The relationship between organizational culture and environmental scanning: a case study.
The intelligence function comprises the collection, analysis, and dissemination of information about events in a company's external environment to decision makers and/or strategists (Aguilar, 1967; Porter, 1980). This case study examines a major component of the collection phase--environmental scanning-which is the acquisition of "information about events and relationships in a company's outside environment, the knowledge of which would assist top management in its task of charting the company's future course of action" (Aguilar, 1967, p. 1). When an organization places a high priority on external information, its decision makers access various sources to aid their
Jerry P. Miller, Graduate School of Library and Information Science, Simmons College, 300 The Fenway, Boston, MA 02115-5898 strategic planning. The apparent connection between organizational success and scanning has prompted the examination of this activity. The strategy literature considers scanning as the stimulus that initiates the organizational adaptation process (Hambrick, 1981; Pfeffer & Salancik, 1978). The popular literature often profiles firms which sustain profitability and success through their reliance on pertinent information. In fact, after twenty-five years, the scanning literature includes at least thirty-five conceptual and empirical journal articles as well as ten doctoral dissertations. However, starting with its pioneers--Aguilar (1967) and Wilensky (1967)--authors frequently stated that minimal attention had been given to the topic of scanning (Kefalas & Schoderbek, 1973; Pfeffer & Salancik, 1978; Hambrick, 1981; Daft & Weick, 1984). Most recently, Choo and Auster (1993) underscored the critical need to expand the understanding of this activity. Despite the continued attention, why have the insights and findings from these studies not produced a clear understanding of scanning behavior?
Ignorance of previous work as well as imprecise analysis may provide some answers to this question. More essentially, however, this research has routinely overlooked the fact that scanning is a behavior which managers perform within their specific setting (Katzer, 1987). Traditionally, scanning studies focused on information sources and their systems as well as quantifiable organizational phenomena. Researchers isolated relatively objective factors to demonstrate statistical significance for possible generalization. Although these works produced various insights, objective external factors do not reflect the ambiguous and inconsistent nature of scanning as a behavior. Therefore, studying the process of how managers scan within their work setting can yield interesting and useful insights for further investigations as well as for the design and implementation of scanning processes. Given this perspective, the objective of this case study is to describe how 220 managers within a Fortune 500 manufacturing firm scan the environment and how attributes of their organizational culture affect this activity.
Researchers have examined the influence of corporate culture values on certain aspects of the information-seeking behavior of managers, but environmental scanning has not been studied. These studies illustrate that organizational values focus information processes and thereby indicate what sources managers can use and what alternatives they can consider within the decision-making process (Cyert & March, 1963; Galbraith, 1974; Feldman & March, 1981; Schwartz & Davis, 1981; Schein, 1983; Smircich, 1983; Wilkins, 1983; Huber, 1984; Ulrich, 1984; Lorsch, 1985; Schein, 1985; Lenz Engledow, 1986). Over time, however, existing norms become so embedded within policies and processes that they create a distinct organizational myopia (Ouchi & Wilkins, 1985; Huber & Daft, 1987). Consequently, the organization's perceptual filter becomes impervious to external change (Sathe, 1983; O'Reilly, 1983; Lorsch, 1985; Reiman & Wiener, 1988). In addition to focusing this process, cultural factors also influence acquisition. Dewhirst (1971) observed that information-sharing norms affect the degree to which information channels are open or closed. When values encourage managers to hoard information, the organization loses internal transparency and its resiliency to market fluctuations. Furthermore, in their examination of the relationships among information acquisition and five organizational climate scales (democratic governance, support, esprit, freedom, and innovation), Samuels and McClure (1983) concluded that effective information processing occurs in open, rather than closed, organizations. Finally, in a study of 695 employees in a public utility, Muchinsky (1977) found that the climate dimensions of interpersonal milieu, organizational structure, and procedures correlated with the use of interpersonal information sources. These studies offer evidence that culture can affect the selection of alternatives for consideration within decision making as well as the processing of information. However, the relationship between organizational values and environmental scanning has not been studied (Wilson, 1981; O'Reilly, 1983; Culnan, 1983, 1985; Huber Daft, 1987). As with other information processes, cultural values could also affect the extent to which managers acquire external information for future internal dissemination and decision making.
The specific assumptions and definitions that form the theoretical foundation of this case study are clarified to provide better appreciation of the factors and their proposed relationships.
Describing scanning behavior presumes the adoption of a suitable definition for information, which is "stimuli (or cues) capable of altering an individual's expectations and evaluation in problem solving or decision making" (Ungson et al., 1981, p. 117). Similar to most stimuli, managers' receptiveness to information cues, including unexpected, unfamiliar, and potentially critical information, can deviate. Cultural values can circumscribe their receptiveness to stimuli.
A case study of scanning behavior also presumes an appropriate conceptualization of scanning. Managers can acquire information about events and relationships in their company's outside environment by using formal and/or informal methods as well as various oral, print, and computer-based sources of information. Formal methods may include the assistance of information brokers, information professionals, online services, and attendance at formal presentations. Informal methods include serendipitous exchanges with colleagues and staff members and skimming printed materials. However, use of the three media types (i.e., oral, written, computer-based) varies.
