European Sport Management Quarterly, Vol. 5, No. 1, 1 /22, March 2005
ARTICLE
Leader Intentions and Employee Perceptions of Organizational Culture in a Private Fitness Corporation ERIC MACINTOSH & ALISON DOHERTY School of Kinesiology, The University of Western Ontario, Ontario, Canada
ABSTRACT Understanding ‘‘how things are done around here’’ is an integral part of managing any organization. Organizational culture may impact the attitudes and behaviour of members, and the performance of the organization as a whole. Thus, the indoctrination of positive values, that become widely understood, is the likely intention of the organization’s leaders. This study examined leader intentions and employee perceptions of organizational culture, as well as the existence of distinct subcultures, and the further influence of subculture on staff behaviour (intent to leave) and organizational performance (profit margin, client retention). Qualitative and quantitative methods were used to describe the specific culture of the focal organization. The study revealed a significant culture gap between the leaders’ intentions and employee perceptions, and the existence of subcultures by organizational level (head office versus club). The strength of the respective subcultures was inversely associated with employee intentions to leave the organization, however club subculture had little association with performance in terms of profit margin or client retention rates. The findings suggest that culture has a more direct influence on employees and a less direct influence, if any, on organizational performance. The results extend our understanding of the nature and influence of organizational culture and subcultures, and have implications for their management within the focal organization.
One of the most recent considerations in organizational theory is the concept of organizational culture. It evolved in the late 1970s from the contention that a shared understanding among members about how things are done within an organization may be one of the most, if not the most, distinguishing features of successful and unsuccessful organizations. Headlines, articles and stories in leading trade journals are a testament to the popularity and seeming importance of organizational culture in manageCorrespondence Address: Eric MacIntosh, School of Kinesiology, 3M Centre, The University of Western Ontario, London, Ontario, Canada N6A 3K7. Email:
[email protected] ISSN 1618-4742 Print/ISSN 1746-031X Online # 2005 European Association for Sport Management DOI: 10.1080/16184740500089557
2 Eric MacIntosh & Alison Doherty ment: ‘‘How to use your organizational culture as a competitive tool’’ (Mitchell & Yates, 2002); ‘‘Culture club’’ (Atwal, 2004); ‘‘Managing a growth culture’’ (Benko & McFarlan, 2004). As Edgar Schein (1999), one of the most prominent scholars on organizational culture, noted, ‘‘Culture is deep, extensive, and stable. It cannot be taken lightly. If you do not manage culture, it manages you’’ (p. 185). Organizational culture is an aspect of organizational dynamics that some would say describes the essence of the organization. It is purported to have a substantial impact on the attitudes and behaviour of people in the organization, and on the performance and effectiveness of the organization (see Deal & Kennedy, 1999; Doherty & Chelladurai, 1999; Goodman & Svyantek, 1999; Kotter & Heskett, 1992; Siehl & Martin, 1988). Organizational culture is relevant to sport organizations, which are often searching and struggling to enhance the satisfaction, commitment, and performance levels of their employees, and to maintain a competitive advantage in the marketplace. Since the early work of Pawlak (1983), organizational culture has drawn the increasing attention of sport management researchers as a critical organizational phenomenon (Colyer, 2000; Costa & Doprano, 2001; Doherty & Chelladurai, 1999; Kent & Weese, 2000; Scott, 1997; Smart & Wolfe, 2000; Southall, 2001; Wallace & Weese, 1995; Weese, 1995, 1996; Westerbeek, 1999). With the intent of enhancing our understanding of organizational culture in the sport realm, the purpose of this study was to examine the phenomenon within a prominent company in the fitness industry. The focal organization, which is described later in more detail, is considered to be one of Canada’s most successful companies in any field (Daniszewski, 2004). The first focus of the study was to identify the leaders’ intended culture, describe the dominant culture perceived by the organization’s employees, and determine whether a ‘‘culture gap’’ between the two exists. The second focus was to investigate the existence of subcultures with respect to individual (age, gender, years in the organization) and structural (hierarchical level in the organization) variables. The third focus of the study was to determine whether the dominant organizational culture or any subcultures were associated with individual behaviour, in terms of employee intent to stay with or leave the organization, and organizational performance, in terms of club profit margin and client membership retention. Of particular interest in the organizational culture literature is the notion of what constitutes organizational culture and how it is known, how it evolves and how it can be strengthened or changed, whether there is more than one culture (or subcultures) within an organization, and ultimately whether culture and/or subculture makes a difference. These issues are addressed in the following sections.
