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Organizational Culture and Work Redesign: Experiences in Three Organizations

Jones, Katherine R. PhD, RN, FAAN; Redman, Richard W. PhD, RN

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Katherine R. Jones, PhD, RN, FAAN, Professor,,

Richard W. Redman, PhD, RN, Associate Dean for Academic Affairs and Professor, School of Nursing, University of Colorado Health Sciences Center, Denver,

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Lack of attention to the organization's culture can mean failure for its strategic initiatives. The authors present the results of three case studies of work redesign initiatives in which organizational culture, as measured by the Competing Values Framework, was assessed before and after project implementation. The organization with a balanced culture at baseline and higher "adhocracy" (developmental) values after implementation was more successful than the two organizations with dominant baseline market and hierarchy cultures. Recommendations for increasing desired values and decreasing undesired ones are provided.

The healthcare industry's merger, acquisition, downsizing, and re-engineering activities have not produced the expected outcomes in terms of efficiency and productivity. In fact, there have been major failures, exemplified by the recent demise of the Stanford-University of California/San Francisco Academic Medical Center merger. Stanford's president attributed the failure to the existence of two distinct organizational cultures that failed to meld over time.1 Other industries report the same phenomenon, providing further evidence of the important role that organizational culture plays in an organization's ability to achieve its goals.

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Organizational Culture

One of the most decisive functions of leadership may be the creation, the management, and when necessary the destruction of culture.2 Kotter and Heskett3 described two components of corporate culture, shared values and group behavior norms. Shared values are important concerns and goals that are shared by most people in a group; shared values tend to shape group behavior and persist over time. Group behavior norms are common ways of acting that are found in a group and persist because they are taught and reinforced by group members. The organization's culture is learned through the connection between behaviors and their consequences. It is difficult but not impossible to change the culture of an organization because it requires employees to learn new behaviors. It generally takes much longer than many organizations are willing to give it.

Organizational culture can have a significant impact on corporate performance.3,4 Cultures that do not emphasize market competitiveness or leadership from managers at all levels can be viewed as less desirable than those that do. Top administrators must know how to alter the corporate culture so that it can enhance the organization's performance.3,4 Clear transmission of organizational values and strategies and involvement of employees in shaping initiatives are essential.

Change requires an adaptive organizational culture. Adaptive cultures have three characteristics.3,4 They are effective: they reinforce the mission, goals, and strategies of the organization. They are strong: everyone knows what is important and how things are done. They are appropriate: they serve the needs of the organization, its customers, and the employees. Employees in adaptive cultures take risks, they are proactive and trusting, they offer mutual support and shared feelings of confidence, and they are receptive to change.3

Nonadaptive cultures develop if leaders do not pay attention to an organization's culture. The employees are frightened, insecure, oversensitive, self-protective, and cautious; they are averse to taking risks and they build protective barriers, undermining morale and performance.3 Such a culture severely compromises the organization's ability to achieve its strategic goals.

Sovie5 identified several characteristics of dysfunctional hospital cultures (Fig. 1). It is easy to see how these traits could impede achievement of organizational goals and might even threaten the hospital's financial viability.

Figure 1
Figure 1
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There are several strategies for changing corporate culture. The most drastic one is to hire a new leader and leadership team. The leadership team and the employees must examine all performance data and benchmark these data against peer group members and over time. The leaders must formulate a strategic vision and set critical and central values, and the stakeholders must "buy in" to these values.

Allen and Kraft6 identified key principles for leaders who want to change an organization's culture:

• Involve people in the problems and programs that affect them.

• Do not place blame.

• Clarify goals, objectives, purposes, and tasks.

• Focus on short-term and long-term results.

• Work from a sound information base.

• Use multilevel change strategies.

• Integrate concern for people and achievement of organizational goals.

• Emphasize sustained culture change.

Deal and Kennedy7 focused on how to create a positive culture in hospitals. They identified six steps:

• Consider the mission of the hospital.

• Trace basic issues to the departmental level.

• Build a consensus leading to a theme that captures the essence of the vision.

• Encourage subcultures through rewards, staff conferences, and other strategies; create a sense of mutual dependence and respect.

• Nurture heroes through certificates, newsletters, and assignment to highly visible task forces.

• Keep the subcultures focused on organizational issues.

Clearly, the leadership team must recognize and value the organization's culture when shaping strategic initiatives. A central theme in today's market-driven healthcare environment is effective assessment and management of the organizational culture.

