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434 PART 5: THE LEADER AS SOCIAL ARCHITECT
The Competing Values Approach to Shaping Culture

Organizational values
Organizational values Organizational values are the enduring beliefs that have worth, merit, and importance
the enduring beliefs that have
the enduring beliefs that have for the organization. The crisis in corporate ethics and the crash of once-promising
worth, merit, and importance for
worth, merit, and importance for
the organization
the organization companies such as WorldCom, Qwest, Enron, and Arthur Andersen have brought
values to the forefront. One review of recent company failures revealed that un-
healthy cultural values played a crucial role in many of the mistakes these com-
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panies made. Ethical values will be discussed later in the chapter. Changes in the
nature of work, increasing diversity in the workforce, and other shifts in the larger
society have also made the topic of values one of considerable concern to leaders.
They are faced with such questions as, “How can I determine what cultural values
are important? Are some values ‘better’ than others? How can the organization’s
culture help us be more competitive?”
In considering what values are important for the organization, leaders con-
sider the external environment and the company’s vision and strategy. Cultures
can vary widely across organizations; however, organizations within the same
industry often reveal similar values because they are operating in similar environ-
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ments. Key values should embody what the organization needs to be effective.
Rather than looking at values as either “good” or “bad,” leaders look for the
right combination. The correct relationship among cultural values, organizational
strategy, and the external environment can enhance organizational performance.
Organizational cultures can be assessed along many dimensions, such as the
extent of collaboration versus isolation among people and departments, the im-
portance of control and where control is concentrated, or whether the organiza-
tion’s time orientation is short-range or long-range. Here, we will focus on two
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specific dimensions: (1) the extent to which the competitive environment requires
flexibility or stability; and (2) the extent to which the organization’s strategic

focus and strength is internal or external. Four categories of culture associated with
these differences, as illustrated in Exhibit 14.3, are adaptability, achievement, clan,
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and bureaucratic. These four categories relate to the fi t among cultural values,
strategy, structure, and the environment, with each emphasizing specific values, as

shown in the exhibit.
An organization may have cultural values that fall into more than one cat-
egory, or even into all categories. However, successful organizations with strong
cultures will lean more toward one particular culture category.

Adaptability Culture
Adaptability culture The adaptability culture is characterized by strategic leaders encouraging values
Adaptability culture
culture characterized by values that support the organization’s ability to interpret and translate signals from the
culture characterized by values
that support the organization’s
that support the organization’s
ability to interpret and translate
ability to interpret and translate environment into new behavior responses. Employees have autonomy to make
signals from the environment
signals from the environment decisions and act freely to meet new needs, and responsiveness to customers is
into new behavior responses
into new behavior responses highly valued. Leaders also actively create change by encouraging and rewarding
creativity, experimentation, and risk-taking. A good example of an adaptability
culture is 3M Corp., where leaders encourage experimentation and taking risks
as an everyday way of life. All employees attend a class on risk-taking where they
are encouraged to defy their supervisors if necessary to pursue a promising idea.
Researchers are allowed to use 15 percent of their time to explore ideas outside
their assigned projects. This encouragement of experimental doodling, as an early
3M manager called it, has led to the creation of hundreds of innovative projects
and entrenched 3M as a leader in some of today’s most dynamic global markets.
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Many technology and Internet companies also use this type of culture because
they must move quickly to satisfy customers.