The Role of Organizational Culture during Business Model Change
Multiple case study within established firms
Anna Oostveen – 10203931
Amsterdam Business School, University of Amsterdam Msc. in Business Administration - Strategy Track Supervisor: S. Von Delft
Statement of Originality
This document is written by Student Anna Oostveen, who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Abstract
The amount of radical changes in the environment of firms is growing (Greenwood & Hinings, 1996), because of globalization and the impressive development of digital technology. To deal with this highly dynamic environment in combination with the continuation of performance, business model change is an important process (Agarwal & Helfat, 2009). A business model describes how a firm creates and captures value
(Chesbrough, 2010). Business model change is the redefinition of how a firm creates and captures value (Pohle & Chapman, 2006). However, during the implementation of business model change, challenges are faced (Cavalcante, Kesting & Ulhøi, 2011). Earlier research showed that an internal environment that is supportive towards change could help dealing with these challenges (De Brentani & Kleinschmidt, 2004). To get a better understanding of this internal environment, this exploratory research aimed to give an answer on the following research question: what is the role of organizational culture during business model change? A qualitative design is used to get a better understanding of the organizational culture and business model change within four established firms. Findings suggest that an internal focus is predominate in the established firms. Furthermore, business model change in established firms is found to happen in small incremental steps. It is suggested that organizational culture change can support the implementation of business model change.
These findings have implications for future researchers by increasing the understanding of the role of organizational culture during business model change. Furthermore, it has practical implications by providing a guidance for managers in their decisions during the
implementation of business model change.
Keywords: Business model, Business model change, Organizational culture,
Table of Contents
The Role of Organizational Culture during Business Model Change... 4
Literature Review... 7
Business Model Change... 7
Organizational Culture... 12
Data and Method... 17
Overall Design... 17 Sampling... 17 Data Collection... 20 Data Analysis... 21 Validity... 22 Findings... 23 Case A... 23 Case B... 26 Case C... 28 Case D... 32 General Findings... 34
Conclusion and Discussion... 38
References... 40
Appendix A – List of Interviewees... 48
Appendix B – Organizational Culture Assessment Instrument... 49
Appendix C – Interview Guideline... 56
The Role of Organizational Culture during Business Model Change
”There is no more delicate matter to take in hand, nor more dangerous to conduct, nor more
doubtful in its success, than to set up as a leader in the introduction of changes.”
N. Machiavelli, in ’The Prince’
For several decades the amount of radical changes in the environment of firms is growing (Greenwood & Hinings, 1996; Weick & Quinn, 1999; Kuppens, 2015). During today's digital revolution, firms are forced to be up to date with the newest digital technology, because it is “…one of the most important driving forces of the economy of today”
(Brynjolfsson & McAfee, 2012, p. 8). Also, due to the globalization, organizations need to adapt their strategy to the requirements for competing on an international level (Bartlett & Ghoshal, 1999). Besides, the natural environment challenges organizations to operate more sustainable (Carroll & Buchholtz, 2014). All these changes ask for strategic renewal to continue performing (Agarwal & Helfat, 2009) and gain competitive advantage in a highly dynamic environment (Week, 2000; Chesbrough, 2010; Schneider & Spieth, 2013). One of the driving forces to achieve strategic renewal seems to be change of the existing business model (Casadesus-Masanell & Ricart, 2007). A business model can be defined as a system of interdependent organizational activities (Zott & Amit, 2009; Teece, 2010; Zott, Amit & Massa 2011) and describes how a firm creates and captures value (Chesbrough, 2010). Business model change is the redefinition of how a firm creates and captures value (Pohle & Chapman, 2006; Schneider & Spieth, 2013).
Studies show that business model change is positively related to cost reduction, strategic flexibility, and exploitation of grow opportunities (Pohle & Chapman, 2006), and sometimes even to profitable growth (Aspara, Hietanen & Tikkanen, 2010). For example, the
firm IBM did business model change in small steps to accomplish continuous strategic
renewal, resulting in achieving superior performance and maintaining a leading position in the chip industry (Agarwal & Helfat, 2009).
However, other studies found negative results of the relation between business model change and firm performance (Henderson & Clark, 1990; Lucas & Goh, 2009; Pascoe, 2012). The contradictory findings raise the question why some firms are able to achieve superior firm performance through business model change, while other firms fail to achieve this positive relation and sometimes even lose their leading position. Extant literature showed that the reason for these contradictory findings may be the challenges that firms face during the implementation of business model change (Markides & Geroski, 2005). Business model change needs to be implemented with respect for the current business model (Holgado, Evans, Vladimirova & Yang, 2015), but with enough changes to keep up with the environmental changes and maintain a good market position. Examples of challenges that could be faced during the implementation are employees that are resisting to change (Isabella, 1990) or a lack of knowledge, skills and/or resources (Cavalcante, Kesting & Ulhøi, 2011).
So far, little research has been done to factors that could help by dealing with these challenges. De Brentani & Kleinschmidt (2004) showed that an internal environment that supports change is important for performance. However, this research is done to new product development, whereas business model change is a broader construct. Studying business model change in the context of the organizational culture could maybe help overcoming the
challenges mentioned above. Part of the organizational culture are the common underlying assumptions and values of the behavior of the organizational members (Martins &
Terblanche, 2003; Büschgens, Bausch & Balkin, 2013). Interestingly, these studies suggest that these underlying assumptions and values can have a crucial coordinative function towards the new goal of the changed business model.
So far, little research has been done to the impact of organizational culture, but the need to overcome challenges during business model change ask for theoretical underpinnings to draw general conclusions. Research on business models has mainly focused on
entrepreneurial firms (e.g. Morris, Schindehutte & Allen, 2005). Therefore, Demil, Lecocq, Ricart and Zott (2015) ask for future research on business model change in established firms. Although earlier research on startups taught us a lot about strategic entrepreneurship, many questions remain unanswered. For example, what the process is of business model change in established firms. That is why the purpose of this paper is to answer the following question:
What is the role of organizational culture during business model change within established firms?
This paper contributes in several ways. First of all, it will be a first attempt to analyze empirically the impact of organizational culture on business model change. Despite the growing interest in business model change, no study tried to get a deep understanding of the role of organizational culture during the implementation. Including organizational culture will give a more accurate representation of the situation in an organization. This paper will
contribute to both the organizational culture literature and the literature on business models by making a bridge between the two different research streams. The conclusions of this paper will guide managers in their decisions about the implementation of change of the existing business model in order to achieve high firm performance. By investigating which
organizational culture improves the implementation of business model change, the percentage of successful business model changes will increase.
