JOHANNES KEPLER UNIVERSITY LINZ Altenberger Straße 69 4040 Linz, Austria jku.at Author Julian Koll, BSc. Submission Institute of Strategic Management Thesis Supervisor Mag. a Dr. in Sabine Reisinger October 2021 HUMANIZING ORGANIZATIONS THE CASE OF BELLAFLORA GMBH Master’s Thesis to confer the academic degree of Master of Science in the Master’s Program Management
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JOHANNES KEPLER UNIVERSITY LINZ Altenberger Straße 69 4040 Linz, Austria jku.at
Author Julian Koll, BSc. Submission Institute of Strategic Management Thesis Supervisor Mag.a Dr.in Sabine Reisinger October 2021
HUMANIZING ORGANIZATIONS THE CASE OF BELLAFLORA GMBH
Master’s Thesis to confer the academic degree of
Master of Science in the Master’s Program
Management
II
STATUTORY DECLARATION
I hereby declare under oath that the submitted Master’s Thesis has been written solely by me
without any third-party assistance, information other than provided sources or aids have not been
used and those used have been fully documented. Sources for literal, paraphrased and cited
quotes have been accurately credited.
The submitted document here present is identical to the electronically submitted text document.
Leonding, October 2021
III
EXECUTIVE SUMMARY
The present master thesis is concerned with the topic of how organizations can respond to the
growing pressure for more flexible forms of organization. To this end, as an alternative to the
bureaucratic-hierarchical form of organizing practiced in most companies, which is often
considered inappropriate and inefficient under today's conditions according to Morris et al. (2006,
p. 1486), a new form of organization is presented that puts people at the center. The
characteristics of this form of organization, the so-called Humanocracy (Hamel & Zanini, 2020),
which are summarized in seven principles, are described in the context of this work. After a rough
overview of all of these seven principles, the focus is limited to three of them in the remainder of
this thesis. A literature review will provide a detailed overview of the current state of the literature
on these topics. In addition, a practical relevance of the findings from the investigation of the
literature is established. To this end, this paper identifies how the individual principles discussed
can help the Austrian company bellaflora GmbH achieve its strategic goals and to master its
current and future challenges. This happens in the form of a case example.
In recent years a range of pressures increased the necessity for reconsidering existing
organizational forms. A fact that is emphasized by several scholars (Hiltrop, 2005; Holbeche,
2019; Johnson et al., 2009; Lee & Edmondson, 2017; Morris et al., 2006; Schreyögg & Sydow,
2010). Above all, the changed environmental conditions such as the explosive growth of new
technologies as Holbeche (2019, p. 668) explains, or the rising globalization, hypercompetition,
and the shortening of product life cycles and declining competitiveness which are emphasized by
Schreyögg & Sydow (2010, p. 1251) led to a shift to leaner and flatter organizational forms (Morris
et al., 2006, p. 1486). In addition Lee & Edmondson (2017, p. 37) point out that rethinking
traditional structures and processes is becoming increasingly necessary due to demographic
change in many organizations. The departure of the so-called Baby Boomers from the world of
work and the increased entrance of Millennials is not only changing the age structure of the
workforce, but also their attitudes and expectations towards work according to De Hauw & De Vos
(2010), Ng et al. (2010), and Smith & Nichols (2015).
This growing pressure on organizations has been recognized by the authors Gary Hamel &
Michele Zanini (2020), who have been studying management innovation for years. In the book of
the same name, they describe a revolutionary, flexible, human-centered organizational form,
called “Humanocracy”. Hamel & Zanini (2020) summarize the characteristics of this form of
organization in seven principles: Ownership, Markets, Meritocracy, Community, Openness,
Experimentation, and Paradox. In this thesis these seven principles are briefly described. In order
to gain more depth in the findings, the focus in the further course of the work is limited to the three
IV
principles ownership, community, and openness which, in consultation with the CEO of bellaflora,
were classified as the three principles most relevant for the company at the moment.
According to the principle of ownership an important step towards a more human-centered form
of organizing is that employees perceive themselves as owners of the organization, Hamel &
Zanini explain (2020, p. 114). This topic of ownership has experienced growing interest from
researchers and practitioners in recent decades and is already a widespread concept in
companies, especially in the U.S., but an increase is also evident in Europe. According to Kruse
et al. (2010, p. 205), to achieve such a sense of ownership, it is particularly important to give
employees a share in the profits of the organization. However, to increase the feeling of ownership
and subsequently also the positive effect employee ownership can have on company performance
and employee attitudes, this stake in the profits should be combined with participative
management practices, as Kaarsemaker & Poutsma, (2006, p. 680), K. J. Klein (1987, p. 329),
Pendleton et al. (1998, p. 99), and Rousseau & Shperling (2003, p. 565) point out. Accordingly,
employees should also have the opportunity to participate in decision-making and have access to
business information according to Chi & Han (2008, pp. 694–696), Kaarsemaker & Poutsma
(2006, p. 679), and Rousseau & Shperling (2003, pp. 557–559). Furthermore, Kaarsemaker &
Poutsma (2006, pp. 671–672) emphasize that companies that have employee ownership as a
central element should pay attention to an internal fit, i.e. to the coherence and consistency of
their HRM practices. According to Harrison et al. (2018, p. 7), Kaarsemaker & Poutsma, (2006, p.
680), and I. L. Pierce et al. (1991, pp. 139–140), management commitment is also crucial to the
effectiveness of employee ownership. This thesis also shows how the implementation of an
employee ownership concept could help bellaflora to achieve its strategic goals and overcome its
challenges. Thus, several positive effects are described which could be achieved by implementing
the concept of employee ownership in the company. These include among others aligning the
interests of employees and owners and increasing organizational commitment and employee
productivity. Furthermore, the concept of employee ownership could also be helpful with regard to
the described difficulties of the company in retaining employees. Possible negative effects or
challenges for bellaflora of an implementation of employee ownership are the danger of free-riding,
the reduction of speed and quality of the decision-making process and the partly high
administrative costs of a profit-sharing program.
The second principle which is in focus of this work is community. In a humanocracy, according to
Hamel & Zanini (2020), it is important for employees to perceive themselves as part of a
community. A community is more than a workgroup, which is a collection of individuals reporting
to the same supervisor, but it is a network of trust, made up of people who share a common
passion and live the values of unity, selflessness, determination, and accountability Hamel &
Zanini (2020, pp. 161–162) explain. One company that has successfully embedded such a sense
V
of community in its organization, according to Hamel & Zanini (2020, p. 174), is Southwest Airlines.
The company has been outperforming in its industry for decades (Hamel & Zanini, 2020, pp. 163–
165). Hamel & Zanini (2020, p. 174) see this performance as rooted in the company's unique
organizational culture. To answer the third research question, how to create a sense of community
in an organization, point 4 of this thesis tries to find out how leaders can create a similar successful
organizational culture. For this purpose, a definition of the term is given at the beginning, followed
by the possible positive effects that the culture of an organization can have on corporate
performance and other factors. Furthermore, points are described to which leaders should pay
special attention when it comes to establishing a strong culture in the company and consequently
also a sense of community. Accordingly, it is important to develop an understanding of the present
culture in the company, to define a mission, vision and values, to align strategy and culture, to hire
and train for culture fit, that the management orients their behavior to the communicated values,
to recognize and reward desired behaviors and practices that support the desired culture, and to
use symbols and ceremonies to reinforce cultural ideals (Chatman & Cha, 2003; C. O’Reilly, 2008;
Rosenthal & Masarech, 2003; Warrick, 2017; Warrick & Gardner, 2021). This thesis also illustrates
how bellaflora could benefit from such a strong culture. Thus, a successful establishment of such
a culture could help bellaflora especially in terms of expanding their market leadership and in
differentiating themselves from its competition. Furthermore, positive effects in terms of customer
service and employee performance could result from the emergence of social control. However, it
should be noted that establishing such a strong culture and thus achieving these positive effects
is challenging and is an interplay of many different factors, Warrick & Gardner (2021, p. 50) point
out.
In addition to the two principles of ownership and community, the principle of openness is also
examined more closely in this thesis. In it, Hamel & Zanini (2020, p. 177ff) address the topic of the
strategy making process and explain how, according to them, it should be designed in a human
organization. Accordingly, in a humanocracy, the strategy process should be a company-wide
conversation that is open to employees, as well as customers and other external partners (Hamel
& Zanini, 2020, p. 190). This approach of involving internal and external stakeholders in the
strategy making process is referred to as “Open Strategy” in the literature (Appleyard &
Chesbrough, 2017; Chesbrough & Appleyard, 2007; Hautz et al., 2017; Luedicke et al., 2017;
Mack & Szulanski, 2017; Whittington et al., 2011). The examination of the current state of the
literature on the topic has shown that this opening up of the strategy process and the associated
involvement of a wider audience represents a promising approach for companies. The urge for
greater openness and thus increased transparency and inclusion is driven by a variety of forces,
as Whittington et al. (2011, p. 536ff) point out. Thus, the concept of open strategy is gaining
increasing relevance through various organizational, social, cultural and technological
developments, according to Whittington et al. (2011, p. 536ff). Furthermore, the opening of the
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strategy process is associated with several positive effects, as Hautz et al. (2017, p. 301ff)
emphasize. However, also risks and costs are associated with increased openness, as Hautz et
al. (2017, p. 301ff) explain. Hautz et al. (2017, p. 301ff) summarize these conflicting outcomes,
i.e. the positive effects and the risks and costs associated with the concept of open strategy, in
five dilemmas, which are discussed in chapter 6.4. At the end of chapter 6, the high dynamics
associated with open strategy are described. This is especially driven by these different dilemmas
and makes an ongoing adjustment of the two key dimensions of an open strategy, namely
transparency and inclusion necessary, according to Hautz et al. (2017, p. 303ff). In this context,
the results are also illustrated using the case example of bellaflora. One of several identified
positive effects for the company in opening up the strategy process could be for bellaflora the
overcoming of industrial thinking and the generation of a multitude of revolutionary ideas.
However, in addition to the range of benefits, this thesis also points out the challenges bellaflora
could face in increasing transparency and inclusion. These include the jeopardization of
competitiveness, as competitors could more easily obtain strategically sensitive information if the
strategy process were to be opened up.
All in all, the findings of this thesis show that in order to become more human as an organization,
a rethink is needed in many areas. Such a rethinking is made necessary by various developments
that require a more decentralized and flexible form of organizing.
VII
TABLE OF CONTENTS 1. Introduction .......................................................................................................................................... 1
1.1. Problem statement ......................................................................................................................... 1
1.2. Objectives of the thesis .................................................................................................................. 3
5. Community .......................................................................................................................................... 47
5.2. Why bother with organizational culture? ...................................................................................... 53
5.3. Characteristics of strong cultures ................................................................................................. 55
5.4. Building a strong culture ............................................................................................................... 56 5.4.1. Develop an understanding of the present culture ................................................................ 56 5.4.2. Define vision, mission and values ........................................................................................ 57 5.4.3. Alignment of strategy, day-to-day practices and culture ...................................................... 58 5.4.4. Hire and train for culture fit ................................................................................................... 59 5.4.5. Walk the talk ......................................................................................................................... 60 5.4.6. Recognize and reward desired behaviors and practices ..................................................... 60 5.4.7. Symbols and ceremonies ..................................................................................................... 61
Figure 1: Central dilemmas of open strategy (Hautz et al., 2017, p. 302) ................................... 74 Figure 2: Dynamics of open strategy: Movements along and between the dimensions (Hautz et
al., 2017, p. 304) ............................................................................................................................ 77
LIST OF TABLES
Table 1: Characteristics Humanocracy (Hamel & Zanini, 2020, p. 233) ...................................... 13 Table 2: Literature sources concerning the concept of ownership ............................................... 32 Table 3: Literature sources concerning organizational culture ..................................................... 51 Table 4: Literature sources concerning open strategy ................................................................. 68 Table 5: Possible effects of employee ownership......................................................................... 84 Table 6: Summary of findings in regard to building strong culture ............................................... 86 Table 7: Effects of Open Strategy ................................................................................................. 87
LIST OF ABBREVIATIO
CEO .............................................................................................................. Chief Executive Officer
ESOP ............................................................................................ Employee Stock Ownership Plan
HRM ................................................................................................. Human Resource Management
n.R. .................................................................................................................................. no Ranking
P&L .......................................................................................................... Profit and Loss Statement
ROE ........................................................................................................................ Return on Equity
WoC ................................................................................................................ Wisdom of the Crowd
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1. Introduction
At the beginning of this chapter, the relevance of the topic is highlighted in the form of a problem
statement. Subsequently, the research questions which this work tries to answer are stated and
the objectives of the work are explained. In section 1.3, the methodology used in this thesis is
described. Finally, an overview of the structure of this thesis is given in this chapter.