Leader Intentions and Employee Perceptions of Organizational Culture 3 An Overview of Organizational Culture The literature on organizational culture has given rise to many variations in its meaning, yet common themes have emerged. The essence of organizational culture may be described as an underlying pattern of shared assumptions, values, and beliefs that are fundamental to the way of thinking and acting on problems and opportunities in an organization, and that are expressed in organizational processes and member behaviour (Deal & Kennedy, 1999; Denison, 1990; Martin, 1992; Sackmann, 1992, 2001; Schein, 1985; Siehl & Martin, 1988). Organizational culture has also been described as the ‘‘learned, shared, compelling, interrelated set of symbols . . . [that] provide a set of orientations for members’’ (Terpstra & David, 1991, p. 6), and may be described as the glue that binds people together (de Mooy, 1998). Organizational culture provides a sense of identity for the organization and for its members (Parker, 2000), while providing ‘‘guidelines and rules for how to behave and, most important, reducing and containing the anxiety of dealing with an unpredictable and uncertain environment’’ (Schein, 1991a, p. 15). It is argued that an organization’s founder(s) and leader(s) will undoubtedly influence and shape organizational culture, through the values they reiterate, reinforce, and celebrate (Denison, 1990; Schein, 1985, 1991a). Indeed, a particular focus of the leadership area has been the leader’s role in creating, maintaining, or changing organizational culture (Weese, 1995). It is understandable that senior management would want to have substantial input into the core values that govern organizational life. However, a key component of any definition of organizational culture is that it is a shared understanding of how things are done within an organization (Schein, 1999). ‘‘Organizational culture is an evolving pattern of values and assumptions that reflects the members’ shared experiences’’ (Doherty & Chelladurai, 1999, p. 286); it may be directed, but it is not ultimately determined, from above. This implies the possibility of a ‘‘culture gap’’, between what organizational leaders want and have attempted to instill in their employees, and what those employees perceive the culture to be. A culture gap may be problematic for both management and staff, as ambiguity, uncertainty and misunderstanding about expectations may result. The existence of such a gap between what leaders intend and what employees perceive may reflect the strength of the organizational culture. An organizational culture is said to be strong to the extent that members agree that certain values exist. A strong or ‘‘thick’’ culture is one where there is a wide and deep realization of common values and beliefs about the organization (Schein, 1985). Interest in culture strength is based on the premise that a strong culture reduces uncertainty about organizational expectations of individual members (Robbins, 1996). The informal rule system in strong cultures spells out how people should behave (Scott, 1997). A strong culture provides the organization with a value system that is consistent and agreed upon, thus helping to remove uncertainty surrounding
4 Eric MacIntosh & Alison Doherty roles and rules of the organization (Deal & Kennedy, 1999). Indeed, Alvesson and Berg (1992) note that cultural control mechanisms complement, and sometimes are superior to, other forms of corporate control. As well, a strong culture is purported to help create a better ‘‘fit’’ when hiring new employees (Goodman & Svyantek, 1999), contribute to higher retention among employees (Bretz & Judge, 1994; Sheridan, 1992), increase employee productivity (Denison, 1990), foster superior organizational performance over the long term (Barney, 1986; Bretz & Judge, 1994), and contribute to organizational effectiveness (Deal & Kennedy, 1999; Denison, 1990; Kent & Weese, 2000; Smart, 2003; Smart & St John, 1996; Smart & Wolfe, 2000). A strong and idiosyncratic or unique culture is believed to provide an organization with a distinct competitive advantage (Alvesson & Berg, 1992; Smart & Wolfe, 2000). However, while cultural strength can be an asset when the perceived values align with the leaders’ objectives, it may also be a liability, such as when those values run counter to the best interests of the organization (see Scott, 1997). The impact of a strong negative culture may be reduced productivity and inferior organizational performance. Therefore, of equal importance in the consideration of the strength of an organizational culture is the nature of that culture (Schein, 1990). The notion that members of an organization think and act alike, and share a common understanding of the values and beliefs may be idealistic (Slack, 1997). Reality more likely involves the existence of subcultures that represent sets of shared values among groups within the organization. This perspective is considered below. An Overview of Organizational Subcultures The notion of subcultures corresponds with Martin’s (1992) differentiation perspective of organizational culture, which argues that consensus about culture exists only within the boundaries of subcultures. She distinguished this from the integration perspective, which focuses on the existence of a single, consistent and consensual set of organizational values, and the fragmentation perspective, which contends that ambiguity is the essence of organizational culture, and that stable organization-wide or subgroup cultural consensus does not exist. The majority of research continues to examine organizational culture from the integration or single-culture perspective. Although the perspectives are conceptually distinct, Martin acknowledged that ‘‘subcultures might coexist with some kind of organization-wide sharing’’ (p. 98). Slack further noted: That different people in different parts of the organization actually have different values and employ different norms of behaviour, does not deny the possibility of ‘‘an organizational culture’’; rather, it highlights the fact that sport organizations actually have a dominant culture, which reflects the core values of the majority of people in the organisation . . . , and a series of subcultures. (1997, p. 277, italics in original)
Leader Intentions and Employee Perceptions of Organizational Culture 5 Indeed, Schein (1990) described organizational culture as a ‘‘negotiated outcome of the interaction of its [subcultures]’’ (p. 117), and Sackmann (1992) found evidence of cultural subgroupings yet an organization-wide acceptance of similar values and beliefs despite differences in group culture. Subcultures reflect the shared values and beliefs of groups of employees that develop close ties due to a variety of possible factors, such as ‘‘common roles, problems, experiences, or backgrounds’’ (Doherty & Chelladurai, 1999, p. 286). Subcultures may be a natural byproduct of structural variations, such as position, function, hierarchical level, or workgroup in the organization (Brown, 1998; Jones, 2000; Martin, 1992; Slack, 1997). Similar personal characteristics, such as age, gender, education, ethnicity and tenure, may also be the basis for the formation of subcultures (Brown, 1998; Martin, 1992; Peter, 1997). Additionally, shared experiences, such as perceived performance success, physical isolation from other groups and a crisis or threat, can all lead to the development of subcultures (Martin, 1992). In sport organizations in particular, one differentiating factor may be the blend of voluntary and paid staff (Colyer, 2000). Sport or team subcultures may also emerge within athletic departments that essentially operate as a collection of sport programs, ‘‘independent of a common goal and belief system for the ‘overall’ organization’’ (Scott, 1997, p. 410). Indeed, Southall (2001) found evidence of subcultures among coaches of male and female sports, and revenue and non-revenue sports within university athletic departments. For example, he reported that high expectations for performance were more strongly valued within male and revenue sports. The limited research that has considered organizational subcultures suggests the phenomenon is directly associated