Cameron & Quinn (2011, p. 38) identify two main dimensions related to organizational culture, which are then put into a quadrant called "The Competitive Value Framework." The first dimension is related to flexibility and discretion versus stability and control, and the second dimension is related to internal and integration orientation versus external and differentiation orientation. The two dimensions result in four different cultures type (Figure 3.2). Firstly, clan culture which refers to organizations that are more like extended families than economic entities. Secondly, adhocratic culture that relates to the ethos of an organization that concentrates on external positions with a high degree of flexibility and individuality.
Thirdly, hierarchy culture that refers to organizational culture concentrating on internal maintenance with the need for stability and control in their management and structure. The fourth one is market culture which refers to the type of organization that functions as a market itself. Market culture refers to organizations that focus on external maintenance with the need for stability and control.
Figure 3.2 The Competing Values Framework
Source: Adopted from Cameron & Quinn (2011, p. 53)
1) Clan culture
Clan culture is characterized by teamwork, loyalty, trust, and support (Demir et al., 2011), where organizations are often compared to extended families. Clan culture concern more about the development and involvement of human resources compared to hierarchy, market, and adhocracy cultures. The main task of leaders and managers in this culture is to empower staff and encourage their participation, commitment, and loyalty. Therefore, leaders are seen as mentors or parents. Rewards are given based on team rather than on an individual achievement basis. At the same time, external focus for employees and organizational performance is also emphasized (Cameron & Quinn, 2011).
Organizations with clan cultures can quickly adapt to rapidly changing environments since they are tied to their shared values, beliefs, and goals, which make the company more adaptable (Cameron & Quinn, 2011). Japanese companies showed great success in building and managing clan culture in the workplace.
Clan culture, which is in the upper left of CVF, is characterized by focus/integration and internal flexibility. Since it is characterized by orientation on collaboration, organizations with clan culture show a high degree of commitment, cohesion, loyalty, and tradition. Hartnell et al. (2011) mentioned that human affiliation, which is characterized by clan culture, generates favorable employee attitudes toward organizations.
The underlying assumption of clan culture is that human affiliation produces favorable employee-oriented organizational attitudes (Hartnell et al., 2011). As organizational attributes and behavior, teamwork, participation, and open communication are expected to produce results from commitment, satisfaction, and better quality of work (Cameron &
Quinn, 2011).
2) Adhocracy Culture
Adhocratic culture is characterized by flexibility, change, and openness. This culture emphasizes rapid growth, creativity, innovation, experimentation, and risk taking (Hartnell et al., 2011) with visionary, innovative, and risk-oriented leadership styles (Cameron &
Quinn, 2011). Staffs are rewarded for their success in self-realization and are expected to be more enterprising and creative. Organizations with adhocracy culture emphasize innovation which they perceive as having the inherent ability to generate new resources and higher profits, in contrast to cultures that rely on procedures, centralized power, and collectiveness (Cameron & Quinn, 2011). In addition, Cameron & Quinn (2011) said that organizations with an adhocracy culture can easily adapt to rapidly changing business environments since the organization is designed to react on an ad-hoc basis that is helpful in facing uncertainty, ambiguity, and impermanence conditions. Many organizations, including public sector organizations, have moved to adhocracy culture since the culture is suitable for answering the increasing public demand regarding effectiveness, openness, and accountability (Cameron & Quinn, 2011).
In CVF, the adhocracy culture position is in the upper right, and it is characterized by external focus and flexibility. Cameron & Quinn (2011) argue that adhocratic organizations are considered to value growth, stimulation, variation, autonomy, and attention in detail. With attributes such as risk-taking, creativity, and adaptability,
adhocracy cultures are expected to foster innovation and breakthrough results (Denison &
Spreitzer, 1991).
3) Hierarchy Culture
Hierarchy culture emphasizes stability, certainty, efficiency, and coordination. The culture can be found in an organization that emphasizes order, procedures, rules, and regulations (Cameron & Quinn, 2011). Leaders and managers in organizations with a hierarchy culture are characterized by well-coordinated, well-organized, and conservative styles. Cameron & Quinn (2011) explained that the hierarchical organization's long-term concern is stability and performance as well as efficient and smooth operation.
Organizations are run on the basis of formal rules and policies.
Max Weber's bureaucratic model is considered as the earliest and most enduring forms of organization in modern times (Walton, 2005). Weber's (1947) model is well-known for its seven features of bureaucracy, i.e. organizations should be rules-based, specialized, meritocratic, hierarchical, separate ownership, impersonal, and accountable, which are believed to foster efficiency, reliability, and predictability regarding the creation of organizations' outputs. Government institutions are mostly run on the hierarchical culture, however, large private organizations also adopt this culture since it is needed for integrating their activities (Cameron & Quinn, 2011).
In CVF, hierarchy culture is put on the lower left, thus characterized by internal focus/integration and stability. Its underlying assumptions lie on control, stability, and predictability that foster efficiency. Its main attributes, i.e. proper communication, routine, formalization, and consistency (Cameron & Quinn, 2011) are expected to promote efficiency, timeliness, and smooth function (Hartnell et al., 2011).
4) Market Culture
Market culture is characterized by accomplishment and competitiveness, external satisfaction and efficiency. Leaders and managers within organizations with a market culture tend to direct, goal-oriented, results-oriented in their style (Cameron & Quinn, 2011; Ferreira, 2014). Such organizations have a long-term focus on competitiveness and define success in terms of market share and penetration (Cameron & Quinn, 2011).
Market culture assumes that the customers are selective and prioritizing quality.
Costumers have the freedom to choose the services that they will buy. Therefore, organizations should be market-oriented by increasing their competitive advantage. Market culture confirms that a clear goal and aggressive strategy will generate profits (Cameron & Quinn, 2011).
In CVF, the market culture is on the lower right, thus characterized by external focus and stability. Market culture assumes that focus on achievement will foster competitiveness and aggressiveness, resulting in short-term and immediate productivity, external satisfaction and shareholder value (Cameron & Quinn, 2011; Helfrich et al., 2007).
The main belief of market culture is that clear targets and contingent rewards motivate employees to perform and meet stakeholders' expectations aggressively. Market-oriented organizations value communication, competence, and achievement. Behavior related to these values consists of planning, focus on tasks, centralized decision making, and clear articulation of goals. Such an approach would allow the organization to defeat its competitors, meet its targets, and increase its market share and profitability (Hartnell et al., 2011) (Table 3.1).
Table 3.1 CVF cultures’ assumptions, belief, values, artefact and effectiveness criteria Culture
type Assumptions Beliefs Values Artefact
(behaviors)
Effectiveness Criteria
Clan Human
affiliation
People behave appropriately when they have trust in, loyalty to, and
membership in the organization.
Attachment, affiliation, collaboration, trust, and support
Teamwork, participation, employee
involvement, and open
communication
Quality
Adhocracy Change People behave appropriately when they understand the importance and impact of the task.
Growth, stimulation, variety, autonomy, and attention to detail
Risk-taking creativity, and adaptability
Innovation
Market Achievement People behave appropriately when they have clear objectives and are rewarded based on their achievements.
Communication , competition, competence, and
achievement
Gathering customer and competitor information, goal setting, planning task focus, competitiveness, and aggressiveness
Customer Satisfaction
Hierarchy Stability People behave appropriately when they have clear roles and procedures are formally defined by rules and regulations.
Communication , routinization, formalization, and consistency
Conformity and predictability
Quantity
Source: adopted from (Hartnell et al., 2011)