The Culture Styles of Management Consulting Industry in Indonesia

Roza Marsaulina Sibarani

Pelita Harapan University, Jl. M.H. Thamrin Boulevard Tangerang, 15811 Banten, Indonesia

Keywords: Culture Styles, Organizational Culture, Consulting Firm Culture, Culture for Millennials Consultants.

Abstract: There are some factors to create effective organization and one of them is organizational culture. This study

aims to identify the styles of organizational culture based on the eight cultures styles theory, specifically in

the management consulting industry in Indonesia. This industry is predicted to be increased averagely 9% per

year along with the growth of modern infrastructure in Indonesia. The data was taken from three management

consulting firms in Jakarta with total respondents of 127 that were collected by using a convenience sampling

technique. The statistical descriptive approach using SPSS software was used in data analysis of this study

and the result showed that the top three culture styles in management consulting firms in Indonesia are

learning, results and purpose. By understanding the culture style, the leader can define the right programs to

build a strong culture that fits organization vision and goals.

1 INTRODUCTION

A consultant is an individual who contributes

knowledge, advice, planning and strategy to an

organization without being part of the practice and

does not take over management (Furusten, 2009).

Consultancy services can be done individually or as a

firm. Management consulting, popular known as

business consulting, give advisory and/or

implementation services to the (senior) management

of the organization in order to improve the business

strategy effectiveness, to increase organizational

performance and operational processes. Management

consulting covers between 50-55% of the total

consulting services in the market, which are strategic

and human resources consulting services

(Consultancy.asia, n.d.).

The worldwide market for management

consulting is more than $130 billion and grow

averagely 4% per year (Consultancy.asia, n.d.). In

Indonesia, the government policy in investment

packages and modernization of infrastructure impact

to the growing of business activities, and then

increasing the demand of management consulting

services by 12% in 2016 (Euromonitor, 2017). The

market growth in this industry was predicted to

consistently increasing averagely 9% per year in

2016-2021 since the modern infrastructure including

digital infrastructure will continue to be built in

Indonesia (Euromonitor, 2017).

In order to be able to meet the needs of business

growth, the organization has to remain to perform and

effective. Organizational performance is often

measured by financial factors such as profit, cost, and

lost. In any case, relying on financial performance by

itself is not enough, the organization should concern

about the business performance and effectiveness in

a long-term basis, which one of the fundamental

factors to predict it is the organizational culture.

Heskett (2012) in his book titled The Culture Cycle

wrote that effective culture could give differences

about 20-30% of corporate performance when

compared with culturally unremarkable competitors.

Since the organizational culture is unique, each

organization has a different culture. Organization

culture is tacit social order of an organization that

shapes attitudes and behaviors in wide-ranging and

long-term period (Groysberg et al., 2018). Groysberg

et al. (2018) also defined the four attributes of culture

are shared (behaviors, values and assumptions),

pervasive (apply broadly in an organization),

enduring (direct the thoughts and actions of group

members over the long term) and implicit (invisible

and unconscious).

The shared core values, beliefs and norms shape

the identity of the organization creates DNA or

genetics of the organization. The more employees

reflected those values, beliefs and norms, the stronger

the organizational culture. With the more millennials

who are digital natives work in the industry, and

Sibarani, R.

The Culture Styles of Management Consulting Industry in Indonesia.

DOI: 10.5220/0008428501430150

In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World (ICIB 2019), pages 143-150

ISBN: 978-989-758-408-4

143

digital technology supports the business process, a

certain type of culture should be strongly applied to

support the business.

To develop a strong culture, the organization

should first identify the current culture which they

could do it through a culture survey by using a culture

measurement method. One of the methods developed

by Cameron and Quinn (2006), who initiated the

Competing Values Framework (CVF). This CVF

well-known as Organizational Culture Assessment

Instrument (OCAI) that grouped organizational

culture into four types of collaborative (clan), creative

(adhocracy), competitive (market) and controlling

(hierarchy). In early 2018, Groysberg et al. wrote the

framework of eight styles of organizational culture,

which are the purpose, caring, order, safety, authority,

results, enjoyment and learning. However, there are

few studies on the organizational culture style in the

management consulting industry. Thus, this study

investigates the culture style of management

consulting industry in Indonesia using the eight styles

of organizational culture.

