Like any other group of people, organizations and companies have different types of group culture. If you’ve experienced working at different jobs before, you may have distinguished a difference between their organizational cultures.
What’s more is that an organization can have a mix of four different organizational culture with one that is dominant. This is based from a research of business professors Kim S. Cameron and Robert E. Quinn at the University of Michigan.
Kim and Robert made the Organizational Culture Assessment Instrument (OCAI). The OCAI is based on the Competing Values Framework Model that was also developed by Kim and Robert.
The OCAI is a validated survey method that allows companies to assess their current and preferred organizational cultures. This has been used by over 12,000 companies across the globe.
There are four types of organizational culture. By being aware of the nature of each one, you can determine qualities that could either grow or kill your organization.
Also, by knowing your organizational culture, you can see how to fill the gap between your current and preferred culture for the company. These are the four different types of organizational culture:
- Clan Culture
- Adhocracy Culture
- Market Culture
- Hierarchy Culture
The Clan Culture
In this type of culture, employees treat each other like family. Members share their experiences, stories and even problems much like how they would with a family member. There’s a very friendly and social environment that helps boost their well-being.
The focus of this culture are:
Among the four types of organizational culture, the clan culture is the most laid-back which has its advantages and disadvantages. A good benefit from having a clan culture is that it can allow employees to work with cooperation instead of internal competition.
Because this culture acts like an extended family, employees have a strong bond. They are loyal to each other and to the organization which can allow them to work on long-term goals.
The downside of this culture though is that there’s lack of diversity, lack of authority and potential for abuse. According to HR Daily Advisor, examples of large companies that use clan culture are Google, Tom’s of Maine and Zappos.
The Adhocracy Culture
This culture has the drive of being so aggressive to creating risks and innovations. It’s based on creativity and energy and is adaptable to change. Employees have the freedom to experiment so the organization will remain on the cutting edge or be part of the industry leaders.
An adhocracy culture promotes employee initiative and being fast-paced with providing or reacting with solutions. Unlike hierarchical companies with systems before implementing changes, an adhocracy focuses on quick development and has an urgency to keep moving with or lead the movement of technology and growth.
Tech companies have an adhocracy as technology is fast-paced and current technology can become irrelevant so fast. Another good example of a company with adhocracy is Facebook. Mark Zuckerberg even said, “move fast and break things – unless you are breaking stuff, you are not moving fast enough.”
The disadvantages of an adhocracy culture are:
- Lack of formalized procedures
- Lack of a rigid hierarchy
- Lack of risk management
- Dependence on technology
The Market Culture
Market culture is focused on competition. Organizations with market culture have demanding and tough leaders to ensure that they beat their rivals. The goal of an organization with market culture is to have a good market share and the way they do this is through fierce competition.
The drivers for organization that adopts a market culture is profitability and market share. If clan culture is the most-lenient among all four, market culture is the opposite. It is the most aggressive amongst the four different types of organizational culture.
Because of the competitiveness of a market culture type organization, its advantages are maximizing profits, being one step ahead of competitors and having driven workers.
However, the downside of a market culture can be detrimental. This includes employees getting burnt-out, getting exposed to a toxic environment and needing a huge investment for market research.
The Hierarchy Culture
An organization that is hierarchical has a formal environment and is based on structure and authority. It has strict procedures to ensure consistency and predictability. Every employee knows their place in the organization and their limits.
In a hierarchical culture, leadership is based on monitoring and coordination. There are multiple layers of management. The power of authority of an individual depends on title and status.
Those with a higher position has power over their subordinates. A hierarchical culture is prevalent to stereotypical, bureaucratic, organizations such as the military, the church, McDonald’s and government bodies.
The advantages of having a hierarchy culture is that authority and positions is clear. Promotions also lead to advancement in status. According to a study, employees who work for organizations with hierarchical cultures feel more secure.
To know how you can achieve the preferred culture of your organization, you must first identify what yours currently have. To do this, you can use the Organizational Culture Assessment Instrument (OCAI).
Achieving the ideal culture can help improve your company’s performance, competitiveness, sales and your employee’s satisfaction, retention, productivity and more.
Organizations can have a mix of cultures with each of their departments. However, there’s always a dominant culture that everyone observes. According to Kim and Robert, flexible organizations are more successful than those that are rigid.
Remember this when trying to plan for your organizational culture. What’s the current culture of your company? Identify it with the tool provided in this article for you to accomplish your company’s preferred organizational culture.