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Organizational alignment
Organizational
alignment
A model to explain the relationships between
organizational relevant variables
Isabel Quiros
285
Departamento Organización de Empresas, UCM, Madrid, Spain
Abstract
Purpose – The purpose of this paper is to propose a theoretical model for the in-depth study of
organizations, producing a framework which makes it possible to clarify many propositions and to
specifically test the theory. In order to carry out this assignment, the paper has two sub-objectives.
Design/methodology/approach – The first one studies the adaptation of the internal
culture-structure variables as a way to determine the congruity of the components of the companies
which form the real structure and to study the behavior that is expected from the people in the
organization. The second sub-aim is to analyze whether the partial adaptations of real structure
mentioned above are orientated correctly towards the achievement of the strategic aims. Only a
suitable design of the real structure which in turn enables the attainment of the aims raised by the
strategy will give rise to the obtaining of a suitable level of efficiency.
Findings – The key contribution of the paper is to render operative in practical terms such a diffuse
concept as is the alignment model.
Originality/value – Alignment theory has been combined with configuration theory to detect the
ideal cultural, structural, and strategic options and making the comparison with the real forms
possible in order to analyze the possible deviations and to predict the level of efficiency.
Keywords Strategic alignment, Organizations, Modelling
Paper type Conceptual paper
Introduction: alignment theory
Alignment theory is one of the most modern approaches used to explain organizational
efficiency. It aims at the need for coherence among the cultural, structural, and
strategic components of an organization. The seminal analytical framework for the
study of congruence is Nadler and Tushman (1988) model. The main assumption of the
model is that, in order to achieve effectiveness, each part or component must be
directed and structured in the correct way, suited to each other (Nadler and Tushman,
1988). The organization and its components are means to implement strategy, the
interactions between components imply a mutual influence on each other, and the
necessity exists to adapt them to achieve adequate results. The study of the link and
congruence between formal and informal elements of the organization continues to
constitute one of the principal challenges to organizational design researchers (Gresov,
1989; Kristof, 1996).
New organizational alignment theory (Semler, 1997), derived from Nadler and
Tushman’s general model analyzes the importance of this relationship. Strong
alignment requires agreement rather than conflict between the strategic, structural,
and cultural variables (Merron, 1994). The literature distinguished between two types
of organizational alignment: vertical and horizontal or lateral (Kathuria et al., 2007).
Vertical alignment refers to the configuration of strategies, objectives [. . .] throughout
the various levels of the organization and horizontal alignment can be defined in terms
International Journal of
Organizational Analysis
Vol. 17 No. 4, 2009
pp. 285-305
q Emerald Group Publishing Limited
1934-8835
DOI 10.1108/19348830910992103
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of cross-functional and intra-functional integration. As Middleton and Harper (2004,
p. 329) said “alignment is vital as it enables a business to respond to its external
environment and so perform effectively.” Alignment is hard to measure but severe
misalignment is easier to see. The role of alignment in organizational performance is
advocated by leading managers.
Nevertheless, alignment statements are made in exceedingly generic terms, and in
order to study these, it is necessary to specify the relationships. It is necessary to point
out that the concept of alignment is not easy to manage from a practical point of view, in
the sense that it is a variable or a concept which is difficult to measure in itself[1]
(Assouline and Meir, 1987; Edwards, 1995; Hinings et al., 1996). Current models that
incorporate the concept of organizational alignment offer simplicity and common sense,
but they do not explain why alignment works, how it can be measured, or how it can be
created or improved. While ample research exits to suggest that vertical alignment lead
to higher levels of business unit performance, the empirical research to support a similar
relationship between horizontal alignment and performance needs to be buttressed.
Management sub-fields such as manufacturing, operations, marketing, information
systems, human resources, and business strategy have focused on the concept of
vertical alignment across different levels of the organization as a starting point in this
research stream (Alegre and Chiva, 2004; Edelman et al., 2005; Joshi et al., 2003).
Organizations traditionally have concentrated their thought and energy on the
strategic path. Most companies invest considerable time and effort in defining strategic
goals and objectives. Fewer explicitly address the cultural path with clearly defined,
published statements of values. Fewer still make a consistent effort to examine and
support the practices and behaviors that represent those values. Values, behaviors, and
organizational norms are the execution of the organizational intent – the ultimate
determinants of its performance. They are what really happens in the organization on a
day-to-day basis.
So, studies of the concept of horizontal alignment within organization are less
common (Kathuria et al., 2007). We can improve performance by ensuring that the
output of each organizational process contributes to achievement of the organization’s
strategic goals. While often relegated to a position of secondary importance, studying
the relationship between culture and structure and the way they work together to
strengthen an organization’s competitive advantages is also relevant. There is a
research limitation that affects the focus of our objective: the study of the real structure
and its role in contributing to the effectiveness of the organization as a response to
strategic imperatives.
To do so, the present paper proposes a theoretical model for the in depth study of
organizations, producing a framework which makes it possible to clarify many
propositions and to specifically test the alignment theory. In order to carry out this
assignment, the paper has two sub-objectives. The first one studies the adaptation of
the internal culture-structure variables (horizontal alignment), as a way to determine
the congruity of the components of the companies which form the real structure. The
second sub-aim is to analyze whether the partial adaptations of real structure
mentioned above are orientated correctly towards the achievement of the strategic
aims. Only a suitable design of the real structure which in turn enables the attainment
of the aims raised by the strategy will give rise to the obtaining of a suitable level of
efficiency (vertical alignment).