2 LITERATURE STUDY

2.1 Organizational Culture

Organizational culture is defined as a pattern of

shared tacit assumptions that was learned by a group

of people and being used when they solve their

problems both form external and internal and should

be quickly adopted by new members as the correct

way to perceive, think, and feel in relation to those

problems (Schein, 2010). The key components of

organizational culture are core values, beliefs and

norms (Flamholtz and Randle, 2012) and it

influenced by many aspects in the organization

including leadership styles, working climate, strategy

formulation, organizational behavior and business

process (Aycan et al., 2000; Saffold, 1998).

Culture is important to an organization, because

strong culture contributes to improving

organizational performance both direct and indirect

(Groysberg et al., 2018; Laforet, 2016; Saffold,

1998). A research did by Tseng (2010) to 131

respondents represented corporations in Taiwan

showed that organizational cultures influence

corporate performance both directly and indirectly.

Indirectly, certain types of organizational culture may

lead to knowledge sharing culture within the

organization that impacted to the corporate

performance. A study that measures the relationship

of organizational culture to the financial bottom line

asset showed that culture is economic and strategic

assets if it is managed well (Flamholtz and Randle,

2012). However, a study did by Pinho et al. (2014)

showed that both organizational culture and culture

types did not influence organizational commitment,

but it leads to organizational performance.

An organization can have a strong and deep-

rooted culture by considering those components of

vision, values, practices, people, narrative, and place

(Coleman, 2013). The explanation of them are as

follow: the great culture starts with a vision and

mission statement, the values are the core of the

organizational culture, culture should be practiced by

the whole employees, the people are the main actors

in culture since they share the core values and

embrace those values, a unique history of a company

could be the best narrative to build culture, and local

culture where the organizational placed influenced

the organizational culture.

Related to the millennials workers who are

increasing in number every day, creating

organizational culture will be a challenge especially

with the issues of millennials such as easily to move

to other companies, more likely to become a

freelancer to get flexible working hours, and want to

be an entrepreneur. Deeply shared vision, open

communication, technology, create communities of

mutual interest and passion and entrepreneurial

environment are the key for building the working

culture for millennials (Benson, 2016).

And in this digital era, creating a culture through

values, process and restructure is not enough.

Goldsmith and Levensaler (2016) said that culture

should be built in three approaches of mind (brain),

heart and system. Values are the heart of culture,

process and organizational structure are the brains of

culture and technology is the nervous system in order

to build technology as the nervous system of culture,

the organization should have democratization of

information, build a culture of opportunity instead of

the classic career paths, and performance enablement

instead of traditional performance management.

2.2 Culture Styles

In an organization, people are so close, helping

others, sharing knowledge, offering mentoring and

making relationship sincerely. In other organization,

people tend to get as much as possible from others

and help others for personal benefits. Grant (2013)

mentioned this as the result of organizational culture,

whether the norms and values in organizations

support helping or not. He then clarified those kinds

of culture into ‘giver culture’ and ‘taker culture’ and

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his study showed that most organizations are in the

middle. Another organization has a different style

and those styles commonly are measured using

Organization Culture Assessment Inventory (OCAI)

Framework developed by Cameron and Quinn

(2006).

By knowing the type of organizational culture is

important especially for leaders, because it can help

them to identify their specific characteristics that

make them know their potentials (Pinho et al., 2014).

By identifying the culture style, the leader will know

whether the culture already fit to the vision of the

organization.

2.2.1 Organization Culture Assessment

Inventory (OCAI) Framework

OCAI is commonly used to diagnose and identify

both the current and preferred culture. By comparing

the current culture style and preferred culture style,

the organization can develop relevant intervention

culture programs in order to create a new culture style

based on the preferred one or to strengthen the

culture. OCAI defined organizational culture based

on Competing Values Framework (CVF) that aim to

support the organization position in the market based

on six characteristics of dominant leadership,

organizational leadership, management of

employees, organization glue, strategic emphases,

and criteria of success.

