Corporate Culture: The Element That Shapes Employees and Guides Operations

By Moon Harper

May 24, 2024 04:49 AM EDT

Company Culture — (Photo : Unsplash/Smartworks Coworking )

Corporate culture can be likened to a company's personality that shapes how employees, customers, and stakeholders interact through shared values, attitudes, and practices.

Companies with a distinctive culture were 80% more likely to report high employee satisfaction compared to those in companies without such, According to PwC's 2021 Global Culture Survey.

Four Types of Corporate Culture

According to two University of Michigan academics, Kim S. Cameron and Robert E. Quinn, who introduced the Competing Values Framework in their 1999 book, "Diagnosing and Changing Organizational Culture," corporate culture is categorized into four main types:

1. Hierarchy

A hierarchical corporate culture prioritizes stability and efficiency with clearly defined roles, top-down leadership, and adherence to established rules and procedures. Employees typically report to one manager, who reports to their manager, continuing up to the CEO, at the top of the pyramid.

A hierarchical culture emphasizes long-term goals, aiming for industry dominance. It relies on standardization and systemization to enhance efficiency and ensure cost-effectiveness and consistent performance. While common in large corporations, this culture may hinder individual creativity and innovation.

2. Market

Market culture thrives on competition, where results matter more than methods, making it fast-paced and demanding. Employees are motivated to be competitive and adaptable, with success determined by a sink-or-swim mentality. Their pay often includes performance-based bonuses, and employees are empowered to make decisions; only the most effective are retained.

3. Adhocracy

An adhocracy culture is often implemented within small or medium-sized teams within a larger organization, where job titles are not strictly defined. While this allows team members to take initiative, think creatively, and develop groundbreaking ideas, this culture may also result in a lack of focus and inefficiency.

4. Clan

Clan culture is characterized by cohesion, care, and closeness. Communication is typically informal and cultivates mutual respect and trust among team members. In contrast to hierarchical cultures, where decisions are top-down, clan culture may involve obtaining buy-in or consensus from all stakeholders before making decisions. While this can make employees feel more involved in their work, it can also significantly slow down adapting to change.

How to Foster a Healthy Corporate Culture?

As your business expands, it's crucial to remain mindful of your corporate culture. While there's no universal approach to cultivating a positive company culture, certain practices can help steer you in the right direction.

Below are the four key steps for establishing a robust company culture:

Define Your Values: Clearly define the values and principles that reflect your company's mission, vision, and goals.
Lead by Example: As a leader, your actions set the entire organization's tone. Hence, it would help if you embodied the values and behaviors you want your employees to emulate.
Foster Open Communication and Collaboration: Create an environment where open communication and collaboration are encouraged by providing opportunities for feedback, brainstorming, and sharing ideas.
Invest in Your Employees: Prioritize your employees' well-being and professional development by offering training and development opportunities, recognizing and rewarding achievements, and creating a supportive work environment.