Eight Types of Organizations & The Absolute Power of Organizational Culture
Linking Strategy & Culture
Most organizations create and update a strategic plan. What many miss is how that plan is developed and sustained is just as critical as the content in it. This is largely driven by its culture. Strategic planning is something widely accepted as effective business practice. Some would say it’s essential to success. Trying to operate a business without a strategic plan can be like trying to plan a trip without an itinerary. Yet, even the best of strategic plans can possess inherent weaknesses. Some use a strategic plan as artificial comfort, attempting to attach budget allocations to conditions that shift so fast they can render long range plans ineffective in less than a year. The dominant logic of most plans is to get the goals to fit the resources. This can result in mistaking the plan for actual strategy. True strategy encompasses risk−and failure.
The trouble with the cost-revenue model of planning isn’t just the unprecedented pace of change today. Perhaps its greatest weakness exists with regard to loyalty. All strategic plans engage people. People are not loyal to a plan. They live in a world where daily change is the norm and adaptability to solve problems depends on the culture of their organization. This is at the heart of all human leadership. Because when it comes down to it, amidst the endless changes in all our lives, people are loyal to culture not strategy.
Developing a strategic plan in the absence of an understanding of organizational culture is like trying to cook a meal without knowledge about the actual ingredients. You might know what kind of flavors you desire, but have no idea what ingredients to add and how. Do you know if your members feel that they are contributing to something important in this world? Do you and they agree with the vision and mission of your organization? Is your organization in harmony with its own culture? This is the emerging idea of “harmony” within and across systems. Maybe if we looked at preceding strategy with “organizational culture mapping,” we might get far more value in our planning.
Organizations that thrive understand the supreme value of culture. Successful organizational cultures tend to be led by passionate communicators who drive the core of the culture. These leaders believe and follow transparency as they constantly build trust and empower members. They understand the importance of accountability and how to align individual strengths with measurable goals. Today, they leverage data more than ever as they seek to evolve amidst constant change. None of this can be achieved in the absence of organizational culture. It is culture, the living values of the organization that must inspire all the members and stakeholders to overcome daily and long-range challenges.
Eight Different Types of Organizations
When it comes to types of organizations, there have been many models. One way to look at this is to go back to the origins of personality theory. Like individuals, organizations possess personalities. Typing by personality has a long history, extending back to the work of Dr. Carl Jung. Jung and Baynes (1923) created a theory based on eight personality types. They speculated that an individual is either an extrovert or introvert, and that as humans we experience the world through four primary psychological functions – sensation, intuition, feeling, and thinking. Furnham & Gunter (2015) categorize companies themselves into “personality types” such as “dramatic,” “depressive,” and “paranoid,” and “schiazoid.” If we return to Jung’s original theory, we can consider how an organization gathers data through their perceptions, constructs policy from their observations, and then directs its resources in actual practice. When we do that, like Jung’s original theory, we get eight different types of organizations.
Like Jung’s two major groups of introversion and extroversion, organizations can be thought of as “passion and emotion led” and “reason and logic led.” Every organization uses both emotions and logic. But, all organizations tend to emphasize one over the other, however slightly. It doesn’t stop there, as all organizations process and apply what they perceive. Through this analysis we get these eight overall types:
PASSION & EMOTION LED ORGANIZATIONS
1) SERVICE DRIVEN: E H A−Emotional, Holistic, Altruistic: EHA organizations perceive the world emotionally, not always applying data and relying more on the vision of the company. They are typically altruistic in mission focused on serving others. This leads to a “service-driven” culture at their core. If elements exist in their organization that do not support that desire to serve a larger goal, they are unlikely to gain support. These organizations value passion and social action.
2) EXPLORER DRIVEN: E D I−Emotional, Detail, Individualistic: EDI organizations perceive the world emotionally, not always applying data and tending to value detailed policy and compliance. They are more focused on organizational needs. This results in the placement of high value on exploration and wandering at the core of the culture. They tolerate and even encourage failure as a strategy for growth, and are therefore risk-friendly. They remain focused on profit and growth through exploration.
3) ALTER DRIVEN: E D A−Emotional, Detail, Altruistic : EDA organizations perceive the world emotionally, not always applying data and greatly valuing detailed policy and compliance. They are more focused on needs outside their organization. This yields a high degree of flexibility as external conditions change. These organizations value adaptability at their core, possessing a strength to morphing to whatever is dictated by markets. At times they will seek change even if data do not support it.
4) DISSENT DRIVEN: E H I−Emotional, Holistic, Individualistic: EHI organizations perceive the world emotionally, not always applying data and relying more on the vision of the company. They are more focused on the needs of their organization. This creates a core value of nonconformity in the organization. These organizations are highly likely to go an entirely different route than their peers and competitors. They treasure healthy disagreement and encourage if not reward it.
