The Thinking Organization: How Patterns of Thought

Determine Organizational Culture

An understanding of how people think in organizations can help corporate leaders change the

culture of their company.

by Evelyn Pitre and Henry P. Sims, Jr.

Thursday evening, 7:30 P.M. In his office on the seventh poor, Michael G. Smith, new CEO of Avant-Garde Computer, Inc. (AGC), examines the most recent sales report. The message is depressing: sales have leveled off in the past year, AGC is a small and innovative young company located in the Silicon Valley. Founded eight years ago, AGC’s specializa- tion is engineering graphics design software. The founder, an engineer himself, had successfully mar- keted two highly specialized software packages for mechanical and electronic design. Two years ago, the need for capital became acute, and the founder sold AGC to a very large multinational corporation.

Michael G . Smith was appointed CEO by the consortium. He recognizes the dijjjculQ of AGC’s current situation, but he is optimistic that he can re- vive the company. His strategy would be to broaden AGC’s market by adapting and offering its graphics products to other end-user specialists besides engi- neers, and to add a counseling service to educate and orient clients to graphics applications. However, he foresees that the members of AGC’s team would not be thrilled by his view of the future, since they are concerned solely with the engineering applications of the company’s products. Quite honestly, he really does not know how to introduce these major strategic

340 National Productivity ReviewiAutumn I987

Since organizations are an aggregation of people, a “thinking organization” can be oiewed

as an aggregate of people’s thoughts and representations.

changes without losing either the team’s spirit or the team.

Michael’s problem is more common than one might think. Each time a manager sets out to change someone else’s point of view about a task, a decision, an orientation, or a strategy, he or she would be ask- ing the same set of “how to” questions that trouble Michael. How can I introduce this change in the most effective manner? Is our corporate culture sympathet- ic or antagonistic to this change?

The difficulties associated with changing indi- vidual attitudes and behaviors have been addressed through literature on resistance to change. From an organizational viewpoint, resistance to change takes on an entirely different perspective. At that level, change impacts on more than individual attitudes and behaviors. Indeed, aggregate patterns of thoughts, at- titudes, and behaviors throughout an organization will either reinforce the proposed change, or, more likely, severely impede its progress. Therefore, changing an entire organization frequently entails changing pat- terns of thought that are deeply rooted among large numbers of people. Like Michael, many CEOs have faced the difficulty of turning around an organization from one way of thinking to another.

Fortunately, a new stream of theory and re- search has emerged that promises to help executives understand how to change organizationwide patterns of thought. The ideas, generally known as organiza- tional social cognition, originate from the science of cognitive psychology, which studies the process of how humans think. The term cognition derives from the Greek word “cognos”-to think-and the term social cognition refers mainly to how we think about other people in social situations. For Michael, our CEO, the main issue is how the people in his organi- zation think of themselves with regard to their prod- uct/market interface.

A recent book, The Thinking Organization,’ draws on developments in organizational social cog- nition to provide new knowledge to executives who face the challenge of changing organizational patterns of thought.

The book is based on the assumption that the way people think and organize their thoughts in their organizational life is likely to influence the direction of organizational culture. Therefore, in this article we

draw upon ideas from The Thinking Organization to introduce fundamentals of social cognition; namely the notions of schema and symbol, and to suggest how they can be used to facilitate organizational change. From a managerial viewpoint, greater under- standing of how people think could be an important asset that might determine the success or failure of change.

Fundamentals of social cognition Obviously, organizations do not think, but

people within them do. Since organizations are an ag- gregation of people, a “thinking organization” can be viewed as an aggregate of people’s thoughts and rep- resentations. This metaphor is used by Henry Sims and Dennis Gioia, who argue that “organizations are products of the thought and action of their members,”2 and who “explore how people in organi- zations think about their experiences and how they act in conjunction with their thought^."^ The way we think is not yet fully understood. Nevertheless, schol- ars are beginning to derive some knowledge about how cognitions and symbols are created and used, and how these cognitions and symbols lead to behaviors and actions.

Person schemas or categories

A person is said to cognitively abstract and simplify the multitude of information encountered in day-to-day life in order to capture the inherent organi- zation of the world. Various ideas have emerged re- garding how people reorganize that information. One common type of cognitive process is a categorization procedure by which a person mentally classifies an object or another person.