Early user studies endeavored to determine the effectiveness of information sources, or the criteria that governed users' selection of information sources. These investigations of information-seeking behavior often referenced Zipf's "law of least effort" (1949), which states that users base their selection of information in terms of the work required to gain access to the source. Building upon this premise, an early investigation of Allen (1966) found that information quality had no relationship to frequency of using written or oral sources. In a related study, Rosenberg (1967) concluded that research and nonresearch personnel preferred to access information sources that were easy to use rather than because of the amount of information which they provided. In their study of electrical engineers, Gerstberger and Allen (1968) investigated the criteria employed when selecting various oral and written technical information sources. Accessibility not only determined the overall frequency of source use, but also the choice of first source. In many instances, subjects preferred using oral sources due to their relative accessibility and ease of use. In contrast, due to its sophisticated nature, some engineers did not understand and, therefore, were reluctant to use their professional literature. The perception of such sources as inaccessible or difficult to use prompted their hesitancy. Therefore, perceived accessibility as well as ease of use greatly determined the degree of experience in using a source. Of most interest, the criteria of perceived technical quality was of little importance in relationship to frequency, first selection choice, as well as degree of experience. These engineers sought access to sources which required minimal effort with a lack of attention to quality. Therefore, these investigations suggest that "law of least effort"--specifically accessibility and ease of use--prompts the use of oral sources.
A case study of scanning behavior also assumes the identification of those who are most likely to perform this activity. Every manager within an organization need not access external information; rather, decision makers are responsible for selecting from among various alternatives in planning future actions or justifying actions already taken (March & Simon, 1958; Cyert & March, 1963; Weick, 1979). Therefore, measuring the frequency with which decision makers scan the environment is appropriate (Hambrick, 1982).
Building upon these concepts, the theoretical framework also incorporates concepts within the open systems model that emphasizes organizational flexibility and change with its external environment. As with any system, an organization can sustain itself by interacting with its external environment or by feeding upon itself. Open and adaptive organizations possess a highly permeable boundary or filter; closed organizations possess an impenetrable boundary. Theorists caution that perceptual screens, cognitive filters, or schemas can trigger a strategic myopia that can affect the degree to which managers engage in environmental scanning (Dearborn & Simon, 1958; Cyert March, 1963; Lawrence & Lorsch, 1967; Miles et al., 1974; O'Reilly Roberts, 1974; Connolly, 1977; Argyris & Schon, 1978; Huber, 1984; Lorsch, 1985). Furthermore, an organization's culture embodies the values and norms which support the extent to which managers can scan the constantly changing external environment (Means, 1969; Tichy, 1982; Reiman & Wiemer, 1988). These cultural values influence environmental scanning by determining the extent to which the organization's boundary is open or closed (Sathe, 1983; Samuels McClure, 1983; O'Reilly, 1983; Lorsch, 1985; Reiman & Wiener, 1988). Therefore, this theoretical framework regarding the permeability of an organizational boundary incorporates the concept that cultural values influence how managers scan the external environment. Managers cannot collect all relevant information in the external environment (Daft et al., 1988). The reasons for this inability are twofold: bounded rationality and the boundless business environment.
Managers experience bounded rationality (Simon, 1957) and, therefore, cannot comprehend the degree of fluctuations occurring within a vast and complex external environment (Cyert March, 1963). The concept of bounded rationality suggests that individuals have perceptual and information-processing limits. Although managers may want to act rationally, they must accept their limits. This limited function includes acting upon sufficient rather than complete knowledge as well as using simple rather than complex search strategies for problems and consistently using shortcuts. Within these limits, they attempt to understand the boundless business environment, which is defined as "the relevant physical and social factors outside the boundary of an organization that are taken into consideration during organizational decision making" (Duncan, 1972, p. 314). In addition, the environment can be conceptualized as consisting of two layers (Bourgeois, 1980; Dill, 1958). The layer closest to the organization is the task environment whose sectors of competitors, suppliers, and customers have direct transactions with the organization. The outer layer is the general environment that includes the governmental, economic, and technical sectors with which the organization has a comparatively indirect relationship. Assigning these specific sectors into either the task or general environment depends upon how administrators choose to define and interact with their corporate domain. For example, for a manufacturing firm, the task environment may consist of the customers, suppliers, competitors, and technology sectors. Therefore, the notion of bounded rationality and the magnitude of the external environment creates problems for studying scanning behavior. However, researchers can incorporate these cognitive limitations into their interpretation and analysis as well as include the sector names in the instruments that measure scanning frequency, thereby easing managers' conceptualization of the external environment.
How values affect this scanning activity presumes an appropriate conceptualization of organizational culture. The organizational culture literature offers multiple perspectives on studying culture. As Martin (1992) emphasizes, organizational culture researchers have developed three social scientific perspectives: integration, differentiation, and fragmentation. Within the integration perspective, all cultural manifestations support the same values, which members across the entire organization share unquestionably. Ambiguity is eliminated. Within the differentiation perspective, cultural manifestations occasionally support the same values because consensus develops within subcultures, whose values of ten conflict with those of other groups. Here, ambiguity is controlled. Within the fragmentation perspective, ambiguity itself generates organizational culture. Members reach consensus and disagreement on specific issues; therefore, consensus does not occur within subcultures or across an entire organization. Here, blurring and inconsistencies dominate. However, a particular perspective does not depict an organizational culture more accurately nor more objectively. Although each perspective captures some cultural aspects more fittingly, each one also ignores and distorts other features. A single perspective fails to dominate the literature because each is an interpretative framework which a researcher chooses to impose on the procedures for gathering and evaluating the cultural data. Subjective factors and subjective judgments affect an entire study.
