Charles Handy

Four Cultures Theory

The four cultures theory is a model of culture, popularized by Charles Handy (1999) that classifies organizational cultures  into four major types: the power culture, the role culture, the task culture, and the person or support culture. Handy’s approach helps us understand why we might be more comfortable in some organizations than others.

POWER CULTURE:

His analogy for this type of the culture as a spider’s web. Meaning that the most important spider sitting in the center, because the whole organization, the boss is the most important, and sits in the center.  He is thensurrounded by ever-widening circles of intimates and influence. The closer you are to the spider, the more influence you have.

Organizations with this type of culture can respond quickly to events, but they are heavily dependent for their continued success on the abilities of the people at the center; succession is a critical issue. They will tend to attract people who are power orientated and politically minded, who take risks and do not rate security highly.
Size is a problem for power cultures. They find it difficult to link too many activities and retain control; they tend to succeed when they create new organizations with a lot of independence, although they usually retain central financial control.

This type of culture relies heavily on individuals rather than on committees. In organizations with this culture, performance is judged on results. Working in such organizations requires the employees correctly anticipate what is expected of them from the power holders and perform accordingly. If managers get this culture right, it can result in a happy, satisfied organization that in turn can breed quite intense commitment to corporate goals. Anticipating wrongly can lead to intense dissatisfaction and sometimes lead to a high labor turnover as well as a general lack of effort and enthusiasm.In extreme cases, a power culture is a dictatorship, but it does not have to be.

ROLE CULTURE:

This culture is illustrated as a building supported by columns and beams. This relates to each column and beam symbolizing a specific role, keeping up the building; individuals are role occupants but the role continues even if the individual leaves.

This type of organization is characterized by strong functional or specialized areas coordinated by a narrow band of senior management at the top. The work of the functional areas and the interactions between them are controlled by rules and procedures defining the job, the authority that goes with it, and the mode of communication and the settlement of disputes.

Position is the main power source in the role culture. People are selected to perform roles satisfactorily; personal power is frowned upon and expert power is tolerated only in its proper place. Rules and procedures are the chief methods of influence. This type of organization is likely to be successful in a stable environment, where the market is steady, predictable or controllable, or where the product’s life cycle is long, as used to be the case with many UK public sector bodies. Conversely, the role culture finds it difficult to adapt to change; it is usually slow to perceive the need for it and to respond appropriately.

For employees, the role culture offers security and the opportunity to acquire specialist expertise; performance up to a required standard is rewarded on the appropriate pay scale, and possibly by promotion within the functional area. However, this culture is frustrating for ambitious people who are power orientated, want control over their work or are more interested in results than method. Such people will be content in this culture only as senior managers.

TASK CULTURE:

Task culture is job-or project-oriented, and its accompanying structure can be best represented as a net. Some of the strands of the net are thicker or stronger than others, and much of the power and influence is located at the interstices of the net, at the knots.

It is a team culture, where the outcome of the team’s work takes precedence over individual objectives and most status and style differences. Influence is based more on expert power than on position or personal power, and influence is more widely dispersed than in other cultures.

 The task culture is  appropriate when flexibility and sensitivity to the market or environment are important, where the market is competitive, where the life of a product is short and/or where the speed of reaction is critical. Against this must be set the difficulty of managing a large organization as a flexible group, and of producing economies of scale or great depth of expertise.

Control in these organizations can be difficult. Essential control is retained by senior managers, who concentrate on the allocation of projects, people and resources, but they exert little day-to-day control over methods of working or procedures, without violating the norms of the culture.  Most managers, certainly at the middle and junior levels, prefer to work in the task culture, with its emphasis on groups, expert power, rewards for results and a merging of individual and group objectives. It is most in tune with the current trends of change and adaptation, individual freedom and low status differentials – but it may not be an appropriate culture for all circumstance.

PERSON CULTURE:

Person culture is an unusual culture. It is not found in many organizations, yet many people espouse some of its values. This type of culture is illustrated by a loose cluster or a constellation of stars. In this culture the individual is the focal point; if there is a structure or an organisation, it exists only to serve and assist the individuals within it, to further their own interests without any overriding objective. 

