How interpersonal motives explain the influence of organizational culture on organizational productivity,creativity,and adaptation

Abstract

Despite decades of research on organizational culture, the current literature lacks an orienting paradigm by which research findings can be accumulated regarding specific cultural forms’ influence on specific organizational outcomes. This paper introduces an AIM (ambidextrous interpersonal motives) model of organizational culture. First, drawing on literature from both individual psychology and social anthropology, we suggest that organizational culture can be understood through a framework of interpersonal motives (cooperation, competition, and autonomy). Second, we extend research on organizational ambidexterity to describe both pure and hybrid forms of interpersonally based organizational culture. Third, we suggest that pure forms of culture have consequences for individual achievement and citizenship, with unclear implications for higher level outcomes, while combinations of cultural motives (hybrid forms) have positive consequences for higher level outcomes such as organizational productivity, creativity, and adaptation. Fourth, we address the importance of subcultures and temporal considerations in the model with regard to organizational viability and overall performance. Finally, we outline the theoretical and practical implications for future research in organizational culture.

Keywords

autonomy culture organizational culture

Culture is very, very important. It’s the hardest thing for someone else to compete with, you can go out and get all the tangible things, the material things, the hardware things; but it is very hard to compete with the spirit of the people at Southwest Airlines (Herb Kelleher). (Welch & Byrne, 2001)

Organizational culture has been one of the more difficult constructs to define, measure, and understand in the organizational sciences (Fiol, 2001; Martin, 2002). Although authors contend that attention to the concept is on the upswing (Chao & Moon, 2005; Sackmann, 1997), organizational culture research is still viewed as the missing link to advancing our understanding of behavioral dynamics within organizations (Schein, 1990, 1996). The single greatest challenge regarding organizational culture research has been the difficulty in establishing an orienting paradigm by which research findings can be accumulated. That is, we are presently without consensus as to how to effectively measure an organization’s culture and what particular outcomes one can reasonably expect to predict. Indeed, the term has become the ubiquitous clarion call for both organizational successes (e.g., introductory quote) and organizational failures. In fact, some organizational scholars have embraced the opaque nature of the construct such that the lack of understanding of how organizational culture truly affects organizational outcomes forms the basis for the sustainability of culture-based organizational successes (Barney, 1986).

The description of organizational culture as both ubiquitous and opaque is consistent with the conceptualization of societal culture by sociologists such as Geertz (1973) who views culture as a dogma steeped in thick description. Geertz asserts that “cultural analysis is intrinsically incomplete. And, worse than that, the more deeply it goes the less complete it is (1973, p. 29).” Wilderom, Glunk, and Maslowski (2000) reviewed 10 separate papers linking organizational culture to organizational performance but found that although there was a common pattern regarding a positive correlation, the studies did not generalize. The studies under review neither built on each other’s work nor attempted to provide any common metric or theme. Thus, a present challenge among organizational scientists is to formulate a replicable conceptualization of culture that can consistently predict relevant organizational outcomes.

We introduce a model of organizational culture with three main goals. First, we suggest that one method by which organizational culture can be understood is through a framework of interpersonal motives. We draw upon classic work in both individual psychology (Horney, 1945) and social anthropology (Mead, 1937) to justify focusing on three primary interpersonal motives: competition, cooperation, and autonomy. Second, unlike previous treatments of culture that regard various dimensions as mutually exclusive (Coase, 1937; Deutsch, 1949), or temporally framed (Hong, Morris, Chiu, & Benet-Martinez, 2000) we suggest that firms may derive certain competitive advantages from cultures that exhibit ambidextrous combinations (O’Reilly & Tushman, 2004; Tushman & O’Reilly, 1996). Third, we suggest that particular cultural motive profiles have different consequences for individual achievement and citizenship, unit-level productivity, innovation and adaptation, and organizational performance and viability. We specify three organizational performance outcomes: productivity, creativity, and adaptation. We use the interpersonal motives and the advantages of ambidexterity to draw specific paths to particular outcomes and introduce the ambidextrous interpersonal motives (AIM) model of organizational culture. We end by providing implications of this model along various subcultures within an organization, and implications of this model when considering the temporal life cycle of an organization.

Organizational culture

Although there are many definitions of organizational culture, it is typically understood as a system of shared values and norms that define and guide appropriate attitudes and behaviors (O’Reilly & Chatman, 1996). Culture is represented by artifacts (e.g., images, symbols), values, and assumptions held in common by the members of an organization (Detert, Schroeder, & Mauriel, 2000). These elements then create norms that act as a “social glue” and guide behavior (Golden, 1992).