Therefore, this researcher chose the differentiation perspective. Experience has demonstrated that interpretations, assumptions, and values vary for numerous reasons, including educational background, economic status, task, function, race, gender, age, and ethnicity. To maintain status, employees assume the values of the formal and informal groups to which they belong. Consistency develops within these groups. Therefore, the integration perspective, with its notion that all employees share the same values, is unrealistic and simplistic. As for the fragmentation perspective, its emphasis on multiple interpretations and its inclusion of ambiguities requires the use of an ethnographic approach whereby the researcher works within the culture for months or years to understand its subtle nuances. Lacking the time and the skills, this approach could not be taken.
As per the differentiation perspective, an organization's culture consists of multiple and competing interpretations and values that rarely coalesce into a unified whole. A conceptual framework that reflects this perspective is the competing values framework (Quinn, 1988). According to this theory, rather than one dominant culture, organizations demonstrate numerous subcultures in which each exhibit four culture types (Rohrbaugh, 1981; Quinn & Hall, 1983; Cameron, 1986; Rousseau, 1990). This model juxtaposes the counterbalancing dimensions of flexibility and control as well as internal stability and external focus. Within its four quadrants, the framework connects the assumptive bases of the desired organizational outcomes of effectiveness, leadership, and motivation within clusters of values that correspond to four culture types: (1) rational, (2) group, (3) hierarchical, and (4) developmental. By balancing the values that correspond to desired outcomes, organizations effectively respond to internal and external developments as well as promote individual well-being (see Figure 1) (Quinn, 1988).
The four clusters of values correspond to four culture models. The Rational Goal Model emphasizes order with a focus on the external environment. Within this rational culture, managers motivate through competition and successful attainment of objectives by emphasizing the values of productivity, performance, achievement, and goal attainment. In contrast, the Human Relations Model emphasizes spontaneity with a focus on the internal organization. Within this group culture, managers motivate through attachment, cohesiveness, and membership by emphasizing belonging, trust, and participation. The Open Systems Model emphasizes flexibility and change with a focus on the external environment. Within this developmental culture, managers motivate through stimulation and variety, by emphasizing growth, resource acquisition, creativity, and adaptation. Finally, the Internal Process Model emphasizes predictability with a focus on the internal organization. Within this hierarchical culture, managers motivate through security, order, rules, and regulations by emphasizing the values of conformity, coordination, evaluation, and internal efficiency.
Based upon profiles that depict the intensity and congruence of these values, respondents recognize cultural imbalances from which to make appropriate adjustments. By unraveling cultural biases, managers recognize that values can become vices, and that an overemphasis of one culture type can cause imbalances and ineffective behaviors (Quinn & Kimberly, 1984; Campbell, 1988). The group culture becomes a country club; flexibility becomes turmoil; control becomes rigidity. By moving out of balance with a single-solution perspective, rational managers discourage individuals and misdirect organizations. To adjust these imbalances, effective managers think in contrasts--that is, they conceptualize opposite values simultaneously Worthington, 1982; Simon, 1987). By intuitively using multiple frameworks, master managers motivate individuals as well as lead organizations effectively (Quinn, 1988).
The competing values framework also incorporates dimensions of human information processing (Quinn & McGrath, 1985; Quinn 1988). Both personal and organizational values regulate perceptual systems and information processes by circumscribing how managers receive and interpret information as well as by determining what alternatives to consider and what strategies to implement. When scanning the environment, perceptual systems distinguish information by its level of uniqueness and uncertainty as well as by its associated level of response time. These information-processing orientations correspond to the values within the four-quadrant framework. Rational managers display a focused orientation and seek independence and achievement within situations of high certainty and short response times. With reliance on previous knowledge, guidelines, and structures as well as with a single purpose, they establish a direction that ensures success. Within the Developmental Culture, adaptive managers display an idealistic orientation and seek risk, growth, creativity, and change within situations of uncertainty and short response times. By relying on intuition and new ideas and with a multiple focus, they concentrate on possibilities that stress adaptability. Consensual managers, within a group culture, display a feeling orientation and seek interdependence and partnership within situations of uncertainty with long response times. Through an interactive decision-making process and with a multiple focus, they guide individuals toward harmony. Within the hierarchical culture, managers seek predictability and security within situations of certainty and long response times. Through systematic verification of facts, and with an emphasis on standards and the status quo, they strive with a single purpose for the best solution. Therefore, the competing values approach accommodates the personal orientations that influence information processing behavior (see Figure 2).
To summarize, using accessible and easy-to-use oral, print, and computer-based sources, decision makers receive stimuli about events and relationships in their company's environment. Although these managers strive to sustain their organizations by interacting with the external environment, their inherent bounded rationality and the boundless nature of the business environment sets limits. In addition, the organizational culture circumscribes scanning activities by focusing information processes and by indicating what sources managers can use and what alternatives they can consider within the decision-making process. Finally, scanning practices vary within the same organization due to the differentiated nature of organizational culture. This variance can be attributed to numerous factors including functional differences and rank within the corporate hierarchy.