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Competing Values Framework

The Competing Values Framework8 is one way to define an organization's culture. This framework describes four cultural orientations:

Group/clan: An organization that focuses on concern for people and sensitivity to customers. This is a very friendly place to work, where people share a lot of themselves. The leaders are considered to be mentors. The organization is held together by loyalty or tradition. The organization emphasizes the long-term benefit of human resources development; high cohesion and morale are important. It places a premium on teamwork, participation, and consensus building.

Developmental/"adhocracy": An organization that focuses on innovation and individual initiative and freedom. This is a dynamic, entrepreneurial, and creative place to work. People are encouraged to take risks. The leaders are considered to be innovators and risk takers. Commitment to experimentation and innovation holds the organization together. The emphasis is on being on the leading edge, being ready for change, and meeting new challenges. Success means having new products or services.

Rational/market: An organization that emphasizes results and getting the job done. People are competitive and goal-oriented. The leaders are hard drivers, producers, and competitors who are tough and demanding of their staff. The organization is held together by an emphasis on winning. Success is defined in terms of market share and penetration.

Hierarchy: The organization is a very formalized and structured place to work. Procedures govern what people do. The leaders are good organizers and coordinators and care about efficiency. Formal rules and policies hold the organization together. Success is defined in terms of dependable delivery, smooth scheduling, and low cost.

These cultural orientations can be arranged on a grid that reflects two core dimensions. One dimension is flexibility versus control. The clan and adhocracy cultural orientations emphasize flexibility; market and hierarchy cultures emphasize control strategies. The second dimension is internal versus external focus. The clan and hierarchy cultural orientations focus on internal processes; the adhocracy and market cultures focus on external challenges. Figure 2 shows the grid on which an organization's current and preferred cultural orientation can be plotted.

Figure 2
Figure 2
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The four cultural orientations represent ideal types. Organizations have combinations of these values, with some being more dominant. Balance among the cultural orientations is important because it allows the organization to respond to various environmental conditions. Cameron and Freeman,9 studying colleges and universities, found significant relations between the type of cultural orientation and measures of effectiveness. Clan cultures were associated with higher morale, adhocracy cultures were associated with external adaptation and academic achievement, and market cultures were associated with greater success in acquiring resources. Yeung et al.10 studied human resource practices and performance in businesses and found that organizations with balanced cultures were the best performers; organizations with dominant hierarchical cultures were the poorest performers. Zammuto and Krakower,11 also focusing on colleges and universities, found that clan and adhocracy values were associated with trust, high morale, and leader credibility, whereas market and hierarchy values were associated with formalization, conflict, and scapegoating. Quinn and Spreitzer12 used the Competing Values Framework to study public utilities and found that clan and adhocracy values were associated with the highest quality of work life, whereas the hierarchy value was associated with dissatisfaction with job and work life but satisfaction with supervision.

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Application of Competing Values Framework to Hospital Work Redesign Initiatives

We were involved in evaluating three work redesign projects in midsized, community hospitals in the West and Midwest. Descriptions of these projects can be found in previous publications.13-17 One of the common instruments used in the program evaluations was the Competing Values Framework questionnaire for measuring organizational culture. The instrument consists of six organizational components (dominant organizational characteristics, organizational leader, managerial style, organizational glue, strategic emphasis, and criteria of success), each followed by four descriptive statements that reflect the four cultural orientations previously described. This instrument has been tested on large samples of organizations and has been shown to have high internal consistency reliability and evidence of convergent and discriminant validity.8,12

In two of the settings, respondents were instructed to distribute 100 points across the four descriptive statements, with the distribution reflecting the weight that the organization places on that value. In the third setting, respondents noted their answers on a five-point Likert scale ranging from "strongly disagree" to "strongly agree." Each descriptive statement had a response set ranging from one to five, and the mean summed scores (6-30) were calculated for each value orientation. Both scoring methods have been used in previous applications of the Competing Values Framework, but the point system is preferred because it reduces the chances of a response-set bias.

