Choosing Between Tight or Loose Organizations

I recently finished reading Michele Gelfand’s 2019 book, Rule Makers, Rule Breakers, which is based on research she has been doing over the past several years (I have referenced her work in my own book, Successful Global Leadership). Her book details a different way to look at cultures by examining the dimension of tightness-looseness – the degree to which social norms are pervasive, clearly defined, and reliably imposed within nations. Tight cultures, her research shows, have strong social norms and little tolerance for deviance, while loose cultures have weak social norms and are highly permissive. Furthermore, people from tight cultures “view effective leaders as those who embody independence and great confidence – that is, as people who like to do things their own way and don’t rely on others”, whereas people from loose cultures prefer “visionary leaders who are collaborative.”

Her measure of tightness-looseness, which she and her team have administered in over 30 countries, uses the following six items which individuals respond to on an agree-disagree scale:

1. There are many social norms that people are supposed to abide by in this country.
2. In this country, there are very close expectations for how people should act in most situations.
3. People agree upon what behaviors are appropriate versus inappropriate in most situations in this country.
4. People in this country have a great deal of freedom in deciding how they want to behave in most situations.
5. In this country, if someone acts in an inappropriate way, others will strongly disapprove.
6. People in this country almost always comply with social norms.

Countries that she has found to be more tight include Pakistan, South Korea, Turkey, Malaysia, and Singapore, while countries that are more loose include Brazil, New Zealand, the United States, Greece, and the Ukraine.

Gelfand’s framework is but the latest in a number of frameworks studying cultural differences across nations. Hofstede’s is perhaps the most well-known, although his research, as well as those of others, has been subject to some criticism. His construct of Uncertainty Avoidance (which he defines as a society’s tolerance for uncertainty and ambiguity) seems to overlap with the tightness-looseness distinction. In my own book, I propose Preference for Structure as one dimension that also seems to overlap with Gelfand’s concept.

Gelfand believes, and I agree, that her framework can be applied to organizations. Substitute “employees” or “workers” for “people“, and “organization” for “country” in the six statements above and you can see the applicability easily. For example, her book explains that part of the reason why the Daimler-Benz and Chrysler merger failed was due to the vast difference in cultural tightness-looseness between the two companies:

“Daimler had a top-down, heavily managed, hierarchical structure devoted to precision. As a result, the company’s manufacturing operations were rigid and bureaucratic. Much like its country of origin, Daimler leaned tight. Chrysler, on the other hand, was a looser operation with a more relaxed, freewheeling, and egalitarian business culture. Chrysler also used a leaner production style, which minimized unnecessary personnel and red tape.” (p. 140)

She acknowledges that differences in industry pressures may also explain the collective tightness or looseness of different organizations. For example, hospitals, police departments and airlines tend to have tighter cultures than R&D groups and start-ups because failures in the former tend to have greater life-and-death consequences. She also suggests that an organization’s country of origin plays a significant role in influencing its tightness or looseness; for example, Israeli companies tend to be loose, while Japanese companies tend to be tight.

In a Fortune piece (September 11, 2018) as well as in her book, Gelfand explains that many companies today want to develop tight-loose ambidexterity. Loose organizations that are capable of deploying the opposite set of norms she refers to as having structured looseness. Flexible tightness, on the other hands, happens when a tight organization tries to deploy a looser state. What’s the right balance and how do you manage the transition? For example, when start-ups start to scale, they introduce hierarchy and rules over time, and these can stifle the looseness that led to the initial success of these start-ups. On the other hand, tight organizational cultures that move toward looseness might suffer from an “anything goes” mindset.

Having had experience interviewing and consulting with many managers from global companies, and having worked as an executive with several multinationals, I can confirm that her observations seem to make sense on the surface. However, the reality is more complex. Let me explain. As we know, all organizations have cultures that are shaped by many things: the behaviors of top leaders, the history of the organization (including certain events which have influenced it), the industry in which it belongs, its national origin, and its goals and strategy. For example, Apple and Amazon’s cultures have been heavily influenced by Steve Jobs and Jeff Bezos respectively. As another example, I know managers who work in the U.S. subsidiaries of Samsung and Michelin who have described to me organizational norms in these companies that are heavily influenced by their home countries’ cultures (South Korea and France, respectively).