Recall that the objectives of this case study are to describe how 220 managers within a Fortune 500 manufacturing firm scan the environment and how attributes of their organizational culture affect this activity.
To maximize the possibility of assessing a full range of managers, a large multidivisional organization was sought. A Fortune 500 manufacturing firm that employed 13,500 individuals within its corporate headquarters, forty-two manufacturing plants, and over 100 distribution centers agreed to participate in this study. To ensure the support of management, cooperation was obtained from senior management. The chief executive officer distributed a letter that encouraged 269 upper- and middle-level decision makers to actively participate in this two-phase study.
Phase one consisted of semistructured interviews of seventy-seven upper and middle managers. This aspect of the study helped to ascertain the dimensions of scanning behavior as well as to appreciate the cultural context and thereby its meanings (Gregory, 1983; Riley, 1983). An understanding of how these managers shape their corporate reality was gained via these interviews and extensive observations of various organizational processes as well as numerous casual interactions with the managers over a three-month period (Morgan & Smircich, 1980). Based upon this information, questionnaires were developed and subsequently distributed during the second phase to 269 upper and middle managers. The quantitative results supplement the qualitative data to provide a portrait of impressions indicating how perceptions affect scanning as well as a chain of evidence justifying how scanning expresses cultural meaning (Jick, 1979; Yin, 1981; Schein, 1987; Van Maanen, 1979, 1988).
With the cooperation of senior management, a purposive sample for the interview phase was drawn from fifty-five managers who made relatively significant decisions based upon information about the external business environment (Kerlinger, 1973). These individuals represented most aspects of corporate operations, including strategic planning, sales and marketing, engineering, research and development, operations, distribution, administration, finance, personnel, as well as information and legal services. These interviewees were located at corporate headquarters as well as at various plants within North America. To those initially selected, an additional twenty-two managers were included when the possible significance of their insights and comments became known to this researcher. Other researchers have used comparable samples to investigate similar relationships requiring broad population characteristics (Kefalas & Schoderbek, 1973; Blandin & Brown, 1977; Hambrick, 1982; Culnan, 1983; Daft et al., 1988; Tyler & Bettenhausen, 1989). This balanced purposive sample of seventy-seven interviewees maximized the possibility that the primary functional and managerial levels would furnish multiple portraits of organizational life. For the questionnaire phase, and with the cooperation of senior management, a purposive sample was drawn from 269 decision makers within corporate headquarters, forty-two manufacturing sites, four research centers, and various distribution centers. In addition to the seventy-seven interviewees, the total sample consisted of representatives from the corporate executive council, senior management, middle management (i.e., the next few layers under the vice-presidents), senior functional areas, as well as supervisory personnel who report to middle management. This balanced purposive sample ensured the inclusion of individuals from the major functional areas and levels of responsibility within the corporation who would adequately describe the relationships under examination. A random sample may not have met this requirement. Furthermore, random assignment is not a prerequisite for the case study approach. Data from the individual semistructured interviews provided an appreciation of the interconnections between values and scanning that existed within this firm. The interviews focused on: (1) how managers valued information, (2) how they used information for decision making, (3) how cultural values support control and flexibility; and (4) the organization's internal or external focus. Principles from organizational development, effective management, and fieldwork guided the interviews (French & Bell, 1984; Schein, 1987; Quinn, 1988).
After the interviewee reviewed a summary of the study see Appendix A) and its purpose was clarified, the respondents addressed the following questions:
1. Do you understand why I am here?
(Purpose: clarified purpose and ensured confidentiality. 2. I would like to know about your job. Can you help me understand
what you do on the job?
Purpose: focused the session on the interviewees prompting them
to talk about their work and to reveal insights about their
personalities. 3. What sources of information do you usually use to find out about
what's happening in the business world?
Purpose: explored the types of sources used and how external
information was distributed through the company. 4. Do you think the company/unit effectively responds to market
shifts? Do you think that the company takes enough risks?
Purpose: described the managerial vision or framework that guides
organizational adaptation. 5. Who determines the direction of the company? Does that mind-set
help or hinder you in gathering information and formulating
(Purpose: identified the openness of the organizational ideology
emanating from senior management and explored its implications
for information distribution. 6. How can this study help you in your work?
(Purpose: revealed specific barriers which may not have been
expressed. 7. Are there any questions that I have not asked that I should have
Purpose: permitted any unexpressed insights to emerge regarding
the relationship between scanning and corporate values.
Thank you very much, I appreciate your cooperation. Be assured
of my confidentiality and the anonymity of your responses.
An instrument consisting of a list of thirteen categories of sources measured scanning scope within six environmental sectors (see Appendix B). These categories include sources that are commonly used in most work organizations. As previous research has shown, although managers use multiple types of information for decision making, they rely on oral sources most frequently due to their high level of perceived credibility and accessibility (Duncan, 1972; Holland et al., 1976; Blandin & Brown, 1977; Huber & Daft, 1987; Daft et al., 1988; Tyler & Bettenhausen, 1989). Even though this pattern has been established, the instrument included categories within the principal media types of written, oral, and electronic sources. These categories have been successfully used in previous studies. Culnan (1983) indicated that these source categories adequately measured information source use and reported Cronbach alphas ranging from .60 to.81. Therefore, use of these categories maintained methodological consistency. Furthermore, although the resulting 78-cell grid was initially imposing, the explication of the thirteen categories with reference to specific sources to which interviewees often referred may have prompted an ease of response. In addition, an explanation of the categories appeared on the page which preceded the grid; as it was not fastened to the survey, respondents refer to it while completing the grid.