with individual commitment and retention with the organization (Peter, 1997), and inversely associated with intergroup conflict (Sorra, 2000). The influence of subcultures on individuals, the group and the organization as a whole is not clear. It may be expected, following from the arguments pertaining to organizational culture, that a strong subculture would reduce uncertainty about group expectations, increase member retention and contribute to group performance and effectiveness. The further impact of subcultures at the organizational level is an interesting consideration because organizational effectiveness is purportedly associated with a strong overall culture where common values are widely shared. Subcultures, by definition, imply a differentiated organizational culture. As such, subcultures may be considered to be detrimental to the long-term success of an organization. The further possibility of negative or countercultures, based on values and beliefs that actually oppose the dominant culture (Martin, 1992), may reinforce the notion that subcultures are a detriment to the organization. Again, both the strength and nature of organizational subcultures appear to be key considerations in this regard. According to Deal and Kennedy (1999), the challenge of managing subcultures is to articulate core values as a higher cause and a source of glue that unites working subcultures and keeps them focused on a common purpose. These core values represent the dominant
6 Eric MacIntosh & Alison Doherty organizational culture in an organization. Doherty and Chelladurai (1999) suggest that organizational culture provides the means by which diverse subcultures may be aligned toward greater synergy. Uncovering Organizational Culture Uncovering an organization’s culture has proven to be both complicated and contentious (Broadfoot & Ashkanasy, 1994). Edgar Schein’s contribution to understanding organizational culture has been paramount. Schein’s (1985) three-level model of organizational culture provides a framework for deciphering culture; from superficial and readily identifiable artifacts (Level 1), such as documents, policies, physical space and language, to values and beliefs (Level 2) that are not as readily observable but may be known through dialogue and/or their manifestation in member behaviour, to basic underlying assumptions (Level 3) that reflect the taken-for-granted understandings about the organization. Although culture can, in theory, be known at all three levels, it is typically measured and indicated as the core values of the organization (Broadfoot & Ashkanasy, 1994). Thus, the current study focused on the measurement of organizational culture at this level as well. While there appears to be little disagreement with Schein’s (1985) model as a guideline for understanding culture, there has been much debate over how culture should be uncovered. The use of qualitative and quantitative methods has been advocated for tapping into the culture of an organization. The advantages of qualitative methods include: . . . [using] the focal unit’s own terms to describe itself, the intensive and in-depth information that can be obtained about a unit, and the amenability of the method for exploratory research on issues and processes about which little information exists. (Cooke & Rousseau, 1988, p. 246) Interviews and observations intrinsic to the qualitative approach are ideally suited to the intensive and in-depth information that must be obtained to truly know an organization’s culture (Cooke & Rousseau, 1988). In contrast, quantitative methods, such as culture surveys, offer important advantages for cross-sectional organizational research and direct comparison (Cooke & Rousseau, 1988). In their review of the measurement of organizational culture, Broadfoot and Ashkanasy (1994) noted that research based on quantitative methods (for example, Organizational Culture Profile, O’Reilly, Chatman & Caldwell, 1991; Organizational Culture Inventory, Cooke & Lafferty, 1986; Organizational Culture Assessment Instrument, Cameron & Quinn, 1999) typically reflects predetermined value profiles or culture types (for example, 26 values measured by the Organizational Culture Profile, including innovation, opportunities, experimenting, risk taking, security, fairness, tolerance, action orientation and precision; Group, Developmental, Hierarchical and Rational cultures measured by
Leader Intentions and Employee Perceptions of Organizational Culture 7 the Organizational Culture Assessment Instrument). This approach assumes there is a set or sets of common values across all types of organizations, and that certain values will be more strongly associated with organizational effectiveness. This assumption is being challenged with the continual proposal of new scales, leaving the measurement of organizational culture a ‘‘messy’’ area (Broadfoot & Ashkanasy, 1994). The large majority of organizational culture research, including the sport setting, has relied on existing measurement tools, such as those noted above. However, both Colyer (2000) and Southall (2001) noted the limitations of relying on generic instruments to explore organizational culture. The use of such tools may not tap into the unique culture of an organization. Sackmann (2001) thus contended that: . . . no single method is able to reveal the cultural complexity of an organization nor is one research project able to capture the cultural complexity of a given organization in total. (p. 150) In an attempt to draw on the advantages of both qualitative and quantitative methods, she recommended a mixed-method approach to the study of organizational culture, to gain a sufficiently in-depth sense of the meaning of an organization’s culture as well as addressing the issue of ‘‘validity [and] whether or not the findings really capture the essence of the research setting’’ (Sackmann, 2001, p. 157). The body of knowledge regarding organizational culture continues to grow, with new perspectives continuing to challenge and stimulate our understanding of this phenomenon. Given the apparent role and influence of leaders in the establishment and direction of organizational culture, the notion of a culture gap between what leaders try to instill and what members perceive should be examined. As well, the concept of subcultures, which has some empirical support, requires further examination; with particular consideration of the bas(es), nature, and impact of these phenomena on individuals and the organization as a whole. The research to date has focused predominantly on the concept of a single or integrated organizational culture, and from the perspective of generic values that all organizations may have in common. As Schein (1985) noted, organizational culture may be a particularly distinguishing feature among organizations. Therefore, it is important to attempt to capture the essence of an organization’s culture. The current study addressed these considerations. Method Following Sackmann’s (2001) recommendation for innovative research on organizational culture, this study incorporated both qualitative and quantitative approaches. Qualitative methods were used to identify the intended organizational culture, through interviews with the leaders of the company to determine what values they consider to be most important within the organization and which they strive to instill among employees. A review of
