9 Different Types of Organizational Cultures You Can Model for Success

Having an effective corporate culture is one of the most important factors for business success. It is directly tied to the company’s bottom line and can have a huge impact on how employees interact with each other, their motivation levels, and how well they perform in their roles.

But, how do you cultivate that winning culture? What does it look like?

Depending on the needs and vision of a particular organization, there are various types of organizational cultures that can be modeled for optimal success.

This article will provide an overview of nine specific types of company culture, introducing their main characteristics and offering guidelines on how to implement them in your own business.

By understanding the unique traits and benefits associated with each type, you can identify which current culture best suits your organization’s needs.

Read on to find out more about the common types of culture and which types of organizations each one is suitable for.

9 types of organizational Culture

Here we’ll go over the nine main types of organizational cultures, along with their specific characteristics and benefits.

1. Clan (or collaborative) culture

Employee feedback on what they’d like to see change and how they view the organization’s culture is key.

This work environment of high employee engagement fosters a high level of collaboration and commitment of employees to achieving the firm’s goals. It also leads to happier, more engaged, and more productive employees. However, the lack of clear leadership can also be problematic at times.

In terms of management structure, that of clan culture is horizontal. Teams within the organization aren’t micromanaged, instead, they’re trusted to get their work done autonomously.

That being said, clan culture doesn’t mean that there are no organizational rules. It means that there are rules, but employees are encouraged to follow those rules because they believe in them, not because they’re forced to.

Clan culture works best in smaller companies such as start-ups and family-owned companies. However, huge tech companies such as Google also incorporate some degree of clan mentality in their culture.

Pros

Cons

2. Hierarchy (or control) culture

This involves having clearly defined layers of management. Hierarchy-based companies have highly centralized control when it comes to the organization’s rules and operations. Companies with this culture often have strict oversight from each layer of the hierarchy over the one below it.

In some industries, such as banking and insurance, this kind of organizational culture is highly conducive to productivity and success. This is due to the clear-cut sense of direction and explicitly defined roles of each employee. This ideology is also suitable for oil and gas companies.

On the other hand, companies in industries that need innovation and creativity do not find strict hierarchical structures attractive, because they do not encourage innovation or creativity.

Pros 

Cons 

3. Adhocracy (or creative) culture

Adhocracy culture is often the way that companies in tech-based industries opt to go. Similarly to clan culture, adhocracies give employees the space and freedom to experiment, take risks, and come up with new ideas.

For example, start-up and tech companies need to be able to attract the premier talent in the market. When jobseekers see that a company allows them to use their skills and experience completely, they are more likely to want to work there.

A prime example of a successful corporation with an adhocracy culture is Nike.

Pros 

Cons 

4. Market (or compete) culture

Market culture is often adopted within the larger framework of a hierarchy culture. Individuals within the organization can move up the ladder by beating out their peers in aspects such as sales volume and efficiency. This is the culture adopted by Amazon with great success.

The advantage of market culture is that it makes employees inherently inclined to further the firm’s interests. This is because it’s also in their own interest to do so. 

On the other hand, this highly competitive setting can be unhealthy and create a toxic work environment that discourages prospective employees from wanting to work there.

Pros 

Cons 

5. Strong leadership culture

This kind of culture refers to having charismatic individuals at the top of the firm’s hierarchy. The leader’s job is to set a clearly defined purpose and vision for the workplace and to communicate that vision to employees in a way that makes them buy into it.

This culture also places a strong emphasis on employee development. This comes in the form of an abundance of training programs and mentorship for employees at the lower positions of the firm.

This is because such companies prefer to promote from within as opposed to making new hires.

Pros 

Cons 

6. Customer-first culture

Traditionally, companies have created products and services first and then tried to create demand for them through their marketing efforts.

However, more and more companies nowadays are shifting towards basing their operations and R&D on market research. This involves conducting surveys to find the gaps in the market in terms of what customers need and then striving to meet those needs.

This isn’t limited to just the firm’s product offerings, but it also includes how its employees interact with customers. A great example of this is Xerox, who understood the importance of people-to-people relationships in relation to developing customer satisfaction. With this mentality, they were able to regain their lost market share in the 80s.

