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What is Corporate Culture?
Corporate culture is the set of shared values and norms that influence the way employees behave in a company. It includes things like the company's mission and vision, how it communicates with employees, and the types of behaviours that are encouraged or discouraged. A strong corporate culture can help a company attract and retain top talent, and it can also be a source of competitive advantage.
When it comes to corporate culture, there are a few different schools of thought. One is that culture is something that should be deliberately created and nurtured by company leaders. This approach often involves developing explicit values and then working to ensure that employees understand and buy into them.
Another school of thought holds that culture is something that emerges naturally from the interactions between employees. In this view, culture is not something that can be created or controlled by leaders; rather, it is something that develops organically over time.
Which of these approaches is right? There's no simple answer, and there are advantages and disadvantages to both approaches. Ultimately, the best approach for a particular company will depend on the company's specific needs and goals.
When we think about corporate culture, there are a few key things to keep in mind. First, culture is not static; it can and does change over time. Second, culture is influenced by many factors, including the company's history, industry, size, and location. And finally, culture is something that should be actively managed; it's not something that will just take care of itself.
Creating a strong corporate culture can be a challenge, but it's worth the effort. A company with a strong culture is more likely to attract and retain top talent, and it will be better positioned to achieve its business goals.
What are the benefits of a strong corporate culture?
There are many benefits that come with having a strong corporate culture.
1. Attract and retain top talent
First, it can help a company attract and retain top talent. Employees who feel like they fit in with the company's culture are more likely to stick around, and this can save the company money in recruiting and training costs.
2. Source of competitive advantage
Second, a strong corporate culture can be a source of competitive advantage. If customers perceive that a company has a strong culture, they may be more likely to do business with that company. And if employees feel proud of their company's culture, they may be more likely to go the extra mile to help it succeed.
3. Improving employee productivity
In addition, a strong organisational culture can help improve employee productivity. Employees who feel they are part of a positive, supportive culture are more likely to be engaged and motivated at work. And when employees are more productive, this can mean both increased profits and greater innovation for the company.
4. Reduce turnover & enhance loyalty
A strong corporate culture can help reduce turnover. If employees feel like they belong in the company and are proud of its culture, they'll be less likely to leave. This can save the company money in recruiting and training costs, and it can also help maintain continuity and institutional knowledge.
5. Higher customer satisfaction
Finally, a strong corporate culture can improve customer satisfaction. If customers feel like they're doing business with a company that cares about its employees and its culture, they'll be more likely to be satisfied with the products and services they receive.
Challenges of creating a Corporate Culture
The challenges that come with corporate culture can include anything from communication barriers to conflicts over work/life balance. It's important to be able to navigate these challenges and maintain a positive attitude in order to be successful in the workplace.
Some of the most common challenges that come with corporate culture include:
1. Communication barriers
One of the greatest challenges that can come with corporate culture is communication barriers. This can be anything from language barriers to different ways of communicating. It's important to be able to overcome these barriers and learn to communicate effectively.
2. Conflicts over work/life balance
Another challenge that can come with corporate culture is conflicts over work/life balance – especially nowadays in times of hybrid work. This can be anything from disagreements about the amount of work that should be done outside of work hours to different views on how much holiday time should be taken. It's important to be able to find a balance that works for both sides in order to maintain a positive working relationship.
3. Different views on what is considered "professional"
Another challenge that can come with corporate culture is differing views on what is considered 'professional'. This can be anything from the interpretation of dress code to how much personal information should be shared at work. It is important to find a middle ground that everyone can agree on to create a positive working atmosphere.
4. Lack of trust
A very common and a major problem in the corporate world is a lack of trust between employees. This can be anything from mistrust of management to mistrust of co-workers. It's important to be able to build trust in order to create a solid corporate culture.
5. Misaligned values
Another challenge that can come with corporate as with any other culture is misaligned values. This can be anything from different views on what is important in the workplace to different personal values. It's important to be able to find common ground and work together towards a common goal.
These are just a few of the challenges that can come with corporate culture. It's important to be aware of these challenges and learn how to navigate them in order to reduce friction that could arise in a corporate culture.
The four Types of Corporate Culture
In 1999, Kim Cameron and Robert Quinn did a study on what makes an organization successful. According to the Competing Values Framework, they came up with the Organisational Culture Assessment Instrument which distinguishes four culture types.
A finding from the research showed that values producing polarities, such as flexibility vs. stability and internal vs. external focus, are most significant in determining organisational success. The polarities create a quadrant with four types of culture, as follows:
Clan culture (internal focus and flexible) – A workplace where leaders act like father figures and employees are treated like family.
Adhocracy culture (external focus and flexible) – A dynamic workplace with leaders that encourage innovation.
Market culture (external focus and controlled) – A workplace with leaders who are always driving to be the best.
Hierarchy culture (internal focus and controlled) – A workplace in which coordination is key, and leaders maintain a formal structure.
These cultures are also called Collaborate (Clan), Create (Adhocracy), Control (Hierarchy) and Compete (Market) cultures.
Let’s have a detailed look into these cultures.
Clan culture
When you work in this type of culture, you are part of a clan. This is a group of people who work together and have the same goals. They are like a family and help each other out. This culture is based on trust and respect. It is important to have a positive attitude and be a team player.
