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Early studies of organizational cultures believed thatbusiness success could be enhanced through thedevelopment of a strong culture (Deal & Kennedy,1982; Peters & Waterman, 1982). However, theyignored the complexity of an organizational life. It isnaïve to assume that there is a single cultural "formula"for achieving organizational success (Miller,2006). Alternatively, Miller (2006) highlights that theorganizational culture is not unitary and subculturesemerge.Previous studies have investigated whether subculturesare beneficial or detrimental to organizations(Galunic & Eisenhardt, 2001; Tushman & O'Reilly,1996). Although subcultures contain seeds of conflict(Van Maanen & Barley, 1985), inconsistencies amongcultural views are expected and even desirable(Martin, 2002). Subcultures are beneficial in the organizationswith a strong culture. Organizations withstrong cultures are capable of only limited changesbecause members are resistant to changing thosestrongly shared values (Gagliardi, 1986). Without innovation,focusing on the stability works only for bringingthe short-term success (Denison & Mishra, 1995).Subcultures are the containers of creativity and innovation(Martin & Siehl, 1983). Thus, strong culturefirms that allow subcultures to emerge will be moreinnovative than strong culture firms that prevent subculturesfrom emerging (Boisnier & Chatman, 2002).Yet, the benefit from the counterculture is conditional.For example, DeLorean's counterculture to theoverarching organizational culture in General Motors(GM) that valued loyalty and conformity was successfulonly until he brought the desirable amount ofinnovation to the organization (Martin & Siehl, 1983;National Defense University, 2008). When he reachedthe point of an ultimate rejection of GM's core valuesand the failure to maintain a delicate balance withinthe dominant culture's latitude of tolerance, he wasasked to leave GM and the counterculture disintegrated.This illustrates how countercultures can bedysfunctional and ultimately extinguished when theyadvocate a complete rejection of the dominantnorms (National Defense University, 2008).Paradoxically, strong cultures nurture the ground forgrowing subcultures. When people's sense of behavioralfreedom is threatened, they may attempt toreassert it through direct or indirect oppositionalbehavior (Brehm, 1966). Strong cultures are so oppressivethat threatened individuals may develop agreater liking for the behavior that has been restricted(Boisnier & Chatman, 2002). So, counterculturesare likely to emerge in strong culture organizationsthan in weak culture organizations.Subcultures also emerge in the organizations in whichpower is decentralized. The emergence of DeLorean'scounterculture at GM is attributed to theirdecentralized power structure (Martin & Siehl, 1983).Decentralized decision-making enables members toobtain the resources and autonomy necessary toconstruct and maintain a subculture in innovatingfirms (Tushman & O'Reilly, 1996). Thus, subculturesare more likely to emerge in larger organizationswith greater task differentiation, more divisions, moregroups of professionals, and more decentralizedpower and decision-making than in smaller organizationswith less task differentiation, fewer divisionsor professional groups, and more centralized powerand decision-making (Boisnier & Chatman, 2002).However, current organizations with strong culturesdo not fit to this categorization, as more organizationsemphasize innovation and more employeescome from different cultures and work together,forming multicultural situations. For example, IDEO isa successful innovation and design firm which has500 employees who work in multidisciplinary teams.The firm has a strong culture which emphasizes oninnovation and decentralized power. Employees'job satisfaction and the congruence of their valueswith the overarching organizational culture seem tobe high. As a result, reactance to the overarchingculture in IDEO is not frequently found regardless ofthe firm's large size. There are also other large firmssuccessfully maintaining the culture of innovationand diversity, especially in the information technologyindustry where more international employeesare hired (e.g. Google). Therefore, it may be a datedidea to predict the emergence of counterculturesbased on the strength of organizational culture andthe size of firm.Structural changes resulting from environmentaluncertainty are also likely to lead to an increase insubculture emergence (Burns & Stalker, 1961). Forexample, People Express (PE) found by Donald Burrin 1981 had a strong people-oriented culture, whichwas strengthened by the selection process and trainingsessions. Due to the deregulation, the airlineindustry became more dynamic and competitivethan before. While the competition became fierceand the workloads for each employee becamecorrespondingly larger, some subgroups were formedin PE and the individuals in those groups complainedabout the organization's major policies andstrategies and even its core values proposed by thefounder. In response to the changing industry andthe employees' complaints, PE went through thechanges in the growth strategy and the overall structurein 1985 and 1986. This example enables this studyto predict that more dynamic than static environmentsare likely to yield subcultures.In sum, previous studies have predicted subcultureemergence only from the cases where the counterculturebrought an innovation to the conservativeoverarching culture. However, their approachis not suitable to the 21st century's organizations ofwhich majority are focusing on innovation and areconsisted of diverse cultural groups of employees.Thus, this study proposes the following hypotheses:Hypothesis 1: Subcultures are more likely to emerge inthe strong culture organizations which focus on stabilitythan in the strong culture organizations whichfocus on innovation or in the weak culture organizations.Hypothesis 2: Subcultures are more likely to emergein the organizations with greater task differentiation,more divisions, more groups of professionals, andmore decentralized power and decision-makingthan in the organizations with less task differentiation,fewer divisions or professional groups, and more centralizedpower and decision-making, regardless ofthe organization's size.Hypothesis 3: More dynamic than static environmentsare likely to yield the emergence of subcultures.In conclusion, this study suggests that previous studiesare limited in finding when and where organizationalsubcultures emerge and challenges the traditionalviews that the strength of the overarching cultureand an organization's size are only good predictorsof subcultures. Future research should correctly predictthe cultural conflicts in the multicultural situationsand suggest any solutions for them.