Types of Organizational Culture

 

(Tutorialspoint, 2023)

 

Organizational culture is defined as the underlying values, beliefs, assumptions, and ways of interacting that contribute to the unique social and psychological environment of an organization. It is widely believed that while national cultures are based on deeply held values, organizational cultures are focused more on practices. And the repetition of these practices or behaviors within an organization is what determines the organizational culture (Association for Talent Development, 2023).

A good organizational culture is hailed as the driving force behind a company's continued success (Nneji & Asikhia, 2021). In fact, companies with healthy organizational cultures are 1.5 times more likely to experience increased revenue of 15% or more over three years and 2.5 times more likely to experience significant stock growth during the same period. Culture is also key when it comes to attracting talent and outperforming the competition. Accordingly, 77% of employees consider a company's culture before applying, and almost half of the employees would quit their current job for a lower-paying job in an organization with a better culture. The culture of an organization is also a top indicator of employee satisfaction and engagement and the reason why almost two-thirds of employees stay in their jobs (Wong, 2020). The main types of organizational culture include:

 

(Moussavi, 2021)

 

Clan Culture

A clan culture is a friendly, almost family-like work environment that often encourages employees to view leaders as mentors and emphasizes employee involvement and team building. Companies with this culture prioritize employee well-being and health while simultaneously challenging and motivating them. They may also prioritize human resource development. As a result, companies with this culture often implement long-term HR strategies that emphasize inclusion and teamwork. Clan culture can be seen most often in small companies, start-ups, and family-owned businesses (Indeed, 2022).

 

Adhocracy Culture

Also called a create culture, an adhocracy culture focuses on innovation, agility, and learning from failure (Association for Talent Development, 2023). Thus, companies with this culture encourage employees to experiment and test new ideas and view their leaders as calculated risk-takers. Organizations with this culture seek to expand their business and develop new products. They assess their success by whether or not they can anticipate the needs of the market and create solutions to meet them (Indeed, 2022).

 

Market Culture

A market culture is an organizational culture centered on results, desired outcomes, or goals (Association for Talent Development, 2023). Organizations with this culture are highly driven and motivated and accomplish tasks quickly and efficiently. They often use competition to motivate them and measure their success based on stock and market results (Indeed, 2022).

 

Hierarchy Culture

This culture emphasizes structure, compliance, and stability over innovation. Leaders in these organizations strongly encourage employees to adhere to strict institutional procedures. Organizations with this culture value efficiency and uniformity in their pursuit of desired results and outcomes and use process control and systematic problem-solving to operate efficiently. Bureaucratic organizations often have this kind of organizational culture (Indeed, 2022).

 

Conclusion

Organizational culture plays a crucial role in driving a business toward success. It also attracts and retains top talent, motivates and engages employees, and leads to increased revenue and growth. Hence, it is essential for companies to recognize the importance of organizational culture and actively work towards creating a positive and healthy organizational culture. The four main types of organizational cultures are clan, adhocracy, market, and hierarchy. Each has its own unique characteristics and can be found in different organizations.

 

References

Association for Talent Development, 2023. What is organizational culture? [Online]
Available at: https://www.td.org/talent-development-glossary-terms/what-is-organizational-culture#:~:text=Organizational%20culture%20is%20the%20sum,psychological%20environment%20of%20an%20organization.
[Accessed 01 May 2023].

Indeed, 2022. Organizational culture: definition and why it's important. [Online]
Available at: https://www.indeed.com/career-advice/career-development/organizational-culture
[Accessed 01 May 2023].

Moussavi, S., 2021. 4 types of organisational (organizational) culture. [Online]
Available at: https://www.linkedin.com/pulse/4-types-organisational-culture-sepideh-moussavi?trk=read_related_article-card_title
[Accessed 01 May 2023].

Nneji, N. E. & Asikhia, O., 2021. Organizational culture and organizational performance: a literature review. Volume 3, pp. 361 - 372.

Tutorialspoint, 2023. HRM - Organizational culture. [Online]
Available at: https://www.tutorialspoint.com/human_resource_management/human_resource_management_organizational_culture.htm
[Accessed 01 May 2023].

Wong, K., 2020. Organizational culture: definition, importance and development. [Online]
Available at: https://www.achievers.com/blog/organizational-culture-definition/
[Accessed 01 May 2023].