In the context of an organization, cultural models are frameworks that define, shape, and influence corporate culture. Cultural models also provide some structure to a corporate culture that tends to be fluid and vulnerable to change. Once upon a time, most businesses utilized a hierarchical culture where various levels of management oversaw subordinates below them. Today, however, there exists a greater diversity in models as leaders realize the top-down approach is outdated in many industries and that success can be found elsewhere.
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.
The Competing Values Framework was developed in 1983 by Robert Quinn and John Rohrbaugh.
The pair found that successful companies needed to balance two factors:
Focus – some companies were effective when they maintained a competitive external position, while others were better suited to focusing on internal processes, and
Stability – some companies were also more efficient when they displayed flexibility, while others were successful because they favored control and stability.
From these two factors, Quinn and Rohrbaugh argued there were four ideal types of organization with each having a unique set of behaviors:
Hierarchy – inward-looking, ordered, and controlled companies with a focus on structure. Their rigidity makes them less responsive to situations and market demands.
Clan – also inward-looking but able to respond to change with teamwork, collaboration, and a shared, almost familial environment.
Adhocracy – outward-looking companies that are flexible and responsive innovators and risk-takers. Unsurprisingly, they tend to be entrepreneurial and driven.
Market – outward-looking companies that are customer-oriented, competitive, less nurturing, and cognizant of their position in the market.
Denison organizational culture model
The Denison organizational culture model is a relatively recent model that was based on the Competing Values Framework.
It describes four key traits (and twelve associated management techniques) that help an organization develop a robust and effective culture. These include:
Mission – does the company know where it is heading?
Involvement – are employees engaged with their work and in alignment?
Adaptability – is the company able to respond to the market, customers, and other external factors?
Consistency – can the company leverage its values, processes, and systems?
The model measures behaviors that are driven by the beliefs and assumptions of each trait to help the business clarify its culture.
Hall’s iceberg model
Hall’s iceberg model was developed in 1976 by American anthropologist and cross-cultural researcher Edward T. Hall.
Hall likened corporate culture to an iceberg. He posited that some aspects of culture were:
Visible (above the waterline) – such as vision, mission, strategy, external presentation, and policies.
Invisible (below the waterline) – such as values, norms, relationships, unwritten rules, status, and fundamental employee needs such as safety and belonging.
Companies use Hall’s cultural model to shape their culture by addressing the invisible aspects, as these constitute the values and thought patterns that ultimately drive behavior.
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.
The McKinsey 7s framework was developed by Tom Peters and Robert Waterman while they were involved with McKinsey as consultants in the 1970s.
Peters and Waterman describe a corporate culture in terms of six elements that are classified as either:
Hard elements – strategy, structure, and systems, or
Soft elements – staff, skills, and shared values.
Each of these six elements is interdependent and each must be balanced for the company to succeed.
To that end, the McKinsey 7s framework has a core focus on change management and its ability to positively or negatively reshape corporate culture.
Hofstede’s cultural dimensions theory was developed by Dutch social psychologist Geert Hofstede in 1980. Hofstede’s cultural dimensions theory is a framework for cross-cultural communication. To create his theory, Hofstede analyzed the results of a global survey of IBM employees to determine the dimensions in which different cultures vary. Between 1967 and 1973, approximately 117,000 employees across 50 countries were asked about workplace values and leadership and how they were influenced by culture.
The Hofstede model was developed by culture expert Geert Hofstede in the 1980s to serve as a framework for cross-cultural communication. Over six years, he analyzed the results of IBM employee surveys to determine how the culture of society impacted their values and by extension, workplaces.
Hofstede’s work has been used by consultants in international business, psychology, and communication.
The model does not provide a concrete plan of action. Instead, it is used by businesses to conceptualize their ideal corporate culture and understand the various societal and cultural factors that are present.
This makes it ideal for new companies who need to establish a corporate culture or develop a cultural manifesto.
Key takeaways:
In the context of an organization, cultural models are frameworks that define, shape, and influence corporate culture. Cultural models are frameworks that provide some structure to a corporate culture that tends to be fluid and vulnerable to change.
Cultural models include the Competing Values Framework, a common cultural model that inspired the relatively recent Denison model.
Other models include Hall’s iceberg model, the McKinsey 7s framework, and the Hofstede model which is based on research into the impact of culture on employee values, societies, and workplaces.
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
