A positive and well-defined company culture is essential for success. But what does that look like in practice? There are many characteristics of corporate culture, each with its own strengths and weaknesses. To help you determine what might work best for your organisation, let's delve into four key types of corporate culture
What is a company culture?
Culture helps to define how activities are directed within a company, including how roles and responsibilities are allocated, how communication flows, and how different areas are connected. Corporate culture influences everything from how efficiently decisions are made to how engaged employees are. A good corporate culture leads to streamlined operations, clear communication, increased productivity, and aligns teams toward a shared vision. On the other hand, the wrong structure can lead to slow decision-making, poor communication, and reduced morale.
The characteristics of your company culture also form promises you make to your team and prospective candidates about what it’s like to work for you. It shapes the environment, the core values, cultural norms, communication, and conflict resolution.
Four types of company culture
To foster a culture that supports your team and business goals, you first need to understand where you’re starting from. It can be tricky to try and identify your corporate culture. There are four types of company cultures that come from foundational research done by business professors Robert E. Quinn and Kim Cameron.
Although there are four distinct types of company culture, one is not inherently better than another, and they all have relative strengths and weaknesses. Many organisations will be a blend of these different types, and they can also shift depending on the team or project.
Let's take a look at these four types of company cultures to help you pinpoint where you are and identify where you want to end up.
1. Clan culture
Clan culture, also known as collaborative culture, emphasises togetherness and teamwork. No specific organisational culture is enforced. There is a friendly working environment where relationships are crucial. Morale and participation are key characteristics of this corporate culture, and managers are mentors rather than figureheads.
Employees are largely free to manage their own work and schedule flexibly. The objective is to foster long-term cohesion and let everyone express themselves freely so the company can achieve its goals.
Pros
- A happy, engaged team
- Flexibility and good communication
Cons
- Too much unnecessary collaboration
- Inability to make tough decisions
2. Adhocracy culture
In organisations with adhocracy culture, teams are motivated by competition. The “move fast and break things” philosophy that is popular among tech startups falls under this category. In this entrepreneurial type of work environment, employees are encouraged to take risks and pursue innovative ideas.
Pros
- Fosters innovation and growth
- Creative and new ideas
Cons
- Lack of stability due to constant change
- Pressure to work quickly and aggressively
3. Market culture
Also known as Apollo culture, market culture emphasises performance and customer service. Beating the competition and establishing the company as a leader in its field is the focus. Employees are highly goal-focused, and leaders are tough and demanding to achieve the company's success metrics. It can be a high-pressure environment, but it is simultaneously rewarding when hard work pays off with real, measurable results.
Pros
- Highly driven and motivated employees
- High performance and success
Cons
- High pressure leading to toxic work environments
- Stress and burnout
4. Hierarchy culture
Hierarchy culture can also be defined as Zeus corporate culture or control culture. The characteristics of organisational culture are very structured and process-oriented. Activities and decisions are dictated by existing procedures, and leaders make sure their teams are well-oiled machines. People want to get involved in projects and achieve goals to increase the company’s turnover.
Pros
- Provides structure and reassurance
- Clarity in expectations and priorities
Cons
- Inflexible or unsupportive environment
- Rigidity that stifles innovation and growth
The importance of good company culture
The work of business professors Robert E. Quinn and Kim Cameron nearly 40 years ago identified the four types of company culture and came to the conclusion that no culture is as straightforward as being good or bad, just distinct.
A company's culture is key to its success. A Deloitte survey found that 94 percent of executives and 88 percent of employees believe a distinct workplace culture is important to business success. In today's increasingly remote workplace, a strong company culture is essential. Organising collaborative in-person sessions where teams share knowledge and insights makes coming to the office exciting and fosters a sense of community.
If your company is searching for an office space that enhances communication and collaboration, contact Central Park today about leasing opportunities.