4 types of organisational culture: what you need to know as an HR manager

Nurturing the right culture for your business is key to its success and the happiness of your employees. By cultivating the right culture that helps you achieve your business goals, you’ll attract the ideal people to grow your team while also delighting your customers.There are four main types of organisational culture and where your company lies within this list depends on your business focus, communication style and ways of working. We’ve delved deeper into these four types of company culture to help you define the culture your business best aligns with.

  1. Clan culture
  2. Adhocracy culture
  3. Market culture
  4. Hierarchy culture

1. Clan culture

In a clan culture, mentorship and teamwork are key. It’s a people-focused culture where the company feels like one big happy family. It’s a highly collaborative environment where individuals are valued and communication is of the utmost importance.

You’ll often find clan culture paired with a horizontal structure that breaks down barriers between the C-suite and employees. Businesses that embrace this culture are action-oriented, welcome change and are highly flexible.

Pros

  • High rates of employee engagement
  • Happier customers because employees are happier
  • A highly adaptable environment that’s ideal for market growth

Cons

  • Can be difficult to maintain as the company grows
  • A horizontal leadership can make day-to-day operations harder to run

This kind of culture is commonly found in startups and smaller companies who put a big emphasis on collaboration and communication, where employers look to employees for feedback on ideas.

To create this kind of culture in your own organisation, you need to speak to your employees and ask for their input often. Ask them what they value, any changes they’d like to see and if they have any feedback on how to help the company grow.

Then, as the employer, you need to take their thoughts into account and put them into action. Clan leaders listen to their people, value their ideas and implement improvements quickly.

2. Adhocracy culture


Innovation is at the core of adhocracy culture.

Companies with this kind of culture are at the cutting-edge of their industry, always looking to create the next big thing before anyone else even begins to think about it. To have a successful adhocracy culture, they need to take risks while also encouraging employees’ individuality and creative thinking. 

Pros

  • Encourages high-profit margins
  • Maintains employee motivation
  • Lots of professional development opportunities

Cons

  • Taking risks means a new venture may not work out and could hurt the business
  • Creates competition between employees
  • May make employees feel under pressure to come up with new ideas

Giants like Google, Facebook and Apple all embody an adhocracy culture. Their creative energy fuels their work within an ever-evolving tech industry where new ideas and products are developed regularly. 

Depending on your industry, it may be difficult to develop an authentic adhocracy culture in your organisation. But you can replicate some of the key benefits by implementing brainstorming sessions to provide your employees with an opportunity to share great ideas to help grow the business.

Plus, rewarding ideas that are successful will also encourage your team to think outside the box.

3. Market culture

With a primary focus on competition and growth, market culture organisations look at  everything with the bottom-line in mind.

Profitability is its priority, which is why each role is created in line with the organisation’s greater goal. As market culture organisations are results-oriented, they focus more on business success than individual people’s satisfaction.

Pros

  • These organisations are usually profitable and successful
  • All employees can get behind a collective objective and work towards it
  • Remain one step ahead of the competition due to market research

Cons

  • Can be difficult for employees to engage with their work
  • Constantly investing in market research which can be expensive
  • Employees can feel overworked and stressed

As market culture organisations want to be the best in their industry, you’ll often find they’re larger companies that are already leaders.

To create this culture within your company, every aspect of what you do must be connected to your company’s bottom line. This can be implemented by starting to evaluate each position within your organisation. Calculate the ROI of all roles and create reasonable goals for company success, as well as rewarding top performers to encourage all team members to do the same.

4. Hierarchy culture

Two things make up the primary focus of hierarchy cultures:structure and stability.

These businesses generally adopt a traditional corporate structure and focus on internal organisation. That’s why they have a clear chain of command as well as management tiers to separate employees and leadership. 

They have a tried and tested way of doing things and as a business they’re financially stable and don’t usually take risks.

Pros

  • Have a clear direction
  • Defined processes that adhere to the organisation’s main objectives

Cons

  • Its rigid structure has little room for creativity
  • Slow to adapt to changing markets
  • Doesn’t encourage employee feedback

To establish a hierarchy culture in your business, the first step is to organise your processes. This could be filling any gaps in your chain of command and ensuring all team members and departments have clear, defined short and long-term goals. 

Your company culture defines who you are as a business and what you value, which is why evaluating your existing company culture and identifying what truly matters is of vital importance. Complete our workplace culture audit to find out more about what culture your company currently has, and how you can go about improving it.

Define your company identity with our quiz

As your business grows and changes, maintaining or cultivating the culture you want can be difficult. But, by taking this audit you can identify the pros and cons of your current workplace culture, and start making steps to improve it.

Take our culture audit here

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