Organizational culture is not a buzzword. It is your company’s signature that attracts crème de la crème talent to your organization, like bees to honey. It is also the magnet that helps you retain your top talent.
But how do you identify what is your organizational culture?
In my previous newsletter, I discussed four types of organizational cultures. In this newsletter, I will explore each culture in more detail and explain how to identify which culture your organization represents.
Types of Organizational Culture And Their Features
Essentially, there are four types of organizational cultures, and successful business houses such as Google, Meta (Facebook), Netflix, and Spotify, among others, usually display a mix of these four cultures.
So, without any further ado, here is the list.
Adhocracy Culture
Adhocracy is a portmanteau of ‘ad hoc’ and ‘bureaucracy’ and is also known as creative culture. Adhocracy culture has flat structures, and decision-making is decentralized. Employees are encouraged and empowered to take initiative.
Some popular examples of Adhocracy culture include Google, Spotify, and Netflix.
Adhocracy Culture Features
Adhocracy is all about constant innovation, improvements, and competitiveness, and so the features are
- Individuals take the initiative
- Innovation is constant
- Risk-taking is a norm here
- The structure is highly organic
- Flexibility is the way of life here
- Growth is inevitable here
Advantages and Disadvantages of Adhocracy Culture
Some prominent advantages of Adhocracy culture include
↳ Adaptability is the way of life in this culture, as there are no rules or formal procedures.
↳ Agility is another advantage of adhocracy culture, as there are no time limits or expectations from employees; the decisions are quick here.
↳ The risk-taking environment and the shared goals of the team create an ambiance of supportiveness.
↳ Flexibility is the norm of adhocracy culture, as it values work and not the place of work.
↳ Growth is an advantage and one of the features of adhocracy culture. Reason: The culture supports agility and risk-taking practices, which results in scalability and growth.
↳ Innovation is another huge advantage of adhocracy culture. The culture thrives on innovation, creativity, and vision.
Interestingly, its distinctive features are also among its prominent advantages. But like everything else, adhocracy culture has some disadvantages.
↳ Additional stress due to constant expectations to create something new.
↳ Internal competitiveness is another disadvantage, as team members are always encouraged to outperform.
↳ Adhocracy culture can be expensive for your business, as it supports constant innovation and risk-taking practices.
↳ Mistakes can be a regular occurrence in adhocracy culture, as the environment is quite fast-paced, and there is a tendency for errors and failures.
↳ Lack of clarity and stability are other disadvantages of this type of culture.
Clan Culture
A group of close-knit and interrelated families or people with a strong common interest come together to form an organization with clan culture. This is usually seen in small or family-owned businesses that are not hierarchical in nature, such as the Irani Cafes in Pune.
Some popular examples of clan culture are Starbucks coffee house and Airbnb.
Clan Culture Features
Clan culture showcases collaboration within the team, and with that in mind, some distinctive features include
- Teamwork and collaboration are the key ingredients here
- Kinship rules in clan culture
- Mentoring is the norm here
- Participation is a must here
- Informality rules over everything
- Shared values make work fun
Advantages and Disadvantages of Clan Culture
Some advantages of clan culture include
↳ Happy employees who are heard, appreciated, valued, and respected.
↳ Another advantage of clan culture is high performance. Happy employees perform better, and that’s good for your business.
↳ Informal ambiance results in improved communication with your employees and with employers.
↳ Employees in clan culture have a sense of belonging, which results in building up strong relationships within the company and also encourages loyalty.
↳ The work environment in clan culture is quite supportive, as employees and employers work together to overcome challenges and keep the clients happy.
But not all is good at clan culture, and there are some disadvantages also.
↳ With no distinct leadership and a lack of clarity, there can be confusion at times.
↳ Too much informality in the work environment may result in unnecessary banter that may affect productivity.
↳ Stagnant creativity followed by poor growth and slow decision-making are other big disadvantages of clan culture.
↳ Additionally, an outsider may not be well-accepted in a clan culture, which can result in a lack of diversity and inclusion.