Subjects indicated on an ascending five-point Likert scale from "less than once a year" to "dally" how often they used each type of source for acquiring information about events outside the corporation (Daft et al., 1988). The frequency method of measuring scanning scope has been compared with the interest and time methods and has been found to be highly reliable with Cronbach alphas ranging from.58 to.84 (Farh, J-L. et al., 1984). Reliability coefficients for this instrument range from .93 to.80.
To assess cultural values, the competing values instrument was used (see Appendix B). This survey instrument permits systematic investigations of organizational culture and its influence on behavior (i.e., environmental scanning). Furthermore, this quantitative measure enables researchers to make comparisons within and across organizations. From the aggregated responses to twenty-four value statements, six of which correspond to each of the four quadrants, the subsequent profiles represent perceived cultural strengths and weaknesses within each culture type. Respondents indicated the extent to which each item was presently valued as well as how much it should be valued in their work unit. Although the current profiles and the difference scores are primarily used in the analysis, the desired profiles may provide senior management with insights for future development. In addition, eight statements which address specific values of particular interest to senior management were included. However, these were not incorporated into any statistical analyses.
The competing values instrument emerged from an examination of organizational performance indexes (Quinn & Rohrbaugh, 1983). Organizational researchers and theorists evaluated the similarity of effectiveness criteria. Through the use of various multivariate techniques, a three-dimensional space appropriately depicted the similarities. Subsequent interpretations determined that the dimensions reflected: (1) the internal/external organizational focus, (2) the preference for stable/flexible structures, and (3) the means-end approach to desired organizational outcomes. Subsequent incorporation of organizational theories enriched the model, thus providing a robust multilevel framework for diagnosing and initiating individual and organizational change (Quinn, 1984; Quinn & McGrath, 1985; Quinn & Cameron, 1988).
The scales of the four culture quadrants have demonstrated high psychometric validity as well as a high level of reliability (Cronbach alpha from .84 to .77) (Quinn & Spreitzer, 1991). Both convergent and discriminant validity were confirmed in a multitrait-multimethod analysis as well as in multidimensional scaling. In addition, a spatial mapping produced nomological evidence justifying the relationships within and across the four quadrants. In this analysis, the reliability coefficients (Cronbach alpha) for the scales are: the developmental culture (.82), the group culture (.81), the hierarchical culture (.75), and the rational culture (.77).
In summary, three instruments were used during the two phases of this study. In phase one, a series of questions focused on the interviews. In the second phase, a nominally scaled instrument measured frequency of source use and a Likert-scaled instrument assessed cultural values. It should also be noted that, during the second phase, the survey instruments were pretested among fourteen managers who represented the primary functional and managerial levels within various sites of the firm. Because no changes were required, the three-part survey was subsequently distributed via in teroffice and surface mail to 269 upper- and middle-level managers within corporate headquarters, the manufacturing sites, and the principal distribution centers. Follow-up telephone calls were made after the third and fourth week following initial distribution. A total of 269 managers received the survey, 220 (83 percent) responded. Of this total, 208 chose to complete the population characteristics section of the questionnaire. The survey sample primarily consists of male (92.3 percent), middle managers (69.2 percent), between the ages of 30-49 (93.7 percent), responsible for various manufacturing and distribution processes (81 percent), outside corporate headquarters (73.7 percent).
The sample mean of 2.21 (on a five-point scale) indicates that these managers use the thirteen source types to scan the six environmental sectors on an average of a few times per year. In addition, 75 percent of the population is at or below the scale-mean of 2.50, and 6.9 percent (fourteen managers) scan at least on a monthly basis. This mean frequency is relatively low in comparison with recent studies that used similar scales (Culnan, 1983; Daft et al., 1988; Watson, 1990). Further examination of these scores reveals that the most frequently used sources from among the seventy-eight-cell survey grid are subscriptions and conversations with peers and subordinates (see Table 1). On almost a weekly basis, the managers read newspapers, magazines, and professional journals to follow economic developments as well as talk among themselves about competitors and customers. Monthly conversations to peers and subordinates about issues occurring within the six sectors predominate their mode of accessing environmental information. This survey data corroborates interview comments as well as research findings from previous studies which indicate that managers use oral sources more of ten than other media to obtain external information (Keegan, 1974; McLeod & Jones, 1986; Specht, 1987; Daft et al., 1988; Smeltzer et al., 1988).
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Additional insights emerge through a series of ANOVA analyses between frequency and the sample characteristics. Functional specialty categories significantly differentiate scanning frequency. As anticipated, engineers scan technological issues, accountants follow economic conditions, and marketers and salespeople search all sectors. With the exception of the technology sector, managers of information systems use sources the least. Interview comments regarding the task-oriented nature of most managers partially explain associations between function and use of particular source types. The characteristic of corporate location indicates that corporate personnel scan a bit more frequently than production managers with means of 2.32 and 2.16 respectively; economic, technological, and customer issues attract the most attention. Although corporate staff account for only 26 percent of the sample, their positions within finance, engineering, and marketing departments require them to use information more frequently than manufacturing personnel. Operational group categories also differentiate the scanning frequency. Examining the mean scores by operational group indicates that the corporate services and sales groups scan the regulatory (2.88), economic (3.31), and customer (2.59) sectors most often. Furthermore, as with the characteristic of functional specialty, managers of information systems within the distribution and logistics group use sources the least (1.97). This practice is related to the concentrated use of information systems for production and distribution processes, which require an internal focus. Also, a discrepancy exists between the powertrain and chassis product groups. Interview comments and observations revealed that political rivalries as well as differences in managerial focus exist which may, in turn, influence source use within these two product groups.