1.1. Problem statement
According to scholars (Hiltrop, 2005; Holbeche, 2019; Johnson et al., 2009; Lee & Edmondson,
2017; Morris et al., 2006; Schreyögg & Sydow, 2010; Starkey et al., 2000) a range of pressures
increased the necessity for reconsidering existing organizational forms in recent years. First and
foremost, the changing environmental conditions such as the explosive growth of new
technologies as Holbeche (2019, p. 668) explains, and the rising globalization, hypercompetition,
the shortening of product life cycles and declining competitiveness emphasized by Schreyögg &
Sydow (2010, p. 1251) led to a shift to leaner and flatter organizational forms (Morris et al., 2006,
p. 1486). Under such uncertain conditions, the bureaucratic-hierarchical form of organization is
seen as inappropriate and inefficient according to Morris et al. (2006, p. 1486). As Lee &
Edmondson (2017, p. 36) point out, managerial hierarchy functions are “more effectively in stable
conditions but faces serious challenges in dynamic conditions”. Furthermore, they support the
effectiveness of the execution of routine tasks but hinder the handling of complex unknown
problems, especially when cross-functional cooperation is necessary for solving Adler (2001, p.
216) explains.
In addition to the above-mentioned environmental conditions, there are also internal developments
in the organizations which require a rethinking of traditional structures and processes. Thus
according to scholars (De Hauw & De Vos, 2010; Lee & Edmondson, 2017; Ng et al., 2010; Smith
& Nichols, 2015), employers are facing a change in their workforce due to the retirement of the
so-called Baby Boomers and the increased entrance of people born between 1980 and 2000 into
the workforce, referred to as Millennials. These Millennials, also called “Echo Boomers”,
“Generation Y” or “Generation Next” in the literature (De Hauw & De Vos, 2010, p. 293), are
characterized by very different attitudes and expectations toward work compared to previous
generations according to De Hauw & De Vos (2010), Ng et al., 2010 and Smith & Nichols (2015).
In their study Ng et al. (2010, p. 289) that one of these differences is that for Millennials a good
work-life balance is of great importance. Furthermore, this generation enjoys the social aspect of
work as Ng et al. (2010, p. 283) describe: “Millennials also like collaborating closely with, and
2
learning from, colleagues and managers they respect, and hope to form friendships with their
coworkers”. Another characteristic that distinguishes this new part of the workforce is the desire
and aspiration for meaningful and fulfilling work as De Hauw & De Vos, (2010, p. 294) and Ng et
al. (2010, p. 283) explain. According to the literature (De Hauw & De Vos, 2010, p. 294; Ng et al.,
2010, p. 283), it is more important for Millennials to have meaningful work where they can grow
than financial rewards. Moreover De Hauw & De Vos (2010, p. 294) and Lee & Edmondson (2017,
p. 37) state that this generation generally values a certain degree of autonomy in the execution of
their work.
Another pressure that leads to the rising popularity and importance of less hierarchical forms of
organizing is the growth of knowledge-based work according to Lee & Edmondson (2017, p. 37).
Thus knowledge is playing an increasingly central role in more and more companies operating in
the so-called knowledge economy (Lee & Edmondson, 2017, p. 37). This growing knowledge-
intensity is driven on the one hand by the rising educational level of the workforce and on the other
hand by the growing scientific and technological knowledge, Adler (2001, p. 216) explains. One of
the consequences of this development is according to Lee & Edmondson (2017, p. 37) that
managers often do not have the knowledge and expertise to solve organizational problems in the
best possible way. Because of this, Lee & Edmondson (2017, p. 37) emphasize the necessity for
such companies to involve employees at all hierarchical levels in the generation of solutions and
ideas in order to be successful.
This growing pressure to move away from traditional managerial hierarchies especially due to the
mentioned developments led to increasing interest of scholars and practitioners in the topic of new
less hierarchical organizational forms in the last decade (Lee & Edmondson, 2017; Martela, 2019;
Morris et al., 2006; Pfeffer, 2013). In this context, there are some organizations that have attracted
high managerial and scholarly attention due to their revolutionary way of organizing. Examples
include Zappos, Morning Star, Valve, W.L. Gore and Hayer (Lee & Edmondson, 2017; Martela,
2019).
Although some companies have already succeeded in transforming themselves, Gary Hamel &
Michele Zanini (2020) are convinced that the majority of companies are still trapped in outdated
bureaucratic structures and thought patterns: “Like all technologies, bureaucracy is a product of
its time. Since its invention in the nineteenth century, much has changed. Today’s employees are
skilled, not illiterate; competitive advantage is the product of innovation, not just scale;
communication is instantaneous rather than tortuous; and the pace of change is hypersonic, not
glacial. Yet the foundations of management have remained cemented in bureaucracy. This must
change.” (Hamel & Zanini, 2020, p. 19). The authors who have been working on management
innovations for years, emphasized the problem that companies are too inhuman. In their work
3
"Humanocracy" (2020) they describe that companies should become as resilient, creative, and
passionate as the people inside them (Hamel & Zanini, 2020).
Due to these developments and the resulting growing need for more flexible and "human" forms
of organization, this paper will examine which specific elements characterize such an organization
and how organizations can manage to implement individual elements of such an organizational
form.
1.2. Objectives of the thesis
The main objective of this thesis is to answer the following research questions:
- What constitutes a human-centered organization?
o How can organizations achieve a sense of ownership in the workforce?
o How can organizations create a sense of community within their company?
o What are the benefits and problems associated with opening up the strategy
process?
The need for more flexible and less hierarchical organizational forms is increasing due to various
factors, such as the uncertain environment with which most organizations are confronted or the
demographic change that is taking place in many companies. These developments make it all the
more interesting and relevant to find answers to the stated research questions of how
organizations can make their processes and structures more human.
For this, it is first necessary to find out and define what are characteristics of such a "human" and
"flexible" organization. For this purpose, the organizational form of a so-called humanocracy,
which was brought to life by Gary Hamel and Michele Zanini (2020) in their book of the same
name, will be examined in detail. This form of organizing is characterized by seven principles,
namely Ownership, Markets, Meritocracy, Community, Openness, Experimentation, and Paradox,
which will be described in the course of this work and will be related to the current state of the
literature on the individual topics. In the further course of this thesis, the focus is particularly on
four of these principles. In consultation with the CEO of the company under investigation,
4
ownership, community, and openness were determined to be the most relevant principles for
bellaflora GmbH at present.
The goal of the principle of ownership is according to Hamel & Zanini (2020, p. 114) that
employees perceive themselves as owners of the organization in which they work. Creating such
a sense of ownership in the workforce is associated with a number of positive effects, such as
increased productivity (Pendleton & Robinson, 2010) and job satisfaction (Bryson et al., 2016) or
the alignment of the interests of the employer and employee (Rousseau & Shperling, 2003). The
aim of this paper is to shed light on this particular aspect of humanocracy and to explore how such
a sense of ownership can be achieved in the workforce of an organization.
In addition to ownership, another principle of a humanocracy is examined in more detail, which is
community. According to Hamel & Zanini (2020), employees in a human-centered organization
should perceive themselves as part of a community. According to them, a community is more than
a workgroup, i.e. a collection of individuals reporting to the same supervisor, but it is a network of
trust, made up of people who share a common passion and live the values of unity, selflessness,
determination, and accountability (Hamel & Zanini, 2020, pp. 161–162). The outcomes of
successfully establishing a culture where employees see themselves as part of a community are
dedication, devotion, and loyalty towards the employer but especially towards the customers
Hamel & Zanini (2020, pp. 164–165) emphasize. But how can an organization achieve this?
Answers to this very question are to be found within the course of this thesis.
The third principle which is examined more closely in the context of this work is openness. In this,
Hamel & Zanini (2020, p. 189) criticize the way strategy is currently made in most organizations
and describe the process as “(…) a top-down, budget focused ritual that harnesses only a tiny
fraction of the organization’s collective imagination”. In a human-centered organization, however,
this strategy making process should be a company-wide conversation involving employees,
customers and other external partners, Hamel & Zanini (2020, p. 190) emphasize. This relatively
new approach of involving internal and external stakeholders in the strategy making process is
referred to as “Open Strategy” in the literature (Chesbrough & Appleyard, 2007; Hautz et al., 2017;
Pittz et al., 2019; Pittz & Adler, 2016; Whittington et al., 2011). What exactly is meant by opening
up the strategy process and what advantages and disadvantages are associated with it will be
answered in the course of this thesis.
5
1.3. Methodology
In order to find answers to the stated research questions, a comprehensive literature review on
the topic was conducted. In management research, this method can be understood as a key tool,
as it is used to handle “the diversity of knowledge for a specific academic inquiry” (Tranfield et al.,
2003, p. 208). With regard to the procedure of this literature review, it was guided by the model
formulated by Tranfield et al. (2003, p. 214 ff). This describes the process of a systematic review
in three phases. Accordingly, the planning of the review is the focus of the first phase. Here, the
necessity of the review is determined and a search strategy for the identification of relevant
literature, i.e. criteria for the inclusion and exclusion of studies in the review, is defined. In the
context of this work, the description of the need and relevance of the investigation was initially
made in the problem statement. According to Tranfield et al. (2003, p. 215 ff), this initial planning
of the review is followed by phase 2, which involves finding relevant literature based on defined
quality criteria. The quality assessment in this thesis was mainly based on information from the
online database VHB, which ranks journals according to various criteria (VHB Ranking, n.d.). To
ensure a high significance in this search, the focus was on top-ranked academic journals, i.e.
those with a ranking of A+, A, B, or C. For finding relevant literature on the topic, the search
engines primarily used were EBSCOhost, Emerald Insights, ScienceDirect, SAGE Journals, and
Google Scholar. The findings of this process are presented in the chapters three, four, five, and
six. In the third and final phase described by Tranfield et al. (2003, p. 218 ff), the results of the
literature review are to be linked to practice.
To ensure this link to practice, this thesis also includes an empirical part in addition to the
investigation of the current state of the literature on the topic. Accordingly, an illustration of the
findings from the literature review will take place using the case of the Austrian company bellaflora.
The information for the case example described in chapter 2 was obtained from various sources.
In addition to examining documents from the company, an interview was also conducted with the
CEO Franz Koll. The aim of this document analysis and the interview was to gather information
regarding the company’s strategy and the challenges and threats bellaflora is currently facing or
will face in the future, in order to show how the results of the literature review could help in
achieving the objectives and overcoming these challenges.
6
1.4. Structure and content
This thesis begins with a problem statement that emphasizes the relevance of the topic from
today's perspective. Subsequently, in chapter 1.2. the research questions are presented, and the
objectives of this work are described. The methodology chosen for this thesis is outlined in the
following. In chapter 2 there is a presentation of the case of bellaflora GmbH, where an overview
of the company, its goals and challenges is given. Subsequently, Chapter 3 begins with a brief
explanation of the term humanocracy. After that, the seven principles of this form of organization,
namely Ownership, Markets, Meritocracy, Community, Openness, Experimentation, and Paradox,
are described and linked to the current state of the literature on the individual topics. After this
rather brief insight into the various principles, the focus in chapters 4, 5, and 6 is limited to the
three principles of ownership, community, and openness which have been assessed by the
company under investigation as the most interesting and relevant at present. At the end of
chapters 4, 5, and 6, an interim summary shows how the findings from the literature on each topic
can help bellaflora meet its strategic goals and overcome its challenges. A conclusion can be
found in Chapter 7 followed by the enumeration of limitations of this thesis and opportunities for
further research in Chapter 8.
7
2. The case example In addition to examining the current state of the literature on each of the principles, this paper also
investigates the applicability and relevance of the resulting findings for a specific company, namely
bellaflora Gartencenter GmbH. This takes place in the form of a case example. In the following is
a description of the case, starting with an overview of the company, followed by an outline of the
current strategy of the company and a description of the risks and challenges the company faces
or may face in the future.
2.1. Overview of bellaflora Gartencenter GmbH
bellaflora Gartencenter GmbH, in the further course of this work simply referred to as bellaflora, is
the largest purely Austrian retailer of plants and garden accessories. The company was founded
in 1978 by Josef Umdasch, the father of the current owner Hilde Umdasch. In total, bellaflora
operates 27 garden centers in seven provinces, with the company headquarter located in
Leonding (Upper Austria). In total, the company employs 550 people. At the top of bellaflora since
2018 is Mag. Franz Koll. In 2019, the company managed to achieve a revenue of 86 million euros,
with more than two-thirds of it generated by plants and the rest by garden accessories and
decorative items. bellaflora's biggest competitor is the German garden center chain Dehner.
(Bellaflora.at, 2021; Wikipedia, 2021). After this brief overview of the company, the next point
describes bellaflora's strategy. For this purpose, information from the sustainability report from
2019 and a PowerPoint presentation of the company were taken. In addition, an interview was
conducted with bellaflora's CEO.
