Key management

An organization with a hierarchy culture has a high need for control and stability, and is focused inwards. Organizations with such a culture follow the traditional approach to management. As such, they are highly bureaucratic. They are characterized by strict controls, specialist jobs, policies, as well as standard operating procedures, which the members are supposed to adhere to without fail. Authority, power and knowledge are concentrated at the top, and communication flows are primarily vertical (top down, and consisting of orders and instructions from the top cadres to the subordinates).

In such organizations, the traditional chain of command as postulated by Weber is very much in place, and has to be respected. Such organizations attach a lot of premium to control, standardization, as well as a clearly defined structure for decision making and authority. Their organizational structures have many management layers, and key leadership roles under this culture include organizing, coordinating, and controlling (Tharp, 2009). Organizations having the market culture also have a high need for stability and control, but unlike those with hierarchy cultures, they are outward looking and not internally focused.

As such, while hierarchy cultures value integration, market cultures value differentiation. Market cultures view the fostering of relationships with external stakeholders (such as customers, suppliers, and so on) as the key to success. The predominant philosophy is that competitiveness can be enhanced through partnerships and positioning. Such cultures are characterized by a high degree of competition, and are highly results-oriented (Tharp, 2009). Organizations with a clan culture show little concern for stability and control. Instead, they attach a lot of value for flexibility.

Instead of driving the organizational members to achieve the organization’s goals through the use of stringent rules and procedures, the members are inspired to achieve the organization’s goals by means of an inspiring and engaging vision, as well as through the involvement of the organizational members in setting goals and achieving them (Tharp, 2009). Unlike organizations which have a hierarchy culture, organizations with clan cultures have flat management structures and organizational members are given the authority to make decisions.

In organizations with a clan culture, the focus is however inward, and a strong sense of camaraderie exists between the organizational members. The role of the leaders in such organizations is only facilitative and supportive. Clan cultures extensively deploy the use of semi-autonomous teams, and resemble extended families (Tharp, 2009). Adhocracy cultures have an external focus, and value flexibility rather than stability and control.

Such organizations highly value creativity and innovation, and this is viewed as key to the cultivation and maintenance of a competitive advantage. They are also characterized by a strong entrepreneurial drive, risk taking is encouraged rather than penalized, with individual employees being encouraged to go out of their own way to take individual initiative (Tharp, 2009). The competing values framework with its categorization of organizational culture into four distinct types can be used to help understand the type of organizational culture predominant at Walgreens.