Discovering the 4 Types of Corporate Culture: Which One Fits Your Business?

Running a successful and profitable business isn’t just about having a great product or service. The corporate culture that drives your business is what sets you apart from your competitors and can make or break your success. But what exactly is corporate culture, and how do you determine what type of culture fits your business? In this article, we will explore the four main types of corporate culture and help you identify which one is right for your business.

What is Corporate Culture?

Corporate culture refers to the shared values, beliefs, attitudes, and behaviors that shape an organization’s identity. It encompasses everything from the way people communicate with each other to the way decisions are made. Corporate culture is like the personality of an organization, and it plays a critical role in attracting and retaining employees, driving innovation, and ultimately, achieving business success.

Type 1: Clan Culture

Clan culture is a family-like environment where employees are loyal to the company and feel a sense of belonging. In this type of culture, the company values collaboration, teamwork, and employee development. Clan cultures tend to be more informal and focus on developing relationships between employees. Examples of companies with a clan culture include Zappos and Southwest Airlines.

Type 2: Adhocracy Culture

Adhocracy culture is a dynamic and entrepreneurial environment where employees are encouraged to take risks and innovate. In this type of culture, the company values creativity, experimentation, and change. Adhocracy cultures tend to be more flexible and decentralized, giving employees greater autonomy. Examples of companies with an adhocracy culture include Google and Amazon.

Type 3: Market Culture

Market culture is a competitive and results-driven environment where employees are focused on achieving measurable objectives. In this type of culture, the company values competitiveness, customer focus, and achieving financial results. Market cultures tend to be more formal and structured, with a focus on performance and meeting targets. Examples of companies with a market culture include Goldman Sachs and General Electric.

Type 4: Hierarchy Culture

Hierarchy culture is a structured and controlled environment where employees are expected to follow rules and procedures. In this type of culture, the company values stability, predictability, and efficiency. Hierarchy cultures tend to be more formal and bureaucratic, with a focus on control and consistency. Examples of companies with a hierarchy culture include IBM and Ford.

How to Determine Your Corporate Culture

Now that you know the four types of corporate culture, you may be wondering how to determine which one fits your business. The first step is to identify what type of culture you currently have. Look at your organization’s values, beliefs, and behaviors. How does your company communicate? What is the decision-making process? Are employees encouraged to take risks and experiment, or are they expected to follow a strict set of rules?

Once you have identified your current corporate culture, the next step is to determine whether it aligns with your business goals. For example, if you are a startup looking to grow quickly and take risks, a clan or adhocracy culture may be more suitable. On the other hand, if you are a well-established company focused on efficiency and stability, a market or hierarchy culture may be a better fit.

Conclusion

Corporate culture is a critical component of business success. Understanding the type of culture that fits your business can help you attract and retain employees, drive innovation, and achieve your business goals. By identifying your current corporate culture and aligning it with your business objectives, you can create a strong and cohesive culture that will help your business thrive.