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Hospital 1

Hospital 1 underwent extensive organizational re-engineering, adopting a patient-focused care model that included architectural remodeling of units, unit-based admissions and discharges, unit-based satellite pharmacies and laboratories, bedside computers and patient servers, and the use of "care pairs" and multi-skilled workers. Its goals included more healthcare providers to meet patient care needs, higher patient and family satisfaction, streamlined clinical and system processes, fewer job categories and numbers of workers, and reduced compartmentalization across departments. Traditional job titles disappeared and workers became clinical, technical, service, or administrative partners. The hospital began the re-engineering process by holding patient focus groups to determine what patients wanted and expected during their experience with the hospital, followed by staff focus groups to determine what was needed to meet patient expectations. A core curriculum was developed that included competency testing and unit-based preceptors. The human resources department was extensively involved throughout the implementation, focusing on team building, transition management, and communication.

Table 1 shows the "before and after" measures for the four competing values. The results showed a balanced cultural orientation before the new model was implemented, which helped the organization adapt to external environmental challenges. The adhocracy value was dominant at follow-up; the hierarchical value declined. These values reflect a higher perceived organizational emphasis on creativity and innovation and a reduced emphasis on formal rules and procedures. Patient satisfaction scores improved on the units that had adopted the new model and remained stable on the units that had not undergone re-engineering. Nurse satisfaction remained stable.

Table 1
Table 1
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Hospital 2

Hospital 2 also adopted a patient-focused care model but did not engage in as extensive a re-engineering project as did the first hospital. The redesign teams involved 226 people, including the chief executive officer and the board of directors, steering, communication, and human resources committees, a project team that included consultants and employees, three vision teams, and three design teams. Its goals were to focus care around the patient and family, reduce the number of people having contact with patients, improve coordination of care, promote a team concept of care provision, bring services to the patients, and reduce patient waiting times. The redesign involved a smaller but still sizable number of job categories and a reduction in the number of management levels and numbers.

As shown in Table 2, the dominant perceived cultural values at baseline were hierarchy and market. The "after" scores showed a significant increase in the market value; the hierarchy value showed a significant decline and the adhocracy value also declined. The dominant values reflected a control orientation and an emphasis on internal efficiency and external competition. Both registered nurses and nonregistered nurses reported greater dissatisfaction with their jobs after the work redesign. Patient satisfaction remained stable.

Table 2
Table 2
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Hospital 3

Hospital 3 had the least extensive redesign, which involved changing the staffing mix by introducing multiskilled unlicensed personnel. The respiratory therapy, nursing, environmental services, and food and nutrition departments were involved. The primary goal was to reduce patient waiting time. Data were collected on existing work processes, and new roles were designed and reviewed by the nursing practice committee. Unlike the other two hospitals, this initiative was viewed as a nursing project, not a hospital project.

Table 3 shows that the dominant organizational values before implementation were market and hierarchy. These two cultural orientations strengthened after implementation of the model. The values for clan and adhocracy were very low. The perceived cultural orientations reflected a control orientation, with heavy emphasis on competitive strategies in the external environment and a focus on the bottom line. Job security and satisfaction with supervision declined significantly after the work redesign for all caregiver categories. Patient satisfaction with nursing care decreased significantly.

Table 3
Table 3
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Analysis of Findings

Hospitals 2 and 3 were organizations with unbalanced cultures, making it difficult to implement organizational change. The dominant cultures, hierarchy and market, have been correlated in other studies with distrust, conflict, resistance to change, and a reactive rather than proactive strategic orientation. Both work redesign initiatives were implemented in an environmental context that did not support such initiatives. The American Nurses Association at the time had launched its "Every Patient Deserves a Nurse" initiative, and the state nurses association had issued "nurse alerts," advising its members not to participate in any activities that examined nursing functions or activities with the intent to introduce new job categories.

Hospital 2 was in an extremely competitive local market, with three community hospitals struggling to survive while their financial bases dwindled. Merger was inevitable, but no one knew who would dominate and who would be taken over. All three hospitals had undertaken redesign initiatives, which appeared in detail in the local newspaper. The most vocal opponents of these changes appeared in the stories, and accusations of cost reduction at the expense of patient outcomes were made. These events made it very difficult for the institutions to "stay the course." At one point, the management team put the project implementation on hold to allow things to quiet down; they set up forums so all concerns could be heard and addressed. When goals were clarified and data indicated that patient outcomes had not been compromised, work redesign implementation resumed.