To clarify the definitions and relations between organizational culture and business model change, a theoretical background will be given. Afterwards, the method of the research will be explained and the results will be analyzed. Lastly, a conclusion will be drawn and suggestions for further research will be done.
Literature Review Business Model Change
Impressive changes in the environment of the firm such as the digital revolution, globalization and a growing need to become more sustainable (Bartlett & Ghoshal, 1999; Weick & Quinn, 1999; Brynjolfsson & McAfee, 2012; Carroll & Buchholtz, 2014), have accelerated the academic and managerial interest in business models and changes in business models. As written above, a business model describes how a firm creates and captures value (Chesbrough, 2010). Value can be defined as “the amount buyers are willing to pay for what a firm provides them” (Porter, 1985, p. 38). A business model has several functions: articulating the value proposition, identifying the market segment, describing the cost structure of the firm’s activities, defining the structure of the value chain, describing the position of the firm within the value network, and estimating the profit potential (Chesbrough and Rosenbloom, 2002, p. 533-534; Stoelhorst, 2015; Osterwalder, Pigneur & Tucci, 2005).
A business model is different from a strategy, because the former is about the logic of the firm and how a firm operates, while a firm’s strategy also includes competition and how to do better than its rivals (Magretta, 2002; Casadesus-Masanell & Ricart, 2010). Osterwalder et al. (2005) underline this by conceptualizing a business model as a blueprint for how to do business. Cavalcante et al. (2011) describe business models also on a conceptual level, namely “an abstraction of a company’s core repeated standard processes” (p. 1328).
The activity system perspective build on those researchers by stating that a firm’s business model can be seen as a system of interdependent organizational activities centered on a focal firm (Zott & Amit, 2009; Teece, 2010; Zott et al., 2011; Amit & Zott, 2012). The activities of its partners, vendors and customers are included in a firm’s activity system. An activity can be defined as “the engagement of human, physical and/or capital resources of any party to the business model (the focal firm, end customers, vendors, etc.) to serve a specific
purpose toward the fulfillment of the overall objective” (Zott & Amit, 2009, p. 217), in other words what happens in the black box. The activity system perspective suggests that a business model design consists of three elements which describe the architecture of an activity system (Zott & Amit, 2009; Amit & Zott, 2012), see Table 1.
Table 1. The three elements of a business model design.
Element Definition Example
Content Activities that should be performed Bancolombia Structure How the activities should be linked IBM
Governance Who should perform the activities Seven-Eleven
Content is about the activities that should be performed. For example, Bancolombia
started focussing on offering microcredit and to achieve this, activities were added to the current business model (Zott & Amit, 2009). Structure refers to how the activities should be linked. For example, the sequencing between the activities. IBM switched its activities by shifting from being a hardware supplier to becoming a service provider (Zott & Amit, 2009).
Governance describes who should perform the activities. For example, franchising is one type
of the element governance. In Japan, Seven-Eleven stores are franchised by the entrepreneur Toshifumi Suzuki and value is created through local adaptation (Zott & Amit, 2009).
However, creating value with the existing business model is not enough (Osterwalder et al., 2005). Due to the changing environment, for example advances in information and communication technology, changes in the business model are needed to create superior value (Casadesus-Masanell & Ricart, 2007). Changing a business model refers to the redefinition of how the firm creates and captures value (Schneider & Spieth, 2013; Pohle & Chapman, 2006). This is a crucial source for gaining competitive advantage (Chesbrough, 2010; Schneider &
Spieth, 2013). Especially in a highly dynamic environment (Week, 2000), when a firm is changing its business modelbefore circumstances are forcing to (Hamel & Välikangas, 2003).
As rightly questioned by Florén & Agostini (2015), what should be the magnitude of the change of the business model to be able to deal with the dynamic environment. Changes in business models can be more or less radical (Henderson & Clark, 1990). As stated by
Cavalcante et al. (2011), “A change initiative … is more or less disruptive with respect to specific organizational core processes” (p. 1335). According to Henderson & Clark (1990), radical innovation is happening when the linkages between the core concepts and components are changed and the core concepts are overturned. Incremental innovation is happening when the linkages between the core concepts and components remain unchanged and the core concepts are reinforced. In this paper, ‘business model innovation’ will refer to radical innovation (Cavalcante et al., 2011; Florén & Agostini, 2015), whereas ‘business model change’ will refer to innovation that is more incremental.
According to Amit & Zott (2012), business model change can happen by adding novel activities, linking the current activities in new ways or changing the parties that perform the activities. Florén & Agostini (2015) build on those types by stating that business model change can happen by one of the manners that Amit & Zott (2012) describe or by a combination. To be able to identify and compare these various types of business model change, Cavalcante et al. (2011) developed a framework. According to this framework, there are four different types of business model change, see Table 2.
The first type is business model creation, the transition from business ideas into a new venture (Cavalcante et al., 2011). This creation starts with an idea or vision of an
entrepreneurial agent and evolves in implementation of the initial process for running the business. An example of business model creation is Naturhouse during its early development. Key challenges are uncertainty and ambiguity, and a lack of knowledge, skills and resources.
The second type of business model change of Cavalcante et al. (2011) is business
model extension. Extension means adding activities to the existing business model and/or
expanding the current core processes. Examples of adding activities are operating over a wider area or offering a new line of products/services. Enlarging the existing business and exploiting commercial opportunities are reasons for business model extension. For example, when Apple introduced the iPod, their existing business model was extended with new activities (Amit & Zott, 2014). Key challenges are controlled risk and some shortage of resources.
The third type is business model revision, changing the current way of doing business. An element of the current business model is removed and replaced with a new process
(Cavalcante et al., 2011). Reasons for business model revision could be new technologies that provide commercial opportunities, requiring to change the current way of doing business. A startup that introduces a completely new (more effective) way of doing business is also an example of business model revision. Another example is a company that stops the
manufacturing of the current product and is launches a totally new line of products. Kodak started working together with other firms in joint ventures instead of trying to develop certain technology internally. Key challenges are uncertainty and ambiguity, the lack of knowledge and skills, inertia, and resistance.
Lastly, type four is business model termination (Cavalcante et al., 2011). This type of business model change refers to the removement of processes, e.g. closing down a particular business unit or area. For example, the closing of one of the business units of Corning (Freeman, 2009). A key challenge is resistance.
Table 2. Four types of business model change, according to Cavalcante et al. (2011).
