Organizational Culture and CVF

Fabrizio SCRIMA University of Rennes 2

Introduction According to Schein, culture is the characteristic of a group that takes shape as the group members gain shared experiences; indeed, one can only talk about an actual culture when in presence of common experiences and a shared cultural baggage. Such culture unfolds as organizations - which have already developed their own culture - acquire other cultures and engage in mergers or other forms of association. In Schein's words:

Culture is a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. (Schein, 1985)

Schein argues that culture exists at all levels, which he explores from the most visible one to the most invisible and taken for granted. Upon entering an organization, the most immediately visible level – artifacts – includes structures and processes that, although observable to others, are often not decipherable. This level therefore includes all the phenomena that one sees, hears, and feels when one encounters a new group with an unfamiliar culture […] this level of the culture is easy to observe. (Schein, 1985). However, this is only a first step. To develop understanding, one must review what one has observed and perceived with those who work inside the organization. Here is where level two – values – arises, namely focussing on the strategies, goals, and philosophies that insiders consider as the organizational values.

A set of beliefs and values that become embodied in an ideology or organizational philosophy (Schein, 1985)

Finally, to develop further understanding, one must decipher what is going on at an even deeper level – basic assumptions – where assumptions are unconscious and taken for granted, and account for the ultimate source of all values and actions. To this purpose, one must also consider organizations from a historical perspective, as Schein himself says:

When a group is first created ... it reflects some individual’s own assumptions but the group does not yet have any shared knowledge as a group because it has not yet taken a common action in reference to whatever it is supposed to do. Until the group has taken some joint action and together observed the outcome of that action, there is not as yet a shared basis… and thus part of the culture of an organization. (Schein, 1985) Competing Values Framework

The Competing Values Framework (CVF) is the framework produced by the working group set up by Cameron and Quinn who, for twenty-five years, studied the major predictive factors of organizational performances. The model was developed on the basis of the Organizational Culture Assessment Instrument (OCAI), which had proved successful in different organizations worldwide and therefore seemed to be reliable.

CVF was built upon the model created by Campbell, Brownas, Peterson, and Dunnette

(1974), which consisted in a list of thirty-nine indicators accounting for all possible measurements used to detect organizational effectiveness. Quinn and Rohrbaugh (1983) considered the list to be overcrowded with items and therefore suggested a less cumbersome way to identify the key factors: namely, they carried out a statistical analysis of the factors, detected two major dimensions, and defined four main groups. The model thus built is a practical tool to understand, measure, and modify organizational culture. Its peculiarity lies in showing the aspects that, within an organization, function in simultaneous harmony and tension with one another. The framework includes two dimensions of the competing values existing in all organizations. In graphic terms, this translates in four quadrants making up one single figure where the vertical and the horizontal dimensions meet.

The authors' research shows that the measuring parameters of organizational effectiveness unfold along two basic dimensions, the first accounting for the organization's internal focus and integration versus its external focus (i.e., its clients) and the second showing flexibility and discretion versus stability and control. Four culture types are thus identified on the basis of the different values and criteria aimed at achieving organizational effectiveness, and each organization may be characterized by aspects pertaining to any one of the four culture types, which will eventually prevail.

The notion of internal focus is assessed by the authors through the OCAI, a

questionnaire whereby the underlying structure of psychological archetypes present in the core dimensions of an organization (Cameron & Quinn) is detected.

The Clan culture is located in the upper left quadrant and is so called because a Clan organization has a greater concern for flexibility as well as an inward focus and a sense of family – rather than business -- which includes both its own people and clients. Its main characteristics are: Internal cohesion, Shared values, Teamworking, Discretion, Corporate Committment, and Informal networks. The leader type is here a facilitator and a mentor, namely a facilitator insofar as he/she is people and process oriented. This person manages conflict and seeks consensus. His or her influence is based on getting people involved in the decision making and problem solving. Participation and openness are actively pursued (Cameron & Quinn, 2011, pg. 249)

and a mentor because he/she is

aware of others and cares for the needs of individuals. His or her influence is based on mutual respect and trust. Morale and commitment are actively pursued (Cameron & Quinn, 2011, pg. 249)

The Hierarchy culture is located in the lower left quadrant and characterizes internally

focused as well as stability and control oriented organizations. The main aspects of such typically bureaucratic culture were beautifully identified in the 1920's by Max Weber, the famous German sociologist and economist, as follows: set of rules, technical training, appointment and promotion based on contractual agreements, hierarchy, systematically ordered positions, impersonality, sense of responsibility. The typically authoritarian leadership style prevails here, so that the Hierarchy leader type is basically a coordinator and an organizer monitoring his/her subordinates' activity. He keeps the organization functioning and provides for its stability. He also monitors the smooth execution of tasks. If the Adhocracy leader type considers leadership as a game of chess, the Hierarchy type's approach has many similarities to the game of checkers, which implies that his/her subordinates are moved as if they were draughtsmen.

The Adhocracy culture, located in the upper right hand quadrant, is typical of those

organizations with a creative and energetic working environment which encourages

individual freedom. Leaders and employees are dynamic innovators and risk takers. Its major characteristics are flexibility, discretion, and commitment to experimentation as well as innovation. The leader type is here a visionary insofar as he/she constantly shows a high-risk orientation so as to anticipate the needs behind his finding creative solutions.