Formulating a precise definition of organizational culture will require an integration of top–down signifiers provided by leaders and founders (Schein, 1991), as well as agreed-upon norms influencing individual behaviors (Mitchell, 1997). We will employ one useful definition of organizational culture by O’Reilly and Chatman (1996, p. 160) in developing an AIM model of organizational culture. O’Reilly and Chatman define organizational culture as “a system of shared values (that define what is important) and norms that define appropriate attitudes and behaviors for organizational members (how to feel and behave).” Our adapted definition allows for the deletion of the parenthetical explanations by inserting two key words into the definition: strategic and interpersonally. Therefore, we provide the following adapted definition of organizational culture as an emergent strategic system of shared values and norms that define the interpersonally appropriate attitudes and behaviors for organizational members.

Our definition inserts the word strategic to contend that organizational culture can emerge as the outcome of either volitional or unintended strategic decisions detailing how leadership, or strategic human resource management functions, expect organizational members to interact. An example of a strategic decision that informs an organization’s culture would be the implementation of a forced grading distribution at a university. The forced distribution signals to the students that they should spend less time cooperating with other students to help each other reach common learning objectives; and more time attending to their own performance as they now compete for a limited number of high grades. Therefore, actions taken within the localized confines of an organization will have consequences, whether intended or unintended, on subsequent shared perceptions of acceptable behavior. Thus our use of the term strategic clarifies the parenthetical term “that defines what is important” in the O’Reilly and Chatman’s (1996) definition.

Martin (2002) suggested that there are divergent approaches, material and ideational, to studying organizational culture. The ideational approach focuses on subjective aspects of culture such as habits and norms; whereas, the material approach identifies organizational artifacts such as symbols and infers from them the organization’s culture. We insert the word interpersonally to de-emphasize the importance of artifacts and symbols that are critical when studying ancient civilizations. This is not to say that one can’t find value through an analysis of material artifacts within living organizations; but direct observation of living organizations should provide a clearer signal than indirect inferences based on artifacts. In this spirit, we build upon Mitchell’s (1997) assertion that interpersonal motives might provide a superior road map to better understanding how organizational culture can directly influence subsequent organization performance metrics. Thus, our use of the term interpersonally clarifies the parenthetical term “how to feel and behave” in the O’Reilly and Chatman (1996) definition.

In the next section we use this definition to provide a model of organizational culture, not the model of organizational culture. We provide a model of organizational culture that is plausible, not exhaustive. Most importantly, we intend to provide a model of organizational culture that is predictive, not descriptive.

Organizational culture through interpersonal motives

Cooperation and competition

Adler (1933) summed up the potential for psychology to advance our understanding of human nature as the dichotomous exploration of those motivating forces around an individual’s superiority striving and social interest. This dichotomy has been explored consistently over the past century at all levels of analysis. At the individual level, psychologists depicted self and other-centeredness as an individual’s internal struggle between selfish and altruistic tendencies (Adler, 1964; Bakan, 1966). In the group social sciences, interpersonal motives have been characterized in terms of the dimensions of individualism and collectivism (Earley, 1993; Olson, 1965; Wagner, 1995; Wagner & Moch, 1986), or cooperation and competition (Deutsch, 1949; Teger, 1980). Organizational theorists have also recognized both individual achievement (Taylor, 1911) and cooperation (Barnard, 1938) as essential requirements for successful organizations. Classic economists (e.g., Coase, 1937, 1960) detailed the difficulties that firms have in trying to maximize the productivity of a firm through the factors of both individual-level competition and group-level cooperation. At the highest level of analysis, cooperation and competition have even been central constructs to those theorists looking at a single society (Mead, 1937) or multiple societies (Hofstede, 1980; Riesman, 1961).

Although these two interpersonal motives have been central to most theories of behavior, they become insufficient when considering the interactive patterns of larger more technically complex organizations. Aldrich and Mueller (1982) defined an organizational form as an amalgamation of technology, coordination, and control of vital functions. They provide a written history of organizational evolution from simple mercantile family-based businesses to managed marketplaces consisting of highly differentiated organizations with large scope and increased activity. The added stress that an organization endures as it grows creates the need for a third motive that is deeply embedded in the structure of the larger complex organization: autonomy. Classic theories such as organic systems (Burns & Stalker, 1961) provide the rationale for increases in unit-level autonomy in order to function in highly complex environments.

Autonomy

Organic organizational structures differ on many dimensions from mechanistic structures; however, most central is the level of discretion and self-governance required to operate at the highest levels of flexibility and speed. This need for a more open organization was central to structural theories based on a loose-coupling (Cyert & March, 1963) view of organizations as “a coalition of groups and interests, each attempting to obtain something from the collectivity by interacting with others, and each with its own preferences and objectives” (Pfeffer & Salancik, 1978, p. 36). Therefore, in addition to cooperative and competitive interpersonal motives, there is a third motive ramifying from structural needs for autonomy. At the individual level, job characteristics theory (Hackman & Oldham, 1976, 1980) identified autonomy as a critically attractive feature in work design.