OCAI adopted four items in organizational drive

to change, which are allowing the people to have

flexibility and discretion at work (flexibility),

organize the organization in stable and do control

things in business process (stability), focus on finding

out what is important to the organization and how

they actually want to work (internally focus and

integration) and focus on finding out what the

valuable for the market and the position in the market

(external focus and differentiation). Based on those

indicators, OCAI results grouped the organization

into four types of culture: clan culture, adhocracy

culture, market culture and hierarchy culture

(Cameron and Quinn, 2006):

1) Clan culture has a family character, where people

are treating others as a partner. Leaders manage

people through teamwork and people

development.

2) Adhocracy culture demands creativity and

innovation in order to create new products and

services to anticipate future market needs.

Leaders encourage and supports the creativity and

build the entrepreneurial spirit of the team

members.

3) Market culture is a competitive culture, where

people are a mostly high achiever and goal-

oriented persons. The main task of leaders is to

control productivity, results, goals, and profits.

4) Hierarchy culture is characterized by formal and

structured organizational and business processes

forms. Leaders focus on producing goods and

services efficiently and effectively.

2.2.2 The 8 Culture Style

Groysberg et al. (2018) published a new framework

of the 8 culture styles in Harvard Business Review.

They enhanced the four organizational drive to

change based on OCAI framework by using the

dimensions of flexibility and stability as the way

people respond to change; independence and

interdependence as dimensions of how people

interact each other This framework formed the eight

culture styles. However, an organization is not fixated

on one type of culture but rather a combination of

them:

1) Caring culture focuses on relationship,

togetherness and cooperation. People in this

culture style tend to be loyal and value diversity,

enjoy collaborating and work in a team. Leaders

emphasize sincerity and positive relationship in

team members.

2) Purpose culture focuses on idealism and altruism.

People share ideals and contribute to greater

goals; therefore, they are tolerant and accept

changes to achieve their goals. Leaders shared the

common goals and encourage team members to

achieve that goal together.

3) Learning culture is characterized by exploration,

expansion and creativity. People are united by

curiosity and open-minded; and leaders

emphasize innovation and working as an

adventure.

4) Enjoyment culture is characterized by pleasure

and joy. People in this culture style consider

working to be fun, so they enjoy working without

direction from others. Leaders emphasize

spontaneity, fun and using humor when

discussing the work.

5) Result culture focuses on achievement and

victory. People want to achieve the best

performance, united to build capability and

success.

6) Authority culture is a competitive place where

people try to get personal benefits. People are

difficult to accept the change, they are firm and

united by strong control. Leaders emphasize trust

and dominance.

The Culture Styles of Management Consulting Industry in Indonesia

145

7) Safety culture focuses on planning the future.

People aware of risks and anticipate change,

leaders emphasize realistically and plan.

8) Order culture focuses on respect, structure and

norms shared. People work according to the rules

and want to adjust changes, while leaders

emphasize procedure and respect.

Figure 1: The Culture Style Framework (Groysberg et al,

2018).

3 METHODOLOGY

3.1 Data Collection

This part is an outline of how this study takes place.

A research design is typically included how data is

collected, what instruments are employed, and how to

analyze it. This study aims to describe the culture

style of management consulting firms in Indonesia,

therefore, descriptive research is undertaken.

Descriptive research is used for gaining new insight

and for ascertaining the characteristics of the

variables of interest in a situation (Sekaran and

Bougie, 2016).

This paper is an actual study, while the

preliminary study was already conducted to 30

respondents in a consulting firm. The preliminary

study showed that all of the indicators are valid and

reliable. Hence, the study was continued to actual

study to more than one firm.

This study uses both primary and secondary data.

Structured questionnaires for employees are collected

for understanding the present culture style. Therefore,

unit analysis of this study is individuals who are the

employees of selected firms. Journals, books and

other published materials will be utilized to review

the previous research for supporting this research.

The survey was conducted in November and

December 2018.

Non-probability sampling technique is used in

this study specifically convenience sampling method.

In this method, the researcher selects the subjects that

are more readily accessible, but the study results are

not necessarily generalizable to the population

(Sekaran and Bougie, 2016).

