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Unions and Change

10/17/2012-

by Clif Boutelle, SIOP Public Relations

Unions Can Present Challenges to Organizational Culture and Change

Unions can often create cultural dynamics that pose challenges to the effectiveness of organizations and can be difficult to change, according to the findings of a recent study.

The study was led by Levi Nieminen, director of research and development at Denison Consulting, an Ann Arbor-based firm that works with organizations to improve business performance by focusing on culture and leadership development.

The findings were based on 10 years of survey data from organizations with both unionized and non-unionized employee groups. In all, more than 7,000 employee responses were analyzed, representing 3,234 unionized workers and 3,789 non-union employees. Based upon their experience and interest in working with unions, the researchers compared the results.

“Union and non-union groups can be studied in a variety of ways, and we focused on their impact on organizational culture and change,” Nieminen said. “Culture is increasingly being recognized as a key component to organizational growth and success. As leaders develop and implement new strategies, often their success or failure will depend upon their ability to tune in, be aware of, and, if necessary, to change their company’s culture.”

Although not always easy to define culture, Nieminen says every organization has a culture whether it knows it or not. So, it behooves leaders to closely examine and determine the nature of the organization’s culture and manage it the same way it manages other parts of the business.

Organizational culture, says Nieminen, refers to the values, norms, beliefs, and assumptions that are shared by the members of an organization, build up over time, can influence the performance behaviors of individuals and of the collective firm.

Indeed, culture is a “business issue” with strong implications for a firm’s effectiveness and performance, and ultimately its success or failure, he said.

Within the organization’s culture exist subcultures that are based upon various factors including identification with a primary work group, occupational or professional skills, gender, and age.

Subcultures can be functional or dysfunctional, Nieminen says, and the challenge for leaders is to align subcultures in a way that enhances corporate goals and objectives. A major component in managing and developing a company’s culture is communicating how all parties need to perform to make the organization more effective and competitive.

The study found that unions have a distinct culture in comparison to non-union groups and that the nature of the cultural variation may present a challenge to the well-being of the company. Nieminen describes the culture gap that appears along union and non-union lines as a potential “fault line” within the overall organization’s culture.

“The union--non-union relationship can be thought of as a faultline due to a number of factors including labor-management relations, conflict, and differences in the characteristics of the people, job, and work context and the fact that union members are usually the only subgroup assessed dues to belong,” he said.

“Each of these factors make it likely that union and non-union groups will diverge from one another over time, developing at least some values, norms, and beliefs/assumptions that are unique,” he added.

And the results of the study bear this out. “We found that union groups are less likely to endorse the norms and values that characterize highly effective organizational cultures than their non-union counterparts.”

“Interestingly, the largest differences between union and non-union groups were found in the realm of employee involvement, with unions reporting reduced empowerment, less effective teamwork, and less support for career development and advancement within the company. This finding appears somewhat ironic given that a major focus of unions is to increase employee security and ownership in the organization,” Nieminen said.

“As a consequence, unionized employees might experience lower job satisfaction and even a sense of disenfranchisement from the organization, though future research will be needed to explore this connection,” he added.

The study also showed that union groups exhibited less culture change over time than non-union groups. This suggests that closing the culture gap may be particularly challenging for unions. Indeed, unions often engage in “rent-seeking” behavior that attempts to shape the implementation of policy and regulation changes originating with management, said Nieminen. One overriding reason is to block potential loss of union power.

However, he is quick to point out that unions are not always change resistant. “They can be a stimulus for new regulations and employee policies that are beneficial to both employees and the organization,” he said.

Unfortunately, in the case of cultural types of change, union failure to evolve its norms and values may be detrimental to both unionized employees and the broader organization.

Changing the culture of an organization, said Nieminen, is critical to long term success, yet it produces apprehension and angst among employees, who often prefer the status quo. And change that is purely management driven is more likely to lead to resistance.

“However, culture change will be more likely to occur when leadership is getting buy-in from both union and non-union employee groups and when they take ownership of the process of change rather than have change dictated to them,” he added.

For more information, contact Nieminen at 734-302-4002 or email at lnieminen@denisonculture.com