Management Theory of Charles Handy

The management theory of Charles Handy

Handy’s theory focuses on four management styles or cultures, often found in the workplace. His theory observes how each organizational culture can motivate employees by providing distinct standards, behaviors and values that must be upheld. Over time, and when properly managed, these standards and values can foster enhanced organizational development and stronger leadership — although they also have disadvantages. 

Charles Handy’s four cultures

The four organizational cultures are as follows:

1. The Power Culture: Based on Zeus, this culture emphasizes centralized or top-down, power and influence. It typically operates in a formal environment led by a fast-paced leader, like a dynamic entrepreneur, focused on producing quick results. While this culture can be efficient, it can also be challenging for employees to thrive due to its high expectations and emphasis on interpersonal relationships and trust over objective ideas. Success often hinges on the quality of leadership.
2. The Role Culture: Based on Apollo, this culture is bureaucratic, run by strict procedures, narrowly defined roles and precisely delineated powers. Although this culture uses predictability and stability to help employees understand their role in the organization, it can also prevent businesses from adapting.
3. The Task Culture: Based on Athena, this culture is small-team-focused, results- and solutions-oriented and characterized by flexibility, adaptability and a culture of empowered employees. A team immersed in a task culture leverages its expertise to focus on end results. Through problem-solving and high levels of creativity, the task culture fosters deeper employee engagement across the group. However, staff must be motivated and open to workplace collaboration for it to succeed.  
4. The Person Culture: Based on Dionysius, this culture focuses on the individual and prioritizes organizations working toward the betterment of their people. Such organizations are values-oriented, people-focused and geared toward meeting individual employees’ self-actualization needs by utilizing each staffer’s unique talents. However, because the culture relies heavily on self-motivation, it can be challenging for businesses to implement effectively.

John Rossman, author and keynote speaker at Rossman Partners, said that there is a fifth style outside Handy’s four cultures that businesses should know: the highly aligned, loosely coupled organization. He named Amazon as a prominent example (as he details in his book Think Like Amazon).

“This model works to gain clarity and make high-judgment decisions on resource allocation at the center and then decentralize into small, self-organizing teams led by high-judgment individuals to execute and operate,” Rossman explained. “At Amazon, the centralized process is called ‘OP1’ or ‘Operating Plan 1.’ The small teams are called two-pizza teams.”

Considerations for businesses using Handy’s theory in modern settings

When Handy developed his four cultures model in the 1970s, the business world wasn’t quite as globalized as it is today. Cindy Kravitz, an executive coach and business strategist, noted that the theory imperfectly maps onto present-day business conditions.

“Handy’s management theory is a foundational tool for understanding organizational culture,” Kravitz explained. “However, its practical application often requires deeper context and adaptation to meet the demands of today’s globalized business environments.”

Kravitz detailed two crucial considerations for businesses applying Handy’s management theory to improve their operations:

1. The existence of hybrid cultures: Kravitz emphasized that many organizations today operate with a mix of cultural types across departments. “For example, a sales team might thrive in a task culture focused on problem-solving and innovation, while HR operates in a role culture to ensure consistency.”
2. The dynamic nature of company culture: Kravitz also stressed the dynamic nature of workplace cultures, which evolve due to leadership changes, growth or market pressures. “Many companies begin with a power culture driven by strong leadership but transition to a task or role culture as they scale,” Kravitz shared.

How to use Charles Handy’s management theory in your business

Incorporating Handy’s management theory can significantly impact your business, creating a more employee-centric company culture and increasing productivity. However, it should be strategically implemented. Here’s how to apply it effectively. 

Set clear goals.

Define your end goals before applying Handy’s theory to your organization. For example, do you want to grow your company, improve collaboration among your team or develop more efficient and hardworking employees? Whatever your target organizational change, set realistic and attainable goals based on the results you want to see.

Kravitz cited 2021 McKinsey & Company data showing that when businesses align their cultures with their strategic goals, they are 2.5 times more likely to outperform competitors.

