New organizations are usually less structured. But when they grow a little larger, they develop a structure that mainly focuses on functional groups.
Thus, activities that relate to production are put together. This also covers the marketing activities and personal activities.
This organizational form only performs well if all the activities focus on one primary service or product, and only if the transformation is steady.
The structure helps to describe the duties and responsibilities of the employees who are in the company.
We’ve narrowed down the four types and their unique features. You will be able to know what types of organizational culture you belong to after going through this list.
Types of Organizational Culture: 1. Clan Culture
The working environment is a welcoming one. A clan culture is a tribe-like or family-like type of corporate environment. It stresses on commonality and agreement of values and goals.
The clan cultures are less competitive and are the most collaborative ones.
You need to mentor employee engagement and employee commitment. This way, you can promote loyalty and empowerment in the working environment. And in the end, you will have enhanced your business success and productivity.
But, clan culture critics do not agree with this. They debate that businesses which follow this model can’t practice diversity.
They also argue that paying too much attention to integrity can suppress opposition. And also, that a pleasant environment can make employees more reluctant on production. They would be more active in a more competitive culture.
It’s essential to note that clan organizational culture aims at promoting the spirit of togetherness. It advocates for teamwork and active participation of every concerned role player. With this, an organization can achieve overall success.
Lastly, yet important, in this type of organizational culture, those in top executive positions are perceived as mentors. The fundamental objective is to foster a morally trained team of employees.
2. Market Culture
Market culture is a type of organizational culture that focuses on competition. Not only between the corporate and its market rivals but also between the employees. This model is the most capitalistic and the most aggressive of the four basic organizational culture models.
Employees are expected to set up strict objectives and aspire to achieve them. The performance of an employee gets monitored closely. He or she can either be awarded or punished for their performance.
The success of an organization is achieved by emphasizing on individual employee performance. An employee, too, can achieve his set goals by focusing on his performance.
But, the market model critics’ debate that, putting too much focus on individual achievement can be unappealing. And that it can also encourage dishonesty, thus, leading to an unproductive work environment.
Also, it is in this organization culture that you find leaders to be strict and arduous. As a result of this, more emphasis gets done on commanding a wide market share and generating more profits.
This structure also aims at hitting targets and accomplishing goals.
General Electric can serve as a perfect example in this context.
Under his leadership, Jack Welch stated that every business unit must have had to be ranked top two in their particular market areas. Otherwise, it would get sold off.
During his tenure, Welch drove the company’s profit from $1.5 billion to $15 billion, serving as one of the most successful CEOs of his time.
3. Adhocracy Corporate Culture
In a business context, an adhocracy is an organizational culture that can quickly adapt to the changing conditions.
An adhocracy organizational culture is identified by employee empowerment, flexibility, and their priority on the individual initiative. The hierarchical corporate culture is stricter than adhocracy culture in defining organizational levels.
Adhocracies model critics’ debate that lack of clarity in leadership can bring about chaos in the working environment. Responsibilities will be misunderstood, and essential duties can remain unfinished.
Even so, we have to note that in this type of organizational culture, both employers and employees take risks. Risk-taking fosters the development of a vibrant and resourceful labor force.
The driving agenda is to expand the business as well as create new prospects.
After all, the availability of new products and services is considered as a success factor. It is in this type of organizational culture that a persons’ creativity is boosted.
4. Hierarchy Culture
This is a formal setup of a work environment. There is no guidance from anyone. Every person has to adhere to authoritative measures to fit well in this type of organizational culture.
The driving elements in a hierarchy organizational structure are reliability and homogeneity. This group’s leadership has an organized structure and mode of coordination. They help in emphasizing on competence and certainty.
Besides, this type of organizational structure emphasizes more on individual discipline and respect. This is across all divisions of leadership in the organization. Both short term and long term goals are set, aiming to achieve solidity and deliver results.
This means that we can define success by skillful planning, low cost of operation, and dependable delivery. The military is the best basic example that can illustrate this type of organizational culture.
How is organizational culture important to any business?
Having a healthy corporate culture for your business will boost your retention ability. You will agree with us that it’s costly for any business when hiring new employees. But, an organization can avoid such unnecessary expenditures. It can choose to keep competent workers rather than getting new ones.
Also, an organization with its own culture creates a sense of belonging to its employees. One can proudly identify themselves with their places of work.
You need to understand that all these cultures work in their respective organizations. This is to achieve success and general growth. Also, all these types of organizational culture uphold specific conduct as well as impede others.
Have you thought of the best type of organizational culture that can fit your business? Check out our blog for more helpful information to guide you on the types of organizational cultures.