Your corporate culture profoundly influences how work gets accomplished within your organization. Understanding how your company fits into these four distinct types of corporate culture can help you align your environment with your business goals.
What sets your company apart? If you’re thinking, “Our corporate culture, of course!” you’re likely correct. But what does this really entail? Despite its growing relevance, corporate culture can be elusive and difficult to define clearly. Essentially, corporate culture is the promise you make to your employees and candidates about what it’s truly like to work with you. It’s about the environment you offer, your core values, and the norms you establish.
Think of your corporate culture as your organization's personality. It embodies the shared beliefs and behaviors that shape how your team interacts and makes decisions. Given its significance, it’s no surprise that a Deloitte survey found 94% of executives and 88% of employees believe a distinctive workplace culture is crucial for business success. Additionally, SHRM notes that the type of workplace culture is often more impactful than the actual location, with remote work presenting challenges for maintaining a cohesive culture.
It's important to understand your starting point to create a supportive and effective culture that aligns with your business objectives. Identifying your current organizational culture can be challenging, but recognizing these four main types of corporate culture can help you assess where you are and where you want to go.
Organizational culture is the bedrock of a company's internal environment, shaping how employees interact, make decisions, and contribute to the organization's goals. It encompasses the values, beliefs, and practices that define a workplace. Understanding the different types of organizational cultures can help businesses align their internal dynamics with their strategic objectives, foster a positive work environment, and enhance overall performance.
When evaluating organizational culture types, it’s essential to understand that not all cultures are simply “good” or “bad”—they’re unique and distinct. This perspective comes from the pioneering research of business professors Robert E. Quinn and Kim Cameron. Nearly four decades ago, they conducted foundational studies on corporate culture and identified four different types of organizational culture.
“These types are based on rigorous empirical research rather than theoretical concepts. In fact, nearly 90% of organizations worldwide can be classified as having one or more of these cultural types predominant within their structure.
Each of these four types offers its own set of advantages and challenges. None is inherently superior to the others; rather, they reflect different ways organizations operate and succeed. Moreover, many organizations exhibit a blend of these cultural types, with their culture evolving based on specific teams or projects. Understanding where your company fits within these categories can help you harness the strengths of your organizational culture effectively.
Ever heard colleagues describe each other as family? That’s a hallmark of a clan culture, also known as a “collaborative culture,” where teamwork and close-knit relationships are highly valued.
In a clan culture, the work environment is warm and supportive, focusing on employee engagement, morale, and collective decision-making. Leaders in this culture are viewed as mentors who guide and support their teams rather than just issuing directives.
Zappos, the online shoe and clothing retailer, exemplifies clan culture. The company is renowned for its positive work environment, so much so that its CEO authored a book on their culture of happiness. Zappos’ emphasis on “building a positive team and family spirit” aligns perfectly with the clan culture model.
Derived from the term “ad hoc,” adhocracy culture thrives on the “move fast and break things” ethos, often seen in startups. Known as a “create culture,” it champions a dynamic and entrepreneurial work environment.
In this culture, employees are encouraged to take bold risks and explore unconventional ideas. This approach fosters significant innovation and growth, benefiting both individuals and the organization as a whole.
Google epitomizes adhocracy culture, constantly innovating to enhance search capabilities and introduce new products. Their approach to fostering creativity and risk-taking is a prime example of this culture type. Similarly, Facebook’s original “move fast and break things”
Market culture, also known as "compete culture," revolves around achieving results and surpassing goals. This culture is driven by a focus on performance, where winning and accomplishing targets are paramount.
In a market culture, employees are intensely goal-oriented, and leaders adopt a tough, demanding approach to ensure success. The environment is high-pressure, but it can be highly rewarding when efforts translate into measurable achievements.
Amazon is a prime example of a market culture. Known for its relentless pursuit of results, the company sets high expectations for its employees to deliver and excel. Despite occasional criticisms regarding work pressures, Amazon’s emphasis on achieving success and delivering results aligns perfectly with the market culture ethos. Their leadership principle, “Deliver Results,” underscores their commitment to performance and resilience.
Hierarchy culture, or "control culture," is characterized by a structured, process-oriented work environment where procedures dictate most activities and decisions. This type of culture emphasizes stability, predictability, and reliable delivery.
In a hierarchical culture, leaders focus on maintaining smooth operations and adhering to established processes. The environment is less about innovation and more about following set guidelines to ensure efficiency and consistency.
Government agencies often exemplify a hierarchy culture due to their stringent regulations and need for adherence to policies. These organizations operate within a clearly defined framework, where processes are strictly followed, and career advancement paths are well established, leaving little room for ambiguity.
Maybe you reviewed one of the above types of organizational culture and immediately thought, “Yep, that’s where we fit.” Or maybe things aren’t quite so clear-cut, and you’re not sure where you land.
It is important to get a firm grasp on your company’s current culture. The key is to know where they are now and where they desire to be.
You can’t make changes or improvements to your organizational culture without knowing where you’re starting. But how can you figure this out? Are you left to throw a dart at a board or take your best guess?
Not quite. As a complement to their research, “it has been used by thousands of organizations to assess their organizational cultures reliably
Identifying your company’s culture is crucial for driving meaningful improvements and aligning your team with organizational goals. Whether one of the culture types resonates with you or the fit isn’t immediately clear, understanding your current culture is the first step toward transformation.
Consider using the Organizational Culture Assessment Instrument (OCAI) to gauge your company's culture. This widely used tool helps you assess your existing culture and determine your ideal culture. By completing a brief, 15-minute survey, you can uncover detailed insights into your organizational culture, identifying where you currently stand and where you aspire to be.
With this validated information, you can make informed decisions to nurture a culture that promotes growth and satisfaction rather than one that might lead to disengagement or frustration.
Understanding your company’s culture is more than just an exercise in self-reflection; it’s a strategic move that can significantly impact your organization’s success and employee satisfaction. By identifying which of the four types of corporate culture best describes your current environment and comparing it to your ideal culture, you gain valuable insights into how to foster a more effective and supportive workplace.
Utilizing tools like the Organizational Culture Assessment Instrument (OCAI) provides a clear, data-driven approach to this process, allowing you to make informed decisions and implement changes that align with your business goals. Investing time in understanding and evolving your company culture will not only enhance team dynamics but also drive overall organizational performance, paving the way for long-term success and growth.