When first encountering a person, an individu- al mentally matches that person with cognitive struc- tures that have previously been created from long- standing experience and interaction with the world. A cognitive structure, sometimes called a “schema,” is a mental representation or system of organization, usually expressed through language or imagery. The cognitive schema used in categorization is called a “category. ” A particularly vivid representation of a

National Productivity Review/Autumn 1987 34 1

Executioes usually haoe clear cognitioe structures regarding which behaoiors are

appropriate under certain conditions.

category is sometimes called a “prototype.” A com- mon example used in cognitive psychology is the label “bird,” which calls forth a mental schema with attributes like ‘ ‘feathers, ’ ’ ‘ ‘beak, ’ ’ “flying, ’ ’ etc .

One particular type of social schema is a per- son category, which stands in contrast to an object category. The boundaries of a person category are not as well defined. Indeed, it is easier to judge an object as a member of a “chair” or “shirt” category than it is to adequately categorize a person as an “extrovert” or an employee as a “bad supervisor.” Social catego- rization always involves a “fuzzier set.” That is why, in an attempt to simplify the categorization process of individuals, cognitive prototypes emerge.

Social categorization is a fairly common event for managers. Formal decisions such as selection and appraisal, as well as more informal day-to-day activi- ties, are based on that process. For example, our own research has shown that when a potential employee matches the prototype of a category, like an extro- verted person for a salesperson job, that person is more likely to be preferred to fill the even though on the basis of objective information, others could fill the job as well or better.

Executives build prototypes of good and bad performers (person schema) that they use to select or appraise employees. A prototype of a good employee, for example, might be someone who is always on time, who meets and outdoes standards, who is will- ing to occasionally do something extra, etc.

The main advantage of social categorization is that it is efficient. That is, the cognitions involved in categorization allow us to process mentally a poten- tially overwhelming amount of information relatively quickly. It is a way to simplify chaos, to order our perceptions. Categorization is not very “effortful. ” It is a short cut.

However, executives should be aware that so- cial categorization also has disadvantages. One is the fact that people, when asked to reconstruct social in- formation about someone, tend to add to their de- scription information that fits their schema even if it may not be a true characteristic of the individual de- scribed. This process is called “gap filling,” because we are able to fill in information that we do not truly possess. On the one hand, gap filling allows a person to form an impression from only a few cues, yet can also lead to overgeneralization and false impressions.

Another problem with social categories is that they are particularly resistant to evidence that is in- consistent with them. That is, they “persist stubborn- ly” even when specific situations, persons, or behav- iors contradict them.5 Typically, people explain the persistence by claiming that the inconsistency is the exception that confirms the rule. Further, we tend to selectively seek out and attend to information that supports our prototypes and to ignore or discount dis- confirming evidence. Thus, managers judging em- ployees may, at least for a while, continue to favor- ably appraise a once good employee despite systematic evidence of decline in performance.

Prototypes also typically have an emotional component deeply entwined within the schema. For example, we might have a particular prototype of how a supervisor for our company should appear and act. An individual who matches or conforms to this proto- type would evoke an unconscious positive effect. A supervisor who consistently violates our conventional viewpoints of appropriate supervisory behavior is likely to evoke an unconscious negative effect.

This connection between emotion and cogni- tive structure is one reason that individuals may not be able to recognize bias brought on by their own emo- tional response, but sincerely believe their viewpoints are “objective” and “rational.” Also, the emotional component is one reason that mere exposure to con- tradictory information is not enough to change the pattern of thought.

Most of all, it is important to understand that this resistance is not overt or deliberate but is a subtle, usually unconscious cognitive response.

Event schemas or scripts

Another type of cognitive organization is “event schemas,” also called “scripts. ” Executives usually have clear cognitive structures regarding which behaviors are appropriate under certain condi- tions. When these behaviors are linked together into sequences of behavior, the cognitive organization that describes the sequence is known as an event schema, or script. For example, because of their long experi- ence, most executives have well-formed and relative- ly detailed scripts concerning how performance ap-

342 National Productivity ReviewiAuturnn 1987

praisals should be conducted. An event schema is a cognitive organization of appropriate sequential be- haviors in a specific situation. Event schemas are con- structed as a result of doing something in a certain way over and over again. Religious rites (an Irish Catholic mass or a funeral in Louisiana); habits (morning rituals or superstitious ones); everyday life routines (driving a car or eating in a restaurant); and work-related situations (job interviewing, negotiating, or sales calls) are all examples of event schemas.

An event schema usually allows a person to act automatically in a given circumstance, freeing him or her of unnecessary cognitive burdens. Managers who do not have to think about the procedure of inter- viewing (including what questions to ask) can con- centrate their energy on evaluating candidates and their responses. For example, secretaries who are good typists can perform efficiently when typing from a dictaphone and yet, when asked, may not be able to recall the content of what they have just typed.

