Organizational culture is the main personality of a company, it focuses on the values, attitudes and practices which outline and define an organization. The culture can have a direct impact on the wellbeing of the staff, which is why it is crucial that a company considers their culture carefully.
This article will focus on the four main types of organization culture, analyzing the pros and cons of each one. By doing this, it will be easy to compare different cultures and make informed decisions on which one would be the most effective for your organization.
Why Is Organizational Culture Important?
Organizational culture is extremely important as it outlines the values of the company. Having a specific culture can ensure all candidates align to it to decrease any work toxicity and increase productivity of workers.
Before joining a company most candidates will analyze a company’s culture to decide if it is an environment that works for them. This supports successful candidates by increasing the chance of consistency and a unified team.
1. Adhocracy Culture
The first main culture is Adhocracy. This culture’s main focus is innovation and risk taking. They strongly believe in taking large risks to achieve the goal. Employees within an Adhocracy culture are encouraged to think creatively and broadly, suggesting different ideas.
Adhocracy culture also encourages all their staff members to be innovative and question what is currently in place. This is often done by group brainstorming or strategy meetings.
Pros of Adhocracy Culture
There are lots of pros of Adhocracy culture as it can significantly contribute to high profit margins. The more the employees risk, the higher the reward opportunities. Also, employees are extremely motivated as they are always trying to strive higher and improve the company.
There are lots of professional development opportunities within this culture due to the creativity and flexibility and the amount of new ideas which appear.
Cons of Adhocracy Culture
Whenever working with the mindset of taking risks, there are always chances that it won’t pay off. Taking large risks can have huge impacts on a company if an idea doesn’t work out, costing the company both time and money.
Adhocracy culture also increases competition between workers as everyone is aiming to find the next big thing and improve what is already out there. Competition can contribute to a toxic work environment as it lowers trust between workers.
Example of Adhocracy Culture
Organizations would operate in this culture by employees encouraging themselves to always go above and take risks which they believe would benefit the company. This type of culture would work in a company such as Amazon or Wikipedia where there is always a way to improve and adapt the existing product.
2. Clan Culture
The second main culture is Clan culture. This culture focuses on mentorship and teamwork with a generic view that they are a team and support one another.
This culture is specifically people-focused and often has a family-like feel within the teams. The environment is extremely collaborative and communication and teamwork is prioritized.
Employees may have a specific mentor or a group of mentors increasing opportunities to learn off of another worker above them or someone with more experience. There is also a flexible approach to the work to reduce the stress and benefit everyone’s wellbeing.
Pros of Clan Culture
The main pros of Clan culture are that it has the highest rates of employee engagement and wellbeing. The environment is very supportive and positive, making people feel relaxed and able to work to the best of their ability.
There are also a large amount of opportunities to learn from different people due to the overall family feel and the acceptance of asking for help or further explanation in a different field.
Cons of Clan Culture
The main con of Clan Culture are that it is difficult to maintain in a larger company with different teams and large groups of people. When this is implemented in a large company the objectives and individual responsibilities can be confused which increases a lack of leadership and less work being completed.
Example of Clan Culture
An organization with a Clan culture would operate by focusing on the people instead of the outcome and prioritizing personal wellbeing and happiness. By doing this people feel safe and relaxed, often increasing their work ethic. This would work well in a small company such as a restaurant, shop or small office.
3. Hierarchy culture
The third main culture is the Hierarchy culture. This type of culture focuses on the traditional structure with a clear chain of command and direct line leaders. There is usually a set structure and a strict dress code for all employees to follow.
A clear chain of command is outlined when a new employee joins which reduces any complications or confusions within the team. Most teams will have a team leader who reports to their leader and this ranking continues until reaching the CEO.
Pros of Hierarcy Culture
The main pros of the hierarchy culture is that with a clear structure there is clear direction and less employees will be confused about who to report to and who to go to with queries.
This can also increase workload as each person has a clear understanding of what their role is and how to do it.
Cons of Hierarchy Culture
One con of hierarchy culture is that with a rigid structure there are limitations on creativity and flexibility, reducing the speed that a company will keep up with changes outside of the company.
This type of culture also has low employee feedback as it is a system without much freedom.
Example of Hierarchy Culture
An organization would operate within a hierarchy culture by having specific jobs and a hierarchy between each role so it is clear who reports to who. This type of culture works in large offices and organizations such as political institutions and the military.
4. Market Culture
The fourth main culture is market culture. The main focus within this culture is competition and the company continuing to grow. The priority is profit and what the company can do to always increase their profit and finances.
Each role will have specific targets and will focus on reaching those targets. Employees may be encouraged with bonuses or other rewards if they are able to meet them.