The study has been divided into three basic sections in order to achieve its
objectives. The first of these establishes the theoretical framework which will make it
possible to address the study. It will be verified as the approach of causality cannot be
sustained for the study of the real structure and can only defend a perspective of
congruence. Once the fundamentals of the study are analyzed, the concept of alignment
will begin to become operative, generating the specific model of analysis, in the second
section. The ideal forms that represent the cultural, structural and strategic elections
will be defined, and will form part of a coherent frame of analysis, defined from the
competing values model (CVM). The last section will define the conditions under which
the model becomes operative, and which make it possible to have a research hypothesis
which contrasts in specific terms and is adapted to our objective, the theory of the
alignment. We will close the paper with the principal conclusions of the paper, as well
as its more relevant contributions.
Organizational alignment: from a perspective of causality to a perspective
of congruence
The first aim now is to raise the general frame in which three concepts could be located,
so that these relations are understood and can obtain a certain degree of efficiency.
Thus, we will begin by analyzing the internal organizational aspects, the culture and the
structure in order to choose the perspective most adapted to the study of the real
structure. We will analyze the approach of causality cannot be sustained for this study
and the most adapted perspective is congruence approach. This approach will be
included in the general theory that sustains it, alignment theory. This will make it
possible not only to suit the study but also to introduce another fundamental element of
the analysis, competitive strategy. Including competitive strategy makes it possible to
understand the relations previously mentioned, nor to clarify a certain level of efficiency.
Culture, structure and strategy. A perspective of causality
Researchers who have studied organizational structure and culture have seen these
variables interact with each other, but they have not tested the process of this
relationship or its direction. Schwartzman (1992) summarizes different approaches to
the study of organizational culture:
.
culture as a national or external variable (Harrison et al., 1994);
.
informal as a component of formal (Jones, 1995); and
.
formal as a way to express of the informal (McNabb and Sepic; 1995).
As the first approach has taken into account organizational processes in different
national contexts, it is not included in this paper. We will now analyze the other two
approaches.
Culture as causing structure. Most of the research into organizational structure has
followed a contingency approach. These models hold that the structure of an organization
is dependent on its context (Wong and Birnbaum-More, 1994). Structure/contingency
models endeavor to obtain a causality explanation by analyzing factors which influence
one structural design. Reviews of the structure/contingency literature indicate that
although some consistencies are observed, the research evidence is far from conclusive.
Congruence between conditions and structure is essential to achieve organizational
effectiveness. But the fact that both effective and ineffective organizations, with both
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similar and different structures, have been found to exist in the same context suggests that
factors other than those of context are involved. Child (1972) suggest that decision makers
are not homogeneous and the relationship between context and structure is to be viewed as
a problem of designer choice and the impact of the contextual variables on that choice is a
function of the designer’s preferences for structure (Wong and Birnbaum-More, 1994). In
this respect, they are using culture only in an indirect way, through the decision making
process. Gordon’s (1991) model defends a similar idea. To sum up, culture is an indirect
cause of structure. However, structure can be considered as a vehicle built to reflect
meanings.
Thus, culture can also be a direct cause. Organizational members can create
meaning provinces, including interpreting schemes, articulated as values and interests,
which form their orientation and strategic purposes in their organization. Following
Thompson (1967), organizational members create formal structural frameworks
consistent with their complex values. Organizational actors are intrinsically involved
in the production and reproduction of social reality, through the dissemination of
symbols, rituals, myths, and language itself. The key analysis has to do with power
relationships which permit some members to create organizational structures
congruent with their meaning provinces. Structure is not a separate element; it is a
vehicle to transmit organizational culture. This approach is mentioned in many papers
(Denison et al., 2004; Hanges and Dickson, 2004; McNabb and Sepic, 1995).
Structure as culture cause. Hall and Saias (1980) state that organizational research
defines structure as a formal distribution of roles and administrative mechanisms to
facilitate control and integration to the organizational activities. As a result, structure
is more than a social network, it includes internal processes too. The result of the
process is organizational culture, which reflects the ideas, beliefs and values of the
constituted parts. Organizational members are part of a society and bring with them
the values and beliefs of this society. Moreover, structure is a political hierarchy, which
defines power and dependency relationships. This hierarchy has to be internalized in
order to form part of the organizational structure. As a conclusion, interaction among
these elements during work generates culture, which is a part of structure (Jones, 1995).
As a conclusion, the only tested thing we can say is that culture and structure are
related. Cultural symbols have a dual nature. They establish a way to develop an
objective and the conditions for this objective (Feldman, 1985). In this respect, research
has glimpsed the possible relations between organizational culture and structure, but it
has not been tested whether these conclusively form part of the process. The only thing
that is clear, in line with the arguments of Bierly and Spender (1995), is that the culture
and the formal structure interact and depend on each other. That is, congruence
perspective.
Relationships among culture, structure, and competitive strategy. In the same way,
the relationship between strategy and structure, or strategy and culture, has been the
subject of a great deal of research. The relationship between strategy and structure has
been analyzed in the literature from many perspectives, from Chandler’s (1962) pioneer
work to the present day. However, the need to combine strategy with culture has been a
norm in many textbooks (Thompson and Strickland, 1990), it is implicit in McKinsey’s
7-S model (Peters and Waterman, 1982), and is taken for granted in the financial press,
although it has always been used in very general terms. In other words, it is believed
that strategy should be congruent with the most important values of an organization,
which are its practice and its beliefs. But only a few researchers have been more
specific and they are not analyzed all the components together.