The central organizational theory that speaks directly to the influence of autonomy is structural contingency theory (SCT; Burns & Stalker, 1961), which holds that there is no one best way to structure an organization. Successful organizations match their structure to their environment such that functional forms operate most effectively in placid environments while divisional structures operate most effectively in turbulent environments. Hollenbeck et al. (2002) state that the central determining difference between functional and divisional structures is autonomy. Functional structures are more efficient while divisional structures are more flexible. This theory has received support at both the firm (Drazin & van de Ven, 1985; Miller, 1988) and group (Moon et al., 2004) level of analysis. Autonomy, however, has not been exclusively considered an organizational-structure variable. There are theories at multiple levels that consider autonomy as one of three primary motives engaged in by individuals, groups, and even societies.

Cooperation, competition, and autonomy

Societal-level example of three interpersonal motives

Margaret Mead (1937) added a third cultural type to her original two (cooperation and competition) after completing in-depth studies of 13 diverse societal cultures. Her initial focus was on cooperative and competitive behaviors. She hypothesized that the extent to which an overall culture exhibited competitive or cooperative behaviors was directly related to the nature of their technology. For example, people who “habitually pulled together in a big canoe…would also be cooperative in other aspects of their lives where these technological factors did not operate” (Mead, 1937, p. 15). Superior cultures would combine both competitive and cooperative behaviors. However, Mead and colleagues found that the simple cooperative–competitive dichotomy did not capture the full range of motives that existed in the most advanced societies. They added a third category: individualistic behavior. This category was meant to capture “behaviors in which the individual strived toward his goal without reference to others” (Mead, 1937, p. 16).

Group-level example of three interpersonal motives

Deutsch (1949) discussed the valence of goals of individuals within groups. He suggested that in certain social situations, goals might be “promotively interdependent,” whereby, if some members of the group do not attain the goal, other members will not either. Goals could also be “contriently interdependent,” whereby if one person in the group attains the goal, no one else in the group can (a sort of zero-sum arrangement). In between these two types of goals, a third type might exist—that of zero valence, whereby individuals act to attain goals that have little to no relevance on the ability of others to achieve their own goals.

Social interdependence in groups is said to exist when goals are common and the outcome is shared. Yet goals of individuals may be structured in such a way that they have no bearing on the success or failure of others. In this case, individuals would be acting “in their own self-interest with no regard for the success or failure of others” (Stanne, Johnson, & Johnson, 1999). Stanne et al. (1999, p. 134) suggest that individuals may operate in one of three ways in group settings: they may

work together cooperatively to accomplish shared learning goals… work against each other to achieve a goal that only one or a few can attain… [or] work by oneself to accomplish goals unrelated to the goals of others… an individualist structure [such as this third situation] leads to no interaction among participants.

Individual-level example of three interpersonal motives

One of the earliest individual-level acknowledgements of three interpersonal motives can be found in Karen Horney’s work. Like Freud, she characterized individuals as perpetually attempting to resolve conflicts within their inner selves. For Horney, these conflicts “crystallized” along three “main lines”—that people can move “toward people, against them, or away from them” (Horney, 1945, p. 42; original emphasis). According to Horney, some individuals accept their own plight as somewhat helpless; as a result, to survive and prosper, individuals must seek the company of others:

in spite of his estrangement and fears, [the individual] tries to win the affection of others and to lean on them… by complying with them, he gains a feeling of belonging and support which makes him feel less weak and less isolated. (Horney, 1945, p. 42)

To the extent that individuals are concerned with moving against others Horney (1945, p. 43) noted that the individual “accepts and takes for granted the hostility around him, and determines, consciously or unconsciously, to fight… he wants to be the stronger and defeat them, partly because for his own protection, partly for revenge.” Finally, with regard to the idea that individuals move away from others, Horney (1945) postulated that the individual may choose not to operate in the context of others—he/she may choose to keep apart thereby building up a world of their own.

Recent research on goal interdependence has also used a tripartite description of how individuals perceive their relationship to others (e.g., Johnson, Maruyama, Johnson, Nelson, & Skon, 1981; Tjosvold, 1986a, 1986b; Tjosvold, Andrews, & Struthers, 1991). Individuals may believe their goals are either positively linked (cooperative), negatively related (competitive), or unrelated (independent) to the goals of others. Results suggest that perceptions of goal interdependence may impact how effectively managers influence subordinates (e.g., managers with cooperative goals relied on collaborative influence and positively influenced employee work and commitment; Tjosvold et al., 1991).

The AIM model of organizational culture utilizes these three interpersonal motives as a foundation to describe organizational culture. Although there are many viable alternative taxonomies of cultural forms (i.e., Hofstede, 1980; O’Reilly, Chatman, & Caldwell, 1991), we begin to build theory linking the AIM model of organizational culture to specific organizational outcomes. More importantly, recall that in our amended definition of organizational culture organizations can volitionally influence the emphasis of each of these motives in guiding the day-to-day expectations of interpersonal behaviors. Figure 1 provides a representation of how the three motives, in combination, lead to three specific organizational outcomes: productivity, creativity, and adaptation. Specifically, three organizational outcomes (creativity, adaptation, and productivity) touch on two particular motives in the center triangle. For example, the productivity outcome touches on competition and cooperation while creativity touches on cooperation and autonomy.