2.2. bellaflora’s strategy
With the change at the top of bellaflora and the entry of Franz Koll into the management, also
came a new strategy, mission and vision. The fundamental goals of this new strategic direction
are to expand and strengthen the company's market leadership position and to make bellaflora
one of the Austrians' favorite brands (bellaflora presentation, 2018). To achieve these goals, the
focus is on four strategic pillars, according to the company's sustainability report: assortment,
stores, services, and online. In all the company's efforts and activities, it is repeatedly emphasized
that the customer should be the focus (sustainability report, 2019, p. 18). In addition, the issue of
sustainability plays a very important role for bellaflora. The individual focal points of this corporate
strategy are described in more detail in the following.
8
bellaflora aims to expand and strengthen its position as market leader and to stand out more
clearly from its competitors (bellaflora presentation, 2018). To achieve this, Franz Koll wants to
move away from the standard and act revolutionary in their industry (bellaflora presentation, 2018,
Interview Franz Koll, 40-43). In this context, especially the offered assortment of the company
plays a decisive role. Thus, bellaflora intends to successively broaden and also deepen its product
range. Through this wider range, the company hopes not only to further differentiate itself from the
competition, but also to make itself less dependent on the peak season in March, April and May.
In these three months, on average, about 50% of the annual revenue is made. The main source
of income is plants and accessories for the garden and balcony. This represents a risk as this
business is very weather dependent. Through the mentioned larger assortment, the company also
hopes for a more even distribution of sales over the rest of the year. (Interview Franz Koll, 31-59).
bellaflora wants to stand out from the competition not only with an enlarged assortment but also
with a revolutionary store concept. This store concept was introduced in 2019 and has already
been implemented in the stores in Leonding and Graz St. Peter. At the heart of the new concept
are inspiring themed worlds, a customer-focused guidance system combined with seasonal
product recommendations (sustainability report, 2019, p. 82). Also included in the strategy is an
expansion of the services offered by the company. Thus, since 2019, the company has been
offering advice and maintenance of indoor and outdoor green areas for private customers and
also companies as part of its "Raum Grün" program. It is planned to further expand this service in
the coming years (sustainability report, 2019, p. 82). One difficulty that arises in this context is
finding qualified personnel to manage this expansion. For this reason, the company plans to train
more employees itself. This training should also enable career changers to turn their passion for
plants into a profession (Interview Franz Koll, 243-247). In addition to deepening and broadening
the existing product range, implementing the new store concept in additional stores and expanding
the services offered, bellaflora's strategic planning also envisages extending the store network in
the coming years. However, not only the stationary trade is to be pushed, but also the online store
of the company is to be continuously optimized (Interview Franz Koll, 261-262).
Repeatedly emphasized by bellaflora's CEO Franz Koll in a personal conversation in relation to
the strategy of the company was that the customer is placed absolutely in the center. Thus, the
main goal is to inspire, convince, win and keep the customer. In addition to the aforementioned
product variety and the presentation of these products, this is to be achieved specifically through
competent advice from the employees. For this reason, the competence and expertise of the
employees plays a very important role. However, a high level of expertise is not enough. For Franz
Koll, customer orientation and passion for this profession are even more important. This attitude
can also be seen in the hires to the company, because customer orientation and passion are
difficult to develop or learn, but expertise is, he explains (Interview Franz Koll, 254-256). In addition
to competent and friendly advice, the customer should also be offered a certain level of comfort.
9
In this context, Franz Koll appeals to his employees to go the extra mile once in a while. As an
example of what he understands by such an extra effort, he says if an elderly lady buys a few
bags of soil and the employee's time permits, he should help her load them into the car. This is
exactly the kind of behavior that creates enormous customer loyalty and extremely good word of
mouth, he explains. This example becomes even more important when you look at bellaflora's
existing customer base. This group is 84% female, over 50, and mainly comes from rural areas.
This high value that the customer has, or should have, at bellaflora is also expressed in the
company's current lead motto of the strategy process: The world of the green No.1 - We for our
customers. (“Die Welt der grünen Nr.1 – Wir für unsere Kunden“) (bellaflora presentation, 2018).
Also covered in bellaflora's strategy is how the company intends to position itself in the future. In
this respect, the brand is to be associated in the future with high customer orientation, as already
described, but also with high quality (bellaflora presentation, 2018). A competitor of the company
which is already mostly associated with these characteristics is the regional gardener. bellaflora
also wants to achieve such an image (bellaflora presentation, 2018). The obstacle here is often
the size, because a large “evil“ chain is usually not associated to the same extent with the
characteristics of regionality, sustainability, and quality as the small regional gardeners, Franz Koll
explains. However, these topics do play a very important role at bellaflora and, according to the
company's strategy, are to be pushed even further in the future, as shown, among other things,
by the sustainability report published in 2019. The high strategic importance of the topic of
sustainability can also be seen from the fact that the sustainability officer, who is responsible for
the coordination and operational implementation of the goals and measures of the sustainability
program, reports directly to the management as a staff unit (sustainability report, 2019, p. 21). One
of these measures in this program is to raise employee awareness of the issue of sustainability.
In this context, the topic is addressed in annual employee appraisals and training courses and
seminars on sustainability issues are held annually. In addition, employees are invited to submit
suggestions and ideas that contribute to improving sustainability in the company via the company
Masarech (2003, p. 4). The third characteristic of a high-performance culture is that the company
provides an environment that encourages employee ownership, Rosenthal & Masarech, (2003, p.
4) explain.
56
In the search for characteristics that make up a successful culture, there were relatively few articles
that provided concrete attributes (Chatman et al., 2014; Chatman & Cha, 2003; Rosenthal &
Masarech, 2003). The reason for this could be that factors for cultural success often vary from
industry to industry. This relationship of industry membership and variance in cultural patterns was
identified by Chatman & Jehn (1994, p. 546) in their study of 15 companies from four different
industries.
After this brief description of the factors that successful organizational cultures have in common,
the next chapter explains points to which leaders should pay special attention when it comes to
establishing a strong culture in the company and consequently also a sense of community,
according to Chatman & Cha (2003), C. O’Reilly (2008), Rosenthal & Masarech (2003), Warrick
(2017), and Warrick & Gardner (2021).
5.4. Building a strong culture
Scholars agree that leaders are the primary influencers in shaping organizational culture (Berson
et al., 2007, p. 618; O’Reilly et al., 2014, p. 595; Warrick & Gardner, 2021, p. 40). “It is a leader’s
values, leadership style, personality and practices that predominantly create the culture in which
people work” (Warrick & Gardner, 2021, p. 40). Berson et al. (2007, p. 618) also note that although
the founders play the initial role in building an organizational culture, “cultures have been known
to change in the hands of subsequent CEOs”. This relationship has been demonstrated, for
example, by Berson and his colleagues (2007). In their study of 26 CEOs, 71 senior vice
presidents and 185 other organizational members reporting directly to senior vice presidents, the
findings showed that CEO values influence organizational culture (Berson et al., 2007, pp. 622,
626). A similar study was conducted by O’Reilly et al. (2014, p. 595), who found in their survey of
32 high-technology companies that CEO personality affects organizational culture. Because of the
importance organizational leaders play in shaping culture, this chapter describes points CEOs
should pay special attention when building a successful and strong organizational culture,
according to Chatman & Cha (2003), C. O’Reilly (2008), Rosenthal & Masarech (2003), Warrick
(2017), and Warrick & Gardner (2021).
5.4.1. Develop an understanding of the present culture
To build a strong organizational culture, Warrick (2017, p. 401) believes it is important for leaders
to develop an understanding of the current culture within the company. “(…) leaders need to
understand the present culture so the strengths can be reinforced and any weaknesses,
57
inconsistencies, and gaps between the desired culture and the present culture can be identified
and addressed” (Warrick, 2017, p. 401). To gain such an understanding, Warrick (2017, p. 401)
suggests using standardized culture questionnaires or interviewing focus groups to get a sense of
how they perceive the organization's current culture. An alternative to such questionnaires or
interviews, according to Warrick & Gardner (2021, p. 45), is the involvement of external experts
who can help evaluate the current culture and change or build a culture. In addition, Warrick &
Gardner (2021, p. 45) describe another way to monitor an organization's culture. Accordingly, a
so-called "culture team" can also be entrusted with the responsibility of monitoring the
organizational culture or, for example, organizing culture-building activities. According to Warrick
(2017, p. 402), such a culture team should be made up of people from different functional areas
and hierarchical levels. In addition, Warrick (2017, p. 402) suggests that one member of the team
should be part of the senior leadership, so that an advocate for culture is at the top. However,
Warrick & Gardner (2021, p. 44) point out that these described ways to develop an understanding
of the culture and monitor the organizational culture should be applied regularly. “Just as leaders
monitor and manage results, budgets, and other important key performance indicators, they
should also monitor the organization’s culture” (Warrick & Gardner, 2021, p. 44).
After highlighting the need to develop an understanding of the current culture and to monitor
culture, the next point will focus on the importance of a compelling vision, purpose and values for
building a strong culture.
5.4.2. Define vision, mission and values
Besides the importance of developing an understanding of the current culture and monitoring
culture, according to Rosenthal & Masarech (2003, p. 9) and Warrick & Gardner (2021, p. 42), for
building a strong culture it is also essential that leaders formulate a compelling vision, a purpose
and organizational values. Such a mission and purpose can be a powerful motivator for people to
join the organization and lead to high employee commitment, Warrick & Gardner (2021, p. 42)
explain. Furthermore, Warrick & Gardner (2021, p. 42) emphasize that working for a higher
purpose and engaging in meaningful work can lead to a number of positive effects, such as
reduced stress, turnover, and absenteeism, as well as increased engagement and a sense of
fulfillment. As already indicated in chapter 4.3, values and norms also play a crucial role in strong
cultures, according to Chatman et al. (2014, p. 788), Chatman & Cha (2003, p. 23), and Rosenthal
& Masarech (2003, p. 4). Accordingly, in a strong organizational culture there is a high agreement
and a high intensity among employees regarding these values, Chatman & Cha (2003, p. 23)
state. However, according to Rosenthal & Masarech (2003, p. 11), it is not enough to simply post
these mission and core values on a bulletin board and wait for change to happen. The key to
success in developing a strong organizational culture is regular communication, Rosenthal &
58
Masarech (2003, p. 11) explain. In addition to the formulated mission and values being
communicated regularly and openly, it is also important that the management team is credible,
and their communication is consistent, according to O’Reilly (2008, p. 99). This helps members
develop consistent expectations about what is important, O’Reilly (2008, p. 99) further explains.
In this context, Rosenthal & Masarech (2003, p. 12) emphasize that it can also be very beneficial
to encourage two-way communication. This means that the new values are not only explained to
the employees but that they also have the opportunity to ask questions and voice concerns.
O’Reilly (2008, p. 95) also sees such employee involvement as critical in developing or changing
a culture. This not only allows employees to make incremental choices, but also signals to them
that they and their opinions are valued, O’Reilly (2008, p. 95) emphasizes. There are various ways
in which such employee participation can be enabled “These may range from formal efforts such
as quality circles and advisory boards to less formal efforts such as suggestion systems and
opportunities to meet with top managers and informal social gatherings.” (O’Reilly, 2008, p. 95).
In addition to the formulation and communication of mission, vision, values, it is important to build
a strong culture that the culture is aligned with the strategy of the company, according to Warrick
(2017, p. 402) and Warrick & Gardner (2021, p. 42). This will be discussed in more detail in the
next point.
5.4.3. Alignment of strategy, day-to-day practices and culture
According to Warrick (2017, p. 402), leaders should align for consistency between culture and
strategy. “When leaders pay attention to both strategy and culture in their planning and decision
making, making sure that both are aligned to support one another, they are in a position to develop
culture by design and not leave it to chance” (Warrick, 2017, p. 402). Thus, for example, decisions
aimed at reducing costs while cultural values are focused on excellence and quality are likely to
have a weakening effect on organizational culture, Warrick, (2017, p. 402) explains. It is precisely
with this alignment of culture and the organization’s day-to-day operations that many companies
struggle, according to Rosenthal & Masarech (2003, p. 14). Rosenthal & Masarech (2003, p. 14)
see performance management and decision making as two of the areas that have an immediate
influence on the culture of an organization in this context. In performance management, according
to them, the great difficulty is not only to measure the results of the employees and make them
accountable for them, but also their behavior that achieved them. In terms of decision making, this
should not only drive business results but should also reflect the values the organization stands
for, Rosenthal & Masarech (2003, p. 14) explain.
Not only should day-to-day practices, decisions, and corporate strategy be aligned with
organizational culture, but according to Chatman & Cha (2003, pp. 26–28), Warrick (2017, p. 402),
59
and Warrick & Gardner (2021, p. 43), human resources policies should also be guided by the
company's values. What is meant by this in concrete terms is described in more detail in the next
point.
