Based on the preceding discussion, we see that organization culture is made up of several different factors. Needless to say, putting all of these factors together into a meaningful rationale that describes a culture can be difficult and frustrating for managers.

Fortunately, a model developed by Cameron and Quinn called the Competing Values Framework presents a rationale that managers can use to categorize organization cultures.15 The Competing Values Framework appears in Figure 16.1. According to the model, cultures differ with respect to two sets of opposite values. The first set of opposite values is organizational flexibility and discretion versus organizational stability, order, and control. The second set of opposite values is an internal organizational focus versus an external organizational focus. Depending on how a culture incorporates various combinations of the competing values represented by these two dimensions, cultures are divided into four types:

1. Clan Culture. As shown in Figure 16.1, clan culture is an organization culture characterized by a strong internal focus with a high degree of flexibility and discretion. The clan culture derives its name from the fact that this organization culture seems much like that of a family. This culture includes activities that reflect shared values and goals, cohesion among organization members, teamwork, and organization commitment to employees.

   The culture at Southwest Airlines is often used as an example of a clan culture. The following excerpt of a recent Thanksgiving Day message from Southwest Airlines president Colleen Barrett shows the emphasis of the Southwest culture on internal focus, flexibility, shared values and goals, and a strong commitment to employees:

   As a Company, we are blessed to have 33,000-plus Employees who continually amaze me with their ability to live the Southwest Way. In an industry where change doesn’t happen gradually, it happens overnight—if you are lucky to have that much advance notice—our People adapt to change faster than a chameleon. Unlike chameleons, when Southwest Employees adapt, they never change their true colors. Their Warrior Spirit, Servant’s Heart, and Fun-LUVing attitude are part of my Thanksgiving blessings.16

   In a clan culture, leaders are seen more as mentors and perhaps even parent figures than as bosses. However, as in any family, relationship issues can crop up, particularly involving mentoring.17

2. Adhocracy Culture. Adhocracy culture is an organization culture characterized by flexibility and discretion along with an external focus. As illustrated in Figure 16.1, an adhocracy is a culture reflecting an organization with a simple structure or a lack of structure. In essence, adhocracy is the opposite of bureaucracy. Within the adhocracy culture, one will find few rules or procedures. Instead, this culture is characterized by a creative workplace where people are entrepreneurial, taking risks to achieve success.

   Google’s organization culture has often been used as an example of an adhocracy culture. The following quote depicts the Google corporate culture as reflecting adhocracy characteristics:

   Though growing rapidly, Google still maintains a small company feel. At the Googleplex headquarters almost everyone eats in the Google café (known as “Charlie’s Place”), sitting at whatever table has an opening and enjoying conversations with Googlers from all different departments. Topics range from the trivial to the technical, and whether the discussion is about computer games or encryption or ad serving software, it’s not surprising to hear someone say, “That’s a product I helped develop before I came to Google.”

   Google’s emphasis on innovation and on its commitment to cost containment means that each employee is a hands-on contributor. There’s little in the way of corporate hierarchy, and everyone wears several hats. For example, the international webmaster who creates Google’s holiday logos spent a week translating the entire site into Korean. The chief operations engineer is also a licensed neurosurgeon. Because everyone realizes that he or she is an equally important part of Google’s success, no one hesitates to skate over a corporate officer during roller hockey.19

3. Hierarchy Culture. Figure 16.1 shows that hierarchy culture is an organization culture characterized by an internal focus along with an emphasis on stability and control. The workplace with this type of culture is formal and structured. Leaders tend to focus on coordination and organization. Individuals within the workplace are concerned about efficiency, and formal rules and policies govern how people operate.

   McDonald’s restaurants are commonly given as an example of a hierarchy culture. The typical McDonald’s restaurant has young employees with little significant experience and produces standardized products for customers. Restaurant success is built on efficient and quick food production. French fries are cooked for an established period, and hamburgers are topped with exact amounts of toppings like mustard and ketchup. Employees are thoroughly trained in the production rules, which cover all facets of restaurant operations, and management closely monitors employee behavior to make sure that the rules are precisely executed.

4. Market Culture. As indicated in Figure 16.1, market culture is an organization culture that reflects values that emphasize stability and control along with an external focus. An organization with a market culture is oriented toward all stakeholders in the market, not just customers. As such, this culture emphasizes relationships with all constituencies, including customers, suppliers, contractors, government regulators, and unions. Leaders in this culture tend to be hard-driving. In addition, the organization focuses on winning and emphasizes achieving ambitious goals and outpacing the competition.20

   General Electric is often used as an example of a company with a market culture. The company operates under the premise that if any of its subsidiaries is not number one or two in market sales, the subsidiary will be sold. As a result of this premise, the company has sold more than 300 businesses over the last few decades. This organization culture is highly competitive and has a “results or else” mentality.

Research tells us that competent managers in each of these four organization cultures tend to act in different ways.21 Figure 16.2 lists each type of culture and shows the corresponding activities that competent managers within each of these cultures tend to emphasize. Studying this figure carefully will provide insights concerning how managers operating in each culture might act to increase the effectiveness of that culture.