Cultures and Creativity within Hierarchical Organizations

Author(s): Christine S. Koberg and Jacqueline N. Hood

Source: Journal of Business and Psychology, Vol. 6, No. 2 (Dec., 1991), pp. 265-271
Published by: Springer
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JOURNAL OF BUSINESS AND PSYCHOLOGY
Volume 6, No. 2, Winter 1991

CULTURES AND CREATIVITY WITHIN

HIERARCHICAL ORGANIZATIONS
Christine S. Koberg
University of Colorado at Boulder

Jacqueline N. Hood
University of New Mexico

ABSTRACT: study examined cultural pluralism along the lines of hier

This
archy among eight large public accounting firms. Although no significant cul
tural differences among the different functional units (auditing, tax, and man
agement consulting) of the firms were found, culture was found to be related to
hierarchical level. Specifically, top level managers (partners) perceived the cul
ture of their organization as significantly more innovative and supportive than
did 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 cultures

rather than a single, monolithic culture (Rose, 1988). Although much
has been written about the notion of multiple cultures, with a few nota
ble exceptions (Hood & Koberg, 1991), little research exists on differing
subcultures within organizations and the interaction of an organiza
tion's culture with individual job-related variables. The present study
examined the extent to which three different types of organizational cul
tures?bureaucratic, innovative, and supportive?coexist in different
hierarchical levels (partners, managers/supervisors, and senior/staff ac
countants) and different functional units (auditing, tax, and manage
ment consulting) of eight large public accounting firms. It also exam
ined the degree of creativity among individuals in these different
organizational positions and units, and analyzed the relationship of cul
ture 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 Business
Research Division, College of Business, University of Colorado at Boulder.
Address correspondence to Christine S. Koberg, Associate Professor, Strategy and Or
ganization Management, College of Business, Campus Box 419, University of Colorado at
Boulder, Boulder, Colorado 80309.

265? 1991 Human Sciences Press, Inc.

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 typology
of 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), inno
vative (results and risk oriented), and supportive (collaborative and rela
tionships-oriented)?that can vary from department to department
within organizations and that she considers common in varying degrees
to all organizations.

ORGANIZATIONAL SUBCULTURES

Asis true with the larger society, one or more subcultures can de
velop within an organization (Rose, 1988). Subcultures reflect the multi
tude of dissimilar work and social environments within an organization
and have been shown to correspond to the thinking and behavioral
styles 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 supporting
goal accomplishment, self-expression, and teamwork; whereas control
lers, at the bottom of the hierarchy, felt they were expected to avoid
conflict, refer decisions upward, and behave in conventional ways
(Cooke & Rousseau, 1988). Lower level workers generally report mini
mal risk taking while managers report the most (Reynolds, 1986).

ORGANIZATIONAL CULTURE AND CREATIVITY

Creativity 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 of
auditing units) can foster cautious and accurate thinkers and can limit
individual creativity (Kirton, 1984). By contrast, an innovative culture
(characteristic of management consulting units) encourages individual
ingenuity, originality, and inventiveness. The different hierarchical
levels within an organization can also be expected to have differing
needs for creativity. Within the auditing division of a large accounting
firm, for example, the top manager (partner) of an audit team controls
the review process and is the creative arm of the team, determining the
overall outcomes of the audit. The lower hierarchical levels (manager/
supervisors and senior/staff level accountants), by contrast, must follow
fairly clear and unalterable guidelines.
 CHRISTINE S. KOBERG AND JACQUELINE N. HOOD 267

THE CONCEPT OF A CULTURAL MATCH

Wallach (1983) suggests that individual job performance and favor

able 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 which
suggest that favorable work outcomes are a function of how well a per
son's personality is matched by a specific work environment variable
(Chapman, 1989). Within an innovative culture, individuals with high
levels of creativity would be expected to experience high levels of job
satisfaction and involvement, and should exhibit less propensity to
leave the organization than those with lower levels of creativity.
Our hypotheses are as follows.

HI: Bureaucratic culture scores will be greater at lower levels than

at higher levels of the organizational hierarchy, and will be greater
among auditing and tax than among consulting units.
H2: Innovative culture scores will be greater at higher than at lower
levels of the organizational hierarchy, and will be greater among
consulting than among auditing and tax units.
H3: Personnel at higher levels of the organizational hierarchy will
score higher on creativity than those at lower levels; personnel in
management consulting units will score higher on creativity than
those in tax and auditing units.
H4: The higher the level of creativity for an individual, the greater
the positive correlation between innovative culture and satisfaction
and involvement, and the greater the negative link to propensity to
leave.

METHOD

Organizations and Subjects

Demographic data and data on the research variables were obtained

from a questionnaire administered on-site to a volunteer group of 122
individuals (89 males and 33 females) working in the tax, auditing, and
management consulting units of 8 large certified public accounting
firms within a major western metropolitan area. Public accounting
firms are structured hierarchically and have an established pattern of
promotion from within, with partners at the highest organizational
level, followed by managers/supervisors and senior/staff accountants. Of
the 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
268 JOURNAL OF BUSINESS AND PSYCHOLOGY

management consulting units. A chi-square test indicated that the sam

ple's composition by functional area (53% auditing; 24% tax; and 24%
management consulting) did not differ significantly from the workforce
of the firms = df =
composition eight public accounting (X2 .43, 2, n.s.).
Subjects had an average age of 33.7 years, had been employed by the
firm an average of 7.2 years, and had been in their present position an
average of 3.1 years. Sixty-six percent held a baccalaureate degree, with
thirty-four percent holding an advanced degree.

