4 Types of Corporate Culture

What is Corporate Culture?

The term “corporate culture” pops up everywhere, but that doesn’t mean it’s easy to define the term. This concept broadly describes the overall environment within a company or an organization. There are 4 types of culture in business.

Most commonly used corporate culture definition is as follows: “Corporate culture characterizes the members of an organization and refers to the values, attitudes, standards, and beliefs that define its nature. Corporate culture is based on an organization’s goals, strategies, structure, workforce, approaches to customers, investors and the wider community.”

Types of Corporate Culture

There are 4 types of corporate culture: clan, adhocracy, market, and hierarchy culture. You can find more info about each culture in this article. We will examine each in detail, without specifying whether it is better or more successful. There can be so many variables to consider, each company must choose the one that best fits their situation.

Clan Culture

Clan culture is also known as collaborative culture. The main focus of the clan culture is team work. Relationships between employees, employee engagement and morale are also very important in clan culture. Unlike an authoritarian “boss” who disciplines those who make mistakes, managers guide employees as mentors and guides.

Clan culture focuses on keeping barriers between the executive level and employees to a minimum. It is a flexible culture. It uses changes to develop.

Adhocracy Culture

Innovation and risk taking are the main focuses of the adhocracy culture. You can see that most of the successful startups have adhocracy culture. Creating an entrepreneurial environment, and encouraging employees to take more risks are 2 main benefits of this culture. Unusual ideas are supported in this type of corporate culture.

The companies that have adhocracy culture have desirable goals and visions. They always take risks to reach to their goals which might be identified as the “next big step.”

Market Culture

Identifying the priority of market culture can help you understand this type of corporate culture better. It’s very simple: results. Results are the most important thing for market culture. The company’s profitability is the main focus. If a company have this market culture, it means that they only focus on the results.

Achieving goals is the best motivation in this type of corporate culture. It attracts employees who are competitive and want to be a “winner”. In the market culture, leaders demand and expect employees to perform better in a pressured environment.

Hierarchy Culture

Hierarchy culture is a type of corporate culture that follows the traditional structure and has a clear chain. Hierarchy culture uses lots of levels of management to separate managers and employees. This type of company has a specific way of doing business, which may include traditional norms such as dress code and strict working hours. The company’s focus is stability and reliability.

So, which of these cultures does your company have?