Business model change type Definition Example
Creation Transition from business idea
to new venture
Naturhouse during its early development Extension Adding activities to existing
business model and/or expanding current core processes
Apple’s introduction of the iPod
Revision Removement of an element of
the current business model and replacing it with a new process
The start of a joint venture by Kodak.
Termination Removement of processes Closing of one of
Corning's business units.
Research has shown that changing a business model is positively related to corporate sustainability (Schaltegger, Lüdeke-Freund & Hansen, 2012), to resilience and excellence (Carayannis, Grigoroudis, Sindakis & Walter, 2014), to cost reduction, strategic flexibility, and exploitation of grow opportunities (Pohle & Chapman, 2006), and sometimes even to profitable growth (Aspara et al., 2010).
However, other studies failed to find positive results of business model change (Morgan & Strong, 2003). There are even examples of organizations reporting lower performance after the implementation of business model change (e.g. Henderson & Clark, 1990; Lucas & Goh, 2009; Pascoe, 2012). An explanation of the failure of finding a positive relation between business model change and firm performance seems to be that implementing business model change is challenging (Markides & Geroski, 2005). During the
implementation of business model change, a firm could face all kinds of challenges
biases (Isabella, 1990), the development of new value networks is challenging (Koen, Bertels & Elsum, 2011), and a lack of knowledge, skills or resources (Cavalcante et al, 2011).
So far, little research has been done to factors that could help firms overcome those challenges. As De Brentani & Kleinschmidt (2004) stated, an internal environment that supports change could help dealing with the challenges during the implementation of innovation. Therefore, it is important to zoom in on the process through which an internal environment positively influences the implementation of a change. Organizational culture is important for determining the working climate, organization behavior and processes and leadership style (Saffold, 1988). Moreover, organizational culture guides the behavior of members of the organization through shared values and norms (Martins & Terblanche, 2003; Büschgens et al., 2013). Therefore, it appears to be one of the key factors of the internal environment (Hornsby, Kuratko & Zahra, 2002). To further investigate in this topic, the next section will discuss the concept of organizational culture, especially in relation to business model change and firm performance.
Organizational Culture
Due to the requirement of the dynamic environment to be more innovative (e.g. Bartlett & Ghoshal, 1999), there is a growing interest in an innovation-supportive culture (jassawalla & Sashittal, 2002). Organizational cultures are very powerful in the reducement of uncertainty, creation of a collective identity, creation of continuity, etcetera (Cameron & Quinn, 2011). Therefore, researchers involved aspects of organizational culture in the analysis of the implementation of business model change. Organizational culture is defined in various ways. Hofstede, Neuijen, Daval Ohayv & Sanders (1990) defined organizational culture as the perceived common practices, i.e. symbols, heroes, and rituals that have a specific meaning for the people working at the organization.
Other studies focused more on the different aspects of organizational culture. According to Schein (1990), organizational culture can be divided into three elements: assumptions, values and artifacts. Assumptions are the beliefs that are taken for granted, values are the principles with intrinsic worth and artifacts are the tangible results of the
actions taken that follow from the assumptions and values (Schein, 1990; Hatch, 1993). Later, Hatch (1993) introduced symbols as a new element of Schein’s model and shifted from a static to a dynamic view of organizational culture to address the active role of assumptions and beliefs. This overlaps with Barney’s definition of organizational culture: “a complex set of values, beliefs, assumptions and symbols that define the way in which a firm conducts its business” (Barney, 1986, p. 657). To get an understanding of the culture of an organization and, if necessary, change it, Schein (1990) emphasizes the underlying assumptions and values as crucial factors. Values are more visible than assumptions and are therefore more easily studied (Alavi, Kayworth & Leidner, 2005).
The Competing Value Framework (CVF) is developed to structure and measure these underlying assumptions and values (Quinn & Rohrbaugh, 1983; Cameron & Quinn, 2011). The CVF turned out to have face validity and empirical validity (Cameron & Quinn, 2011). In this framework, four different types of organizational cultures are described through three underlying dimensions, see Figure 1.
Figure 1. Competing Values Framework. Reprinted from “A Spatial Model of
Effectiveness Criteria: Towards a Competing Values Approach to Organizational Analysis”, by R. E. Quinn & J. Rohrbaugh, 1983, Management Science, 29(3), p. 369.
The horizontal axis shows the focus of the organization. One end reflects an internal focus on integration and maintenance of the current organization, whereas the other end reflects an external focus on competition and interaction with the environment (Quinn & Rohrbaugh, 1983; Denison & Spreitzer, 1991). The vertical axis reflects the structure of the organization. One end reflects an emphasis on flexibility and spontaneity, whereas the other end reflects control, stability and order (Quinn & Rohrbaugh, 1983; Denison & Spreitzer, 1991). The third dimension contains the preferred processes (means) and preferred outcomes (ends) (Büschgens et al., 2013). After analyzing the values of an organization, the
organizational culture will be categorized to one of the four cultural models (Quinn & Rohrbaugh, 1983; Büschgens et al., 2013), see Table 3.
Table 3. Characteristics of the four types of organizational culture.
Human relations model
Open system model Internal process model
Rational goal model
Friendly place to work Colleagues sharing a lot of themselves Loyalty Traditions Commitment Teamwork Participation Dynamic, entrepreneurial, and creative workplace Risk taking behaviour Innovation
Experimentation Creative problem solving
Readiness for change Uniqueness
Formalized and structured place to work
Procedures Formal rules and policies
Concern for stability, predictability and efficiency A smoothly running organization Results-oriented workplace Competitiveness Productivity Aggressive strategy Competitive actions Outpacing the competition Emphasis on winning and market leadership
Organizations which can be categorized into the human relations model (the
collaboration quadrant), emphasize flexibility and have an internal focus (Cameron & Quinn, 2011). Furthermore, cohesion and morale are accentuated as means and human resource development as end. This type of culture can be typified by a friendly place to work, colleagues sharing a lot of themselves, loyalty, traditions, commitment, teamwork, and participation, see Table 3.
The open system model (the creation quadrant) emphasizes flexibility as well, but has
an external focus. The means are flexibility and readiness, and growth and resource
acquisition are highlighted as ends. A culture compatible with this form is characterized by a dynamic, entrepreneurial, and creative workplace, risk taking behaviour, innovation,
experimentation, creative problem solving, readiness for change, and uniqueness, see Table 3. Thirdly, the internal process model (the control quadrant) emphasizes control and an internal focus. Means are information management and communication, and ends are stability
and control. Characteristics are a formalized and structured place to work, procedures, formal rules and policies, concern for stability, predictability and efficiency, and a smoothly running organization, see Table 3.