5.4.4. Hire and train for culture fit
“Recruiting and training for culture at all levels of an organization is essential to sustaining the
desired culture” (Warrick, 2017, p. 402). In this respect Chatman & Cha (2003, pp. 26–28), Warrick
(2017, p. 402), and Warrick & Gardner (2021, p. 43) are in agreement. In this context, Chatman &
Cha particularly emphasize the importance of the selection process, i.e. the selection of new
members for the organization. According to them, the focus should not only be on the person-job
fit, which means that the skills of the person match the job requirements, but also on a person-
culture fit. By person-culture fit, Chatman & Cha (2003, p. 26) mean that the person and his or her
characteristics fit the organizational culture. Chatman & Cha (2003, p. 26) rate this fit between the
person and the culture, or the desired organizational culture, as even more important than the
applicant's fulfillment of the job requirements. “(…) it makes sense to hire people who will fit the
culture, possibly even trading off some immediate skills necessary for the specific entry job for
better culture fit. People can learn new skills; establishing culture fit is much harder” (Chatman &
Cha, 2003, p. 26). Warrick & Gardner (2021, p. 43) also emphasize that companies should pay
attention to this culture fit when recruiting. Furthermore they point out that particular attention
should be paid to this when hiring for management positions (Warrick & Gardner, 2021, p. 43).
Accordingly, a cultural misfit at the top can very quickly undermine a culture that has been
painstakingly built up (Warrick & Gardner, 2021, p. 43).
In addition to hiring for culture, companies should also train for culture, Warrick & Gardner (2021,
p. 43) explain. By this they mean that employees must be made aware of the organization's cultural
values and what is expected of them in terms of behavior, attitudes and performance (Warrick &
Gardner, 2021, p. 43). Chatman & Cha (2003, p. 27) refer to this process by which an individual
understands the values, abilities, expected and desired behaviors, and social knowledge that are
crucial for participating as an organizational member and for assuming an organization role as
socialization. The two main goals of socialization, according to them, are “(…) clarifying the cultural
values and creating strong bonds among employees so that they are accountable to one another
for upholding those values” (Chatman & Cha, 2003, p. 28)
After describing how important it is to align the personnel policy with the organizational culture,
the next point describes the decisive role of the top management team when it comes to building
a strong culture and maintaining it in the long term, according to Chatman & Cha (2003), C.
O’Reilly (2008), and Rosenthal & Masarech (2003)
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5.4.5. Walk the talk
Several authors emphasize the importance of leader’s behavior for the organizational culture
(Chatman & Cha, 2003, pp. 28–31; Kottke & Pelletier, 2013, p. 426; C. O’Reilly, 2008, p. 96;
Rosenthal & Masarech, 2003, pp. 12–14; Warrick, 2017, pp. 401–402; Warrick & Gardner, 2021,
p. 41). According to Rosenthal & Masarech (2003, p. 12), it is not enough to define organizational
values and communicate them repeatedly, as described in point 4.4.2., but these values must also
be visibly demonstrated by the leaders of the company through their behavior and decisions. It is
precisely such clear, visible actions by the management team that are in support of the cultural
values of the organization that characterize a strong organizational culture, O’Reilly (2008, p. 96)
states. O’Reilly (2008, p. 96) also provides a rationale for why employee perceptions of leader’s
behaviors are critical to cultural success. Accordingly, members of an organization want to know
what is important and what is not and one way they can figure this out is to watch and listen
carefully to those above them, O’Reilly (2008, p. 96) explains. Thus, O’Reilly (2008, p. 96)
continues, employees are looking for consistent patterns. “When top management not only says
that something is important, but also consistently behaves in ways that support the message, we
begin to believe what is said” O’Reilly (2008, p. 96). Chatman & Cha (2003, p. 28) point out in this
context that employees are very vigilant about the behavior of their leaders, and even to rather
mundane aspects such as what they invest time in, what is on their calendars, what they ask
questions about, what they fail to ask or also what they follow up on. Thus, it is extremely important
for leaders to regularly review their behavior in order to understand the signals they are sending
to employees, Chatman & Cha (2003, p. 28) emphasize.
However, leaders must not only pay close attention to their behavior and how their employees
perceive them, but for achieving cultural success, it is also critical that they recognize and reward
behavior that supports the desired culture emphasize Chatman & Cha (2003, p. 28), O’Reilly
(2008, p. 98), and Warrick (2017, p. 402). This will be discussed in more detail in the next point.
5.4.6. Recognize and reward desired behaviors and practices
Chatman & Cha (2003, p. 28), O’Reilly (2008, p. 98), and Warrick (2017, p. 402) agree that to
build a successful culture, there must be a reward system in place that recognizes and rewards
behavior that supports the desired culture. Thus, Warrick (2017, p. 402) believes that leaders can
make as many statements as they want about the desired organizational culture, but in the end,
employees align their behavior with what they see as valued, recognized and rewarded. The same
opinion is shared by O’Reilly (2008, p. 98), who explains that at its simplest people do what is
rewarded and avoid what is punished. Thus, O’Reilly (2008, p. 98) continues, by simply analyzing
what gets management's attention, one can get an idea of what the culture supports. For this
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reason, he describes the reward system as a key mechanism for promoting and shaping
organizational culture (O’Reilly, 2008, p. 98). In this context, however, O’Reilly (2008, p. 98) notes
that not only monetary rewards should be used, but primarily the focus should be on rewards such
as recognition and approval. He justifies this with the fact that on the one hand such rewards can
be given much more frequently and on the other hand because “Recognition by your boss or
coworkers for doing the right can be more potent in shaping behavior than an annual bonus”
(O’Reilly, 2008, p. 98).
In addition to the importance of using an appropriate reward system that recognizes and rewards
desirable behavior, leaders can reinforce cultural ideals through symbolic acts and ceremonies,
according to O’Reilly (2008, pp. 96–97), Warrick (2017, p. 402), and Warrick & Gardner (2021, p.
44). This will be addressed in the next point.
5.4.7. Symbols and ceremonies
According to O’Reilly (2008, pp. 96–97), Warrick (2017, p. 402), and Warrick & Gardner (2021, p.
44) symbols and ceremonies can be a useful tool for leaders to build a strong organizational
culture. Symbols in this context Warrick (2017, p. 402) defines as “actions, objects or events that
communicate meaning”. Warrick & Gardner (2021, p. 44) describe an example of such symbolic
action. According to them, the former CEO of Southwest Airlines, Herb Kelleher, sometimes
surprised his flight crew with coffee and donuts in the early morning hours (Warrick & Gardner,
2021, p. 44). Through this symbolic act, he reinforced the service-oriented culture of the
organization, Warrick & Gardner (2021, p. 44) explain. Also, a powerful message for all members
of an organization can be formal and informal ceremonies and gatherings that honor individuals
and groups whose actions reflect the organization's cultural ideals, Warrick & Gardner (2021, p.
44) point out. In this context, Southwest Airlines is again mentioned as an example, which gives
out various awards for exceptional employee performance, according to Klein (2012, p. 38). One
of these is the so-called "winning spirit award" which is given monthly to any number of employees
who have reflected the company's values through their behavior and actions, Klein (2012, p. 38)
explains. Another example is the "president's award" which is given at an annual banquet to those
employees who have continued to contribute despite personal problems or to those whose
performance has gone far beyond what was expected of them.
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5.5. Interim conclusion
All in all, the examination of the current state of literature on the subject has shown the high
relevance of organizational culture on the company and its employees. The "right" culture can
provide a competitive advantage for companies, according to C. O’Reilly (2008, p. 93) and
Rosenthal & Masarech (2003, p. 3). Thus, among others, positive effects of organizational culture
on job satisfaction (Berson et al., 2007, p. 627) and dedication of employees (C. O’Reilly, 2008,
p. 93), as well as on customer satisfaction (Boyce et al., 2014, p. 355), have been observed.
Furthermore, the study of the literature on the subject has shown that values and norms play an
important role. Thus, according to Chatman & Cha (2003, p. 23), strong and successful cultures
are characterized by two features, namely a high level of agreement among employees regarding
what is valued in the company and a high intensity regarding these values and norms. Such high
consensus and endorsement regarding organizational values and norms within a firm can lead to
a kind of social control, Chatman & Cha (2003, p. 21f), O’Reilly & Chatman (1996, p. 167), and
Sørensen (2002, p. 73) emphasize. This informal social control is not only less expensive than the
formal alternative of rules and regulations (O’Reilly & Chatman, 1996, p. 164), but the advantage,
according to Chatman & Cha (2003, p. 23), is that it gives employees some freedom to act and
decide in accordance with the ultimate strategic goals, values and norms of the company.
At the end of this chapter, various points were described which, according to the literature, are
particularly important for creating such a strong organizational culture. According to Warrick (2017,
p. 401), it is first of all important to get an impression of the current culture in the company and to
understand it in order to subsequently reinforce the strengths of this current culture and to identify
and address the weaknesses, inconsistencies and gaps between the desired culture and the
present culture. According to Rosenthal & Masarech (2003, p. 9) and Warrick & Gardner (2021,
p. 42) a strong culture also requires a compelling vision, a purpose and organizational values,
which must be defined and regularly communicated by the leaders. In this context, Rosenthal &
Masarech (2003, p. 12) emphasizes that it is essential that the values are visibly demonstrated by
the leaders through their behavior and decisions. Attention should also be paid to ensuring that
the company's culture and strategy are aligned and consistent, Warrick (2017, p. 402) explains.
Culture should also play a role in recruitment and training, in this respect Chatman & Cha (2003,
p. 26ff), Warrick (2017, p. 402), and Warrick & Gardner (2021, p. 43) agree. Accordingly, when
hiring new employees, companies should not only pay attention to whether the person's skills
match the job requirements, i.e. a person-job fit, but also and especially to whether the person fits
the organizational culture of the company, also called person-culture fit (Chatman & Cha, 2003,
p. 26). In addition, employees should be trained for culture. Thus, according to Warrick & Gardner
(2021, p. 43), they should be made aware of the organization’s cultural values and what is expected of them in terms of behavior, attitudes and performance. However, Chatman & Cha
63
(2003, p. 28), C. O’Reilly (2008, p. 98), and Warrick (2017, p. 402) also note that in order to build
a successful culture, there must be a reward system in place that recognizes and rewards behavior
that supports the desired culture. Finally, the usefulness of ceremonies and symbols in creating a
strong culture is emphasized.
After this comprehensive examination of the literature on the topic of organizational culture, what
insights can be derived for bellaflora with regard to building a strong culture, achieving its strategic
goals and meeting its challenges?
One of bellaflora's clearly defined goals is to expand its market leadership. To achieve this, they
want to clearly stand out and differentiate themselves from the competition (Interview Franz Koll).
Particularly in this respect, it could be beneficial to establish a strong culture within the company.
After all, sooner or later just about everything can be imitated by competitors, including the product
range offered, the new store concept, and even the services offered. However, according to
Rosenthal & Masarech (2003, p. 3), the culture in an organization is something unique that is
impossible to replicate. Accordingly, organizational culture can represent a long-term competitive
advantage (C. O’Reilly, 2008, p. 93; Rosenthal & Masarech, 2003, p. 3).
As described in this chapter, it is mainly up to Franz Koll and his management team to form such
a strong culture, as scholars like Berson et al. (2007, p. 618), O’Reilly et al. (2014, p. 595), and
Warrick & Gardner (2021, p. 40) agree in this respect that leaders are the primary influencers in
shaping organizational culture. Franz Koll took a first step in changing the organizational culture
shortly after joining the company in 2018 by formulating a new strategy, mission and vision. He
subsequently presented this new strategic orientation in person to all branches and answered the
employees' questions as they arose (Interview Franz Koll). After three years of introducing this
new strategy, it could be helpful to analyze whether and how the organizational culture in the
company has changed with regard to this new strategic direction. This is especially emphasized
by Warrick (2017, p. 401), who points out that it is important to develop an understanding of the
current culture in the company in order to subsequently reinforce the strengths of this current
culture and to identify and address the weaknesses, inconsistencies and gaps between the
desired culture and the present culture. In this context, Warrick (2017, p. 401) suggests the use
of culture questionnaires or focus group interviewing to get a sense of how they perceive the
organization’s current culture. An alternative to such questionnaires or interviews, according to
Warrick & Gardner (2021, p. 45), is the involvement of an external expert. In this investigation,
one could try to identify whether the communicated values, such as that the customer is to be
placed absolutely in the center, are actually lived in the company and whether there is agreement
among the employees regarding these values. According to Chatman & Cha (2003, p. 23), such
an agreement and a high intensity regarding values and norms is a characteristic of strong
64
cultures. If such a high level of consensus and endorsement regarding organizational values is
achieved, the resulting social control can have highly positive effects, as Chatman & Cha (2003,
p. 21f), O’Reilly & Chatman (1996, p. 167), and Sørensen (2002, p. 73) emphasize. Thus, in
conjunction with the relaxation of formal rules and regulations, it can lead to outstanding customer
service, according to Chatman & Cha (2003, p. 23). “Formal rules are useful for standardizing
performance and avoiding having to relearn things each time. However, they are only useful for
addressing situations that are predictable and regular. In contrast, outstanding service is
determined, in customer’s eyes, by how organizations deal with situations that are nearly
impossible to anticipate, unique (…) and difficult to solve.” (Chatman & Cha, 2003, p. 23). This
freedom, coupled with a commitment to organizational values, could lead employees to go the
extra mile for the customer that Franz Koll mentioned in the interview.
