Edgar Schein is Sloan Fellows Professor Emeritus and Senior Lecturer at Massachusetts Institute of Technology Sloan School of Management. He is also founding editor of Reflections: The Journal of the Society for Organizational Learning. A social psychologist, Edgar Schein is particularly well known for his work on motivation and what he has dubbed the "psychological contract", i.e. the tacit understanding and expectations that exist between employer and employee and vice versa. He was one of the pioneers of the concept of corporate culture. Edgar Schein's extensive consulting experience over more than four decades has focused on issues relating to this and to organizational development, career development, management development, top management team building, human resource planning and process consultation.

Spotlight: Your most recent books are The Corporate Culture Survival Guide: Sense and Nonsense about Corporate Culture and Process Consultation Revisited: Building the Helping Relationship. What are the main messages?

Edgar Schein: The message I am keen to get across is my belief that the concept of culture is still misunderstood in organizations, being treated too much as a superficial phenomenon. What I have tried to do in The Corporate Culture Survival Guide is to inject a note of reality into the discussion, to point out that culture is really a very deep phenomenon and that if managers/leaders are serious about changing culture, they must make an effort to understand how culture really "works" and what it really is; they must not treat it as a superficial phenomenon, assuming that, if you simply change people's behaviour, you are changing the culture.

My other book, Process Consultation Revisited, interacts with The Corporate Culture Survival Guide to some degree. What I'm emphasizing here is a basic misunderstanding in the field of consultation surrounding the importance that a consultant needs to attach to building a relationship with the client; building such a relationship must precede the giving of any advice or expert recommendations. The consulting industry seems not to be aware of this.

Management literature talks about diagnosis, for example, or "scouting" in the period prior to intervention. But what I have observed in my forty years of experience is that you are really intervening from the moment you make contact with a client. There is no such thing as a diagnostic period. You are in a helping relationship, effectively a building process, from the moment you make contact with a client. Most of the consulting projects that go wrong do so because they ignore this early stage and never sufficiently build up the relationship.

Spotlight: In The Corporate Culture Survival Guide you emphasize the crucial role of corporate culture. Has this role been highlighted by the upsurge of mergers and acquisitions in this ever more competitive global economy and the need for companies to forge partnerships?

Edgar Schein: I think you are absolutely correct. The more companies engage in joint ventures, partnerships, integration - vertically or horizontally - the more culture and sub-culture become an issue, and the more important it is to understand them. However, consultants have erred in suggesting that a marriage between strong, uniform cultures is to be preferred. In this new age of networks it is quite possible that weaker cultures offer advantages as they may be more adaptable than very strong cultures.

There is a dilemma here. In a merger, for example, it is not clear whether, say, a merged company should try to impose a single culture on both units, or whether it is better to let the two units have their own sub-cultures and develop them as appropriate to the needs of their own industries.

Spotlight: Where you have an international grouping, do diverse national cultures compound the problem?

Edgar Schein: Yes, definitely, because corporate cultures are, ultimately, a reflection of national cultures. Cross-country mergers are almost inevitably more complicated than mergers and acquisitions within a single country.

I recently ran a seminar with Siemens executives and we talked at great length about the company's operations in the USA and various European countries. One thing that became abundantly clear is that German culture infuses all of these different units; this has to be taken into account. Ultimately Siemens is a German company, regardless of where it operates.

Spotlight: Where you have, say, two companies with very disparate cultures and they have to work closely together, or are planning to merge their operations, how do you advocate moving towards a working relationship?

Edgar Schein: I think the answer is to start with understanding what culture really is and how it operates. You need to understand that culture means the shared assumptions that people hold, for example, about their mission, how to work, how to measure things. I then recommend that you take each business process and create joint teams from the two, or however many, organizations that are trying to merge, and embark on a dialogue, engaging in in-depth assessments of one another's assumptions, to see what the current reality actually is before attempting to make any changes.

For example, if two companies are merging and one has always been run on autocratic lines while the other has traditionally encouraged people to take personal responsibility, i.e. charging them with making up their own minds, it may well be that you cannot merge the two and should not even try. It might be preferable for the two companies to have a financial holding company over them, while they are allowed to continue to operate as before. So, the first step is to gauge the status quo before deciding whether to opt for a "blending" or for a kind of mosaic, i.e. independent working.

Spotlight: What is the role of leaders in this? You have emphasized the importance of leadership but leadership is presumably at least partly responsible for the status quo, i.e. leaders are part of the prevailing culture. As such, is it not difficult for existing leaders to encourage change?

Edgar Schein: Yes it is, because leaders are created, in a sense, by the cultures of their organizations; they are "embedded" in them. But that does not change the fact that, if anyone is going to "manage" the corporate culture, whether that means maintaining it, evolving it or changing it, that must be a unique function of the top leadership of a group, whether that be a political, a religious or a business group. The most senior leaders are those most in touch with the environment and the potential changes in that environment. Therefore, they should be accountable for managing the culture.

To do this leaders need to move outside their own "systems". They effectively have to "marginalize" themselves, moving around and learning about what else is going on in the world in order to overcome the biases of having "grown up" in their own organization. Some boards manage this by bringing in an outsider as CEO.

