Types of Company Culture

What is company culture?

Company culture – also known as organisational culture, is the shared values, attitudes and practices that define an organisation. It’s the personality of the company, and it affects your employees’ overall satisfaction. Furthermore, good company culture will attract the right candidates and keep them engaged.

Creating a good company culture takes a lot of time and effort – your corporate culture must reflect your values and align with your mission. It’s a big thing to do, but don’t get discouraged, because your efforts will pay off in the long run.

Types of company culture

Robert E. Quinn and Kim S. Cameron of the University of Michigan at Ann Arbor investigated the qualities that make businesses efficient . They identified two key polarities: 1) internal focus and integration vs. external focus and differentiation and 2) flexibility and discretion vs. stability and control.

According to the researches, there are four types of organisational culture: Clan, Adhocracy, Market, and Hierarchy.

Type 1 – Clan Culture – flexibility and discretion; internal focus and integration

The clan culture focuses on people, and the company is one big happy family. This is a collaborative work environment where every individual is valued, and communication is a top priority. Clan culture is often paired with a horizontal structure, which breaks down barriers between the management and employees and encourages mentorship opportunities.

The clan cultures are often seen in startups and smaller companies. Young organisations that are just starting output a heavy emphasis on collaboration and communication, leadership looks to employees for feedback and ideas and companies prioritise team-building.

Benefits: Clan cultures enhance employee engagement, and happy employees make happy customers. Because of its adaptable environment, there’s a possibility for market growth within the culture.

Drawbacks: A family-style corporate culture is difficult to maintain as the company grows. Plus, with a horizontal leadership structure, day-to-day operations can seem cluttered and lacking direction.

Type 2 – Adhocracy Culture – flexibility and discretion; external focus and differentiation

Adhocracy cultures are focused on innovation. These companies want to develop the next big thing before anyone else. To do so, they need to take risks. Adhocracy cultures value individuality in the sense that employees are encouraged to think creatively and share their ideas. But these ideas need to be tied to market growth and company success.

Think of Google, Facebook or Apple – these are companies that embody the external focus and risk-taking nature of adhocracy culture. Adhocracy cultures are commonplace within the ever-changing tech industry where new products are being developed and released regularly.

Benefits: An adhocracy culture contributes to high-profit margins and notoriety. Employees stay motivated with the goal. Plus, with a focus on creativity and new ideas, professional development opportunities are easy to justify.

Drawbacks: There’s always a chance that a new product won’t succeed and may even hurt the business.

Type 3 – Market Culture – stability and control; external focus and differentiation

Market culture priorities profitability. Each position has an objective that aligns with the company’s larger goal, and there are several stages of separation between employees and leadership roles. These are results-oriented organisations that focus on external success rather than internal satisfaction. A market culture stresses the importance of reaching targets and getting results.

The goal of a market culture company is to be the best in its industry. Because of that, these are often larger companies that are already leaders of the pack.

Benefits: Companies that have market cultures are profitable and successful. Because the entire organisation is externally focused, there’s a key objective employee can get behind and work toward.

Drawbacks: On the other hand, because there’s a number tied to every decision, project and position within the company, it can be difficult for employees to meaningfully engage with their work and live out their professional purpose.

Type 4 – Hierarchy Culture – stability and control; internal focus and integration

Companies with hierarchy cultures stick to the traditional corporate structure. These are companies focused on the internal organisation. Multiple management tiers separate employees and leadership. Hierarchy cultures have a set way of doing things, which makes them stable and risk-averse.

Hierarchy cultures can be found at both ends of the corporate spectrum, from old-school organisations to those of the customer service industry, like fast-food restaurants. These are companies that are focused on how day-to-day operations are carried out and aren’t interested in changing things.

Benefits: With the internal organisation as a priority, hierarchy cultures have a clear direction. There are well-defined processes that cater to the company’s main objectives.

Drawbacks: The rigidity of hierarchy cultures leaves little room for creativity, making these companies slow to adapt to the changing marketplace. The company takes precedence over the individual, which doesn’t necessarily encourage employee feedback.

Conclusion

There’s no correct organisational culture. All cultures promote some forms of behaviour and inhibit others. Some are well suited to rapid and repeated change, others to slow incremental development of the institution.

Your company culture says a lot about your team and what you value, and job seekers can pick up on that. Evaluate your existing company culture and think of what truly matters to your organisation – where are you aligned and where are your areas for improvement? While you can influence your company culture, keep in mind that the office dynamic will shift as you onboard new team members.

What culture do you want for your organisation?

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