Special kinds of event schemas known as me- tascripts are used to organize rules and procedures. In decision-making processes and problem-solving strat- egies, metascripts are used as guidelines for integrat- ing apparently unrelated information under uncer- tainty. Through plausible reasoning (a special kind of reasoning used under conditions of uncertainty) and schematic information processing, it is said that man- agers can take action “despite several kinds of igno- rance. ”6 Managers using metascripts as guidelines for their actions have a basis for their decisions despite uncertainty and lack of information.

Role schemas

In organizational settings, a further type of schema is of particular importance. Who a person is within a given company and situation represents a “person-in-situation’’ or ‘‘role” schema. A role schema is a representation of a category or person playing a specific role in a given situation. A doctor informing a patient of a bad prognosis, a manager scolding an employee who is frequently late, and a board of directors deciding on a joint venture with an- other company are all examples of role schemas.

Person-in-situation schemas are based on

knowledge of social norms usually linked with a spe- cific role. For example, a worker in a steel plant is not expected to work in a three-piece suit but is expected to conform to policies of his company regarding safe- ty behavior, including the wearing of safety clothing. As another example, the status and authority of an executive can be recognized by his or her display of a socially accepted set of behaviors in a given situation. He or she is the one who is supposed to be responsi- ble, who controls outputs, who evaluates perfor- mance, and so on.

As with other types of schemas, role schemas free individuals of extensive and laborious informa- tion processing. Also, information contained in a role schema is usually richer, more detailed, and more completely intertwined than in other types of schema and, therefore, potentially less connected to the true characteristics of a given person in a given situation. That is, there is more potential for false gap filling through the intricacy of a role schema. There is a high probability of biases associated with role schemas.

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Symbols are a oery efficient way to deal with a large amount of complex information.

Self-schemas

The last type of schema consists of informa- tion organized around the self. “Self-schemas” are generalizations about the self abstracted from the present situation and past experiences. Individuals build representations of themselves based on their perceptions of themselves (physical characteristics), or their traits (psychological characteristics) and their acts (behavioral characteristics).

For example, an employee who has a negative self-schema because he perceives himself as short, shy, and bungling may believe that he will not be able to perform a new task adequately. The odds are that his behaviors will confirm his apprehensions and will reinforce his self-schema. This influence of self-sche- ma on behaviors is called self-fulfilling prophecy. Self-schemas are notoriously inaccurate or incom- plete.

Symbols

Symbolic processes are also an important part of individuals’ cognitive representation of the world. In an attempt to assign meaning to the environment and to communicate understanding to others, individ- uals use words or images to convey a rich and com- plex message. Organizations and other social institu- tions are rich in symbolic processes.

“Symbols” are traditionally defined as words or images that represent something else. To “roll out the red carpet” is a symbolic representation of respect shown to an important guest. The Congressional Medal of Honor is a symbolic representation of brav- ery and courage. Individuals, for personal conve- nience or through social agreement, transform reali- ties into symbols whose meaning transcends the boundaries of the reality itself.

Symbols can be used to describe the reality to others, but most of all, they act as “energy savers.” They are mental short cuts used to amalgamate infor- mal rules, situational information, emotional content, and other apparently unrelated information into a suc- cinct representation. Organization officials do not have to express explicitly their gratitude toward a re-

tiring partner if they organize a reception, invite his or her friends, and offer a gift. The whole package sym- bolizes their recognition of his or her contribution. Symbols are a very efficient way to deal with a large amount of complex information. Another way by which symbols are energy savers is their capacity to alleviate tension or stress. Symbolic rituals, such as the “meal after the show” for actors and actresses or the involvement of some employees in sports tourna- ments sponsored by their company, are examples of the venting function of symbols.

Symbols also serve as excellent retrieval cues, since they are more easily remembered than the infor- mation they represent and can trigger a flood of mem- ories. Awards, trophies, or diplomas represent years of effort, battles, and incremental progress toward a goal. Executives also have symbolic representations of power and authority, which are frequently con- veyed through titles, appearance, and dress. Those symbols imply or convey knowledge far beyond the immediate attributes associated with them.

Symbolization is also a process by which complexities of environments are reduced and simpli- fied. In social contexts, like organizations, symbols are widely used. Indeed, symbols quickly communi- cate the ideology or the philosophy of the enterprise, spread values and the sense of what is important for the organization, and help identify organizational hi- erarchy and power. Highly symbolic action can be used to develop shared meanings that facilitate com- mitment and concerted action. Allocation of re- sources, bigger budgets, a personal secretary. and a carpet in one’s office are all common symbolic repre- sentations of organizational power. In personnel-re- lated policies, for example, publicity about a success- ful team effort can tell other employees much about an organization’s ideology and culture.

