which are capable of predicting

such "inconsistencies." Thus, behavior that would violate the older

conceptions of consistency and
rationality might be entirely consistent and rational in terms of the
new theory.
Maital's lively, lucid prose
should make the reading of his
b o o k an informative entertainment, in the best sense of the
word, for b o t h lay persons and
professionals; no technical back82

law, consuming less of various

laboratory rewards as the behavioral price of the reward rises.
The supply of animal labor follows
a t e x t b o o k backward bending
curve, with the largest amount of
labor coming at some intermediate
wage rate rather than extremely
high or extremely low wage rates.
Nonlabor income discourages work
among animals, much as it is supposed to do among humans. None
of this literature, admittedly new,
b u t sizeable, receives more than
the briefest mention in passing.
But the omission is altogether forgivable. Few of us know all that we
should of our own specialized
field, let alone some other. And
the gap will be filled soon enough
b y other books b y other authors
who themselves will probably omit
many of the topics that Maital has
covered so ably. [Z~

Basic
Books,
1982.
0-465-04623-1. $14.95.

ISBN:

Corporate Cultures:
The Rites and Rituals
of Corporate Life
ground in economics or psychology is needed for an appreciation of the content. Many of the
psychologists most likely to read
the b o o k will probably feel that it
presents
a severely truncated
picture of the pertinent psychological literature. I refer to the
growing number of psychologists
engaged in research on the economics of animal behavior such as
laboratory studies of foraging, of
delayed gratification, of animals as
consumers or producers. Ironically,
such studies have shown, with
some important exceptions, that
animals conform fairly well to the
dictates of conventional economic
theory, although the evidence to
date is far from complete. Rats,
monkeys, fish, and pigeons show a
t e x t b o o k obedience to the demand
Business Horizons /March-April 1983

by Terrence E. Deal and

Allan A. Kennedy

The reviewer, Janet P. Near, is

Associate Professor o f Administrative and Behavioral Studies at the
Indiana University School o f Business.

Deal and Kennedy offer managers yet another panacea for

achieving high levels of corporate
performance: manage the culture
of the firm, nurture a strong philosophy,
and-"presto-chango"excellent performance will result!
There are two basic problems with
the b o o k describing this panacea:
the validity of its thesis and its
mode of presentation.
The prescription,
parts of
which have been discussed b y
many
organization
theorists/

researchers over the years, may in

fact cure some ills, and the authors
describe many cases in which it has
done so. Unfortunately, clinical
hindsight of this type is not necessarily accurate. We have no way of
assessing whether the initial diagnosis was correct or whether the
patient might have survived with
some alternate prescription. Nonetheless, executives may find some
useful cures here, as well as diagnostic techniques, as long as they
understand that the self-healer cannot carry malpractice insurance.
The second problem with the
b o o k is that it is too glossy. In
fact, it is so clear and so wellorganized that it is downright dull
in spots. However, such a b o o k can
be read quickly and is more interesting than the usual fare turned
out b y those writing about organization theory.
A brief summary is in order.
Chapter 1 introduces the elements
of corporate culture: the business
environment, in terms of product/
market mix; values or shared beliefs about what will lead to success, for b o t h the individual and
the firm; heroes, the role models of
the modern corporation; rites,
rituals, and ceremonies of various
types; and the cultural network, or
the communication process b y
which the nature of corporate culture is explained to people. Strong
cultures give people informal rules
about h o w to behave most of the
time, resulting in less role ambiguity, which allows people to
spend their time being productive
instead of worrying about h o w
they should act. People can also
feel good about what they do,
because they belong to a c o m p a n y
with a strong identity; that is,
other people know what the company stands for, and the special
qualities of its products. Because it
is special, so are its employees.
In Chapter 2, the importance
of values is stressed. Values are
represented b y a c o m p a n y philosophy which is attuned to the
business environment and widely

