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Journal of Managerial Psychology

Temporal elements of organizational culture and impact on firm performance


Marina H. Onken,
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Temporal elements of Elements of
organizational
organizational culture and culture

impact on firm performance


Marina H. Onken 231
Florida Gulf Coast University, Fort Myers, Florida, USA Received June 1998
Revised October 1998
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Keywords Competitive strategy, Corporate culture, Organizational behaviour, Accepted November


Publishing industry, Telecommunications industry, Work psychology 1998
Abstract Examines two temporal elements of organizational culture, polychronicity and speed
values, and their effects on organizational performance. The study of these dimensions of culture
and their effects on firm effectiveness is especially relevant for leaders who are responsible for the
implementation of a firm's culture as one of the firm's strategic resources. The impacts of these
temporal elements are examined individually and within the context of hypercompetitive
industries.

Introduction
Polychronicity is one of the temporal elements of an organization's culture. A
polychronic culture is one in which members value organizing activities by
scheduling two or more events at one time (Bluedorn and Denhardt, 1988; Hall,
1959). Yet developing and managing the temporal dimensions of organizational
cultures as a way to enhance firm performance is a possibility that has not been
considered in the current literature, and this paper attempts to address this gap
by looking at the relationships among polychronicity, speed, and firm
performance. Thus, this study examines the relationships among two temporal
dimensions and organizational performance. The relationships are first
examined individually and then within the possible moderating context of
hypercompetitive environments.

Concepts
Polychronicity
Temporal dimensions of organizational culture have not been examined in
great detail, with most research only discussing the temporal attributes
(Bluedorn and Denhardt, 1988; Schein, 1992) rather than examining these
dimensions empirically. As a fundamental and deeply embedded cultural
dimension (i.e. part of what Schein (1992) classifies as basic underlying
assumptions) polychronicity is a dimension of human time that involves the
extent to which activities are organized by scheduling two or more events at
one time. More precisely, polychronicity is the extent to which people in a
culture:
Journal of Managerial Psychology,
The author wishes to thank the reviewers for their comments, and especially the editor of this Vol. 14 No. 3/4, 1999, pp. 231-243.
special issue for the guidance and patient remarks. # MCB University Press, 0268-3946
Journal of (1) prefer to be engaged in two or more tasks or events simultaneously; and
Managerial (2) believe their preference is the best way to do things (Bluedorn et al.,
Psychology 1999).
14,3/4 At the level of national culture, Hall (1959) described as having relatively
polychronic features: the Pueblo Indians in Arizona, Latin Americans, and
232 Middle Easterners. He also compared polychronic time to monochronic time
(scheduling one thing at a time), which he observed as more predominant
among northern Europeans. At the level of organizational culture, a
polychronic organization would value behaviors where individuals do several
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tasks at once, such as talking on the phone and eating lunch simultaneously.
Thus, more activities are scheduled during a period of the day, with short
periods of time spent on each of several projects as individuals move back-and-
forth among projects throughout the day.
Polychronic time stresses the involvement of people and the completion of
transactions rather than adherence to schedules. Individuals who exist in a
polychronic culture tend to interact with several people at once and are
continually involved with each other. The flow of information is continuous,
and polychronic people are immersed in each other's business as they stay in
touch with one another. Hall (1959) sees this as having an impact on
bureaucratic structures in the organization. Delegation of authority and more
layers of bureaucracy are not needed because the center of the organization is
constantly communicating with many people simultaneously and is handling
many projects simultaneously. The network of people within the polychronic
organization seems to take on a life of its own, becoming a close-knit system of
individuals that work together as a unit.
In some ways, Hall's description of a polychronic culture can be compared to
Burns and Stalker's (1961) description of an organic organization. Compared to
a mechanistic structure, an organic structure is more fluid, individuals are part
of an overall system through which they perform their job function in relation
to the entire organization, and communication tends to flow laterally and
vertically just as easily. Polychronic systems do tend to be more centralized;
nevertheless, polychronic cultures seem to share the organic structure's ability
to deal with unstable conditions where problems and requirements for action
arise and individuals must react through a more informal network of
relationships.