Hierarchy Culture
Hierarchy culture, as the name suggests, is based on hierarchical structures with a top-down approach. The culture is more prominent in the US and each employee knows where they fit in the chain and who reports to whom. Some prominent examples of hierarchy culture are IBM and General Motors (GM).
Hierarchy Culture Features
Some prominent features of this culture are
- Structure
- Stability
- Efficiency
- Well-defined rules, roles, and policies
Advantages and Disadvantages
The advantages of a Hierarchy culture include
↳ Clarity in roles and responsibilities
↳ Efficiency that is guided by structure and processes
↳ There is a straight line upward path to promotion
↳ With everything streamlined, the culture has a sense of predictability, which gives birth to a strong sense of community.
Disadvantages include
↳ Employees may find it difficult to adapt to change.
↳ The culture’s controlling nature may make it hard to attract and retain top talent.
↳ The predictable working environment is not a friend of creativity.
Market Culture
Market culture is more concerned about profit margins and having an edge over competitors. Market culture is result-oriented and wants happy and satisfied customers. Some prominent examples include Tesla, Amazon, and General Electrics.
Market Culture Features
Prominent features of Market culture are
- Competitiveness
- Result-orientation
- Strong customer focus
- Getting things done
- Leaders who inspire and demand
Advantages and Disadvantages
Advantages of Market culture
↳ Clarity is one of the significant advantages of market culture.
↳ Healthy competition is another advantage of market culture, as it motivates organizations to indulge in healthy competition.
↳ Market culture can help your organization become a leader in your industry as you stay on top of your market research and consumer needs.
Disadvantages include:
↳ Common corporate issues like burnout, toxicity, and gaslighting are some of the biggest disadvantages of this culture.
↳ Teamwork troubles are another prominent con of this culture.
Startup work culture is a new culture that is seen in large global companies.
Andy Jassy, CEO of Amazon puts it aptly in his message for the Amazon employees. In his message, he thanked all the employees and shared his vision for the company. He said that he wanted to operate like the world’s largest startup. What he meant was to have a sharp focus on innovation, collaboration, and agility reminiscent of startup culture.
He added, “Strong urgency (for most big opportunities, it’s a race!), high ownership, fast decision-making, scrappiness and frugality, deeply connected collaboration (you need to be joined at the hip with your teammates when inventing and solving hard problems), and a shared commitment to each other.”
Top Ways To Identify Your Company Culture
Now that you know common corporate cultures, I am sure you want to know how to identify which culture your business adopts.
Here are some ways to help you identify your organization’s culture.
↳ Your employees know it better. Ask them to get the real answers. But you must ask pointed questions, and be prepared for some bitter truths, and understand it is not personal but directed toward the culture that requires changes.
↳ Be an anonymous customer and shop around your business. When you explore your business as an anonymous customer, you will know how customers are treated and whether the treatment requires change. A customer-centric culture will always put its customers at the forefront.
↳ Your hiring practices are another mirror that reflects your company culture. Walk through your hiring, interviewing, and onboarding processes to know how the new applicants feel during those times. Do their personality and values match what you have in mind for a new team member?
↳ Reflect on your rules, processes, and traditions and check whether your employees receive them on a positive note or if there is a pushback from their side.
These four practices must help you identify your organizational culture and continue to work to maintain a positive culture and environment that supports growth and innovation.
Final Words
It is a known fact that organizational culture has a huge impact on two Rs – Recruitment and Retention and two Ps – Performance and Profits. Hence, your organization must figure out its organizational culture.
However, if you are still unsure of your organizational culture, and if your employees are happy to work for you and you are able to retain them. You needn’t worry. And keep doing whatever you have done to keep your employees happy and satisfied in your organization.
But start talking about it on your social media platforms or any other opportunity to ensure you also start attracting the right talent to your organization.
So, do you know what type of culture your organization has? Share with us in the comments; we would love to hear from you – how did you achieve it, what tweaks did you make, and what difference has it made on your hiring and recruitment practices?
