Management of organizations is quite a complex issue especially in a dynamic environment where change is quire rapid. However, scholars have come up with various organizational theories aimed at helping managers to run their organizations under various situations. Some of these theories include design theory, organizational change theory and organizational learning and knowledge management theory. However, each of these theories is affected by different factors. One of the main factors affecting them is the organizational culture. Organizational culture determines how employees within an organization interact towards meeting company goals and objectives. Therefore, organizational culture has a crucial impact on how organizations operate (Hatch & Cunliffe, 2008). Examples of organizational culture include hierarchy culture, adhocracy culture and clan culture. The aforementioned theories are affected by these cultures in different ways because of their different focus. For instance, hierarchy culture will focus on control and laid regulations coming from topmost management down to the worker. In contrast, adhocracy culture seeks to allow independence and flexibility at the grassroots to encourage innovations. Similarly, clan culture allows flexibility while focusing on internal integration. Findings show that flexibility of an organizational culture determines how well these theories can work. Flexibility and flat design found in adhocracy and clan culture allows change theory and learning theory to thrive well while hierarchy culture hinders them, because of its tall design.
Organization design theory is a framework through which the organization structures itself to undertake its normal operations. However, organizational design is not only concerned with the structure of the organization, but also how the organization aligns itself to various aspects such as functions, strategies and processes within the business environment (Hatch & Cunliffe, 2008). It seeks to integrate its human resource, information and technology to match to its purpose. There are two main organizational design theories, each with its advantages and disadvantages. These design theories are flat and tall structures. An important point to note is that none of them is absolute in all situations. This is because different factors affect organizational design in different ways. For instance, organizational culture is the main determinant to how workers interact within their workplace. As such, different cultures affect the two designs in different ways.
The two designs simply describe the number of management layers within an organization, where tall structures have many layers compared to flat structures. Further, tall structures emphasize control of operations from the highest level of management down to the workers at the grassroots. On the other hand, flat structures emphasize devolved control where authority is delegated to departments led by managers to allow power near the grass root workers. This has different implications to the flow of operations where tall structures will take longer to take action as decisions are made from top management. On the other hand, flat structures will take a shorter time since decisions can be made at the grassroots. With such differences, both strategies work dissimilarly under diverse situations.
While none of them is bad, their success it determined by different factors. One of the main factors that affect organization design is the culture of a company (Hatch & Cunliffe, 2008). Both of these designs work in different ways under the three aforementioned cultures. Each of these cultures shapes the organization design in different ways. The adhocracy culture emphasizes on flexibility and innovation. It seeks to increase its adaptability and quick response to changing markets, external environments and competition. Further, it requires delegated authority where employees are allowed to experiment using new ideas in order to come up with new products and designs. Therefore, this culture requires quick timely decisions and authority at the lower level to achieve its goals. Flat design would be the most ideal under this culture. The tall structure would not work well under this culture since it does not allow the authority at the lower level. Tall structures inhibit the workers’ ability to innovate as well as make quick decisions.
Hierarchy culture, on the other hand, is the opposite of an adhocracy culture. It emphasizes on formal rules and regulations as well bureaucracy to ensure tight control of the organization. In such a culture, several layers of management with different levels of authority are required. This is a more traditional culture where workers are tightly monitored, and decisions are made at the top. Workers are required to follow the rules without making major decisions. Under this culture, the flat design does not work well since it would be hard to control many departments without several layers of management. This is especially so for large complex organizations. As organizations grow, more levels of management are necessary to control the employees. The number of levels is not definite and depends on the operations of the organization as well as its purpose. On the other hand, tall structures seem to work under this culture. Tall structures seek to achieve tight control over the employees. They require several levels of management just as the culture does. As such, this culture typically describes the tall organizational design. Under this culture, authority and decisions are passed down from top to bottom, allowing employees little control over matters. As such, management retains total control of its employees and operations.
Finally, the clan culture comes in to affect the design also in different ways. The clan culture is defined as one that emphasizes high internal collaboration among the employees. It seeks to act more like a family than a formal structured organization. Companies using such a culture focus on teamwork as well building the morale of workers (Cameron & Quinn, 2011). Authority within such a culture is distributed evenly with flat structures that are led by leaders or managers who acts as mentors to the others. Such a culture focuses on shared vision and goals as well as employee development and training. With flat design, this works well since authority is distributed and workers are closer to their managers for mentorship. However, tall design would hardly work under such a culture where power is quite far from their level. Additionally, tall structures require employees to follow strict rules and no decisions are made at the bottom level (Hatch & Cunliffe, 2008).