Not many organizations can exist with this sort of culture, or produce it, since organizations tend to have some form of corporate objective over and above the personal objectives of those who comprise them. Furthermore, control mechanisms, and even management hierarchies, are impossible in these cultures except by mutual consent. An individual can leave the organization, but the organization rarely has the power to evict an individual. Influence is shared and the power base, if needed, is usually expert; that is, people do what they are good at and are listened to for their expertise. 

Although it would be rare to find an organization in which the person culture predominated, you will often encounter people whose personal preferences are for this type of culture, but who find themselves operating in more classical organizations. Specialists in organizations, such as computer people in a business organization, consultants in a hospital, architects in local government and university teachers benefit from the power of their professions. Such people are not easy to manage. Being specialists, alternative employment is often easy to obtain, and they may not acknowledge anyone as being in a position to exercise expert power greater than their own.

Source

Product: Life Cycle

There are many things that one can identify when it comes to product. The first would be the difference between product line, product range and product mix. A product line is a set of related product that are sold by a company, this is different from the product mix, which is the variety of all product lines that the company produces. All of this is summarized in a  product range which is all of the types of products made by a company. When a company creates a product, it develops according to its own life cycle. A product life cycle is the pattern of sales of a product from its launch to withdrawal. It begins in the introduction stage is when it has been introduced to the market, and all testing and developmental tweaks have been performed. During this phase, sales are often low and increase slowly. People are not aware of this product so lots of promotion and advertising are focusing on spreading the word about this basic model. The next stage is growth. Growth happens when the product is well received by the market, and usually sales grow significantly. Eventually, growth may decline due to many variables - competition or changes in costumer taste or technology. Whne growth slows or stops all together, it reaches the next point of the life cycle, maturity. At this stage sales fail to grow, however, they do not necessarily stop. At this stage the product reaches its maximum demand, and saturation. During maturity, companies might use an extension strategy to lengthen the maturity period of a product. For example, companies might use sales to attract customers, or expand the product completely with new models. When you have telephone for example, you might create it in different colors, to attract further sales, or you might start producing accessories, such as covers, headphones, etc. to help lengthen the stage.

During the life cycle,many changes are likely to happen in the fields of promotion, price or even the product it self. Promotion amounts change during the life of the product. During the introduction stage, high promotion is needed to make the consumers aware of the product's arrival to the market. Then, costumers need to be convinced to repeat their purchase, so brand identification might be the move to help establish loyalty. During maturity brand imaging continues, and positive difference from competitors is stressed. By the decline stage, advertising is very limited. The changes that happen in the field of price are relative as well. During introduction it is likely that the prices will be high compared to competitors if the company uses the technique of skimming. The prices may be low, if the company prefers penetration. If the company has chosen the penetration technique, then during growth the price of the product might rise. During maturity it is very likely that competitors will begin to enter the market, so the company needs to keep the prices at a competitive level. During the decline, lower prices are usually used to sell of stock, or if the product has a small number of followers, the prices could even rise. The product itself changes as well. During  introduction the product is its basic model. During growth, planning of product improvements and developments is taking place to maintain the consumers appeal. When a product reaches maturity, new models and accessories might be used to help expand it, and extend its life. When it reaches decline, it is ready to be replaced with different products, and withdraws from the market.
New product development may be important to some businesses, which are effected by technological changes. Cellphone market, or Nokia as a company would be very dependent on new product development. They have to create new systems, ways, and designs to compete with the growing technology of the world and its competitors. This can cause a problem however,as financing NDP might be difficult as research and development costs have to paid years before any returns can be earned, and even without a guarantee. 

