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k are the definitions of success. Competitive prices and market leadership are important. The organizational style is based on competition.

This form of organizing became popular during the late 1960s as organizations laced new competitive challenges. This form relied on a fundamentally different set of assumptions than the hierarchy and was based largely on the work of Oliver Williamson (1975), Bill Ouchi (I 9S 1), and their colleagues. These organizational scholars identified an alternative set of activities that they argued served as the foundation of organizational effectiveness. The most important of these was transaction costs.

The new design was referred to as a market form of organization. The term marker is not synonymous with the marketing (unction or with consumers in the marketplace. Rather, it refers to a type of organization that functions as a market itself. It is oriented toward the external environment instead of internal affairs. It is focused on transactions with (mainly) external constituencies such as suppliers, customers, contractors, licensees, unions, and regulators. And unlike a hierarchy, where internal control is maintained by rules, specialized jobs, and centralized decisions, the market operates primarily through economic market mechanisms, mainly monetary exchange. That is, the major focus of markets is to conduct transactions (exchanges, sales, contracts) with other constituencies to create competitive advantage. Portability, bottom-line results, strength in marker niches, stretch targets, and secure customer bases are primary objectives of the organization. Not surprisingly, the core values that dominate market-type organizations are competitiveness and productivity.

Competitiveness and productivity in market organizations arc achieved through a strong emphasis on external positioning and control. At Philips Electronics, for example, the loss of market share in Europe and a first- ever year of red ink in 1991 led to a corporation wide initiative to improve the competitive position of the firm. Under the leadership of a new CEO, the worldwide organization instituted a process called Centurion in which a concerted effort was made to shift the company's culture froth a relatively complacent, arrogant, hierarchy culture to a culture driven by customer focus, premium returns on assets, and improved corporate competitiveness-a market culture. Three yearly meetings were held to assess performance and to establish new stretch targets. Assessments using the OCAI showed a substantial shift toward a market-driven culture from the early 1990s to the mid-1990s.

A similar example of a market culture is a Philips competitor, General Electric. General Electric's former CEO, Jack Welch, made it clear in the late 1980s that if GE businesses were not number one or number two in their markets, they would be sold. Welch taught and sold over three hundred businesses during his twenty-one year tenure as CEO. The GE culture under Wetch was known as a highly competitive, results-or-wise, take-no-prisoners type of culture. It reflected a stereotypical market culture.

The basic assumptions in a market culture are that the external environment is not benign but hostile, consumers arc choosy and interested in value, the organization is in the business of increasing its competitive position, and the major task of management is to drive the organization toward p