Four Types Of Company Culture: Which One Is Yours?

manager offering insight into company culture types

Clan culture, adhocracy culture, market culture, hierarchy culture, can you ever have too much culture? In this article, we’ll build on the Competing Values Framework for companies to help understand each of the four types of workplace culture.

It has to be said that workplace culture is certainly not a monolith. It can come in all sorts of shapes, sizes, and forms, and it can evolve over time, too. In short, your corporate culture is flexible, but it needs definition to thrive.

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Organizational Culture: What Is It?

Company or workplace culture is the combined beliefs, core values, and customs that your organization promotes (whether directly or indirectly). Basically, think of it as how your employees feel coming into the work in the morning and throughout the day (and how they interact with colleagues). This is a pretty good reflection of the effect your culture is having.

Company Culture Types: Understanding The Competing Values Framework

competing values framework: clan culture, adhocracy culture, market culture, hierarchy culture

Understood as one of the strongest ways to put a finger on different types of company culture, the Competing Values Framework was crafted in 1983 by researchers Robert Quinn and John Rohrbaugh.

Essentially, it gave rise to four main types of culture:

  • Clan culture
  • Adhocracy culture
  • Hierarchy culture 
  • Market culture

These are based on a handful of factors and dimensions, which we’ll explore more as we dive into each type of culture. That said, it helps to think of these two main considerations: 

  • Internal focus (progress) versus external focus (positioning)
  • Flexibility (individualization) versus stability (top-down control) 

If we consider these dimensions, and where companies place themselves on them as part of a spectrum, we can see these four types of unique cultures reveal themselves.

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The Four Main Types of Organizational Culture

So, let’s dive into it! When it comes to types of company culture, here is the full story behind each and how you might be able to identify it within your own organization… 

Clan Culture

Clan culture can be best understood as ‘one big happy family’ culture. This is where an organization takes a distinctly nurturing tone towards its workforce and focuses on helping them grow within their own sense of responsibility. 

Typically found amongst start-ups, who rely on a culture built on empowerment, clan culture focuses a lot of its efforts on helping employees identify with the company. In that sense, aligning the company’s values with their own employees (and vice versa). 

Clan culture is also defined by its focus on mental health at work and employee wellbeing, which is why it can often be seen as the ‘softest’ of the four cultures. 

While it can have a positive effect on attrition and professional development, it may lack structure and is more likely to experience growing pains as the organization scales. That’s because a clan culture is very insulated, making it difficult to grow on a massive scale. 

A clan culture is best understood as the following statement: ‘We’re all in this together.’

Adhocracy Culture

An adhocracy culture is best understood as constantly screaming toward the future. It is based on innovation and consistently pushing for employees to think beyond the typical, innovate, ‘break things,’ and experiment wildly. 

When done right, these are the kinds of companies that, by way of their employees, craft the future of things. They create and innovate at lightning-fast speeds, and think about the latest trends and how to even go beyond them. 

Adhocracy is very much about doing things ‘ad hoc,’ it’s not so much about having a game plan or a map for the future, but drawing that map and designing the future as a company goes along. 

Adhocracy culture can be a beautiful thing, but it also comes with its own downsides. Those being that employees in this kind of culture can be burnt out much faster, pushing attrition rates and staff turnover ever higher. 

At the same time, taking wild swings and massive risks can also be incredibly damaging to a company if it doesn’t work out. Adhocracy is about pushing, pushing, pushing, but it may result in push back from both employees and markets as a whole. 

An adhocracy culture is best understood by the following: ‘High risk, high reward.’ 

Hierarchy Culture

Traditionally, hierarchy culture is as close as we are going to get to a ‘classic corporate culture.’ It is defined primarily by structure. The main feature is a top-down style of management where decisions are made up high and passed down to managers and employees. 

Rule, rules, rules, that’s what hierarchy culture is all about. That’s not a bad thing, though, because those rules craft processes and procedures that keep things running smoothly and keep every employee on the same page. 

After all, there is something incredibly attractive about stability. Employees know what to expect, and they are also better prepared from day one to know what they are doing (and to succeed at it, at the same time). 

Everyone knows what they are doing, but this is both a gift and a curse. In its worst forms, it can basically root out innovation and push unhappy or unsatisfied employees into the arms of competitors (those who maybe have a greater taste for adhocracy culture). 

Here’s what hierarchy culture basically comes down to: ‘Stay the course and don’t rock the boat.’

Market Culture

Market culture is exactly as it sounds, a culture based on the market for your company’s product or service. Basically, a market culture involves a no-holds-barred focus on numbers, performance, and consistently driving higher. 

It’s a culture determined and defined by pressure. The pressure found in a market culture is typically exerted by leaders who expect the best, and even employees who expect the best of themselves. 

Ultimately, it pushes their employees to be their best, at all times. And, the results can be pretty strong, but they can also be dire. It can result in employee burnout, a lack of satisfaction, and it can be pretty damaging to your employer brand

In fact, many companies can only adopt a market culture in times of intense financial strife or competition. That’s because, while it can push performance to new heights and basically save a business, it is also unsustainable when it comes to the human factor. 

Let’s think of market culture in this way: ‘Make it or break it.’

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How Do You Know If You Have A Negative Culture?

Negative culture is a bit of a relative term, and it all depends on how you want to define it. Is your company’s performance suffering, do you have sky-high turnover rates, is employee engagement dropping rapidly? 

At the end of the day, it all depends on what matters to your company. So, it’s difficult to say definitively whether you have a positive or negative culture, because one company’s idea of a positive culture may not be the ideal for another. 

In general, though, any of the above KPIs should be red flags for just about every company, so it’s more a matter of emphasis on priority. Workplace culture matters, and it matters because leaders can define it, promote it, and change it, too.

Workplace Culture Is Immensely Important

While each type of company culture has its positives and negatives, one thing is for certain: Any company needs to have a concrete, meaningful, and intent understanding of the kind of culture it wants to ‘seed’ and promote. 

If culture is important to you, we can highly recommend this further reading: 

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