Organisational Type and the Changing Environment

By the very nature of the review, cultural analysis is often focused on a particular group itself and therefore does not always regard what happens at the interface of the group and the environment. Regarding that interface, in “Organisational Culture and Leadership”, 4^th ed., 2010, Jossey-Bass, the author, Schein, states that “without a model of what happens at the boundary, it is not possible to determine which type of culture is effective under different environmental conditions.” That can be in terms of fit with the environment or ability to change with a changing environment.

A cultural typology analysis was built by two researchers who addressed exactly those ideas to look both inside and outside the group. The Cameron and Quinn typology was originally built by factor analysing large numbers of indicators of organisational performance. Finding certain “clusters” in their analysis, the indicators were further reduced to two dimensions, namely flexibility versus stability and internal versus external focus.  

Here’s the result of the studies and further implications (“et alors”).

Organisational Type and the Changing Environment

Combining the key dimensions of flexibility/stability and internal/external focus, Cameron and Quinn identified four clear organisational “types”:

Hierarchy

·         These organisations are internally focused and stable.

·         Accordingly they are structured and well coordinated.

Clan

·         These organisations are internally focused and flexible.

·         Accordingly they are collaborative, friendly and family like.

Market

·         These organisations are externally focused and stable.

·         Accordingly they are competitive and results orientated.

Adhocracy

·         These organisations are externally focused and flexible.

·         Accordingly they are innovative, dynamic and entrepreneurial.

Et alors?

Reading the above, the implicit conclusion is that the “adhocracy” is best adapted to change; however to cite Schein, it is actually difficult to see which “type” is more applicable to a given environment at any one time since change is ubiquitous and a type photograph might not therefore represent the organisation “movie”. But it is regarding change where this type analysis can be useful because the short diagnostic research questionnaire can be conducted simultaneously twice: once to capture the “as is” and secondly to capture the respondents’ preferred “to be” type. Note however that the starting principle is that the poles of any dimension are in conflict with each other and must therefore be reconciled: accordingly, “to be” proposals might tend to gravitate towards the middle ground.

Can “hierarchies” change? Do they need to? It’s all about “fit”. If the environment is stable then potentially, the organisation can be internally focused and stable themselves with no further cause for concern. It can be argued however that the macro environment and the business environment are in a state of “permanent” change. For organisations that are also businesses, more flexibility and more external focus might therefore be necessary if only to survive. One step along this road can often be seen in large multinational companies where “clans” or “adhocracies” are likely to be found in the subsidiaries because they have to be flexible and externally focused. One single organisation can indeed be many different types, but if an organisation is searching to innovate in order to survive in a changing world, then perhaps the “hierarchy” type is not the best fit.