Lastly, the rational goal model (the competition quadrant) values control and external focus, and would stress the criteria planning and goal setting as means, and productivity and efficiency as ends. A culture that fits in this quadrant can be characterized by a results-oriented workplace, competitiveness, productivity, aggressive strategy, competitive actions, outpacing the competition, and an emphasis on winning and market leadership, see Table 3.
It is shown that organizational culture can guide the behavior of the organizational members towards the common goals (Martins & Terblanche, 2003; Abu-Jarad, Yusof & Nikbin, 2010; Büschgens et al., 2013). So it is essential to examine and to get an
understanding of the process that lead to successful implementation of change (Detert,
Schroeder & Mauriel, 2000; Jones, Jimmieson & Griffiths, 2005). As stated by Achtenhagen, Melin & Naldi (2013), culture plays an important role in the exploitation of value creation opportunities. However, culture also entails the risk of group thinking (Achtenhagen et al., 2013). Therefore, to enable the implementation of business model change, an organizational culture that allows for thinking out of the box, experimenting with new ideas and question current processes, is necessary (Achtenhagen et al., 2013).
As shown by Zammuto & O’Connor (1992), organizations emphasizing flexibility-oriented values were more likely to successfully implement advanced manufacturing
technologies than organizations emphasizing control-oriented values. Also, organizations that can be classified into the human relations model report higher levels of readiness for change and in turn successful implementation of new information technology (Jones et al., 2005). This should mean that organizations where the human relations model or the open systems
business model change, than organizations in which the internal process model or the rational
goal model is more applicable.
To examine what the role of organizational culture is during business model change within established firms, the next section will explain the research design.
Data and Method Overall Design
This inductive research will be of exploratory nature. A multiple case study design was used for several reasons. First, the attempt is not to control the context (Benbasat, 1984; Benbasat, Goldstein & Mead, 1987; Yin, 2009), as organizational culture and business model change cannot be controlled or manipulated. Qualitative research methods allow to get a rich and deep understanding of real-life phenomena (Eisenhardt, 1989) by allowing the use of multiple data sources. Furthermore, the variables are difficult to define. By interviewing it is possible to go more in depth and ask for further explanation (Yin, 2009). Besides, by
interviewing, this research might give us clues for further research. Multiple cases will be used to be able to compare data,and offer a greater potential for explanation (Yin, 2009; Wiewiora, Trigunarsyah, Murphy & Coffey, 2013).
Sampling
This study focused on established firms. It is even more difficult for established firms to change the existing business model (Koen et al., 2011), so it is transparently observable if organizational culture plays a role in the process of business model change (Eisenhardt, 1989; Pettigrew, 1990).
Four interviews are conducted per firm to get a holistic and accurate view of the organization. Organizational culture is measurable at all levels of an organization, so there
were no specific requirements for the interviewees to be able to measure organizational culture. However, the interviewee needed to be knowledgeable about the business model of a firm, including changes. Therefore, it will be necessary that the interviewee is member of the top management team, a middle manager or corporate staff (e.g. the department of Human Resources, Communication and/or Control). The top management team is involved in the development of business model changes. Middle managers are involved in the execution or implementation of a business model (Gordijn, Osterwalder & Pigneur, 2005). The corporate staff can be involved in both the development and implementation of a business model (Gordijn et al., 2005).
The four cases are carefully chosen. Below, a detailed description and justification of the cases is given.
Case A. This is a large established company in the airline industry. It offers flights all
over the world. Because of the cutthroat competition (Clayton & Hilz, n.d.), business model changes play an important role in the airline industry (Hansson, Ringbeck & Franke, 2003). Case A recently introduced a collaboration with an online social network company and launched a new service with which they are the first worldwide. The interviewees of Case A are part of the innovation network, see Appendix A. The tenure of the interviewees is between 4 and 26 years, leading to a refined feeling for the organizational culture and knowledge about changes in the business model.
Case B. This is an established international company providing services in the field of
advisory, tax and assurance. The industry underwent major changes due to the changing public opinion (e.g. Barford & Holt, 2013). Before, the criterion for society to perceive something as right or wrong was whether it was allowed according to the law (Barford & Holt, 2013). Last ten years, society became more critical. For example, from a legal
disapproves (Barford & Holt, 2013). This led to major changes in the industry. The four interviewees of Case B are all part of the corporate staff (see Appendix A) and having close contact with the Board of Directors This means that they are well informed about the business model and current changes. Three (out of four) interviewees are currently involved in a major cultural change, so they are knowledgeable.
Case C. Case C is a large international financial services provider. The banking
industry is subject to fast technological changes (Adizes, 2014), which are one of the main reasons for business model change (Klick, 2011). For example, since the rise of the use of Internet on mobile phones, Case C recently introduced an application, enabling customers to check their banking details on their mobile phone. The interviewees are all part of the middle management (see Appendix A), meaning that they are knowledgeable about the business model as well as the organizational culture of Case C .
Case D. The last case is an established hybrid research company focusing on several
themes. A hybrid organization can be defined as “an organization that incorporates elements from different institutional logics” (Battilana & Dorado, 2010, p. 1419). Case D shifted from being almost fully subsidized by the government to a more market-driven organization.
Due to those reduced government finances, Case D needs to find alternative ways to generate revenue (Anonymous, 2016). Changing the way a firm generates revenue means changing the revenue model (Zott & Amit, 2009), which is part of the business model (Zott et al., 2011). The four interviewees are top- or middle-managers, see Appendix A. As stated above, top- and middle managers are knowledgeable.
The interviewees were approached via Facebook and e-mail. Judgement sampling is used to actively select the most productive sample (Marshall, 1996). Through maximum variation sampling heterogeneity will be ensured by maximizing the diversity. Through ‘key informant sampling’ (special expertise) and ‘snowball sampling’(one interviewee
recommends another individual to be interviewed, because of his/her relevant knowledge, Denison & Mishra, 1995) the quality of the sample is improved (Marshall, 1996).
Data Collection
This research contains interviews supported by a survey, and archival data. The interviews lasted about one hour and are semi-structured to increase the dependability (Gibbert & Ruigrok, 2010). The interviews consisted of open-ended questions to assess the type of organizational culture and business model change.
