Core Group Theory
(Kleiner)

Knowledge Center

The actual objective of the modern corporation

Kleiner makes the bold statement that what comes first in every organization is: keeping the Core Group satisfied (normally most of the top managers). And yet, according to Kleiner, Core Groups are not inherently bad or dysfunctional. They are rather necessary and even the best hope we have for ennobling humanity, since organizations are natural amplifiers of human capability. An organization's Core Group is also the source of its energy, drive and direction. Or more accurately, any organization goes wherever its people perceive that the Core Group needs and wants to let it go. Non-members depend upon the Core Group for direction. The Core Group and its members depend upon the non-members for their legitimacy.

Core Groups are normally not mentioned in any organization chart. Compare: Organization Chart. They exist only in people's hearts and minds. After some time, organizations will resemble their Core Group and act like it. And automatically pivot and twist to give the members of the Core Group what they think they want and need, without even asking them. Great Core Groups hold an essential form of knowledge. They set the context that establishes this knowledge as significant.

How do Core Groups become so powerful?

Kleiner explains that the mechanism is based on guesswork and amplification. People who are not in the Core Group try to guess what it is the Core Group wants. So even a casual remark in passing by a Core Group member can be amplified to a shift of direction of an entire division. As a consequence, top managers need to be very cautious in what they say. According to Kleiner, concepts like the Balanced Scorecard do not really change this. Although more objective measurements may be used and there is better strategic communication top-down, still a lot of guesswork remains: people assume that they should interpret the numbers according to what they perceive the Core Group really wants, And people also assume they should interpret the Core Group according to the numbers: if the measurements send a clear signal, then people assume that is where the Core Group wants the organization to go. According to Kleiner, Core Group dynamics also prevent organizations from changing easily. Both the Core Group and the non-core employees are interested in maintaining the status quo.

Expanded Core Group Organizations

Kleiner suggests that is it is possible to create "Expanded-Core-Group Organizations". To do this, the following elements are suggested:

• Employee securities (stock) ownership plans.
• Financial literacy.
• Non-hierarchical decision-making.
• Comprehensive (financial and strategy) training programs.

This is where Core Group theory is not unlike Value Based Management thinking.

As far as the Value Creation part of VBM is concerned, it is important to decide whether an organization should aim primarily at maximizing shareholder value, or to take the position that in reality the Core Group comes first. The last is essentially a form of Stakeholder Value Perspective. Thus Core Group dynamics can provide an explanation for the phenomenon in which companies, despite having adopted the maximizing shareholder value philosophy, are not being very responsive to shareholders needs. Sometimes Core Group members believe mistakenly, that the organization's first task is to keep up the share price. The easiest way of doing that is: the presentation of slowly but steadily growing positive quarterly results. Through guesswork and amplification the entire organization will follow a Core Group that makes this serious mistake. The organization will support the Core Group in providing a manipulated and wrong picture of the reality instead of what really should be done: taking decisions that maximize shareholder (or stakeholders) value. Compare: Seven Signs Of Ethical Collapse

Book: Art Kleiner - Who Really Matters -

Forum New Topic Forum about Core Group Theory. 🔥 NEW Key Assumptions of the Core Group Theory Kleiner says that the Core Group Theory (CGT) holds for both for-profit organizations and non-profit organizations. The (...) 8   0 comments

Expert Tips Sign up Advanced insights about Core Group Theory. Here you will find professional advices by experts. 3 Causes of Disagreement in Team Decision-making Processes Group Decision-making, Team Decision-making, Reasons for Disagreement, 3 Fs, Group Collaboration According to Freeman and Haskins (2014), there are three main categories of potential root causes for disagreements with (...) Why is Changing an Organization Culture So Hard? The ASA Model (Schneider) Organization Culture, Culture Change, Corporate Culture, Change Management, Recruitment Why is changing an organization culture so difficult? Because, once it is established, a culture has the tendency to str (...) The Relationship between the Power of Leaders and Overconfidence Leadership, Power, Leadership Development, Executive Education Fast et al. (2012) researched the relationship between power and overconfidence. In many cases it can be seen that decis (...) Mobilize the Expertise in your Team Early On Team Formation, Expert Power, Group Decision-making, Extroversion, Introversion In a short article, Bonner and Bolinger describe a surprisingly simple process to beef up the problem solving and/or dec (...) Kleiner’s Core Group Theory versus Thompson’s Dominant Coalition on Decentralization Mechanisms Behind Core Groups and Dominant Coalitions In the article ”Core Group Theory and the emancipation agenda” the CGT of Kleiner and the Dominant Coalition of Thompson (...) Who really matters? Who is in my Organization's Core Group? Strategy, Leadership In order to find out which people are in the core group of your organization, Art Kleiner suggest asking yourself follow (...) Pluralistic Ignorance and the Abilene Paradox Problems in Group Decision Making Pluralistic Ignorance can be described as a situation in which a certain person has an opinion, but believes that most o (...) The Role of the CEO in Strategic Change Initiation Communicating Strategic Change In management literature the role of the CEO in formulating and implementing strategic change has often been emphasized. (...) PROs and CONs of a Strong Corporate Culture Corporate Culture Change, Change Management, Organizational Change Implementing a significant change is generally easier when the corporate culture is not strong. By strong Corporate Cult (...) Am I in the Core Group? Strategy, Leadership Art Kleiner suggests asking yourself following questions in order to find out if you are in the core group of your organ (...)

Information Sources Sign up Various sources of information regarding Core Group Theory. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. Power and Politics in Organizations Power Relations, Bases of Power, Political Behavior, Politics, Political Tactics, Organizational Politics This presentation covers the topic of politics in organization, especially focusing on power issues. The presentation in (...) The Fatal Coaching Mistake by Managers Coaching, Mentoring, Management, Leadership Managers and executives often don't realize how much influence they have over their staff, by just being their superior (...) Group Conflicts, Group Cohesion and Groupthink in Decision Making Group Decision Making, Conflicts in Groups, Cohesion of Groups, Groupthink Presentation about conflicts and cohesion in groups, and how it influences decision making. The presentation includes th (...) Avoiding Group Biases: The Pre-Mortem Technique Group Decision Making, Avoiding Group Biases, Group Think, Tunnel Vision Nobel laureate Professor Emeritus Daniel Kahneman explains the Pre-mortum approach by Gary Klein to arrange a special me (...) Group Influences and Opinion Leadership Groupthink, Group Dynamics, Word of Mouth Marketing, Sales, Opinion Leadership, Convincing People, Persuation Presentation about Group Influences, including various related concepts such as the Social Comparison Theory and Word-of (...) 10 Leadership Theories in a Nutshell Leadership Theories Overview, Leadership Development, Management Development, Leadership Styles, Coaching, Mentoring This 5-minute video gives a brief overview of 10 theories of leadership, explaining their main differences: 1. The Grea (...)

Research Links Sign up News Videos Presentations Books More

Compare with:  Groupthink  |  Spiral of Silence  |  Organization Chart  |  Organic Organization  |  Bases of Social Power  |  Levels of Culture  |  Appreciative Inquiry  |  Positive Deviance  |  Changing Organization Cultures  |  Culture Types  |  Contingency Theory  |  Framing  |  Charismatic Leadership  |  Servant-Leadership

Return to Management Hub: Change & Organization  |  Communication & Skills  |  Ethics & Responsibility  |  Human Resources  |   Leadership  |  Strategy

More Management Methods, Models and Theory