BY DAVID LEWIN

The 1990s were marked by the ascendancy of celebrity chief executive officers and by “strong culture” organizations, that is, organizations whose members (presumably) share common values, behavioral norms, beliefs and expectations. Indeed, many CEOs and their senior management teams extolled (and continue to extol) the virtues of a strong organization culture, especially the positive effects of such a culture on organizational performance. Jack Welch who retired from General Electric is perhaps the best-known proponent of this view. But former CEOs of non-U.S.-based companies — including Percy Barnavik of ABB and Helmut Macher of Nestle — as well as CEOs of nonprofit organizations, such as Elizabeth Dole, formerly of the American Red Cross, also articulated this view.

But as the global economic boom of the 1990s turned to global economic recession in the early 2000s, and as terrorism came to the United States, the notion of strong culture organizations merits further scrutiny and questioning. One test of the strength of an organization’s culture is the extent to which that organization maintains its members during “bad” times. The substantial work force reductions initiated in 2001 and 2002 by many putatively strong culture organizations, General Electric and ABB among them, imply that a strong organization culture is better suited to good than bad economic times — or, in other words, is procyclical. Such work force reductions are undertaken to reduce labor costs, but an alternative way of achieving the same objective, especially in so-called strong culture organizations, is to reduce organizational members’ pay. While a few organizations — Southwest Airlines, Harmon-Kardon and Nortel Networks — have opted for pay cuts rather than job cuts, the fact that most other airlines, consumer electronics and software companies, as well as nonprofit organizations, have chosen to cut jobs rather than pay implies that strong organizational cultures have little staying power.

Another test of the strength of an organization’s culture is the extent to which rewards are shared among all members. During the boom 1990s, it seemed that greater, relatively more egalitarian, reward-sharing developed widely in business enterprises, perhaps especially in high-technology businesses and in businesses with stock option plans. But more recent evidence suggests otherwise.

What may be concluded from all this is that the “strong culture” organization has been vastly oversold. Strong culture organization leaders may claim that organization members share common values, norms, beliefs and expectations, but, especially in bad economic and unsettling political times, it is clear that they do not “commonly” share jobs and rewards.

Lewin is the Neil Jacoby Professor of Management, Human Resources and Organizational Behavior at The Anderson School.