Hospital 3 had the least extensive work redesign initiative and the most stable external environment, but it also had the most nonadaptive cultural orientations and the most resistant employees. The explanation seemed to be more internal than external. The project was viewed as a nursing initiative rather than a hospital initiative and thus had fewer supporters who wanted or needed to see it work successfully. Indeed, in-depth interviews with department managers17 revealed that other departments viewed nursing as having all the power (as they saw their best employees siphoned off for unit-based patient care assistant roles), whereas nurses themselves felt powerless and forced to accept nonprofessionals into their work teams.

The work redesign project had goals that were unclear to most workers, and the assumption was made that it was entirely cost-driven. The implementation was primarily from the top down, and there were insufficient opportunities for feedback from the staff as the project was rolled out. This led to heightened resistance on the part of several professional groups. As reflected in the culture scores, staff in this hospital did not perceive that the organization had a commitment to teamwork, customer service, creativity, or innovation, values essential for the successful implementation of the work redesign models. Incongruity between desired organizational goals and the dominant perceived organizational values might explain why many organizational mergers and work redesign initiatives fail.

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Promoting Desired Organizational Cultures

These hospitals provide important insights about organizational culture as both an independent and dependent variable-in other words, how it affects redesign initiatives and how it is affected by them. One advantage of using the Competing Values Frame-work is that it provides specific strategies for promoting the desired cultural values and minimizing undesired ones. The selected strategies may vary by type of organization, but they provide a starting point for the leadership team as it destroys the dysfunctional culture and replaces it with a more adaptive one. The following strategies from Cameron and Quinn8 may be applicable to hospital settings.

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Strategies for Promoting Adhocracy Values

1. Analyze the current vision statement. Does it provide both cognitive and emotional direction? Does it inspire creative initiative?

2. Identify the major emerging issues of concern in the hospital and apply the "one voice" concept by making one person responsible for each emerging issue.

3. Using hospital trend data and industry norms, forecast customer demand at all points of service and staff appropriately.

4. Ask a task force of front-line people (product line managers) to develop new strategies for expanding markets and developing new services.

5. Read about the concept of continuous improvement, find out what is being done successfully in other places, and adopt the most promising approaches.

6. Include all disciplines and departments in the first stages of the design process in creating all new services and products. Be sure that the customer is represented in these initiatives.

7. Develop systems to encourage, measure, and reward innovative behavior at all levels in the organization.

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Strategies for Promoting Clan Values

1. Have the chief executive officer conduct focus groups with middle managers to determine how they understand the direction of the company and to get their recommendations on how to make the direction more clear.

2. Institute an employee survey program that will allow systematic monitoring of employees' attitudes and ideas. Establish employee teams to work on making the changes identified in the survey.

3. Involve employees in all phases of strategic planning.

4. Develop programs to increase the facilitation and team-building skills of employees.

5. Identify the most long-standing intergroup conflicts. Analyze the conflicts and design interventions for overcoming them.

6. Examine the expectation systems that drive the behaviors of middle managers. Alter the incentives so that the middle managers behave in more empowered and innovative ways.

7. Energize the employee recognition system. Encourage managers to use resources to reward extra effort.

8. Create an "internal university" that involves a training strategy for all educational needs at every level of the unit.

9. Monitor employees' responses to extensive change and incorporate those responses to the degree possible while the change is still being implemented.

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Strategies for Decreasing Hierarchy Values

1. Eliminate policies and procedures that impede innovation and change.

2. Reduce paperwork that does not add value to organizational and clinical outcomes.

3. Reduce corporate directives and top-down implementation strategies.

4. Eliminate micromanagement.

5. Remove unnecessary constraints on individual and team performance.

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Strategies for Reducing Market Values

1. Stop driving toward the numbers at all costs; at a minimum, help employees understand the numbers.

2. Focus on key goals.

3. Motivate others to perform.

4. Adapt to market as well as human needs.

5. Maintain commitment to quality as well as the operating margin.

Over time, organizations tend to gravitate toward the market and hierarchy cultures, and the longer they stay there, the harder it is to change the values to adhocracy and clan. Strong leadership characteristics are needed to promote and maintain clan and adhocracy cultures, whereas strong management characteristics are the norm for hierarchy and market cultures. These findings have implications for the recruitment and selection of executives and middle managers and for succession planning.

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Organizational culture is often overlooked when major work redesign initiatives and organizational mergers are planned and implemented, but failure to identify and manage the organizational culture can have a profound impact on such endeavors. Assessing the organization's culture and using it as an important part of any planning and strategic initiative may make the difference between success and failure in managing change.

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© 2000 Lippincott Williams & Wilkins, Inc.