Product: The most obvious aspect of the Marketing Mix

Product is the main part of the marketing mix. Without product, you cannot market. Products have different forms. They can be a service, or actually tangible, and can usually be categorized into three different categories. The first category is Convenience Goods. They are products in which consumers hold very limited shopping efforts. Such products must be always available, and its brand name to be well established. A good example of a convenience good is toothpaste. Shopping goods, on the other hand are goods in which the consumer is willing to invest a great deal of time and effort. For example, they are willing to spend lots of time looking for a new computer. Wanting the best quality, price and innovation, therefor would be important. Specialty goods are those that only a small spectrum would be interested in. Industrial goods can  be broken down into subgroups, depending on their uses. This type of good would be tractor, or book biding machine used in professional printing presses. They are the goods that everyday life does not request, and would be purchased only under certain circumstances. And within that, products of the company are classified.
Product line refers to the assortment of similar things that the firm holds. For example, Maybelline's product like features lipstick, lip-gloss, lip-stain, etc. In contrast, the firm’s product mix is the combination of different product lines that the firm holds. For example, Hersey's does not do just chocolate bars right? Other firms can maintain either numerous lines or fewer lines, but hopefully all have some common theme. Numerous lines would represent a wide product mix. Maybelline has a many product lines, but they are all related in the fact that they are cosmetics. For instance, they offer mascaras, foundations, concealers, eyeliners, etc. Depth refers to the variety that is offered within each product line. Maybelline offers a great deal of depth in mascaras, with different colors and purposes for each one.

The Persuaders

In the current times, marketing follows us. It fills every possible empty space of our world, and tries to convince us that various products are worth our money, or that we should share certain opinions. Consumers, however, are starting to be immune to the clutter. We grow more cynical about marketers' claims, and so the persuasion industries start to research and refine methods to reinforce an emotional attachment between the people (us) and the brands we buy.

Kevin Roberts, CEO of the marketing company Saatchi & Saatchi Worldwide, states that in order to create attention catching and effective advertising, a company has to move beyond relational influence and create an emotional connection with the consumer. Everybody has information and knowledge, it's no longer a competitive advantage for companies, we now live in the age of the ideas. Consumers want to be able to connect with what's behind the brand, what's behind the promise that we see expressed on billboards or in ads. People feel the world through senses, and that's what's next. The brands that can move to that emotional level, that can create loyalty beyond reason, those are going to be the brands where premium profits lie."You want lifetime customers, and you want them to have a love affair with you so that no matter what the competition do, no matter what Wal-Mart is offering cheaper, they will stay with you and they will pay a premium, just as you will stay with your wife or your husband over 30 years because you have towards them loyalty beyond reason, something bigger than a product attribute, bigger than a brand benefit, OK? That's the role of marketing" And this type of reasoning is totally understandable. When you appeal to a greater sense to the people, they will see something more then just all the clutter that surrounds them. We're living in the attention economy. You are bombarded with messages from left and right. Wherever you go, you're surrounded by brands and media. A company has about three seconds to connect with a consumer emotionally and to interest them. And as Kevin Roberts says, that's exactly what we're trying to do with Lovemarks: We're trying to entertain, interest and bond. And an important thing  is that it has to be full of mystery. Most brand managers are obsessed with explaining their product in the smallest detail and nobody could care less. In my opinion, you have to catch attention and make people want more information. Every person cares about a different thing, the social side of the product, efficiency or the popularity of the company, whatever it is - they can look it up. The advertisement should interest the consumer and attach to the consumer, so they do the rest of the information research. You build the base, but not overload the person with statistics and points relating to everybody.  Just in the end, get the person to persuade themselves.

Brand Leaders

A brand leader commands the largest profit margins, of a given market. The brand is then most widely sold and has the most recognized product in a particular market segment. Brand leaders are specific to their group, for example, Coca Cola is a perfect example of a brand leader in the beverage market. Not only do they know that they hold most sales of all of the competitors, as brand leader they receive a lot of perks.Coca Cola has very high customer loyalty. Being a the most popular, and quality product ensures that the customers keep coming back for more.
Being a brand leader can be signal of quality too. For example, Louis Vuitton is currently the leader among luxury goods. Being a brand leader of this sort shows different advantages such post might hold. Louis V, being a brand leader receives a lot of free publicity. Of course, it is particularly the commercials that help earn the post, but after that, people are interested in the name, products and the companies actions - it leads to people talking - basically free marketing. The fact that it is a brand name, decreases price sensitivity in a customer. You would not pay $500 for just any bag or pair of shoes, but the fact that it Louis Vuitton makes it seem like a good buy even with the ridiculous price-tag. Such brand is admired, and has a high purchase intent. This means that it can expand. Although it may have been originally bags, now this brand makes belts, scarves, or shoes. The fact that it is a brand leader provides a platform for expanding the product categories.