The clan culture is based on the following values:
- Teamwork: We work together as a team to achieve our goals.
- Respect: We respect each other and value diversity.
- Integrity: We are honest and act with integrity.
- Communication: We communicate openly and honestly.
- Accountability: We are accountable for our actions.
Advantages of the clan culture
The clan culture is a good way to make sure people in a company get along. People in the clan culture are friendly to each other and help each other out. This makes it more likely that people will work together and be productive. Clan culture also makes it easier to keep people in a company because they feel like they are part of a family.
Disadvantages of the clan culture
While this culture sounds great in the first place, it also comes with some challenges. For example, people might not feel like they can speak up about their ideas or problems because they are worried about offending someone. This can mean that people might not feel comfortable giving their best work, or that problems might not get solved as quickly as they could. Additionally, the close-knit nature of the clan culture can mean that people might not feel like they have enough privacy or space, which can be stifling. Finally, because the clan culture is so focused on relationships and harmony, it can be difficult to make decisions that are in the best interest of the company as a whole, rather than just the people in the clan.
Adhocracy culture
An adhocracy culture is one where employees can make decisions quickly and efficiently to get the job done is based on creativity and innovation. This type of culture is often seen in startups or companies that are in a high-growth phase. Employees are typically given a lot of autonomy and are expected to come up with creative solutions to problems. This type of culture can be very beneficial for companies as it allows them to move quickly and adapt to changing market conditions. However, it can also be chaotic and may lead to problems if employees are not careful.
Advantages of the adhocracy culture
The adhocracy culture is a good way for a company to be creative and also to take risks. People in this culture are allowed to make decisions on their own, which means they can come up with new ideas quickly. This culture also lets people move around the company easily, so they can learn new things and share their ideas with other people. This culture is good for companies that want to be innovative and try new things, which can lead to new products, services, growth and team spirit, being part of the adhocracy culture.
Disadvantages of the adhocracy culture
The adhocracy culture in a company can have some disadvantages. This type of culture is where there are no rules and people just do what they think is best. This can be a problem because it can be hard to make decisions when everyone is doing their own thing. There can also be a lot of conflict in this type of culture because people are not used to working together. Therefore, this type of culture can be hard to change or control because it is so chaotic.
Market culture
The Market culture is based on competition and winning. Employees in this type of culture are usually very aggressive and constantly looking for ways to make more money or sell more products. They are also very concerned with their own success and often do not care about the success of the company as a whole. Market cultures can be very stressful and competitive. They can also be very successful if the company is doing well.
Pros and cons of the market culture
The advantages of the market culture are that it can create a lot of motivation for employees to do their best, and it can also lead to high levels of success for the company. The disadvantages of the market culture are that it can be very stressful and competitive which can lead to a few unwanted results like a low morale among employees, burnout or even damaging the employer brand. Some might say the time Steve Jobs took over Apple from 1997 to 2011 was such a culture (saving Apple from going bankrupt in the first place).
Hierarchy culture
A hierarchy culture is one that closely resembles a traditional corporate culture. It is defined primarily by its organizational structure. The primary feature of this company is a top-down decision-making process in which upper management creates decisions that filter down to lower employees. A type of culture in a company that is based on rank and authority, like the military.
Advantages of the hierarchy culture
The Hierarchy culture is a type of corporate culture where people are divided into groups, or levels, and each level has different responsibilities. This type of culture is advantageous because it allows people to specialize in their work and makes it easier for companies to make decisions because everyone knows their role. This division and type of culture can promote a feeling of competition and camaraderie within the company.
Disadvantages of the hierarchy culture
The hierarchy culture is when people have to do what their boss says. They might not get to do what they want, and it can be hard to move up in a company. This can lead to people being unhappy at work and not doing their best. Or they will run over to the competition who is running a different organisational culture.
How to create a strong company culture?
No matter what culture type(s) are dominant in your organisation, creating a solid corporate culture can be influenced by various things. It involves determining the company's core values, establishing realistic goals, and getting employees involved in the process.
One of the most important things is to make sure that everyone in the company is on board with the culture. This means that employees should be encouraged to participate in creating and shaping the culture, and management should lead by example.
Another important part of creating a strong company culture is setting clear standards and expectations. Employees need to know what is expected of them, and they need to feel like they are part of something larger than themselves. This can be accomplished by simply giving employees a sense of ownership in the company.
Creating a vital company culture also requires communication. Employees have to be kept up-to-date on changes, and they must feel like they can come to management with any questions or concerns they may have. Transparency is key when it comes to company culture.
Finally, it is important to foster a sense of community within the company. Employees should feel like they are part of something larger than themselves, and they should be able to rely on their coworkers for support. This can be accomplished through team-building exercises, social events, or simply providing a positive work environment.
Conclusion
There are many different types of corporate cultures, and each one has its own advantages and disadvantages. It is important for companies to understand these cultures and how they work so that they can choose the right one for their employees and their goals.
Creating a strong corporate culture can be difficult, but it is one of the most powerful things a company can do, for itself and its employees. A company with a strong culture will be better positioned to attract and retain top talent, achieve its business goals, and improve customer satisfaction. There are many challenges that come with creating a corporate culture, but with a little effort, you can create a positive and productive environment for your employees.
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