1.5. Culture analysis – OCAI method
1.5.1. General about culture analysis methods
To understand the basic underlying drives that influence the operation and development of an organization, it is critical to capture its culture. However, if only analyzing culture by collecting its incoherent signs in many layers, it is just a discrete finding, not a systemic comprehension. Consequently, it is difficult to understand it as a whole system and inevitably impossible to predict its responds or to change it.
17 Fons Trompenaars & Charles Hampden-Turner, “Riding the waves of cultures – Understanding cultural
Obviously, it is not easy to capture an organizational culture in some specific words because organizational culture is extremely broad and inclusive in scope.
However, categorizing culture into types can help a company‟s cultural tendency interpreted, analyzed and changed.
There are various methods to categorize culture because it comprises a complex, interrelated, comprehensive and ambiguous set of factors. For examples, Deal &
Kennedy proposed a dimension based on Speed of Feedback (high speed to low speed) and a Degree of Risk dimension (high risk to low risk), Ernst argued for People Orientation (participative versus non-participative) and Response to the Environment (reactive versus proactive) while Hofstede focused on Power Distance, Uncertainty Avoidance, Individualism, and Masculinity, then broaden to Long-term orientation.
Power distance: a measure of the inequality between „bosses‟ and inferiors, the extent to which this is accepted.
Uncertainty avoidance: the degree to which one is comfortable with or feels threatened by ambiguous, uncertain situations, the extent one can or cannot tolerate uncertainty and tries to avoid it by establishing more structure.
Individualism – Collectivism: the degree to which a culture relies on and has llegiance to the self or the group. In other words, it is the degree to which one thinks in terms of „I‟ versus „we‟; either ties between individuals are loose or people are part of a cohesive group throughout their lives.
Masculinity – Femininity (also known as achievement versus nurturance orientation): the degree to which a culture values such behaviour as assertiveness, achievement, cquisition of wealth or caring for others, social support and quality of life.
Confucian dynamism: this fifth dimension was later added following Hofstede‟s work with Michael Bond (Hofstede & Bond 1988) which was meant to explain the rapid economic development of many Asian countries. This dimension refers to the selective promotion of particular set of ethics found in Confucian teachings. Particular teachings that lead to economic development include thrift,
perseverance, a sense of shame, and following a hierarchy. Other Confucian teachings are less emphasised such as tradition and protecting face.
The impact of long-term or short-term orientation is also studied as part of this dimension.
Example 1: Individualism vesus Collectivism (categorized by Hofstede) One of the main point of Asian culture is Collectivism, in contrary with Western culture individualism. Hofstede stated collectivism is the degree to which individuals are integrated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty.
Through Hofstede‟s research about main dimensions between countries, we can see the interesting figure below for Collectivism ranking.
FIGURE 0-4: INDIVIDUALISM RANKING18
18 http://www.geerthofstede.nl/
Through the Scale of Hofstede, Sweden and Switzerland can be considered as individualistic with a relatively high score (71 points and 68 points relatively). In such countries, people emphasize on personal achievements and individual rights.
They expect from each other to fulfill their own needs. Group work is important, but everybody has the right of his own opinion and is expected to reflect those. In an individual country people tend to have more loose relationships than countries where there is collectivism.
In contrary, Singapore and Vietnam as other Asian countries have low ranking for Individualism. The low Individualism ranking is manifested in a close and committed member 'group', be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount. The society fosters strong relationships where everyone takes responsibility for fellow members of their group.
National culture differences are reflected not only in solutions to organisation problems in different countries, but also in the validity of management theories in these countries.
Different national cultures have different preferred ways of structuring organisations and different patterns of employee motivation. For example, they limit the options for performance appraisal, management by objectives, strategic management and humanisation of work. In his research into organisation cultures, Hofstede identified six independent dimensions of practices:
• process-oriented versus results-oriented;
• job-oriented versus employee-oriented;
• professional versus parochial;
• open systems versus closed systems;
• tightly versus loosely controlled; and
• pragmatic versus normative
The position of an organisation on these dimensions is determined in part by the business or industry the organisation is in. Scores on the dimensions are also related
to a number of other „hard‟ characteristics of the organisations. These lead to conclusions about how organisational cultures can be and cannot be managed. In the case of international business, it means handling both national and organisational culture differences at the same time. Hofstede argued that „organisational cultures are somewhat manageable while national cultures are given facts for management;
common organisational cultures across borders are what keep multinationals together. While defining culture as „the collective programming of the mind which distinguishes the members of one human group from another‟, Hofstede (1991, 1997) emphasises that culture is not a property of the individuals, but of groups.
The Denison organisational culture survey (Appendix 4: DENISON ORGANIZATIONAL CULTURE SURVEY) (Denison 1990) is another instrument for which evidence of sensitivity to organisational change has been presented. This tool assesses organisational culture along the four basic cultural traits, which are presented by certain organisational dimensions. The tool consists of 60 items, which are used to assess and measure the dimensions.
