The 4 models of company culture

Nataša Mlađenović
Nataša Mlađenović
May 31, 20226 minute read

Company culture is the set of beliefs, values, attitudes and behaviors that make up the identity of an organization. It is often described as the "personality" of a company.

Company culture can be a powerful tool for attracting and retaining employees, but it can also be a major source of competitive advantage. Here we'll discuss the main types of company cultures, their benefits, drawbacks and easy methods to foster them in your workplace.

The four main types of company culture

Even though company cultures vary widely in different countries and industries, most of them can still be categorized in one of the following base models.

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Clan culture - "We're all in this together"

Examples: Starbucks, Zappos, Google

A clan culture is all about the we. Clan cultures are built on trust, respect and a shared sense of purpose, and are the most collaborative and least competitive of the four main culture types. Employees are encouraged to work together like a family and support one another. There is a strong sense of community and belonging, where every individual is valued and communication is a top priority.

Benefits: Clan cultures can be very motivating and rewarding for employees. They often lead to high levels of employee engagement and loyalty.

Drawbacks: Clan cultures can be exclusive and harder to upkeep in larger organizations. They can also lead to a lack of diversity.

Works best for: Small to medium sized businesses, but it can also work in large enterprises especially in creative industries.

How to foster clan culture: To foster a clan culture, you need to create opportunities for employees to socialize and bond with one another. This could include organizing regular social events, providing mentoring programmes and encouraging team building activities.

Adhocracy culture - "Doers not dreamers"

Example: Apple, Uber

Adhocracy cultures are all about agility, creativity and innovation. The name itself is derived from the phrase "ad hoc" which describes something that has been formed or used for a special and immediate purpose, without previous planning. Employees are therefore empowered to take risks, experiment and think outside the box. There is a strong focus on innovation and creativity, as well as on developing new ideas and products.

Benefits: They often attract highly creative and talented employees. They can also lead to a high level of innovation.

Drawbacks: Adhocracy cultures can be chaotic and may not be suitable for all employees. They can also lead to a high level of stress and burnout.

Works best for: Small to medium sized businesses, especially in creative industries and IT

How to foster adhocracy culture: To foster an adhocracy culture, you need to create opportunities for employees to be creative and innovative. This could include setting up innovation labs, organizing hackathons and encouraging employees to pitch new ideas.

Hierarchy culture - "There is a place for everything, and everything has its place"

Example: IBM, government organizations

A hierarchy culture is all about order and control. Employees are encouraged to follow rules and procedures. There is a clear chain of command and a strict set of rules to follow. This type of culture emphasizes long term stability, and is designed to create years of steady output. Employees are expected to understand their duties and the chain of command is pretty straight forward.

Benefits: Hierarchy cultures can be very efficient and effective. They often lead to high levels of productivity and discipline. They also offer clear lines of communication, and can be good for large organizations.

Drawbacks: Hierarchy cultures can be inflexible and may stifle creativity.

Works best for: Large organizations, especially in traditional industries.

How to foster hierarchy culture: For this type of culture to work, you need to define your hierarchy from day one. This could include setting up clear guidelines, providing training on company policies and encouraging employees to adhere to strict deadlines.

Market culture - "It's all about the bottom line"

Examples: Amazon, Microsoft

A market culture is all about competition. Employees are encouraged to be competitive and to strive for success. There is a strong focus on profit and on achieving results. Competition is not only encouraged with other companies, but with coworkers as well. The goal is to be the best. This is the most aggressive of the four main culture models.

Benefits: Market cultures can be very motivating and rewarding for certain types of people and employees. They often lead to high levels of employee engagement and loyalty.

Drawbacks: Market cultures can also be very stressful. Not all employees can handle the constant pressure, so burnout is a common problem.

Works best for: All types of businesses, especially in fast-paced industries.

How to foster market culture: To foster a market culture, you need to create opportunities for employees to compete with one another. This could include setting up sales competitions, introducing bonus schemes and offering rewards for high achievers.

Other company culture models

Apart from the four main models, there are also other types that are either less common, or that are hybrids of the main models.

One example is the achievement culture, which is a combination of the market and adhocracy cultures. This type of culture is all about achieving results, but also about encouraging creativity and innovation.

The so-called "bureaucratic meritocracy" is also a hybrid variation. According to this model, rules and procedures are important, but so is creativity and innovation.

And then there are also cultures that don't really fit into any of the main models.

It's also worth bearing in mind that culture is not static. As your company grows and changes, so too will your culture. So if you're not happy with the culture you have now, don't worry - it's never too late to change it.

So where do you start?
Just book a demo with us.
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