University of San Diego Digital USD Dissertations Theses and Dissertations 1989 The Transformation of a Corporate Culture in a Mature Organization James F. Kelly EdD University of San Diego Follow this and additional works at: https://digital.sandiego.edu/dissertations Part of the Leadership Studies Commons Digital USD Citation Kelly, James F. EdD, "The Transformation of a Corporate Culture in a Mature Organization" (1989). Dissertations. 526. https://digital.sandiego.edu/dissertations/526 This Dissertation: Open Access is brought to you for free and open access by the Theses and Dissertations at Digital USD. It has been accepted for inclusion in Dissertations by an authorized administrator of Digital USD. For more information, please contact [email protected]. THE TRANSFORMATION OF A CORPORATE CULTURE IN A MATURE ORGANIZATION by James F. Kelly, Jr. A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Education University of San Diego 1989 Dissertation Committee Johanna Hunsaker, Ph.D., Director William Foster, Ed.D. Joseph Rost, Ph.D. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Copyright @ 1989 by James F. Kelly, Jr. All rights reserved Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ABSTRACT THE TRANSFORMATION OF A CORPORATE CULTURE IN A MATURE ORGANIZATION KELLY, JAMES F., JR., EcLD., University of San Dieoo. 1989, 297 pp. Director: Johanna Hunsaker, Ph.D. Much recent attention has been focussed on organizational culture as a useful vehicle for understanding organizations. There have been many studies of the cultures of organizations and some on efforts by leaders to change them or implant new ones. Most of these have dealt with founders, their successors or other early generations of leadership or management. Many of them are anecdotal and most, if not all, have been conducted by researchers external to the organization. The limited time and access typically available to the researchers have generally impeded efforts to penetrate to the core culture or to identify significant subcultures. Moreover, there is a paucity of research efforts which examine the transformation of an existing culture in an already-mature business enterprise. This descriptive research employs the historical case study, ethnographic and phenomenological methodologies to determine how a culture evolved at Great American First Savings Bank and how it was transformed by leaders to facilitate attainment of a shared vision and goals for the organization. A history of the 104-year-old financial Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. institution has been developed to serve as necessary background for understanding the culture which evolved. The study describes the current corporate culture as well as the several subcultures which have developed and the persons, events and circumstances which influenced them. The interaction of the main culture and subcultures was also analyzed. Examined also was the effect of mergers and acquisitions upon the parent culture and the culture of the acquired companies. Attempts to preserve the main culture during periods of dramatic change, dynamic growth, deregulation and transformation to a sales and service culture were analyzed. Data were gathered from records, minutes, artifacts, newspaper accounts, periodicals, meetings, conversations and direct observations extending over a period of five years. Additionally, 23 interviews were conducted with current and former members of the organization at various levels and in various locations throughout the company. Results indicate that the culture evolved into a strong, coherent culture over a period of 85 years and that two leaders effected a major transformation of it in order to better position the company and its stakeholders for the growth and competitive environment they knew lay ahead. The findings further suggest that the concept of culture modification is a powerful tool for effecting transformational change or for leading organizations through Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. periods of turbulent change while preserving the basic values and spirit of the organization. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. To Charlane for her patience and encouragement ii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. PREFACE AND ACKNOWLEDGMENT I have felt for some time that ethnographic studies of the cultures of competitive business enterprises were frequently superficial or myopic because of the access and time limitations which typically confront the researcher. In the time normally available, it is extremely difficult to penetrate through to the core of the culture and even more difficult to gain an understanding of the subcultures and their degree of interaction. My position and length of time at Great American First Savings Bank permitted me a rare opportunity to identify and to actually participate in the culture of this mature company and to study its transformation. There is a dearth of research on the transformation of a strong, well-established culture in a mature business organization, and I felt it important to take advantage of this opportunity to add some thick description to the sparse literature on this subject. I am sincerely grateful for the support and encouragement to pursue this project that I received from my employers and associates at Great American. I am grateful as well for the support, encouragement and direction I received from my dissertation director, Johanna Hunsaker and from the other members of my committee, William Foster and Joseph Rost. I also wish to thank Dean Edward De Roche for his encouragement, time and friendship. Finally, I owe much to all my professors and classmates at the University of San Diego for all that they have taught me. iii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. TABLE OF CONTENTS Page List of Tables................................ vii List of Figures............................... viii List of Appendices............................ ix CHAPTER ONE: INTRODUCTION.......................... 1 Statement of the Problem......................... 1 Purpose of the Study............................. 3 Need for Research in this Area................... 4 Significance of this Study....................... 6 Definitions and Key Terms........................ 8 Organization.................................... 11 CHAPTER TWO: REVIEW OF THE LITERATURE................ 12 Overview........................................ 12 General Observations from the Literature......... 14 Principal Themes of the Literature............... 19 Organizational Culture and Leadership...... 22 Organizational Culture and Ethics.......... 27 Organizational Culture and DecisionMaking... 32 Culture and Organizational Change.......... 35 Summary Remarks on the Literature................ 48 CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY...... 51 Design of the Study............................ 51 Possible Methodological Approaches............... 53 Rationale for Methodology Employed............... 58 Overview of the Research Procedures............ 60 Sites for Data Collection.................... 61 iv Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Sources of Data............................. 62 Participants in the Research................. 62 Data Gathering Methods...................... 62 Data Analysis............................... 63 Assumptions and Limitations.................. 64 Role of the Researcher...................... 65 Ethical Considerations...................... 65. CHAPTER FOUR: HISTORY OF GREAT AMERICAN FIRST SAVINGS BANK.................................... 66 Origins of the Organization................. 67 The Second Decade............................... 78 The Third Decade................................ 82 The Fourth Decade............................... 88 the Fifth Decade................................ 93 The Sixth Decade................................ 104 The Post World War II Period.................... 118 The Beginning of the Retail Branch System...... 129 The Luce-Schmidt Era: A New Image.............. 131 Deregulation and Transition to a Sales Culture... 137 CHAPTER FIVE: TRANSFORMATION OF THE CULTURE........ 150 Overview............................... 150 The Dominant or Mainstream Culture.............. 154 Subcultures.................................... 186 Loan Group ............................... 186 Regional Cultures........................... 191 Summary........................................ 199 CHAPTER SIX: DISCUSSION, CONCLUSIONS AND IMPLICATIONS. 201 Evolution of the Culture........................ 201 v Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The Current Culture....................... 203 Perceptions of the Culture................. 211 How Luce and Schmidt Transformed theCulture 228 How Mergers and Acquisitions Impacted the Culture 235 The Development of Subcultures................. 240 Preserving the Corporate Culture............... 244 Conclusions and Implications................... 251 Recommendations for Further Research........ 254 Concluding