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 / Summer 2004 / Issue 35(originally published by Booz & Company)


The 7 Types of Organizational DNA

These results also appear to indicate a discrepancy between senior executives’ favorable perceptions of the organizational structures and processes they have established, and the actual adoption and utilization of those structures and processes. This finding is consistent with our client experience.

In contrast to their superiors, line managers and midlevel managers and business unit staff tend to be pessimistic in their assessments of organizational effectiveness. Nearly 70 percent of their surveys indicated unhealthy profiles. Line managers and business unit staff feel Overmanaged; 23 percent of them described behavior consistent with this profile. Midlevel and line managers believe their organizations struggle to pull in the same direction at the same time, as evidenced by the high incidence of Fits-and-Starts profiles.

Corporate staff personnel are slightly more optimistic. Perhaps they are far enough removed from daily operations that they are less aware of organizational problems. Most notably, they do not perceive the same Overmanaged behaviors that other nonexecutives report.

One survey question that drew a consistent response across organizational levels was, “Managers above me in the hierarchy ‘get their hands dirty’ by getting involved in operating decisions.” More than half of all respondents reported this happening “frequently,” with senior managers, at 65.4 percent, citing this tendency in their companies more than any other group.

But survey results suggest this is where the consensus ends. Although senior managers likely view their involvement in operating decisions as good (given their overall positive bias), junior managers reported feeling micromanaged. There is widespread agreement among business unit and corporate staff, as well as line managers, that “decisions are often second-guessed.” Fewer senior managers see it that way.

There is also a disparity in beliefs regarding the role of corporate staff. Although business unit staff, line management, and middle management believe that “the primary role of corporate staff is to support the business units,” corporate staff respondents believe their role is to audit those units, a view senior management overwhelmingly supports.

These differences in perception can lead to significant organizational dysfunction. Business unit personnel may feel frustrated as they spend more time reporting up the hierarchy than doing productive work. Not surprisingly, lower-level employees reported a higher incidence of “analysis paralysis” and excessively bureaucratic decision making in their organizations. Feeling distrusted, underestimated, and trapped in an overly politicized environment, those with initiative and exceptional talent may well defect.

Decisions, Decisions
If lower-level employees are feeling stifled by excessive bureaucracy and layers of micromanagement, it could be because decision rights are poorly communicated in many organizations. More than half of the Org DNA Profiler respondents indicated that they felt the accountability for decisions and actions was unclear in their organizations. This finding was consistent across all organizational levels, though senior management was slightly more sanguine.

Although decision rights are vague across the board, the lack of understanding seems particularly acute within overhead functions (e.g., human resources, finance, and information technology), where redundant “shadow staff” frequently multiply to fill the gaps left by incomplete or poorly specified responsibilities. Since so many organizations now outsource overhead functions to third-party vendors, decision rights in those organizations may be hampered by unclear service-level agreements and governance mechanisms. In line organizations (such as manufacturing and sales), decision rights — except at the lowest levels — are slightly clearer, perhaps because those organizations face more direct market pressure to resolve conflicting or poorly specified responsibilities that interfere with responsiveness to the customer.

In combination with generally unclear decision rights, lack of timely and relevant information contributes to ineffective execution. A majority of respondents at all levels reported that “field/line employees frequently lack the information they need to understand the bottom-line impact of their day-to-day choices,” and a majority disagreed with the statement that “information flows freely across organizational boundaries.” As always, senior managers were slightly more upbeat in their assessments, but most still took a dim view in their responses to these questions. (See Exhibit 7.)

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  1. Jeffrey W. Bennett, Thomas E. Pernsteiner, Paul F. Kocourek, and Steven B. Hedlund, “The Organization vs. the Strategy: Solving the Alignment Paradox,” s+b, Fourth Quarter 2000; Click here.
  2. Gary Neilson, David Kletter, and John Jones, “Treating the Troubled Corporation,” s+b enews, 03/28/03; Click here.
  3. Gary Neilson, Bruce A. Pasternack, and Decio Mendes, “The Four Bases of Organizational DNA,” s+b, Winter 2003; Click here.
  4. Org DNA Profiler assessment tool: Click here.
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