At the start of the interview, participants were asked to complete the Organizational Culture Assessment Instrument (OCAI) questionnaire (Cameron and Quinn, 2011), which provided the basis for the interview. See Appendix B for the Dutch and English version. Cameron and Quinn (2011) developed the OCAI, based on the Competing Values
Framework, to identify the organizational culture. The instrument consists of six items, each with four alternatives. The participant is asked to rate his/her organization by dividing 100 points among these four alternatives, depending on the extent to which each alternative applies to his/her organization. The participant rate his/her organization on all six items in the current situation (“now”) and in the preferred situation (“preferred”).
After completing the OCAI, the semi-structured interview consisting of open-ended questions was conducted in which mainly two topics were covered: organizational culture and business model change. See Appendix C for the interview guideline. Questions about the manifestations of the organizational culture build upon the OCAI and were asked to provide a deeper insight into the type of organizational culture (Cameron & Quinn, 2011; Wiewiora et al., 2013). The extant literature suggested topics such as interaction between people,
leadership style, and organizational structure (Cameron & Quinn, 2011). Secondly, questions about business model change are asked, covering topics such as the current business model
and recent changes. The questions about business model change tried to reveal if business model change was happening. If yes, what type of business model change, by asking about what changed recently.
Lastly, archival data (e.g. annual reports) are used as secondary data to be a source of triangulation, to verify the data obtained from the interviews (Gibbert and Ruigrok, 2010).
To avoid misunderstandings, the interviews and survey were in the native language of the interviewer and interviewee: Dutch. The most important parts are translated into English and integrated into the text (e.g. see Findings). During the interviews, detailed notes are taken. Also, all interviews are recorded with permission and transcribed afterwards.
Data Analysis
To manage the data, four steps are taken. The transcribed interviews are systematically coded to find patterns or regularities (Corbin & Strauss, 1990). First, the data is ordered by firm. Secondly, the data is ordered by theme: organizational culture & business model change. Thirdly, the completed OCAI is analyzed. Lastly, a cross-case analysis is has been done.
As written above, the theme ‘organizational culture’ consists of four categories: human relation model, open system model, internal process model, and relational goal model (Quinn & Rohrbaugh, 1983). Each category has its own characteristics (Cameron & Quinn, 2011), see Table 3. The semi-structured interviews are coded, based on these characteristics, by utilizing the pattern-matching logic (Yin, 2009). At the end of this coding process, it was possible to draw a conclusion about the culture within each of the four firms.
The theme ‘business model change’ also consists of four categories: creation, extension, revision and termination (Cavalcante et al., 2011). As with the organizational culture categories, each category has its own characteristics, which were specified prior to the data collection, on which the interviews is coded, see Table 2.
Afterwards, the Organizational Culture Assessment Instrument (OCAI) that is completed by all participants will be analyzed according to the description of Cameron & Quinn (2011), see Appendix D.
Furthermore, because of the multiple case approach, the technique ‘cross-case synthesis’ will be used (Yin, 2009) to be able to compare the data of the four cases. Each individual case study is treated as a separate study, but afterwards word tables et cetera will enable the study to draw cross-case conclusions.
Validity
Credibility. Critical investigation of all data is used, including data that did not fit
within the theoretical framework. So the analysis reflected more than a few good examples (Silverman, 2006). Furthermore, a clear research framework is developed (Gibbert & Ruigrok, 2010). In addition, member checks are used by giving the interviewees the interview transcript and research report so they can comment the findings. Because of the qualitative design, the causality is limited. However, the research is exploratory so the limited causality was not a big issue.
Transferability. Due to the small sample, the generalizability of this research will be
limited. However, the purpose of this case study is to generalize from observations to theory, rather than to a population (Yin, 2009). The rationale for the selection of the cases are
described above.
Dependability. Detailed data presentations are provided and all interviews are
recorded and transcribed. Also, the interviews will be semi-structured to standardize as much as possible (Gibbert & Ruigrok, 2010).
Confirmability. The measurement of the variables will be subject to subjectivity
confirmability (Yin, 2009). Besides, the data collection procedures is clearly reported and explained to provide a clear chain of evidence (Gibbert & Ruigrok, 2010).
Findings
The analysis of the data resulted in interesting main findings. In this section, the results will be discussed. First, it is subdivided into paragraphs of the different firms.
Afterwards, an overall analysis is carried out to draw general conclusions. An answer is given to the research question what the role is of organizational culture during business model change within established firms.
Case A
Organizational Culture. The organizational culture of Case A can be categorized
more in the internal process model and human relations model, rather than in the open system
model or the rational goal model. First about the characteristics of the internal process model
as procedures, formal rules and policies (see Table 3, Cameron & Quinn, 2011) present at Case A. A typical example of these characteristics is shown in what the consultant CIO office 1 said: “The organization is very hierarchical. You have to deal with ten, fifteen people, before you can do something”. Another example is that the innovation manager notices in his/her daily work: “It is just rigidity. We have the issues of the day and these are prevailing. Besides, people are fired. Case A is currently in a survival mode, instead of in an enterprise mode.” About the leadership styles: “I call it old fashioned. It is all very instrumental, I do not know how to say it different. They especially satisfy the processes that they agreed upon with each other. For example, about which lists need to be made, and when the reviews need to be done. There is not a lot of active coaching, active encouragement, creation of own plans, or
having a vision. Of course, there are some exceptions, but let’s say that eighty percent is instrumental” (consultant CIO office 1).
Secondly, characteristics of the human relations model are dominant at Case A (Cameron & Quinn, 2011), confirmed by the results of the OCAI. The scrum master
explained that Case A is a friendly place to work: “How I characterize this firm? Really as a family business, togetherness. One big family, that was what I felt when I entered this firm. That is also what I feel at every location. If you say that you are a colleague, they will welcome you with a big smile and be sure that you get all the comfort you want. So I think that is sometimes very powerful.” Also, the innovation manager talked about the open
atmosphere. The scrum master mentioned that there is a lot of personal attention to the private life of colleagues. This refers to the characteristic ‘colleagues sharing a lot of themselves’ (see Table 3, Cameron & Quinn, 2011).
It seems evident that the internal process model and human relations model
predominate. According to the CVF, this means that Case A has an internal focus (Quinn & Rohrbaugh, 1983). However, there was another remarkable finding. There was a change of culture reported by all four interviewees. According to the scrum master and the consultant CIO office 1, for the first time in history the words ‘winning’ and ‘competing’ are used in the firm. The interviewees named as transition point the arrival of the new CEO. Indeed, the core values of the founder or CEO often have a major impact on the organizational culture
(Achtenhagen et al., 2013). This phenomena clearly showed a movement in Case A to the rational goal model, with these characteristics: competitive actions, emphasis on winning and market leadership, aggressive strategy (see Table 3, Cameron & Quinn, 2011).
