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Oct

The September 24, 2011 edition of The Economist reports these survey results from LRN:

It found that 43% of those surveyed described their company’s culture as based on command-and-control, top-down management or leadership by coercion—what Mr Seidman calls “blind obedience”. The largest category, 54%, saw their employer’s culture as top-down, but with skilled leadership, lots of rules and a mix of carrots and sticks, which Mr Seidman calls “informed acquiescence”. Only 3% fell into the category of “self-governance”, in which everyone is guided by a “set of core principles and values that inspire everyone to align around a company’s mission”.

The study found evidence that such differences matter. Nearly half of those in blind-obedience companies said they had observed unethical behaviour in the previous year, compared with around a quarter in the other sorts of firm. Yet only a quarter of those in the blind-obedience firms said they were likely to blow the whistle, compared with over 90% in self-governing firms. Lack of trust may inhibit innovation, too. More than 90% of employees in self-governing firms, and two-thirds in the informed-acquiescence category, agreed that “good ideas are readily adopted by my company”. At blind-obedience firms, fewer than one in five did.

In our own research on organizational change, we’ve found similar results.  When organizations have tightly controlled decision making, employees evidence both distrust in top management and are less likely to engage in the behaviors that promote innovation.

Aneil

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