So each causality study specifically involves these concepts and can only be done
with a broad theoretical framework to sustain this relationship, but this is not the case
here. However, as regards the theoretical approach, it is accepted in the research that
tangible and intangible factors of organizational life must coexist for proper
organizational performance. It is not as relevant to analyze the direction of the
relationship as the idea of congruence between both components of the organizations.
That is to say, culture, structure, and strategy must be congruent. In the next section,
we will analyze culture, structure, and strategy congruence, justifying general models
to include the idea of congruence.
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Organizational culture, structure and strategy. A congruence approach
As we have explained in the introduction, the general analytical framework for the
study of culture-structure congruence is Nadler and Tushman (1988) model (Figure 1).
Congruence model
Informal
organization
Context
Strategy
Formal
organization
Task
Effectiveness
organi. results
Person
Feedback
Alignment model
Effect of culture
Inputs
Drivers
Structure
Outputs
Environment
resources,
history
Leadership
strategic goals
tactics
Processes
reward systems
power relationships
Goal attainment
satisfaction
learning
Values
Norms
HR
Feedback
Sources: Nadler and Tushman (1988:32); Semler (1997:32)
Figure 1.
Fit perspective
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The model has three parts: context, organization, and results. In the congruence model,
the organization and its components are means to implement strategy, the interactions
between components imply a mutual influence on each other, and the necessity exists
to adapt them to achieve adequate results. Fundamentally, the most debated
adaptations in the literature have been between task and formal organization, and
between person and organization (Gresov, 1989; Kristof, 1996). However, the study of
the link and congruence between formal and informal elements of the organization
continues to constitute one of the principal challenges to organizational design
researchers.
New organizational alignment theory, derived from Nadler and Tushman’s general
model analyzes the relevance of this relationship too (Semler, 1997). The perspective is
different but the objective of the study is the same (Figure 1). Organizational leadership
and strategy serve as drivers to the process, and are affected by the culture. The
structure of the organization performs the transformation of inputs into outputs and is
also affected by the organizational culture.
These models show that the analysis of the culture/structure congruence (horizontal
alignment) will only give rise to the fulfillment of the necessary but not sufficient
condition for the achievement of organizational efficiency, thus, this analysis would
remain incomplete without the incorporation of the conductive element of the whole
process: the competitive strategy. An analysis of alignment needs the study of the
congruence between internal components of the organization (structure and culture)
and the components which guide the above mentioned relation (vertical alignment).
It is useless to foment the design of a certain real structure if it is not part of the
achievement of the strategic aims. This adaptation determines whether the company
could achieve a certain level of efficiency. The goals will only be achieved if an
internally coherent real structure has been designed and this is in consonance with the
aims pursued by the strategy.
Thus, the analysis will be carried out in two steps: first there the alignment of the real
structure will be analyzed, then a test will be made whether this contributes to
the achievement of the strategic aims and, therefore, positive results are obtained.
The theory of the organizational alignment will also be tested through the approach raised
in the model of dynamical relations. It is necessary to consider the main components in
each of them, choose one of interest, and finally, compare them. In the literature we can find
many examples in these regard: strategy and structure relationship (Chandler, 1962;
Parnell et al., 1996), culture and structure (Hinings et al., 1996; Rowlinson, 1995; Wong and
Birnbaum-More, 1994) and resources and structure (Alexander and Randolph, 1985;
Hoffman et al., 1992) as bases for what I have explained above.
However, in order to study culture structure and strategy congruence we can
analyze concrete dimensions, as independent components, or coherent groups of these.
Therefore, we will approach the study of the adjustment of these three concepts by
comparing homogenous sets of cultural norms, structural forms and strategic patterns.
Considering the specific dimensions of one or other concept only gives us a partial view
of the issue, which would prevent us from completing our objectives. This leads us to
the heart of the configurational theory. So we will follow the three methodological
stages needed to develop a configurational theory for our research alignment model:
the description of ideal types, the definition of the suitable type and the interpretation
of equifinality.
Culture, structure and strategy congruence. A model of analysis to study
alignment among them
The theoretical framework explained in the previous section justified the perspective of
congruence as the suitable one to confront the study of the three concepts raised, as
well as the need to approach the analysis through the detection of the ideal profiles of
each one. Only this perspective allows us to provide a global vision which makes it
possible to achieve the aims of the study. Therefore, the next step is to identify the
extreme cultural, structural and strategic decisions which allow us to define the ideal
types, and which reflect the options which the executives can use to coordinate the
behavior of the persons in an organization. To do so, a study is first made of the options
of the real structure in an attempt to integrate them into a coherent framework, then an
analysis is made whether they respond to a strategic profile.
Horizontal alignment: cultural and structural profiles
Real cultural profiles. Cultural literature recognizes that there are no pure cultural
styles, but that organizations have certain features which allow them to be classified
into certain categories (Cooke and Rousseau, 1988; Gillett and Stenfer-Kroese, 2003;
House et al., 2002; Ouchi, 1981). The simplest classification identified by the authors is
the one which differentiates whether or not of cultural mechanisms are used in an
organization; that is to say, it is the distinction between the pure structural
management as opposed to the pure cultural management. Thus, Wallack (1989)
focused on the organizational shares and behavior which classify the organizational as
bureaucratic culture (the mechanism of structural coordination) or as support (the
mechanism of cultural coordination). Alternatively, Ouchi (1981) refers to Type
A (bureaucratic) and Type Z (clan), while Cooke and Rousseau (1988) discuss the
typology “procedure” and “people” and Bates et al. (1995) discuss the culture orientated
to the hierarchy as opposed to orientation towards the clan. While the descriptive
names are different, the characteristics which define the different types are consistent.
