Organizational Personality & Organizational Performance

by Vincent J. Natoli, Jr.

Organizations, like people, have personalities but the traits are not necessarily the same because of the differences between organizations and people. While an organization has reporting relationships, people do not. Some traits, for example, authoritarianism and conformity, apply to both people and organizations while others, for example, employee participation, are unique to organizational hierarchies and do not apply to people.

5 Organizational Personality Traits

The organizational personality trait that is most relevant to organizations is authoritarianism. Herbert A. Simon, a social scientist who won the Nobel Prize for Economics, stated that authority is the mode of influence that distinguishes individuals organizational from non-organizational behavior and authority gives an organization its formal structure. An organization chart, quite simply, is an authority structure whereby those in a position of authority have the formal power to distribute, withhold or retract economic benefits to those lower in the hierarchy. While not known to many, there is a formal psychological definition of authoritarianism and that is the 3 attitudinal clusters: aggression, submission and conventionalism. Organizations can be characterized as authoritarian if they have management practices scoring high on these 3 behaviors and non-authoritarian if they do not score high on all 3.

Punitiveness is the extent to which employers punish employees and punitiveness is related to authoritarianism because authoritarians control people by punishing them. An employer inclined to control employees with management practices that punish them is more likely to rate high on punitiveness, and also authoritarianism, than an employer who controls employees through non-punitive practices.

Employee conformity is the extent to which employers move employees to their norms, that is, standards of behavior.

Employee participation is the extent to which employees share in the decision-making process. Employee participation ranges from relatively minimal where employers inform employees as to what is occurring in the organization, to relatively extensive, though unlikely in the United States, where employees sit on the board of directors and have influence in major organizational decisions.

Organizational socialization is the process by which employers acculturate employees to their norms, values and behaviors, although I sometimes use it to mean the extent to which employees are socialized or acculturated to the organization’s norms, values and behaviors. Just as authoritarianism and punitiveness are related, employee participation and organizational socialization are related. Research shows that when people are given input to the decisions that affect them, they are more committed to those decisions so that if employees are given input to the norms, values and behaviors that affect them, they are more likely to be committed to those norms, values and behaviors and thereby be more highly socialized. The extent to which employees are socialized is important to employers because the more socialized they are, the fewer bureaucratic mechanisms are needed to control them.

3 Ways Organizations Gain Compliance

The organizational sociology literature states there are 3 types of organizations in terms of how they gain compliance of their members, or employees as in this case. Coercive organizations, such as prisons and custodial mental hospitals, are the most authoritarian and punitive, and least participative with the least socialized members, and gain compliance by force. At the other extreme, in terms of the personality traits of interest, are normative organizations such as religious institutions and charities. Normative organizations gain compliance of their members through common values, and normative organizations are the least authoritarian and punitive with the highest level of employee participation and organizational socialization. In between coercive and normative organizations are utilitarian, or remunerative, organizations which includes most businesses. Utilitarian organizations gain compliance of employees through the use of material rewards.

Employer Authoritarianism Outcomes

These 5 organizational personality traits are important to employers because over 60 organizational performance outcomes have been associated with them. Among the organizational outcomes associated with employer authoritarianism are: employee motivation and commitment; employee selection; employee complaints such as grievances, unionization, regulatory agency complaints and litigation; implementation of incentive plans; implementation of performance appraisals; empowerment; effectiveness of organizational change; productivity and effectiveness; organizational learning; coaching; employee need achievement; employee creativity; job enrichment programs; absenteeism; bullying; turnover; work stoppages; quality; and workplace violence.

Employer Punitiveness Outcomes

Among the organizational performance outcomes associated with employer punitiveness are: empowerment; performance appraisals; turnover; absenteeism; unlearning old behaviors; employee creativity; organizational learning; and productivity.

Employee Conformity Outcomes

Among the organizational performance outcomes associated with employee conformity are: organizational learning; role conflict; autonomy; job satisfaction; willingness to quit; organizational change; and employee involvement.

Employee Participation Outcomes

Among the organizational performance outcomes associated with employee participation are: productivity; organizational learning; organizational change; competitiveness; employee stress (which is related to health care costs); job satisfaction and commitment; employee creativity; employee performance; employee’s sense of security; implementation of gainsharing programs; retaliation against whistle-blowers; absenteeism; turnover; morale; motivation; safety; and decision-making.

Organizational Socialization Outcomes

Among the organizational performance outcomes associated with organizational socialization are: turnover; discipline; organizational stability; retaliation against whistle-blowers; productivity; motivation; bureaucratic control; commitment and satisfaction; performance; and employee stress.

While the length of this article does not permit an extensive explanation of how these organizational personality traits lead to the outcomes, I will briefly explain some for illustrative purposes. Authoritarian employers who aggress against employees for refusing to submit to behavior the employer considers conventional, may find that the employee has a different concept of conventionalism and is not happy with the employer’s aggression. Such unhappiness, depending on the extent, could lead employees to miss work, to quit, to produce a level of output the employee considers fair based on the workplace environment, to seek protection in the form of a union or litigation, to avoid risk-taking behavior, or, most drastically, to use violence as a form of redress. Similarly, participative employers have lower levels of employee stress because employees have more control over their work lives when they participate in the decisions that affect them; and, likewise, participative employers have employees who are more likely to show-up and not quit, and assume an ownership interest in their jobs with a greater concern for output.

5 Ways to Determine an Organization’s Personality

There are 5 ways to determine where your organization stands in relation to other organizations on the personality traits of interest, particularly with respect to authoritarianism.

1. most obviously, is the law: if the employer’s concept of conventionalism violates American legal standards, that is, American conventionalism, then your organization is probably too high, at least on the particular issue of concern.
2. standard American conventions.
3. industry or general business practices.
4. employee feedback.
5. benchmarking.

Organizational Personalities in Mergers and Re-Organizations

In addition to knowing where an organization stands compared to other organizations, in general, in order to improve its management practices, it is also useful for an organization to know where it stands on the organizational personality dimensions to compare itself directly with another organization when considering a merger or acquisition. If an organization low on employee participation, for example, is considering merging with an organization that is high, it is less likely to have a successful merger than if the two organizations have a similar level. Similarly, it is useful to know where an organization’s departments stand on the personality traits when an organization undergoes a re-organization and combines departments.

By optimizing the organizational personality, organizations can attain the more desirable performance outcomes. With respect to the trait of authoritarianism, there is a good reason to believe that employers can improve their behavior. The theoretical literature shows that authoritarians do not realize they are authoritarian and once apprised of their standing, authoritarians are often willing to change their behavior.

July 26, 2004