Focus

recognized b y all employees. This

philosophy actively influences the
strategy of the firm; it is not just
some moral prescription alluded to
only once a year in the annual
report. The values are important
because they guide and control
managers' behavior, helping them
to make better decisions and to
feel motivated to perform well.
Values are articulated b y company
heroes, the
subject of
Chapter 3. These are the visionaries
of the c o m p a n y who provide role
models for others and symbolize
the possibilities for individual success within the firm. They serve a
variety of functions, may be
" m a d e " b y a c o m p a n y that lacks
" b o r n " heroes, and come in diverse
shapes and sizes. The " o u t l a w s "
serve as a focus for frustration and
show the boundaries of appropriate behavior. The "compasshero" points the direction for
change while the "hunker-down
hero" persists in the face of incredible adversity. Finally, the
"sacred cow h e r o " protects those
mythical relics of the firm that
cannot be destroyed. Heroes are
not necessarily sensitive or charismatic b u t
push people dogmatically toward their visions.
What Deal and Kennedy fail to
note here is the likely fate of
heroes whose visions are wrong.
Chapter
4
concerns
rites,
rituals,
and
ceremonies.
The
" m o d e r n " corporation has all sorts
of rituals: rituals for communication (first name vs. Ms./Mr.), work
rituals that specify ways of working, management meetings that
specify methods for managing
(how and when to hold meetings),
recognition rituals to recognize
performance or p r o m o t i o n or exit
(retirement dinners), and cultural
extravaganzas like a Mary Kay sales
meeting to institutionalize values.
Managing the development and use
of rituals is not easy. It requires
the setting of standards with regard
to such things as language, public
decorum, and interpersonal behavior. It involves the problem of

on Books

integrating newcomers, particularly with which feedback can be obthose more likely to be unaccus- tained regarding the success of
t o m e d to such rituals, such as decisions taken or strategies impleminorities
and
females.
And mented. Four types of cultures
rituals, once instituted, are hard to emerge from this analysis.
change.
The "tough-guy macho culChapters 1 through 4 suffer ture" is seen where there is high
from being a bit elementary, b u t risk and fast feedback, which is
Chapter 5 is well done, perhaps the characteristic of police departbest in the book. It describes the ments, venture capitalists, and the
process of communicating culture entertainment
industry,
among
through the cultural network, that others. Members are individualists
informal
hierarchical
structure who play for big stakes and get
based on influence in the company feedback in less than a year. This
rather than on performance. With- culture is effective in cases where
in this network, people fill various flexibility and innovation are
roles. They may be "story tellers" needed.
who perceive and convey values
The " w o r k hard/play hard"
due to their position at the center culture offers low risk but fast
of the information flow. They may feedback; it is seen in sales and
serve as "priests" who worry about manufacturing departments. Sucand guard the culture listening to cess depends on persistence and
confessions and giving solutions. team-play; it is effective when
Or they may be "whisperers" who things need to "get done fast."
are the power behind the throne,
The " b e t - y o u r - c o m p a n y " culgetting action by virtue of their ture is high risk/slow feedback; it is
connections to the top rather than found, for example, in firms inby any formal authority. Other volved in oil drilling, investment
roles are "gossips," "secretarial banking, or computer design. Since
sources," "spies," and "cabals," the future of the corporation is on
the line, deliberate and careful
action is rewarded. This culture is
"Some readers may find effective in situations where
that the b o o k offers little making the right decision for the
new in term o f basic pre- long-term is important.
The "process" culture is bus c r i p t i o n s . S o m e o f the reaucratic, functioning well where
ideas are f u n , h o w e v e r , there is low risk and slow feeda n d d e s e r v e at least a back, as in the banking, insurance,
or utility industries. Rewards are
quick skim."
based on the process and h o w well
it is done since feedback is too
who influence the network's view slow to allow evaluation on the
of who is currently a " d u m m y " basis of outcomes. The process
and who is not. Clearly, cultivating culture is effective in cases where
the network is important to any reliable and predictable rates of
manager and the authors provide output are needed.
ways for accomplishing this.
This chapter continues with a
The plot thickens in Chapter 6 discussion of tribal habits used b y
as Kennedy and Deal discuss the the four cultures, which makes for
typology of cultures, which will fascinating conjecture. Chapter 7
probably be remembered long after discusses ways for diagnosing culreaders forget the rest of the book. tures from the perspective of both
Basically, they say cultures vary an outsider and insider. It conalong two dimensions: the degree cludes with a section on signs of
of risk of the company's (or de- trouble for firms whose cultures
partment's) activities and the speed are in disrepair.
Business Horizons / March-April 1983

83

The Underclass
by Ken Auletta

The reviewer, James R. Wood, is

Professor o f Sociology and Associate Dean in the College o f Arts
and Sciences at Indiana University.