Figure 1.

Ambidextrous Interpersonal Motives (AIM) and related outcomes

Wilderom et al. (2000) conducted a review of the link between organizational culture and organizational performance (C–P) and were generally pessimistic. They note that the actual testing of a C–P link has only occurred over the past couple decades. Their review revealed that a major deficiency in C–P research was the lack of congruence across studies. One problem lay in the fact that researchers employed disparate conceptualizations of culture. However, equally problematic was different dependent variables predicted by organizational culture such as: return on sales (Denison, 1990), money raised (Rousseau, 1990), market share (Marcoulides & Heck, 1993), and perceived performance (Denison & Mishra, 1995). A common theme of all of these dependent variables was an attempt at measuring a generalized form of organizational performance.

Sørensen (2002) introduced an important advancement in C–P based studies by exploring the ability of a firm to excel at change. Sørensen looked at both reliability and variability of firm performance sustainability resulting from either strong or weak corporate cultures. The implicit argument is that the strength of an organization’s culture serves both as a buffer and stabilizer against a hostile environment. Sørensen (2002) provided a different outcome (temporal viability) than previous research on influence of organizational culture. Indeed, we feel that it is time for a model of organizational culture that not only details the relevant independent variables but also maps these variables to clear outcomes.

Organizational outcomes influenced by interpersonal motives

The conceptualization and measurement of general organizational performance is immensely complex (March & Sutton, 1997). There are a multitude of viable ways in which performance can be measured each with its own parochial strengths and limitations. Our model proposes three criteria of interest: productivity, creativity, and adaptation.

Productivity

Productivity is a well-established construct that is synonymous with classic conceptualizations of efficiency. Productivity at any level of an organization can be assessed by considering the level of overall output given either a fixed amount of inputs or number of employees. A shipping company in the UK assesses its productivity as a ratio of how many employees at HQ are required to manage a fixed number of ships. Either an increase in the number of managed ships with the same number of employees or a lower number of employees managing the same number of ships or any positive combination thereof would be considered a productivity increase. Other companies might assess productivity as unit cost of their product or speed of production. Nations calculate a productivity index to detail the ratio of aggregate output given a population of workers.

Creativity (innovation)

Organizational creativity explains why some firms outgrow others and why some firms’ products are more valued than others. Organizational innovation is often indistinguishable from organizational creativity, which is defined as an idea that is both novel and useful (Amabile, 1988). Our conceptualization of organizational creativity maps directly with that of Moran and Ghoshal (1999) who consider innovation as value creation, but we focus on creativity as the foundation from which innovation blossoms. Baldwin and Clark (2000) define value as a measure of a product’s worth in a particular social context. Creativity-based innovation can be measured in various ways, from a hard count of the number of patents to price premium for similar product groups.

Adaptation

Adaptation has received relatively less attention than productivity and creativity. Like creativity, adaptation is related to change. These two critical dependent variables have been researched along two distinct paths, and critical similarities and differences between creativity and adaptation have not been directly addressed in any single study. However, we theoretically distinguish creativity and adaptation by stating that creativity is more concerned with value creation while adaptation is more concerned with viability. In other words, creativity is more concerned with creating markets (internally driven, proactive) while adaptation is more concerned with reacting to market conditions (externally driven, reactive). This difference reveals a critical distinction between the two constructs regarding their orienting strategy. While creativity takes an endogenous view of change and value creation (inside–out) adaptation takes an exogenous view of change and viability (outside–in).

Hannon and Freeman (1977) conceptualized adaptation as the ability of an organization to remain relatively intact throughout its life cycle and the life cycle of the population of firms within its competitive milieu. In this regard, adaptation can be conceptualized and measured as a simple binary function (i.e., 0 = the death of a firm; 1 = the firm's ability to survive or remain viable). Galaskiewicz and Bielefeld (1998) studied nonprofit organizations during an economic downturn and documented different strategies employed by organizations such that some organizations stayed rigidly true to their initial mission while other organizations chose to change, sometimes dramatically, their mix of product and services. A classic example of an adaptive outcome was Zald and Denton’s (1963) description of the transformation of the YMCA from its initial mission as a religious welfare-based organization to a recreation center for middle-class families. In sum, adaptation can be used as a survival measure or as a change-related construct.