8 Eric MacIntosh & Alison Doherty company documents and materials was conducted for this purpose as well. Subsequently, a survey questionnaire was developed and distributed to a sample of employees to quantitatively measure their perceptions of organizational culture in the company. The interview and survey participants and data collection measures are described in further detail below. Focal Organization The focus of this study was a private fitness corporation that has been in existence for over 25 years. The current Chief Executive Officer (CEO) and Chief Operating Officer (COO) founded the company. Members pay fees to join one of the organization’s over-75 clubs across Canada. All clubs offer the same basic services of weight training equipment, cardio classes and personal training advice, as well as on-site childcare. A number of clubs offer additional services, such as a swimming pool, hot tub and/or sauna, massage therapy and tanning beds. The organization owns 82% of the clubs and the remainder are franchised. The head office is the home base for the CEO and COO, who oversee the marketing, personnel, operations and finance departments. Head office oversees the establishment and management of each club (including franchised clubs), which are geographically separated from head office. There are currently over 70 employees in the head office, and over 2500 employees in the clubs. The organization has a rich history that is well documented in the company literature. There is a common mission and vision, as well as corporate values, for the organization as a whole and each club. These are developed by and transmitted from the CEO and COO to employees throughout the company via training manuals, a new recruit package that describes the organization and its history, a book written about the company by the CEO that is provided to every employee, and the company web site. Regular in-club professional development sessions and monthly club staff meetings are additional forums for the dissemination and discussion of corporate policies and practices. Staff training is systematic and top-down, where club managers are trained through head office, and club staff are trained by club managers. New staff are provided with company documents and literature, and are closely mentored in their role by more senior employees. The organization’s success in the Canadian fitness industry, its well-documented history and its systematic training program made it an interesting focus for the current study. Participants Interviews to identify the intended culture of the organization were conducted with the CEO and COO of the organization. These corporate leaders were also the founders of the company and continue to shape the organizational culture. It was of specific interest in this study to determine
Leader Intentions and Employee Perceptions of Organizational Culture 9 what these top leaders deemed to be the critical values and what they strive to transmit through the organization. Surveys were conducted with the population of head office staff at the time of the study (N70) and a stratified random sample of 300 employees in 9 clubs. Access to club and employee data was provided by the organization. Clubs were selected based on the number of staff, number of members and age of the club, to ensure a cross section of clubs by size and age. Employees of the clubs were selected to ensure a cross-section according to position (sales and service, fitness trainer). To ensure the CEO and COO were not able to identify the respondents directly involved in the study, 20 clubs were identified for the study but only 9 were used. To further ensure confidentiality of respondents, completed surveys were returned directly to the investigators in self-address stamped envelopes that were provided. /
Measures Interviews and document analysis. The company leaders (CEO and COO) were interviewed to determine what they consider and work towards instilling as the ideal culture for their organization. Schein’s (1991b) guidelines for uncovering organizational culture were used to develop semi-structured interview questions to discover the history, artifacts, values, and basic assumptions of the organization. For example, the leaders were asked to describe the original goals and values of the organization when it was founded, to identify symbols, ceremonies, events or stories that are important to the identity of the organization, and to explain what values they try to instill in employees and their expectations for staff behaviour. The audiotaped interviews lasted 45 minutes each, and were transcribed in full. In addition, a thorough review of company literature was used to help uncover the intended organizational culture. The company web site, new recruit orientation packages, staff training manuals, and the CEO’s book about the company were analyzed for this purpose. Data from the interviews and documents were content analyzed in an attempt to identify the critical organizational values. Analysis involved the development of a coding scheme, using a constant comparative method to determine whether each data point represented a unique and new code, or belonged in one existing code category versus another (Patton, 2002). Both interview transcripts and all documents were analyzed independently by the investigators, with 100% inter-rater reliability. Together, the investigators then assigned a simple descriptor to each category. The identified values were then reviewed by the CEO and COO, and confirmed as representing the core values of the organization. Ten values were identified and are presented in Table 1. Survey. Multiple items were generated to represent the 10 organizational culture values. In most cases, the items were taken directly from the interview transcripts (for example, staff care for each other). The company leaders further confirmed that the items represented the 10 values. A pilot test was performed with 15 head office and club staff to determine whether
10 Eric MacIntosh & Alison Doherty Table 1. Organizational culture values of a private fitness organization Care
Staff care for each other as team members in the organization; staff care for members; the organization cares for its staff. Trust Staff count on the organization to look after them; members count on the staff to look after them. Integrity Staff take responsibility for the consequences of their actions, staff follow through on promises. Fitness Staff are committed to their own personal fitness and the fitness of members. Peak Attitude Staff are upbeat and motivated to serve members. Performance Staff are committed to contributing to the company’s success by maintaining professional standards, appearance of the clubs and sales excellence. Passion Staff are dedicated to serving members and getting them excited about fitness, and are persistent in their efforts to do so. Innovation Staff are active in their attempts to improve their jobs; staff try to come up with new ways of making their jobs better. Growth Staff and the organization are focused on individual growth in terms of maturity, and professional growth in terms of abilities and knowledge in the field. Communication Staff can openly contribute and receive information from their managers and co-workers
the survey instructions and statements were clear. After the pilot test, the survey was corrected for errors and concerns the employees had with respect to simplifying vocabulary and clarifying differences between similar items. The total number of items did not change as a result of the pilot test. A final list of 37 items represented the 10 culture values in the survey. Participants were instructed to indicate on a scale of 1 (strongly disagree) to 4 (neither agree nor disagree) to 7 (strongly agree) the extent to which each statement describes how things are within the organization. Three items were used to measure employee intent to quit. Participants were asked to rate on a 7-point scale how often they felt like quitting their job and how often they felt like leaving the organization (1never; 4sometimes; 7often), and how long they thought they would stay with the organization (1will leave very soon; 4will stay for a while; 7will stay forever). The last item was reversescored. Participants were also asked to provide background information regarding their gender, age and length of employment with the organization. /
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Other data. Organizational performance data were supplied by the COO in the form of club profit margin and client membership retention ratings. These variables were identified as the most important indicators of organizational effectiveness by the company’s leaders. Profit margin was based on expected performance versus actual performance of the clubs. The COO gave 20 clubs a rating of 1 (low performer) to 4 (high performer) for profit margin. Data for the 9 clubs included in the study were extracted by the investigators. Membership retention data were provided for the 20 clubs as percentage of clients still with the club at the end of the previous year.
