3.5.1 Deal and Kennedy model of organisational culture
Deal and Kennedy’s (1982) model, based on two dimensions, suggested that the biggest single influence on a company’s culture was the business environment in which it operated. They called this ‘corporate culture’,which they asserted embodied what was required to succeed in that environment. The two key dimensions were the degree of risk associated with the company’s activities, and the speed at which companies – and their employees – get feedback on whether decisions or strategies are successful. By ‘feedback’ Deal and Kennedy do not mean just bonuses, promotions and pats on the back. They use the term much more broadly to refer to knowledge of results. In this sense, a goalkeeper gets instant feedback from making a great save, but a surgeon may not know for several days whether an operation is successful, and it may take months or even years to discover whether a decision about a new product is correct. Deal and Kennedy distinguish between quick and slow feedback. Also, by splitting each dimension into high and low they came up with four ‘generic’ cultures, as shown in the Figure 16.
The tough guy, macho culture
A world of individualists who regularly take high risks and get quick feedback on whether their actions were right or wrong.
This type of culture is commonly thought to be prevalent in organisations in which feedback comes in the form of financial rewards. You can think here of commodity brokers and sales-orientated organisations, such as those that sell water purifiers or financial services. Feedback, however, can come in many other ways. Police officers, sports people and entertainers all receive rapid feedback on the effectiveness of their work, and they could all be classified as belonging to a ‘tough guy’ culture, even though their feedback is not simply financial. Similarly, all these occupations have a degree of inherent risk, and the line between success and failure can be very fine indeed. For example, a football manager’s career could rest on one refereeing decision, and a comedian’s success depends on the mixture of people in the audience.
Managers in this type of culture need to be able to make decisions quickly and to accept risk. To survive when things go wrong, they need to be resilient. These cultures are characterised by aggressive internal competition. Employees in such organisations believe that to get on they must be as tough as the ‘movers and shakers’ at the top. These activities tend to produce a lot of internal politics and conflict. In addition, these cultures tend to nurture short-term views, and here you might recall some of the reasons that are believed to have led to the fall of organisations such as Enron (auditing failures in picking up billions in debt from failed deals and projects) and Lehman Brothers Bank (bad debts led to its eventual collapse). Despite the label ‘tough guy’, Deal and Kennedy suggest that this culture is the least discriminatory of the four because it is, in their view, a meritocracy in which success is what is acknowledged and rewarded.
The work hard/play hard culture
Fun and action are the rule here, and employees take few risks, all with quick feedback; to succeed, the culture encourages them to maintain a high level of relatively low-risk activity
This type of culture is characterised by high levels of activity, and each employee has to take few risks. Instead, success is measured by persistence. Typically, the primary cultural value is to supply customers with a quality product or service. These cultures spawn meetings, conventions, teamworking, office parties, jargon, buzzwords and so on. They are typical of large organisations such as the motor industry, IT and telecoms because in smaller organisations there are often increased levels of risk as ‘every decision is a big one’. The high levels of energy create two main problems for a manager: ensuring that the energy is being directed at the right tasks, and ensuring that quality accompanies the high levels of activity. For these reasons, IBM put up ‘Think’ signs all around the company.
The bet-your-company culture
Cultures with big-stakes decisions, where years pass before employees know whether decisions have paid off. A high-risk, slow-feedback environment.
This type of culture is found in organisations involved in projects that consume large amounts of resources and take a long time to be realised. Examples include an aerospace organisation deciding to develop a new aircraft, such as Airbus, which has spent many years developing its new A380. Other examples would include a construction company building a skyscraper or an oil company that starts drilling in a new region. Each of these projects is very risky and the organisation does everything it can to ensure it makes the right decisions initially. Meetings become very important and experts are drawn in to give their opinions.
The process culture
A world of little or no feedback where employees find it hard to measure what they do; instead they concentrate on how it’s done. We have another name for this culture when the processes get out of control – bureaucracy!
Process cultures get a bad press from nearly all quarters. They are the bureaucracies, awash with red tape and memos. Their low-risk, slow feedback environment means that employees become more concerned with how work is done – the process – than with what the work is. There is a danger that artificial environments develop, detached from the real world. Employees in these cultures may be very defensive. They fear and assume that they will be attacked when they have done things incorrectly. To protect themselves they engage in behaviour such as circulating emails copied to everyone remotely concerned with the issue.
Deal and Kennedy admit that this four-culture model is simplistic, but it can be a useful starting point for looking at your own organisation. A mix of all four cultures may be found within a single organisation. Furthermore, they suggest that companies with very strong cultures will skilfully blend the best elements of all four types in a way that allows them to remain responsive to a changing environment. Although these cultures have been criticised, for example, because customers fear the high-risk attitudes of those in a tough guy culture or the thoughtless energy of those in a work hard/play hard culture, they exist because they bring order to organisations and ensure that certain procedures are followed. Yet few organisations fall neatly into one of these four types, and it is very hard to relate these types to psychological personalities.
Stop and reflect
What sort of culture would you want in your organisation or, for example, looking after your life savings?
Think also about equity. Bureaucracy in public service undoubtedly makes services unresponsive, but it also ensures greater consistency, equity and impartiality of service – all of which rightly command high priority in public service organisations.