This classification of the researchers of culture involves the possible alternative
forms of control: structural vs cultural procedure (Ashkanasy, 2003; Black, 2003;
Denison and Mishra, 1995; Martin, 2002). Therefore, what appears with this dichotomy
is the utilization of one or other mechanism and the procedure that it is associated to. In
this case, there is no interest in analyzing the profiles which relate to bureaucratic
culture, but it is of interest to detect what type of mechanism of behavior control the
organizations are using (Pierre et al., 2006; Shalley et al., 2000). Therefore, it is a
question of removing if possible the management based on values or shared procedure.
Kerr and Slocum (1987) created the basic distinction within a merely cultural set up.
They discern what is known as clan culture and market culture, reflecting a dichotomy
made up of a set of central values, either with the individual as a basic component, or
else in the task itself as back-up for the rest of the organizational components
(Hofstede, 2001; Holmes and Marsden, 1996; Kabanoff, 1991; Kirsh, 2000; Litwinenko
and Cooper, 1994). Since then, other authors have considered this basic cultural
typology, broadening it and introducing other variables which are not merely cultural,
keeping the purely cultural elements intact (Holmes and Marsden, 1996; Kabanoff,
1991; Litwinenko and Cooper, 1994). A reflection of this is the theory of distributive
cultures was given by Kabanoff (1991) and Holmes and Marsden’s (1996) four different
types of culture: the culture of the elite, culture based on merit, culture based on
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leadership and collegiate culture, or the typology of Litwinenko and Cooper (1994),
which established a group which classifies culture in terms of role, power, task or
support, depending on the values that correspond to the form in which the power is
exercised or of the development of the individual in the organization.
It can be observed that the typologies of culture obtained from the empirical works
explained above overlap to a great extent. All the classifications respond to extreme
ideal types and the central component of the cultural management mechanism of
coordination always involves the dilemma between management based on the
employee or on the organizational results (Ashkanasy, 2003; Cooper et al., 2001;
Yahyagil, 2006). Thus, all those types which do not represent pure cultural forms will
be eliminated, by analyzing the ideal ends, which involve culture focused on the person
and culture focused on the organization.
Ideal structural profiles. As the fundamental dilemma which is entailed in any
classification of organizational culture is the emphasis on the importance of the
individuals or of the organizational results, within the structural area the fundamental
conflict consists of choosing for organic or mechanical purposes. In this way, one of the
most well-known classifications is the one which groups the companies depending on
their degree of formalization, thus obtaining two types of structures: the mechanical
and the organic. The mechanical type is similar to the traditional bureaucracies and the
organic type is more flexible and orientated towards processes. The basic
characteristics of these organizations were defined by Burns and Stalker (1961).
Therefore, the mechanical organizations are characterized by the specialist
differentiation of their functions, that is to say, every task is carried out with skills
and particular intentions. This type of structures is denoted by the use of the formal
hierarchy as a mechanism of coordination and by a structure of control, authority, and
formal communication. On the other hand, organic organizations are characterized by
the need for persons with specific knowledge and experience in order to accomplishment
the common task. In this case a continuous adjustment takes place and the individual
tasks are continually redefined though interaction with other members.
Even though this is a widely studied and accepted classification, these are many
other possible classifications, depending on the criteria of the group, and these are in
use and the subject of studies. Thus, probably the most known taxonomy is the one
which groups the formal structures depending on the criterion of departamentalización
or horizontal differentiation. This classification, nevertheless, is not adapted as it does
not suit the aims of the present study since it only includes a partial aspect of the
decisions on organizational design.
Nevertheless, there are other classifications of the structural aspects which
contribute to the reduction of the variability of behavior and, therefore, can add
something to the present study. One of these is the classification depending on the type
(enables vs coercive) and degree of formalization, established by Adler and Borys
(1996). This is not a question concerning personnel depending on organizational
learning, but concerns compliance with a few specific rules imposed on the members,
regardless of whether they share these or not. Another classification with the same
criterion is the one established by Pugh et al. (1969), which incorporate that of
specialization and centralization, which entails progress as regards the previous one,
since it incorporates new components. These classifications overlap to a great extent
with the generic one of organic and mechanical organizations, as they serve to
incorporate additional components into the analysis that should be borne in mind when
analyzing the congruity between the culture and the structure of an organization,
within the generic category, but they do not incorporate relevant aspects to be included
in the study.
The above only extends the basic dichotomy of all the structural systems reflected
in the organic/mechanic conflict, by distinguishing sub-classifications which are
within the generic one, although these are only sub-types of the basic typology
analyzed originally as the ideal, therefore, this will be the key to our study. The
organic/mechanic classification is no more than an ideal classification of two ends of
the continuum between which managers can choose when taking decisions concerning
organizational design. This group has been recognized and accepted in an explicit form
by the researchers of organizational structure, its significance has been fully tested,
and it will be used in our case.
Vertical alignment: cultural and structural decisions into a coherent frame of analysis.
Strategic pattern role through CVM
The cultural direction of an organization can range from the emphasis on the individual
or the emphasis on the organizational results, whereas the structural direction can
change from an organic coordination to a mechanical one. Once the extreme forms are
defined, the next step is to identify a framework which makes it possible to integrate the
above mentioned decisions so that a joint analysis can be made.
