The competing values framework was created by Robert Quinn and John Rohrbaugh, emerging from research into the major characteristics of effective organizations. The competing values framework is a tool used to understand and characterize organizational behaviors and beliefs and how they contribute to success.
|Competing Values Framework (CVF)||Description||Analysis||Implications||Applications||Examples|
|1. Key Elements (KE)||The Competing Values Framework (CVF) is a model used to assess and understand organizational culture. It categorizes organizational cultures into four major types: Clan, Adhocracy, Hierarchy, and Market, each characterized by unique values, beliefs, and behaviors.||– Identify and categorize organizational cultures into one of the four CVF types. – Assess the dominant cultural traits within an organization. – Consider the interplay of multiple cultures within complex organizations.||– Provides a framework for analyzing and categorizing organizational culture. – Highlights the strengths and weaknesses associated with different cultural types. – Recognizes that organizations may exhibit a blend of cultural characteristics.||– Organizational culture assessment and transformation. – Leadership development and training. – Change management and alignment with strategic goals.||Key Elements Example: Identifying that an organization’s culture is primarily Clan-based, emphasizing collaboration, teamwork, and employee development.|
|2. Clan Culture (CC)||Clan Culture is characterized by a family-like environment where members have a strong sense of belonging and collaboration. It values teamwork, mentorship, and employee development.||– Assess the presence of Clan Culture elements, such as strong relationships, mentorship programs, and a focus on employee well-being. – Evaluate how Clan Culture impacts decision-making and communication within the organization. – Consider the advantages and disadvantages of Clan Culture in achieving organizational goals.||– Fosters a supportive and cohesive work environment. – Encourages employee engagement, satisfaction, and retention. – May face challenges related to adaptability and competitiveness in fast-paced environments.||– Employee engagement and retention strategies. – Team building and leadership development programs. – Enhancing collaboration and communication within teams.||Clan Culture Example: A family-owned business that prioritizes close-knit relationships among employees and emphasizes mentorship and personal growth.|
|3. Adhocracy Culture (AC)||Adhocracy Culture is characterized by a dynamic and entrepreneurial spirit that values innovation, experimentation, and risk-taking. It encourages employees to be creative and explore new ideas.||– Assess the presence of Adhocracy Culture elements, such as a focus on innovation, experimentation, and flexible work structures. – Evaluate how Adhocracy Culture influences decision-making and adaptability. – Consider the advantages and challenges of Adhocracy Culture in driving innovation and growth.||– Promotes innovation, adaptability, and rapid response to change. – Encourages creativity and a willingness to take calculated risks. – May face challenges related to stability and maintaining established processes.||– Innovation and product development initiatives. – Encouraging a culture of continuous learning and experimentation. – Nurturing creative problem-solving and idea generation.||Adhocracy Culture Example: A technology startup that values experimentation, encourages employees to pursue innovative projects, and promotes a culture of “out-of-the-box” thinking.|
|4. Hierarchy Culture (HC)||Hierarchy Culture is characterized by a structured and controlled environment with clear roles, processes, and a focus on efficiency and stability. It values consistency, rules, and formalized procedures.||– Assess the presence of Hierarchy Culture elements, such as clearly defined roles, strict processes, and a focus on efficiency. – Evaluate how Hierarchy Culture affects decision-making and organizational stability. – Consider the strengths and limitations of Hierarchy Culture in achieving operational efficiency and compliance.||– Ensures clear roles, accountability, and adherence to established procedures. – Supports stability, predictability, and consistency in operations. – May encounter challenges related to adaptability and innovation in rapidly changing markets.||– Process optimization and efficiency improvement initiatives. – Compliance and risk management efforts. – Clarifying roles and responsibilities within organizations.||Hierarchy Culture Example: A government agency with strict protocols, clear hierarchy, and a focus on procedural compliance to maintain consistency and stability.|
|5. Market Culture (MC)||Market Culture is characterized by a competitive and results-oriented environment that values achievement, customer focus, and profitability. It encourages employees to set and meet ambitious goals.||– Assess the presence of Market Culture elements, such as a strong focus on competition, results-driven behavior, and customer-centricity. – Evaluate how Market Culture influences decision-making and goal attainment. – Consider the advantages and challenges of Market Culture in achieving competitiveness and profitability.||– Drives a strong focus on achieving market success and profitability. – Encourages a competitive spirit and customer-centric mindset. – May face challenges related to work-life balance and employee well-being in highly competitive environments.||– Sales and revenue growth strategies. – Setting and aligning ambitious performance targets. – Cultivating a customer-focused mindset among employees.||Market Culture Example: A financial institution where employees are incentivized based on achieving sales targets and profitability, with a strong emphasis on competition and customer service.|
Understanding the competing values framework
Based on the study of culture, leadership, structure, and information processing, Quinn and Rohrbaugh discovered 39 different indicators of effectiveness. These were then analyzed for patterns and distilled into two major dimensions of organizational success:
- Organizational focus – which may be internal or external. Some companies focused on internal processes to achieve success, while others achieved similar results by maintaining a focus on competitive advantage and rivalry.