Interpersonal motives and organizational outcomes

Having detailed the three primary interpersonal motives and three primary organizational outcomes, we can now begin to develop specific propositions regarding how the various interpersonal motives might relate to specific organizational outcomes. In Figure 1 we offered a depiction of the AIM model of organizational culture through ambidextrous combinations of various motives on specific outcomes. This next section will be segmented into three parts. First, we will detail how each of the individual motives has been clearly associated with individual outcomes; with less clarity in regard to organizational outcomes. An implicit assumption of our model is that a culture that focuses on any single motive is easily imitable. That is, although there are benefits to having a culture focused on cooperation, competition, or autonomy, organizational-level sustainable and inimitable advantages accrue when an organization successfully combines different motives. The reason for the added difficulty in maintaining a culture with multiple motives is that they often seem to be contradictory (i.e., having both autonomy and cooperation as cultural motives).

Cameron (1986, pp. 544–545) addressed the complex environment in which organizations operate and extolled the benefits of organizational paradoxes by stating, “Organizational effectiveness is inherently paradoxical. To be effective, an organization must possess attributes that are simultaneously contradictory, even mutually exclusive.” Organizational paradoxes are mutually exclusive elements that are seemingly contradictory yet operate simultaneously within an organization, and ambidextrous organizations are able to maximize the synergies inherent in these contradictions (O’Reilly & Tushman, 2004). In regard to the aforementioned interpersonal motives, Horney (1945, p. 45) noted that there is no reason to believe that the three motives should be mutually exclusive: “One should be capable of giving in to others, of fighting, and of keeping to oneself.” In fact, a general proposition of the interpersonal motives theory of organizational culture is that ambidextrous forms of motivational cultures are required to elicit sustained higher level outcomes, and different combinations of interpersonal motives lead to different organizational outcomes.

This general proposition is based on the notion that ambidextrous organizations (Tushman & O’Reilly, 1996) have advantages over their more simplistic rivals. O’Reilly and Tushman (2004) addressed the ability of organizations to capture both the exploitation of current opportunities and the exploration of future possibilities by engaging in ambidextrous behaviors such that executive structure embraces both independence and integration. We offer that the AIM model improves on the notion of ambidexterity by detailing how different combinations of interpersonal motives lead to different organizational outcomes. Table 1 details the next section of our model development.

Table 1.

Hybrid forms of motivational culture and associated performance orientations

		Potential outcomes
Interpersonal Motives	Underlying Assumptions	Pure Forms	Hybrid	Complex
Cooperation	Inherent good in others. Benefits of shared outcomes	Higher levels of individual citizenship
Competition	Limited resources make winners and losers	Higher levels of individual achievement striving
Autonomy	Internal locus of control, self-motivation	Higher likelihood of divergent and creative outcomes
Cooperation-Competition			Sustained Productivity advantage
Competition-Autonomy			Sustained Adaptation advantage
Cooperation-Autonomy			Sustained Creativity advantage
Subcultures				Sustained Organizational Performance
Lifecycle				Sustained Organizational Viability

Pure cultural forms and individual outcomes

Cooperative motives

Barnard (1938) exemplified the importance of a cooperative environment by proposing that the most critical function of executives is the ability for them to engender a cooperative spirit among an organization’s members. Katz and Kahn (1966) noted the critical importance of spontaneous and innovative behaviors beyond an individual’s role requirement. They specifically state that an organization’s long-term viability is entirely dependent on the positive volitional behaviors of its members. Ouchi (1980) made the case for a “clan” mentality wherein individuals act in the best interest of the collective.

Organizational citizenship behaviors have been closely associated with cooperative cultures in the organizational sciences (Lepine, Erez, & Johnson, 2002; Organ, 1988). Organ (1988) defined citizenship behaviors as volitional actions that are usually not rewarded by organizations or within the formal job scope of the individual. Podsakoff, MacKenzie, Paine, and Bachrach (2000) noted a substantial increase in attention among organizational scientists in documenting the antecedents of these forms of behaviors. Moon, van Dyne, and Wrobel (2005) noted that this literature has conceptualized the different behaviors along the lines of either focused on other individuals or the organization, and either oriented toward promoting or protecting the organization. Although cooperation has been linked closely to individual-level citizenship, there is not an established link between individual citizenship and higher level outcomes.

Competitive motives

An individual is characterized as having competitive motives when he/she is focused on self-oriented achievement striving, sometimes at the expense of others. The underlying assumption involved behind this set of motives may be a belief that the world is a challenging place where limited resources (a fixed pie or zero-sum game) make for conditions that create winners and losers.

A classic example of the benefits associated with a competitively driven motive structure was provided in Taylor’s (1911) seminal management text, which noted that maximizing productivity in an organization is accomplished first by selecting the most able workers via competitive assessment of their ability, and then by compensating them solely on their individual output. A contemporary model of a competitive motivational culture can be found in the environment surrounding a tournament atmosphere (Becker & Huselid, 1992; Lazear & Rosen, 1981; O’Reilly, Main, & Crystal, 1988). A central theme found in all competition-based models of performance is that competition will lead to positive organizational performance through individual achievement (Smith, 1776/1937; Taylor, 1911). However, do the motives of individual achievement always lead to higher levels of productivity at higher levels of analysis?