A strong corporate culture could also have a further positive effect on employee retention.
According to the company’s sustainability report (2019, p.57), the company is struggling with a
relatively high turnover rate. Thus, an organizational culture where employees feel comfortable
and where there is a high sense of community could potentially lower this rate since a strong
organizational culture is associated with positive effects such as increased job satisfaction (Berson
et al., 2007, p. 627) and dedication of employees (C. O’Reilly, 2008, p. 93).
Finally, it should be noted that establishing such a strong culture and thus achieving these positive
effects is challenging and is an interplay of many different factors, Warrick & Gardner (2021, p.
50) point out. However, whether or not one dedicates oneself to this challenging task of creating
a successful culture a culture will be formed either way in the organization, department or work
group, according to Chatman & Cha (2003, p. 32). “The question is whether the culture that forms
is one that helps or hinders the organization’s ability to execute its strategic objectives.
Organizational culture is too important to leave to chance (…)” (Chatman & Cha, 2003, p. 32).
After this comprehensive discussion of the literature on the topic of organizational culture, how to
build a strong culture in the company and the derivation of conclusions for bellaflora from this
information, the next chapter deals with another principle of humanocracy in detail, namely Open
strategy.
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6. Openness In this chapter, the focus is on another principle of a humanocracy described by Hamel & Zanini
(2020, pp. 177–198), namely the principle of openness. The decision to investigate this principle
in addition to ownership and community was again made with the CEO of bellaflora, who considers
it to be one of the most relevant for bellaflora at the present time. In this principle, the authors
address the topic of the strategy making process and explain how, according to them, it should be
designed in a human organization (Hamel & Zanini, 2020, pp. 177–198). Hamel & Zanini (2020,
p. 190) see the planning process currently practiced in most organizations as no longer in keeping
with the times. They describe it as “elitist, formulaic, and extrapolative”, and explain further “It’s a
top-down, budget-focus ritual that harnesses only a tiny fraction of the organization’s collective
imagination” (Hamel & Zanini, 2020, p. 189). In a humanocracy, however, the strategy process
should be a company-wide conversation that is open to employees, as well as customers and
other external partners, Hamel & Zanini (2020, p. 190) emphasize. The authors are aware that
such an opening of the process of strategy formulation is messier and more time consuming than
the top-down alternative, but there are numerous benefits associated with it which, according to
Hamel & Zanini (2020, p. 190), are worth the effort. Thus, they are convinced that more radical
and ambitious ideas can be generated. Furthermore, this openness leads to a higher commitment
and understanding of the different individuals involved towards the formulated strategy, Hamel
and Zanini explain. Another benefit the authors describe is the faster implementation of the
strategy if it was developed through an open process. The rationale for this is that people who
participate in the process see the strategy take shape in real time and when the time comes that
the strategy is ready for implementation, the people are primed and ready to act, according to
Hamel & Zanini (2020, p. 191). Similar benefits are also described by scholars (Appleyard &
Chesbrough, 2017; Hautz et al., 2017; Hutter et al., 2017; Luedicke et al., 2017; Mack & Szulanski,
2017; Stieger et al., 2012). These, together with possible disadvantages and problems of opening
up the strategy process, are discussed in more detail in chapter 6.4.
This relatively new approach of involving internal and external stakeholders in the strategy making
process is referred to as “Open Strategy” in the literature (Appleyard & Chesbrough, 2017;
Chesbrough & Appleyard, 2007; Hautz et al., 2017; Luedicke et al., 2017; Mack & Szulanski, 2017;
Whittington et al., 2011). In the following points, the current state of the literature on the topic of
open strategy is elaborated in detail. As in the previous two chapters, the literature used for this
purpose is listed in the table below and sorted in descending order by publication date.
66
Name of researcher, Journal
Research method
Title of research paper Key findings
Mount et al. (2020),
Long Range
Planning (B)
Systematic
literature
review
Conceptualizing the de-
materializing
characteristics of internal
inclusion in crowdsourced
open strategy
Identification of ways how
to involve different
organizational actors in
strategic conversation;
Description of social and
structural barriers
Dobusch et al.
(2019), Organization
Studies (A)
Qualitative
case-study
Closing for the Benefit of
Openness? The case of
Wikimedia’s open strategy
process
Development of a two-
dimensional framework of
openness
Appleyard and
Chesbrough (2017),
Long Range
Planning (B)
Systematic
literature
review
The Dynamics of Open
Strategy: From Adoption
to Reversion
Dynamics of Open
Strategy; Motivations of
switching between open
and closed modes of
strategizing
Baptista et al.
(2017), Lang Range
Planning (B)
Systematic
literature
review,
Qualitative
Research
Social Media and the
Emergence of
Reflexiveness as a new
Capability for Open
Strategy
Examination of the role of
social media in regard to
open strategy;
Definition/description of the
capability of reflexiveness
Gegenhuber and
Dobusch (2017),
Long Range
Planning (B)
Qualitative
case-study
Making an Impression
Through Openness: How
Open Strategy-Making
Practices Change in the
Evolution of New Ventures
Identification of three
different modes of how
organizations pursue open
strategy with external
audiences; Relation of
these modes to impression
management effects
Hautz et al. (2017),
Long Range
Planning (B)
Systematic
literature
review
Open Strategy:
Dimensions, Dilemmas,
Dynamics
Identification/formulation of
five dilemmas of open
strategy; Exploration of key
dynamics of Open Strategy
67
Name of researcher, Journal
Research method
Title of research paper Key findings
Hutter et al. (2017),
Long Range
Planning (B)
Quantitative
research
Falling Short with
Participation – Different
Effects of Ideation,
Commenting, and
Evaluating Behavior of
Open Strategizing
Examination of the different
forms of participation
behaviors and of their
effects on virtual and
organizational senses of
community
Luedicke et al.
(2017), Long Range
Planning (B)
Qualitative
case-study
Radically Open
Strategizing: How the
Premium Cola Collective
Takes Open Strategy to
the Extreme
Investigation of practices
and outcomes of a radical
open strategy; Identified
practices allow the
collective to develop a
collective identity, legitimize
strategic decisions,
maintain employee
motivation
Mack and Szulanski
(2017), Long Range
Planning (B)
Qualitative
case-study
Opening Up: How
Centralization Affects
Participation and Inclusion
in Strategy Making
Examination of how open
strategy practices and
activities vary with
centralization
Malhotra et al.
(2017), Long Range
Planning (B)
Action
research
Using Public Crowds for
Open Strategy
Formulation: Mitigating the
Risks of Knowledge Gaps
Online collaboration of
stakeholders can be used
for the formulation of an
open strategy; Identification
of two risks for open
strategy formulation when
knowledge gaps are
present
Yakis-Douglas et al.
(2017), Long Range
Planning (B)
Quantitative
research
Opening M&A Strategy to
Investors: Predictors and
Outcomes of
Transparency during
Organisational Transition
Investigation of the
circumstances in which
organisations engage in
increased transparency
towards their outside
stakeholders during M&A;
68
Name of researcher, Journal
Research method
Title of research paper Key findings
likelihood to demonstrate
increased transparency is
high for those who have
strategies that depart from
industry norms
Stieger et al. (2012),
California
Management
Review (B)
Qualitative
case-study
Democratizing Strategy:
How Crowdsourcing Can
Be Used For Strategy
Dialogues
Formulation of five goals
companies can pursue
employing internal
crowdsourcing;
Identification of three broad
dimensions that
characterize the unique
contexts of different
crowdsourcing initiatives
Whittington et al.
(2011), British
Journal of
Management (B)
Systematic
literature
review
Opening Strategy:
Evolution of a Precarious
Profession
Analysis of four forces that
drive the evolution of
strategy as a profession;
Identification of increased
transparency and inclusion
of organizations with regard
to their strategy
Chesbrough and
Appleyard (2007),
California
Management
Review (B)
Systematic
literature
review
Open Innovation and
Strategy
Investigation of the concept
of open innovation -
especially with regard to
business strategy
Table 4: Literature sources concerning open strategy
At the beginning, the concept of open strategy will be briefly described in section 6.1, followed by
a discussion of the two dimensions of open strategy, namely inclusion and transparency.
Furthermore, point 6.3 describes forces which, according to scholars (Hautz et al., 2017, p. 299f;
Whittington et al., 2011, p. 536ff), lead to greater openness of companies with regard to their
strategy. The advantages and disadvantages of the concept of open strategy are then presented
in the form of five dilemmas. In addition, the high dynamics of the concept described in chapter
6.5 are discussed.
69
6.1. Open strategy
According to Mack & Szulanski (2017, p. 385) and Whittington et al. (2011, p. 535), there is a trend
that the strategy process of organizations is becoming more open to a wider audience. More
specifically, this means that organizations are increasingly moving away from a formal strategy
making process that is centralized around the CEO and the top management team towards a more
open form of strategizing that also involves internal and external stakeholders, Mack & Szulanski
(2017, p. 385) explain. This development represents a defining feature of the emerging concept
of open strategy, as Mount et al. (2020, p. 1) explain. The concept of open strategy builds on the
notion of open innovation and is used as an umbrella term to describe processes and practices
that increase the inclusiveness and transparency of strategy work to a larger group of internal and
external stakeholders, according to Hautz et al. (2017, p. 299), Mount et al. (2020, p. 2), and
Whittington et al. (2011, p. 535). This fundamental nature of greater inclusiveness and
transparency “stand in sharp contrast to strategy’s conventional elitism and opacity” as Whittington
et al. (2011, p. 536) point out. Accordingly, strategy has traditionally been very exclusive and
strategic responsibility has been strictly separated from operational management (Whittington et
al., 2011, p. 535). Furthermore, an organization's strategy is usually considered a secret, and
competitive advantages were due to asymmetries and ambiguities of information that prevented
competitors from imitating successful strategies, Whittington et al. (2011, p. 535) emphasize.
After this brief explanation of the term open strategy, the following chapter will explain in detail the
two key dimensions of the concept, namely inclusiveness and transparency.
6.2. Dimensions of open strategy
The concept of open strategy challenges the orthodoxies of the conventional way of strategy
making, i.e. that strategy is traditionally exclusive and it is considered a secret, by increasing
transparency and inclusiveness, according to Whittington et al. (2011, p. 535). Inclusiveness in
this context can be defined as “the range of people involved in making strategy” (Whittington et
al., 2011, p. 532) and transparency as “the visibility of an organization’s strategy” (Whittington et
al., 2011, p. 536). In simple terms, this means that with openness “more strategic information is
available, and more people are able to engage in the strategy conversation” (Hautz et al., 2017,
p. 298). These key factors of strategy work, according to Whittington et al. (2011, p. 531f), are
described in more detail in the following.
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6.2.1. Inclusion
„Inclusion refers to participation in an organization’s strategic conversation, the exchanges of
information, views and proposals intended to shape the continued evolution of an organization’s
strategy” (Whittington et al., 2011, p. 536). In this context, Whittington et al. (2011, p. 536)
distinguish between internal and external inclusion. By internal inclusion, the authors mean the
inclusion of people within the organization (Whittington et al., 2011, p. 536). In the case of external
inclusion, there is an exchange with regard to the strategy process with external stakeholders,
such as with other companies or with the public at large, as is the case with crowd-sourcing,
Whittington et al. (2011, p. 536) explain. According to Hautz et al. (2017, p. 299f), such efforts to
involve internal and/or external stakeholders are particularly promoted by new information
technologies such as strategy jamming or wiki technologies. However, Hautz et al. (2017, p. 301)
and Mack & Szulanski (2017, p. 386) point out that inclusion can come in different forms. Thus,
Mack & Szulanski (2017, p. 386) distinguish between participation and inclusion, whereby the
former is understood as the pure collection of inputs in the sense of ideas and information and
inclusion goes further. “Inclusion is about creating and sustaining a community of interacting
stakeholders engaged in an ongoing stream of issues in the strategy process” (Mack & Szulanski,
2017, p. 386). Accordingly, organizations engage in inclusion when they involve stakeholders in
task forces or working groups in which they interact, share information and knowledge, and joint
decision making among members, Mack & Szulanski, (2017, p. 386) explain. Hutter et al.'s (2017,
p. 365f) findings show how powerful inclusion can be, in the sense of this definition. The study of
Siemens' internal crowd sourcing process showed that involvement in the form of idea evaluation
and active commenting led to the emergence of a sense of community among the employees
involved (Hutter et al., 2017, p. 365). However, the mere submission of ideas, according to Mack
& Szulanski (2017, p. 386) a form of participation, had a very small or even negative effect on the
sense of community, Hutter et al. (2017, p. 366) demonstrated. In summary, Hautz et al. (2017, p.