1 iiiiiiiiiiii
'
84

.....

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TerrenceEDea|gAl|anA.Kenaedu

Chapter 8 gives managers prescriptions for managing the culture, and Chapter 9 discusses costs,
benefits, and methods for change.
One amazing statement is made:
The authors estimate that the cost
of change represents 5 to 10 percent of annual salary costs of
individuals involved in the change
effort. This clearly may reach
astronomical
proportions
very
quickly.
Chapter 10 describes the firm
of the future, the "atomized organization." Kennedy and Deal
predict that it will have small units,
less than 20 people each, with a
great deal of a u t o n o m y and selfcontrol, and will be linked to the
company through its strong shared
culture and computer hook-in.
Their basis for this prediction
makes interesting reading.
In short, some readers may find
that the b o o k offers little new in
terms of basic prescriptions. Some
of the ideas are fun, however, and
deserve at least a quick skim. Indeed, it is entertaining to diagnose
the culture of one's own organization and often sobering to consider
how well one fits in that culture! V-]

Addison-Wesley,
1982.
0-201-10277-3. $14.95.
Business Horizons [ March-April 1983

ISBN:

Ken Auletta set out to discover

"those people behind the bulging
crime, welfare, and drug statist i c s - a n d the all-too-visible rise in
antisocial b e h a v i o r - t h a t afflicts
most American cities." Auletta describes this hardcore subset of
American poor as an underclass
that "feels excluded from society,
rejects commonly accepted values,
[and] suffers fi'om behavioral as
well as income deficiencies" (p.
xiii). There are several million such
Americans; expert estimates range
from 2 to 18 million.
Auletta focuses his search for
the underclass on those persons
participating in the supported
work programs of the Manpower
Demonstration Research Corporation (MDRC), a non-profit corporation using both government
and private funds in search of ways
to reach long-term welfare recipients, ex-convicts, ex-addicts,
and delinquent youths. A stable
society
fostering
equalitarian
values requires that we provide
w o r k - i n the broad sense of
meaningful activity that contributes to s o c i e t y - t o everyone who
wants it and that we try to ensure
that everyone wants it. Thus these
carefully conducted experiments in
the effects of supported work are
of utmost importance. Though
there are no final answers yet, such
programs seem to succeed even for
some of the hardcore unemployed.
Much of the material in the
book consists of results from
Auletta's two years of observation
and interaction with participants in
supported work and associated
training programs. Around the life
histories and the present experiences of these persons Auletta
builds an impressively balanced in-

terpretation of the problem of

poverty in America today, drawing
on numerous interviews with social
scientists, politicians, and leaders
of various organizations.
The Underclass facilitates a
dialogue between those who see
right individual attitudes as necessary (and the poor's sense of victimization as unredemptive) and
those who insist that all the attitudes and good resolve come to
naught against structural unemployment or inadequate family
structures.
Auletta distinguishes among
three approaches to problems associated with the underclass: the
wholesale, laissez-faire, and retail.
Those taking the wholesale approach see the root of the problem
as economic. T h e y advocate largescale programs such as the war on
poverty, and m a n y of them call for
major structural changes effected
through public ownership, taxes on
wealth, and profit ceilings. They
want to go b e y o n d equality of
opportunity to equality of result.
Other wholesale proposals include
a guaranteed annual income, the
government as employer of last
resort, and compulsory national
service for every young person

"Auletta builds an impressively balanced interpretation of the problem of poverty in America

today."
The laissez-faire approach sees
poverty in the individual. "No
a m o u n t of compassion, concern, or
philanthropic or government intervention can overcome their cultural or intellectual defects" (p.
297). "'The underclass is retarded
. . not primarily because its members are poor or are victims of
racism or economic inequality but
because of their own attitudes and
values" (p. 294). The best solution
is patience. Laissez-faire advocates
also devise plans to promote eco-