Leader Intentions and Employee Perceptions of Organizational Culture 11 Data for the 9 clubs selected for the current study were pulled from this information by the investigators. Data Analysis Analysis of the qualitative data was described above. For the quantitative data, first, item-total correlation and Cronbach alpha reliability analyses were used to determine whether the scale structures of the 10 organizational culture values were supported. To determine whether the items supported their intended scale, an item was accepted if it correlated .40 or stronger with its own scale, and correlated more strongly with its own scale than with any other scale (Stevens, 2002). For the Cronbach alpha reliability analyses a value of .70 or higher was considered to be acceptable (Tabachnick & Fidell, 2001). Descriptive statistics and a repeated measures ANOVA were used to describe the dominant culture of the organization. To determine whether any culture gaps exist, multiple t-tests were used to compare the dominant culture and the leaders’ intended culture. A Bonferroni adjustment to the significance level, whereby the pre-determined p-level is divided by the number of tests, was used to account for multiple comparisons (Vincent, 1999). The leaders did not indicate any difference in the priority of the organizational culture values; rather, each was considered to be a critical value* no more or less important than any other* requiring the organization’s and employees’ attention. Thus, each element of the intended culture was assigned a value of 7 on the 7-point Likert scale for how things are within the organization. A multifactor MANOVA and, where appropriate, further univariate analyses of variance were used to explore subcultures according to gender, age, years of experience with the organization and hierarchical level in the organization (head office, clubs). Finally, correlation statistics were used to determine the association between the measures of employee behaviour (intent to quit) and organizational performance (membership retention) and organizational culture. A MANOVA was conducted to determine whether organizational performance in terms of club profit margin was associated with organizational culture. The level of significance for all tests was set at pB.05, and adjusted where necessary for multiple comparisons (Vincent, 1999). The observed power of each test was considered, and deemed to be acceptable at the .80 level (Cohen, 1988). /
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Results Description of Respondents A total of 72 employees completed the survey. Respondents ranged in age from 17 to 50 years with an average age of 30 years, and most were female (n52, 72%; n20 male, 28%). Respondents had been with the organization for 1 to 14 years, with an average of 3.5 years. Half of the /
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12 Eric MacIntosh & Alison Doherty respondents (n35, 49%) were head office staff, and half were club staff (n37, 51%). An average of 4.6 staff per club participated in the study. Club staff had been with their club for 1 to 10 years, and an average of 2.5 years. Two-thirds (n25, 67%) of the club staff were in a fitness trainer position, and the remainder (n12, 33%) were involved in sales and service. For the purpose of further analyses, respondents were classified into subgroups of age and years with the organization according to natural breaks in the distribution for both variables. Sub-groups for age were identified as: (1) less than 30 years (n37, 52%); and (2) 30 years and older (n35, 48%). Subgroups for years with the organization were identified as: (1) less than 3 years (n37, 52%); and (2) 3 years or more (n35, 48%). /
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Psychometric Properties Item-total correlation and Cronbach alpha reliability analyses were performed to determine whether the items loaded significantly and exclusively with their intended scales, and the internal consistency of those scales. After 4 iterations, 8 of the original 37 items were excluded because they either did not load sufficiently (r B .40) or exclusively with their intended scale. The three items representing the value of Communication demonstrated an unacceptable Cronbach alpha coefficient of .61, and that scale was eliminated. The acceptable organizational culture value scales comprising 26 items were: /
. . . . . . . .
Integrity (3 items, a.76). Passion (3 items, a.79). Peak Attitude (3 items, a.86). Fitness (3 items, a.78). Growth (3 items, a.82). Innovation (3 items, a.81). Performance (4 items, a.85) Care/Trust (4 items, a.88). /
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Due to consistently high correlations among the Care and Trust scale items at the outset, they were combined to form one scale of Care/Trust. A composite score for each scale was based on an average of the ratings for each item within the scale. Cronbach alpha reliability analysis of the three items representing intent to leave the organization revealed strong internal consistency (a.89). A composite score for each of these variables was based on an average of the rating for each item within the scale. /
Organizational Culture Profile Dominant organizational culture. One purpose of the study was to describe the dominant organizational culture perceived by employees. A repeated measures ANOVA with the eight values revealed significant differences in the perceived strength of these values, F(4.7, 323.8)10.90, /
Leader Intentions and Employee Perceptions of Organizational Culture 13 p B.001, h1.0. (To correct for a violation of symmetry, the GreenhouseGeisser epsilon was used to adjust the degrees of freedom in the numerator and denominator of the F-ratio; Tabachnick & Fidell, 2001). Post hoc Bonferroni’s pairwise comparisons indicated that Fitness (M 5.38, SD 1.13) was the strongest value, and was significantly greater than all of the other seven values (p B.05). The next strongest values in descending order were Peak Attitude (M 4.94, SD 1.36), Passion (M 4.90, SD 1.23), Performance (M 4.78, SD1.36), and Innovation (M 4.75, SD1.30), which did not differ. The last three values did not differ, but were significantly weaker than the top three values: Care/Trust (M 4.48, SD1.38), Integrity (M4.46, SD 1.27), and Growth (M 4.46, SD 1.48) (p B.05). /
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Culture gap. To determine whether a culture gap exists between the dominant culture and what the leaders advocate for that culture, a pairedsample t-test for each value was performed. The level of significance was adjusted to account for the multiple analyses (p B.05/8p B.006). Employee perceptions of dominant culture were significantly lower than the leaders’ intended culture for each of the eight values. The gap is evident in Figure 1. /
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Organizational Subcultures A 2222 MANOVA was used to determine whether gender, age, years with the organization and organizational level explained any variation in the dominant culture. A significant main effect was found only for level in the organization, F(8,56)5.88, p B.001, h1.0. No significant interaction effects were observed. Results of further univariate analyses with organizational level revealed significant differences between head office and club staff in their perceptions of the organizational culture values of Passion, Peak /
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7 6
Leaders' Intended
