10 Types of Company Culture Explained

“We believe that it’s really important to come up with core values that you can commit to. And by commit, we mean that you’re willing to hire and fire based on them. If you’re willing to do that, then you’re well on your way to building a company culture that is in line with the brand you want to build.”

– Tony Hsieh, CEO, Zappos

Zappos is known as one of the greats when it comes to company culture. Company culture isn’t just a buzz word. It’s a vitally important component to any business – large or small.

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In the past, company culture was implied and developed organically over time. These days, companies that want to attract and retain top talent actively work to establish and promote a healthy company culture. Read on to learn about the different types of company culture and the positive ways it can move your business forward.

Types of Company Cultures

Businesses aren’t pigeon holed into one kind of company culture. If you’re interested in building a strong culture, you can piece together elements from two or more types that will move your business forward.

Clan

A clan is described as a group of close-knit and interrelated families with a lot in common. A clan culture in business is friendly and collaborative with loyalty playing a big role. Clan cultures are described as the most cooperative and the least competitive. Clan cultures typically involve weekly one-on-one meetings with the main emphasis being on team presentations and all-hands meetings. Adopting a culture with a clan-like feel helps employees think and work as a team.

Adhocracy

The adhocracy type of culture was given prominence by writer Alvin Toffler in 1970. He popularized the phrase "adhocracy", referring to a company that operates without a formal hierarchy. An organization adopting this philosophy emphasizes creative thinking. Adhocracy oriented cultures are entrepreneurial and focus on risk-taking and innovation. 'Keep moving' is this culture's motto and this environment is suited to those who think big then act larger. Some of the drawbacks of an adhocracy culture are a lack of planning and risk management. In an adhocracy culture, the company responds to issues as they come up instead of having a plan in place to avoid the problem in the first place.

Hierarchy

A business with formal rules, regulations, and bureaucracy operates with a hierarchy culture. Leadership is based on organized coordination and monitoring and the chain of command through management layers is followed closely. Organized, efficient operations are key. This type of company culture is common with government organizations (think the Department of Motor Vehicles). Businesses of all types have some elements of hierarchy.

Team-first corporate culture

Team bonding, cross-department collaboration, and employees' happiness is this culture’s top priority. It’s a “people over process” mentality. One company often cited as a team-first leader is Netflix. They offer a full year of unlimited family leave, allowing employees the opportunity to decide what works best for them. Team-oriented companies hire for culture fit before considering skills and experience. They hold team-building events often and offer creative employee benefits.

Elite corporate culture

Have you heard about the legendary and grueling hiring process at Google? The giant company has an elite corporate culture, hiring only the best-of-the-best. Innovation and forward-thinking are expected and employees want the business to become an industry leader. An elite corporate culture encourages out-of-the-box thinking and going above and beyond the status quo.

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Horizontal corporate culture

Smaller companies and start-ups benefit from a horizontal corporate culture. All employees pitch in and collaboration is key. Since the company is typically young, a horizontal corporate culture is flexible and encouraging. Increased productivity comes with this culture as employees are involved directly in the decision-making process and management supervision is minimal.

Conventional corporate culture

Conventional corporate culture usually happens in older, established companies (Think Chrysler or GE). There are strict policies governing individual roles, different departments rarely interact, and the major decisions are left up to the CEO. While this type of culture doesn’t sound very appealing, it does work for businesses that are successful, have cornered the market, and are well-established.

Progressive corporate culture

Human Resources expert Liz Ryan describes the progressive culture as:

“A progressive culture is one where the culture is deemed worthy of attention all the time. The company recognizes and celebrates the fact that its employees make the company great, so-so, or terrible as the case may be.”

Employees are valued in a progressive culture leading to employee happiness and business success.

Customer service excellence

A customer service culture is when a company's efforts are centered around the customer. This means that the entire company, even departments that don't normally interact with customers, are focused on the customer. Every decision is made with the customer in mind, and everyone in the organization knows how they impact the customer service strategy and customer experience. Zappos is an excellent example of this type of culture.

Innovation

An innovation culture nurtures unconventional thinking. When management fosters a culture of innovation, they generally believe that innovation is not just for upper management but can come from any employee. Leading customer service consultant Micah Solomon encourages business owners to identify three distinct areas that are ripe for innovation–product (what you sell or make), process (how you make and sell it), and business model (how your company is conceptualized and organized).

Additional Resources

Want to dive deeper? Check out the book Diagnosing and Changing Organizational Culture by business experts Robert E Quinn and Kim S Cameron. This well-researched book provides ways to understand and change a company’s culture in order to make it more effective. You’ll also learn strategies and methodology for changing organizational culture and personal behavior.

The SmartBiz Small Business Blog has articles you can use to help establish a healthy company culture. For strategies to keep your employees happy and engaged, read 12 Proven Employee Retention Ideas. To help you create a fun, atmosphere, try a few of these creative games 10 Fun Team Building Icebreakers Activities. Finally, recognize when your employees have gone the extra mile, picked up a new skill, or introduced a fresh idea: 15 Original Employee Recognition Ideas.

 

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