A theoretical model which allows us to integrate these extreme tools is the CVM of
Quinn and Rohrbaugh (1981), developed, used, and discussed in Denison
organizational culture model, as it can see in Figure 2 (Denison and Mishra, 1995;
Fey and Denison, 2003). Studies aiming to evaluate cultural management based on the
person have done so by considering the mechanisms which enable the enterprise to
achieve united work forces, prizing fraternal relationships, mutual long-term
commitment, and striving for individuals to have shared interests. The philosophy
behind these studies fits in with the prevailing values in the first part of the CVM, as
can be seen in the cohesion/moral confrontation as opposed to productivity/efficiency.
Denison and Mishra (1995) refer to this quadrant as involvement.
In the same way, cultural management based on the organization emphasizes the
need to obtain a long-term commitment, but by achieving organizational objectives
(Cameron and Quinn, 2006; Litzky et al., 2006). That is to say, here the importance does
not stem from the individual but rather from the organizational results; the individual
appears as a means of achieving the aim. Here, commitment is obtained by involving
the individual in the task under way, not through his personal development. These
studies, therefore, fit in with the philosophy that underlies the third section of the CVM
(see in Figure 2 the values presented in contrast to the opposing model) and with
mission cultural trait in Denison and Mishra’s (1995) model.
Studies evaluating the mechanical structures of structural management have
emphasized the need to maintain process stability, whereas, inside the organic models,
flexibility is used to achieve a higher level of innovation. Organizations with a greater
level of adaptation are associated with organic structures; while those less adapted are
associated with mechanical structures. The philosophy underlying the study
evaluating extreme structural forms is similar to that defined in parts two and four
of the CVM, which completes this model (see confrontation stability/control as opposed
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Values of human
resources, training
1
Involvement
Flexibility,
adaptation
Flexibilility
2
Mean
Ends
Growth,
utilization of
environment
Ends
294
Mean
Involvement
Adaptability
Internal focus
External focus
Consistence
Mission
Information
management
Ends
Mean
4
Figure 2.
Competing values model
Ends
Stability, control
1
3
2
4
Mean
Productivity
efficiency
Planning, goal
setting
3
Control
Opposite
models
1
2
1
4
2
3
3
4
Possible joint
models
Sources: Created by the author from Quinn and McGrath (1982:467); Denison and Mishra (1995:216)
to adaptability/availability in Figure 2). Denison and Mishra (1995) analyze these
models as adaptability vs consistence cultural traits. But, we think these traits are not
pure cultural, because this sector are studying the use of structural norms to coordinate
employees behaviors, as we have analyzed before in real cultural profiles.
It is not a question of analyzing all the values which underlie every organizational
model, but to locate the dominant cultural or structural alternatives of those who
prepare to reduce the variability of the behavior of the members of an organization. To
do so, only those which present shared values as the principal mechanism of
coordination will be analyzed as cultural alternatives, and those that rely on other
components will be eliminated. For example, the mechanical model rests on a series of
values, but its principal criterion of coordination are the rules, the policy and processes,
that is to say, a structural mechanism. This is why this framework is relevant as a link
which allows us to carry out this research but our aim is different from Denison’s
model.
The CVM, therefore, makes it possible to integrate the essence of the studies on ideal
forms that may appear, both in the field of structure as in that of culture, as we have
seen above. The CVM is useful because it not only highlights the values that are
included in each model, as we have seen, but also juxtaposes each model in relation to
every other one. On one hand, each model has one other model with which it shares no
core dimension and no general value, hence, it tends to be dramatically different from
the opposite model. These are choices that managers have to adopt (cultural direction
based on people vs organization; organic vs mechanic structural form). On the other
hand, because each model shares at least one dimension and general value with its
neighbor, each model can be combined with it. That is, section number one
(people-based culture) can be combined with section number two (organic structure),
and four (mechanic structure) because they shared one dimension, but they cannot be
combined with section three (organization-based culture) because they are opposite
models (Figure 2). This suggests that managers must consider all of these criteria in
adopting decisions and that they make explicit or implicit trade-offs between them.
Furthermore, it makes it possible to adapt them following the same philosophy as our
study. No organization will have a totally organic or mechanical structure, or will
manage based completely on the person or on the organization, but a suitable balance
will be achieved among these depending on the circumstances.
Once the real structure has been placed in a coherent setting within the CVM, it will
be necessary to place the strategic pattern in our model and this is the origin of our
specific model. It is now a question of identifying the type of strategy which will allow
us to achieve the objectives of the study, that is to say, which will allow us to describe
strategic homogenous profiles of enterprises which fit in with the setting previously
described and will therefore also determine the reason behind the previously
mentioned choices. In our case, the type used for the present analysis will be that of
Miles and Snow (1978), as it is the one which best fits in with the objective of the study.
However, links with other styles will also be taken into account, the coherency of which
may be analyzed in future papers (Doty et al., 1993). For the purposes of the present
study, only ideal forms will be analyzed, that is to say, the type reflecting extreme
strategic points. The reactor will not be taken into account, though, as in this case we
are considering an inconsistent strategic pattern, and therefore one in which no
alignment is produced.
Very few authors have analyzed the possible similarity between the CVM and
strategic patterns, amongst whom are Bluedorn and Lundgren (1993) and
Govindarajan (1986). Nonetheless, there seems to be a link between ideal strategic
forms and ideal cultural/structural forms. Thus, the philosophy of the prospector
seems to fit in with the first sector (involvement); the defender with the fourth
(consistency) and the analyzer with the philosophy of number three-mission (Bluedorn
and Lundgren, 1993; Govindarajan, 1986; Quinn and McGrath, 1982). The prospector
continually searches for market opportunities and regularly experiments with
potential response formats, which indicates an external focus. Prospector
organizations use decentralized control systems, which, along with the use of
flexible, prototypical technologies, suggests an emphasis on flexibility. An emphasis
on flexibility and an external focus suggests the first sector/prospector strategy fit
(Bluedorn and Lundgren, 1993).