Measures

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

(1983) was used to measure organizational culture. The OCI is a meas
ure of organizational culture in three dimensions?bureaucratic, inno
vative, and supportive. Subjects are asked to indicate, using a 4-point
Likert scale, the extent to which 24 different adjectives such as "hier
archical" and "power-oriented" correspond with how they see the organi
zation. Items are grouped into three cultural profiles, each containing
eight items, with scores for each profile or dimension expressed as a sum
total. The reliabilities for the three scales were .80, .75, and .77, respec
tively.
The 30-item Remote Associates Test (RAT) developed by\ Mednick
(1962) was used to determine creativity. The RAT is designed to capture
the creative thinking process, defined as the "forming of associate ele
ments into new combinations which either meet specified requirements
or are in some way useful" (Mednick, p. 221). While the RAT has been
criticized by some as being more a measure of verbal skill or IQ than a
measure of creativity, even one of its severest critics (Hayes, 1978) ad
mits it is the only standardized measure of creativity that is directly
linked to a psychological theory of creativity. The RAT taps two differ
ent types of cognitive abilities. The first concerns symbolic abilities?
learning to recognize words or to operate with numbers; the second con
cerns semantic intelligence?important in situations where the learn
ing of ideas is essential (Guilford, 1959).
Job satisfaction, defined as an affective response resulting from
one'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 pertaining
to the subject's level of satisfaction with the job. An alpha coefficient of
.79 was obtained. Job involvement, defined as the "importance of work
in the worth of person", was measured using a 6-item, 4-point Likert
type instrument developed by Lodahl and Kejner (1965, p. 24). The re
liability coefficient was .76. Propensity to leave was the measured by a
three-item instrument using a 5-point Likert scale developed by Lyons
(1971). The alpha coefficient was .83.
 CHRISTINE S. KOBERG AND JACQUELINE N. HOOD 269

Table 1

Analysis of Variance Table for Innovative Culture

Source SS MS df F p
Main Effects 4
2.95 .74 3.91 .005
Function .82 2 .41 2.16 .120
2.41
Level 2 1.21 6.37 .002
Two-Way Interaction
Function X Level 4.40 .10 .53 .711
Residual 19.32 102 .19
Total 22.68 110 .21

RESULTS

As Hypothesis 1 predicted, the culture of the organization was per

ceived as significantly more innovative and supportive by top level man
agers (partners) than by either managers/supervisors or senior/staff ac
countants (3.37 versus 3.09 and 3.01 for innovative culture; 3.06 versus
2.61 and 2.75 for supportive culture). Although the differences failed to
reach statistical significance, mean creativity scores were higher for
partners than for managers/supervisors and senior/staff accountants
(18.78 versus 14.85 and 15.23). Contrary to Hypotheses 2 and 3, there
were no statistically significant differences among the three functional
units in mean 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 2

Analysis of Variance Table for Supportive Culture

Source SS MS df F p
Main Effects 3.17 .79 4 4.03 .004
Function 2.94.47 2.39 .10
Level 2.33 2 1.17 5.9 .004
Two-Way Interaction
Function X Level 1.32 .33 4 1.69 .16
Residual 19.66 100 .19
Total 24.16 108 .22
270 JOURNAL OF BUSINESS AND PSYCHOLOGY

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

DISCUSSION

Although convergence between studies in different cultural con

texts may not always be expected, the present study supports the hy
pothesis that organizations exhibit cultural pluralism along the lines of
hierarchy (Thompson & Wildavsky, 1986). In this study of accounting
firms, organizational culture was found to be significantly related to
hierarchical level, with the top level of management perceiving the cul
ture of the organization as significantly more innovative and supportive
than eithermiddle level management or lower level accountants. Al
though previous research on vertical differentiation has analyzed think
ing styles and behavioral norms at various hierarchical levels (Cooke &
Rousseau, 1988), this study investigated how those in different organi
zational positions have quite different perceived work contexts, reflect
ing different 'organizational cultures'. It has been argued that innova
tive, creative workers are welcomed at levels and in departments that
interface with the public (Kirton, 1984). Top level managers in account
ing firms have primary responsibilities in interfacing with clients and
others outside the firm. Tasks at lower levels of an organization, by
contrast, may primarily involve problem solving that is of necessity safe
and adaptive. Task requirements at differing hierarchical levels thus
influence perceptions of an organizational culture.
In management accounting research, it has been suggested that re
searchers need to pay more attention to the counter-intuitive, the sur
prising, and the puzzling (Choudhury, 1986). In the present study the
surprise is a negative one: that the auditing, tax, and management con
sulting arms of accounting firms should have different subcultures and
exhibit different levels of creativity, we found no such differences. Al
though these findings contradict some previous research (Cooke &
Rousseau, 1988; Kirton, 1984), a possible explanation is provided by
Cooper and his associates who note that accounting systems facilitate
the negotiation of a shared organizational reality "by providing the var
ious actors with a common language and framework for such negoti
ations" (Cooper, Hayes, & Wolf, 1981, p. 183). In addition, internal
accounting systems (e.g., standard operating procedures, cost accumula
tion, financial reporting and budgetary systems, and records) not only
inhibit creative behavior but also serve to encourage imitative behavior
methods of handling problems as they occur. The struc
by prescribing
 CHRISTINE S. KOBERG AND JACQUELINE N. HOOD 271

ture and elements of an accounting system thus help define appropriate

and acceptable ways of acting, organizing, and talking about issues in
the organization, so that a common view of the organization's culture
(i.e., that of the office) dominates any subcultural elements in the divi
sions or functional areas.

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