Speed
Another temporal dimension of organizational culture is the speed with which
individuals in an organization accomplish tasks and the values attached to
doing so, a matter closely associated with the general sense of urgency in a
firm. For instance, Schneider and De Meyer (1991) pointed out that strategic
issues will be seen as less urgent when there is an emphasis on the past rather
than the future. This emphasis affects how individuals will interpret strategic
issues, and how quickly they will respond to them. Following Hall's (1959)
description of how time can be perceived, if time is seen as unlimited and Elements of
expendable, then the sense of urgency will be less. organizational
Several other researchers have also examined the speed dimension of culture
organizational culture. Schriber and Gutek (1987) examined organization
members' values concerning how quickly decisions should be made. Bluedorn
and Denhardt (1988) also addressed the tie between temporal dimensions of
organizations and decision making when they reviewed the relationships 233
among the amount of time available to make a decision, the quality of the
decision, and the attributes of the problem that require a decision. Moreover,
Schriber and Gutek (1987) also developed an instrument that, in part, measured
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the pace of work in an organization, which they define as ``the rate at which
activities can be accomplished (the speed of activity or the number of activities
that can be done within a given interval)''. As a dimension of organizational
culture, speed is considered to be the belief in the number of activities that
should be done within a given interval and the value attached to doing so.

Hypercompetition
Some researchers have called for a more dynamic approach to strategy and
organizational theory. One response has been D'Aveni's (1994) work on strategic
interactions in hypercompetitive industries. D'Aveni generally defines a
hypercompetitive industry as one in which the environment is characterized by
disruptions punctuated by rare stable periods and, as a result, advantages are
temporary. It is an environment that is ``characterized by intense and rapid
competitive moves, in which competitors must move quickly to build advantages
and erode the advantages of their rivals. This speeds up the dynamic strategic
interactions among competitors'' (D'Aveni, 1994 p. 218). D'Aveni writes about
hypercompetition, not as a dichotomy per se, but as a continuum in which some
industries exhibit varying degrees of hypercompetitive behavior.
After defining a hypercompetitive environment, D'Aveni defined what
hypercompetitive behavior is within an industry: ``Hypercompetitive behavior
is the process of continuously generating new competitive advantages and
destroying, obsoleting, or neutralizing the opponent's competitive advantage,
thereby creating disequilibrium, destroying perfect competition, and
disrupting the status quo of the marketplace'' (D'Aveni, 1994, p. 154). When
firms exhibit more and more of these behaviors, then it becomes clearer that
that industry is hypercompetitive. The collective behavior of firms makes the
industry hypercompetitive, or non-hypercompetitive if the firms in that
industry exhibit very few hypercompetitive behaviors.
D'Aveni also defines perfect competition as being distinctly different from
hypercompetition: ``Perfect competition is a situation in which no competitor
has an advantage in any of the four arenas'' (D'Aveni, 1995, p. 154). The four
arenas are frameworks to understanding market processes. These arenas:
(1) cost and quality;
(2) timing and know-how;
Journal of (3) stronghold creation/invasion; and
Managerial (4) deep pockets
Psychology can be used as an analytical tool to describe competitive maneuvering as
14,3/4 sources of advantage are created and destroyed over time.
Temporal elements seem especially appropriate for inclusion in D'Aveni's
234 work, especially when he talks about being able to move more rapidly than
other competitors in the industry. Therefore, the elements of polychronicity and
speed provide an important extension of some of his thoughts on timing and
quick responses.
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Hypothesis development
The polychronicity and speed dimensions seem to be related. One of the
attributes of a polychronic culture is the ability to be decisive and to consider
several alternatives at once (Hall, 1959). Eisenhardt (1989) found in a study of
top management teams that the consideration of multiple alternatives
simultaneously led to faster decisions in a high-velocity environment. This
suggests the dimensions of speed and polychronicity in an organizational
culture may naturally co-exist and complement one another. Hence:
H1: The polychronicity and speed dimensions of organizational culture will
be positively correlated.
Eisenhardt's (1989) work seems to support D'Aveni's assertion about the
linkages between strategic action and the environment within which the firm
exists. In high-velocity environments, Eisenhardt found that managers made
better decisions when they considered multiple alternatives simultaneously.
This also led to faster decision making. D'Aveni asserts that when firms are in
hypercompetitive environments (in which high velocity is only one of the
characteristics), members of the firm need to focus on implementing several
strategic thrusts simultaneously and should do it quickly in order to compete
successfully. Thus, in the strategic decision-making process, polychronic
behavior and speed of decision making seem to be characteristics that enhance
firm success in hypercompetitive environments. Because all private sector
environments appear to be at least moderately hypercompetitive, polychronicity
and speed should be positively correlated with firm performance. Thus, H2
and H3:
H2: The more polychronic an organization's culture, the better its performance.
H3: The more an organization's culture values speed, the better its performance.
Eisenhardt's (1989) findings about speed and performance appear limited to
environments with very high levels of hypercompetitiveness (Judge and Miller,
1991). This suggests that the relationships between organizations'
polychronicity values and their performance, and between organizations' speed
values and their performance, should be stronger in environments
characterized by high levels of hypercompetitiveness than in environments
characterized by low levels of hypercompetitiveness. Consequently, H4 Elements of
and H5: organizational
H4: The positive relationship between an organization's polychronicity culture
values and its performance will be stronger in environments displaying
high levels of hypercompetitiveness than in environments displaying
lower levels of hypercompetitiveness.
235
H5: The positive relationship between an organization's speed values and its
performance will be stronger in environments displaying high levels of
hypercompetitiveness than in environments displaying lower levels of
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hypercompetitiveness.