Business Model Change. Case A operates in the airline industry, providing scheduled
passenger and cargo services to more than hundred destinations. Surprisingly, all four interviewees responded different, when asked to the current business model. Whereas the
consultant CIO office 2 talked about flying as the main activity, the innovation manager said that flying is becoming of secondary importance. Nevertheless, there are also similarities in the answers of the interviewees about the business model of Case A. The innovation manager and the consultant CIO office 1 both explained that the transfer of their passenger is one of the activities through which most value is created, “we are a transfer company”. Besides, the innovation managers and the consultants CIO office 1 and 2 all explained that during the flight, Case A creates value by selling ancillaries. Ancillaries are “things that you can buy on-top-of, for example a comfort seat, a special meal” etcetera. Case A does research about the satisfaction of people with the ancillaries, that is how the value is captured” (consultant CIO office 1).
The interviewees of Case A reported difficulties in answering questions about business model change. According to the scrum master, “big decisions within this firm have to be approved by labor unions, which makes it almost impossible to implement fundamental changes”. The innovation manager and the consultant CIO office 1 gave similar answers. Nonetheless, noteworthy are the following reported changes. Since a couple of years, Case A is extensively using social media platforms to inform customers and launch marketing
campaigns (innovation manager). Case A currently made a deal with an online social network company (scrum master, consultant CIO office 2). It is now possible to check your flight details through this online social network. Case A is the first airline company worldwide with this service. So, the collaboration with the online social network company and the offer of the new service are new activities. They are added to the business model. This change can be called business model extension (Cavalcante et al., 2011).
Case B
Organizational Culture. The organizational culture of Case B can be categorized
more in the internal process model and the rational goal model, rather than in the human
resources model or the open system model. The internal process model is clearly shown in the
following quote of the press officer: “The company is now very compliance-focused. So there are strict rules about how things should be. Employees need to behave according to these rules and give each other feedback. That is to avoid mistakes”. Case B is characterized by formal rules and policies, procedures and a concern for stability, predictability and efficiency. This indicated an organizational culture compatible with the internal process model (see Table 3, Cameron & Quinn, 2011). As the press officer said: “It is focused on quality and predictability of the process, so not very creative”. This was confirmed by the manager strategy: “Especially assurance has a lot of rules and procedures, many laws”.
Besides, Case B showed also characteristics of the rational goal model, confirmed by the results of the OCAI. For example, the manager public affairs and the transformation director emphasize the results oriented workplace and productivity: “We are very results-focused. We are busy with the delivering of a good product that meets the needs of customers.”. Another quotation that refers to this characteristics: “The company is very results oriented and success is measured by your share of the revenues and the declared hour”. For Case B, ultimately, it matters what remains bottom line, a profit-driven organization (press officer). Besides, the manager strategy explained the competitiveness: “We have a competitive drive, wanting to be the best. This aspect has a central place in the strategy and communication.”
The combination of the internal process model and the rational goal model is clearly shown in the following quotation of the transformation director: “This organization is very competitive, which has pros and cons. People work very hard and are very involved in their
job. Their job is very important for them. It is very much quality based and focused on predictability.”
According to the CVF, Case B seems to emphasize control, since both the internal
process model and the rational goal model are dominate (Quinn & Rohrbaugh, 1983).
Interesting is that all four interviewees of Case B mentioned a culture change, as well as mentioned above at Case A. At the request of the Board of Directors, almost all employees of Case B recently completed the Global Value Assessment, enabling the corporate staff to measure the culture and develop a plan for a culture change (transformation director). Case B wants to evolve to a learning organization by creating an organizational culture in which it is also more accepted to make mistakes (transformation director). A team-based approach should help the organization getting less individual oriented and creating more attention to diversity (manager strategy). The recent creation of a general purpose and redefinition of the values are other examples of the culture change of Case B (transformation director). Those examples show the movement to the human relations model, because of the emphasis on ‘the bigger whole’, teamwork and participation, and the sharing of the same values, beliefs, and goals (Cameron & Quinn, 2011).
Business Model Change. Case B is a project-based organization providing three lines
of service: assurance, advisory and tax. As the transformation director stated: “It is a ‘hour-factory’. So it's a matter of attracting a job, and doing good work, whereby the revenue depends on the number of hours. The price per hour is determined by the quality you provide. Quality is thus also very important.” The value is created: “together with the stakeholders, for example clients, society and employees” (manager strategy) and because of “the worldwide network” (press officer). The most important purpose is to “solve complex problems and build trust in society” (transformation director, confirmed by the annual report of 2014-2015). However, this purpose is recently developed, due to the changing public opinion of the
society (Barford & Holt, 2013). Case B revised their business model as response to the criticism on the operations of the industry. A purpose is added to the business model, and their product is adapted to providing more socially approved services. An example of their product is advice to multinationals about taxes. Therefore, Case B is currently also renewing their recruiting and hiring processes. Other competences are required than before. Nowadays, employees “need to be more foresighted, have more sentiment and antennae for social
developments, so they are able to provide the advisory-, tax-, or assurance services that are approved by society” (manager strategy). An illustrative example of this change, the press officer noticed that within the tax service, people that studied History or Law or Mathematics, are now hired, because it is now important that they look at tax in a different manner. Case B replaced their old service for a new service, namely the old type of advice is updated to a better version that fits with the current way of thinking of society. Because of the removement of an element of the current business model and replacement of a new process, it can be called
business model revision (Cavalcante et al., 2011).
Case C
Organizational Culture. The organizational culture of Case C can be categorized
more in the internal process model and the human resources model, rather than in the rational
goal model and the open system model. The combination of these models is typified by the
program manager of Case C: “We are truly a hierarchical company, but not necessarily controlled hierarchically. So that is a little bit in between. We are not like other big banks, which are very directive. We are clearly a cooperative business, that is reflected in everything. With the local banks or clients we do co-making, that is how we call it literally. So it means that we work closely together with the client or local bank.”