301) note that “inclusion in the Whittington et al. (2011) sense needs to be understood as involving
varying degrees of inclusiveness, with different kinds of outcomes”.
However, the concept of open strategy is characterized not only by increased inclusivity but also
by increased transparency, according to Whittington et al. (2011, p. 536). What exactly is meant
by transparency is explained in the next point.
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6.2.2. Transparency
According to Whittington et al. (2011, p. 536), “Transparency refers to the visibility of information
about an organization’s strategy, potentially during the formulation process but particular with
regard to the strategy finally produced”. Again, a distinction can be made between internal and
external transparency, Whittington et al. (2011, p. 535f) explain. As with inclusion before, the
former refers to transparency within the company and the latter to transparency to external
stakeholders (Whittington et al., 2011, p. 535f). However, Hautz et al.'s (2017, p. 300) study of the
literature on the subject concluded that transparency is “contingent and highly variable in form”.
This variability of transparency has been demonstrated by Baptista et al. (2017), who examined
“the roles of different kinds of information technology, such as blogs, wikis, and videocasts”. With
respect to these technologies, a significant graduation in transparency was evident, particularly in
terms of the range of topics permitted, the degree of access, and the degree of freedom from
moderation and controls, according to Baptista et al. (2017, p. 328f). Furthermore, Hautz et al.'s
(2017, p. 300) emphasize in this context that “Transparency is a continuum subject to managerial
choice”. However, Yakis-Douglas et al. (2017, p. 412) show that transparency does not always
depend on managerial choice. In their work, the authors distinguish between voluntary and
mandatory disclosure of strategic information, thereby pointing out the regulatory pressures that
often require a certain degree of transparency from organizations (Yakis-Douglas et al., 2017, p.
412). Summing up these two papers by Baptista et al. (2017) and Yakis-Douglas et al. (2017),
Hautz et al. (2017, p. 300) conclude that “(…) transparency comes in many forms, with managers
sometimes having to make careful choices about the degree to which it is allowed, but sometimes
obliged to concede openness whether they like it or not”.
After this closer look at the two dimensions of inclusion and transparency, the next chapter will
discuss which forces are according to the literature responsible for companies tending towards
greater openness in their strategy process.
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6.3. Four forces of open strategy
In his work, Whittington et al. (2011, p. 537) describe four forces which, according to them, support
inclusion and transparency and, consequently, greater openness of companies. Whittington
adapted these forces from Abbott (1988), who studied the development of professions under the
influence of various environmental and endogenous forces. Whittington et al. (2011, p. 537)
consider four of the forces defined by Abbott (1988) as particularly relevant to the concept of open
strategy, which are organizational, social, cultural and technological. These four forces will be
examined in detail in this subsection.
As one organizational force that requires greater openness of companies, Whittington et al. (2011,
p. 539) cite the increased international scope which “ (…) has challenged the capacity and value
of exclusive central control from the center”. In this context, Whittington et al. (2011, p. 539) point
to the increasing importance of decentralized initiatives and local expertise for multinationals. In
addition, Whittington et al. (2011, p. 539) point out that more transparency of corporate leaders
regarding their strategies is also encouraged by the rise of a more aggressive financial form of
capitalism since the 1980s. According to Whittington et al. (2011, p. 539), the best prevention of
hostile takeovers is to keep shareholders fully informed about the business and its strategy.
As a social force that requires increased transparency and inclusion, Whittington et al. (2011, p.
539) mention the generational shift that is taking place in companies. Accordingly, involvement in
strategy conversations is considered simply natural by younger employees, Whittington et al.
(2011, p. 539) explain. The increasing inter-firm mobility of some corporate employees represents
another development for Whittington et al. (2011, p. 539) that makes it difficult to keep the strategy
secret and within the company. “As managers become more mobile, strategies become more
transparent to outside audiences. It is vain to set much store in secrecy when key staff are always
on the move.” (Whittington et al., 2011, p. 539).
Cultural changes also require companies to be more open about their strategy, according to
Whittington et al. (2011, p. 539). As one such change, the authors cite the wide dissemination of
strategic knowledge through Google and Wikipedia, among others (Whittington et al., 2011, p.
539). “Strategic planning techniques are no longer the arcane possession of an elite; every
manager can access them” (Whittington et al., 2011, p. 539). Moreover, Whittington et al. (2011,
p. 539) explain that the rise in postmodernism has led to the knowledge of local lower managers
being increasingly respected. Accordingly, strategic planners in the head office no longer have a
monopoly on wisdom (Whittington et al., 2011, p. 539).
73
The fourth force that Whittington et al. (2011, p. 540) believes plays a major role in inclusion and
transparency comes from technology. The importance of this force for the concept of open strategy
is also reflected in the fact that it is probably the most frequently mentioned in this context. Thus
besides Whittington et al. (2011, p. 540), Baptista et al. (2017, p. 322), Dobusch et al. (2019, p.
344), Hautz et al. (2017, p. 299f), Mount et al. (2020, p. 1ff), and Stieger et al., 2012, p. 45) also
point out the great potential for opening up the strategy process which stems from new
technological possibilities. Whittington et al. (2011, p. 540) emphasize that strategies are no longer
laboriously typed, photocopied and posted as in the past. Instead, new technologies such as
PowerPoint enable collaborative creation of strategy documents across numerous worksites and
organizational levels (Whittington et al., 2011, p. 540). In this context, other technologies that
promote greater inclusion and transparency are also mentioned, such as social media (Baptista
et al., 2017, p. 322; Hautz et al., 2017, p. 299), wiki technologies (Dobusch et al., 2019, p. 344;
Hautz et al., 2017, p. 299), crowdsourcing (Mount et al., 2020, p. 2) or strategy jamming (Hautz et
al., 2017, p. 299).
Finally, Whittington et al. (2011, p. 540) note that these four forces do not affect all companies
equally. For example, privately held companies are under less pressure from financial market
regulations and external shareholders, according to them (Whittington et al., 2011, p. 540).
Nevertheless, they are convinced that most companies should address the issue of openness:
“(…) most organizations will need to factor in the impact of information technology and the
managerial advantages of openness, both internally and externally. To a large extent, greater
external transparency is probably unavoidable” (Whittington et al., 2011, p. 540).
After explaining the organizational, social, cultural, and technological forces that, according to
Whittington et al. (2011, p. 536ff), require organizations to increase their degree of openness, the
next point discusses possible positive effects, but also risks and costs that, according to scholars
(Appleyard & Chesbrough, 2017; Baptista et al., 2017; Gegenhuber & Dobusch, 2017; Hautz et
al., 2017; Hutter et al., 2017; Luedicke et al., 2017; Mack & Szulanski, 2017; Malhotra et al., 2017;
Stieger et al., 2012; Yakis-Douglas et al., 2017), are associated with the concept of open strategy.
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6.4. Dilemmas
The concept of open strategy and the increased transparency and inclusion it brings are
associated with numerous positive effects, but also with risks and costs, according to Hautz et al.
(2017, p. 301). Hautz et al. (2017, p. 301) summarize these conflicting outcomes in five dilemmas,
which are discussed in more detail in this chapter. An overview of these dilemmas is provided in
figure 1.
Figure 1: Central dilemmas of open strategy (Hautz et al., 2017, p. 302)
The first dilemma described by the authors is called the dilemma of process (Hautz et al., 2017,
p. 301). Here, Hautz et al. (2017, p. 301) refer to the ambivalent effects that arise when a wider
audience is involved in the strategy process. Stieger et al. (2012, p. 46) explain that the great
advantage of inclusiveness is that you can “tap into the knowledge of the people involved” and
thus “improve the content of strategic decisions”. In this context, Appleyard & Chesbrough (2017,
p. 316), for example, have shown that the involvement of a larger audience allows access to
different sources of technical expertise. Furthermore, a multitude of different ideas for strategic
initiatives can be generated as Hautz et al. (2017, p. 301), Hutter et al. (2017, p. 355ff), Luedicke
et al. (2017, p. 382), and Mack & Szulanski (2017, p. 387) point out. However, increased
inclusiveness is not only associated with positive effects, but often leads to significant challenges
in the decision-making process, according to Hautz et al. (2017, p. 301). “(…) the involvement of
wider audiences reduces the speed, flexibility and control over the decision making process, which
in some cases might even prevent the organization from making any decision at all” (Hautz et al.,
2017, p. 301). Gegenhuber & Dobusch (2017, p. 347) emphasize in this regard that greater
openness often demands considerable organizational resources, for example the time needed to
answer user questions. Furthermore, Malhotra et al. (2017, p. 398) describe the risk of continuous
75
conflict where “the crowd engages in posting negative, personal and destructive attacks instead
of focusing their interaction on the strategic challenge at hand”. In addition, according to Malhotra
et al. (2017, p. 398), there is a risk of self-promotion. Here the authors mean that individuals are
often too focused on promoting their own point of view without paying attention to the contributions
of others (Malhotra et al., 2017, p. 398).
In the dilemma of commitment, Hautz et al. (2017, p. 302) highlight the fact that open strategy
can increase but also decrease commitment towards an organization’s strategy. Thus, the
involvement of a wider audience in the strategy process has a positive motivational effect and
leads to an increased commitment to the outcome of the process, according to Hautz et al. (2017,
p. 302). Stieger et al. (2012, p. 46) also point out that the involvement of a large number of
employees results in a common understanding and a stronger commitment. This understanding
of and commitment to the strategy is also conducive to its implementation, Stieger et al. (2012, p.
46) explain. However, there are also studies describing that difficulties in processing the input of
the people involved often leads to dissociation and frustration from the strategy process, Hautz et
al. 82017, p. 302) point out. In this context, the authors refer for example to Baptista et al. (2017,
p. 328) who explain that what they call user frustration can arise when the people involved in the
strategy making process find that their inputs are restricted or moderated in terms of visibility.
Furthermore, Baptista et al. (2017, p. 328) emphasize “Employees were happy to engage with
organizational disclosure but expected in return their voice and contribution to be acknowledged
and purposefully considered”. Luedicke et al. (2017, p. 374) explain that it can lead to a loss of
motivation on the part of the participants if they are excluded from developments that originally
came from their own initiative.
The third dilemma, the dilemma of disclosure, Hautz et al. (2017, p. 302) address the many
benefits that come with greater transparency, but also the significant risks associated with it. On
the one hand, higher transparency can serve as a means for impression management, as
Gegenhuber & Dobusch (2017, p. 350) demonstrate in their study, or help to reduce information
asymmetries according to Yakis-Douglas et al. (2017, p. 420). Moreover, Whittington et al. (2011,
p. 539) emphasize that it can increase a company's legitimacy in the face of regulatory
requirements and new social norms about transparency. On the other hand, Hautz et al. (2017, p.
302) warn that increased transparency can weaken an organization's competitiveness by making
it easier for competitors to obtain strategically sensitive information. Another negative effect,
according to Hautz et al. (2017, p. 302), could also be “that the organization gets exposed to
greater regulatory influence as regulatory agencies are granted access to information about the
internal workings of the organization”.
76
The inclusion of a larger group of people in the strategy process can be seen as a blessing but
also as a burden by the participants, a circumstance Hautz et al. (2017, p. 303) address in the
dilemma of empowerment. In this context, Hautz et al. (2017, p. 303) emphasize the positive
effect that greater inclusion gives participants a say in strategy and thus more power in the
organization. However, this can also be a burden for the people involved because of “(…) the
expectation that the participants invest – typically in addition to their regular tasks – extra time and
effort into strategy work” (Hautz et al., 2017, p. 303). In addition, Hautz et al. (2017, p. 303) explain
that by being involved in the strategy making process, “participants become (formally or at least
morally) accountable for the results of their work”.
The dilemma of escalation represents the fifth dilemma described by Hautz et al. (2017, p. 303),
which addresses the problem that when organizations begin to open up their strategy process in
certain areas, forces arise that require other areas also to be opened up. In some cases, such
escalation can be positive, according to Hautz et al. (2017, p. 303), when organizations experiment
with openness in limited areas before using these experiences to practice openness on a large
scale. However, the authors warn that there is often no way for organizations to restrict openness
once some areas have been opened up (Hautz et al., 2017, p. 303). “Hence, organizations face
the dilemma, on the one hand, of not opening up at all, hence, to relinquish potential benefits of
selective openness, or, on the other hand, to risk being forced to open up completely with the
respective challenges or to suffer the negative consequences of disappointed expectations about
openness” (Hautz et al., 2017, p. 303). In this context, Baptista et al. (2017, p. 328f) emphasize
that when people are involved in the strategy making process, they often expect to have access
to the relevant information concerned and, conversely, when a company gives information about
the strategy to a selected group, these people often want to participate in the strategy development
process. Moreover, according to Baptista et al. (2017, p. 328f), when an audience experiences
the privilege of participating in an organization's strategy, other audiences are likely to expect the
same openness toward them.