Pros of Market Culture
The main pro for market culture is that companies who focus on profits usually increase them regularly. Employees are focused on reaching their targets due to the rewards they receive if they do. There are also additional motives for the top performers, increasing motivation for all workers.
Cons of Market Culture
The drawback of market culture is that each decision is based around a number, making it hard to make decisions based on anything other than data. Often data alone isn’t enough information to make an informed and sensible decision.
There is also a higher chance of burnout due to pushing for personal reward. If employees are risking their mental health to reach a target it increases the toxic environment of the workplace, decreasing the quality and quantity of the work.
Example of Market Culture
An organization would use market culture to increase productivity and encourage employees to work to their highest ability to increase profit margins for the company. This is often rewarded with bonuses. This could be used in a competitive industry where there is constant change and pressure for a company to remain the best and most efficient.
Which One Is The Right Fit For Your Organization?
An organization must decide which culture is the most appropriate for itself by weighing up the pros and cons of each culture. Also addressing the main goals and deciding which aligns with current staff and leadership.
If none of the four main types line up perfectly, there are other organizational cultures. However, a company can merge cultures to find the right mixture for optimal performance. It is important for an organizational culture to be well established and reflect the values of the company to attract the right type of employees.
What are the four 4 type of culture in an organization? ›
They identified 4 types of culture – clan culture, adhocracy culture, market culture, and hierarchy culture.What are the four types of corporate culture please explain any two types with examples? ›
- Clan Culture. Clan culture, also called a collaborative culture, is mainly focused on teamwork. ...
- Adhocracy Culture. Adhocracy culture is primarily focused on innovation and risk-taking. ...
- Market Culture. In a market culture, the bottom line is the main priority. ...
- Hierarchy Culture.
The organizational culture definition relates to the structure of an organization such as a company or non-profit and the values, sociology, and psychology of that organization. Some examples of organizational culture include philosophy, values, expectations, and experiences.What are the 4 types of organizational structures examples? ›
The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.What are 4 examples of culture? ›
Customs, laws, dress, architectural style, social standards and traditions are all examples of cultural elements.What are the types of culture and examples? ›
The two basic types of culture are material culture, physical things produced by a society, and nonmaterial culture, intangible things produced by a society. Cars would be an example of American material culture, while our devotion to equality is part of our nonmaterial culture.What are the 4 elements of culture? ›
The major elements of culture are symbols, language, norms, values, and artifacts. Language makes effective social interaction possible and influences how people conceive of concepts and objects.What are the four types of organizational culture quizlet? ›
There are four main types of organizational cultures: clan, adhocracy, market, and hierarchy.What are 5 organizational culture examples? ›
- L.L. Bean. Ranked in Fortune's 100 Best Companies to Work For, L.L. Bean's dedication to customers through offerings like lifetime warranties and free shipping is reflected in its internal culture. ...
- Adobe. ...
- DogVacay. ...
- Wrike. ...
- Zappos. ...
There are four types of social norms that can help inform people about behavior that is considered acceptable: folkways, mores, taboos, and law. Further, social norms can vary across time, cultures, places, and even sub-group.
What are the 4 basic functions of corporate culture? ›
- Employee retention. One of the benefits of corporate culture is that it helps in promoting employee retention. ...
- Great public brand. Today, the public brand of a company helps it to attract and retain customers. ...
- Enhanced performance. ...
- Quality. ...
- Improved employee well-being.
- Establish a desktop filing system. ...
- Pin applications and notes to your taskbar. ...
- Bookmark important pages. ...
- Follow a file naming structure. ...
- Purchase additional storage. ...
- Implement organizational procedures and policies. ...
- Schedule appointments and meetings electronically.
Publix Super Markets, Southwest Airlines and Adobe are just some examples of strong organizational culture.What are good examples of company culture? ›
- Respect and fairness.
- Trust and integrity.
- Growth mindset.
- Employee engagement and opportunities for advancement.
- Communication and transparency.
BASES OF DEPARTMENTAL ORGANIZATION
According to Luther Gulick, an eminent scholar of Public Administration, there are four basis of department organization, these are purpose, process, person, place, popularly known as 4Ps Principle.