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Dominant Culture
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Club Subculture
3 Head Office Subculture
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Pe ak
Fi tn es s A tti tu de Pa ss Pe io rf n or m an ce In no va tio C n ar e/ Tr us t In te gr ity G ro w th
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Figure 1. Profiles of intended and dominant organizational cultures, and subcultures
14 Eric MacIntosh & Alison Doherty Attitude, Fitness, and Performance. Univariate results and subculture profiles are presented in Table 2 and Figure 1. Influence of Organizational Subcultures Intent to quit. Given that distinct head office and club subcultures were revealed in the study, the influence of these subcultures on employee behavior was examined. Both head office staff and club staff indicated they were somewhat unlikely to leave the organization (M 3.10, SD 1.68, and M3.0, SD 1.66, respectively), and they did not significantly differ in this regard, F(1,54).32, p .05. Correlations were performed to examine the relationship between head office subculture and head office staff intent to leave the organization, and between club subculture and club staff intent to leave the organization, respectively (Table 3). An inverse relationship suggests that the more the subculture value is realized within the organization, the less likely employees will leave the organization. Head office staff intent to leave the organization was strongly and inversely associated with the values of Growth (r .75, p B.001) and Care/Trust (r .68, p B.001). Moderate relationships were observed for the values of Passion (r .43, p B.01) and Innovation (r .48, p B.01). Club staff intent to leave the organization was significantly associated with all eight culture variables, and particularly with Care/Trust (r .76, p B.001) and Integrity (r .74, p B.001). The remaining values were all moderately associated with intent to leave (r .47 to r .58, all p B.05). /
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Organizational performance. To examine profit margin, clubs were rated by the COO on a scale of 1 (low performer) to 4 (high performer). For the purpose of further analyses, two subgroups of respondents were created based on whether they were employees in top performer clubs (n21, 57%) or bottom performer clubs (n16, 43%). Results of a MANOVA revealed no significant difference in the club subculture of top and bottom performing clubs. To examine membership retention, data for each club were provided as the percentage of clients who were still with the club at the end of the /
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Table 2. Comparison (Univariate F) of head office and club subcultures Values Fitness Peak Attitude Passion Performance Innovation Care/Trust Integrity Personal Growth
Head office subculture M (SD ) 4.78 4.30 4.45 4.34 4.60 4.07 4.07 4.13
***p B/.00, **p B/.01, *p B/.05
(1.15) (1.32) (1.17) (1.12) (1.12) (1.21) (1.09) (1.32)
Club subculture M (SD ) 5.91 5.52 5.30 5.18 4.89 4.86 4.82 4.76
(.84) (1.12) (1.14) (1.46) (1.44) (1.45) (1.25) (1.58)
F (1,63) 33.41*** 16.05*** 15.59*** 8.40* .90 5.75 6.08 3.94
Leader Intentions and Employee Perceptions of Organizational Culture 15 Table 3. Correlations (r) between head office subculture and head office staff intent to leave, and club subculture and club staff intent to leave Subculture values
Head office staff intent to leave
Club staff intent to leave
Fitness Peak Attitude Passion Performance Innovation Care/Trust Integrity Personal Growth
/.04 /.31 /.43* /.39 /.48* /.68*** /.40 /.75***
/.56** /.52** /.52** /.53** /.57** /.76*** /.71*** /.64***
***p B/.001, **p B/.01, *p B/.05
previous year. The average membership retention for the clubs was 44% and ranged from 40% to 55%. Correlations were performed to determine whether membership retention was associated with club subculture. Only two of the culture values were significantly, yet modestly, associated with membership retention: Passion (r.38, p B.05) and Fitness (r.33, p B.05). /
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Discussion The approach taken in this study of organizational culture was to decipher the actual values intended by the organization’s leaders, rather than relying on a profile of generic values that may be common in any organization. Existing culture surveys are less likely to capture the unique aspects of a particular organization’s culture (see Colyer, 2000; Southall, 2001). For example, the core values uncovered here, such as Fitness, Passion, and Care/ Trust, are not found, at least not in combination, in the existing, generic culture surveys. Sackmann’s (2001) mixed-method approach, combining indepth qualitative analysis of the intended culture and subsequent broader quantitative measure of perceived culture across the organization, facilitated the description and analysis of the focal organization’s culture in this study. While the specific values and corresponding scales referred to in the current study are not necessarily transferable to other settings, the research method and general observations with regard to culture gap, subcultures, and impact may inform future research and practice. Response to the survey was fairly limited (N72). While the response rate of head office staff was an acceptable 50%, the response rate for club staff was unknown. A total of 300 surveys were sent to employees at 9 clubs, however it is not known whether all of those surveys were actually delivered. In a follow up with the organization and several clubs, it was determined that the company employment records were not up to date. Thus, surveys sent to staff who had quit, were fired, transferred, or on a leave of absence were undeliverable. Despite the overall low response it was determined, /
16 Eric MacIntosh & Alison Doherty through the aid of company data, that the respondents were fairly representative of all employees according to average age (study average 30 years; company average30 years), gender ratio (study ratio 2.6:1 women to men; company ratio 4:1) and average years with the organization (study average3.5 years; company average3 years). The study sample was slightly overrepresented by club staff in the fitness trainer position (67% versus 40% of the company population) and underrepresented by sales and service staff (33% versus 60% of the company population). As well, it was determined that the average membership retention rate at the selected clubs (44%) was equivalent to the overall company average (46%). These observations increase confidence that the limited sample is representative of the population from which it was drawn. Fitness was the strongest value of the dominant culture, and was significantly greater than the other seven values. This is not surprising given that the focal organization does its business in the fitness industry. However, it may be surprising that, with a rating of 5.38 on the 7-point scale, respondents only somewhat agreed that employees were committed to their own fitness as well as the fitness of clients. Further, employees were fairly neutral to somewhat in agreement regarding whether the remaining seven values* Peak Attitude, Passion, Performance, Innovation, Care/Trust, Integrity, and Growth* were present in the organization, with ratings between 4.46 and 4.94. Overall, the dominant culture may be described as fairly neutral to somewhat strong, depending on particular values. Another indication of the strength