Corporate Culture: 4 types of company cultures

Having a strong corporate culture is necessary for the success of the company.

Indeed, not only does the company culture bring a sense of unity and belonging to the team, but it also helps the workers know what the company stands for and make sound decisions in line with the company’s values. It has many other advantages including increasing the revenue and attracting talents.

It is safe to say that investing in company culture design is worth it and, to be honest, unavoidable.

Even if you invest in the company culture, you have to invest in the right way to confirm that the culture you are building (1) is strong enough to resist time and growth and (2) fitting with what the company stands for.

Types of Corporate Cultures

The first step in designing a company culture is to lay the foundations. What kind of culture do you want to build? There exist four different broad families of corporation cultures.

Clan Culture

Referred to as Collaborate Culture is basically putting the relationships between the individuals at the forefront of the company’s culture.

In Clan culture, the employees’ well-being, the work environment, the relationships, and cooperation are the main keywords forming the culture.

Managers, rather than the authority who has the last word and makes decisions, are mentors.

You will often see employees working in such companies talking about how their coworkers are like their family.

Advantages

• This culture improves communication and collaboration between employees.
• When your employees are happy, the business is happy! In addition to increasing productivity, employees also turn into your advocate to the outside stakeholders!
• With a healthier working environment, where communication is a given, employees are more prone to provide fresh ideas and constructive feedback, a total win for the business.

Disadvantages

• However, working with your family might become uncomfortable in some situations. Indeed, because everyone is close, managers might be wary of reprimanding their subordinates or making difficult decisions.
• Moreover, because everyone is so close, you might lose time in chitchatting and thus decrease productivity.
• Furthermore, when you feel too comfortable at work, there is a thin line between comfort and inappropriate behaviour. Because the workers might misunderstand clan culture with a “no rules culture”, undesirable practices le practices might emerge.

For who?

This kind of culture fits small companies but might be strenuous to maintain as the company grows, although it is not impossible.

Zappos, the shoe and clothing giant, is the prime example of appreciable clan culture.

Adhocracy Culture

Known as Create Culture is the culture of all risks. Adhocracy, deriving from ad hoc, promotes a fast-moving, boundaries-breaking type of culture more than having a clear plan for the future.

The company pushes the employees to innovate, take risks, and think beyond the box to break through.

Advantages

• As for clan culture, adhocracy advocates for a more informal environment, which helps people share their ideas. It results in numerous innovations, high learning and growth rates for employees and the company.
• It also encourages people to take risks and provides employees with the confidence to try new things.
• Additionally, because employees have to know a wide range of topics, it is easier for them to switch positions and thus, they have higher control over their careers.
• Moreover, when done right, this kind of culture will allow your company to always stay on top of the trends, be avant-garde and create them!

Disadvantages

• However, taking risks also involves failing, and if failing is not always bad, it sometimes causes non-negligible damage to the company.
• Moreover, because of the fast-moving environment and the ever-changing innovations, this culture lacks a sense of structure and stability.
• Additionally, because the employees strive to go beyond, it results in higher burnout and turnover rates.
• Finally, as in clan culture, the lack of hierarchy makes it hard for conflict settlements.

For who?

Startups in fast-growing markets, tech, and high Research-&-Development-markets companies are well-suited for this corporate culture.

Successful examples of adhocracy include Amazon and NASA.

Hierarchy Culture

Also known as Control Culture is the corporate culture of structure and order. It is the culture closest to the “traditional” corporation-style culture. The main characteristics are that this culture uses a top-down approach, which means that ideas and new policies flow from the top of the company – namely, the CEO, the COO, etc. – to the bottom – the front-line workers.

The corporation favours structure, order, and the functioning of a well-organized machine over freethinking and innovation.

Advantages

• This culture brings stability and security; risks are shunned since employees must rely on fixed procedures. It reduces stress for employees.
• The communications and expectations are clear; there is little to no room for misunderstanding.
• Thanks to the stability, rules, and procedures, it is easy for employees to know what to do and solve a problem. It is also easy to know who to turn to with the clearly established roles.

Disadvantages

• Routine can lead to unhappy employees. Unhappy employees are the worst company advocates; they can sometimes turn to competitors.
• Moreover, because the corporation has all the procedures laid down, it rules out innovations and fresh ideas, which, in the long run, can put the company at a competitive disadvantage.

For who?

Still, this kind of corporate culture is suited for work environments where procedures and stability are required. A prime example is the typical governmental bureaucracy. In such an environment, it is crucial to follow the rules and procedures; a hierarchical culture is suitable.

Market Culture

Commonly known as Compete Culture is the culture of results. This model emphasizes competitiveness in the market but also among the employees.

Employees, and the company, are goal-focused, customer-focused, and results-oriented. They bring results in whatever they undertake.

The goals set for each employee are challenging. Their performance is closely monitored. It is not rare for them to get rewarded or punished.

It is the most aggressive corporate culture and the total opposite of clan culture. Indeed, whereas clan culture puts individuals first, results are the drivers of the market culture.

Advantages

• Being obsessed with results and customers will result in higher profit. The goals are set to be met, and if they aren’t, employees must find new ways to accomplish them. Failure is not an option, and that results in maximizing revenue.
• Moreover, by always watching what is happening in the company’s market – trends, etc. – the company can keep a competitive advantage over its competitors and thus sustain a considerable market share.
• Finally, because the managers always push the employees to strive for the best results, they never satisfy themselves with halfway-done jobs.

Disadvantages

• However, with an intense culture obsessed with competition also come unwanted drifts. Indeed, with employees being pressured to bring results, some might turn to unethical or even illegal practices.
• Moreover, collaboration is low, as employees are ambitious and want to be the best at all costs.
• Additionally, this attitude of always being pushed to better results in a higher burnout rate within the company.
• Finally, this kind of culture can also bring extra costs to the company. Indeed, keeping track of what is happening in the industry/market requires resources.

For who?

Big corporations in highly competitive markets fit best this kind of culture.

These companies must have a leader that is always hungry for success and pushes their employees to the best of their capacity. One of the most famous instances is Steve Jobs with Apple.

Conclusion

The company management can adapt the four types of culture to their business. Those are the foundations you want to use to build your corporate culture.