The four basic types of organizational resources are human, monetary, raw materials and Capital. Organizational resources are combined, used, and transformed into finished products during the production process. Human resources are the people who work for an organization.What is the 4 level of organization? ›
An organism is made up of four levels of organization: cells, tissues, organs, and organ systems. These levels reduce complex anatomical structures into groups; this organization makes the components easier to understand.What are the types of culture explain your answer? ›
Types of culture include material culture and immaterial culture. Material culture is the culture of tangible items such as technology, architecture, and art; while immaterial culture is the culture surrounding beliefs, mythology, values, or spiritual practices, they are non-physical objects.What are the 4 factors that influence culture? ›
Many cultural characteristics, and the health states related to them, are associated with education, occupation, income, and social status. These factors influence one's awareness of the world, and whether one will seek improvement or accept things as they are.What are the main types of culture *? ›
Each person belongs to several kinds of cultures: national, subcultural (regional, gender, ethnic, religious, generational, and socioeconomic), and group or workplace (corporate culture).
What is real culture examples? ›
Some examples of real culture would be that marriages often end in divorce, despite marriage ostensibly being a life-long commitment in many cultures. Another example would be that despite the fact that the United States is a society with strict laws and one that despises crime, people commit crimes on a daily basis.What are the characteristics of culture and examples? ›
Culture is a complex system, made up of many parts that are interconnected and related to each other. Some examples of the parts of culture are education, technology, marriage, medicine, economics, family, beliefs and religion, government, and language.What are the 4 components of cultural intelligence? ›
CQ is comprised of four factors: metacognition, cognition, motivation, and behavior, and it is most commonly assessed with a 20-item measure called The Cultural Intelligence Scale (Ang et al., 2007).What do the 4 elements mean? ›
The four elements of western culture are: EARTH, AIR, FIRE, and WATER. These four elements were believed to be essential to life. Taoism has five elements, each one superior to the next in turn: wood, earth, water, fire, and metal. Metal conquers wood, wood conquers earth, et cetera.Which are the 4 stages of organizational learning? ›
In order to understand this variation, we separate organizational learning into four processes: search, knowledge creation, knowledge retention, and knowledge transfer.What are at least 4 characteristics of culture? ›
Culture has five basic characteristics: It is learned, shared, based on symbols, integrated, and dynamic.What company is an example of organizational culture? ›
Google – A corporate culture that employees stand by
It was the first to launch many of the perks and benefits that startups are now known for. Google employees are synonymous with drive, talent and a motivated workforce. So what makes them one of the best organizational culture examples?
Handy outlined four types of culture: power, role, task and person.What is organizational culture answer? ›
Organizational culture is generally understood as all of a company's beliefs, values and attitudes, and how these influence the behaviour of its employees. Culture affects how people experience an organization—that is, what it's like for a customer to buy from a company or a supplier to work with it.What is functional organization example? ›
In a functional organization structure, the entire organization is divided into smaller groups or departments based on specialized functions. So for example in such an arrangement there will be a finance department, an IT department, marketing department etc.
What is Coca Cola's organizational culture? ›
They are employee-led, company-recognized networks formed to act as a resource to both employees and the organization. They are regionally structured, globally connected groups of employees with common interests or backgrounds who wish to create a better shared future for people everywhere.What are 4 elements of culture? ›
The major elements of culture are symbols, language, norms, values, and artifacts. Language makes effective social interaction possible and influences how people conceive of concepts and objects.What is a good example of organizational culture? ›
Amongst these six organizational culture examples, Zappos is probably the best-known. Zappos hires for culture first, treats employees to a three-day culture camp training event, and regularly features employee contributors in a culture series for its blog.What are some examples of culture in the workplace? ›
- Adhocracy Culture.
- Clan Culture.
- Customer-Focused Culture.
- Hierarchy Culture.
- Market-Driven Culture.
- Purpose-Driven Culture.
- Innovative Culture.
- Creative Culture.
- Sole proprietorship. A sole proprietorship is a type of business where there is no legal distinction between the business entity and its owner so it best fits situations where the organization only has one owner. ...
- Partnership. ...
- Corporation. ...
- Limited liability company. ...
Organizational control typically involves four steps: (1) establish standards, (2) measure performance, (3) compare performance to standards, and then (4) take corrective action as needed.What is Nike's Organisational culture? ›
At Nike, it's in their nature to innovate and their mission is to bring inspiration and innovation to every athlete in the world. They embrace different perspectives—from scientists and designers to coders and quarterbacks—because they know everyone brings unique experiences and ideas to the team.What is IKEA's Organisational culture? ›
Togetherness is at the heart of the IKEA culture. We are strongest when we trust each other, pull in the same direction and have fun together. We want to be a force for positive change. We have the possibility to make a significant and lasting impact — today and for the generations to come.What is the organizational culture of PepsiCo? ›
Real World Leadership.
PepsiCo's organizational culture emphasizes leadership based on what employees, investors, customers and communities really need. The company uses employee knowledge to develop its leadership. More specifically, PepsiCo promotes employees to leadership positions.