- Organizational structure – is the business flexible or does it prioritize stability? The researchers found that some companies were successful because they were adaptable and agile. Conversely, some succeeded because of stable leadership and process orientation.
The competing values framework has been recognized as one of the 40 most important frameworks in the history of business. It has wide-ranging applications in leadership competency, organizational culture, financial strategy, information processing, and life cycle stage development.
The four major models of the competing values framework
Four major models, or cultural archetypes, are derived from the degree to which a company is internally or externally focused and flexible or stable.
The interaction between each archetype appears to send conflicting messages, which gives the competing values framework its name. For instance, an organization may need to be flexible while also displaying control and stability at the same time.
With that said, let’s take a look at each archetype below:
- Clan (collaborative) – an organization underpinned by shared values such as stability, cohesion, and participation. The culture is dominated by an emphasis on personal development, mentorship, empathy, and openness. Company effectiveness is also bolstered by risk aversion.
- Adhocracy (creative) – adhocracies are innovative, externally focussed, and flexible. Creative and diverse ideas drive the company forward because leadership is not afraid to take risks. This type of organization is supremely adept at navigating uncertainty, ambiguity, and instability.
- Hierarchy (controlling) – these organizations are focused internally and owe their success to control, order, and continuous improvement. Culture is overtly formal and procedural. Leadership makes long-term predictions based on efficient, capable, and stable processes that are known quantities.
- Market (competing) – competing companies are driven by profitability, market share, and goal achievement. Success is acquired with an aggressive and decisive mindset that is energized by the presence of competitors. Winning through hard work and productivity is actively pursued. With a relatively stable structure, market organizations create a strong brand identity by delivering high customer value.
The competing values framework and leadership
The organizational values of the framework can also be used to model leadership styles.
Below is a brief look at some leadership types based on the hierarchies listed in the previous section:
- Mentor, team builder, facilitator (Clan) – these leaders value development, communication, and commitment.
- Innovator, visionary, entrepreneur (Adhocracy) – these leaders preach values around agility, transformation, and innovation.
- Coordinator, organizer, monitor (Hierarchy) – these leaders prefer consistency, uniformity, predictability, timeliness, and efficiency.
- Producer, competitor, go-getter (Market) – these leaders are primarily concerned with attaining dominant market share, goal attainment, and profitability.
Competing values framework examples
To conclude, we’ll discuss some examples from each of the four main archetypes of the competing values framework.
1 – Clan (collaborative)
The clan culture is often found in start-ups and smaller companies, but it can also be found in companies that employ the franchise model.
One particular example is Tom’s of Maine, an American business and Certified B Corporation that manufactures natural health products such as toothpaste, soap, and deodorant.
Founder Tom Chappell stressed the importance of respectful relationships between co-workers, customers, owners, suppliers, the community, and the environment.
Employees are provided with a safe environment to grow and learn and the culture is more reminiscent of an extended family, with Chappell serving as a mentor and parental figure to subordinates.
2 – Adhocracy (creative)
Pixar has a flat organizational structure which creates the ideal conditions for adhocracy to thrive.
The company has a proven track record of both artistic and technological innovations and is known as a leading pioneer in computer animation.
Pixar is proud to proclaim that, unlike its competitors, it has never purchased scripts or ideas from external parties.
