Monday, October 15, 2012

Reading :: Diagnosing and Changing Organizational Culture

Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework
By Kim S. Cameron and Robert E. Quinn

I found this book as I was reviewing the literature on adhocracies, and was intrigued by some similarities with the TIMN framework. The book is based on many years of research conducted by Quinn and his colleagues, research that characterizes organizational culture.

The book itself, however, is not a research text but more of a how-to: How do organizations characterize their own internal culture, and how do they use that characterization to better understand how to change it? As the authors state, "The current challenge ... is not to determine whether to change but how to change to increase organizational effectiveness."

To help these organizations characterize their org culture, the authors present a heuristic and various instruments for filling it out. This heuristic, the Competing Values Framework (CVF), is described as "now the most dominant framework in the world for assessing organizational culture." It's a grid with two axes. The horizontal axis "differentiates effectiveness criteria that emphasize flexibility, discretion, and dynamism from criteria that emphasize stability, order, control" (cf. my Genre 2012 presentation). The vertical axis "differentiates effectiveness criteria that emphasize an internal orientation, integration, and unity from criteria that emphasize an external organization, differentiation, and rivalry." So:

  • Horizontal: control v flexibility
  • Vertical: internal v external
Laying down those axes, you get four quadrants. Clockwise from the top, these are:
  • Clan (collaborate)
  • Adhocracy (create)
  • Market (compete)
  • Hierarchy (control)
If you've been following my discussions of Ronfeldt's TIMN framework, you may notice at least a superficial resemblance to his Tribes (Clan), Institutions (Hierarchy), Markets (Market), and Networks (Adhocracy). Ronfeldt has thoughts on the resemblance that are well worth reading.

The authors note that "different organizational values have become associated with different forms of organization." These organizational forms are described in the modern era, not across the sweep of history, and the discussion focuses on workings internal to the organization rather than crossing organizations.
  • Hierarchy. This discussion is based on Weber and describes the Hierarchy form as involving 
    • a formalized, structured place of work
    • stability, predictability, efficiency
    • formal rules and policies
  • Market. This discussion is based on Williamson and Ouchi and describes the Market form as involving
    • transaction costs
    • orientation toward the external environment
    • economic market mechanisms, competitive dynamics, monetary exchange
  • Clan. This discussion is based on Ouchi; the Clan form is specifically traced back to the success of Japanese firms. The Clan form involves
    • shared values and goals, cohesion, participativeness, individuality, and "we-ness"
    • the organization as an extended family
    • teamwork, employee involvement programs, corporate commitment
    • semiautonomous work teams; team accomplishment
  • Adhocracy. This discussion is not extensively sourced, but seems loosely based on Mintzberg. The Adhocracy form involves
    • responsiveness to the information age and its "hyperturbulent, ever-accelerating conditions"
    • innovativeness and pioneering initiatives
    • fostering of entrepreneurship, creativity, and activity on the cutting edge
    • temporary, specialized, dynamic work
    • fostering of adaptivity, creativity, and flexibility
    • the disintegration of the structure at the end of the project
These organizational forms have competing values and criteria of effectiveness. Yet organizations tend to be a hybrid of such organizational forms, sometimes a hybrid of all four. Furthermore, Cameron and Quinn argue, organizations tend to develop through forms in a particular order:
  1. Adhocracy
  2. Clan
  3. Hierarchy
  4. Market
(Note that this order not only contradicts Ronfeldt's TIMN framework (which postulates four basic organizational forms developing in the order Tribes, Institutions, Markets, and Networks over the span of human existence) but also Mintzberg's more complex order in The Structuring of Organizations, in which adhocracy emerges last but shares the principle of mutual adjustment with the earliest form. [Update: I withdraw this statement with regard to Mintzberg; I misread Mintzberg's order. CS 11/2/12] The CVF is simpler, with fewer factors, than Mintzberg's scheme.)

Furthermore, the authors argue, "mature ... organizations tend to develop subunits or segments that represent each of these four culture types." One example is Apple's "pirates" on the Macintosh development team during Steve Jobs' first term, which functioned as a clan.) And "the organization must develop the capability to shift emphases when the demands of the competitive environment require it." Indeed, the authors say, culture change is much less predictable in mature organizations.

The CVF is a powerful heuristic for assessing organizational culture. Yet it is powerful in part because it is reductive and that reductiveness poses limitations. For instance, the developmental account isn't strong, and since it focuses on developments in the modern era, it doesn't give us a good tool for analyzing organizations historically or for analyzing long change. CVF provides a way to see competing values, but not to analyze them in terms of their contradictions, again particularly in terms of how those contradictions lead to developments in the long term. The spatial metaphor leads us to think of increments or decrements in each dimension rather than examining how they overlap or interact and can become points of innovation. And the CVF focuses on culture within an organization, not on how cultural dimensions can stretch across organizations. I'm particularly interested in how the notion of adhocracy can be applied to federations of activities, for instance, but the CVF is not geared to that sort of analysis.

But it doesn't pretend to be. The CVF seems to be very helpful for getting one's arms around the competing values in an organization along these specific dimensions. If you're interested in that sort of analysis, either directly or in terms of how it can interact with other sorts of analyses, definitely check it out.


David Ronfeldt said...

i'd like to clarify the extent to which their CVF "contradicts" my TIMN in regards to the preferred developmental order. if their start-up adhocracy is little more than a small group that then enlarges and bonds like a clan, later developing a hierarchy etc., i don't see much contradiction. i've noted before that all the later TIMN forms may at first have strong tribal/clan aspects — e.g., warlords who precede states and armies, merchant families who precede market firms, today's network tribes — before a new form takes full root, spreads, and becomes professionalized.

moreover, there appear to be two very different kinds of adhocracies in play in their work, if i understand correctly. one is little more than a small informal localized group, as per above. the second is much more information-age in design and potential: like a professional work team drawn from various divisions and locales, meant to deal with a particular task and then dissolve. the first would fit early in their developmental scheme, but the latter would come last, or so it seems to me.

Clay Spinuzzi said...

Right, and I apologize for not properly closing the loop I started.

The developmental order seems to contradict TIMN, but that's because TIMN takes a historical view in which the different forms (though they are all nascent at all time periods) have matured over centuries.

CVF, on the other hand, is concerned with the developmental arc of individual organizations over years and decades.

I also think you're dead on with your assessment that "there appear to be two very different kinds of adhocracies in play in their work"—and this is where they contradict Mintzberg, at least in the terminology. Mintzberg was responsible for formalizing and popularizing the concept of adhocracy, which closely resembles the second kind of adhocracy you mention. But Mintzberg claims that during the lifecycle of an organization, it tends to go through the following stages:

1. The entrepreneurial organization.
2. The machine organization (bureaucracy).
3. The professional organization.
4. The divisional (diversified) organization.
5. The innovative organization ("adhocracy").

The entrepreneurial organization corresponds to the first kind of adhocracy you mention: it's a small, informal, localized group with a flat structure, coordinated via mutual adjustment.

Over time, as the organization scales, it turns to more formal divisions of labor and methods of control and coordination. By the time we get to step 5, the work is complex enough that most of the control goes back to the individual professionals and they return to mutual adjustment, which is the only way to coordinate swiftly enough. Yet their work organization is still qualitatively different from the entrepreneurial organization.

1 and 5 are conflated in CVF—perhaps because the authors don't see a difference between 1 and 5 in terms of organizational culture? I'm not sure. But CVF does make a big deal of the thing that 1 and 5 most have in common, mutual adjustment, which I think looms large in terms of org culture.

By the way, the Mintzberg book is really terrific. I'm trying to find time to review it.