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Cultures and Creativity within Hierarchical OrganizationsAuthor(s): Christine S. Koberg and Jacqueline N. HoodSource: Journal of Business and Psychology, Vol. 6, No. 2 (Dec., 1991), pp. 265-271Published by: SpringerStable URL: http://www.jstor.org/stable/25092334

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JOURNAL OF BUSINESS AND PSYCHOLOGYVolume 6, No. 2, Winter 1991

CULTURES AND CREATIVITY WITHINHIERARCHICAL ORGANIZATIONS

Christine S. KobergUniversity of Colorado at Boulder

Jacqueline N. HoodUniversity ofNew Mexico

ABSTRACT: This study examined cultural pluralism along the lines of hierarchy among eight large public accounting firms. Although no significant cultural differences among the different functional units (auditing, tax, and management consulting) of the firms were found, culture was found to be related tohierarchical level. Specifically, top level managers (partners) perceived the culture of their organization as significantly more innovative and supportive thandid individuals at lower hierarchical levels (managers/supervisors and senior/staff accountants). Creativity was not affected by culture.

It has been documented that organizations have multiple culturesrather than a single, monolithic culture (Rose, 1988). Although muchhas been written about the notion of multiple cultures, with a few notable exceptions (Hood & Koberg, 1991), little research exists on differingsubcultures within organizations and the interaction of an organization's culture with individual job-related variables. The present studyexamined the extent to which three different types of organizational cultures?bureaucratic, innovative, and supportive?coexist in differenthierarchical levels (partners, managers/supervisors, and senior/staff accountants) and different functional units (auditing, tax, and management consulting) of eight large public accounting firms. It also examined the degree of creativity among individuals in these differentorganizational positions and units, and analyzed the relationship of culture to creativity and other job-related variables.

Culture consists of the values, norms, and beliefs an individual

Support for the preparation of this manuscript was partially provided by the BusinessResearch Division, College of Business, University of Colorado at Boulder.Address correspondence to Christine S. Koberg, Associate Professor, Strategy and Organization Management, College of Business, Campus Box 419, University of Colorado atBoulder, Boulder, Colorado 80309.

265 1991 Human Sciences Press, Inc.


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266 JOURNAL OF BUSINESS AND PSYCHOLOGY

holds in common with members of some social unit or group (Cooke &Rousseau, 1988). In the present study, a measurable and useful typologyof organizational culture developed by Wallach (1983) has been used.She has distinguished three separate types of organizational culture?bureaucratic (structured, ordered, regulated, and power-oriented), innovative (results and risk oriented), and supportive (collaborative and relationships-oriented)?that can vary from department to departmentwithin organizations and that she considers common in varying degreesto all organizations.

ORGANIZATIONAL SUBCULTURESAs is true with the larger society, one or more subcultures can de

velop within an organization (Rose, 1988). Subcultures reflect the multitude of dissimilar work and social environments within an organizationand have been shown to correspond to the thinking and behavioralstyles of individuals in different hierarchical levels and functional areas(Pavett & Lau, 1983). Top-level managers of the Federal Aviation Ad

ministration have been found to describe the organization as supportinggoal accomplishment, self-expression, and teamwork; whereas controllers, at the bottom of the hierarchy, felt they were expected to avoidconflict, refer decisions upward, and behave in conventional ways(Cooke & Rousseau, 1988). Lower level workers generally report minimal risk taking while managers report the most (Reynolds, 1986).

ORGANIZATIONAL CULTURE AND CREATIVITYCreativity is important to managerial and organizational success.Creative individuals can turn error into opportunity and tend to be less

conforming and more spontaneous and energetic than others (Barron &Harrington, 1981). An organization's culture can affect its members'creativity. A highly controlled bureaucratic culture (characteristic ofauditing units) can foster cautious and accurate thinkers and can limitindividual creativity (Kirton, 1984). By contrast, an innovative culture(characteristic of management consulting units) encourages individualingenuity, originality, and inventiveness. The different hierarchicallevels within an organization can also be expected to have differing

needs for creativity. Within the auditing division of a large accountingfirm, for example, the top manager (partner) of an audit team controlsthe review process and is the creative arm of the team, determining theoverall outcomes of the audit. The lower hierarchical levels (manager/supervisors and senior/staff level accountants), by contrast, must followfairly clear and unalterable guidelines.


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CHRISTINE S. KOBERG AND JACQUELINE N. HOOD 267

THE CONCEPT OF A CULTURAL MATCHWallach (1983) suggests that individual job performance and favorable work outcomes, including job satisfaction and involvement and pro

pensity to remain with the organization, depend on the match or "fit"between an individual's characteristics and an organization's culture.This notion is consistent with other related "good match" theories whichsuggest that favorable work outcomes are a function of how well a person's personality is matched by a specific work environment variable(Chapman, 1989). Within an innovative culture, individuals with highlevels of creativity would be expected to experience high levels of jobsatisfaction and involvement, and should exhibit less propensity toleave the organization than those with lower levels of creativity.Our hypotheses are as follows.