Moon (2001) linked individual achievement striving to self-centered decision making. Specifically, he found that achievement strivers tended to invest more organizational resources into a failing project for which they were responsible. Moon, Kamdar, Takeuchi, and Mayer (2008) found that achievement strivers were less likely to engage in innovative citizenship behaviors in the form of offering suggestions to improve the organization. Therefore, one would expect individual achievement in a competitive culture with less clear higher level implications, especially when cooperation is required.

Autonomous motives

An individual is characterized as having autonomous motives in the context of the workplace environment when he/she appears to be focused on self-oriented activities outside the context of other individuals. In other words, the focal individual is simply concerned with his/her own activities, without paying special attention to or being concerned with what those activities are in relation to what anyone else might be doing at any given time.

Related characteristics may include a strong sense of self-motivation, high levels of self-esteem and generalized self-efficacy, in addition to tolerance for ambiguity and an internal locus of control. These characteristics have led to the proposed benefits of autonomy through work design (Hackman & Oldham, 1976). Autonomy has been linked to both flexibility (O’Reilly & Tushman, 2004) and creativity (Zhou, 1998). However, although autonomy can be based on the hope that it allows individual talent to emerge, it can also serve as a way to ostracize the individual (Williams, 2007), which will lead to alienation and lower productivity (Williams & Sommer, 1997).

Ambidextrous forms and organizational outcomes

Competition and cooperation: The productivity hybrid

Recent work by Beersma et al. (2005) and Hollenbeck et al. (2002) has attempted to unlock the intricate contingencies in determining the proper use of cooperative or competitive team structures. The extent to which either competition or cooperation is superior has been thought to be contingent upon the level of work interdependence (Deutsch, 1949; Rosenbaum et al., 1980; Wageman, 1995). For example, Deutsch (1949) viewed a cooperative structure as one in which an individual feels that the advancements of others are positively related to the advancement of themselves. Conversely, a competitive structure is one in which the advancement of others is negatively related to the advancement of themselves. This leads to a seeming paradox wherein if one asserts that a competitive and cooperative environment can coexist, a condition must be reached such that advancements of others are both positively and negatively related to the advancement of oneself. Nonetheless, a string of recent organizational scholars have argued for just that paradox (Brandenburger & Nalebuff, 1996; Katz, 2001; Mirvis, 1998; Robbins & Finley, 1998)

Brandenburger and Nalebuff (1996) coined the phrase “co-opetition” to exemplify the most advanced form of productivity an organization can strive for among its members. Katz (2001) explored simultaneous competitive and cooperative behaviors in a sports context and proposes that those teams that are both highly competitive and cooperative are most successful. Becker and Huselid (1992) used auto racing as an example of a context in which both competition and cooperation are evident. Although racers compete with each other in order to maximize their finishing place, they cooperate with each other in order to minimize accidents. That is, during the course of a race, those drivers that are near the rank of other drivers compete fiercely. However, when two drivers of significantly different rank encounter each other, for example one of the top three cars and one near the bottom, the lower ranked car will give way.

Lado, Boyd, and Hanlon (1997) proposed a theory in which firms that both compete and cooperate engage in “syncretic” rent-seeking behavior that is associated with the highest levels of organizational performance. Organizations that are able to excel at the creation of cooperative relationships while maintaining a high level of competition within their industry are thought to enjoy critical advantages. Thus, the positive relationship between a competitive culture and productivity will be increased in the presence of a simultaneous cooperative culture.

The focus on the benefits of an ambidextrous culture including competition and cooperation has revolved around the fact that each has benefits for productivity (Smith, 1776/1937; Teger, 1980). When discussing the influence of autonomy, however, the link to productivity is not so clear. Hollenbeck et al. (2002) detailed the efficiency limitations of an autonomous structure based on the fact that often the right hand might not know what the left hand is doing. That is, there are inherent possibilities of both redundancy of effort and lack of coordination and learning. Autonomy, however, has often been linked conceptually to flexibility and change (O’Reilly & Tushman, 2004). A central tenet of the AIM model of organizational culture is that there are both structural and interpersonal ramifications of increases in autonomy that will clearly diminish the overall productivity of the organization. However, the benefits of autonomy will be realized in other outcomes such as innovation and adaptation. This tenet is consistent with the corporate strategy literature that distinguishes between exploitation (efficiency and productivity) and exploration (innovation and adaptation) orientations. In other words, we rely on the assumption that, by definition, autonomy decreases productivity because of both structural limitations and the lack of motives engendered by competition and cooperation.

Competition and autonomy: The adaptation hybrid

The importance of organizational adaptation is documented by Tushman and O’Reilly (1996) as they observed how various organizations’ viability waxes and wanes in response to environmental shifts. Chandler (1962) noticed that as organizations increased in size and complexity, a natural byproduct was an increase in the level of autonomy associated with organizational fragmentation. Williamson (1975) proposed a solution to the pressure created by the link between size and fragmentation based on a multidivisional-form (M-form) organizational structure. The premise of the pure M-form organizational structure supposes that the external capital market’s ability to punish poor performance and reward good performance via resource allocation has positive performance implications at the firm level by allowing an artificially insular firm-level market to accurately reflect the changing demand functions of the firm’s environment.