From these five dilemmas it can be seen that the concept of open strategy is associated with many
positive effects but also with numerous risks and costs. Therefore, the decision to move towards
greater transparency and/or inclusion should not be taken lightly by companies and the pros and
cons should be carefully weighed. If a company decides to move toward greater openness in the
sense of increased transparency and inclusion, the dilemmas described in this chapter “require
continuous reassessment and rebalancing of the extent and mixture of the bundle of practices
applied” (Hautz et al., 2017, p. 303). Appleyard & Chesbrough (2017, p. 311ff) and Hautz et al.
(2017, p. 303) emphasize in this context that this process can be seen as very dynamic with
frequent movements along and between the two dimensions. This dynamic of the open strategy
concept will be discussed in more detail in the next chapter.
77
6.5. Dynamics
Hautz et al. (2017, p. 303) describe the choice of openness of an organization as very dynamic
with possible movements between and along the two dimensions of transparency and inclusion.
This dynamic is particularly fostered by the dilemmas explained in the previous chapter, according
to Hautz et al. (2017, p. 303). The following chapter explains how exactly these emergent
dilemmas induce this adjustment of the levels of transparency and inclusion. These dynamic shifts
are illustrated in figure 2, with the axes of the individual figures 2a-d describing the two dimensions
transparency and inclusion as variable in their form and extent.
Figure 2: Dynamics of open strategy: Movements along and between the dimensions (Hautz et al., 2017, p. 304)
The lower left corner of figure 2a shows the traditional way of strategy making Hautz et al. (2017,
p. 303), which according to Whittington et al. (2011, p. 535) is considered as an exclusive and
78
secretive process. Arrows 1, 2 and 3 illustrate the growing trend towards greater openness in
terms of increased transparency and/or inclusion, which according to Hautz et al. (2017, p. 303)
is particularly motivated by the expected beneficial outcomes for companies. Arrow 1 (figure 2a)
represents the situation in which a company decides to increase transparency and provide more
information about strategic decisions but without the possibility of participation in the decision-
making process, Hautz et al. (2017, p. 304) explain. The reverse is also possible, according to
Hautz et al. (2017, p. 304), where a company moves “along the continuum of inclusiveness”, as
was the case at Siemens, for example, which invited employees to submit ideas and suggestions
regarding strategy formation as part of a company-wide initiative (Hutter et al., 2017, p. 359ff).
Mack & Szulanski (2017, p. 389) show in their study that this is particularly the case in centralized
organizations, where increased participation in idea generation is still combined with a low level
of transparency. However, Hautz et al. (2017, p. 304) emphasize that in most cases where there
are efforts regarding increased openness, there is a combination of increased transparency and
inclusion noticeable, which is illustrated in arrow 3. Furthermore, Hautz et al., 2017, p. 305) point
out that there are companies that do not have to undertake shifts in order to be more open. One
such company is “Premium Cola” which was already born open, Hautz et al. (2017, p. 305) explain.
Thus, Premium Cola has practiced radical open strategizing with high levels of transparency and
inclusion since its beginning, according to Luedicke et al. (2017, p. 376ff).
Apart from exceptional cases, such as Premium Cola, organizations increase transparency and/or
inclusion only to limited degrees, Hautz et al. (2017, p. 305) emphasize. The result of this limited
movement on the two dimensions can be various dilemmas, such as the dilemma of commitment
and the dilemma of escalation, Hautz et al. (2017, p. 305) explain. Thus, according to Baptista et
al. (2017, p. 328f), it can lead to additional questions and demands for more information if a
company practices moderate levels of transparency and only selectively provides exclusive
information (movement along arrow 1). Similarly, pressures can also arise regarding a shift on
arrow 2 if an organization has only moderate levels of participation, as this “might raise actors’
expectations to be also included in further decision-making” (Hautz et al., 2017, p. 305). The
dynamic toward greater transparency and/or inclusion can also be driven by the dilemma of
commitment, as the findings of Baptista et al. (2017, p. 328f) and Hautz et al. (2017, p. 305)
demonstrate. “Allowing only limited levels of transparency or inclusion may noticeable reduce
newly gained commitment and motivation when participants are eventually excluded from
developments that originated from their own contributions or find them restricted in visibility”
(Hautz et al., 2017, p. 305). This in turn could create pressures for companies to move along
arrows 1 and 2, according to Hautz et al. (2017, p. 305).
As illustrated in figure 2b, restrictively opening one of the two dimensions of transparency and
inclusion can also lead to forces to open up the other dimension as well, Hautz et al. (2017, p.
79
305) explain. Thus, according to Baptista et al. (2017, p. 328f) and Hautz et al. (2017, p. 305),
providing more information to a larger audience can lead not only to a demand for a higher degree
of transparency, but “can simultaneously raise demands of increased participation, driving
organizations to move along arrow 4” (Hautz et al., 2017, p. 305). According to Hautz et al. (2017,
p. 305), this also applies to companies that increase inclusiveness but provide insufficient
information to enable meaningful participation, leading to shifts along arrow 5.
However, the dilemmas described can lead not only to an increase in transparency and inclusion,
but also to a decrease in openness, Hautz et al. (2017, p. 305) explain. Examples where
companies have decided to switch from an open strategy to a closed one are provided by
Appleyard & Chesbrough (2017, p. 312f) in their study. The authors refer to this transition from
open to closed as reversion (Appleyard & Chesbrough, 2017, p. 318). According to Hautz et al.
(2017, p. 305), the dilemmas of disclosure, empowerment, and process may be particularly
responsible for movements toward lower levels of openness or even a return to a completely
closed approach. A reduction in transparency along arrows 6,7 or 8 (figure 2c) may be driven by
the dilemma of disclosure and empowerment, in which increased sharing of information with a
larger audience becomes inefficient due to the risk of loss of competitiveness or due to the risk of
“information overload and the inability of individuals to appropriately process and interpret the
additional information“ (Hautz et al., 2017, p. 305). Furthermore, the dilemma of process and
empowerment can cause a reduction in levels of inclusiveness, according to Hautz et al. (2017,
p. 305). “Empowering people to participate can also require digesting an excessive amount of
information, investing free time or being accountable for the results of the suggestions” (Hautz et
al., 2017, p. 305). These burdens can cause movement along arrows 8, 9, and 10 (figure 2d)
toward lower levels of inclusion, Hautz et al. (2017, p. 305) point out.
These dynamics, triggered by several dilemmas, give an idea of how complex the concept of open
strategy is. To practice the right degree of openness, companies must remain very flexible and, in
the face of new developments and circumstances, constantly reflect on and assess past decisions,
Hautz et al. (2017, p. 306) emphasize.
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6.6. Interim conclusion
After this examination of the current state of the literature on the topic, it can be said that the
opening up of the strategy process and the associated involvement of a wider audience represents
a promising approach for many companies. The urge for greater openness and thus increased
transparency and inclusion is driven by a variety of forces, as Whittington et al. (2011, p. 536ff)
point out. Thus, the concept of open strategy is gaining increasing relevance through various
organizational, social, cultural and technological developments, according to Whittington et al.
(2011, p. 536ff). Furthermore, the opening of the strategy process is associated with several
positive effects, as Hautz et al. (2017, p. 301ff) emphasize. For example, an open strategy process
makes it possible to tap into the knowledge of the people involved and thus has the potential to
improve the content of strategic decisions, according to Stieger et al. (2012, p. 46). Another
advantage is that a multitude of different ideas can be generated by involving a wider audience,
several authors point out (Hautz et al., 2017, p. 301; Hutter et al., 2017, p. 355ff; Luedicke et al.,
2017, p. 382; Mack & Szulanski, 2017, p. 387). Furthermore, the concept of open strategy is also
associated with positive motivational effects of the people involved and increased commitment to
the outcome of the strategy process, Hautz et al. (2017, p. 302) explain. However, organizational
skepticism about increased transparency and inclusion is not unfounded, as risks and costs are
also associated with increased openness, as Hautz et al. (2017, p. 301ff) explain. Thus, opening
up the strategy process and involving a broader audience reduces flexibility, speed, and control
over the decision-making process, Hautz et al. (2017, p. 301) point out. Moreover, increased
transparency can jeopardize an organization's competitiveness, as it becomes easier for
competitors to obtain sensitive information, Hautz et al. (2017, p. 302) warn. Hautz et al. (2017, p.
301ff) summarize these conflicting outcomes, i.e. the positive effects and the risks and costs
associated with the concept of open strategy, in five dilemmas. At the end of this chapter, the high
dynamics associated with open strategy are described. This is especially driven by these different
dilemmas and makes an ongoing adjustment of the two dimensions of transparency and inclusion
necessary, according to Hautz et al. (2017, p. 303ff).
The question that remains to be answered after this examination of the literature on the subject is
how the concept of open strategy could help bellaflora to achieve its goals and to cope with its
challenges. From the study of the company and especially from the conversation with Franz Koll,
it can be surmised that the current type of strategy-making can be classified as rather traditional.
Thus, this strategy was formulated by Franz Koll and his management team without involving
employees or other stakeholders. The impression was given that the company's strategy is more
of a secret and that strategic responsibility is separate from operational management. For this
reason, the opening up of the strategy process and the associated increase in transparency and/or
inclusion could represent a challenge for bellaflora, as according to Whittington et al. (2011, p.
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536) the fundamental nature of greater inclusiveness and transparency “stand in sharp contrast
to strategy’s conventional elitism and opacity”. If the company nevertheless succeeds in opening
up its strategy process to a wider audience, this could have positive effects in terms of achieving
its goals and mastering its challenges.
As mentioned above, the involvement of a wider audience in the strategy process has a positive
motivational effect and leads to an increased commitment to the outcome of the process,
according to Hautz et al. (2017, p. 302). This increase in motivation could have a positive effect
on the described challenge of the work attitude of some employees, who showed a lack of
motivation and a certain lethargy after returning to the branches after the lockdowns. In addition,
the increased commitment to the strategy, if it has been developed with the participation of the
employees, can lead to them taking the contents more to heart and possibly implementing them
more conscientiously.
Other positive effects of an open strategy are that it allows to tap into the knowledge of the people
involved and thus has the potential to improve the content of strategic decisions (Stieger et al.,
2012, p. 46) and that a multitude of different ideas can be generated by involving a wider audience
(Hautz et al., 2017, p. 301; Hutter et al., 2017, p. 355ff; Luedicke et al., 2017, p. 382; Mack &
Szulanski, 2017, p. 387). This multitude of ideas and the access to knowledge of different
stakeholders could serve the company especially with regard to the goal of underlining their market
leadership position through a revolutionary course of action. Therefore, the involvement of
customers, suppliers, employees and other stakeholders could potentially overcome the industry
mindset and generate innovative and revolutionary ideas that will lead to the company
differentiating itself even further from its competitors.
However, opening up the strategy process is not only associated with positive effects, but also
with risks and costs, as highlighted in section 6.4. Thus, an increase in transparency could
jeopardize bellaflora's competitiveness, as competitors could more easily obtain strategically
sensitive information (Hautz et al., 2017, p. 302). Furthermore, the involvement of a wider
audience is associated with the loss of control, flexibility and speed in the decision-making
process, which can lead to no decision being made at all in some cases (Hautz et al., 2017, p.
301). Greater openness also often takes up considerable organizational resources (Gegenhuber
& Dobusch, 2017, p. 347) which, in the case of bellaflora, may be needed elsewhere, such as in
the expansion of the online store or the services offered by the company. Another danger is that
if bellaflora decides to open up certain areas of its strategy process, this could lead to forces
demanding that other areas be opened up as well, as Hautz et al. (2017, p. 303) discuss in the
dilemma of escalation.
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As you can see, the decision as an organization to take steps towards greater openness in the
strategy process is not an easy one, as there are several advantages, but also numerous
disadvantages associated with it. It is important that bellaflora's management is aware that if it
decides to increase transparency and/or inclusion, that the company must remain flexible and, in
the face of new developments and circumstances, constantly reflect on and assess past decisions
(Hautz et al., 2017, p. 306). This flexibility, and the constant adjustment of the degree of
transparency and inclusion, is necessitated by the various dilemmas described in Section 6.5,
according to Hautz et al. (2017, p. 303).
After this comprehensive examination of the literature on the topic of open strategy and an
illustration of the results based on the case study of bellaflora, the reader will find a conclusion in
the next point in which the research questions formulated in point 1.2 are answered based on the
findings of this work.
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7. Conclusion The present work is concerned with the goal of finding out what constitutes a human organization.
