What is company culture?
Company culture is the way in which company employees interact, make choices and share values. It’s much easier to see a company’s culture than to read about it, since company culture dictates how employees work with one another both professionally and socially in the workplace. Common elements of corporate culture are:
- The company’s mission
- Company-wide goals
- Employee-specific goals
- Leadership style
- Company values
- Company ethics
- Employee expectations
Company culture goes by several other names, like corporate culture, organizational culture and workplace culture.
Related: What Is Culture in Business?
Why is it important to define your company’s culture?
Knowing what drives your employees to perform well and feel comfortable at work can help you ensure you’re maintaining an ideal workplace. With a strong company culture, your employees know what’s expected of them and have the necessary workplace relationships to meet organizational and personal goals. A few of the benefits of a strong company culture include:
- Leadership: When your business has a clear culture that guides the leadership level’s actions, all employees in the company are likely to follow the model set by their supervisors and managers.
- Retention: Employees who feel connected to their workplace and appreciated by their employers are much more likely to stay with the company than look for a new job.
- Identity: People often associate company culture with the company’s brand. A positive and supportive company culture implies a positive and supportive brand for consumers.
- Satisfaction: Satisfied employees who feel supported by their company’s culture are much more likely to be productive at work.
Different types of company culture
While every company’s culture is unique and reflects the disparate values and ideas of the people who work there, many company cultures fit into one of these four broad categories:
Companies with a clan culture are often described as a family. The employees in this company form deep, bonding relationships and support one another professionally and personally. Clan cultures value:
- Shared goals
While many clan culture companies operate in teams or departments, organization leaders trust their employees to work relatively autonomously. They may provide oversight and guidance, but they prefer to give their employees the resources they need and then space to work as they wish.
Adhocracy culture is based on the term “ad hoc.” Companies with an adhocracy culture are often hyper-focused on innovation and problem-solving. Adhocracy cultures value:
Companies with adhocracy cultures are driven by creating new and exciting products or services. They value idea generation and continually finding new and better ways to complete tasks and solve problems. The employees in these organizations may work on their own or in small teams, usually with substantial autonomy.
Companies with a market culture are almost entirely focused on external success in the marketplace rather than employee comfort and satisfaction. The values that market culture companies maintain are:
- Customer satisfaction
Often, organizations with a market culture are highly competitive. Most employees work independently and seek out recognition from their leadership. Companies with market culture usually don’t give their employees much freedom and autonomy. Instead, they develop specific formulas and protocols for work to yield the best possible return on the most efficient work.
Companies with a hierarchy culture value systems and prescribed roles. Usually, companies with a hierarchy culture have clearly defined jobs and several layers of management and oversight. Hierarchy culture values:
In a hierarchy culture, every employee knows exactly what their role is and to whom they report. There’s little room for innovation in a hierarchy culture. Most employees have a decent amount of autonomy, though if they stray from their prescribed protocols and tasks, they’re likely to incur more oversight from their superiors.
Identifying your company’s culture
If you’re not sure what type of culture your company has, you should take steps to find out. Establishing a company culture that aligns with your values and company objectives will make it easier for everyone to meet organizational goals. Use these tips to help you determine your company’s culture:
- Review your mission. Ideally, your company’s mission aligns with the company’s culture. Review your mission and see what values you list for your company. See if these values are evident in the day-to-day work of your employees.
- Ask your employees. Poll your employees anonymously to see how they would describe the company’s culture. You can also ask them what sort of culture they would most like to work in and what type of culture would best serve the company’s bottom line.
- Observe interactions. Watch your employees and see how they interact with one another. Look at employees of the same rank and employees with different supervisory statuses. Notice how much freedom and oversight managers give to their team members.
- Assess job descriptions. Review the written job descriptions for each role in the company. See how the daily tasks are described, what the level of oversight is supposed to be and what goals and objectives the position should meet.
With this information, you should be able to categorize your company into a clan, adhocracy, market or hierarchy culture. If your company doesn’t currently have the culture you want, take steps to shift the culture in the direction you desire. Company culture can have a significant impact on employee satisfaction and company success. Knowing what type of culture your company has can help you better align that culture with your organization’s values and goals.