Organizational change is defined as any change that has the potential to affect the way an organization’s work is performed and goes further to affect the staff. It is also defined as, the movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness,” (Jones & George, 2008). Lewin’s Force-Field Theory of change suggests that a wide variety of factors emerging from the way an organization operates makes it resistant to change. Some of these factors or forces include its structure, control systems and organizational culture. Further, other forces emerge from changing operations and the general environment that force organizations to change. With these kinds of forces opposing each other, managers are daunted with the task of increasing the forces of change while decreasing resistance to change in order to achieve intended changes (Hatch & Cunliffe, 2008).
Change is inevitable, and organizations have to deal with them. The way an organization deals with change determines its success or failure. There are two main types of changes, evolutionary and revolutionary changes. Evolutionary change is continuous and gradual as well as narrowly focused (Hatch & Cunliffe, 2008). An example is total quality management that is applied constantly within the organization and achieves improvement over time. Revolutionary change, on the other hand, is sudden and broadly focused. It happens when an organization requires fast changing, in most cases responding to external forces such as transformations in technology and economic environment. Revolutionary change is huge and requires a lot of effort to implement.
While there is several forced affecting the two types of change, we look at how the three previously discussed organizational cultures affect change. Organizational culture affects how employees within a company interact with each other to achieve the desired goals. Therefore, organizational culture can hinder of facilitate organizational change (Jones & George, 2008). We first consider the hierarchy culture. This culture maintains very strict rules and regulation in order to ensure control of the whole organization. As such, bureaucratic culture is highly resistant to change because of several things. Bureaucratic culture offers no incentives for higher performance, leaving employees satisfied with achieving average performance. Within this culture, employees become rigid and reliant on procedural functions. Response to changes is quite slow because of long delays in making decisions. Learning is also hindered to lack of incentives for it. Therefore, under this culture, organizational change becomes quite hard. Evolutionary change would not achieve anything since employees can avoid it. Revolutionary change would require putting all effort and changing the resistance to change, in most cases changing the culture.
On the other hand, adhocracy culture emphasizes on flexibility and innovation. The culture encourages its employees to experiment with new ideas while paying attention to the external positioning as well as differentiation. It seeks to come up with new methods, products and ways f satisfying the market (Cameron & Quinn, 2011). The adhocracy culture is characterized by a large degree of flexibility and independence, which is driven by the changing external environment. As such, it is designed to adapt to the environment as it changes. It does this through forming teams that respond to new challenges. It is dynamic, creative and entrepreneurial. As such, any change under this culture is achievable. Revolutionary change would mean creating teams to respond to the new challenges such as changing technology or market demands. Evolutionary change is always evident under this culture since it is designed to cope with new challenges all the time.
Almost similar to adhocracy culture is the clan culture that focuses on flexibility and innovation while paying particular attention to internal maintenance and integration of employees. Clan culture seeks to treat each employee with utmost value. It encourages interaction of all employees at all level, with managers playing the role of mentors instead of authority figures. Rather than focusing on control, people are driven by shared vision, goals and objectives (Cameron & Quinn, 2011). It also focuses on innovations and flexibility where all employees work toward the same goal. Under this culture, change is easily achievable through communicating the intended goals for employees to follow. Managers take up the role of mentoring workers towards change. As such, resistance is minimal. Both revolutionary and evolutionary changes are achieved through shared vision and goals. Revolutionary change happens when the organization is responding to large external changes such as the economic environment. Evolutionary change, on the other hand, is gradual and is achieved over time through advocating for certain functions or strategies such as total quality management. The teamwork that is highly encouraged under such culture allows all employees to work towards achieving desired change (Hatch & Cunliffe, 2008).
Organizational Learning and Knowledge Management
Organizational learning and knowledge management theory states that for an organization to remain competitive within a changing environment, it has to change its goals and actions to arrive at expected goals (Dierkes et al, 2003). For learning to occur, an organization has to make conscious decisions to change its actions in response to changing circumstances (Hatch & Cunliffe, 2008). Further, it has to link its actions to outcomes. In order to learn, an organization has to inquire especially when expected outcomes differ from the actual ones. During inquiry, employees will interact with one another and learning will occur. However, this has to follow a problem that requires solving. In most cases, an individual identifies a problem and shares it with other members of the organization with an aim of coming up with an answer. Sharing information has to take place where all or the involved departments are aware of the newly acquired knowledge (Dierkes et al, 2003). Therefore, this theory suggests that learning is a product of such interactions within the organization.