Denison‟s Organisational culture survey offers a quantitative multi-dimensional assessment of the main organisational cultural traits. The assessment has also been correlated with organisational performance measures. Denison (1990) argues that this approach allows for assessment of the ways in which organisations (or sub- groups within organisations) deal with seemingly contradictory or paradoxical goals and demands. Denison regards the understanding of such conflicts as essential to developing sustainable adaptive organisational behaviour, and a number of studies have reported that the pattern of cultural traits of high-performance organisations can be clearly distinguished from those with lower performance (Denison 1984;
Denison & Mishra 1995; Fisher & Alford 2000). Under such a model, organisational culture might be viewed as the system that permits organisations to make coordinated adaptive responses to the numerous competing and even paradoxical demands.
1.5.2. Advantages of OCAI method
This thesis bases on categorize method of Kim S.Cameron & Robert E.Quinn19 called Organizational Culture Assessment Instrument (OCAI) with main benefits and advantages like following:
TABLE 0-3: COMPARISION BETWEEN OCAI METHOD AND OTHER METHODS
OCAI Method Hofstede’s method Denison’s method
Focus on organizational culture
Focus on national culture
Focus on
organizational culture
The first intervention to initiate change
Base on competing values framework that argues each company can pick up a proportion among 4 categories as their strength to deal with internal integration and external adaptation
Not mentioned To explain how
organisations deal with seemingly
contradictory or paradoxical goals and demands
Not only point out the current culture profile but also focus on culture change by defining preferred culture in an organization.
People become aware of the current and of the preferred culture.
“Where are we now and where do we want to or have to go?” This can generate momentum for
Focus on defining only the current culture but not preferred culture
Point out the current culture profile
19 Kim S.Cameron & Robert E.Quinn, “Diagnosing and Changing Organizational Culture: based on the competing values framework”, Jossey Bass, Revised Edition, 2006
change.
Based on 6 specific categories, it is easier to predict which measures of change will turn out to be effective.
Management will get more grips on change.
Resistance to change can be anticipated, it will not happen completely unexpected.
Categories are not pointed out
specifically to define where the effects come
It offers starting points to encourage employees and thus use their energy and creativity that leads to more support for change.
It is the basis for a step- by-step, systematic change plan.
Culture changes are also mentioned but in a form of ideas, not step- by-step
Not mentioned
Easy & user friendly form to survey for a large sample
More complicated
survey to be implemented
1.5.3. Dimensions in OCAI
According to S.Cameron and Robert E.Quinn‟s method to find out the dimensions, key questions are considered:
1. What are the main criteria for determining if an organization is effective or not?
2. What key factors define organizational effectiveness?
Based on the questions, a list of 39 indicators was created from statistical analysis, then, 2 major dimensions were summarized which divide organizational culture into four major clusters. Following is the two major dimensions:
1. Internal Focus and Integration versus External Focus and Differentiation. To the left in the graph, the organization is internally focused: what is important for us, and how do we want to work? To the right the organization is externally focused: what is important for the outside world, the clients, and the market?
2. Stability and Control versus Flexibility and Discretion. At the top of the graph, the organization desires flexibility and discretion, while at the bottom the organization values the opposite: stability and control.
FIGURE 0-5: THE COMPETING VALUES FRAMEWORK20
The two dimensions create four quadrants each of them represents a distinct set of organizational effectiveness indicators. These indicators of effectiveness represent what people value about an organization‟s performance. They define what is seen as good and right and appropriate. The four clusters of criteria, in other words, define the core values on which judgments about organizations are made.
20 Kim S.Cameron & Robert E.Quinn, “Diagnosing and Changing Organizational Culture: based on
the competing values framework”, Jossey Bass, Revised Edition, 2006, page 37
CLAN
(IBM, Hewlett-Parkard)
ADHOCRACY (Microsoft, Nike) HIERACHY
(Boeing)
MARKET (Toyota, Honda) Flexibility & Discretion
Stability & Control
Internal Focus & Integration External Focus & Differentiation
What is notable about these four core values is that they represent opposite or competing assumptions. Each continuum highlights a core value that is opposite from the value on the other end of the continuum – flexibility versus stability, internal versus external.
1.5.4. Questionnaire applied in OCAI
In OCAI method, Cameron and Quinn based on a questionnaire with six categories to capture an organization‟s culture profile. The purpose of OCAI is to assess six key categories of organizational culture which are:
(1) Dominant Characteristic (2) Leadership Style
(3) Management of Employees (4) Organizational Glue (5) Strategy Emphases (6) Criteria of Success
In each category, there are four alternatives (A, B, C, D) which need to be scored in both NOW and PREFER columns. In each category‟s column, the total point is 100 as it based on the competing value framework, meaning that the scare resource of the organization makes people need to trade-off between alternatives.
The column labeled NOW is the assessment about the Corporate Culture currently while the PREFER column reflects the expectation in the future.
The response will produce two independence ratings of the organization‟s culture – one as it currently exists and one as it is wished to be in the future.
Following is an example of scoring for category (1) Dominant Characteristic.
TABLE 0-4: EXAMPLE OF SCORING FOR CATEGORY DOMINANT CHARACTERISTIC
ALTERNATIVE NOW PREFER
A The company is a very personal place. It is like an
extended family. People seem to share a lot of them. 40 50
B
The company is a very dynamic and entrepreneurial place. People are willing to stick their necks out and take risks.
20 10
C
The company is very result-oriented. A major concern is with getting the job done. People are very competitive and achievement-oriented.
20 20
D The company is a very controlled and structured place.
Formal procedures generally govern what people do. 20 20
Total Point 100 100