Method
A questionnaire was distributed to firms in two industries:
(1) the telecommunications industry; and
(2) the publishing industry.
The telecommunications industry is a hypercompetitive industry, and the
publishing industry is a non-hypercompetitive industry. The questionnaire
measured organizational polychronicity and speed values. Firm performance
data were collected from Compustat and SEC sources.

Data collection
Several approaches can be taken to measuring aspects of organizational
culture, depending on the perspective taken. Anthropologists and sociologists
often take a qualitative approach, immersing themselves in the culture by
participating and providing an ethnographic description of the organization.
However, once specific dimensions of organizational culture have been
identified, it is useful to quantify the impact of that culture on the
organization's effectiveness. Organizational and management theorists tend to
quantify dimensions of organizational culture by employing questionnaires
and content analysis of stories collected through open-ended interviews of
organizational members (Ouchi and Wilkins, 1985). This approach is valid
especially when culture dimensions have been specifically identified.
Moving beyond qualitative work by quantifying organizational culture is
also helpful because the measures can be linked to organizationally relevant
outcomes (Petty et al., 1995). Qualitative and descriptive work tend to examine
an organization's culture by defining it as a social construction of reality that is
unique to the organization (Petty et al., 1995). By defining an organizational
culture through quantitative methods, not only can the organizational culture
be measured as weak or strong (Deal and Kennedy, 1983), but it can also be
linked to organizational effectiveness.
In this study the data about the cultures' polychronicity and speed values
were collected with questionnaires. Several researchers have used
questionnaires to assess organizational cultures (Ouchi and Johnson, 1978;
Journal of O'Reilly, 1982), and questionnaire scales to measure temporal dimensions of
Managerial culture have also been developed and validated (Bluedorn et al., 1995; Schriber
Psychology and Gutek, 1987). The questionnaire scale developed by Bluedorn et al. (1995)
was used in its entirety for this study, and some dimensions were used from a
14,3/4 questionnaire developed by Schriber and Gutek (1987). Both of these
questionnaires have been validated and refined.
236 Once the industries were chosen, a list of firms within each industry was
downloaded from Compustat. A total of 247 firms were contacted by letter to
obtain their permission to be studied. Of these firms, 153 were from the
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telecommunications industry, and 94 firms were from the publishing industry.