“Leaders must continually evaluate cultural fit, particularly during transitions, such as mergers, expansions or leadership changes, to ensure long-term cohesion and [goal achievement],” Kravitz said.

Conduct a cultural audit.

Kravitz defined a cultural audit as the use of employee surveys, interviews and observational methods to assess a business’s existing company culture. She also noted that IBM once ran a cultural audit that led the company to roll out targeted interventions that boosted employee retention by 15 percent.

“Advanced tools like Culture Amp or Peakon allow leaders to identify misalignments between stated values and actual employee perceptions,” Kravitz shared. She emphasized that free tools like Google Forms and Typeform can also be used to gather anonymous employee feedback, making the process accessible to businesses of all sizes. 

“The important thing to note here is that it’s not the level of sophistication of the tool that matters,” Kravitz added. “Instead, what matters is that the cultural audit is conducted and the key themes identified, prioritized and actioned on.”

Leverage formal and informal training and education. 

Consultants with knowledge and experience in Handy’s management theory can guide you in maximizing its principles in your company’s unique environment. If you’re on a budget, there are ways to get expert guidance and educate yourself on Handy’s theory without spending top dollar.

“Leverage low-cost platforms like Coursera, LinkedIn Learning or podcasts to develop leadership skills in emotional intelligence and adaptability,” Kravitz advised. “Encourage leaders to share takeaways during team meetings to foster collective growth. Identify opportunities for peer-to-peer learning and accountability.”

Widely available online tools and resources can help you implement the Charles Handy management theory more easily. Videos, assessments and other materials will help you choose the resources most valuable to your business.

Monitor your organization’s progress and performance.

As you implement Handy’s theory into your business, consider your employees and ensure they feel fully supported and are aligned with the organization’s goals. Conduct regular check-ins and survey staff to monitor your organization’s progress and ensure your team’s performance is improving, not decreasing, with these new changes. Kravitz recommended 15-minute daily stand-up meetings to discuss wins and priorities in a manner aligned with your company culture. 

Review your process.

After applying the strategy, review your process to evaluate your progress. Determine if your goals were met, what challenges you faced and what lessons were learned. This evaluation will provide insights to refine future implementations.

Kravitz suggests that leadership be receptive to employee feedback when reviewing management processes. “Schedule open office hours or coffee chats to reinforce transparency and trust,” Kravitz recommended.

Shift cultures one department at a time.

Overhauling the many cultures across all corners of your company can be like trying to swim for the first time without floaties. Instead, start by identifying cultural gaps across departments and focusing on those that need extra attention. Along the way, be upfront with your employees about the steps you’re taking and why you’re taking them and remain hands-on in the process.

“Transitioning between cultures, such as moving from a role to a task culture, requires clear communication, leadership involvement and transparency,” Kravitz explained. “Start small by piloting cultural shifts within a single department or team and scaling successful initiatives. Build momentum with these pilots and learn from them on how to enhance efforts moving forward.”

Alternatives to Handy’s management theory

Charles Handy’s management theory is only one leadership approach. There are dozens of other theories to consider incorporating into your strategy, including the following: 

• What Your Business Can Learn From Peter Drucker
• The Management Theory of Max Weber
• The Management Theory of Frederick Taylor
• The Management Theory of Henry Mintzberg
• Management Theory of Henri Fayol
• Management Theory of Rosabeth Moss Kanter
• Management Theory of Robert Waterman
• Management Theory of Henry Gantt
• Management Theory of Joseph Juran
• Management Theory of Stephen Covey
• Management Theory of Edgar Schein
• Management Theory of Michael Porter
• Management Theory of Elton Mayo

Four cultures — many ways forward

Handy’s management theory suggests ways forward but doesn’t quite dictate them. It’s on you and your business’s other leaders to determine your culture and how to align your employees with it. The good news is that, with all the advice above, you now have plenty of starting points. Get started now, take the process slowly, and you’ll find intriguing ways forward that will benefit your organization for years to come.

Miranda Fraraccio contributed to this article.