In my experience, there is something missing in this dichotomy between tight and loose, and that is the strength of the organization’s culture. As Sorensen (2009) and other researchers have pointed out, companies with strong corporate cultures tend to be higher-performing than companies in the same industry with weaker cultures. Now what is a “strong culture” exactly? This is Sorensen’s definition: “An organizational culture is said to be strong when the basic assumptions of the culture are widely shared and deeply held by members of the organizations.” In other words, there is a shared understanding among organizational members of what the basic values of the organization are. Talk to individuals in these organizations, such as Johnson & Johnson, Google, Wegmans, and the Navy Seals, and they will be able to tell you what the organization stands for and what its purpose is. Not only that, most of them are committed to these values.

On the other hand, the degree of tightness or looseness of an organization refers to its practices, social norms and customs rather than deeply held values. These espoused values will not always translate to practices and customs unless the organization’s senior leaders model and reinforce these practices through the organization’s systems, processes and structures. So you can envision a 2 x 2 matrix, where you have strong and weak cultures on one dimension, and tight and loose organizations on the other dimension:

Culture Types	Tight Organizations	Loose Organizations
Weak Cultures	1. (Tesla)	3.(Uber)
Strong Cultures	2.(Apple, Goldman Sachs)	4.(Southwest, Twitter, Zappos)

Some examples might help. In Cell 4 you will find companies such as Southwest Airlines, Twitter, and Zappos. At Southwest Airlines, for example, the late Herb Kelleher instilled a very strong culture through his own behaviors and reinforced the company’s values in many different ways, such as hiring employees with the right attitude. Yet Southwest leans very loose; this has been widely reported in the press as well as in several interviews with Mr. Kelleher and his successors. For example, you can watch many YouTube videos where Southwest airplane crew members are playing pranks or improvising pre-flight announcements.

In Cell 1, on the other hand, you will find companies where there is a strong emphasis on procedures and practices, but values that are not strongly emphasized and reinforced. One of my colleagues once consulted for a mid-sized, family-owned business where rules and protocols were tightly enforced. For example, employees had to follow a dress code strictly, and the CEO believed that this level of tightness was what has made the firm successful to this point. The firm paid its employees way above the market, which has kept its turnover rate low. Yet, in my colleague’s opinion, the company seemed “soulless.” Employees did not seem engaged, and there was no passion or higher purpose other than making money for the company.

Based on my readings about Tesla, it seems to fall into this category. Elon Musk runs a very tight ship and fires executives seemingly willy-nilly. A number of people I have talked to who know employees in Tesla say that they remain there mainly for the opportunity and not necessarily because they believe in the company’s culture.

In Cell 2 you will find companies such as Apple, which is run very tightly yet manages to have a very strong, values-driven culture. Tim Cook and his executive team, and Steve Jobs before him, make sure that everything is very buttoned-up. Finally, in Cell 3, you will find companies such as Uber and other startups, where cultures are not well-defined and there is a looseness to the organization. The past scandals involving Uber’s founder are a reflection of this.

What’s the best cell to be in for an organization? It depends on at least four factors: the industry or sector it’s in (e.g., hospitality versus hospitals), its own strategy and long-term goals, its competitive pressures, and its own core competencies. There is no magic bullet here. However, as far as tightness or looseness is concerned, I agree with Gelfand that companies in today’s complex and turbulent environment need to strive toward greater flexibility and looseness. In addition, I would suggest that organizations should also strengthen its culture; the evidence on the positive relationship between cultural strength and performance is quite strong. In other words, moving towards Cell 4 would make a lot of sense as a go-to strategy for many organizations today.

References:

Gelfand, M. (2018). Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Our World. New York: Scribners.

Gelfand, M. (2018). Is Your Organization Tight or Loose? How to Tell – and Ways to Fix It. Fortune, September 11.

Gelfand, M. et al. (2011). Differences Between Tight and Loose Cultures: A 33-Nation Study. Science (332), 1100-1104.

Henson, R. (2016). Successful Global Leadership: Frameworks for Cross-Cultural Managers and Organizations. New York: Palgrave Macmillan.

Sorensen, J. (2009). Note on Organizational Culture. Stanford Graduate School of Business Case OB-69.