Symbols are also an essential part of the so- cialization process. New employees must identify “the rules” as quickly as possible. Informal rules are frequently represented by symbols. Stories about dar- ing behavior, past practical jokes, bosses’ feats, and so on, rapidly tell the newcomer what is important, what is permitted, what is valued, who is to be re- spected, etc. Most of all, executives should think about the potential of deliberately managing symbols as a means to influence organizational culture.

344 National Productivity ReviewiAutumn 1987

Changes of culture are typically not euolutionary, but reoolutionary. Crisis is a

typical prerequisite for cultural change.

Organizational cultural change Organizational culture is a broad, complex,

and sometimes confusing concept. Most writers use the term to represent a system of rules, norms, and symbols on which members agree and which is a basis for action. But organizational culture can also be viewed from a social cognition perspective.

Each individual employee has patterns of thought (schemas, symbols) that are highly idiosyn- cratic. But some patterns are shared by the vast major- ity within a given organization. The technical term for a shared pattern of thought is “consensual.” This means that people in an organization, for example, who share notions of how a meeting is to be conduct- ed, have a consensual script about the appropriate se- quence of behaviors. Also, employees of an organiza- tion typically have fairly consistent ideas about how an executive should appear and behave-an example of a consensual person-in-situation schema.

Organizational culture is the result of a con- vergence of employee schemas and symbols. But cul- ture is also a cause. That is, once created or imple- mented and shared, organizational culture provides justifications or reasons for employees and managers to decide, behave, plan, and perform the way they do. In most organizations, there is also some degree of shared understanding about the fundamental nature and strategies of the organization, and this is also a type of consensual pattern of thought. For example, Michael Smith, the CEO in our introductory case, took over a company when the label of “engineering application” was the currently operative consensual pattern that identified the company. In this case, schemas and symbols represent a culture that is inter- nally focused, with major emphasis on the develop- ment of a technically excellent product. In contrast, Michael, with his broader experiences, sees the need for an externally-focused, marketing-oriented strate- gy, where the product would be oriented to a wider application base and then could be fine-tuned to the needs of specific customers. Like many executives who wish to reorient a department or a company, Mi- chael is faced with the problem of dealing with a deeply entrenched consensual pattern of thought.

Changes of culture are typically not evolution- ary, but revolutionary. Crisis is a typical prerequisite for cultural change. In the AGC example, the take-

over of the company and the arrival of Michael as new CEO, along with the dismal business outlook, may provide the necessary conditions for organizational cultural transition to take place. Other potential times of transitions would be sharp periods of recession, technological breakthroughs, changes in the manage- ment team, and all sorts of managerial crises. Under those circumstances, the confidence of organizational employees in the veracity and applicability of pre- viously shared patterns of thought can be unfrozen, thus paving the way for a new consensual pattern of thought. Nevertheless, it is important to remember that those patterns are very persistent and quite resis- tant to disconfirmatory information.

Understanding consensual schemas and sym- bols are of crucial importance i n any attempt to change an organizational structure. The essence of cultural change is the replacement of one consensual pattern with another. The challenge to Michael is to replace an internally-oriented engineering schema with an externally-oriented marketing schema.

Steps toward change

How this replacement might be accomplished is not an easy question to answer. What are the specif- ic actions that Michael can take? Here are some sug- gestions that revolve around the idea of replacing one consensual schema with another.

First, it is important to recognize, define, and articulate the current consensual pattern of thought. For Michael, especially since he i s new, this might entail extensive conversations with the staff and cus- tomers to obtain information about how they view the company. Another approach might be to bring impor- tant members of the staff together and ask questions like: What are we? What do we stand for? What is our current strength? Clearly, the main value of this first step would be to help define and understand a baseline from which a change effort can be mounted.

Then, it may be useful to organize and list the so-called rational factors that currently constrain the company. What are the impediments and disadvan- tages of the present way of doing things‘? Why is the current situation inadequate to accomplish what needs to be done? However, it is important at this stage to

National Productivity ReviewiAutumn 1987 345

Management and control of consensual patterns of thought can be used to create, implement, or

change an organizational culture.

//1/ ' I

remember that information alone is not sufficient to create change. For example, Michael would be disap- pointed if he depended solely on an objective argu- ment about the inadequacies of engineering elegance to meet market demands.