HI: Bureaucratic culture scores will be greater at lower levels thanat higher levels of the organizational hierarchy, and will be greateramong auditing and tax than among consulting units.H2: Innovative culture scores will be greater at higher than at lowerlevels of the organizational hierarchy, and will be greater amongconsulting than among auditing and tax units.H3: Personnel at higher levels of the organizational hierarchy willscore higher on creativity than those at lower levels; personnel in

management consulting units will score higher on creativity thanthose in tax and auditing units.H4: The higher the level of creativity for an individual, the greaterthe positive correlation between innovative culture and satisfactionand involvement, and the greater the negative link to propensity toleave.

METHODOrganizations and Subjects

Demographic data and data on the research variables were obtainedfrom a questionnaire administered on-site to a volunteer group of 122individuals (89 males and 33 females) working in the tax, auditing, andmanagement consulting units of 8 large certified public accountingfirms within a major western metropolitan area. Public accountingfirms are structured hierarchically and have an established pattern ofpromotion from within, with partners at the highest organizationallevel, followed by managers/supervisors and senior/staff accountants. Ofthe subjects, 50 were senior/staff accountants, 42 were managers/super

visors, and 30 were partners; 62 worked in auditing, 28 in tax, and 28 in


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management consulting units. A chi-square test indicated that the sample's composition by functional area (53% auditing; 24% tax; and 24%

management consulting) did not differ significantly from the workforcecomposition of the eight public accounting firms (X2 = .43, df = 2, n.s.).Subjects had an average age of 33.7 years, had been employed by thefirm an average of 7.2 years, and had been in their present position anaverage of 3.1 years. Sixty-six percent held a baccalaureate degree, withthirty-four percent holding an advanced degree.

MeasuresThe "Organizational Culture Index" (OCI) developed by Wallach

(1983) was used to measure organizational culture. The OCI is a measure of organizational culture in three dimensions?bureaucratic, innovative, and supportive. Subjects are asked to indicate, using a 4-pointLikert scale, the extent to which 24 different adjectives such as "hierarchical" and "power-oriented" correspond with how they see the organization. Items are grouped into three cultural profiles, each containingeight items, with scores for each profile or dimension expressed as a sumtotal. The reliabilities for the three scales were .80, .75, and .77, respectively.The 30-item Remote Associates Test (RAT) developed by\ Mednick(1962) was used to determine creativity. The RAT is designed to capturethe creative thinking process, defined as the "forming of associate elements into new combinations which either meet specified requirementsor are in some way useful" (Mednick, p. 221). While the RAT has beencriticized by some as being more a measure of verbal skill or IQ than ameasure of creativity, even one of its severest critics (Hayes, 1978) ad

mits it is the only standardized measure of creativity that is directlylinked to a psychological theory of creativity. The RAT taps two different types of cognitive abilities. The first concerns symbolic abilities?learning to recognize words or to operate with numbers; the second concerns semantic intelligence?important in situations where the learning of ideas is essential (Guilford, 1959).

Job satisfaction, defined as an affective response resulting fromone's job, was measured using an instrument developed by Hoppock(1935) and later revalidated by McNichols, Stahl, and Manley (1978).

The instrument consists of four 7-point Likert type questions pertainingto the subject's level of satisfaction with the job. An alpha coefficient of.79 was obtained. Job involvement, defined as the "importance of workin the worth of person", was measured using a 6-item, 4-point Likerttype instrument developed by Lodahl and Kejner (1965, p. 24). The reliability coefficient was .76. Propensity to leave was the measured by athree-item instrument using a 5-point Likert scale developed by Lyons(1971). The alpha coefficient was .83.


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Table 1Analysis of Variance Table for Innovative Culture

Source SS dfS F pMain Effects 2.95 .74 3.91 .005Function .82 2 .41 2.16 .120Level.41 2 1.21 6.37 .002Two-Way InteractionFunction X Level .40 .10 .53 .711Residual 19.32 102 .19Total 22.68 110 .21

RESULTSAs Hypothesis 1 predicted, the culture of the organization was perceived as significantly more innovative and supportive by top level man

agers (partners) than by either managers/supervisors or senior/staff accountants (3.37 versus 3.09 and 3.01 for innovative culture; 3.06 versus2.61 and 2.75 for supportive culture). Although the differences failed toreach statistical significance, mean creativity scores were higher forpartners than for managers/supervisors and senior/staff accountants(18.78 versus 14.85 and 15.23). Contrary to Hypotheses 2 and 3, therewere no statistically significant differences among the three functionalunits inmean innovative, bureaucratic, or supportive culture scores; nor

did accountants in different units differ significantly in creativity.These findings are based on the results of two-way analysis of variance(see Tables 1 and 2) and the Scheffe multiple comparison technique

Table 2Analysis of Variance Table for Supportive Culture

Source SS dfS F pMain Effects 3.17 479 4.03 .004Function .94.47 2.39 .10Level 2.33 2 1.17 5.9 .004

Two-Way InteractionFunction X Level 1.32 433 1.69 .16Residual 19.66 100 .19Total 24.16 108 .22


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using a .05 alpha level. Because creativity (RAT scores) failed to correlate with any culture variable, examination of a culture-creativity culture-creativity interaction (Hypothesis 4) became moot.