The comparatively high means for males within the customer (2.41), competitor (2.18), technological (2.35), and regulatory (1.88) sectors reflect the composition of the related departments; the overall mean for females is 1.79. Furthermore, scanning increases with age in all but the technological and competitor sectors. The greater number of engineers and marketers in the lower age groups explains this occurrence. Overall, however, frequency increases with age and, as other data reveal, with managerial level; as tenure and rank in the corporation increases, so does scanning frequency. Finally, management level categories also differentiate frequency. Although middle managers constitute 69 percent of the sample, their use dominates only the customer and technological sectors with means of 2.49 and 2.38 respectively. The number of engineers, sales personnel, and marketers explains this fact. However, the members of the executive council, who comprise 4.3 percent of the sample, are the most frequent users of external information in most sectors with an overall mean of 2.41, which possibly indicates where the external focus of this corporation resides. In contrast, as anticipated, supervisors, whose responsibilities do not require the use of external information, scan the least in all sectors, with an overall mean of 1.97.
Aggregating the mean frequencies by source type into written, oral, and electronic media reveals similar patterns; specifically, managers use oral sources most of ten (2.67) and electronic sources the least (1.56). Upon examining frequency distributions, the majority of the sample scores for total use of written and electronic sources are at or below the scale mean; however, for use of oral sources, only 42.7 percent are at or below the scale mean. In summary, managers scan sources on an average of a few times per year, although they talk among themselves on a monthly basis about most environmental issues. The additional analyses not only reveal the anticipated relationships among function, managerial level, corporate location, and gender but also identify the most frequent scanners to be senior male executives, who, in this manufacturing firm, are marketers and engineers.
Culture was assessed from the responses of each manager to the twenty-four item Likert-scaled Competing Values Instrument. Managers were asked to describe the extent to which values currently operate in their own work unit as well as how values should be practiced. Based upon aggregate scores for each of the four culture types, the culture profiles graphically represent the actual and desired status of the four cultures.
The internal consistency as well as the underlying dimensions of the scales in the Competing Values Instrument were confirmed. The reliability coefficients (Cronbach alphas) for the scales are: the developmental culture (.82), the group culture (.81), the hierarchical culture (.75), and the rational culture (.77), which are similar to other findings (Quinn & Spreitzer, 1991). The factor analysis also verifies the four-factor structure of the instrument.
Results of Factoring the Competing Values Instrument Factor Eigenvalue % of Variance Factor 1 (developmental) 6.78 28.3 Factor 2 hierarchical) 3.79 15.8 Factor 3 (rational) 1.49 6.2 Factor 4 (group) 1.01 4.2 cumulative 54.5
The total sample reveals that the organization presently emphasizes a relatively balanced set of values across all four cultures (see Table 2). The mean differences between the two configurations indicate the desire for flexibility, a greater focus on the external environment, and a marginal increase of control.
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To further examine the similarities among the four culture scales, hierarchical clustering was used. Using the Ward method, hierarchical clusters of mutually exclusive groups were formed on the basis of similar standardized means for the four culture scales (Ward, 1963). This method reduces mutually exclusive groups by estimating the union of possible pairs and clustering the groups according to an established value. Four distinct cultures emerged. A series of ANOVA analyses confirmed the differences among the four profiles.
Profile 1, 2, and 4 display relatively balanced cultures without the dominance of a specific culture type (see Table 3). However, across all four cultures, profile 1 scores are considerably below the mean in all four cultures; profile 2 scores are at or near the sample mean; and profile 4 scores are substantially above the mean in the four quadrants. The "weak comprehensive" culture of profile I represents 15 percent of the sample; profile 2, the "comprehensive" culture, 60 percent; and the "strong comprehensive" culture of profile 4, 13 percent of the sample. Profile 3 displays an imbalanced culture dominated by the hierarchical and rational cultures with a disregard for the developmental and group cultures. This "H-R Culture" represents 12 percent of the sample.
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Cross-tabulations of the clusters by sample characteristics further describe their composition. Proportionate to their size, the eight functional specialties (as well as the age, gender, and corporate location categories) are equally distributed across the clusters. However, management level and operational group categories moderately distinguish the groupings. As the row-tabulated section of Table 4 indicates, middle managers dominate the four clusters; however, they also comprise 69 percent of the total sample. Examining the column-tabulated section reveals that profile 2 includes the majority of managers from within each category, however, this cluster also represents 60 percent of the sample. The functional specialists describe the culture only in terms of profiles 1 and 2, leaving profile 3 membership to supervisors and middle managers and profile 4 to the remaining management levels. As the significance level indicates, management level moderately distinguishes the clusters.