Table 1: Operational Definition of the 8 Culture Styles

Questionnaire.

Operational Definition Item Number

1. The organization focuses on cooperation IT 1

2. Organizations focus on mutual trust IT 2

3. The organization feels like a big family IT 3

4. Organizations focus on deep attention IT 4

5. Organizations focus on tolerance IT 5

6. The organization feels like an ideal

community

IT 6

7. The organization focuses on exploring

self-potential

IT 7

8. Organizations focus on creativity IT 8

9. The organization feels like a dynamic

projec

IT 9

10. Organizations focus on pleasure IT 10

11. The organization focuses on enthusiasm IT 11

12. The organization feels like an always

pleasant situation

IT 12

13. Organizations focus on achievement IT 13

14. The organization focuses on victory IT 14

15. The organization feels always gives

awards according to expertise

IT 15

16. Organizations focus on individual

strengths

IT 16

17. Organizations focus on individual

courage

IT 17

18. The organization feels like a competitive

arena

IT 18

19. Organizations focus on planning IT 19

20. Organizations focus on alertness IT 20

21. The organization feels like working with

great care

IT 21

22. Organizations focus on organizational

strength

IT 22

23. The organization focuses on

organizational stability

IT 23

24. The organization feels like a smooth

process

IT 24

A self-administered questionnaire survey of 24

questionnaires using 5-scale Likert. This

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questionnaire is built by adopting the 8 culture styles

developed by Groysberg et al. (2018) with some

adjustments. In the original questionnaire, there are

eight questions which the respondents should rank

between 1 and 8 to what best describes the

organization's culture. In this study, the original

questionnaire was split into one statement per

question to avoid double meaning, so that it became

3 questions representing each cultural style with a

total of 24 questions.

After the survey was analyzed, semi-in-depth

interviews were conducted to six people representing

three directors and three employees from each firm in

order to clarify and find a deeper meaning of the

survey results.

3.2 Sampling Procedure

The target population is the entire set of units for

which the data used to make inferences (Sekaran and

Bougie, 2016). In this study, the target population is

the employees in management consulting firms in

Jakarta. It is not known exactly how many

management consultant firms in Indonesia yet. And

they are used to classify as: (1) global advisory firms

with more than 50 employees, (2) local firms with

more than 50 employees, (3) local firms with 15-50

employees and (4) local firms with less than 14

employees. This study focused on local firms and

managed to collect data from each group of local

firms.

Three management consulting firms in Indonesia

are chosen as research objects: Consulting A with 86

fulltime employees, Consulting B with 34 fulltime

employees and Consulting C with 17 fulltime

employees. Those employees consist of management

consultants in all levels (partner, senior, middle and

junior level), and marketing and support employees

also in all levels (senior, middle and junior level). The

activities of consulting firms are diagnosing the need

of clients both individual and organization, giving

solutions to them through training and consulting

services, and measuring the results. Questionnaires

are sent online, and 127 respondents participated in

this study.

3.3 Data Analysis

A two-stage data analysis was performed to assess the

measurement quality of the indicators. In the first

stage is measuring the validity and reliability of each

indicators using SPSS version 23 software. Validity

is an index that shows the extent to which a measuring

instrument really measures what needs to be

measured. In this study, validity will be seen based on

the comparison of the value of the correlated item-

total correlation with the results of the calculation of

r table.

The r-table to measure the validity of 127

respondents is df = (n-2) = (127-2) = 125. With df =

125 and significance of 5%, the r-table is 0.1743.

Since all of the r-score are > r-table or r-score >

0.1743, thus all of the indicators are considered to be

valid.

Table 2: Validity test of the 8 Culture Styles.

