There are many types of organizational culture. Fun-loving (Zappos), rule-bound (Bank of America) to innovative (Airbnb).
Organizational culture arises from the underlying assumptions, values, and beliefs that determine how people behave. You can think of culture as an organization’s personality.
Company CEOs have the responsibility to drive results. But if organizational culture is not aligned with the business strategy it will thwart successful achievement of initiatives: culture and strategy clash.
An organization's leader can want to move in the direction of being more innovative. But if the culture is bureaucratic and risk-averse it will be virtually impossible to implement.
The Competing Values Framework of Quinn and Rohrbaugh (1983) is a theory developed from research conducted on the major indicators of effective organization. Based on statistical analyses of a list of effectiveness indicators, the researchers discovered two major dimensions underlying the effectiveness of organizational culture.
The first dimension is related to organizational focus, from an internal emphasis on well-being and development of people in the organization to an external focus on the well-being and development of the organization itself.
The second dimension is the organizational preference for structure and represents the contrast between stability and control versus flexibility and change.
Together these two dimensions form the four basic quadrants of organizational culture.
The criteria within the Competing Values Framework seem to carry conflicting messages. Organizations must be adaptable and flexible, but we also want them to be stable and controlled at the same time. A paradox.
The Multi-Dimensional Personality of Organizational Culture
Just as each individual’s personality is unique, so is each organization’s culture.
Rarely does an organization’s culture reside entirely in one quadrant. It can be a mixture of all of the quadrants, predominantly with the emphasis being in one or two of them. For example, in tech startups, the culture may reside more deeply in the Community and Entrepreneurial quadrants.
Over time, as a Community and Entrepreneurial company matures, the "shape" of the organizational culture is likely to change. It may shift to be more inward, with less camaraderie and tolerance for mistakes.
The older and larger the organization is, the more set its culture becomes.
From research four basic models of culture are determined to exist, with varying degrees of internal and external focus, and flexibility and stability:
FOUR TYPES OF ORGANIZATIONAL CULTURE
The four basic types of organizational culture are:
Below are general characteristics of each different culture.
This culture embodies a well-defined, formal, structured work environment that depends on authority, hierarchy, and procedures to keep the organization running smoothly. There is a focus on efficiency, reliability and smooth execution.
Identity: Belonging: the organization will take care of you in exchange for loyalty.
How things are done: Accuracy, efficiency in task completion
Approach to work: Do things right
Leadership style: Authority
Downside: Slow to act, red tape, may become irrelevant
This is a friendly environment. People are relationship-oriented and express themselves openly. There is a high level of involvement and teamwork. Great value is placed on trust and morale. At times established policies may be disregarded in order to maintain positive relationships.
Identity: Belonging: you are part of a family that cares about you
How things are done: Teamwork
Approach to work: Do things together
Leadership style: Mentor
Downside: Groupthink, avoid conflict
There is a customer-focused, goal-oriented attitude with a strong emphasis on delivering results. Policies, procedures, and measures are aligned to respond to the demands of the market and meet customer needs. The environment is challenging and competitive. Top performers are rewarded and highly regarded.
How things are done: Achieving results, winning
Approach to work: Be the best
Leadership style: Coach
Downside: Stress, burnout
This is an innovative environment where risk-taking, experimentation and creativity are more important than policies or procedures. Individual initiative and freedom are encouraged. The atmosphere is dynamic and free-wheeling, and roles are not always clearly defined.
Identity: Individual initiative
How things are done: Results, creative new ways to solve problems
Approach to work: Do things differently
Downside: Instability, chaos
The Best Type of Organizational Culture
There is no one best culture. The best type of culture depends on your business, strategy, and goals. What’s most important is that your culture and business strategies are aligned.
Ask yourself is the culture helping or hindering us to successfully implement our organization's strategy?
If at some point you find your culture and long-term business strategy are not aligned, you will need to think about proactively transforming culture.
Not to be naive, it is extremely difficult to change a culture. Yet, it is not impossible and has been achieved by many fine organizations, such as TastyCatering of Elk Grove, IL.
An organization will be successful if everyone in the organization works together towards making change happen. Of course, it also requires having the right people who embody the values and desired cultural tendencies of the organization.