Deal and Kennedy Corporate Cultures

Background

As a manager, you are concerned about planning a strategy that achieves the company's and organization's goals together with your employees.

You can have a lot of fine plans, but your corporate culture must support these plans. It is important that your employees also are involved and accept the plans you are working on. We are going to look at corporate culture from the theories of two American culture and management consultants Terrance E Deal and Allan A Kennedy.

Deal and Kennedy’s model from 1982 is based on two dimensions and suggests that the biggest single influence on a company’s culture is the business environment in which it operates. They called this ‘corporate culture’, which they asserted embodied what was required to succeed in that environment.

About the model

Deal and Kennedy work from 4 generic culture types:

•Macho tough guy

•Work hard play hard

•Bett your company

•Process

Culture is a very important subject and you can consider it a management tool. By knowing and working with the culture, the management can get the employees more targeted and motivate them by leading according to the values that are important to your employees. A strong organizational culture provides informal rules for how to behave and therefore, the leader must be very aware of the culture.

Corporate culture consists of 5 elements:

•The corporate environment - environment and conditions

•Values - the norms and values that define success and are the core of the culture

•Personification of the values of culture. The heroes of the organization. 

•Rituals and ceremonies - planned activities

•Cultural networks - different roles.

Based on Deal and Kennedy, we look especially at the surroundings and the conditions that exist for the company. Deal and Kennedy look at the environment in the company and what kind of environment the company is in. 

Macho Tough Guy

A world of individualists who regularly take high risks and get quick feedback on whether their actions were right or wrong.

The culture type macho tough guy. Here we have an environment where there is very high speed and fast feedback. And high risk with large investments when producing the products. This is a fact in for instance the film industry, in top sports and TV commercials. The culture is a hero culture. We have major risks like shows on Broadway - a lot of money to set up the show and feedback immediately from the audience. The trend in this culture is a youth culture with speed and not endurance. It is an all or nothing culture and there is a need to make quick decisions. There is often aggressive internal competition between the departments and thus a meeting can become almost like a war game and the way forward is to be aggressive. Stars are temperamental.

Managers in this type of culture need to be able to make decisions quickly and to accept risk. To survive when things go wrong, they need to be resilient. Despite the label ‘tough guy’, Deal and Kennedy suggest that this culture is the least discriminatory of the four because it is, in their view, a meritocracy in which success is what is acknowledged and rewarded.

According to this culture it is allright to be temperamental because you run a risk and you believe in that you can do the best deal. To do the best campaign and run a large risk is an important part of this culture. 

Work hard/play hard

Fun and action are the rules here, and employees take few risks, all with quick feedback; to succeed, the culture encourages them to maintain a high level of relatively low-risk activity

Now let us look at the work hard / play hard culture, where there is a low degree of risk and a high degree of feedback. We meet this culture in a sales organization with high activity. Other examples can be real estate agents, IT companies, car salesmen and hamburger chains like Mac Donald and Burger King.

This type of culture is characterized by high levels of activity, and each employee has to take few risks. Instead, success is measured by persistence. As the employees live with small risks and it is not the individual sales that are crucial for success and the employees get a fast and intensive feedback. Either you get the order or you do not. Activity and speed are crucial and it is important that employees can keep pace.

Bet your company Culture

Cultures with big-stakes decisions, where years pass before employees know whether decisions have paid off. A high-risk, slow-feedback environment.

Bet your company culture has a very high risk and a very low speed of feedback. Large investments and projects that take years to develop. The aviation industry, the pharmaceutical industry - the army. The Danish company Terma operating in the aerospace, defense, and security sector is a good example of the Bet your company culture. Major investments and projects where it takes a long time before they find out if it was a success or a failure. For every investment there is a risk of putting the entire company's future at stake.

Another example includes an aerospace organization deciding to develop a new aircraft, such as Airbus, which has spent many years developing its new A380.

Process culture

A world of little or no feedback where employees find it hard to measure what they do; instead they concentrate on how it’s done. We have another name for this culture when the processes get out of control – bureaucracy.

The last culture is the Process culture. Low risk and slow feedback. Here, the financial efforts are low, and there is no single business that is crucial. Employees get almost no feedback - they can write a whole lot of reports and often they do not get feedback on what they write. 

Process cultures get a bad press from nearly all quarters. Employees in these cultures may be very defensive. They fear and assume that they will be attacked when they have done things incorrectly. To protect themselves they engage in behaviour such as circulating emails copied to everyone remotely concerned with the issue.

Criticism of model

Criticism of the model include that none of the cultures is pure and it does not take national cultural differences into account, but is based on American thinking. In addition, there may be different cultures in different departments. However, it is a good guideline in relation to industries and in terms of understanding the conditions under which the company works.