The Effect of Adaptive Organizational Culture on Long-Term SurvivalJ Bus Psychol

About

Authors
David P. Costanza, Nikki Blacksmith, Meredith R. Coats, Jamie B. Severt, Arwen H. DeCostanza
Year
2015
DOI
10.1007/s10869-015-9420-y
Subject
Applied Psychology / Business, Management and Accounting (all) / Business and International Management / Psychology (all)

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Text

ORIGINAL PAPER

The Effect of Adaptive Organizational Culture on Long-Term

Survival

David P. Costanza1 • Nikki Blacksmith1 • Meredith R. Coats1 • Jamie B. Severt1 •

Arwen H. DeCostanza2  Springer Science+Business Media New York 2015

Abstract

Purpose Organizational culture is a critical resource for organizations to adapt to dynamic environments and to survive in the long term. Unfortunately, a lack of clarity exists in the conceptualization of adaptive cultures and little empirical research investigates its impact on survival.

Therefore, the purpose of the present study was twofold: (1) to identify, define, and develop a measure of adaptive organizational culture and (2) to demonstrate the effect of adaptive culture on organizational survival.

Design/Methodology/Approach An adaptive culture rating scale was developed based on a review of the existing literature. Ninety-five organizations founded prior to 1940 were rated on nine characteristics of adaptive culture.

Ratings were used to predict likelihood to survive using a

Cox regression with proportional hazards survival analysis.

Findings Exploratory factor analysis revealed two broad factors of adaptive culture, values toward change and action-orientation. Findings indicate organizations with adaptive cultures were more likely to survive.

Implications The present effort provided evidence that culture can serve as an adaptive mechanism with effects spanning decades. Leaders should focus on establishing adaptive cultural norms and values in order to increase chances of surviving.

Originality/Value This is one of the first historiometric studies to develop and utilize a measure of adaptive culture. Further, this study looked at the impact of adaptive culture on long-term organizational outcomes using survival analysis, a statistical technique not often employed in the organizational literature.

Keywords Organizational culture  Organizational performance  Survival analysis  Adaptability

Introduction

Organizations have long operated in dynamic environments that threaten their existence (Sheppard 1994).

Environmental threats include technological innovation, increased competition, and evolving customer needs (Gittleson 2012; Mitchell et al. 2014). Adapting to changing environments has long been a concern of organizational leaders and founders (Gittleson 2012; Huber 2011;

Mitchell et al. 2014). Even as far back as The Art of War in the 6th century B.C., Sun Tzu mentioned the importance of adaptability and flexibility for organizations in changing environments (Tzu 1963).

In order to respond to environmental threats and opportunities, organizations must develop an infrastructure and capabilities that allow adaptation to such environmental changes (Huber 2011; Levinson 1994; Pearce and Robbins 1993; Ployhart and Turner 2014; Trahms et al. 2013) and, ultimately, survival. However, many organizations struggle

An earlier version of this research was presented at the 29th annual meeting of the Society for Industrial & Organizational Psychology,

Honolulu, HI. & David P. Costanza dcostanz@gwu.edu

Nikki Blacksmith nikkiblacksmith@gmail.com 1 Department of Organizational Sciences and Communication,

The George Washington University, 600 21st St.,

Washington, DC 20052, USA 2 U.S. Army Research Laboratory, 459 Mulberry Point Rd.,

Aberdeen Proving Ground, Aberdeen, MD 21005, USA 123

J Bus Psychol

DOI 10.1007/s10869-015-9420-y to determine how they can adapt in a timely and appropriate manner (Mitchell et al. 2014).

One resource that organizations might use to recognize and respond to changes in dynamic environments is their culture (Denison and Mishra 1995; Schein 2010). While organizational culture has many definitions, one common definition is the shared values, beliefs, and implicit assumptions that guide member actions as well as rituals and pattern of behaviors within the organization (Ostroff et al. 2003; Schein 2010; Schneider et al. 2013). Organizational culture is generally thought of as a long-standing and relatively stable characteristic that may provide a foundation for organizational members to recognize change and implement adaptations within the context of that particular organization (Denison and Mishra 1995;

Schein 2010). While culture can and does change (Meyerson and Martin 1987), such changes generally occur very slowly and are difficult to effect (Schein 2010). Therefore, the organizations’ original ongoing culture can have a long-lasting impact (Barney 1986; Schein 2010).

Within the organizational culture literature, researchers have tried to assess the impact of culture, including its impact on organizational effectiveness. Many cultural traits have been studied in relation to organizational effectiveness such as involvement, consistency, mission (Denison and Mishra 1995), hierarchical culture (Giberson et al. 2009; Cameron and Quinn 1999), clan culture (Cameron and Quinn 1999; Giberson et al. 2009), conflict (Gelfand et al. 2012), adhocracy (Cameron and Quinn 1999), market culture (Cameron and Quinn 1999), innovation, supportiveness, and team orientation, (O’Reilly et al. 1991), just to name a few. In a few cases, cultural types or traits have been used to predict specific organizational performance dimensions. For instance, Hartnell et al. (2011) found that market cultures have stronger positive relationships with organizational profit and subjective market performance than do other culture types such as clan cultures.

One type of organizational culture trait that might help explain why some organizations survive and others do not, is adaptability. Specifically, a culture that guides behaviors and processes that support appropriate responses to the environment may allow the organization to be more flexible and adaptable. Adaptability, broadly defined, has been shown to be a predictor of outcomes related to organizational survival such as growth (Covin 1991; Denison and

Mishra 1995) and short-term performance (Chatman et al. 2014; Gordon and DiTomaso 1992).