Similarly, organizational cultures that embrace reward systems linking the autonomous individuals’ or units’ performance to the allocation and reallocation of organizational resources should have positive adaptive implications (Armour & Teece, 1978; Hill & Hoskisson, 1987). This is a direct derivation of competition and its focus on a natural selection (e.g., Darwinian) or “survival of the fittest” mentality. The application of population ecology theory to organizations suggests that environments essentially select organizations for survival based on whether certain organizational forms fit with environmental characteristics, largely because organizations face a great deal of structural inertial pressure that prevents them from being naturally adaptive (e.g., Aldrich, 1979; Hannan & Freeman, 1977).

A competitive focus alone, however, would provide organizations with only some of the elements required to successfully adapt and survive the natural selection process in a turbulent and complex environment. That is, competition among an insular group only guarantees that the best of that particular group will succeed, not that the representation of the group accurately reflects what a changing environment requires. The added benefit of autonomy coupled with a competitive culture is that different perspectives should emerge due to the lack of central coordination among the various units. This can be directly contrasted with the case of cooperation wherein the group would only promote one agreed-upon strategic solution. Thus, the positive relationship between a competitive culture and adaptation will be increased in the presence of a simultaneous autonomous culture.

Cooperation and autonomy: The creativity hybrid

Although Amabile (1988) viewed creativity as a necessary but not sufficient condition of innovation, creativity and innovation have been closely coupled at multiple levels of an organization (Ford, 1996; Woodman, Sawyer, & Griffen, 1993; Woodman & Schoenfeldt, 1990). Recent literature exploring the antecedents to individual creativity in organizations has proposed that autonomy is a critical factor in determining the generation of new and novel ideas. For example, Zhou (1998) found interactive effects between level of organizational autonomy and an individual’s level of creativity while Shalley, Gilson, and Blum (2000) interviewed over 2,800 individuals and found that their level of autonomy was directly related to individual creativity.

The literature on ambidextrous organizations advocates the separation of new, exploratory business units (sometimes referred to as skunk-works) from traditional, exploitative units (e.g., O’Reilly & Tushman, 2004). The assumption is that the autonomy experienced by the exploratory business units will allow them to act in a more innovative manner, both in terms of their organizational innovation (i.e., developments in organizational structures and administrative processes) and technological innovation (i.e., the commercialization of new technological knowledge and ideas into new products or processes; He & Wong, 2004; Poole & van de Ven, 1989).

Along with the importance of autonomy is a concurrent body of literature extolling the virtues of cooperation when trying to elicit creative behaviors (George & Zhou, 2001; Shalley & Perry-Smith, 2001). Oldham and Cummings (1996) found that manufacturing employees were most creative when they were supervised in a noncontrolling and supportive fashion, similar to what O’Reilly and Tushman (2004) suggested in terms of what senior leadership should do when trying to develop ambidextrous organizations. Thus, the positive relationship between a cooperative culture and innovation will be increased in the presence of a simultaneous autonomous culture.

AIM through subcultures and life cycles

What is the ultimate form of an organization? Does it seem feasible that a large organization would not contain elements of all three interpersonal motives? Furthermore, organizations seek all three positive outcomes related to productivity, creativity, and autonomy. Therefore, how do the various ambidextrous combinations operate within the scope of a large firm? We proffer that through subcultures and time, organizations incorporate the various ambidextrous combinations, and that firms which are able to blend these forms most appropriately stand to benefit the most.

Subcultures

It is conceivable that all three motives could be present in large organizations through various organizational subcultures. Indeed, one can argue that no complex organization can exist without all three interpersonal motives. Since organizations are generally divided into subunits, it is quite possible that these subunits can and should maintain a unique subculture that is distinct from the rest of the organization and more consistent with their particular mission. This means that at any one time, multiple organizational cultures can exist within an organization. We offer that overall organizational performance is based on maximizing the productivity of units that are tasked with exploiting competencies, maximizing the adaptability of units that are sensitive to external evolution, and maximizing the creativity of units that are seeking to innovate.

To begin we conceptualize the utility of the AIM model of culture through various small enterprises and then combine these different enterprises within the scope of a large organization. First, consider the typical small engineering firm. This firm is often tasked with developing innovative products through the creative process. The AIM model would propose that the creative firm concentrate on the combination of a cooperative and autonomous culture with less emphasis on competition among its members. Second, consider a typical manufacturing firm. This firm is tasked with producing a product in the most efficient manner possible. The AIM model would propose that the manufacturing firm should concentrate on building a cooperative and competitive culture while de-emphasizing autonomy. Third, consider a typical sales organization. This organization is tasked with selling successfully to the external market. The product is only relevant to the degree that the salespeople can find an adequate number of buyers. The AIM model would propose that the sales firm should focus on building a culture around competition and autonomy with generally less focus on cooperation. Specifically, through independent trial and error, the sales organization should evolve toward an adaptive mix of the appropriate products with the most effective sales techniques that meets the requirements of a changing environment. Those salespeople who are successful should be mimicked but it takes the various approaches provided by an autonomous culture to engender a larger number of different strategies.