Another great example of a firm that has successfully adopted a customer-first culture is Trader Joe’s. This grocery store chain has one of the highest customer satisfaction scores in the US because its employees will go to great lengths to satisfy customers.

Pros 

Cons 

7. Role-based culture

Role-based culture is another type of corporate culture that doesn’t place much stock in hierarchy.

Instead, the roles and responsibilities of employees in companies that adopt this culture are based on each employee’s expertise and skill set. 

This is in direct conflict with hierarchical structures, because an employee can be assigned to lead a critical project instead of their manager, for example. This decision is based on the merit of their expertise in the matter at hand.

Pros 

Cons 

8. Task-based culture

For such a company to succeed, employees need to wear multiple hats and demonstrate an excellent knowledge of the industry as a whole. They must be willing to carry out tasks outside their given profession.  

Task-oriented cultures are often seen in small businesses or start-up companies that don’t have a lot of employees. 

Pros 

Cons 

9. Purpose culture

It involves creating a work environment in which employees are working for a common cause that is often non-monetary. This could be something such as human rights or environmental sustainability.

Pros 

Cons 

The role of corporate culture

Culture is extremely important in shaping how a business is viewed both by its employees and the public. It also has a major impact on how the company functions internally and the paths it takes as a whole. 

To understand how workplace culture plays such a vital role in company success, let’s dive into the finer details:

Increased profitability

Having a great culture isn’t just good for morale. It also plays a major role in your bottom line. Corporations that score in the top 25% for employee experience report almost 2x the return on sales and 3x the return on assets.

Brand image

Workplace culture is an essential component in the coherence of its brand image and identity. In order for the image the firm portrays to be credible, the way it operates must be in line with the company values implied by that image.

Employee attitude

At the end of the day, an organization is a product of the people that work in it. 

Therefore, if a firm’s employees are happy and satisfied with the way things are done in the workplace, they’re more likely to be productive. One study by the University of Warwick found that happy employees are 12% more productive on average, and reached as high as 20% over the control group.

They’re also more likely to want to stay put and not seek employment elsewhere. In fact, employees who have a sense of meaning and purpose, and who’s values align with the company’s, are 4x as likely to love their jobs.

Sense of direction

Having a sense of direction for the company is paramount to cultivating an effective and productive organizational culture.

This includes the words used to describe your company culture. By establishing a mission and vision statement, companies are able to articulate their core values and align employee activities with the desired organizational goals.

This allows employees to understand their role within the organization and create a collective understanding of how the company should move forward in order to be successful.

One IBM study of more than 23,000 employees found that employees who feel their work is consistent with organizational values are 50% more likely to report a positive employee experience.

How to choose and build a corporate culture

When selecting and constructing a corporate culture, it is essential to take a variety of factors into consideration. These include the company’s mission and vision, desired customer experience, employee interactions and preferences, values, norms, and external influences such as competition or industry trends.

A great way to gauge how your employees are responding to your organizational culture is through regular employee feedback.

One of the main things you need to determine is what culture gives your company the best chance to succeed. This will in large part be decided by the nature of the industry you operate in.

For example, if you operate in the tech industry or any other industry that requires your organization to be highly innovative to stay competitive, you’ll want to adopt a culture that’s conducive to that. 

Fostering a Clan or Adhocracy culture that creates an environment where employees work hard to develop new ideas would be an ideal fit.

Building an effective company culture starts from the top. As a business leader, you’ll need to first clearly establish the vision and values for your organization. 

Company leaders then need to communicate these values and diffuse them throughout the organization in a way that will encourage buy-in from team members. 

The best way to do so is to lead by example. Employees are more likely to view the company culture as credible if the example set by management is a positive one.

FAQ

Here are some commonly asked questions (and the answers to them) regarding organizational culture:

Conclusion

There are many different types of culture that organizations choose to adopt, with a lot of opportunities to create cultures that optimize success.

While every company is different and there is no one-size-fits-all approach, it is important to consider the nine different types of organizational culture and try to create an environment that will lead to long-term success.

It’s possible to craft a culture with clear goals and values, an atmosphere of collaboration and innovation, proactive problem-solving, and an emphasis on employee development and satisfaction.