[TABULAR DATA 4 OMITTED]
Cross-tabulations by the operational group categories significantly differentiate the clusters. Although the highly populated "comprehensive" culture includes the largest percentage of managers from each group, the remaining population is unevenly distributed among the other cultures. Powertrain managers constitute 41.4 percent of the "weak comprehensive" culture, and the chassis group dominates the "H-R Culture" (64 percent). The two largest operational categories of manufacturers contain a definite percentage of defectors from the "comprehensive" culture. In contrast, the remaining portion of managers from the nonmanufacturing groups of corporate services, marketing, and logistics categories is more heavily concentrated in the "strong comprehensive" culture than in the "weak comprehensive" culture. Apparently, manufacturers are particularly dissatisfied with the present milieu. During the interview phase, many managers discussed the shift in corporate focus from manufacturing to marketing which angers a sizable portion of engineers, designers, and plant personnel.
ANOVA analyses of difference scores within clusters across the four cultures reveal that the level of balance for each of the "now" profiles indicates the corresponding degree of growth reflected in the "should" profiles. However, managers within all clusters want a slight change in the hierarchical culture. The highly dissatisfied segment within the "weak comprehensive" profiles wants substantial growth across all cultures. The "H-R Culture" profiles represent the flexibility seekers who desire considerable change in the group and developmental cultures; they also want moderate growth in the rational culture as well as a definite decrease in the hierarchical culture. Although the managers within the "comprehensive" and "strong comprehensive" profiles are apparently satisfied, they desire a moderate change in the hierarchical culture, together with growth in the other cultures.
In summary, the profile from the total sample represents a relatively balanced set of values across all four cultures; however, managers want greater emphasis in the future on the values embodied in all but the hierarchical culture. Therefore, the difference scores indicate the desire for flexibility, a greater focus on the external environment, and a marginal increase of control. Furthermore, hierarchical clustering of similarities among the four culture scales identified four distinct clusters. Three profiles reflect a balanced set of values: one culture at the level of the sample mean, another considerably below the mean in all four cultures, and the third substantially above the mean in the four quadrants. The fourth profile displays an imbalanced culture that de-emphasizes the developmental and group culture. As the significance levels indicate, management-level categories moderately distinguish the clusters. However, the operational group categories suggest that manufacturers are particularly dissatisfied with the present environment. ANOVA analyses of difference scores within clusters across the four cultures further reveal that the level of balance for each of the "now" profiles indicates the corresponding degree of growth reflected in the "should" profiles.
The descriptive statistics reveal that managers scan a few times per year and use oral sources more often than other media to access external information. The smallest percentage of the sample comprises the most frequent scanners (i.e., senior male executive marketers and engineers). Furthermore, the total sample feels that the firm practices a relatively balanced set of values across all four cultures. However, in the future, managers want an increased emphasis on the values that are embodied in all but the hierarchical culture. Clustering identified four culture profiles that describe the firm at different levels of comprehensiveness and as overemphasizing the control-focused hierarchical and rational cultures. Sample characteristics reveal that chassis products and powertrain managers are particularly dissatisfied with the present environment.
RELATIONSHIPS BETWEEN SCANNING AND CULTURE
Recall that culture profiles 1, 2, and 4 display relatively balanced cultures without the dominance of a specific culture type. However, across all four cultures, profile I scores of the "weak comprehensive" culture are low; the scores for the "comprehensive" culture are at or near the sample mean; and profile 4 scores of the "strong comprehensive" culture are high. The "H-R Culture" of profile 3 displays an imbalanced culture dominated by the hierarchical and rational cultures with a disregard for the developmental and group cultures. Also recall that the total sample mean for scanning frequency is 2.21 on a five-point scale with 75 percent of the population at or below the scale mean of 2.50.
To examine the relationship among these four cultures and scanning frequency, one-way ANOVA analyses of culture and scanning frequency by source types were conducted. As Table 5 shows, managers within the "comprehensive" and "strong comprehensive" cultures report relatively higher frequency means than the dissatisfied managers within the other two cultures. In the "conversation with outsiders" source-type category of Table 5, the relationships are significant at the .017 level. Furthermore, across the categories in this table, managers within the "strong comprehensive" culture are the most frequent scanners within the total sample. Although these analyses do not yield statistically significant findings, they strongly suggest that the differences in the comprehensiveness of culture profiles relate to scanning frequency.
[TABULAR DATA 5 OMITTED]
Exploring these relationships further, a regression equation was constructed to examine the relative effects of various predictors on scanning frequency. Despite the possibility of multicolinearity, factors that emerged as significant in previous analyses were included in these models. The functional specialty categories and culture profiles which significantly correlated with scanning frequency were included in the first equation (see Table 6). The overall equation as well as some predictors are significant. The positive beta weights for the strong comprehensive profile and the marketing category, as well as negative weights for the information systems and distribution categories, indicate the importance of these factors in comparison with the other variables in this analysis for predicting scanning frequency. These results confirm previous analyses as well as suggested relationships which indicate that membership within the strong comprehensive culture affects scanning. This analysis also demonstrates the importance of function in relationship to source use; specifically, the marketing function encourages scanning while the internally focused systems and distribution operations inhibit scanning.