A large organization is comprised of each of these smaller departments, each with a different mission: research and development, manufacturing, and sales. Thus, one can conceptualize a large organization as a cluster of various ambidextrous combinations of interpersonal motives. Even companies that are thought to be high-tech or highly creative will have components of its firm that are more conventional and rigid in its purpose, structure, and culture.

Time

Within any large complex organization, there are clearly subunits which may require a different subculture to reach different objectives. Nonetheless, many large organizations can still maintain an overarching organizational culture based on mission statements or socialization patterns. A final question, however, needs to be answered regarding whether there are systematic cultural themes based on a reflection of the life cycle of the typical organization as it grows from infancy to maturity.

Although any large organization can have a dominant focus which would lead to the preeminence of different interpersonal motives; it is quite possible that the various ambidextrous forms will be differentially important throughout a typical organization’s life cycle. For example, organizations in their earliest stages are critically dependent upon innovation (autonomy and cooperation) to capture new markets, or develop a unique niche. They must create a valuable product to a static environment at a given point in time. Those organizations that have successfully established themselves in a market must then meet the challenge of increased productivity (cooperation and competition) as the demand of their product grows. Humphrey, Moon, Conlon, and Hofmann (2004) found the general tendency to focus on production at the midpoint of projects. A small company can get away with inefficiencies that a larger organization can’t. The importance of economies of scale and of clearing the initial organic growth wall faced by the typical small start-up firm requires a different focus.

Finally, although environmental changes can occur at any point in an organization’s life cycle, the likelihood that the environment will change should increase over the course of time. Once an organization has innovated itself into a market, and successfully met the challenges of growth, it then must begin to ensure that it can adapt (competition and autonomy) to environmental changes. The importance of an adaptive culture becomes more salient as the organization becomes institutionalized and rigid over the course of its existence. All else being equal, the importance of ambidextrous forms differ in their importance throughout the life cycle of a firm such that, in general, innovative cultures are more important in the earlier stages, productive cultures are more important in the middle stages, and adaptive cultures are more important in the later stages of an organization’s life.

Conclusion

We developed a theoretical model of organizational culture based on a framework of interpersonal motives. Drawing on theory from individual psychology (Horney, 1945) and social anthropology (Mead, 1937) we proposed a tripartite model of interpersonal motives including cooperation, competition, and autonomy to describe how culture influences performance at the organizational level. In doing so, we extended the literature on organizational ambidexterity by suggesting that (a) combinations of these interpersonal motives lead to hybrid cultural forms and (b) these hybrid forms result in certain competitive advantages over the advantages of the pure forms. Specifically, we proposed that the competitive–cooperative hybrid is linked to productivity, the competitive–autonomous hybrid is linked to adaptation, and the cooperative–autonomous hybrid is linked to creativity. Finally, we explained how complex forms of these motives can occur through organizational subcultures and the organizational life cycle.

From a theoretical perspective, this conceptualization makes three main contributions. First, it uses a bottom–up approach to understanding how organizational culture manifests through interpersonal relations. Specifically, the extent to which organizational members are motivated to cooperate, compete, and be autonomous as an aggregate leads to the construction of agreed-upon norms of attitudes and behaviors that make up the culture of the organization. Second, it extends the theory of organizational ambidexterity to look at the implications of ambidexterity from a cultural perspective. Third, this model suggests a mechanism for cultural change and complexity through subcultures and over time.

The next steps in the development of this model include identifying the mechanism of aggregation and specifying an approach to measurement. First, researchers should reflect on the mechanism involved in the aggregation of interpersonal motives to the organizational level. Previous research on the aggregation of mood in groups via emotional contagion (e.g., Barsade, 2002) might provide a launching point for this discussion. Second, we consider the issue of measurement. While there has been a relative proliferation of measurement instruments recently to assess the essential norms and values that make up culture within organizations (Chatman & Jehn, 1994; Hofmann & Jones, 2005; House, Hanges, Javidan, Dorfman, & Gupta, 2004; O’Reilly et al., 1991) it is important for researchers to reflect on the theoretical basis of their work and select a measurement approach that fits best with their theory. In the case of examining the cultural antecedents of organizational performance, the three-dimensional approach to organizational culture that we postulated here—with the understanding that the three dimensions are not orthogonal and can be combined into various hybrid forms—may be the optimal way to consider culture. Therefore, the development of an appropriate measurement tool to evaluate these dimensions would represent a significant contribution.

Footnotes

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

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