to create a better match between the organization’s culture and its purpose. Policies have to be adapted to fit the culture or the culture has to be changed to accommodate new policies.

Using the cultural theme of consensus management, the consensus generating techniques and the concept of undifferentiated participation will illustrate these principles. Having observed consensus management for some time, it began to appear that the consensus generating techniques had developed not so much as means for generating consensus, but more as means for controlling individual and group participation in the decision making process. Engineers frequently talked about feeling out of control of their project development activities because so many other individuals and groups demanded a say on every issue. After showing engineers the list of consensus generating techniques, they talked at length about how they used these techniques, not just for generating consensus, but also for controlling how much others could participate in decision making activities. They repeatedly stated that ‘no one person has the power to make something happen, but any one person or group can stop an activity. If all relevant parties don’t agree a decision can’t go forward.’ While I talked with them about how different groups could participate in different ways on different issues, they did not understand. The concept was appealing, but from their perspective someone participated or did not participate. It was truly an all or nothing concept for them.

Taking into account the notion of undifferentiated participation and the typology of consensus generating techniques I spent more time observing and analysing employee participation. Several hypotheses were developed:

HI : The consensus generating techniques have as much to do with controlling people’s behaviour, i.e., their kind of participation, as they have to do with

MARCIA V. WlLKOF

actually reaching a decision. Hz: Some amount of conflict is displaced

onto technical issues when the argu- ment is really over who participates on what issues, when, and in what way.

One by-product of consensus management is that people often feel frustrated and overwhelmed, and they experience a loss of control. This situation led to the following hypothesis :

HD : Feeling frustrated overwhelmed and not in control is due to a lack of clarification about the kind of participation various individuals and groups will have with respect to a particular decision.

I decided to use responsibility charting (Beckhard & Harris, 1977) as a means to raise their level of awareness about participation and consensus generation. To this end, one-day responsibility charting activities were conducted with each of two product development groups, each of which had two managers, one who took a broader, longer term, more external view of the product, and one who ran more of the day-to-day technical areas. With my assistance, each pair generated a list of tasks that needed to be performed or decisions that needed to be made on their project and a list of the groups that needed to participate. Each manager filled out the chart indicating the kind of participation that was desired from each group according to the code presented at the end of the following chart.

A comparison of completed charts proved interesting. In some cases the two managers had different perceptions of various groups’ types of participation. They had different reasons and/or expectations for some groups’ participation. For example, one thought a group should be involved for technical reasons, while the other thought the group was involved because one of its members was influential politically. We discussed all groups’ types of participation, what the managers would like to have happen and what they thought would really happen. The next step was the development of strategies for dealing with different groups and individuals, which allowed us to identify where


Organisational culture and decision making 197

CODE: A = R = C = I = M = x =

DK =

Authority to approve/veto Responsible for initiatinglmanaging Should be consulted before a decision is made Should be informed after a decision is made Implements No involvement Don't know involvement

Figure 2 Resimnsihilily chart

the managers should focus their energies and in what ways. It also allowed the managers to better understand each other's perspectives on the project, individuals and groups.

According to the engineers, as a result of this exercise they felt they developed (1) an understanding of the various kinds of participation that are possible, (2) agreement from their teams about who should participate in what ways on what issues, ( 3 ) strategies for attaining the kind of participation they wanted from groups relevant to their project and (4) a shared appreciation with their teams that would allow the team to send consistent messages to co-workers instead of confusing or conflicting ones.

The initial results indicated that the project teams became more able to differen- tiate which conflict related to the type of participation a group wanted and which related to technical issues. A greater awareness about the types of participation that are appropriate for different groups on various issues was also developed. The project teams became more aware of their need to allow

groups to take a more active role in certain issues. Individual learning also resulted. Engineers felt they benefited from the perspective they gained about their own behaviour. Becoming conscious of the consensus generating techniques and undifferentiated participation afforded managers the opportunity to more critically examine and reflect upon their management style, what they do, how they do it and how effective they are at it.

This example shows how focussing on and understanding an organization's culture is a useful approach for identifying, diagnosing and correcting a key dysfunction in the organization's behaviour. It also illustrates the choice of an intervention that would modify behaviour yet fit into and be supportive of the organization's culture.