Finally, the Market culture -- located in the lower right quadrant – characterizes the

externally focused organizations with a stability and control orientation. The organizational style is based on market competitiveness (hence the name) and is client (whether real or potential) oriented. Indeed, measuring clients' preferences is a major strategy. Effectiveness is the key word and shall be achieved at all costs; among the underlying values, there are also competitiveness, productivity, and profitability. In terms of leadership, the Market type is a hard driver and a competitor concentrated on goals but not a deceiver or a hypocrite. With regard to his/her subordinates,

his or her influence is based on intensity and rational arguments around accomplishing things (Cameron & Quinn, 2011, pg. 249)

The above-mentioned quadrants can also be considered from a different perspective,

namely one that takes into account the processes characterizing the four cultural types as well as their relevant definitions.

First, the Internal Process Model. It is based on hierarchy and its emphasis is on measurement, documentation, and information. Such processes bring stability and control; indeed, hierarchies seem to function best when tasks are well understood and time is not a key factor.

Second, the Open Systems Model. Based on an organic system, its emphasis is on adaptability, readiness, growth, resource acquisition, and external support. These processes bring innovation and creativity. People are not controlled but inspired.

Third, the Rational Goal Model. It is based on profit and its emphasis is on rational action. It assumes that planning and goal setting results into productivity and efficiency. Tasks are clarified and objectives are set.

Finally, the Human Relations Model. Based on cohesion, its emphasis is on human resource and training. People are seen not as isolated individuals but, rather, as cooperating members of a common social system.

Although the four Models all seem to orbit around totally different domains, they are actually closely intertwined insofar as each of them represents a set of organizational effectiveness indicators to be included in the wider Organization and Management Theory. The four Models, therefore, account for the invisible factors underlying the life of people as well as organizations.

When, more than two decades ago, the authors engaged in their study of organizational

effectiveness, they realized that what was true for some organizations (i.e., the more flexible and adaptability-oriented, the better) was exactly the opposite for other organizations (the more stable and control-oriented, the better). Moreover, they noticed that in some cases effectiveness degrees were higher if the internal process efficiency was high too, whereas in other cases organizations were more effective if competitiveness characterized both their external focus and their clients. In other words, one of the CVF dimensions differentiates flexibility, discretion, and dynamism from stability, order, and control, thus showing a continuum ranging from versatility and flexibility to stability and control.

Another differentiation is showed by the second CVF dimension, namely: on the one hand, internal focus and process integrity, and, on the other, external focus and competitiveness. To put it differently, cohesion and uniformity versus separation and independence.

In sum, CVF is how people evaluate organizations, process information, and learn about their environments, how they organize and lead others, including what kinds of value created for customers, the cluster of organizational effectiveness criteria, and what they see as good, right, and appropriate (Cameron & Quinn, 2005).

Most importantly, this model provides an insight into the different ways to create and

measure value inside organizations. Actually, and interestingly, all the four quadrants represent opposite assumptions since competing dimensions are located along the vertical/horizontal axis but also include the diagonal dimensions which produce conflicting values as well.

The Competing Values Framework is designed to help organizations diagnose and make proper changes to organizational culture in light of a fast-changing business environment. Each culture type mirrors its own basic assumptions: managerial style, strategies, environment, reward system, leadership, and core values. Changing one's

organizational culture, therefore, means first recognizing and then modifying such elements through a process whereby all those who are supposed to start and manage such change engage in a dialogue. Managers are usually involved but the same may apply to all organizational levels.

Because organizational culture is mostly invisible and taken for granted, organizations often find it difficult to detect or even describe it, let alone change it out of awareness. Hence the point of the OCAI method, whereby an organization can begin to see the otherwise undefined aspects of its own culture. This could help identify the way to start the most appropriate changes with a view to profitability. Once such insight has produced a relevant classification, the latter shall be interpreted from multiple perspectives. Namely, a list of six items provides the key characteristics to be measured: dominant characteristics, discrepancies between the current and potentially future organizational conditions, stability-derived strength, consistency within a diversity framework in terms of attributes and actors, comparison with other cultural classifications provided by managers of about one thousand organizations, and trends (as detected through the instrument). As a result, the quadrant with the highest score shows the dominant organizational culture including its basic assumptions and value drivers. This provides an insight into a major reason behind success – i.e., the underlying culture meeting the needs of a competitive context. For example, a company with a strong Clan culture and a weak Market culture that operates in a highly competitive and aggressive sector may fail due to a mismatch between its own culture and the surrounding framework. Other significant data arise from the differences between the actual and the potential organizational culture. However, since the OCAI envisages only an ipsative scale, it does not allow for any statistically significant differences

to be detected and a strong culture will therefore emerge from the score of a given culture type: the higher the score, the stronger (or dominant) the culture type. Research has showed that strong cultures are associated to consistency, clear vision, and higher performance rates face to environments requiring a common vision. Cultural congruence – to sum up – implies the alignment of all the elements making up an organizational culture so that the same culture types are detected in several portions of the organization.

Figure 1: Cameron & Quinn (2011) pg. 250. Culture types and Management styles.

Conversely, the absence of congruence often raises the awareness of a need for change. People do not feel at ease and complain about ambiguous attitudes or a lack of integration or even experience, namely when faced with behaviours perceived as incompatible with the spoken basic assumptions. In other words, a missing cultural congruence often leads to different viewpoints, goals, and strategies. If it is only temporary, it may help highlight the most disturbing or neglected aspects within the organization, or it may disclose previously unnoticed dysfunctions. However, in the long run, it inhibits the organization's effectiveness capacity. Increasing the drive for cultural change, therefore, may be a desirable achievement.