Company Culture Types

Four Types of Company Culture: Which One Is Yours?

Clan culture, adhocracy culture, market culture, hierarchy culture, can you ever have too much culture? In this article, we build on the Competing Values Framework for Organizations to understand the four types of workplace culture.

It must be said that workplace culture is certainly not a monolith. It can come in all sorts of shapes, sizes and forms and can develop over time. In short, your company culture is flexible, but it needs definition to thrive.

Organizational culture: what is it?

Company or workplace culture is the set of beliefs, core values, and customs that your company promotes (directly or indirectly). Basically, you can imagine how your employees feel when they come to work in the morning and how they interact with their colleagues throughout the day. This is a pretty good indicator of the impact of your culture.

Types of Corporate Culture: Understanding Competing Value Frameworks

The Competing Values Framework was developed in 1983 by researchers Robert Quinn and John Rohrbaugh and is considered one of the best methods to describe the different types of corporate cultures.

Essentially, four main types of culture have been distinguished:

Type:
Clan culture
Adhocracy culture
Hierarchy culture
Market culture.

In Essence:
“We’re all in the same boat.”
“High risk, high reward”.
“Stay the course and don’t get out of hand.”
“Make it or break it”

These are based on a handful of factors and dimensions, which we will discuss in more detail when looking at each culture type. However, it’s helpful to keep these two key considerations in mind:

• Internal focus (progress) versus external focus (positioning)

• Flexibility (individualization) versus stability (top-down control)

If we look at these dimensions and companies’ positions on them as part of a spectrum, we can identify these four types of unique cultures.

Organizational Culture: The 4 Main Types of Organizational Culture

So, let’s go! Below you’ll learn all about the different types of company cultures and how to identify them in your own company…

What is clan culture?

Clan culture is a “big, happy family” culture. It means that a company supports its employees in a special way and helps them to grow in their own responsibility.

Where is clan culture most common?

The clan culture is typical of start-up companies that rely on a culture of ownership. The clan culture focuses heavily on promoting employee identification with the company. In this sense, the company’s values are aligned with those of its own employees (and vice versa).

Clan culture is also characterized by its focus on workplace mental health and employee well-being, which is why it is often considered the “softest” of the four cultures.

What are the disadvantages of clan culture?

While it can have a positive impact on turnover and career development, it can lack structure and is more likely to experience growing pains as the company scales. This is because a clan culture is very isolated, making it difficult to expand over time.

What is an Adhocracy Culture?

An adhocracy culture is a culture based on innovation. She is constantly screaming about the future and pushing employees to think beyond the typical, innovate, change things and experiment wildly.

What are the benefits of an adhocracy culture?

When done right, these are the kind of companies that shape the future of things through their people. They create and innovate at lightning speed, thinking about the latest trends and how to go beyond them.

Adhococracy is not so much about having a plan or map for the future, but about drawing that map and shaping the future as the company moves forward.

What are the disadvantages of an ad hoc culture?

Adhocracy culture can be a wonderful thing, but it also has its downsides. In such a culture, employees can burn out much more quickly, driving up turnover rates and staff turnover.

At the same time, taking wild swings and massive risks can also be very damaging to a company if it doesn’t work out. Adhocracy is about pushing, pushing, pushing, but this can be met with resentment from both employees and the markets at large.

What is hierarchy culture?

The hierarchy culture comes closest to a classic or traditional corporate culture. It is primarily defined by structure. The main characteristic is a top-down management style, where decisions are passed down to managers and employees.

What are the advantages of hierarchy culture?

Rules, rules, rules – that’s what hierarchy culture is all about. But that’s not a bad thing, because these rules create processes and procedures that ensure everything runs smoothly and keep all employees on the same page.

After all, there is something incredibly attractive about stability. Employees know what to expect, and they’re better prepared to know what they’re doing (and be successful at it) from day one.

What are the disadvantages of hierarchy culture?

Everyone knows what they’re doing, but it’s both a gift and a curse. In its worst forms, it can essentially stifle innovation and drive unhappy or dissatisfied employees into the arms of competitors (who may have a greater preference for the adhocracy culture).

What is market culture?

Market culture is exactly what it sounds like: a culture based on the market for your company’s product or service. Essentially, a market culture is about an unconditional focus on numbers, performance and a consistent increase in performance.

It is a culture that is determined and defined by pressure. The pressures that exist in a market culture are typically exerted by leaders who expect the best and also by employees who expect the best from themselves.

Is market culture good or bad?

That depends on who you ask. She can motivate her employees to do their best at all times. The results can be very good, but they can also be disastrous. It can lead to employee burnout and lack of satisfaction and damage the employer brand.

When is a market culture most common?

Many companies can only adopt a market culture during times of intense financial strife or competition. That’s because while it can drive performance to new heights and essentially save a company, it’s also unsustainable when it comes to the human factor.

How do you recognize a negative culture?

Negative culture is a relative term, and it depends on how you want to define it. Is your company’s performance suffering, do you have a high turnover rate, is employee engagement declining rapidly?

Ultimately, it all depends on what is important to your business. So it’s difficult to say definitively whether you have a positive or negative culture, because what is a positive culture for one company may not be ideal for another.

In general, however, any of the above KPIs should be a red flag for almost every company, so it’s more a matter of priority. Workplace culture matters, and it matters because leaders can define it, promote it, and also change it.

Workplace culture is immensely important

While each type of corporate culture has its advantages and disadvantages, one thing is certain: every company must have a concrete, meaningful and conscious idea of the type of culture it wants to “sow” and promote.