CONCLUSIONS AND IMPLICATIONS

This paper has illustrated that studying organizational culture provides a dynamic and historical perspective on organizational

R&D Manaxemerit 19. 2. 1989

198

behaviour that is useful for assessing organizational performance. Such a perspective enhances the identification of themes critical to organizational life. The goodness of fit among and between the themes and other organizational characteristics can be crucial for performance. When these are congruent they enhance the organization and focus the system’s energy on constructive activities. When they are incongruent, they divert energy from the major thrust of the organization and diminish its effectiveness and efficiency. The example of undifferentiated participation illustrated how a mis- match between the two resulted when there were changes in organizational characteristics without complementary changes in the culture. It highlighted the importance of actively and consciously changing an organization’s culture when conditions so warrant. It also illustrated the importance of knowing the culture so as to choose interventions that will bring about the desired change and be compatible with the culture.

In addition, this level of detailed individual and organizational understanding and awareness provides further insight into the specifics of managing organic organizations. It reveals that consensus management does not occur with ‘one big happy family,’ where everyone has equal participation, responsibility and rewards. Instead consensus management occurs through a political process of bargain- ing and negotiation. Unless the organization’s culture has forces that balance individuality, entrepreneurship and competition with group work of a cooperative, collaborative nature, the organization can become destructively political. Looking at consensus management in the context of an organization’s culture, therefore, is critical if we are to improve our understanding and constructive management of consensus.

This paper has examined consensus management in the context of organizational culture. It is recognized, however, that there are other factors involved in the generation of consensus. While a political interpretation is implied, future research could develop it more fully. In addition, the relationship between consensus management and organizational selection and socialization could be explored. An organization’s performance could suffer if it unconsciously selected in or

MARCIA V. WILKOF

out those people who would perform well in its current culture. While this criterion for selection could enhance socialization and strengthen current organizational performance, hiring only individuals who fit the current situation may be detrimental when the organization’s internal or external conditions change. The organization would become less adaptable and poorer performance over time would result.

DW Enterprises is an organization con- cerned with both individual and organizational growth and development. We can design organizations that are more humane, more oriented toward satisfying both human and organizational needs. Studying organizational cultures and learning more about how to design them is one way for us to do so.

ACKNOWLEDGMENT

I wish to thank Deborah Britzman, David Bussard, Joel Harmon, John Selsky and Karl Weick for theoretical insights and suggestions on earlier drafts of this paper.

REFERENCES

Ackoff, R. L.. (1974). Redesigning rhe Furure: A Sysrems Approach 10 Societal Problems. New York: John Wiley & Sons, Inc.

Argyris. C . . (19671. ‘Today‘s Problems with Tomorrow’s Organizations’, Journal ofManagemenf Srudies. Vol. 4, No. 1.

Beckhard. R.. (19691. Organization Developmen/: Straregies and Models. Reading, Mass.: Addison-Wesley Publishing Company.

Beckhard. R. and Harris. R. T. . 11977). Organizafional Transitions: Managing Complex Change. Reading. Mass.: Addison-Wesley Publishing Company.

Benne. K. D.. and Birnbaum. M., (19h9l. ‘Principles of Changing’. in The Planning of Change. W. G . Bennis. K . D. Benne. and R . Chin (eds.) . Second Edition. New York: Holt. Rinehart and Winston. Inc.

Bennis. W. G.. (19691, Organization Developmenr: Its Nature. Origins, and Prospects, Reading. Mass.: Addison-Wesley Publishing Company.

Bennis. W. G . and Slater. P. E.. (19681, The Temporary Sociely. New York: Harper Colophon Books.

Bourgeois, L. J . . 111, (19801. ‘Performance and Consensus’. Slrategic Managemenl Journal. Vol. 1.

Bourgeois, L. J . . and Singh, J. V.. (1983). ’Organizational Slack and Political Behavior within Top Management Teams‘. Academy of Managemenl Proceedings.

Brodwin, D. R.. and Bourgeois. L. J.. (19841. ‘Five Steps to Strategic Action’. in SIrafegr and Organization: A West Coast Perspecrive, G . Carroll and D. Vogel leds). Boston: Pitman.

Burns, T.. and Stalker. G . M.. (19611. The Manaaemen! of lnnovafion. London: Tavistock.

‘Corporate Culture’. (19801. Business Week, October 27.

R& D Management 19,2, 1989

Organisational culture and decision winking Dess. G . G . , and Origer. N. K.. 11987,. 'Environment. Structure.

and Consensus in Strategy Formulat ion: A Conceptual Integration'. Academy of Management Review. Vol. 12. No. 2.

DeWoot. P.. Hayvaert, H. and Martou, F.. I lY77-7X1. 'Strategic Management: An Empirical Study of I6X Belgian Firms'. International Studies of Management and Organization. Vol. 7. Fall-Winter.