Spotlight: So what is the role of outside consultants here? In some of your writing you have criticized them for hindering, rather than helping, the process. Where have they gone wrong?

Edgar Schein: I think outside consultants, and particularly commercial consultants who aim to sell products, are less than helpful because they tend not to understand that solutions have to be culture-specific. The notion that the consultant must make a recommendation would be sound if the recommendation really took into account the culture of the organization. But over and over again I have seen companies bring in consultants who interview everybody, produce studies and make recommendations that simply don't match what that organization is capable of or what its identity allows. So, in the end the money is wasted.

Spotlight: Do you feel that to some degree the consultants may be standing too far "outside" the organization whereas, conversely, some of the leaders are too entrenched?

Edgar Schein: Exactly right. So, what you need, and what I argue for in Process Consultation, is a team to bridge the gap between the insider client, i.e. the leader, and the outsider, i.e. the process consultant, so that neither side takes decisions unilaterally. They act in conjunction.

Spotlight: How then do you involve and motivate employees? Are we coming back here to your central tenet of the psychological contract and the role in this of a corporate culture?

Edgar Schein: I think that initially we must move away from the culture and get back to the nature of the business to determine what is really needed. I don't think we should start with the notion that we are going to change the culture. We should start with the notion that something is wrong in the business and that we need to improve our business processes for survival and growth. Whether the culture will be an aid or a hindrance to this new way of working is not known initially.

My book argues that you should not start with culture analysis but with analysis of what the new way of working should be. How do you want people to change in order to make the organization viable? Once you are very clear as to what the new behaviour is to be, e.g. perhaps you require people to be more responsive, or want them to think differently, then you can analyse the culture to determine which cultural elements will help you get there and which will hinder.

In my experience, most of the time it is both feasible and easier to build on an existing culture. Frequently the culture does not need to be changed; what has to be changed is the way in which people work in the existing culture.

Spotlight: You have been writing about corporate culture for many years. To what extent have your ideas developed or changed?

Edgar Schein: I think I would describe this more as a process of re-enforcement. Early on in my work with sensitivity training groups, I learned that the degree to which you can change people is very much limited by their own experience. The role of the change agent is really to facilitate and help the change process, rather than to force it. As I have delved deeper into culture questions, my consulting experience has re-enforced that conviction.

Culture is not something you change wholesale; you may be able to facilitate some change or you may be able to help people make some accommodations. But you are dealing with powerful forces and there is a big danger in trivializing those forces and assuming that you can make changes that are really not very feasible.

As a footnote I would add that if an organization discovers that the way it is operating really is dysfunctional, and that this is a function of the culture that has grown up, then leaders usually try to get rid of the "culture carriers", replacing them with people who hold different assumptions that are more in line with aspirations. That is a very costly, cruel process, but that is the way businesses work.

Spotlight: Does business process re-engineering have an element of this in it?

Edgar Schein: Yes. I think one of the problems with business process re-engineering was that it was too technical a process; there was no consideration of cultural elements, no understanding of the cultural framework of what was to be re-engineered.

Spotlight: You have designed a certain number of diagnostic "tools" to identify and tackle cultural and compatibility problems. What sort of shape do these tools take?

Edgar Schein: Because culture is a group phenomenon, these are almost all group discussion-type tools. I believe the quickest way to understand a culture is to bring a diagonal "slice" of the organization together and to start talking about culture and identifying some of the "artefacts", espoused values and deeper assumptions through which this organization works. In a group context this can be done much more quickly.

Spotlight: Returning to employees, if the basis of a psychological contract is how people feel about their work, can you somehow alter this to encourage a change in culture - perhaps in such a way that the overall process of corporate cultural change becomes somehow "organic" and barely perceptible?

Edgar Schein: You can change the psychological contract but whether or not that will create a new culture really will depend on how well the new behaviour works in the environment because culture is learned from success. The notion of psychological contracts has to be seen as something that management can change but, in doing so, it is taking a gamble. If the new way of behaving, the new contract, is an improvement, a new culture will emerge. But, if it doesn't work better, it will be seen as little more than a management tool, a "programme of the month". [SP1]

All of this has to be put into a time and learning context. You can't change things overnight. You create new behaviour, but whether attitudes and assumptions will catch up with the new behaviour is very much a function of how successful the new behaviour is at solving whatever problems there are to be solved.

Spotlight: Are there any closing comments you would like to make?

Edgar Schein: Yes. What I would really urge is that in both cases, i.e. whether studying the culture or looking at the helping concepts and processes, people think a little more deeply, more realistically, about what is actually going on socially and psychologically in those processes. My worry is that pursuing simplistic formulas leads to oversimplification of the phenomenon and, ultimately, time wasting - even if it doesn't do any actual harm. In the global economy the situation is becoming more complex and therefore even more care is required in thinking things through.

Edgar Schein has numerous articles and books to his name. His most recent books are The Corporate Culture Survival Guide: Sense and Nonsense about Corporate Culture (Jossey-Bass, 1999) and Process Consultation Revisited: Building the Helping Relationship (Addison-Wesley/Prentice Hall, 1999). These books can be ordered through the Emerald library's direct link with amazon.com

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