By using firms from two different industries that were identified as being
hypercompetitive and non-hypercompetitive, these individual firms would
provide sufficient variance in hypercompetitive characteristics and contribute
to a robust sample. D'Aveni (1994) identifies several industries as being
hypercompetitive. These industries, as well as several the author identified as
possibly being non-hypercompetitive, were researched and summaries of each
industry were written. These summaries, as well as the supporting
documentation, were given to three outside panelists, who were asked to rate
each industry on a variety of industry characteristics. These characteristics
were identified by D'Aveni (1994) as those that define a hypercompetitive
industry. Two industries (telecommunications and publishing) that fell on
either extreme were selected for the study. The firms in these two industries
were written to twice, with follow-up phone calls to the contact persons within
each firm. The contact persons were the president of the firm, the head of
human resources, or the head of the public affairs division. Despite a follow-up
letter and phone calls to the contact person, the response rate was still low. Ten
firms from each industry participated in the study, a total of 20 firms.
The contact persons in the participating firms then distributed the
questionnaires to employees within their firms. The contact persons were
asked to collect the questionnaires and send them back to the author. A total of
90 surveys were completed and returned.

Measures
Hofstede (1980) measured culture through a questionnaire that used Likert-type
profiles and scaling. Similarly, other researchers have examined the temporal
dimensions of organizational culture by using questionnaires that were
distributed to all members of the organization (Bluedorn, et al., 1995; Schriber
and Gutek, 1987) and measured the temporal dimensions of organizational
culture by aggregating organization members' responses to the questionnaire
items.
Polychronicity. Polychronicity was measured with the Inventory of
Polychronic Values (Bluedorn et al., 1999). The Inventory of Polychronic Values
is a ten-item Likert-type scale which respondents answer on a seven-point
response scale. The item responses were summed and divided by ten.
Speed. Seven items from Schriber and Gutek's (1987) scales were used to Elements of
measure the value placed on doing things quickly in an organization, on how organizational
much the organization's culture valued speed. Two items (the doing-things- culture
right-is-better and better-to-make-a-bad-decision-quickly items) from their
future-orientation-and-quality versus speed scale were added to their work-
pace scale to create a seven-item scale that measured the organization's speed
values. Respondents answered the items on a seven-point response scale, and 237
the item responses were summed and divided by seven.
Organizational performance. Return on assets (ROA), return on equity
(ROE), and return on sales (ROS) were used as indicators of organizational
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performance. These variables are consistently used in strategy research, with


ROA being one of the most widely employed measures of performance because
it has been shown to relate to a variety of other indicators of firms' financial
performance (Robins and Wiersema, 1995). ROA helps to preserve consistency
with other research that has been carried out in strategic management. To
calculate ROA, ROE, and ROS, net income was divided by total assets, total
common equity, and total net sales, respectively. All performance data were
downloaded from Compustat.
Hypercompetitiveness. As indicated previously, industry (telecommuni-
cations or publishing) was used to indicate how hypercompetitive an
organization's environment was. Organizations in the telecommunications
industry were classified as being in hypercompetitive environments, and
organizations in the publishing industry were classified as being in non-
hypercompetitive environments.

Results
As mentioned previously, a total of 90 respondents from 20 firms returned
questionnaires. Because the polychronicity and speed values dimensions were
to be measured by aggregating individual responses from each firm, a within-
and between-analysis (WABA) correlation procedure was performed to
simultaneously examine individual- and group-level effects in order to justify
the aggregation procedure (George, 1990; George and James, 1993). An
organizational level of analysis is not meant to replace individual-level
findings. Rather, the WABA procedure can potentially justify aggregation by
demonstrating agreement within a group rather than differences across groups,
which is a test of homogeneity within groups.
The WABA correlation procedure involves the calculation of two types of
correlation coefficients, a within-group correlation and a between-group
correlation. The between-group correlations are calculated by using group
mean scores that are distributed back to individuals in each of the groups; these
coefficients basically represent relationships across groups.
For the within-group correlations, each individual's score on the variables is
subtracted from his/her group's score on the variables; these adjusted scores
are then used to compute the correlations. Within-group correlations control for
group differences in this manner and emphasize individual-level relationships.
Journal of Results of the WABA procedure are presented in Table I. As one can see, the
Managerial between-group correlations are all larger than the within-group correlations.
Psychology These results indicate that the relationships are at the group-level, results that
support the belief that group-level effects are taking place, hence that
14,3/4
aggregation of the individual responses from each firm is justified.
Having justified the aggregation procedure for measuring polychronicity
238 and speed values as dimensions of organizational culture, the analysis could
proceed. The means, standard deviations, and correlations among the variables
in the study are shown in Table II. As shown in the Table, firms reported
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relatively high means for polychronicity values (coefficient alpha = 0.82) and
speed values (coefficient alpha = 0.70). Means of the performance variables ±
return on assets, return on equity, and return on sales ± were negative. Table II
also provides data that test H1, H2 and H3.
H1 predicted that polychronicity and speed values would be positively
correlated, and their correlation was a positive correlation, r = 0.44, that was
significant at the 0.05 level. H2 predicted a positive correlation between
polychronicity values and organizational performance. The correlations
between polychronicity values and the three performance indicators were all in
the predicted direction, and two of them ± with ROA, r = 0.17, and with ROS,
r = 0.20 ± were significant at the 0.10 level. Thus H2 was generally supported.
H3 predicted a positive correlation between speed values and organizational
performance, and although the correlations with the three performance
indicators were all in the predicted direction, only one of these three
correlations ± with ROS, r = 0.18 ± was significant at the 0.10 level. Thus, H3
was supported, but not as strongly as H2.

