A guide to the four types of corporate culture and how to leverage them for your organization’s growth and performance.
Corporate culture is more than just a buzzword. It’s the set of values, beliefs, and behaviors that shape how your employees work together and how your customers perceive you. It’s also a key factor in your organization’s success, as research has shown that companies with strong cultures outperform their peers in terms of profitability, customer satisfaction, innovation, and employee engagement.
But what exactly is a strong corporate culture, and how can you create one for your organization? In this blog post, we’ll explore the four types of corporate culture identified by the Competing Values Framework (CVF), a widely used model that helps organizations assess and improve their culture. We’ll also share some practical tips on how to leverage each type of culture for your organization’s goals and challenges.
The Four Types of Corporate Culture
According to the CVF, there are four types of corporate culture, each with its own strengths and weaknesses. They are:
- Clan culture: A clan culture is characterized by a high degree of collaboration, trust, and loyalty among employees. It’s like a family, where everyone shares a common vision and supports each other. Clan cultures are good at fostering innovation, creativity, and employee satisfaction. However, they may also struggle with decision-making, accountability, and efficiency.
- Adhocracy culture: An adhocracy culture is characterized by a high degree of flexibility, experimentation, and risk-taking. It’s like an entrepreneurial startup, where everyone is constantly looking for new opportunities and solutions. Adhocracy cultures are good at adapting to changing markets, customer needs, and technologies. However, they may also lack stability, consistency, and control.
- Market culture: A market culture is characterized by a high degree of competition, results-orientation, and customer focus. It’s like a sports team, where everyone strives to win and achieve their goals. Market cultures are good at driving performance, productivity, and profitability. However, they may also create stress, conflict, and short-term thinking.
- Hierarchy culture: A hierarchy culture is characterized by a high degree of structure, order, and rules. It’s like a bureaucracy, where everyone follows established procedures and protocols. Hierarchy cultures are good at ensuring quality, reliability, and efficiency. However, they may also stifle innovation, creativity, and employee engagement.
How to Leverage Each Type of Corporate Culture
There is no one best type of corporate culture for every organization. Rather, the best type of culture depends on your organization’s goals, challenges, industry, and environment. For example, a clan culture may work well for a creative agency that needs to foster collaboration and innovation among its employees. A market culture may work well for a sales-oriented company that needs to drive revenue and customer satisfaction. A hierarchy culture may work well for a manufacturing company that needs to ensure safety and quality standards. An adhocracy culture may work well for a technology company that needs to respond quickly to changing customer demands and market trends.
The key is to identify the type of culture that best suits your organization’s needs and align your strategies, processes, and practices accordingly. Here are some tips on how to do that:
- Assess your current culture: You can use tools like the Organizational Culture Assessment Instrument (OCAI) or the Denison Organizational Culture Survey to measure your current culture along the four dimensions of the CVF. You can also conduct surveys, interviews, or focus groups with your employees and customers to get their feedback on your culture.
- Define your desired culture: You can use tools like the OCAI or the Denison Organizational Culture Survey to create a vision of your desired culture along the four dimensions of the CVF. You can also involve your stakeholders in defining your desired culture by asking them what values, behaviors, and outcomes they want to see in your organization.
- Identify the gaps and opportunities: You can compare your current culture with your desired culture and identify the gaps and opportunities for improvement. You can also prioritize the areas that need the most attention or have the most potential for impact.
- Implement changes and monitor progress: You can implement changes that will help you move from your current culture to your desired culture. These changes may include revising your mission, vision, and values; communicating your expectations and goals; rewarding and recognizing desired behaviors; providing training and coaching; redesigning your processes and systems; etc. You can also monitor your progress by measuring key indicators such as employee engagement, customer satisfaction,
performance metrics etc.
Corporate culture is not something that you can ignore or take for granted. It’s something that you need to actively shape and manage to achieve your organization’s success. By understanding the four types of corporate culture and how to leverage them for your organization’s goals and challenges,
you can create a strong corporate culture that drives growth and performance.
- Cameron, K. S., & Quinn, R. E. (2011). Diagnosing and changing organizational culture: Based on the competing values framework. John Wiley & Sons.
- Denison, D. R., & Mishra, A. K. (1995). Toward a theory of organizational culture and effectiveness. Organization science, 6(2), 204-223.
- Kotter, J. P., & Heskett, J. L. (1992). Corporate culture and performance. Simon and Schuster.