The internal process model is characterized by procedures, a formalized and
structured place to work and formal rules and policies (Cameron & Quinn, 2011). These are reflected in the statements of the program manager: “We are busy with risk control. That has to do with the many processes and procedures, that sort of things. The regulations which we must meet. We have an external supervisory body, and internally we have many regulations as well. We have a major control device.”. This is confirmed by the head business change management: “The regulations become more and more. There are external regulators who are requiring that you stick to all kinds of rules, which means that we as an organization become totally paralyzed. This is almost fatal if you want to be innovative.” Also the business change manager mentions the same and gives a possible explanation: “We always say that we are an open and flexible organization, but actually we are an old bank of forty years ago with all kinds of fixed patterns and steering committees. Looking at the psychology, the middle manager wants to see its own added value confirmed. While several people around him or inside the organization could have developed better and more convenient solutions. Only because of the hierarchical power of the middle manager, they may choose not to give those employees freedom. Almost every project is going well. You should want that a number of projects is failing, otherwise you are taking too few risks. Now everyone can put checkmarks at the end of the year, because everyone did well in that safe comfort zone. It would be good if we sometimes take more risks and dare to fail.”
In addition to the strong concern for stability and predictability, Case C also has an strong consensus culture, which is one of the characteristics of the human relation model. As stated by the program manager: “We have an extreme consensus culture. It is good if you want to give stakeholders a voice as well et cetera, but it requires also a certain strength to make decisions. Consensus flattens out. You need to have that sharpness and make clear choices. So I think, and more are with me, that we need to have less consensus.” The decision
making process within this consensus culture is explained by the head business change management: “There is a lot of mutual consultation. The decision-making process in this organization is often characterized by ‘everyone must agree’. So you want to reach consensus. Obviously, that is slowing down the decision-making process. During that process there are few managers that raise their hand and decide which way to go.” The characteristic
‘colleagues sharing a lot of themselves’ of this model is also present in Case C. An illustrative quotation: “This organization is very informal. People are very interested in each other. They know what is going on with their colleagues privately, so it is personal interest. It is not that people ask a few questions and then go back to work” (business change manager).
According to the CVF, the internal focus is dominate in Case C, because of the present characteristics of the internal process model and the human relations model (Quinn &
Rohrbaugh, 1983; Cameron & Quinn, 2011). Surprisingly, all four interviewees reported a major transformation of Case C that is been going on. As stated by the program manager, Case C is engaged in several cultural programs to move towards a more open culture with self-managing teams in which employees give each other feedback etcetera. Also, the performance-management system will be adopted to a less instrumental and more personal system in which leadership styles are important: “Conveying a vision, exemplary behavior, engaging in dialogues, etcetera, are examples of the new leadership style. The teams will become more central, less hierarchical layers” (program manager). Besides, the business change manager talked about the creation of more cross-functional teams, the removal of steering committees, and the establishment of a new department in which employees will have the freedom to do their own thing, irrespective of the steering committees. This culture change is characterized by the setup of a more dynamic, entrepreneurial, and creative workplace where risk taking and innovative behaviour is more allowed, showing a move towards the open system model (Cameron & Quinn).
Business Model Change. Case C is a bank, providing financial services as explained
by the business change manager of Case C: “We provide access to knowledge, networks and finances. Finance is of course traditionally the business of a bank, that's just the core business. If you need money or want to transfer money, you can go to a bank and arrange it. That's the financial part.”. The head of business change management explains this financial service in more detail: “It is of course a margin business, if you want to see it that way. On the one hand, we lend money at a certain percentage. On the other hand, money is entrusted to us at a
certain percentage on which we have a margin. You have to cover all costs. We of course have our own capital.”. The value of Case C is created and captured “through the local banks and their close involvement in the local community, the local banks know what is going on in their neighbourhood” (head business change management). Due to the fast technological development of digital services (see also Adizes, 2014), Case C introduced an application for mobile phones, enabling customers to check their banking details (manager process
management). This development extends the current business model of Case C with a digital (mobile phone) service. Recently, Case C revised this part of the business model by
developing a new mobile phone application with an entirely new philosophy, according to the manager process management. The manager process management clarified this new
philosophy as follows: “The application is now client centered. By pressing a button, the customer is in communication with a local employee. This changed philosophy means that the entire data-landscape behind this application must also be regulated according to the client focus. For example, if a customer uses the chat help function in the application, the local employee immediately needs to have all the data and information of the customer at hand to be able to help. So the idea of customer journeys, and how we can support the customer as well as possible and as quickly as possible”. That the old mobile phone application is totally
renewed, means a removement of an element of the current business model and replacement of a new process (Cavalcante et al., 2011). Therefore it can be called business model revision.
Case D
Organizational Culture. The organizational culture of Case C can be categorized
more in the human resources model and the open system model, rather than in the internal
process model or the rational goal model. Cultures compatible with the human resources model are characterized by teamwork, commitment and a friendly place to work (see Table 3,
Cameron & Quinn, 2011). Those characteristics are clearly highlighted in the results of the OCAI and the interview with the senior project manager: “Employees have a lot of autonomy and prefer to work together. The absenteeism is relatively high, because people are too much involved in their work. The atmosphere is socially safe, no gossips or hidden agendas. There is a strong consensus culture, people give each other little critical feedback.” The department head confirmed this by clarifying that Case D has a family-personal character with a strong focus on the development of the employees”. He stated that Case D is “not very competitive or achievement oriented”. Those characteristics are not embedded in the organizational structure. Employees would not immediately be judged on mistakes and the organization provides no framework to reward aggressive performance-win behavior. Also, the higher management is not associated with large salaries or status.”
Besides the attention for the human aspects, main characteristics of the open system
model are also present. Employees have a lot of autonomy, causing a lot of entrepreneurship
(senior project manager), which can be linked to the ‘dynamic, entrepreneurial, and creative workplace’ characteristic (see Table 3, Cameron & Quinn, 2011). The work is not routinely, Case D is a content-driven organization. It is all about substantive renewal, discoveries, innovations, research (department head). The managing director explained clearly the
innovative and creative aspects of the organization: “We are not, as a commercial
organization, aggressive in the market. We should be unique worldwide, we are distinctive in terms of innovation and are proud of that and are focusing everything on that. We do not have to be aggressive as long as we are unique, creative and distinctive with our knowledge and technology.”
To conclude, Case D showed characteristics of the human relations model and the
open system model. According to the CVF, Case D emphasizes a flexible structure (Quinn &
Rohrbaugh, 1983).