DISCUSSIONAlthough convergence between studies in different cultural contexts may not always be expected, the present study supports the hy

pothesis that organizations exhibit cultural pluralism along the lines ofhierarchy (Thompson & Wildavsky, 1986). In this study of accountingfirms, organizational culture was found to be significantly related tohierarchical level, with the top level of management perceiving the culture of the organization as significantly more innovative and supportivethan either middle level management or lower level accountants. Although previous research on vertical differentiation has analyzed thinking styles and behavioral norms at various hierarchical levels (Cooke &

Rousseau, 1988), this study investigated how those in different organizational positions have quite different perceived work contexts, reflecting different 'organizational cultures'. It has been argued that innovative, creative workers are welcomed at levels and in departments thatinterface with the public (Kirton, 1984). Top level managers in accounting firms have primary responsibilities in interfacing with clients andothers outside the firm. Tasks at lower levels of an organization, bycontrast, may primarily involve problem solving that is of necessity safeand adaptive. Task requirements at differing hierarchical levels thusinfluence perceptions of an organizational culture.

In management accounting research, it has been suggested that researchers need to pay more attention to the counter-intuitive, the surprising, and the puzzling (Choudhury, 1986). In the present study thesurprise is a negative one: that the auditing, tax, and management consulting arms of accounting firms should have different subcultures andexhibit different levels of creativity, we found no such differences. Although these findings contradict some previous research (Cooke &

Rousseau, 1988; Kirton, 1984), a possible explanation is provided byCooper and his associates who note that accounting systems facilitatethe negotiation of a shared organizational reality "by providing the various actors with a common language and framework for such negotiations" (Cooper, Hayes, & Wolf, 1981, p. 183). In addition, internalaccounting systems (e.g., standard operating procedures, cost accumulation, financial reporting and budgetary systems, and records) not onlyinhibit creative behavior but also serve to encourage imitative behavior

by prescribing methods of handling problems as they occur. The struc


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ture and elements of an accounting system thus help define appropriateand acceptable ways of acting, organizing, and talking about issues inthe organization, so that a common view of the organization's culture(i.e., that of the office) dominates any subcultural elements in the divisions or functional areas.

REFERENCESBarron, F. & Harrington, D. M. (1981). Creativity, intelligence, and personality. Annual

Review of Psychology, 32, 439-476.Chapman, J. A. (1989). Improving organizational research: A model of person-organizationfit. Academy of Management Review, 14(3), 333-349.Choudhury, N. (1986, Winter). In search of relevance in management accounting research.

Accounting and Business Research, 21-32.Cooke, R. A. & Rousseau, D. M. (1988). Behavioral norms and expectations: A quantitative approach to the assessment of organizational culture. Group and Organization

Studies, 13 (3), 245-273.Cooper, D. J., Hayes, D. & Wolf, F. (1981). Accounting in organized anarchies: Under

standing and designing accounting systems in ambiguous situations. Accounting, Organizations and Society, 6 (3), 175-191.

Guilford, J. P. (1959). Three faces of intellect. American Psychologist, 469-479.Hayes, J. R. (1978). Cognitive psychology: Thinking and creativity. Homewood, IL: DorseyPress.Hood, J. N. & Koberg, C. S. (1991, September). Accounting firm cultures and creativity

among accountants. Accounting Horizons, 1-8.Hoppock, R. (1935). Job satisfaction. New York: Harper and Row.Kirton, M. J. (1984). Adaptors and innovators?why new initiatives get blocked. Long

Range Planning, 17, 137-143.Lodahl, T. M. & Kejner, M. (1965). The definition and measurement of job involvement.Journal of Applied Psychology, 49, 24-33.Lyons, T. F. (1971). Role clarity, need for clarity, satisfaction, tension, and withdrawal.

Organization Behavior and Human Performance, 6, 99-110.McNichols, C. W., Stahl, M. J. & Manley, T. R. (1978). A valuation of Hoppock's job satis

faction measure. Academy of Management Journal, 21, 737-742.Mednick, S. A. (1962). The associative basis of the creative process. Psychological Review,

69, 220-232.Pavett, C. M. & Lau, A. W. (1983). Managerial work: The influence of hierarchical leveland functional specialty. Academy of Management Journal, 26 (1), 170-177.Reynolds, P. D. (1986). Organizational culture as related to industry, position and performance: A preliminary report. Journal of Management Studies, 23, 333-345.Rose, R. A. (1988). Organizations as multiple cultures: A rules theory analysis. Human

Relations, 41(2), 139-170.Thompson, M. & Wildavsky, A. (1986). A cultural theory of information bias in organizations. Journal of Management Studies, 23, 273-285.

Wallach, E. J. (1983, February). Individuals and organizations: The cultural match.Training and Development Journal, 29-36.

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