Focus on Books

nomic growth, and some favor a

work requirement for most welfare
recipients.
Those taking the retail approach "believe in government intervention but oppose big government; they think that the underclass usually has behavioral deficiencies but also income deficiencies; they think that racism
can be a cause of social problems
but also a c r u t c h " (p. 298). The
MDRC's test-market approach to
the underclass reflects the cautious
compassion of the retail approach.
Though this book clarifies a
complex subject better than any
other book I know, perhaps the
crowning virtue of The Underclass
is that it does not oversimplify.
Rather, it closes with a call for
acceptance of complexity and for
urgent discussion by Americans of
various backgrounds and perspectives. [Z]

Random House, 1982.

0-394-52343-1. $1 7.00.

ISBN:

International Marketing
Data and Statistics 1982
Business executives and marketing research departments will
find International Marketing Data
and Statistics the most comprehensive, up-to-date source of comparative data on social, economic, and
consumer trends internationally.
International Marketing Data
and Statistics 1982 covers 128
countries throughout the world.
Comparative statistical data measuring sixty factors of population,
production, trade, and so on, are
presented in easy-to-use tables.
Nine sections furnish statistical
tables in these broad areas of interest: Population, Employment,
Production,
Trade,
Economy,
Standard of Living, Consumption,
Housing, Health and Education,
Communications,
Travel
and
Tourism.
Within each of the ten major

sections of the book, comparative

statistical data is presented for
specific factors. Production statistics, for example, include separate
tables for Land Use and Irrigation,
Livestock, Cereals, Automotives,
Consumer Durables, and more. To
aid comparison the countries are
arranged by continent and region,
rather than in a single alphabetical
sequence.
For researchers interested primarily in the major consumer markets of the world, a separate section provides a detailed statistical
look at twenty-five of the most
important international consumer
markets. Among the data given for
these twenty-five key markets are
demographics by age and by sex,
manufacture of various products,
production and assembly of motor
vehicles, ownership of consumer
durables, consumer expenditure
breakdowns, food consumption,
mass
media
indicators,
and
more. [52

Seventh
Edition, Euromonitor
Publications Ltd., 1982. Distributed by Gale Research Co.
ISSN: 0308-2938. $170.00.

The European
Community: A Guide
for Business and
Government
by Brian Morris, Peggy Crane,
Klaus Boehm

The reviewer, Julie Bobay, is a

Reference Librarian at the Indiana
University School o f Business.
The
European
Community
works to break down trade barriers
within a c o m m o n market and
create a political union among the
peoples of Europe. It plays a forceful role in shaping European social
and industrial policy, affecting
every business, government, and
individual involved with any of its
members.

The European Community: A

Guide for Business and Government is a reference work designed
to lead the reader through the
complex maze of the E.C. organization. Subjects, organizational
sections of the E.C., and various
E.C. rules and regulations are arranged alphabetically, enabling
both the novice and the experienced user to locate information
quickly. Each entry contains references to related entries, guiding
the reader to other relevant information. Appropriate agencies, ofrices, and personnel are identified,
and addresses are included.
One of the strengths of this
guide is its generous use of graphs,
tables, and charts. Since the European Community is a complex
system of sub-organizations which
interface at various points, the
guide's use of graphs and charts
enables the reader to conceptualize
the relationships of the parts and
the system as a whole.
The European Community: A
Guide for Business and Government provides quick and easy access to a broad range of information, such as the bird species which
are protected in Europe, the meaning of the term "Euro-loaf," and
the differences between E.C. Directives and E.C. Regulations. It is a
wealth of truly useful information,
and an essential guide for anyone
dealing with the European Community. [25]
Indiana University Press, 1981.
ISBN: 0-253-32100-x. $32.50.

Encyclopedia
of Economics
Edited by Douglas Greenwald

The reviewer, Nels L. Gunderson,

is a Reference Librarian at the
Indiana University School o f Business.
H e r e at last is an encyclopedia
Business Horizons / March-April 1983

85