Another step is an analysis of the emotional factors that might stand in the way of change. One should perform an analysis of who will be threatened. Will some perceive the possibility that they may suf- fer a loss of power or prestige'? Understanding the emotional bases of resistance to change will be help- ful. Most of all, a realization that the resistor may not be fully aware of the underlying reasons that are caus- ing his or her resistance, and an awareness that the resistance is not necessarily malevolent, will help one to be patient and understanding.

Perhaps the most important step is to institute a process of reevalution. A top-down transmittal of information and orders is not likely to be successful. A bottom-up effort of analysis and examination of al- ternatives has a better chance of succeeding. Addi- tional information from outsiders might be very ap- propriate at this stage.

For example, Michael might learn from John Scully, CEO of Apple Computer, who instituted a re- evaluation of Apple's way of thinking soon after he assumed the chairmanship. He brought together key corporate executives for an extended retreat to reeval- uate the coordination and direction among the diver- gent, and some thought confusing, Apple product line. This was a difficult and extended process, but i t was ultimately successful in creating a coherent direc- tion for the organization.

Another important step is selecting and choos- ing the actors who will carry out the change. Several alternatives are available. The frontal assault would be attempting to directly change the patterns of thought of the existing staff. Sometimes this will work, especially if the organization is really seen to be in crisis. A second alternative would be to select those individuals who seem to be most sympathetic to new ideas and empower them with authority and re- sponsibility for change.

A third alternative would entail importing new key individuals from outside. One CEO who wanted to make a radical shift in product technology went to the extreme of creating a new and separate legal entity to compete directly with his old organization. When

queried about this rather unusual strategy, he stated that he felt the old organization was "too married" to the old technology.

Whichever alternative is chosen, the key ele- ment is the development and implementation of new consensual patterns of thought.

Michael would also be wise to utilize specific symbolic action as a part of his change effort. As one example, he might, with some publicity, establish a new task force charged with the assignment of devel- oping a new strategic marketing thrust. He might em- phasize, especially through his own actions, the im- portance of adapting the company's systems to unique customer needs, and ensure that these actions are given wide visibility in the organization. The point here is to create highly visible examples that vividly convey the new pattern of thinking.

Finally, sometime well into the change imple- mentation phase, Michael should try to "close the loop" by attempting to articulate and publicize a co- herent strategy that will solidify the new consensual pattern of thought.

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Conclusion

In changing an organization’s culture, it has been said that leadership is of prime importance, especially the leader’s “vision.” Vision means the capability to formulate and articulate new patterns of thought that can be shared by all to propel the organi- zation toward new horizons. If we view organization- al culture as consensual patterns of thought, then management and control of those patterns can be used to create, implement, or change an organizational cul- ture. Personal schemas, event schemas, role schemas, and symbolic representations should be objects of focus.

The major goal is to hammer together a new consensual pattern of values. Again using the example of AGC, one can predict that Michael Smith will have more success in changing AGC’s set of values if he can systematically demonstrate what he believes in and diffuse it throughout the organization. The cre- ation of new symbols and patterns of thought are real- istic ways to change an organizational culture.

NOTES

1 . H. P. Sims, Jr., and D. A. Gioia, The Thinking Organization: Dynamics of Organizational Socinl Cognition (San Francisco: Jossey-Bass, 1986).

2. Ibid., p. 1 .

3. ibid., p. 2.

4. A. J. Jaccoud, D. A. Gioia, and H. P. Sims, J r . . “Schema- Based Categorization and Personnel Decisions.” Proceeding: Na- tional Academy of Management Meeting, 1984. pp. 274-78.

5 . S. T. Fiske and S. E. Taylor, Social Cognition (New York: Random House, 1984).

6. D. J. Isenberg, “The Structure and Process of Understanding Implication for Managerial Action,” in H . P. Sims, Jr., and D. A. Gioia, op. cit., pp. 238-62.

Evelyn Pitre is lecturer in organizational behavior in the School of Business Administration (Ecole des Hautes Etudes Commerciales) at the University of Montreal. Her research interests are cognitive and affective processes as they influence interper- sonal relationships in organizations.

Henry P. Sims, Jr., is professor of organization behavior at George Mason University and The Pennsylvania State University. Dr. Sims’ research on leadership and managerial/employee psycholo- gy has been published in over sixty-five journals. He is coauthor of Super Leadership: Discovering How to Lead Others to Lead Themselves to Excel- lence (Prentice-Hall, 1986) and The Thinking Or- ganization: Dynamics of Organizational Social Cognition ( 1986).

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