RULE MAKERS, RULE BREAKERS:How Tight and Loose Cultures Wire Our World

Michele J. Gelfand

Hey Boys,

How’s The Water?

s the water? What the hell is

water?

CULTURE

Omnipresent… but invisible

Distinctly human … no other species has it

Affects everything from politics … to parenting

Pavalena/Shutterstock.com

Pavalena/Shutterstock.com

Saul Steinberg, View of the World from 9th Avenue

Cover of The New Yorker, March 29, 1976

© The Saul Steinberg Foundation /Artists Rights Society (ARS), New York

Cover reprinted with permission of The New Yorker magazine. All rights reserved.

It’s just like going

from New York

to Pennsylvania!

Singapore is a ‘fine city’ by shankar s. [CC BY 2.0], from flickr.com

Used by permission.

Photo by Pablo Heimplatz on Unsplash

ADD CREDIT HERE – Otago times will send once they receive payment

https://www.flickr.com/photos/62140256@N04/8236987723

By Jerryhattric (Flickr: wizard's wishes) [CC BY-SA 2.0], via Wikimedia Commons

By Bachrach44 [Public domain], from Wikimedia Commons By Serenity [CC0], from Wikimedia Commons

Derived from NHANES data

Unique baby names in the U.S.

Data source: https://www.cdc.gov/nchs/data/hestat/obesity_adult_15_16/obesity_adult_15_16.htm

Prevalence of Obesity Among U.S.

Adults Aged 20-74

Data source: https://www.cdc.gov/nchs/data/hestat/obesity_adult_15_16/obesity_adult_15_16.htm

What Ties These Examples Together?

• Human ability to develop, maintain and enforce rules

• The glue that binds us together

Social Norms

TIGHT O

Strong Norms& Punishments

Weak Norms &Permissive

33 Nations

7000 Individuals

6 Continents

22 Languages

International Investigation

TIGHT O

Lower Crime

Uniformity

Self-Control

ORDER

Different People

Creativity

Change

O P E N N E S S

0

5

10

15

0 1 2 3 4

Pop Density

0

5

10

15

0 100 200 300

Food Deprivation

0

5

10

15

0 5 10 15

Territorial Threat

0

5

10

15

0 0.5 1 1.5 2 2.5

Pathogen Prevalence

0

5

10

15

0 0.5 1 1.5 2

Disasters

A Fractal Pattern of Human Difference

Source: NOAA Climate.gov (https://www.climate.gov/news-features/blogs/beyond-data/2016-historic-year-billion-dollar-weather-and-climate-disasters-us)

Personality Openness

State Tightness State Looseness

Personality Conscientiousness

Order•More Law Enforcement•Less Homelessness•Less Divorce

Self Control•Lower Drug Use•Less Debt

Creativity•More Patents•More Fine Artists

Equality•Fewer EEOC claims•Minority-owned Businesses

FOLLOW THE RULES

The Culture of Class

Middle Class

• Working Class versus Upper Class• Meaning of Rules

• Jaguars versus Plumber Vans

• Greater threat:

• Falling into poverty

• Dangerous occupations

• Threatening neighborhoods

• Tight loose trade-off

• Age 3: Max the puppet

Photo included with permission from the child’s parents

Within Our Organizations

Organizational Culture• Rules and predictability; Formal• Strong socialization (training) and monitoring• Prevention-focus (avoids mistakes) and impulse control

Industries• Manufacturing, Hospitals, Airlines

Context • Greater threat • High volume of oversight & regulations

Tight Organizations

Loose Organizations

Organizational Culture• Flexibility and experimentation; informal• Less monitoring• Promotion-focus (taking risks) and openness

Industries• Start-ups, Design, Tech

Context• Safety risks are minimal • Mobility and change

Leaders, Tight and Loose

• Over 15,000 managers across 700 organizations in 62 societies

• Leadership behaviors that contribute to being an “outstanding leader”

Tightness autonomous Looseness Charismatic, team-oriented

Challenges to Tight-Loose Mergers

• Method

– 4,638 CBAs across 32 Countries, 1989-2013 (SDC Platinum database)

– CBA performance = ROA Change Acquirer’s ROAt-1 –ROAt+3

Gelfand , Gordon, Li, Choi, & Prokopowicz (2018) Harvard Business Review

Results• CTL differences reduce CBA performance

• 1 Std. dev. change in CTL diff. => .6 percentage loss, US$ 204 million change in net income

• Relation strengthened by directionality (tight acquirer), …

Variable Model

Cultural tightness-looseness (CTL) differences (H1) -0.633*

(0.264)

Controls, year, and industry dummies are included

Observations 4,638

R-squared 5.40 %

Lessons Learned• Prepare to Negotiate Culture

– Cultural assessment

– Which domains need to be tight?

– Which can be loose?

• TL Ambidexterity

Reaching Ambidexterity

Which is Better?

An Age-Old Debate • Freedom or Constraint?

– Plato, Confucius, Hobbes

– John Stuart Mill, Freud

• Neither?

– Too tight or too loose is maladaptive

• The Goldilock’s principle of TL

Depression

Blood Pressure

Suicide

Happiness

TL Balance

• Identify contexts where we need to tightenloose norms – Tesla, Uber– The wild west of the internet

• Identify contexts where we need to loosen tight norms– United; some manufacturing firms

Our Own TL Mindsets

• Are you an order Muppet or a chaos Muppet? (Dalia Lithwick, 2012)

• Cultivate empathy for others’ mindsets

• Identify and negotiate tight-loose conflict in our daily lives