Weighted mean 1 2

1. Polychronicity 0.5106 ± 0.7911**


2. Speed 0.3198 0.0237 ±
Table I.
Within- and between- Note: ** 5 0.05; Between-group correlations are above the diagonal and within-group
analysis correlations correlations are below the diagonal

Means, standard deviations, and intercorrelations among all variables


Variable Mean SD 1 2 3 4 5 6

1. ROA ±0.1272 0.4356 ± ± ± ± ± ±


2. ROE ±0.3051 2.0118 0.925** ± ± ± ± ±
3. ROS ±0.3817 1.4530 0.984** 0.953** ± ± ± ±
4. Polychronicity 5.2959 1.0035 0.167* 0.134 0.196* ± ± ±
Table II. 5. Speed 4.6270 0.5721 0.129 0.120 0.183* 0.437** ± ±
Means, standard 6. Hypercompetition 0.5667 0.4983 0.192* 0.349** 0.205* 0.037 ±0.072 ±
deviations, and
intercorrelations Notes: *p 5 0.10; **
p 5 0.05
H4 and H5 both predicted that the relationships specified in H2 and H3 would Elements of
be moderated by the hypercompetitiveness of the organizations' industries. organizational
Specifically, both positive relationships were predicted to be stronger in culture
hypercompetitive than in non-hypercompetitive environments. To test these
relationships, the regression lines for the speed values-performance and
polychronicity values-performance relationships in the two difference
environments were examined. As is illustrated in Figures 1 and 2, the slopes 239
did differ, substantially in the case of Figure 1, but in both cases, the steeper
slope was for the relationship in the non-hypercompetitive industry, which is
the opposite of the moderating effect predicted by both hypotheses.
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Moderator regression tests were conducted for all of the performance


variables. Although none of the performance variables revealed significant
interaction terms, the relationships in Figures 1 and 2 were chosen for
presentation because they revealed the greater graphic differences, and thus
could best illustrate the direction of the interactions for the polychronicity-
performance relationships and for the speed-performance relationships. The
pictorial representations show very clearly the direction of the interactions, and
create an incentive to do more research in this area. It is interesting to examine
the pictorial representations, especially in light of the small sample size and the

Figure 1.
Speed and
hypercompetition
interaction
Journal of
Managerial
Psychology
14,3/4

240
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Figure 2.
Polychronicity and
hypercompetition
interaction

results obtained. A larger sample size would likely have revealed statistically
significant interactions, albeit interactions in the opposite direction from those
predicted in this article.

