One area of interest to many managers and scholars alike is whether there is a link between organizational culture and performance. In this study, the researchers focused on a large electric utility to see whether certain values that were part of the organization's culture were related to performance. The values included in the study were teamwork, trust and credibility, and common goals.

Twelve organizations within the electrical utility participated in the study. A survey was administered to 884 employees in these twelve organizations at two different times, one year apart. This permitted the researchers to assess the stability of the values. The performance data were collected for the two fiscal years for each of the twelve service organizations. The performance measure was a summary of five objective performance indicators: operations, customer accounting, support services, marketing, and employee safety and health.

The researchers correlated the values with the performance indicators. The results showed that teamwork was the major aspect of organizational culture that was related to performance. In this electric utility, an organizational culture that emphasizes teamwork was more conducive to organizational effectiveness than one that does not foster cooperative behaviors. Helping others, sharing information and resources, and working as a team enhanced performance in the utility. Future studies will need to address whether this holds true for other types of organizations.

SOURCE: M. M. Petty, N. A. Beadles II, D. F. Chapman, C. M. Lowery, and D. W. Connell, "Relationships Between Organizational Culture and Organizational Performance," Psychological Reports 76 (1995): 483-492.

ORGANIZATIONAL REALITY

Empowerment Pays Off at Chrysler

Chrysler is the most profitable automaker in the world on a per vehicle basis. A few years ago, it was near death. Things are looking up now, however. While Toyota leads the world in quality, Chrysler is catching up fast. Last year's earnings were up 246 percent and sales were far above previous records. Employees have turned out a fleet of hot-selling new models: the Neon subcompact, Ram pickup, and hand-built Viper convertible. When asked how the company accomplished its turnaround, CEO Robert Eaton replies, "If I had to use one word, it's empowerment. That's the biggest reason."

When Chrysler creates a new model, it forms a team of about 700 people from engineering, design, manufacturing, marketing, and finance, including specialists of all kinds. These self-contained, multidisciplinary groups have a vice president who acts as a "godfather" or advisor, but the group organizes as it sees fit. The group works out a contract with managers that sets out objectives, and the team is turned loose to work. As a result, every single vehicle has come in below its investment target and its cost-per-car target. When teams have the power to create the car and the responsibility to meet the budget, they meet it.

Empowerment was in full swing when Robert Eaton arrived at Chrysler, but it has become even more important during his leadership. One payoff is speed to market. It used to take Chrysler five years to get a car into production. Now it takes 21/2 years or less. That even beats the Japanese, according to CEO Eaton.

Global expansion is the vision at Chrysler, which is growing at a rate of 20 percent abroad. Chrysler is exploring many foreign ventures in Southeast Asia and in South America. As Eaton surveys the global auto market, he concludes that Chrysler's success will ultimately come down to people. "What will make all the difference in business will be how well you train your workforce, how well you motivate-and how well you empower."

SOURCE: M. Loeb, "Empowerment That Pays Off," Fortune, March 20, 1995: 145-146. © 1995 Time Inc. All rights reserved.

ORGANIZATIONAL REALITY

Culture Change at Microsoft?

Perhaps one of the most recognizable organizational cultures of modern times is that of Microsoft Corporation. The Microsoft Campus in Redmond, Washington, is a hive of creative energy surrounded by tall pines. The dominant members of this culture are the software developers, called "wild ducks," who design software as a team. The fact that people are the most important asset is so well ingrained that no one bothers to talk about it. And collaboration within Microsoft is also ingrained. Terminology like "autonomous work teams" is unnecessary-it's simply the way the company works.

The "wild ducks" are charged with making software that is "seamless" or user friendly, and managers operate with a "seamless" philosophy. They interfere with the wild ducks as little as possible. Empowerment underlies Microsoft's ability to recruit and retain wild ducks, who are automatically assigned a mentor to help them learn to function as a member of the team. All the latest equipment, the opportunity to do state of the art development, flexible work hours, attractive surroundings, little bureaucracy, and a highly creative environment also attract the wild ducks. Microsoft works hard at making its campus environment as employee-friendly as possible.

As Microsoft grows, can it sustain this culture? Many companies that start out small and creative end up large, bureaucratic, and rigid. Only time will tell if Microsoft will go this route. The culture faces one of its biggest challenges as Microsoft shifts its emphasis to CD-ROM products. Bill Gates has predicted that by the year 2000, home-based CD-ROM products will make up over 50 percent of Microsoft's revenues. The company has already had success with several products like Encarta and Microsoft Complete Baseball. Microsoft Home, the brand name for the Microsoft Consumer Division, expects a boom. Typical home PC users own more than 20 CD-ROM titles.

Microsoft's leap into CD-ROM may cause a rapid change in the company's internal culture. Developers are accustomed to collaborating with each other and jealously protecting their technology from the outside world until it is ready to be sold. CD-ROM titles, however, are rich in content and require the skills of many companies, scholars, and artists. Microsoft Home has to go outside and team up with many experts to accomplish its tasks. Working collaboratively with outsiders may be a challenge for Microsoft. And developers, in particular, who are used to interacting with their own kind, may have problems relating to a variety of scholars and artists. Making CD-ROMs is more like being a movie production company, which may require Microsoft's strong culture to adapt.

SOURCE: Reprinted with permission from the September 1992 issue of Training magazine. Copyright 1992. Lakewood Publications, Minneapolis, MN. All rights reserved. Not for resale.

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