Types of company culture

The progress of any organization is dictated by how well its culture is. The employees work towards sustaining that culture, which points out the importance of having a positive company culture that is aligned to the mission. 

It is also important to note that each organization has its own culture, which sets it apart from the rest. This gives it the competitive advantage in a perceivably complex market environment. 

Although it is speculated that having the right culture makes the business thrive, small enterprises find it difficult to implement a culture that is financially constraining them. They opt to do things in a way to save on cost, something that has given large corporations a chance to remain tall in the market.

4 Types of company culture

Irrespective of the size of an organization, company culture works in almost the similar way. Ideally, the company culture brings people together and encourages them to work towards a common goal. 

The following are four main types of company culture.

1. Clan culture

Clan culture is also referred to as collaborative. This type of culture focuses on developing team work, and has the potential of instituting change through creativity and innovation. Managers are looked at as advisors rather than dictators who always direct what should be done without incorporating the views of others. 

It is aimed at reducing the gap between the executive and the employees. This type of culture is majorly seen in the technology industry, where innovation is required at all cost. 

This is because the employees in the technology industry, such as software engineers, need to work in a collaboration with other professionals to understand the needs of the company, thereafter assisting in developing technology solutions.

Advantages of Clan Culture:

• The team enjoys working together and solving problems as a team.
• There is an open and effective communication within the team reducing time latency.
• Employees are highly engaged.
• There is a high chance of market growth.

Disadvantages of Clan Culture:

• It is difficult to sustain this culture as the business continues to grow.
• Career path might be unclear since it is a horizontal leadership structure.
• Due to too much emphasis on teamwork, individual productivity might lower.

2. Adhocracy Culture

The next company culture type is chiefly focused on taking risk and innovation. Most of the start-ups are considered to have adopted this culture, as they aim at capturing a wider market. 

It creates an environment where the employees are taught on how to take risks. Ideas that are considered too difficult are nurtured and executed in this kind of culture.

Advantages of Adhocracy Culture:

• There is a high potential for growth.
• Employees use their creativity and develop new ideas on solving modern challenges.
• Workers feel supported when suggesting new ideas.
• More likely to invest in professional development opportunities.

Disadvantages of Adhocracy Culture:

• There is a high chance of lack of stability due to the number of new initiatives being undertaken.
• The junior employees might feel threatened due to the aggressive working environment.
• It might bring competition among the employees causing conflicts.

3. Market Culture

In a market culture, everything is measured based on results. The profitability of the organization is always on mind, and the tasks are divided based on strengths. 

It has to be noted that this culture measures the performance of the employees through appraisals to understand the contribution of every person to the attainment of the set goal. Leaders expect the employees to post positive results in a high-pressure environment.

Advantages of Market Culture:

• Employees are encouraged about their work.
• The competition within the work environment makes employees always achieve the assigned roles.
• Organizations with market culture are always profitable.

Disadvantages of Market Culture:

• Each decision is tied to a number which demands extra engagement of the employees.
• Constant competition can create a toxic working environment.
• There is a possibility of stress among the employees due to high expectations to perform.

4. Hierarchy Culture

This is the culture that follows the traditional fabrics of an organization. It has several chains of commands, and is commonly found in government institutions. There is a specific way of doing things such as dress code, and fixed working hours.

Advantages of Hierarchy Culture:

• The company remains stable since the culture is conservative.
• The objectives are clearly defined to meet the goals of the company.
• Employees have a clarity of what they are supposed to do.

Disadvantages of Hierarchy Culture:

• It upholds procedure over people creating inflexible working time.
• It discourages innovation since employees are demotivated to suggest new ideas.
• May be difficult to address changes in the market environment.

No matter what the type of culture is running in your organization, company culture software could be helpful in tracking your employee performance and overall happiness.

Subscribing to the organization’s culture is the first step for success. The leaders should take time and educate the employees about their culture to enhance peaceful co-existence and performance.

Check out our similar articles such as Employee engagement definition in simple words or What is effective communication in workplace.