Discussion
Several of the results are noteworthy and worthy of further consideration, even
some that were not anticipated.
Consistent with our expectations, industry hypercompetitiveness seemed to
moderate the positive relationships presented in H2 and H3, relationships that
were supported, but as Figures 1 and 2 illustrate, the moderating effects
obtained were in the opposite direction of those predicted in H4 and H5. One
could speculate that a polychronic culture does indeed lead to higher firm
performance, but especially so in non-hypercompetitive industries. These
relationships also suggest that variance in speed values has more of an impact
on performance in non-hypercompetitive industries than in hypercompetitive
industries. Perhaps speed is one of the key success factors in hypercompetitive
industries, meaning that speed needs to exist just for the firm to survive in that
industry. However, in non-hypercompetitive industries, firms could use speed
as a way to attain a competitive advantage.
Also unanticipated was the character of the performance data: all the means Elements of
for the performance variables were negative. Although it is difficult to surmise organizational
why the sample groups' performance was negative, the author speculates that, culture
for the hypercompetitive industry especially, the industry was changing
rapidly at that time because of deregulation and mergers, and performance for
that year was negative. Some of the smaller, less dominant firms in the
telecommunications industry, especially, had a more difficult time competing in 241
that industry successfully. Negative performance is actually one of the
characteristics of competing within a hypercompetitive industry (D'Aveni,
1994).
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D'Aveni (1994) also discussed the importance of firms undertaking multiple


strategies and implementing them quickly. Although the sample in this study
is quite limited and the results need to be interpreted cautiously, the results do
seem to support D'Aveni's thesis. One of the factors that supports a firm's
success is that of organizational culture. Shaping the firm's culture in a way
that enhances a firm's likelihood of success is one strategy that is difficult for
competitors to imitate, and therefore, one of the most powerful strategies to
implement. Consistent with this idea, the results obtained in this study
supported the hypothesized relationships between polychronicity values and
performance, and between speed values and performance.
Additional research is needed to better understand the relationships among
polychronicity, the firm's strategies, and firm performance. Organizational
structure and culture can be measured as some of the resources that a firm
possesses and can manipulate in a strategic intent to achieve competitive
advantage.
The use of organizational culture as a way to enhance firm performance is
not a new idea, but it is a controversial one. Some researchers would disagree
with the idea that an organizational culture can, or should, be shaped. However,
the resource-based view of the firm (Barney, 1996; Conner and Prahalad, 1996)
suggests that it is the resources that a firm manages that can lead to a
competitive advantage, especially the intangible and non-imitable resources.
An organization's culture, if it enhances a firm's performance, can be a
powerful resource to manage and could even lead to a competitive advantage if
it enhances the firm's performance.
If D'Aveni (1994) is correct in saying that most industries will become
hypercompetitive, then it becomes a question of how to survive and compete in
these industries. D'Aveni presents an argument that it is impossible for a firm
to sustain a competitive advantage in a hypercompetitive industry. However, if
firms can use resources that are difficult to imitate as a way to enhance firm
performance, doing so strengthens the firm's position to be able to compete in a
hypercompetitive industry. However, as a source of potential competitive
advantage, cultural variables such as speed and polychronicity values have
been largely ignored by scholars and managers alike.
Thus, the linkages between polychronicity, speed, and hypercompetition
need to be more clearly defined and studied. The small sample size in this study
Journal of limits the generalizability of its findings, but the results are certainly
Managerial interesting enough to provide the basis and motivation for more study of these
Psychology questions. Because the previous polychronicity literature did not make the
linkage to firm performance, the finding that polychronicity is related to firm
14,3/4
performance is one of the main contributions of this study. However, it would
be premature to say that leaders need to incorporate elements of speed and
242 polychronicity into a firm's culture as a way to enhance firm performance.
Nevertheless, the results obtained in this study, that an organizational culture
that supports both speed of decision making and undertaking several tasks at
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once has a positive impact on firm performance, especially in hypercompetitive


environments, seem to support Eisenhardt's (1989) findings. This study
extends Eisenhardt's work by providing a linkage between behavior at the
organizational level and firm performance.
In today's marketplace, in which the environment is changing quickly and it
is imperative that an organization is able to keep up, possessing the capability
to react quickly and to juggle many activities at once is critical. D'Aveni (1994)
asserts that most industries are moving to a hypercompetitive state, a state in
which industries are undergoing radical change, firms are more competitive,
and it is more difficult to make a profit. Appropriate strategic responses would
appear to include developing the internal capability of speed and the cultural
values that support it, and of being able to implement several simultaneous
strategic thrusts and developing the values that support doing so.

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Vol. 14, pp. 299-319.
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dimension of organizational culture'', Paper presented at the Academy of Management,
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