Maintaining Organizational Balance

The grid can also be divided up into four organizational zones, which are congruent with the four market zones.  Organizational zones indicate how well an organization is doing in its appropriate market environment, and reflect its current cultural and operational conditions.

You can use your organization's grid position as previously discussed to determine what organizational zone it is in.  This position will tell you how in sync your organization is with its market and, thus, how poised for success it is.

These organizational zones presume that your organization is already operating in the appropriate market quadrant.  If it is not, than your task is to align the organization and its market as quickly as possible.

The optimal zone is the one that best fits the market archetype; if your organization is here, it is in an ideal position, and should be able to deal with whatever circumstances arise in it. 

In the coping zone, a good deal of stress is being put on the organization's culture, but it should be able to endure the pressure and perform adequately, at least for now.  However, if nothing is done to move closer to the center of the grid, its position could deteriorate to the point where coping and putting out fires become the norm.

An organization is in the dysfunctional zone when its culture is simply unable to handle the issues inherent to the market in useful, productive, or positive ways.

The following chart lays out what goes on in organizations that operate in each of these zones:

Organizational Zone Characteristics

Organization	Optimal Zone	Coping Zone	Dysfunctional Zone
Ruler	Low internal costs; moderate agility; relatively small bureaucracy; significant customer service; market dominance	High internal costs; slow and plodding action; large bureaucracy; effective  strategy; aggressiveness; market dominance	Very high internal costs; very large bureaucracy; very slow action; obliviousness to market and customer needs
Warrior	Very low internal costs; few layers to the hierarchy; good coordination; somewhat agile and responsive to the market	Moderate internal costs; some labor- intensive processes and significant technology costs; fair coordination; moderate number of hierarchical levels; somewhat insensitive to market needs and conditions	Excessive internal costs; many labor-intensive processes and high technology costs; lack of coordination; bulging hierarchy; almost total loss of market sensitivity and responsiveness
Hunter	Low internal costs compared to competition; lean production; excellent customer service; significant and successful research and development	Same internal costs as competition; adequate or good customer service; somewhat successful research and development; difficult technology and/or distribution process	Higher costs than competition; poor customer service; very complex market; technology difficulties; poor or very difficult distribution; little successful research and development
Pioneer	Well-managed internal costs; personnel well- matched with technology needs; very unbureaucratic; focused on research and customer needs	High internal costs, especially for research and market development; some difficulty in finding staff, especially for technology positions; somewhat bureaucratic; difficult but possible to focus on customer needs	Excessive internal research and development expenses; difficulty meeting customer needs; high inventories; unwieldy management; difficulty in finding staff, especially for technology positions

If a particular product or service drifts toward the market zone connoting danger or disaster, it will exert a force on your organization that will pull it toward the organizational zone indicating dysfunction.  At such times, leadership's job is to keep the organization as healthy, as operational, and as close to the center of the grid as possible.

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