A defender has a narrow product-market domain and deals with its entrepreneurial
problem by sealing off part of the market to create a set of stable customers with a
narrow, stable domain while also ignoring developments outside this domain. Ignoring
developments outside its domain indicates an internal orientation. The defender’s chief
administrative problem, maintaining strict control to ensure efficiency, is a strong
indication of a control orientation. An internal focus and an emphasis on control
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suggest the fourth sector/defender fit (Bluedorn and Lundgren, 1993). The analyzer is a
compromise between the extreme prospector and defender strategies, as it operates in
both stable and dynamic domains. It attempts to do so by using market penetration,
product-market development and surveillance mechanisms in marketing (indicating an
external orientation). Its engineering problem is to maintain efficiency in the stable
portions of its domain, which indicates something of a control emphasis, while
remaining flexible in the changing portion. The analyzer’s combination of a moderate
control emphasis and an external focus indicates the third sector and it fits with the
analyzer strategy (Bluedorn and Lundgren, 1993).
Lastly, the second sector (adaptability) does not appear to fit into any particular
strategy, but rather seems to be an ideal way of implementing any of these (Bluedorn
and Lundgren, 1993; Quinn and Hall, 1983). It is, therefore, an ideal tool for putting this
into effect. The patterns of Miles and Snow fit perfectly in with the CVM. We believe
that this fit cannot be achieved in the same way as any other strategic typology, and
that is basically the reason why we have selected it.
Once the three relevant concepts of our analysis have been integrated into the same
coherent framework, it must be tailored to the analysis of the alignment. To do so, we
start from the definite framework up to now, which includes the extreme alternatives
available, which have been analyzed previously and which can be located in the CVM.
That is to say, until now only ideal forms have been defined structurally continuous
and culturally different, as the strategic motivation that provokes them.
Definition of the specific model of analysis
The CVM allows us to integrate the essence of the studies made in extreme ways in
which this can be focused, both in the field of structure and in that of culture, as we
have seen. But this model reflects extreme forms and no organization will have a
totally organic or mechanical structure, nor will it carry out its form of management by
choosing between either the person or the organization, but will find the correct
balance depending on the circumstances. In order to obtain their aims and to control
the behavior of their personnel, all organizations, can use a series of (formal and/or
informal) mechanisms, and consider these to be the correct form. That is to say, when
making decisions, managers will not usually opt for extremes or pure forms, but will
rather mix them according to their degree of compatibility and the organizational
objectives. Any choice in this respect will indicate whether emphasis has been placed
on cultural or structural factors, with alternative/complementary mechanisms of
coordination, as well as on the aspects on which they have been focused. That is,
organizations will not choose cultural or structural options they will use a mixture of
cultural and structural mechanisms and the analysis of the congruence of these mixes
is the objective of the present analysis. This is the main limitation of Denison’s and
CVMs (they do not analyze the possibility of organizational mixtures, they only study
the main traits of each model) and the key contribution and fundament of our model.
So, the study of the combination of the ideal mechanisms is established merely by
mixing the options in order to see the different combinations or alignment possibilities,
as can be seen in Figure 3. The result is our specific research model. By combining the
extreme options offered with the CVM background, we obtain four new quadrants
which show all the possible real structure combinations, whose congruence is being
analyzed. In our specific analysis model, the axes are the ideal cultural and structural
Flexibility,
adaptation
Value of human
resource
Cohesion/moral
Organizational
alignment
Mean
Ends
Mean
Growth,
environment
Organic
systems
People
Quadrant IV
297
Quadrant II
Mechanic
systems
Information
and information
Ends
Quadrant I
Org.
Productivity,
efficiency
Quadrant III
Ends
Ends
Mean
Mean
Stability,
control
Planning,
goal
Figure 3.
Research model from
competing values model
Source: Created by the author from Quinn and Rouhrbaugh (1981)
forms, which constitute the basis for every combination. Each quadrant reflects the
possible joint uses. That is, now quadrant number one reflects organizations with a
combination of culture based on the individual and an organic structure at different
levels and so on. Figure 4 reflects the main traits or characteristics of each quadrant.
The level of adjustment or kind of relationship of each of these possible combinations
and their effect on effectiveness will give rise to the alignment hypotheses.
Once our quadrants are definite, the following step is to analyze the congruence in
each of these, that is to say, the possibility of the joint use of structural and cultural
mechanisms, which will give rise to the propositions we create in the present paper.
Organic structure
Quadrant 1: Organic
structure and person culture
Quadrant 2: Organic structure
and organization culture
Flexiblity
Commitment
Social link
Employee autonomy
Adaptability
Profesional link
Specific abilities
Profesional development
Person culture
Organization culture
Quadrant 4: Mechanic
structure and person culture
Quadrant 3: Mechanic
structure and organization culture
Strict structural rules
Human capital as a mean
Control of operations
Short-term emphasis
Sense of misión
Rationalization of the process
Mechanic structure
Figure 4.
Model of analysis
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The achievement of the first aim will entail analyzing the degree of adjustment of the
possible combinations which could arise from the mixing of cultural and structural
types, that is to say, the different possibilities of real structure or horizontal alignment.
The second one will determine the detection of the strategic motivation which underlies
each of the behavior alternatives (vertical alignment).