Dimension Indicator Item

Corrected Item-

Total Correlation

Interdependence Caring

IT 1 0.36

IT 2 0.42

IT 3 0.40

Flexibility Purpose

IT 4 0.36

IT 5 0.39

IT 6 0.39

Flexibility Learning

IT 7 0.40

IT 8 0.33

IT 9 0.43

Independence Enjoyment

IT 10 0.33

IT 11 0.33

IT 12 0.39

Independence Result

IT 13 0.38

IT 14 0.40

IT 15 0.41

Stability Authority

IT 16 0.24

IT 17 0.32

IT 18 0.23

Stability Safety

IT 19 0.38

IT 20 0.32

IT 21 0.37

Interdependence Order

IT 22 0.37

IT 23 0.29

IT 24 0.42

Reliability is an index that shows the extent to

which the instruments, in this case the indicators, can

be trusted or relied upon (Sekaran and Bougie, 2016).

In this research, a reliability study is measured using

Cronbach's Alpha and the score of Cronbach’s Alpha

The Culture Styles of Management Consulting Industry in Indonesia

147

in this study is 0.893. According to Sekaran and

Bougie, Cronbach’s Alpha should be more than 0.6 to

be considered reliable (2016).

Descriptive statistics illustrate the central

tendency of the result which is the mean score. And

index number is used to interpret actions for a specific

time period using percentage value designed to

measure the change in a variable by reference to a

base value (Black, 2014).

4 DISCUSSIONS

This study extends the existing research in the areas

of organizational culture especially the culture styles

in an organization. The extend the knowledge in this

area, the study was conducted based on the theories

of the 8 culture styles especially in management

consulting firms in Indonesia.

Findings from the index analysis for each item

shows that the highest index is IT 14 (index score =

4.85) and the lowest index is IT 24 (index score =

3.35). Findings from the index analysis for each

culture styles show that the three dominant cultures

styles (indicators) in management consulting firms in

Indonesia from the most dominant to the less

dominant is results, learning, caring, purpose, safety,

enjoyment, authority and order. In this study, the

analysis focuses on the dominant three culture styles

and the lowest culture style.

Table 3: Index of the 8 Culture Style of Management

Consulting Industries in Indonesia.

Dimension Indicator Item

Index per

Item

Index per

Indicator

Interdependence Caring

IT 1 4.28

13.02



IT 2 4.41

IT 3 4.33

Flexibility Purpose

IT 4 4.13

12.88



IT 5 4.50

IT 6 4.25

Flexibility Learning

IT 7 4.71

14.08



IT 8 4.85

IT 9 4.52

Independence Enjoyment

3.60

11.45

4.04

3.81

Independence Result

4.73

14.39



4.84

4.82

Stability Authority

3.60

11.36



3.72

4.04

Stability Safety

4.27

12.14



3.78

4.09

Interdependence Order

3.77

10.68

3.56

3.35

The three dominant culture styles formed a

triangle. This shows that consultants and support staff

in management consulting firms in Indonesia are

flexible, adaptable and receptiveness to change. They

tend to prioritize the process of innovation of

consulting solutions, open communication between

team members and team leaders, and used to work in

diversity. By the interaction between employees, they

work independently by having their own autonomy

and tend to lead to competition.

Figure 2: The Culture Style of Management Consulting

Industries in Indonesia.

Compared to industries in global, a study did by

Groysberg et al. (2018) showed that in financial and

professional services firm, which management

consulting is part of this industry, the culture styles

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148

ranked by order from highest to the lowest ranks are

results, caring, order, learning, safety, purpose,

authority, and enjoyment. In figure 2, the dotted line

represents the dominant culture style in financial and

professional services firms in global.

4.1 Results Culture

In results culture, outcome and merit are key factors

to inspire people to achieve top performance. The

benefits of results culture are good in execution, focus

on external, consistently build capacity to achieve the

goals. However, its disadvantage that should be

considered is communication and collaboration

breakdown and high levels of stress and anxiety

(Groysberg et al., 2018).

Both consultants and staff are united to achieve

the target and leaders push the employees to achieve

the target. This can be seen from the statement of

employees of Consulting A, “Our Director always

ask for target achievement at anywhere anytime!”

When the Director was interviewed to clarify the data,

he said, "We want to grow. We started by less than 10

people and now we are 86 employees. We are not

growing by a number of people but also by a number

of revenues. Therefore, we need to focus on our

achievement." Director of Consulting B said, “Our

remuneration package is very interest. We want our

employees to meet their needs, so they are no longer

looking for a side job and focus on the project.”