LOGIC & REASON LED ORGANIZATIONS
5) IDEA DRIVEN: L H A−Logical, Holistic, Altruistic: LHA organizations perceive the world logically, applying data and relying less on intuition. They focus on the vision of the company and on altruistic service to others. This combination of traits yields a value system very heavy on innovation and vision. Deep conviction based on data analysis create high energy and a relentless amount of courage at the value center of these organizations.
6) DATA DRIVEN: L D I−Logical, Detail, Individualistic: LDI organizations perceive the world logically, applying data and relying less on intuition. They tend to value detailed policy and compliance and focus on the needs of the organization. Equity and fairness are among the core values of such organizations. This combination results in an almost painful awareness of reality and the ability to forecast problems and challenges long before the competition.
7) SENTRY DRIVEN: L D A−Logical, Detail, Altruistic: LDA organizations perceive the world logically, applying data and relying less on intuition. They tend to value detailed policy and compliance yet focus on needs outside their organization. While emphasis on compliance is important, it must support the overall value of stewardship and commitment to the outside community of clients or customers. These organizations pride themselves on their logical processes and its impact on their communities and the world.
8) TRUST DRIVEN: L H I−Logical, Holistic, Individualistic: LHI organizations perceive the world logically, applying data and relying less on intuition. They rely more on the “big picture” or vision of the company. They are more focused on the needs of the organization. Loyalty, respect, and dedication exist at the core of these organizational cultures. With trust comes transparency. These organizations are big on disclosure and informing all members on a constant basis as much as possible.
You may be thinking that any or all of these apply to your organization. Aren’t all organizations to some degree data driven? Don’t all organizations value ideas and dissension? You could take any one of these types and say it relevant to your company or group. The key here is to ask yourself to what degree. Being driven by data is very different than being driven by service or stewardship. Each of these types are intended to express the dominance of a trait, much like a personality.
Why is Organizational Culture Important?
The idea of a “person-organization fit” has been around awhile. Oreilly, Chatman, & Caldwell (1991) found that this predicts job satisfaction and organizational commitment a year after it was measured and actual turnover after two years. Edgar Henry Schein, a former professor at MIT Sloan School of Management, created a model to help us better evaluate organizational culture (Schein, 2017). He proposes that organizational cultures have three levels: artifacts and behaviors, espoused values, and what he called “assumptions.” Examples of artifacts and behaviors include the actual policies of the organization and its procedures. Schein (1997) went so far as to define culture as, “… a pattern of shared basic assumptions that the group learned 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.”
There it is again, how something perceives, thinks, and feels. Perhaps most interesting to us is Schein’s position that difficulties may arise in an organization if espoused values by leaders are not in line with the deeper assumptions of the culture. Culture is dynamic and can change slowly or dramatically as well as member perceptions of that culture. We can think of organizational success like a sheet of music. We enjoy songs that have what we call “harmony.” If organizational cultures become too “consonant,” there is not enough variation and creativity to thrive. If these cultures become too “dissonant,” they cannot reach the level of cooperation required to function and grow. If you could “map” your organizational culture, you could better align your resources to the true values and goals of your organization. Doing this before you attempt to create a strategic plan takes that planning from an exercise in document completion to an actual part of your organizations dynamic culture. Therein lies the greatest loyalty and motivation for each and every member, and the highest levels of performance and commitment.
To learn more about how to map your organizational culture, order the book: The Herd: How to Leverage the Absolute Power of Organizational Culture. In it, you’ll find a series of quantitative instruments and specific strategies on how to leverage your organization’s culture.
Visit http://www.organizationalcultureharmonics.com for more…
Dr. Stephen W. Dunnivant Dr. Stephen W. Dunnivant has served in business and higher education for over 30 years. He has served on numerous economic development task forces, national organizations targeting innovation and entrepreneurship, and as invited speaker at regional and national conferences on systemic change and organizational development. He is currently the Dean of Business, Industry, and Technology at Tallahassee Community College.
Furnham,A. & Gunter, B. (2015). Corporate Assessment: Auditing a Company’s Personality. Routledge, NY.
Jung, C. G., & Baynes, H. G. (1923). Psychological types ; or, The psychology of individuals. London: Paul, Trench, Trubner.
Oreilly, C. A., Chatman, J., & Caldwell, D. F. (1991). People And Organizational Culture: A Profile Comparison Approach To Assessing Person-Organization Fit. Academy of Management Journal, 34(3), 487-516.
Schein, E. H. (1997). Organizational culture and leadership. San Francisco, CA: Jossey-Bass.
Schein, E. H. (2004). Organizational culture and leadership. 3rd Ed., San Francisco, CA: Jossey-Bass.