Identifying the Four Main Types of Company Culture

Which one does your company fall under? Learn about the strengths and weaknesses of each one.

Lacy Callahan

Aug 17, 2021 • 4 min read

The best way to start improving your company's culture is identifying what category it falls into based on the major characteristics of the existing culture. You can then anticipate potential weaknesses specific to your situation to monitor.

These findings were developed by Kim Cameron and Robert Quinn at the University of Michigan. More detailed information can be found here

What factors determine types of culture?

Internal v.s. External

Does your organization have internal orientation: focusing on collaboration, innovation, and coordination, or external orientation: focusing on what other companies are doing, trends, and the market.

Typically, with more security, companies are able to favor internal growth. With any volatility in the market, companies are forced to closely monitor external patterns

Stability v.s. Flexibility

Companies that prioritize stability focus on controlling what they can, such as budgeting, scheduling, and coordinating anything they can ahead of time.

Flexible companies are more willing to try new things and take risks with the possibility of great reward. These companies are typically better able to adapt to obstacles.

How do the factors identify a specific type?

Each combination dimensions indicates a specific type of culture: clan, hierarchy, adhocracy, and market.

Clan Companies:

This type of company can also be called a "collaborative company" or "family company." The employees in a "clan culture" have similar goals and aspirations, the environment is supportive, and rather than having a firm hierarchy there are mentor or advisor figures. Clan companies do things together to strengthen their team, and they value the mental well-being of their employees. Traditionally, employees in a clan company are given more trust and freedom.

If you have a "clan company," here are some potential pitfalls to monitor. At times, too much flexibility can become dangerous for companies and can encourage employees to cut corners or lower their standards. Additionally, those in charge may have to take extra caution to preserve their authority after establishing themselves as friendly figures.

Hierarchy Companies:

These companies adhere to the "tried and true" structure, which emphasizes organization and practicality. These companies aim to do things "correctly," and are often successful. Countless other companies throughout history have adapted this culture with strong results in the past. In contrast to the flexibility of clan companies, hierarchal companies monitor their employee's work. Additionally, because boundaries and company structure are outlined clearly ahead of time, there are usually no issues with power struggles.

One potential downside to look out for in this culture style is that creativity and innovative ideas to help grow the company are often passed over. Additionally, when only the top employees make decisions, things can take more time to get done.

Adhocracy Companies:

Adhocracy companies constantly innovate and push the boundaries of what is possible in their field. They prioritize trying new things and taking risks to achieve the impossible. Merely working is not enough. Adhocracy companies do not settle for anything less than excellence. The pace moves quickly, and creativity is vital for success. New ideas are constantly being tested, and employees must be able to iterate and problem-solve. Tech companies traditionally fall into this culture type because leaders consider each product to be temporary. They are always in search of the newer, better thing.

The potential pitfalls to note in adhocracy cultures are the sometimes chaotic environments and unclear responsibilities. Additionally, the constant pressure to innovate can take a mental toll on a person. Even when an employee has a groundbreaking idea, it never seems good enough because soon they are on to the next one.

Market Companies:

Market companies look externally, much like adhocracy companies, for any potential opportunities for their business to grow. Unlike the adhocracy companies, however, they focus less on innovation and more on what the market around them is doing. Market companies look at what their competitors are doing to advance the market. Employees then strive to match targets and live up to specific metrics. Market companies are analytical and use the world around them to create things strategically. The goal of these companies is to control as much of the market as possible and make reliable money.

The potential tensions to note for companies who share the "market culture" type is that with pressure to maximize profit and meet predetermined standards, employees can become over-competitive. People can also become hyper-fixated on metrics and deadlines, and potentially eliminate any existing passion or creativity they once had.

Which type of organizational culture does your company fall into? Keep an eye on how people engage with their work, and look into specific solutions geared toward that type. For more information on the 4 culture categories, check out these resources:

For even more culture insights and solutions, try Disco!