4.2 Learning Culture

In a learning culture, idea exploration and creativity

are the key factors. The benefit of learning culture is

agility, to innovate and build organizational learning.

But it may lead to lack of focus and difficult to exploit

existing advantages (Groysberg et al., 2018).

Consultants and staff have high curiosity in

exploring new process, new methods and new

solutions. And leaders support them by providing an

open environment and reward for innovation and

sharing knowledge. All of the informants said that

they have to up to date to new knowledge and sharing

each other make the learning process easier, for

instance sharing the new management book and

theories.

Since the leader noticed that informal learning is

the best for sharing, they have a cosy place such as in

a corner for sharing knowledge. More, since half of

the consultants are millennials and the majority of the

staff are millennials, they provide technology for

sharing knowledge such as cloud database for sharing

the project documents, working together in Google

Documents, and online communication through

WhatsApp group and Telegram.

Director of Consulting A said, “Learning is very

important for our business. Not only sharing

knowledge but we also eager to build our consultant

capabilities such as let them update their knowledge

by following certification programs, but the

challenge is the time. They are busy with projects and

have limited time for training.” Director of

Consulting B added, “Our millennial consultants and

staff eager to learn new knowledge and share it to

others. Even some of them are continuing their study

now and we support them financially and by giving

flexible working hours.”

4.3 Purpose Culture

In purpose culture, idealism and altruism are the keys.

This is the differentiator of culture style in the

management consulting industry in Indonesia and

global professional services industry studied by

Groysberg et al. (2018). In global services industries,

the third dominant culture style is order culture that

has advantages to improve operational efficiency,

reduce conflict and greater civic-mindedness. While

in Indonesia the third dominant is purpose culture,

with the benefits of appreciating the diversity,

sustainability and responsibility. And the

disadvantages of this culture style is that it may get in

the way of practical and immediate concerns

(Groysberg et al., 2018).

Consultant and staff are tolerant, and they have

the same spirit by helping clients (both individual and

organization), they contribute to do good for the long-

term future of the world. Leaders continuously share

the ideas of helping other succeed and helping clients

succeed will impact to the world.

Director of Consulting C said, “One of our vision

is giving impact to society. And we do it consistently

through our solutions to our clients. Imagine if we

can improve the system of a company with 500

employees. If that company improved in its

performance and can raise the salary or bonus to

their employees. That improvement is not only to

those 500 employees but also to their families.” A

senior consultant of Consulting B added, “With the

millennials employees, this kind of vision touches

their heart deeply. They want to be a part to improve

the world, to change the world, and they can do it by

becoming a consultant or support staff for consulting

projects."

The Culture Styles of Management Consulting Industry in Indonesia

149

5 CONCLUSIONS

Organizational culture influences organizational

performance including in the management consulting

industry in Indonesia. The current issues in the

business of millennial workers and digital technology

also influence culture implementation.

For the academic purpose, this study shows that

dominant culture styles in the management consulting

industry in Indonesia. This result is slightly different

than the previous study did by Groysberg et al (2018)

in financial and professional services industry in

global, which are results culture, learning culture and

order culture. The typical work and the shared vison

of the management consulting industry in Indonesia

shaped a certain type of culture style, which

dominantly is resulting culture, learning culture and

purpose culture.

For the practical purpose, the three consulting

firms know their culture styles through this study.

First, all of those companies led by result-oriented

directors, which is shown by the statements of the

directors. This result-oriented behaviour of the

leaders then shaped into result culture of the

organizations. Furthermore, as the consultants should

be updated with knowledge in management and the

millennial workers enjoy learning, this learning

behaviour shaped the learning culture of the

employees in management consulting firms. Since

their shared vision is to give impact to the society

through their consulting and training solutions, it

touched the millennial workers and shaped the

purpose culture. By knowing the current culture style,

those management consulting firms can define the

right intervention programs in order to build a strong

culture that fits their vision and goals.

For further research, it suggested combining this

culture styles and other variables such as employee

engagement, organizational commitment, and

organizational performance. It is also interesting to

study the culture style of global consulting companies

for comparing this study result, and also to other

industries in Indonesia.

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