Organizational Culture

Every organization has a way of operating, and usually, has a unique ‘aura’ – or what the kids would call a ‘vibe’. One thing that sets companies apart is their organizational culture. Some cultures have been carefully crafted, tested, and refined to create their ideal culture. 

Other organizations, on the other hand, allow the culture to naturally come into fruition: Does it seem like people consistently go home early on Fridays? Earn some goodwill and make it a meeting-free day, or make it a ‘policy’ that no meetings can be scheduled after 3 on a Friday, for example. 

Company culture should be intentional, however, and it should reflect the values and mission you wish your employees to embody and work together towards. When in doubt, companies can familiarize themselves with the common archetypes or get inspiration from other organizational cultures discussed below and focus on the one that best matches their industry, values, and strategy. 

What Is Organizational Culture?

There are countless definitions for organizational culture. To keep things simple, let’s go with the dictionary definition of culture, which is: “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.” In other words, organizational culture is what makes a company what it is; it defines the proper way to behave, and sets the context for everything it does.

Why Is Organizational Culture Important?

The concept of organizational culture for businesses is relatively recent, having been coined in the 1950s. Today, it is recognized as an important aspect of productivity. Many studies have proven the benefits of a healthy organizational culture for the promotion of business goals

Beyond the essential benefits that every organization wants, such as efficiency and profitability, the advantages of culture depend on the nature of the organization. For example, a startup company, where creativity is a priority, does not have the same culture as a manufacturing plant, where uniformity and attention to detail are paramount. 

Types of Organizational Culture

There is a huge range of organizational cultures, but the 5 most common types are: 

1. Adhocracy

This term describes an organization where “ad-hoc” thinking, or “making it up as you go along”, is the most valued part of the culture. Adhocracies desire risk-taking, creativity, and initiative, and reward these behaviors accordingly. Examples of adhocracies are startups, some of the large technology companies, and sales organizations. Such companies usually have flat hierarchies. 

2. Hierarchical

In direct contrast to adhocracies are organizations that enforce strict working roles and procedures. Efficiency and meeting goals set by the upper level of the company are what counts, whereas out-of-the-box thinking is often reserved for the corporate strategy team. Lower level employees often feel that they are not valued in such systems.

3. Growth

By comparison, growth companies believe that each person has intrinsic worth. Every hire brings a certain initial value to the organization, but a growth company attempts to discover other qualities that each person can contribute. For example, somebody might be hired as a low level programmer, but through diligent HR practices and L&D programs, it might turn out that they have the skills to lead an entire department. 

4. Clan

These companies often start as family-owned businesses. They involve close personal connections as a way to reinforce dependability and loyalty. Once these organizations become larger, a clan culture will attempt to create the feeling of an ‘extended family’ through a high degree of workplace socialization. 

5. Market

In this archetype, results count more than anything. Such cultures are ideal for organizations that want to see rapid growth that is mostly due to the high productivity of certain individuals. This can be a type of ‘dog eat dog’ environment where top performers see most of the rewards, while the majority either leave or experience stagnation. 

How Organizational Culture Is Created and Maintained

The historical establishment of organizational culture was, in a way, accidental. There was little awareness of this issue, so few companies intentionally created one. Instead, they were a result of the type of product being made, the personality of key figures, the local societal culture, and other elements. 

Nowadays, as the benefits of a well-designed organizational culture are understood, more companies are investing heavily in them. 

Companies with Strong Organizational Cultures

Zappos 

Known for its “clan” culture, Zappos is a shoe manufacturer that requires workers to attend eating contests and offers cash separation bonuses to unsatisfied employees as a way to encourage them to quit

Netflix

A “market” culture which pays some of the highest salaries of any large technology company, at times being double the rate of even major firms

Microsoft

This company was on a downward trend until it instituted a “growth mindset” and tripled its stock price

At the root of a strong organizational culture are a set of practices that reinforce how it is perpetuated, consistently and throughout the company. These include:

  • Creating a detailed plan for definition and implementation 
  • Personification of the culture by top leaders
  • Compensation, benefits, and incentives 
  • Technologies that permit information flows about performance
  • Continuous communications between employees, leaders, and HR
  • L&D programs

Strengthen Your Culture with GrowthSpace

Establishing an effective organizational culture requires many types of skills. If a company wants precise use of technology, employees need training in its use; if communication is vital, then soft skills must be enhanced.

For every skill, GrowthSpace is the enabler. It matches precise L&D requirements with trainers, mentors, and coaches who are experts in their respective fields. With GrowthSpace, organizations can rapidly and efficiently scale L&D programs to support goals ranging from individual soft skills to fundamental organizational change management.   

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