Diesing. P.. I1971 I, Patterns ofDiscosery in /he Social Sciences. Chicago: Aldine- Atherton. Inc.

Galhrai th . I.. (19731. Organization Design. Reading. Mass.: Addison-Wesley Publishing Company.

Grinyer , P. H.. and Norhurn. D.. (1977-7XL 'Planning for Existing Markets : An Empirical Study'. International Sludies of Management and Organization. Vol. 7. Fall- Winter.

Hrehiniak. L. G . . and Snow, C . C.. 11982). 'Top Management Agreement and Organizational Performance'. Human Rela- tions. Vol. 35.

Jaques. E.. (19521. The Changing Culture of a Fac tow. New York: Dryden Press.

Kanter. R. M.. 119x3). The Change Masters. New York . Simon & Schuster.

Kluckhohn. C.. llY49l. Mirror for Man: The Hrlation o f Anthropology ro Modern Life. New York: McGraw-Hill Book Company. Inc.

Lawrence. P. R.. and Lorsch. J . W.. (19671. Organrxztron and Environment. Boston: Harwrd University School ( i f Business Administration.

Lippitt, R . . Watson, J . , and Westley. B.. (19SXl. The Dynamic5 of Planned Change. New York: Harcourt, Brace and World. Inc.

Miles, M . R.. Calder . P. H. . Hornstein. H. A.. Callahan. D. M.. and Schiavo. R. S.. (19661. 'Data Feedback and Organizational Change in a School System'. A paper read ill the American Sociological Association Meetings.

Mintzberg. H.. (197Y), The Slructuring of Organizations: A Svnthesis of the Research. Englewood Cliffs. New Jersey: Prentice-Hall. Inc.

Morey. N. C . , and Luthans. F., 11985). 'Refining the Displace- ment of Culture and the Use of Scenes and Themes in Organizational Studies'. Academv of Martagemen, Revien'. Vol. 10. No. 2.

O'Toole. 1. J . . 11979). 'Corporate and Managerial Cultures'. in

199 Behavioral Problems in Organizations. C. L. Cooper led. I, Englewood Cliffs. New Jersey: Prentice-Hall. Inc.

Pettigrew. A. M.. (19791. 'On Studying Organizational Cultures'. Administrative Science Quarterly. Vol. 24. No. 4.

Schall. M. S.. (19831. 'A Communication-Rules Approach to Organizational Culture', Administrative Science Quarter/>'. VOl. 28.

Schein. E. H.. (19691. Process Consultation: Its Role in Organ- iiarional Development . Reading. Mass.: Addison-Wesley Puhlishing Company.

Schweiger. D . M., Sandberg. W . R.. and Ragan. J. W., (19861, 'Group Approaches for Improving Strategic Decision Making: A Comparat ive Analysis of Dialectical Inquiry. Devil's Advocacy. and Consensus'. Acadeniy ofManapemen/ Journal, Vol. 29. No. I .

Selsky. J.. and Wilkof, M.. (19761. 'Application of a Planned Change Theory: Concepts and Problems in the Pennsylvania Correctional Reorganization Project'. unpublished.

Smircich. L.. and Maxwell, M. M.. (1980). 'Techniques for Understanding Organizational Cultures'. Presented at the Academ>, of Management Meetings. Detroit. MI. August.

S t r a w . A.. Schatzman, L.. Ehrlich. D.. Bucher, R.. and Sahshin, M.. (19631. 'The Hospital and Its Negotiated Order ' . in The Hospital in Modern Societv, E. Friedson l ed . ) . New York: T h e F ree Press of Glencoe.

Thompson. J . D.. (19671. Organizarions in Acrion. New York: McGraw Hill Book Co.

Turner . B. A.. (19711. Exploring the lrtdusrrial Subculture, London: Macmillan Press Ltd.

Van de Ven. A. H.. (19761. 'A Framework fo r Organization Assessment', Academg of Management Review. January.

'Jan Gigch. J. P., (19741. Applied General Systems Theory. New York: Harper & Row. Publisher.

Vickers. G . . (1%5), The Art o f l u d g m e n t . London: Chapman & Hall: New York: Basic Books.

Wilkins, A,, and Martin. J.. (19801. 'Organizational Legends', Gradua te School of Business. Stanford University. Research Paper No. 542, April.

Wilkof. M . V. . 11982). 'Organizational Cul ture: A Grounded Theory Approach'. Unpublished dissertation. Ann Arhor. MI: University Microfilms International.

R&D Managemenr 19. 2 , 1989

Organisational culture and decision making: a case of consensus management

Documents

Transcript of Organisational culture and decision making: a case of consensus management