For this purpose, the organizational form of humanocracy, which was brought to life by Hamel &
Zanini (2020), and its seven principles were described in the context of this thesis. Furthermore,
three of these principles were discussed in detail and the current state of the literature of the
different thematic fields was closely examined. In addition, an illustration of the results of these
findings took place in the form of a case example of the Austrian gardencenter bellaflora. The
following chapter contains a conclusion in which the following research questions are answered
based on these findings.
- What constitutes a human-centered organization?
o How can organizations achieve a sense of ownership in the workforce? o How can organizations create a sense of community within their company?
o What are the benefits and problems associated with opening up the strategy
process?
Developments such as the explosive growth of new technologies (Holbeche, 2019, p. 668), the
rising globalization, hypercompetition, the shortening of product lifecycles (Schreyögg & Sydow,
2010, p. 1251), the generational change in the workforce of organizations (De Hauw & De Vos,
2010, p. 293ff) or the rise of knowledge-based work (Lee & Edmondson, 2017, p. 37) increase the
necessity of a shift towards leaner and flatter organizational forms (Lee & Edmondson, 2017, p.
37). The authors Hamel & Zanini (2020, p. 19) are convinced that most organizations are still
trapped in bureaucratic structures and thought patterns and describe in their book a more flexible
and “human” form of organizing. After analyzing this form of organization described by Hamel &
Zanini (2020) and a comprehensive examination of the literature, it can be said that a human
organization differs from others especially in its perspective towards its employees. Thus,
organizations should move away from the attitude and view that employees are perceived as
instruments to create products and services. Rather, the organization should be seen as an
instrument that is used by the people within it. In order to become more human as an organization,
it is also necessary to flatten the hierarchy and thus the power imbalance and to provide
employees, especially those at lower levels of the hierarchy, with more opportunities, rights,
influence and freedom.
This increase in opportunities, rights and influence should result, among other things, in a sense
of ownership in the workforce. This means that employees perceive themselves as owners of the
organization. In order to achieve such a sense of ownership, and thus answer the second research
question, the review of the literature on the subject has shown that it is important to implement
84
different work practices and introduce a form of shared capitalism in the company, such as
employee participation in the profits of the organization (Chi & Han, 2008, p. 692ff; Kaarsemaker
& Poutsma, 2006, p. 677ff; Rousseau & Shperling, 2003, p. 555ff). These work practices include
involving employees in company decisions and sharing relevant information with them (Chi & Han,
2008, p. 694ff; Rousseau & Shperling, 2003, p. 557f). Furthermore, care must be taken to ensure
an internal fit, i.e. coherence and consistency, of the HR practices used in the company
(Kaarsemaker & Poutsma, 2006, p. 671ff). From the management point of view, it is also important
that they stand behind the concept of employee ownership and see the employees as legitimate
owners (Harrison et al., 2018, p. 7; Kaarsemaker & Poutsma, 2006, p. 680; I. L. Pierce et al., 1991,
p. 140). This thesis also showed how the implementation of an employee ownership concept could
help bellaflora to achieve its strategic goals and overcome its challenges. A key positive effect in
this regard could be the alignment of interests between employees and owners. Furthermore,
could the introduction of employee ownership positively influence the work attitude of the
employees, as the concept is associated with higher organizational commitment among
employees and increased engagement and productivity. In addition, the concept of employee
ownership could also be helpful with regard to the described difficulties of the company in retaining
employees. It is also conceivable that employee ownership would be beneficial in terms of
expanding the product range. However, this thesis also describes possible challenges bellaflora
could face if they were to increasingly realize employee ownership in the company. One of these
challenges is the risk of free riding. Accordingly, there is a danger that employees free ride on the
effort of their colleagues. In addition, the quality and speed of the decision-making process could
be negatively affected by the involvement of ill-qualified employees. Also to be mentioned in this
context are the partly high administrative costs which are often associated with profit sharing
concepts. An overview of these advantages and disadvantages of the concept of employee
ownership, which were identified during the review of the literature on the subject, is provided in
table 5.
Positive effects Possible challenges/risks
• Alignment of employees and owners’
interests
• Increased productivity and
commitment of employees
• Lower voluntary turnover
• Higher ROE
• Reduced monitoring and supervisory
costs
• Free-riding
• Negative effects on quality and speed
of decisions
• High administrative costs of profit-
sharing plans
Table 5: Possible effects of employee ownership
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A human-centered organization is also characterized by a sense of community among its
workforce (Hamel & Zanini, 2020, p. 157ff). With regard to the third research question, how to
achieve such a sense of community in the company, the examination of the literature showed that
various factors are of importance in this context. Therefore, it is important that there is a high level
of agreement among employees about what is valued in the organization and that there is a high
intensity regarding these values and norms (Chatman & Cha, 2003, p. 23). To achieve such an
culture within the organization, where these requirements are met, a compelling vision, a purpose
and organizational values have to be defined and regularly communicated by the leaders of the
company (Rosenthal & Masarech, 2003, p. 9; Warrick & Gardner, 2021, p. 42). Furthermore, it is
essential that the values are visibly demonstrated by the leaders through their behavior and
decisions (Rosenthal & Masarech, 2003, p. 12). Attention should also be paid to ensuring that the
company's culture and strategy are aligned and consistent (Warrick, 2017, p. 402) and that culture
plays a role in recruitment and training of employees (Chatman & Cha, 2003, p. 26ff; Warrick,
2017, p. 402; Warrick & Gardner, 2021, p. 43). Also helpful in strengthening a culture and thus
achieving a sense of community is a reward system that recognizes and rewards desired behavior
(Chatman et al., 2014, p. 28; C. O’Reilly, 2008, p. 98), or the use of ceremonies and symbols (C.
O’Reilly, 2008, p. 96f; Warrick, 2017, p. 402). This thesis also illustrates how bellaflora could
benefit from such a strong culture. Thus, a successful establishment of such a culture could help
bellaflora especially in terms of expanding their market leadership and in differentiating
themselves from its competition. Because sooner or later just about everything can be imitated by
competitors, including the product range offered, the new store concept, and even the services
offered but the culture in an organization is something unique that is impossible to replicate
(Rosenthal & Masarech, 2003, p. 3). Therefore, organizational culture can represent a long-term
competitive advantage. In addition, the literature describes that when there is a high level of
consensus and endorsement regarding organizational values, a so-called social control is created
which can have a positive impact on customer service and employee performance in general
(Chatman & Cha, 2003, p. 21f; O’Reilly & Chatman, 1996, p. 167; Sørensen, 2002, p. 73) .
Achieving a sense of community could also help in regard of employee retention. Thus, an
organizational culture where employees feel comfortable and where there is a high sense of
community could potentially lower the turnover rate of the company since a strong organizational
culture is associated with positive effects such as increased job satisfaction (Berson et al., 2007,
p. 627) and dedication of employees (C. O’Reilly, 2008, p. 93). Finally, it should be noted that
establishing such a strong culture and thus achieving these positive effects is challenging and is
an interplay of many different factors, Warrick & Gardner (2021, p. 50) point out. However, whether
or not one dedicates oneself to this challenging task of creating a successful culture a culture will
be formed either way in the organization, department or work group, according to Chatman & Cha
(2003, p. 32). “The question is whether the culture that forms is one that helps or hinders the
86
organization’s ability to execute its strategic objectives. Organizational culture is too important to
leave to chance (...)” (Chatman & Cha, 2003, p. 32). An overview of the positive effects of a strong
organizational culture and the points to be considered when building it is given in Table 6.
Positive effects Important points for building a strong culture
• Increased job satisfaction and
dedication of employees
• Increased customer satisfaction
• Long-term competitive advantage
• Social control
• Develop an understanding of the
present culture
• Define vision, mission, purpose and
values
• Alignment of strategy and culture
• Hire and train for culture
• Leaders must walk the talk
• Reward system
• Symbols and ceremonies
Table 6: Summary of findings in regard to building strong culture
All these discussed points require a clear rethinking by managers but also by employees, in many
different areas. Such rethinking should also take place when it comes to the strategy making
process, according to Hamel & Zanini (2020, p. 189). Thus, in a human-centered organization,
strategy making should be a company-wide conversation that is open to employees, customers,
and other external partners. The examination of the current state of the literature on open strategy
gives an idea of the great potential associated with this concept. Thus, numerous advantages are
described in the literature which have been associated with the opening up of the strategy process.
For example, an open strategy process makes it possible to tap into the knowledge of the people
involved and thus has the potential to improve the content of strategic decisions (Stieger et al.,
2012, p. 46). Another advantage is that a multitude of different ideas can be generated by involving
a wider audience, several authors point out (Hautz et al., 2017, p. 301; Hutter et al., 2017, p. 355ff;
Luedicke et al., 2017, p. 382; Mack & Szulanski, 2017, p. 387). Furthermore, the concept of open
strategy is also associated with positive motivational effects of the people involved and increased
commitment to the outcome of the strategy process (Hautz et al., 2017, p. 302) explain. However,
organizational skepticism about increased transparency and inclusion is not unfounded, as risks
and costs are also associated with increased openness, (Hautz et al., 2017, p. 301ff) explain.
Thus, opening up the strategy process and involving a broader audience reduces flexibility, speed,
and control over the decision-making process, Hautz et al. (2017, p. 301) point out. Moreover,
increased transparency can jeopardize an organization's competitiveness, as it becomes easier
87
for competitors to obtain sensitive information, Hautz et al. (2017, p. 302) warn. Another danger
is that companies can be pressured to open up their strategy process completely if they start to
open up only certain areas to internal and/or external stakeholders. In this context, the results are
also illustrated using the case example of bellaflora. As mentioned above, the involvement of a
wider audience in the strategy process has a positive motivational effect and leads to an increased
commitment to the outcome of the process. This increase in motivation could have a positive effect
on the described challenge of the work attitude of some employees, who showed a lack of
motivation after returning to the branches after the lockdowns. And the increased commitment to
the strategy, if it has been developed with the participation of the employees, could lead to them
taking the contents more to heart and possibly implementing them more conscientiously. Other
positive effects of an open strategy are, as already mentioned above, that it allows to tap into the
knowledge of the people involved and a lot of different ideas can be generated through that. These
ideas and the access to knowledge of different stakeholders could serve the company especially
with regard to the goal of underlining their market leadership position through a revolutionary
course of action. Therefore, the involvement of customers, suppliers, employees and other
stakeholders could potentially overcome the industry mindset and generate innovative and
revolutionary ideas that will lead to the company differentiating itself even further from its
competitors. Possible risks in this context could be that competitors could more easily obtain
strategically sensitive information. Greater openness also often takes up considerable
organizational resources which, in the case of bellaflora, may be needed elsewhere, such as in
the expansion of the online store or the services offered by the company. Furthermore, as already
mentioned the speed and flexibility of the decision-making process is probably reduced. Again,
Table 7 provides an overview of these positive and negative effects which, according to the
literature, are associated with increased transparency and inclusion.
Positive effects Negative effects
• Tap into the knowledge of the people
involved
• Generation of a multitude of different
ideas
• Positive motivational effects of the
people involved
• Increased commitment to the outcome
of the strategy process
• Reduction of speed, control and
flexibility of the decision-making
process
• Jeopardize organizational
competitiveness
• Openness takes up considerable
organizational resources
Table 7: Effects of Open Strategy
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All in all, it can be said that in order to become more human as an organization, a rethink is needed
in many areas. Such a rethinking is made necessary by various developments that require a more
decentralized and flexible form of organizing.
On the whole, it can be said that it was possible to answer the formulated research questions to a
large extent, based on the literature found on the individual topics. It should be noted, however,
that in answering the first research question, what constitutes a human-centered organization,
reference is made mainly to the two authors Gary Hamel and Michele Zanini (2020), which calls
into question the general validity of the findings.
Finally, in the last chapter of this thesis, limitations of this work and possibilities for further research
in this research area are pointed out.
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8. Limitations and future research Among other things, due to the broadness of the thematic field investigated in this thesis, there
are limitations to this work, which will be described in the following.
One of these limitations is that only three of the seven principles described by Hamel and Zanini
have been examined in detail in this work. Thus, a literature review on the remaining four principles
(markets, meritocracy, experimentation, paradox) would be interesting. Furthermore, an
illustration of the results was only carried out on the basis of one company. It would be exciting to
conduct a more comprehensive empirical study to determine the feasibility and effects of
implementing one or more of these aspects of a human organization. In addition, there are
limitations due to the chosen illustration. Accordingly, only one person was interviewed about the
strategic orientation and the challenges bellaflora is facing. A larger number of interview partners
might have provided more or different information in this context.
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9. References Abbott, A. (1988). The System of Professions: An Essay on the Expert Division of Labour.
University of Chicago Press.
Aboramadan, M., Albashiti, B., Alharazin, H., & Zaidoune, S. (2019). Organizational culture,
innovation and performance: A study from a non-western context. Journal of Management