Although learning can occur under any organizational culture, it becomes organizational learning when knowledge is shared across the whole organization. As such, different cultures within the organization will enhance learning in different ways. In some, it might be hard to occur especially where interaction between members is poor (Dierkes et al, 2003). The hierarchy culture is one of those that hinder learning. This learning emphasizes strict following of procedures and rules. Whenever there is a problem, workers do not inquire or share it with others in an effort to seek a solution. Rather, this is left to the management to solve. Considering the slow pace associated with passing decisions from the top to bottom or vice versa, learning and knowledge management theory becomes hard under this culture (Hatch & Cunliffe, 2008). For it to work, interaction and independence of workers to engage in solving of problems is necessary. For instance, the military passes down rules from top to bottom. Men at the ground follow orders and are not required to inquire, as such; learning theory under such a culture might not work well.
One the other hand, adhocracy theory presents a different scenario where learning theory is the order of the day. Under this culture, focus is no flexibility and innovation while paying close regard to market needs and changes. For innovation to occur, new knowledge is necessary. Therefore, learning is the critical element that drives such a culture. Considering workers are encouraged to experiment with new ideas to come up with solutions, learning has to take place. Additionally, this culture requires employees to focus on responding to market and other external needs. Therefore, whenever a problem rises, employees are required to interact in order to come up with a solution, this encourages learning that in turn comes with new ideas and solution. Additionally, when learning occurs, knowledge gained is well kept and managed for future reference. Therefore, learning and knowledge management under this culture works remarkably well unlike within the hierarchy culture.
Similar to adhocracy is the clan culture except that it focuses on internal integration while adhocracy focuses on external factors. Clan culture is also flexible and innovative. It encourages employees to engage in experimentation. However, it tends to focus mainly on employee integration where all workers are treated like family. It believes in the cohesion and commitment of workers to achieve goals. This allows workers to work together towards solving problems as it emphasizes teamwork (Cameron & Quinn, 2011). With teamwork, there is a good chance of learning within the organization. With such a culture that emphasizes teamwork and participation, learning can be achieved through sharing of information just as like adhocracy. Under the learning theory where sharing of information to solve a problem is the way to gain new knowledge, such a culture does well. However, unlike adhocracy, it focuses on internal cohesion as the way to solving problems. It also differs from hierarchy culture since it does not have strict rules hindering learning. Rather, it lacks authority and managers become mentors, which allow free sharing of information. As such, learning theory within the clan culture works well since it allows sharing of information from any direction or the organizational structure, which is the main way that organizations learn.
When it comes to dealing with different situations within the organization whether internal or external, several factors affect the outcome. However, the culture of the organization determines how well an organization is able to deal with different situations. The three cultures discussed affect how well each of the theories can work. One point that clearly stands out is that under adhocracy and clan cultures, changing theory and learning theory can thrive extremely well. On to the contrary, these theories seem not to do well in a hierarchy culture. The reason behind this is the difference between the hierarchy culture and the other two. This difference is the focus on flexibility and innovation within adhocracy and clan cultures.
This flexibility allows organizations to deal with different situations quickly. The other difference is the organizational design, where both adhocracy and clan cultures favor flat structures. This allows decisions at the lower level, allowing fast response to problems and changes. On the other hand, hierarchy culture favors tall design that has more layers of management to enhance control. This does not give workers any authority to make a decision. Rather, top management makes the decisions that are communicated to the lower level. This takes long to have decisions made, thereby delaying action. Therefore, adhocracy and clan cultures provide environments that are conducive for change and learning theories to thrive while hierarchy hinders them using the tall design.
Cameron, K. S. & Quinn, R.E. (2011). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. New York, N.Y: John Wiley & Sons.
Dierkes, M., Antal, A.B., Child, J. & Nonaka, I. (2003). Handbook of Organizational Learning and Knowledge. Chicago, I.L: Oxford University Press
Jones, G. & George, J. (2013). Contemporary Management. New York, N.Y: McGraw-Hill Education.
Mary Jo Hatch, M. J. & Cunliffe, A. L. (2006). Organization Theory: Modern, Symbolic, and Postmodern Perspectives 2nd Edition. New York: Oxford University Press.