298
First objective: real structure or horizontal alignment
In terms of our model, the implicit propositions which arise from the framework stem
from the analysis of the coherence of the combinations which form every quadrant.
The essence of the model will suppose that in each of the quadrants two types of
hypotheses will be generated. The first one of these will be the result of the analysis of
the compatibility/incompatibility of the cultural/structural used mechanisms and the
second will be related to one to the effects of the above-mentioned
compatibility/incompatibility in the possible generation of hybrid forms and, in the
last instance, in the efficiency of the organization. With this, we will have effectively
covered the second and third stages of a configurational theory, since it is the definition
of the type of adjustment (the first group of propositions) and the interpretation of the
equifinality (the second group of propositions).
As concerns the first group of hypotheses, this will be a question of studying the
congruity of the mechanisms which each of the quadrants defines, by trying to define
whether they are complementary. So they can both be used jointly and even
overlapping if they are alternative, that is to say, if the fact of using one excludes the
possibility of using the other one, or if they are supplementary. This supposes that the
mechanisms can be combined but without overlapping, since this would suppose an
unnecessary waste of resources.
The analysis of congruence made with the first proposition in each of the quadrants
would remain incomplete if the efficiency of the hybrid forms which could appear are
not studied, as well as the implications of this compatibility. The kind of adjustment
that is defined in every quadrant will have enormous repercussions in the definition of
the results of the resultant configurations. If the mechanisms are complementary, any
hybrid form can be equally effective. If they are alternative, the possibility of
generation of hybrid forms which will be less effective than the pure forms is excluded.
If they are complementary, the most effective hybrid forms are those which avoid the
squandering of resources and the overlapping of functions.
Therefore, the philosophy which underlies in the formulation of the hypotheses in
each of the quadrants is the same. The aim of the first group of propositions is only to
allow us to formulate the second block of these. In no case do, we try to pose a
relationship of causality, which it does not have. The only thing that is attempted is to
analyze the kind of compatibility which exists between the selected mechanisms: this is
to say, if they are complementary, alternative or supplementary and, therefore, to be
able to define, in the second block, whether the organizations can be located in every
quadrant through the possibility of obtaining good results. That is to say, if the
equifinality is fulfilled.
To operative the model, we show an example of alignment analysis in the first
quadrant. The analysis of the rest of the quadrants will follow the same philosophy. In
the first quadrant, the high level of commitment (person culture) creates a sense of
ownership and responsibility, which makes people especially capable of working on
their own. Thus, it may be observed that, in this case, cultural management based on
the individual will be easier in organizations where autonomy and capacity to work
alone is encouraged, as is the case in organic organizations. When an organization has
cultural management based on people, horizontal coordination is more important than
vertical. So, both mechanisms are complementary, that is, they can be used together.
This would lead us to formulate our next proposition:
P1.
There is a complementary relationship between the cultural management
based on people and organic structural forms.
This complementary relationships can be tested using ANOVA technique or
something similar on the categories of culture and structure (more or less organic, more
or less person culture). This compatibility has an effect on effectiveness, as the ideal
forms are not the only options that organizations can use. Those companies that are
capable of making their internal procedures complement each other will be more
efficient when it comes to imposing this same strategy. This means any hybrid form
(person culture/organic structure mixes at different degrees) in which organization will
able to create commitment amongst the staff may be as effective as the pure forms:
P2.
The greater the adaptation of hybrid forms between a cultural form based on
the person and an organic structural form, the greater the effectiveness.
To test this proposition we will carry out an ANOVA using effectiveness index as
dependent variable and culture and structure as factors, distinguishing high and low
cultural or structural orientation.
Second objective: global model or vertical alignment
Alignment theory defends the strategy/culture/structure fit. However, the culture
being strategic or the structure being emergent from an isolated form does not also
guarantee organizational efficiency, if the organizations use these simultaneously. It is
only when three concepts are in alignment that the organization manages to be
effective. To achieve this, in order to test the alignment of the global model, it is
necessary to analyze each of the hybrids of real structure (coherent mixings of
culture/structure), that is to say, each of the quadrants analyzed previously,
determining the strategic aims they will help to implement.
In this case, the analysis of the alignment will give rise to one proposition per
quadrant, relative to the adjustment of each one of the combinations of real structure
with the strategy that they help to implement. In other words, the aim is not to
determine the degree of adjustment of the strategy with structural and cultural ideal
types, but the way in which the organization adjusts to the use of hybrid types which
mix aspects of both typologies. The alignment will be analyzed inside each of the
quadrants analyzed previously and due to this, the use of three concepts
simultaneously will be analyzed. If the organizations combine their formal/informal
structures in their daily work, an isolated analysis does not make sense.
We operative the model with an example of the analysis of vertical fit in quadrant
number one. Here, the basic emphasis is flexibility (organic structure). Decentralization
fosters the participation of the staff and commitment takes on a fundamental relevance.
That is why organizations will try to identify workers with specific abilities, taking
into account that they will carry out a long-term role in the organization. Social links
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are extremely important for obtaining the consistency needed for them to identify with
organizational values (Lawler et al., 1995). For all these reasons, this kind of
organization is ideal for carrying out a prospector strategy, since it is flexible enough to
adapt to the changes in the market and its customers (organic structure), and the
workers have sufficient ability and training to carry out varied tasks (person culture).
This leads us to formulate our next proposition:
P3.
Organizations with a culture based on the individual and with an organic
structure will be more efficient if they carry out a prospector strategy.