Business Model Change. Case D is a knowledge organization, doing research- and
development projects for private organizations, public organizations, the Dutch government and European Union (cluster director). As stated by the senior project manager and the department head, per project a price is set, which can be fixed or variable. The department head: “I think the business model runs on research projects. We are a project organization, that is the core. So a project means that there is a customer who requests a research or innovation, and he pays for it.”. Furthermore, all interviewees (senior project manager, department head, cluster director, managing director) mention that Case D has a hybrid business model. Case D is an independent organization, but it is partly subsidized by the Dutch government. As the department head stated: “You should say that we are a two-third project organization and one-third subsidy organization.”. According to the cluster director and confirmed by the website of Case D: “Case D is executing those research tasks for the country that are a state secret, those research tasks that are socially important but cannot be entrusted to others due to objectivity reasons and those research tasks that are socially
important but no money can be earned with it, so if we don’t do it, no one will do it.”. Due to the reduction of the amount of subsidy every year, Case D is considering alternative revenue models (managing director). More market projects and less subsidy projects are carried out
every year, increasingly operating as commercial organization (senior project manager). Several departments were closed down (cluster director). The cluster director explained that Case D has several ways to create revenue. This can be through the generation of knowledge, with business to business and with intellectual property. Also, by introducing an idea or technology with a research group and creating a private company of it, as a spin-off. This spin-off enters the market with the idea or technology. By selling this spin-off, Case D earns money. Currently, the strategy of Case D is to create more value by selling more spin-offs. The closing of several departments (a removement of an element of the current business model), and the increasing focus on the creation of spin-offs (replacement of a new process), are striking examples of business model revision (Cavalcante et al., 2011).
General Findings
This section describes the differences and the similarities that were found between the cases that took part in this research. First, a conclusion is drawn per case. Secondly, a cross-case analysis resulted in some interesting findings, which will be discussed one by one.
Summary of Case Findings. Case A emphasizes the internal focus, because of the
dominating human relation model and internal process model. However, Case A is
undergoing a culture change, moving slightly towards rational goal model. The employees encounter difficulties with innovations. Yet currently business model extension have happened through the introduction of a new service in association with an online social network company.
Case B has a organizational culture that is compatible with the internal process model and the rational goal model, so valuing a controlled structure of the organization. Case B is also in the middle of a major transition, moving their culture more towards the human
Case C emphasizes, the same as Case A, the internal focus. Noticeable in the dominating human relation model and internal process model. The plans for the culture change are currently being implemented, moving towards open system model. Recently, Case C revised their business model and totally changed their mobile phone application in an application with a new philosophy.
Lastly, Case D has a focus on the flexible structure of the organization, noticeable in the present aspects of the human relation model and the open system model. Business model
revision happened through the disappearance of part of the subsidy and several departments
and development of an alternative way to raise substantial revenues.
Internal Focus of Established Firms. One of the main findings is that established
firms tend to have an internal focus. Many characteristics of the human relations model (Case A, C and D) and the internal process model (Case A, B and C) are reported. Three out of four cases are categorized in one of the two (or both) models. For example teamwork, commitment and a friendly place to work are characteristics that are often described by the interviewees, as well as procedures, formal rules and policy and a formalized and structured place to work.
According to the CVF, both models are on the horizontal axis at the end that represents an internal focus on integration and maintenance of the existing organization (Quinn & Rohrbaugh, 1983; Denison & Spreitzer, 1991). The findings of this explorative study suggest that established firms tend to have an internal focus. This could explain why other studies stated that established firms seem to have more difficulties with innovating the existing business model (e.g. Koen et al., 2011). An internal focus means much attention to the current organization (internal) and less attention for the environment (external). However, firms are particularly interested in business model innovation due to the fast changing
environment (Casadesus-Masanell & Ricart, 2007). A lack of attention for the environment means that a firm would not be aware of the need for business model innovation. The
dominating internal focus of established firms fits with the finding that business model innovation is absent in all cases, since none of the core components is overturned (Henderson & Clark, 1990). However, business model change is more incremental than business model innovation. All cases show business model change through gradual steps. For example, Case C first introduced the mobile phone application years ago (business model extension).
Recently they changed the philosophy behind the application and introduced a totally renewed mobile phone application. So instead of one big step and overturning the core concepts
(business model innovation; Florén & Agostini, 2015), Case C took two smaller steps (business model change).
Organizational Culture Change and Business Model Change. Surprisingly, three
organizations (Case A, B and C) are involved in a culture change. This presence of culture change was not expected beforehand. Main reason for this is that earlier research showed that organizational culture change is a difficult process that brings many challenges, as resistance from employees (Cameron & Quinn, 2011). However, in this study, three cultures changed or are changing. Case A has a new CEO with other values, Case B did a Global Value
Assessment and hired a transformation director to guide the change, and Case C is
implementing all kinds of cultural programs, for example a course about giving and receiving feedback. So culture changes seems like an everyday activity for these established firms, although earlier named studies proved this to be very difficult.
In addition to the organizational culture change, all four cases (A, B, C and D) reported business model change. Interestingly, business model change seems to go hand in hand with culture change. As reported by the press officer and transformation director from Case B, to change their service (business model change), it is necessary to change the
leadership styles, organizational values, and to create a (new) purpose (organizational culture change). According to the attraction-selection-attrition model of Schneider (1987), people are
attracted to organizations with goals similar to their own. Besides, organizations select people with goals similar to the organizational goals. Finally, according to this model, people leave an organization with goals that do not connect people's own goals. Therefore, changing the organizational culture will lead to the attraction and selection of the people that fit with the new values and attrition of people that do not fit with the new values. In case of Case B, people that are more socially involved will be attracted and selected. This lead to a change of service, namely the provision of advice that takes more into account the public opinion.
It is remarkable that all three cases that are in a culture change (Case A, B and C) currently have an organizational culture that is compatible with the internal process model, which stands for stability, predictability and control. Maybe an explanation that those three cases are implementing a culture change is that all cases want to lower the characteristics of the internal process model. The internal process model is especially relevant in a stable environment (Cameron & Quinn, 2011). However, all cases are currently in highly dynamic industries, as explained above. To be able to successfully implement business model change, it will help to have less characteristics of the internal process model and to be more flexible oriented (Zammuto & O’Connor, 1992; Büschgens et al., 2013).
According to the CVF, of the four organizational cultures, the one that should be least supportive towards change is Case B (culture in internal process model and rational goal
model) (Zammuto & O’Connor, 1992; Jones et al., 2005). However, Case B even hired a
transformation director to guide the change. A possible explanation is that this culture change is needed exactly for the reason that their culture is not supportive towards change. The organizational culture change facilitates the business model revision that Case B wants to implement.
The culture that should be most supportive towards change is Case D, because of their emphasis on flexibility (culture in human relations model and open system model).
