Access the essential membership for Modern Managers
A key weapon in the war for talent in the 21st century is going to be organizational culture. In the seller’s market for highly skilled labor, Chambers et al cite culture as a key ‘value proposition’ for talented individuals assessing potential employers. [1] In The Harvard Business Review, Goffee and Jones compare business communities to social communities. [2] The practice of holding organizations together and retaining talent is therefore similar to those used by these other communities within towns and villages.
Goffee and Jones describe organizational culture as ‘communities’. The communities to which they refer are similar to those which exist in everyday organizations. They divide organizational culture into two types of human relation: sociability and solidarity, and display this on a four-box matrix. [3] The matrix identifies four types of organizational culture: ‘Networked’, ‘Mercenary’, ‘Fragmented’ and ‘Communal’.
Copyright © 1996 by the Harvard Business School Publishing Corporation; all rights reserved.
According to Goffee and Jones, a community with a high degree of sociability boasts a large number of close friendships and a convivial atmosphere. Often colleagues arrange outings and functions outside of the workplace, and close friendships build up relatively easily. This brings a number of benefits. It provides an enjoyable working atmosphere and often encourages teamwork and creativity. It is also true that this type of environment encourages individuals to go beyond explicit responsibilities to help others. However, the downside of a sociable climate is that the performances of poorer performing individuals are intentionally masked by friends.
On the other hand, a community with strong solidarity is practically devoid of personal ties, but strong professional bonds exist. The advantages of solidarity are that work is done effectively and relationships are mobilized in the event of outside pressure. The drawback of such an atmosphere is that it is only effective if it is focused on the right strategy. Furthermore, roles are clearly defined in an atmosphere of solidarity and this prevents the kind of altruistic behavior that occurs in a sociable situation.
The cultural types in the matrix can be described in the following ways:
Networked
Networked organizations are characterized by a lack of hierarchy. In its place, friendship groups and cliques tend to dictate the ‘rules’ of working and socializing within the organization.
Mercenary
An organization with a mercenary culture is characterized by a clearly defined hierarchy and a definite separation between personal and work life. The personal aspirations of individuals usually correspond with the objectives of the organization.
Fragmented
The fragmented culture has low levels of personal and professional interaction. Workers have no allegiances to their colleagues and often work behind closed doors or at home.
Communal
A communal culture develops out of organizations where employees work together, live together and spend weekends together. That is, employees are close friends, and have developed mutually beneficial professional objectives.
The authors believe that there is no ‘one size fits all’ model for corporate culture and that leaders should attempt to create a culture that best suits the business environment.
For example, the authors suggest that, to increase sociability, managers can take the following steps:[4]
- promote the sharing of ideas, interests and emotions by recruiting compatible people
- increase social interaction among employees by arranging casual gatherings inside and outside of the office
- reduce formality between employees
- limit hierarchical differences
- act like a friend and set good examples by caring for those in trouble
Similarly, they suggest methods for creating an environment of solidarity:
- develop awareness of competitors throughout the organization
- create a sense of urgency
- stimulate the will to win
- encourage commitment to shared corporate goals
In conclusion, the authors state that managers must be able to appreciate the extent of sociability and solidarity in their organization to compete for talent in the modern economy. That is, they must attempt to gain a ‘feel’ for the organization and become aware of the fit of the organizational culture to the business environment. If they do not, this will almost certainly affect their ability to retain talent and compete.
They note that there is no ‘right’ type of culture to ensure that an organization holds on to talent. Culture is affected by external sources like competition but it is also the product of decisions made at the strategic level. Goffee and Jones believe that managers have to be aware that they can alter the culture by taking a variety of steps, such as recruiting compatible people to ensure that ideas and knowledge are shared.
In short, Goffee and Jones believe that culture has a considerable effect on an organization’s ability to create a ‘value proposition’ so that it can hold on to talent. Every organization is capable of manipulating culture to its advantage, but it must be acutely aware of the business climate and existing culture before this becomes a viable proposition.
References[1] Coined in the seminal paper by Chambers et al in The McKinsey Quarterly, No 3 (1998), pp 44-57 and updated in the article E Axelrod, H Handfield-Jones & T Welsh, ‘War For Talent (Part 2)’, The Mckinsey Quarterly, No 2 (2001).
[2] R Goffee, & G Jones, ‘What Holds the Modern Company Together?’, The Harvard Business Review (November-December 1996). Reprinted by permission of Harvard Business Review. From ‘What Holds the Modern Company Together’, by Rob Goffee and Gareth Jones in Harvard Business Review (Nov-Dec 1996). Copyright © 1996 by the Harvard Business School Publishing Corporation; all rights reserved.
[3] R Goffee & G Jones (1996).
[4] R Goffee and G Jones, ‘What Holds the Modern Company Together?’, The Harvard Business Review (November-December 1996).
