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Matching Culture to Industry Demands Published: Tuesday, December 8, 1998 By: Dr. Manuel Angel Morales

A recent survey of nearly 2,000 managers from more than 250 American companies has isolated four distinct cultural types and provided insights into the deep rooted differences between the cultures of various industries, organizations, and regions. Following the research, there are four basic organizational culture types: traditional, consensus, profit-center, and futurist, with most organizations falling into the first two categories. Specific regions and industries tend to be characterized by specific dominant cultures: futurists on the West, traditional organizations in the Midwest; consensus building in the service industries, profit-centers in manufacturing. Regionally, the predominance of specific cultures tend to reflect the industries that are located there more than any other specific geographic factor. Industrially, the likelihood of cultural domination is determined by the industry`s mission: consensus is critically in manufacturing where product offerings need to be compatible; profit centers proliferate in financial services. And size matters: smaller organizations are more likely to be futurist, but growth erodes that sort of culture, making it harder and harder to support. Traditional organizations tend to have a vertical structure, with many levels of reporting. Organizational groupings are generally large and structured around functional areas at the corporate level. Communication tends to flow up and down through formal reporting and command channels. Central staff is relatively powerful, and decisions are made high in the organization. These organizations are commonly found in mature industries with commodity products and low growth rates, such as insurance, utilities and government.

The consensus-driven organization tends to be wider than tall. In this instance, top managers delegate authority to teams of middle managers, and it is these units who make operational decisions. While staff groups are generally large, they don`t carry as much operational authority as line managers. These organizations have a neutral attitude toward innovation. The bureaucracy of policies, budget reviews, stakeholders buyins tend to neutralize new ideas, which get lost in the process. Consensus-driven organizations are often found in slow-to medium growth markets, particularly in markets that at one time were fast-growth and have recently slowed; such manufacturing and service industries as semiconductors, telecommunications and education tend to fall into this category.

The profit-center organization is primarily a cluster of small, autonomous organizational modules that are defined around such clearly stated goals as product lines. Central staff is small and has a clear sense of serving the line managers who produce the products and services. These units tend to be medium in size and relatively autonomous and self-sufficient. These organizations are relatively cold with respect to innovation and reside in slow to medium growth markets like chemical, plastics, and industrial machinery.

The futurist organization tends to be small and relatively flat. It will appear to be organized around teams, each led by knowledgeable and effective leaders. These teams may be organized around a purpose, such as exploring new ideas, or around a function responsibility, within relatively small divisional entity. The organizational structure is relatively fluid and adapts itself to the changing task mix. Small teams are given great autonomy, and decision-making is generally made at the smallest possible level of the organization. Futurist organizations are very prompt to innovation. Individuals throughout the organization are constantly proposing new ideas, and the response of their colleagues is generally enthusiastic. Being leading edge, risky and creative is reinforced. Futurist organizations tend to be young and the product of such fast-growth markets as footwear, toys and biotechnology. When they are small, they can be very successful at bringing new ideas to market quickly.

Can you guess where your organization, your industry and your region would fit?

 


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