We will test this proposition carrying out a variance analysis, including the strategy
orientation as an independent variable and the index of effectiveness as a dependent
variable. The philosophy of alignment will generate the equivalent three propositions
per quadrant in the rest of them. This analysis will close the research model, which will
be ready in time to carry out the empirical test.
Conclusions and implications of the model
The theoretical model developed in the present work presents a framework adapted for
an empirical test of alignment theory. The key contribution of the paper is to render
operative in practical terms such a diffuse concept as is the alignment model. To
achieve this, the theory has been combined with configuration theory to detect the ideal
cultural, structural and strategic options and making the comparison with the real
forms possible in order to analyze the possible deviations and to predict the level of
efficiency.
To do so, in the first step, a model derived from CVM has been described to study
the real structure of organizations (CVM). The usefulness of this involves not only
detecting the options of use of one or the other mechanism in isolation, but the
possibilities of their joint use. This entails the conflict between commitment,
adaptability, consistency, and the mission required in any organization. Consistency
and commitment have to do with the study of the attainment of internal integration,
while adaptability and the mission involve external adjustment. Commitment and
adaptability describe features of the capacity of an organization to change, while
consistency and the mission more probably contribute to the capacity of the
organization to remain stable and predictable over time. The well-integrated systems
are often the most difficult to change, and the highly adaptive systems can achieve
lower levels of efficiency or common intention associated with consistency and
integration. Similarly, the mission and commitment can be contradictory: the meaning
and the direction established through the mission can limit the commitment of some of
the members. The challenge facing the organization is to be able to arrange the
alternative mechanisms in a coherent proportion. The relevancy of the model presented
is that it allows us to see the options and, therefore, to make them explicit.
The main contribution of the paper is the possibility of integrating the three
concepts of the study in a single coherent framework. For this, we have generated our
specific model to study alignment. This framework is designed to analyze and test
organizational alignment The importance of our specific model is that it allows the
identification of the internal processes and the real behavior which fit every strategic
profile, and this involves an in depth analysis of the process of implementation of every
strategic orientation (vertical alignment). Likewise, it makes it possible to identify the
internal processes and behavior which give rise to every level of efficiency inside every
strategic type, which will help the executives to construct or support factors additional
to the business strategy and the internal processes which facilitate the strategic
implementation successfully (horizontal alignment).
At the present time, the first step is to present the theoretical model whose future
monitoring will provide valuable information to both researchers and executives
concerning the form in which they must align the organizational attributes in order to
obtain a competitive sustainable advantage. The usefulness of the framework
presented is that it allows us to integrate the ideal forms of the study, it establishes a
level of analysis, in this case the organizational one, both as regards culture, structure
and strategy, and makes it possible to integrate all the theoretical perspectives and to
provide for the area of a global vision, that is to say, it is capable of supplying a
consistent logic to the different fields of investigation. This allows us to study
horizontal and vertical alignment and overcomes one of the research limitation that we
had found: the study of the horizontal alignment and global alignment as a result. This
may provide and opportunity for the researchers to assess both the amount and the
direction of the deviance from the alignment model proposed.
The framework also solves the problem of the multiple criteria, by presenting a
more limited and better articulated set. The literature of culture, structure and strategy
has been characterized by the utilization of multiple measurements depending on the
subject of study. The model presented makes it possible to annotate the field, by
choosing the most relevant dimensions for the analysis. In addition, the framework
includes the possibility to make grounded statements on the empirical test regarding
the relations between the criteria as we have shown with the example of the quadrant
number one. It includes the cooperative and dynamic nature of the organizations, as
well as the variability of the criteria depending on the time and the perspective, and
constituting an analytical tool which could be applied in special circumstances. Finally,
it facilitates comparisons with and generalizations concerning the findings of the
studies and the subject of study must define the explicit form the concepts, that is to
say, the culture, the structure and the strategy of an organization.
We think that the above helps to give relevancy to the model presented. Thus, this
paper provides a theoretical model with enormous practical implications. The
challenge now lies in making the hypotheses raised theoretically operative and
confirming this in a real sample of organizations. The authors assume the challenge to
quantitatively specify the profiles which fit the qualitative descriptions of the types
presented in the four quadrants and to study how they adapt or their congruence. In
this way, the principal challenge consists of constructing a quantitative model which
adequately represents the logical structure of the theory to be verified. Once this is
done, the model can be extended for application to other levels of analysis, such as
corporate or group analysis, as well as being extended by the incorporation of other
variables which should moderate the relationship.
A theory of organizational alignment is relevant to practice for two reasons. First, it
serves to explain a complex phenomenon that has important implications for
organizational performance. It identifies the factors involved in producing alignment,
why the alignment is desirable, how it may be measured, and how practitioners can
increase its strength within organizations. Second, it provides a basis on which further
improvements in technique can be built. By making explicit the relationships involved
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in the alignment of organizational strategy, culture, and structure, future models can
build on a common body of knowledge that offers a stepping stone to additional
advances in performance.
It should be remembered that the development of quantitative models of a theory is
a necessary step in the development of the theory. The process of shaping is an
important component in the process of construction of theory provided that this
clarifies and refines its underlying logic. The quantitative models serve to best
establish a theory so that it can be tested thoroughly.
Note
1. However, it is possible to have some either theoretical or empirical behavior which allows us
to come closer to partial aspects of it: relations between contingent factors and
organizational variables (relation between technology-organization; relation between
strategy-structure, etc.) and also models or organizational forms which are internally
consistent (functional structure, divisional, bureaucratic, etc.).
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Corresponding author
Isabel Quiros can be contacted at: quiros@ccee.ucm.es
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