of the organizational culture was the significant difference between what the leaders intended and what employees perceived to be valued, expected, and experienced within the organization. A culture gap was found for each of the eight organizational culture values. While employee perceptions of how things are may never reach the level of how leaders desire things to be in any organization, the significant gaps observed here further highlight the fairly neutral to somewhat strong dominant culture in the focal organization. Slack (1997) suggested that weak or thin cultures may be found in organizations where staff members are constantly changing. Indeed, the leaders and personnel manager of the focal organization indicated that there is fairly high turnover, particularly among club staff, within their company and the fitness industry in general. This may explain the observed strength of the dominant culture, and the culture gap between leaders and employees. However, the fairly neutral to somewhat strong dominant culture revealed here may also be due to the presence of differentiated subcultures (Martin, 1992) that diminish the overall strength of certain core values. The findings revealed a significantly differentiated dominant culture and the existence of subcultures based on structural variation (see Brown, 1998; Jones, 2000; Martin, 1992; Slack, 1997), and specifically hierarchical level in the organization. Notably, subcultures were not uncovered with respect to any individual factors, such as age, gender, or years with the organization, as might be expected (see Brown, 1998; Martin, 1992; Peter, 1997). Employees in the focal organization, and perhaps the fitness industry in general, may be /
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Leader Intentions and Employee Perceptions of Organizational Culture 17 quite homogeneous and therefore distinct subcultures based on personal factors may be less likely. Head office staff and club staff reported unique subcultures that significantly differed with regard to the values of Fitness, Peak Attitude, Passion and Performance. Although Fitness was rated highest by both head office and club staff, it was more pervasive in the club subculture than head office subculture. This may not be surprising, given that the mandate of the clubs is to provide quality fitness services to clients. In contrast, head office is responsible for operations, personnel, marketing and finance for the whole organization, and is not as directly involved in the delivery of fitness services. Passion and Peak Attitude were also perceived to be significantly less prevalent in the head office subculture. These particular values pertain to employees’ motivation, attitude and efforts to deliver quality fitness services and therefore it may be reasonable to expect these values to be less pervasive aspects of head office subculture. What is surprising is that Performance, in terms of employee commitment to the success of the company, was also rated lower by head office than club staff. In other words, head office staff considered there to be less of a focus on performance than club staff. This may be a reflection of the measure of this organizational culture value, which was described as maintaining professional standards, maintaining the appearance of clubs and sales excellence. Nevertheless, the leaders verified that these items reflected what they mean by Performance, and therefore it is notable that head office staff did not perceive there to be as strong a commitment to this particular value. Club subculture may be described as somewhat strong to strong, with ratings of 4.76 to 5.91 on the 7-point scale, whereas head office subculture may be described as fairly neutral, with ratings of 4.13 to 4.78. The fairly neutral to somewhat strong dominant culture, an apparent culture gap between what the leaders intend and what employees perceive, and the existence of subcultures have important implications for the focal organization. The culture strength and culture gap suggest that employees do not have a consistent understanding of and expectations about how things are, or are supposed to be, in the organization (see Deal & Kennedy, 1999; Robbins, 1996). This is likely played out in varying behaviour among staff, with regard to such things as passion for their job, caring and trust for others, demonstrating innovation, and integrity. Not only can this make work challenging among employees, it may also be perceived by clients as a confusing and perhaps unfavourable aspect of the organization. The organization’s leaders need to be aware of the strength of the dominant culture and how things really are within the organization. They also need to recognize the existence of two differentiated subcultures, based on level in the organization. Head office staff and club staff have clearly different perceptions about what is valued in the organization and how things are done. The leaders must recognize that values seemingly related to service delivery* Fitness, Passion and Peak Attitude* are not as pervasive elements of the subculture of head office as they are for clubs. Also, Performance, as defined by the leaders, apparently has a different meaning to /
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18 Eric MacIntosh & Alison Doherty head office staff. Consequently, a single set of values may not be as meaningful across the organization. The leaders need to redefine what they consider to be the core set of culture values, and recognize that subcultures that focus on unique variations of these values, and perhaps others that were not tapped here, are prevalent in the organization (see Deal & Kennedy, 1999). Efforts to strengthen the dominant culture or ‘‘negotiated’’ culture (Schein, 1990, p. 117) must focus on strengthening the distinct subcultures that exist according to different levels in the organization by reiterating, reinforcing, and rewarding a combination of what is most relevant to the employees there and what the leaders believe to be most important (see Deal & Kennedy, 1999; Doherty & Chelladurai, 1999). Given that subcultures were identified, it was meaningful to examine their influence on employee behaviour and organizational performance. The findings correspond with previous observations that a strong organizational culture (Bretz & Judge, 1994; Sheridan, 1992), and specifically a strong subculture (Peter, 1997), is associated with employee retention. It was revealed that head office staff intent to leave was particularly associated with the perceived value of Growth in the organization. That is, the more employees and the organization focus on personal and professional development, the more likely head office staff will stay with the company. The subculture value of Care/Trust among employees and the organization was also strongly associated with head office staff’s intent to leave. If head office staff feel that employees do not care about each other and cannot count on each other, or that the organization does not care for them and they cannot count on the organization, then they are more likely to leave the company. These findings also correspond with Smart and St John’s (1996) contention that cultures that value the individual are more effective than cultures that value and practice control. They further suggest that a ‘‘humanizing culture’’ (Mele, 2003) will indeed enhance the social capital of an organization. Innovation and Passion, which reflect how people do their work, were also significantly and moderately associated with head office staff intent to leave the organization. Notably, Fitness* what the organization is all about!* was not a significant factor in whether head office staff intend to stay or go. This finding suggests that head office staff are less concerned about the product than the operations of the focal organization. Whereas head office staff intent to leave the organization was associated with four of the organizational values, club staff intent to leave the organization was significantly and moderately to strongly associated with all eight values, particularly with Care/Trust and Integrity. Caring for others, and feeling cared for by the organization was an important subculture value for both head office and club staff. Club staff also felt that the integrity of other employees, in terms of taking responsibility and following through on promises, was a significant factor in whether they would stay with or leave the organization. As with head office staff, the most important values were those that focus on people rather than practice. Notably, /
