What Are The 4 Types Of Corporate Culture?

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The traditional corporate structure isn’t what it used to be. And that’s not necessarily a bad thing.

What Are The 4 Types Of Corporate Culture

Nowadays, company culture can range from collaborative culture to control culture. From a horizontal leadership structure to a compensation structure.

Either way, corporate cultures are here to establish core values and challenge or maintain the status quo. So, what corporate culture do you think your organization falls under?

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What is corporate culture?

Corporate culture refers to an overall working environment. So there’s no single definition of a corporate culture – rather, there are many.

In fact, the word “culture” is derived from the latin word “colere,” which means to tend or cultivate. (What? You didn’t expect a virtual comedian to be able to whip out a fast fact? Please…)

Ultimately, what creates a company culture is its cultural values, its company values, and how it chooses to characterize members of its own community. So, not an easy thing to pin down.

But since there are many types of organizational culture, companies are able to traverse the ever changing tech industry. And make the necessary changes to create business forward decisions.

So why is company culture so important? Well, wouldn’t you know we thought you’d ask that…

Why is corporate culture important?

Company culture is directly linked to employee engagement and employee satisfaction. In fact, a healthy company culture is often stacked with engaged employees who feel that they can bring new ideas to the table.

Bring in a virtual comedian if you are looking to change your corporate culture up

And this does wonders for the organization’s reduced turnover rates. So not only are job seekers looking for an organization’s values in their company culture.

Employees are continuously looking for these shared values even after securing a job. Not to mention that customer satisfaction also gets a boost when the employee experience is steeped in healthy job satisfaction.

The 4 types of corporate culture

Alright, we’ve made you wait long enough. Here are the 4 main types of corporate culture out there. Which one do you fit into?

#1. Clan culture

From the name itself, clan culture evokes a sense of family. And that’s pretty much what this kind of organizational culture relies on.

Clan cultures tend to offer a highly collaborative work environment. And they are most focused on team building and receiving employee feedback.

Because of this, tech companies with a clan culture tend to be fairly malleable. And that’s because they’re constantly focused on thriving within change and taking appropriate action.

That being said, there are some disadvantages to clan culture. In fact, too much collaboration can sometimes make it difficult for market growth to flourish since productivity may take a nosedive.

And the lack of a rigid structure between managers and employees can make future career paths difficult to recognize. As you’ll see with most of these organizational cultures, there are both pro’s and con’s to each one.

#2. Adhocracy culture

An authentic adhocracy culture is one whose business leaders are steeped in a high risk business strategy. So think startups and entrepreneurial pursuits.

And because risk taking is encouraged within these environments, many employees feel motivated to bring their own creativity to the table. This kind of fast-paced environment may hold several brainstorming sessions.

All with the focus of reaching targets within the constant competition that exists between larger companies. In the grand scheme of things, adhocracy culture is the kind of culture for the dreamers in search of professional development opportunities.

On the other hand, the constant pressure that accompanies an adhocracy culture can pit employees against one another. Especially since everyone is trying to come up with the next big thing.

Additionally, with so many risks taken, there is always the possibility for failure, lending itself to a general lack of stability. But this is why there’s not just one culture that every company must subscribe to, but many.

(And probably also why an adhocracy culture workplace could benefit from hiring a comedian to come in. Just to lighten the mood!)

#3. Market culture

Out of all the organizational culture types, market culture is the one with profitability on the mind. Always.

Typically, the language that dominates a market culture is centered around meeting quotas and reaching targets. So while leaders can be quite demanding within this high-pressure environment, they’re able to yield excellent performances from employees.

Because market culture is focused on the success of the entire organization, there’s not too much competition between employees. Rather, these environments are more team-oriented than not.

Then again, market cultures can be daunting for some employees since every decision they make is tied to a number. In fact, some say that the constant competition within a market culture can lead to a toxic work environment.

But again, some employees tend to thrive under this kind of pressure. So it really is a Goldilocks situation when it comes to the various types of organizational culture.

#4. Hierarchy culture

Hierarchy culture is the most traditional of all the company cultures out there. It maintains a clear chain of command that separates executives and employees, unlike clan culture.

And adheres to specific ways of doing things when it comes to day to day operations. One could say that this makes hierarchy culture a more process-oriented one.

Assess your company culture and determine whether you could use some help from clean comedians

While you might think this kind of culture is vanilla, there is something to be said about its traditional values. In fact, because of the conservative nature of these well-defined processes, hierarchy culture companies tend to remain stable.

And when they ascribe reasonable benchmarks, they’re able to accomplish them without issue. Additionally, employees know exactly what is expected of them so they walk into work with a sense of stability.

But those looking for a flexible work schedule may not appreciate this type of culture. And those who are passionate about implementing strategy and innovation will definitely despise this rigid structure.

But we already told you there were pro’s and con’s to each type of culture out there, didn’t we? So you at least knew what to expect.

Bonus: What Is A Meeting Planner?

What are the 4 major elements of organizational culture?

It’s clear to see the difference between all of these types of cultures. But at the heart of each, they’ll abide by these 4 major elements.