Table 6. Regression Coefficients for Scanning Frequency beta Predictor Variables weight p-level Information Variables -.1702 .0862 Comprehensive Culture Profile .1440 .1336 General Management .1192 .1938 Finance .0235 .8036 Marketing/sales .1996 .0524 Engineering .0637 .5295 Distribution & Logistics .1853 .0792 H-R Culture Profile .0330 .6969 Strong Comprehensive Culture Profile .1902 .0289 Manufacturing .1405 .2220 F-ratio 4.4870 .0000 Adjusted R square .1470
In summary, the results from correlation analyses suggest that a balanced culture positively influences scanning frequency. Specifically, imbalanced cultures sustain rational managers who rarely scan, while balanced cultures develop adaptive managers who frequently scan. The regression analyses suggest the importance of function and culture membership for determining scanning frequency within this population.
INTERPRETATIONS AND IMPLICATIONS
Within the setting for this study, executives are incorporating a global distribution function into an established multinational manufacturing firm. As a manufacturer, management often relied on the precise calculations of analysts and engineers. However, as a multinational distributor, management must respond to shifting market conditions. This transformation requires learning and growth. However, after foreign competitors invaded the industry, parameters changed, but perceptions in the firm did not. Management sought to absorb the turbulence through a strategy of acquisition and differentiation which eventually eroded the firm's fine-tuned financial foundation. Rather than develop its manufacturing expertise, management chose to exploit the firm's distribution capabilities. To accomplish this corporate lobotomy, management divested the firm of numerous acquisitions and terminated many employees. Although granting short-term financial stability, this operation not only divided the corporation between manufacturers and distributors but also removed considerable expertise from the corporate memory. Within this atmosphere, executives delegate responsibilities and decision making; managers of ten respond with mistrust and fear because they perceive such gestures as efforts to promote compliance rather than flexibility. Administrators attempt to mastermind this transformation by touting a strategy of growth, yet they sustain an environment that reinforces obsolete perceptual frameworks and perpetuates debilitative behavior.
The data on scanning frequency indicate that upper management makes decisions and middle management performs tasks. The low sample mean, the relative similarities of scores, as well as the small number of frequent scanners provide evidence that the sample population, particularly middle management, focuses inward. Regardless of function or position, the most frequently used sources are conversations with employees or outsiders with whom managers relate in conjunction with their job (e.g., marketers speak with salespeople, engineers with manufacturers, production managers with suppliers). As interviewees revealed, a lack of cash flow and time prohibits managers from scanning. Those who come upon external information may route it to decision makers through the firm's ill-defined communication channels, sequester it to revenge the reestablished order, or share it to gain respect, particularly from among the newly appointed members of upper management. Although, to retain the corporate locus of control, leaders of ten intimidate, isolate, and terminate informers.
In addition, the findings regarding the most frequent scanners locate the external focus of the corporation within upper management. Unlike lower levels, these managers supplement their frequent use of oral sources with other media. As interviewees revealed, senior members, who desire key positions within the new coalition, eliminate contradictory information rather than risk repudiation or dismissal. Therefore, irrespective of position or job title, the information-processing framework comprises functional and political factors which can explain the infrequent scanning pattern and ultimately inhibit organizational growth.
The cultural profiles graphically portray the dimensions of these contextual factors as well as provide evidence of their importance in effecting scanning frequency. The comprehensive profile which comprises 60 percent of the population not only represents the sample mean, but, more importantly, the behavioral and perceptual norm. Within this culture, managers, who infrequently scan or challenge policies or procedures, are supported; those who act differently are punished. The strong comprehensive profile comprises the most frequent scanners and open-minded managers within the sample. In addition, a major product group constitutes the majority of this culture. This production unit experiments with relatively innovative management techniques to increase teamwork and responsiveness to internal and external fluctuations. The subsequent optimistic perspective encourages a higher degree of scanning, interaction, and responsibility. In contrast, the most infrequent scanners and closed-minded managers within the sample constitute the weak comprehensive and H-R cultures, both of which are dominated by a second major product group. This product division stresses traditional task-specific behavior to sustain its product line. These irresponsive and bureaucratic cultures support unassertive and compliant attitudes as well as scarce scanning behavior. The normative and dissatisfied cultures prohibit responsiveness. The resultant overly cautious perspective jeopardizes the espoused strategy, which frustrates upper management, who retaliate through intimidation. The responsive defectors within the adaptive culture attempt to break this counterproductive cycle. However, the leaders, who remain buffered within their traditional perspective, view them with suspicion and offer only nominal support.
This corporation permits its triumphs to destroy its future. Personnel cannot scan or engage in other responsive and responsible behaviors because leaders prevent managers from developing an interpretive framework to counteract the negative consequences fostered by the traditional perspective. Regardless of the innovativeness of the technologies or strategies, until they confront these cultural and perceptual issues, leaders impede their own attempts to transform the company.
One cannot generalize from the results of this study because of the nature of the case study approach. Additional studies of managers within the same industry would provide a broader sample to allow interorganizational comparisons. A larger sample may also yield greater variations in the data and, in turn, more significant results. However, as a caveat, these studies must include managers who would, in fact, use external information in conjunction with their job. Second, studies which include relatively large samples of managers within different industries may also provide a basis for comparing firms within product and services sectors. Different levels of perceived environmental uncertainty may also be examined in relationship to usage as well as culture. In addition, provided the sample is sufficiently large, the impact of organizational culture on profitability measured by return on equity may be considered.
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|Title Annotation:||The Library in Corporate Intelligence Activities; includes related information|
|Author:||Miller, Jerry P.|
|Date:||Sep 22, 1994|
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