Given that the cultural norms on which we are focusing are related to so many critical attitudes and behaviors, it is no wonder that organizations and subunits with stronger constructive culture perform significantly better along “hard” criteria than those within which these norms are relatively weak. Constructive norms are related to the profitability of organizations. Constructive cultural norms are positively associated with higher average earnings/sales ratios while aggressive/defensive norms are associated with greater volatility or variability in earning/sales ratios. Constructive cultural norms have a significant positive impact on profitability. Multiple studies in many organizations have demonstrated that cultural norms are related to the financial performance of organizations. Cultural norms have also been shown to be related to sales growth.

 

In organizations with strong aggressive/defensive norms, members compete internally, fight with one another to “own” customers, and blame other employees for problems. These behaviors, in turn, result in frustrated customers and fewer sales. In contrast, in organizations with constructive cultures, members tale initiative and work together to quickly solve problems and delight customers, resulting in more sales, customer loyalty, and positive referrals.

 

Various cultural change case studies provide evidence of the value of strengthening both constructive thinking and behavior styles and, over time, constructive cultural norms. Case studies describe a dramatic turnaround in revenues, operating margin, and operating cash reserves.

A longitudinal case study by human Synergistics documented, increases in return on capital oven a period of progressively stronger constructive norms.

 

These cases, illustrate that cultural norms affect how leaders approach any kind of change-whether that change concerns innovation, adapting to turbulence in the external environment, developing and implementing new business models and strategies, or changing the culture itself. As cultural norms become more constructive, problems of change and adaptation are resolved more effectively, and, consequently, organizational performance along key financial outcomes steadily improves. More generally, constructive norms enable organizations to provide clients more efficiently and effectively with valued products or services or fulfill needs important to the larger community. This, in turn, makes it possible for such organizations to garner more resources, grow, and generate a profit.

 

Source: ‘Creating Constructive Cultures; Leading People and Organizations to Effectively Solve Problems and achieve Goals, by J. L. Szumal and R.A. Cooke.