All of the company’s worlds and stories from movies such as Toy Story, Finding Nemo, and Cars came from a creative team who were encouraged to take risks and push the metaphorical envelope.
Indeed, Pixar understands that true creative talent is rare and that management’s role is to not avoid risk entirely but ensure the company can recover easily when inevitable failures occur.
3 – Hierarchy (controlling)
Most investment banks such as Goldman Sachs operate under the hierarchical model with a strict and inflexible structure.
Each is characterized by the following levels with only minor derivations between companies:
- Vice President.
- Director or Senior Vice President, and
- Managing Director.
Each level is associated with certain rituals, benefits, and responsibilities, and employees need to be competitive and possess extreme levels of attention to detail.
Progression through these levels is well defined and has not changed considerably over time.
To encourage employees to work under the intense pressure of a hierarchical structure, promotions are frequent and there is little exclusivity to the titles in most investment banks.
Goldman Sachs, for example, has over 10,000 vice presidents and many firms also have thousands of managing directors.
4 – Market (competing)
Amazon is an oft-cited example of the market culture. Numerous former employees have spoken about a culture that expected the very best they could deliver and to be constantly climbing the ladder.
There were also claims in a 2015 New York Times article that if employees hit the wall – a phrase used to describe one reaching their emotional or physical limits – they were told the only solution was to “climb the wall”.
While the company has made efforts to address its controversial culture in recent years, Amazon’s obvious focus to be the best means it embodies the best (and worst) aspects of the market model for now.
One look at the company’s leadership principles confirms this, with the blurb under the “Deliver results” principle reading as follows: “Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.”
- The competing values framework categorizes the values, beliefs, and behaviors that make up organizational and individual success.
- The competing values framework measures success in terms of organizational structure and focus, two dimensions based on the quantitative analysis of 39 effectiveness indicators.
- The competing values framework suggests four different archetypes, with each displaying varying degrees of structure and focus. They are clan, adhocracy, hierarchy, and market. The framework also details the leadership styles that thrive in each archetype.
- Definition: The Competing Values Framework, crafted by Robert Quinn and John Rohrbaugh, stems from research on effective organizations. It aims to understand and characterize organizational behaviors and beliefs that contribute to success.
- Understanding the Framework:
- Derived from research in culture, leadership, structure, and information processing.
- Distilled into two dimensions: Organizational focus (internal/external) and Organizational structure (flexible/stable).
- The framework has broad applications in leadership, culture, finance, information processing, and organizational development.
- Four Major Models of the Framework:
- Clan (Collaborative): Emphasizes shared values, cohesion, and participation. Focus on personal development, empathy, risk aversion, and mentorship.
- Adhocracy (Creative): Innovates, is externally focused, and embraces flexibility. Thrives in uncertainty and values diverse, innovative ideas.
- Hierarchy (Controlling): Internally focused, values control, order, and continuous improvement. Emphasis on stability, efficiency, and established processes.
- Market (Competing): Driven by profitability, market share, and aggressive goal achievement. Focuses on productivity, customer value, and stability.
- Leadership and the Framework:
- Different leadership types align with the cultural archetypes:
- Clan: Mentors, team builders, facilitators who value development and communication.
- Adhocracy: Innovators, visionaries, entrepreneurs focused on agility and innovation.
- Hierarchy: Coordinators, organizers, monitors preferring consistency and efficiency.
- Market: Producers, competitors, goal-oriented leaders seeking market dominance.
- Different leadership types align with the cultural archetypes:
- Examples of the Framework:
- Clan Culture: Tom’s of Maine emphasizes respectful relationships, personal growth, mentorship, and risk aversion.
- Adhocracy Culture: Pixar’s flat structure encourages creativity, innovation, and risk-taking.
- Hierarchy Culture: Investment banks like Goldman Sachs embody a strict, inflexible, hierarchical structure.
- Market Culture: Amazon exemplifies a market-driven culture, emphasizing constant improvement and ambition.
- Key Characteristics:
- The Competing Values Framework identifies values, behaviors, and beliefs for organizational success.
- Based on organizational focus and structure dimensions.
- Four cultural archetypes: Clan, Adhocracy, Hierarchy, and Market, each with distinct leadership styles.
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