#1. Common purpose

An organization’s culture has to have a clear purpose or mission. Otherwise, it will become chaotic and disorganized.

But a common purpose helps to unite employees and executives under a single set of values. And this helps to give not only the individuals but the company a sense of direction.

This common purpose is especially important for all members of the organization to know. And this often boils down to a manager’s responsibility.

Not only are they tasked with having to educate members on the general strategy, mission, values, and long and short-term goals. They’re tasked with having to unite everyone under one roof.

#2. Coordinated effort

You might think that clan culture is the only true example of a coordinated effort. But even adhocracy cultures require that everyone works together in a way that maximizes resources.

In this way, having a group with a diverse skill set adds value to the company. Because everyone has something specific and unique to offer.

Then again, tapping into these skill sets is the real challenge and often performed by the manager. But when accomplished, it can yield significant results regardless of the kind of culture the organization operates on.

#3. Division of labor

With so much to do, it only makes sense that an organizational culture figures out the most efficient way to get things done. And that’s what is referred to as division of labor.

There are also 4 major components of every company culture

If coordinated effort was finding the skillsets a team has, then division of labor is putting those skill sets into action. This is an integral part of every organizational culture.

Otherwise, who knows how long things would take to get done! But in all seriousness, the way that division of labor gets divided up also bears a great deal on the culture of the organization.

#4. Hierarchy of authority

Hierarchy of authority is the chain of command. And as you’ve seen from the 4 main types of corporate culture, not all organizations embrace this component.

Or, at least they embrace it but to varying degrees. For example, adhocracy culture can look like a level playing field since everyone is encouraged to come up with new ideas.

But when searching for investors, there will always be a head authority figure leading the charge. And of course, a startup will look extremely different from the organizational culture of fast food restaurants.

What are the 8 types of culture?

Let’s say the 4 types of corporate culture just didn’t seem to fit your organization. Well, that’s totally okay!

And that’s also why we’ve included another template for your consideration. (We’re doubling our chances that you’ll see your company reflected in this mould!)

#1. Caring workplace

Like clan culture, a caring workplace is one that’s focused on collaboration and team building. As a culture, it encourages cross-functional collaboration.

And seeks to diversify its skillsets among team members. In other words, competition and fear have no place here.

#2. Purpose-driven culture

A culture focused on purpose is one that values and rewards altruism. That is contributing one’s efforts towards the greater good.

You could say that this is similar to market culture. But sometimes, these kinds of organizations have a much broader goal in mind than just profits.

#3. Learning culture

Learning culture is closest to adhocracy culture in that it focuses on creativity, innovation, and exploration. These kinds of companies will put a huge emphasis on brainstorming.

Change company culture by assessing the organization's values

In fact, according to the Harvard Business Review, Tesla is considered a leading example of this type of organizational culture. Although, only 7% of companies rank this culture highly.

#4. Playful work environments

High energy and playful environments are some of our favorites. But you might say we’re biased as corporate entertainers.

Either way, a playful working environment will have a strong focus on employee engagement. And cultivating a space for spontaneity and humor.

(Can you see why this is our favorite type of workplace now? It seems all too obvious but we can’t help ourselves!)

#5. Results oriented organizations

Results oriented workplaces are also similar to market cultures. But this is what also makes this kind of culture a forward-thinking one.

Because these types of workplaces are focused on results, they’ve always got their pulse on the next best thing. So one could say results-oriented organizations are like a mix between market culture and adhocracy culture.

(Did we mention that your organizational culture might be one or more of the 4 main types? It really is a mix and match.)

#6. Authority culture

Authority culture sounds intimidating. But it encourages strong and confident leadership in a way that inspires boldness and decisiveness.

So no, it’s not exactly like hierarchy culture even though it sounds like it. Instead, it’s about cultivating a mindset within the organization to take control of the current culture and circumstances.

#7. Safe and risk-conscious culture

Okay, if there were to be an opposite of adhocracy culture, it would be this one. Actually, a safe culture would be more akin to hierarchy culture if you like.

Either way, this is the type of organization that values planning, caution, and preparedness above all else. So those looking for a workplace that isn’t there to rock the boat or run impromptu public speaking speeches but wants a company with clear and realistic expectations, then this is for you.

#8. Structured and methodical work environments

Lastly, order and structure run this type of workplace. In fact, it rewards employees for following the rules and sticking with the shared values and norms of the company.

Some consider this type of workplace a rather traditional one. But if tradition has worked this long, why mess with it?

Putting your company’s values into action

While there are widely known to be 4 types of organizational cultures, it’s clear that there are many more. Because you decide what your organization is going to be.

Whether that’s strict and methodical. Or playful and determined. There are plenty of combinations out there.

And all we’re saying is that we’re happy to infuse just a little more fun into your workplace. That is while still getting the job done!

Keep Reading: How To Attract And Retain Employees In 2022

Adam Christing is a professional comedy magician, virtual MC, and the founder of CleanComedians.com. He is a member of the world-famous Magic Castle in Hollywood and a popular corporate entertainer, magician, and virtual speaker.