Jun 22, 20233 min read

Organizational culture

Updated: Feb 8

Author: Debora Amoah

Date of Publication: 22/06/2023

Each organization follows its unique approach in conducting its operations. This includes how people dress and behave at work, which is influenced by their organizational culture. For example, some companies have a strict hierarchy, while others have a more relaxed atmosphere. What is organizational culture and what does it entail?

Organizational culture and its importance

Organizational culture is the collective set of beliefs, assumptions, values, and behaviors. It contributes to the unique social and psychological environment within a company. Also, it encompasses a company's shared beliefs, values, and attitudes, shaping how its employees behave. So, an organization's culture influences how customers perceive and interact with the company and how suppliers experience working with it. Therefore, it has a strong impact on the organization's atmosphere and character.

Moreover, having a strong and clearly defined company culture offers substantial benefits for both employers and employees. This leads to happier employees who feel comfortable in the workplace. Additionally, a well-defined culture fosters a sense of belonging among employees, creating a supportive and inclusive environment.

Types of cultures

Organizational culture, or company culture, is highly important. There are four types of organizational cultures, each reflecting the environment and character of a company. No culture is inherently better or worse than the others, as each has its own strengths and weaknesses. So, understanding these cultures can provide valuable insights into how a company operates and help create a positive work environment.

Clan culture

Clan culture, also known as collaborative culture, focuses on teamwork and togetherness. It creates a friendly environment where relationships, morale, participation, and agreement are important. In this culture managers usually act as mentors rather than bosses.

Adhocracy culture

Adhocracy culture is all about taking risks and being innovative. These companies are always looking for the next big thing before anyone else. For example, they encourage employees to think creatively and share their ideas. Also, adhocracy cultures focus on growing and standing out in the market. To create this culture, companies can organize strategy and brainstorming sessions to promote adaptation and innovation.

Market culture

Market culture is all about competition and growth. These companies are driven by the goal of making a profit and prioritize external success over internal satisfaction. In particular, they place great importance on meeting quotas, reaching targets, and delivering results. In a market culture, every employee has a defined role that contributes to the organization's broader objectives. So, to establish a market culture, companies can assess the impact and value of each role. Afterwards, they should measure the return on investment (ROI) for each position. This way, they provide incentives and rewards to motivate high-performing employees.

Hierarchy culture

Hierarchy culture is all about structure and stability. For this reason, these companies have a traditional corporate setup with clear levels of authority and management. For example, here are dress codes and a focus on following established procedures. What's more, they prioritize internal organization and are not big risk-takers. This culture has a clear chain of command, and employees have defined career paths. Additionally, they value stability and avoid taking risks. Not forgetting the importance of having clear processes and a well-defined management structure in each department and team.

Conclusion

In conclusion, organizational culture is important for every company. It refers to how things are done and influences how people behave at work. Having a strong company culture has many benefits, like making employees happier and creating a sense of belonging. Also, there are four types of organizational cultures: clan, adhocracy, market, and hierarchy. Each one though has different strengths and weaknesses. So, understanding these cultures can help create a positive work environment.

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The Impact of Organizational Culture on Business Decisions