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Leader Intentions and Employee Perceptions of Organizational Culture 19 however, Care/Trust, Integrity and Growth were the lowest rated values of the dominant culture and both subcultures. Variations in the meaningfulness of the culture values for head office and club staff reinforce the observation that distinct subcultures exist. The leaders of this organization need to be aware of the most important subculture values with regard to employee retention, and to strengthen those aspects in order to create a working environment where staff are more likely to stay and thrive. Again, the most important values to both head office and club staff were those that were considered to be the least prevalent within the organization. It is widely contended that a strong culture will contribute to organizational performance, effectiveness, and competitive advantage (see Alvesson & Berg, 1992; Barney, 1986; Bretz & Judge, 1994; Deal & Kennedy, 1999; Denison, 1990; Kent & Weese, 2000; Smart, 2003; Smart & St John, 1996; Smart & Wolfe, 2000). However, the findings revealed that client membership retention was only mildly associated with the club subculture values of Passion and Fitness. That is, to the extent that staff are passionate about their work, and employee and client fitness are valued within the club, there will be higher membership retention. While these relationships are not unexpected, the strength of the association suggests that what is valued and expected in the club subculture is only minimally related to keeping clients in the clubs. Other factors, such as price, location, or ancillary services offered, may be more important factors in client retention. The results also revealed that club subculture did not differentiate high and low performing clubs, in terms of profit margin. Together, these findings suggest that culture has little direct association with organizational performance measures, such as membership retention and profit margin. Instead, it may be expected to have a greater or at least more direct impact on employees than clients. This observation is meaningful in terms of what difference leaders can expect culture to make in the organization. If the effect of culture on organizational effectiveness is in fact mediated by its influence on employees, then it is important to understand the nature of that influence. Recommendations for Future Research The current study builds on existing theory and research by examining the organization-specific dominant culture of a prominent fitness corporation, and the further culture gap with respect to what leaders want and what employees perceive to be valued there. The study also extends the field by investigating the existence of subcultures within that organization, their nature, and association with important indicators of effectiveness. The current study was limited to the consideration of culture values identified by the top leaders of the focal organization; what they are trying to instill among employees. Future research should attempt to uncover any other values that may be apparent in the organization; particularly those that the top leaders did not necessarily intend and those that may be influenced by leaders at other levels in the organization; for example, the club managers.
20 Eric MacIntosh & Alison Doherty Such values may have an even greater association with employee behaviour, and perhaps with organizational performance. They may also indicate the presence of other organizational subcultures. Organizational culture research should continue to explore the existence of subcultures, based on both individual and structural variables. Organizations have substantial if not complete influence over who is hired and how their roles are structured. As such, they may have substantial influence over the formation of subcultures within an organization. There is a need for a much greater understanding of the bas(es), nature, and impact of subcultures in organizations. In the current study, subcultures according to organizational level were revealed. Further investigation may also explore the existence of distinct subcultures among the clubs, which may be evident given their geographical dispersion. The potential mediating effect of employee attitudes and behaviour on the relationship between culture and organizational effectiveness also needs to be explored further. The findings of the current study suggest that the influence of culture is much greater, or perhaps more direct, on employees than clients. The influence of organizational culture or subcultures on clients is another possible avenue of investigation. Given that organizational culture provides a sense of organizational identity, and perhaps further corporate image, it is of interest to consider clients’ perceptions of the organization’s culture. It would be of further interest, then, to compare clients’ perceptions to both the dominant culture and what leaders intend, and also to determine what influence if any the organizational culture has on their attitudes and behaviour with respect to the organization. Weese (1996) found that organizational culture strength was significantly associated with client satisfaction, however the nature of that culture was not considered. The study of organizational culture and subcultures, particularly within the domain of sport, is in its relative infancy and there is much more to be known and understood about this important organizational phenomenon. Researchers are beginning to fill the ‘‘relative void of information in [sport management]’’ (Slack, 1996, p. 102) with regard to organizational culture. However, we must continue to expand our understanding of the nature, strength and impact of organizational culture and subcultures, and the rich insight it brings to the field. References Alvesson, M., & Berg, P. O. (1992). Corporate culture and organizational symbolism . Berlin: Walter de Gruyter & Co. Atwal, G. (2004). Culture club. The Deal.com . Retrieved October 12, 2004, from the ProQuest Direct */ABI/Inform database. Barney, J. B. (1986). Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review , 11 , 656 /665. Benko, C., & McFarlan, W. (2004). Managing a growth culture: How CEOs can initiate and monitor a successful growth-project culture. Strategy & Leadership , 32 (1), 34 /42.
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