Deal and Kennedy’s Organizational Culture Model

As a lead up to the discussion on corporate culture in people’s management, it is important to consider Deal and Kennedy’s contribution. Deal and Kennedy suggests that ‘People are a company’s greatest resource, and the way to manage them is not directly by computer reports, but by the subtle cues of a culture’

Deal and Kennedy (2000) examined organisational culture from a different perspective, concluding that there are six interrelated elements which define organisational culture. These are:

1. The history of the organisation, because shared past experiences shape current beliefs and values and the traditions which organisation is built on.  For example, firms often draw on their heritage and use this as part of their branding strategy, as well as asserting a belief in traditional values.
2. The values and beliefs of the organisation are critical as these focus on the shared beliefs of employees and the organisation as a whole, including the written and underwritten activities and behaviours which are accepted as valid.
3. Rituals and ceremonies, which may be formalised or informal. For example, recognised regular company events such as Christmas or summer parties or award ceremonies. Informal examples might include dress down Friday or bringing in cakes and sweets for people’s birthdays.  Over time, these become reinforcing and form part of the culture of an organisation.
4. Storytelling, which helps new employees understand their position and role in the organisation. Storytelling has long been used as a means of sharing information within cultures and is now increasingly recognized in Human Resources Management (HRM) literature as a way of helping to introduce new employees the organisation, or gradually help to change organisational culture. Stories are often relatable for people, which is why they can quickly become embedded in organisational culture.
5. Heroic figures are usually former employees of the organisation and are often embedded or immortalized in storytelling. They are a manifestation of organisational values and culture, and may well include the founder of the organisation, or an individual who invented or created something new which transformed the fortunes of the organisation. An example might include Steve Jobs of Apple who acquired near mythical status amongst devotees of Apple products.
6. Cultural network is the informal but critical social network within an organisation whereby employees share knowledge and acquire social capital.  Deal and Kennedy believed that there are specific personalities within a cultural network who help spread information and share stories, and might include the office gossip, the office spy, and the office whisperer, all of whom are key players in the collection and dissemination of organisational information.

Deal and Kennedy conceptualized foundation of organisational culture in their framework reflected in below figure, which categories company culture according to degrees of risk-taking and speed of feedback.   In in short, how quickly do organisation’s make and implement decisions, and how quickly they are able to determine whether these decisions and strategies were the right ones for their business.

Their four categorisations of culture are:

• Work Hard/Play Hard Culture
• Tough Guy/Macho Culture
• Process Culture
• Bet-Your-Company Culture

Each type of culture is identified with the following characteristics:

Work Hard/Play Hard: This is likely to be a sales-driven culture where individual employees take very few risks, but they receive quick feedback on their decisions and actions.  Heroes in such a culture are likely to be highly successful salesman, and employees are likely to respond well to internal competitions as well as being motivated by extrinsic rewards, something which runs counter to certain elements of motivation theory.  Individuals are typically positive and upbeat and like to chase targets.  If managed well, this can be a successful culture where employees work collaboratively to achieve sales targets. If managed badly, it can result in an unfortunate culture where underperforming salespeople are demoralised and operate in a culture of fear.

Tough Guy/Macho: This type of environment is often associated with individuals who are not afraid to take risks but expect quick feedback.  Financial traders would be an example, also high performing athletes or music artists.  They expect to be recognised for what they achieve, but are less likely to work as part of the team as they are fiercely competitive and can be difficult to manage.  It is often associated with a ruthless organisational environment which can be unpleasant and uncomfortable to work in unless an individual has a very high degree of self-confidence.

Process: In a process driven culture, risks are low feedback is slow, and it is unlikely that any single individual will be able to have a great deal of impact on organisational activity.  Examples might include large retailers or other transactionally driven organisations which have well established procedures.  Individual employees know that they have little impact on organisational outcomes and there is little to link individual organisational decisions to overall goals and objectives. Therefore, employees tend to focus on accuracy in process and procedure believing that ultimately it will deliver organisational goals.  Technical expertise and accuracy is valued in such a culture but it can be difficult to accelerate process or change organisational direction.  It is likely to be a difficult culture for innovators or entrepreneurial individuals to work in as they will find procedural constraints challenging.

Bet-Your-Company: This is likely to be a high risk environment but one with feedback can be slow often associated with innovation and development such as engineering or pharmaceuticals.  Typically such environments involve a high degree of capital investment and expenditure, and also have a long payback period, but one which can be extremely lucrative.  However, as it takes a long time to determine whether decisions were right, a great deal of effort and energy is expended in planning and preparation. There is also a high degree of teamwork, as employees recognise that they are mutually dependent upon one another to succeed and believe in long-term planning and forward preparation.  The risks associated with this type of culture are found in issues such as groupthink whereby employees mutually reinforce an idea because they are so keen to see it succeed, failing to consider the possible problems.

Although there are many examples of organisations fitting neatly into one of these categories, there is also a recognition of the fact that some parts of the model are more accurate in different situations.  In dynamic business environments it is therefore better to identify which aspects of the model have greater relevance and consider the implications of this for long-term management and culture.