Corporate Culture: Definition & Example

KEY TAKEAWAYS

• Corporate culture plays a significant role in the success of a company.
• It’s one of the most important factors to consider when creating or joining a new business.
• Ultimately, it’s the persona of your brand.

What is Corporate Culture?

Corporate culture is the personality of a company. It describes how employees and management interact within an organization.

Corporate culture includes the shared values, beliefs, and behaviors of people in an organization. It isn’t limited to a set definition. Instead, it varies from place to place. Generally, it simply describes the overall environment within a workplace.

Corporate culture plays a crucial role in determining employee satisfaction. That’s because it encompasses everything from dress codes to business hours. Office layouts, comprehensive employee benefits, and hiring policies. These all reflect a company’s culture.

But it goes deeper than that as well. An organization’s goals, strategies, and approaches to labor are all defined by its corporate culture. These traits will be influenced by national cultures, economic trends, company size, and industry.

If employees share their company’s values and vision, it builds a positive workplace. As a result, morale and productivity will be high. That’s why it’s essential to match employees with the right corporate culture fit.

This will also help to avoid a toxic culture. You want a workplace culture with strong business leaders who encourage mutual trust. With culture in mind at all times, you can establish a positive workplace culture.

And when you achieve that, you’ll notice better employee retention. Moreover, your public perception will flourish. The current culture demands high standards. As such, you must consider every aspect of culture.

You want to be a bold culture. A cherished culture. As a business owner, owning a combined culture will propel you to new heights. 

Types of Different Corporate Cultures

Remember, no organization fits perfectly within these parameters. Each company is different and has a unique combination of traits.

Here are 4 common types of corporate cultures and their pros and cons.

1. Collaborative Culture

This type of culture focuses on teamwork. It promotes close relationships, engaged participation, and high team morale.

Collaborative culture places less focus on top-down management styles. Instead, managers take more of an advisory role. They guide employees and provide support instead of disciplining those who make mistakes.

To foster this type of workplace, there are minimal barriers between executives and employees. Change and open communication is encouraged in clan culture.

Advantages of Collaborative Culture

• Team members enjoy interacting with each other
• Morale and engagement are high
• Encourages a growth mindset
• Open communication

Disadvantages of Collaborative Culture

• Horizontal leadership can make career advancement unclear
• Prioritizes collaboration over productivity
• Not easy to maintain as the company grows
• Makes tough decisions more challenging 

2. Adhocracy Culture

Adhocracy culture is a high risk, high reward. It prioritizes innovation and risk-taking. This makes it best suited to entrepreneurial environments like startups.

Companies that have an ad hoc culture want to move quickly and take risks. They have aspirational goals and lofty visions. As a result, they celebrate ideas considered too unconventional for typical workplaces.

Advantages of Adhocracy Culture

• Employees are encouraged to contribute new ideas
• Inspires creativity and innovative thinking
• High potential for breaking new ground and pushing the limit
• Often promotes career development opportunities

Disadvantages of Adhocracy Culture

• Risky strategies may not always pay off
• May not be as stable as other working environments
• May breed unhealthy competition between employees who are constantly encouraged to come up with new ideas
• New employees may find it difficult to adjust to the pace

3. Market Culture

As its name suggests, the market dictates market culture. The top priority is always the company’s bottom line.

These types of companies focus on results over processes. As a result, it’s a good fit for employees who thrive in a high-pressure environment.

In a market culture, management has high expectations. Also, employees are likely to be competitive and prioritize “winning” over collaboration.

Advantages of Market Culture

• A competitive environment can lead to shared team success
• Employees are passionate about their jobs
• Often a culture found in highly successful companies
• Company profitability benefits the employees as well

Disadvantages of Market Culture

• High employee burnout rate
• Too much competition can result in a toxic workplace
• Reduces everything an employee does down to numbers
• High-pressure environment can place too much stress on employees

4. Hierarchy Culture

Hierarchy cultures are the traditional corporate structure. A clear chain of command and several management layers separate executives from employees.

This workplace environment usually has a lot of rules. These may include strict dress codes, rigid business hours, and detailed company policies.

The goal of a hierarchy culture is to create long-term stability. It doesn’t depend on specific employee experience or personalities. So the company can survive regardless of who comes and goes.

Advantages of Hierarchy Culture

• Conservative and stable workplace
• Policies are clearly defined
• Employees know what to expect and what is expected of them
• Predictability can give employees a sense of security

Disadvantages of Hierarchy Culture

• Not flexible when it comes to individuals and their needs
• This structure is slower to adapt to change
• Discourages innovation
• Employee engagement can suffer

How Do You Create a Successful Corporate Culture?

A company needs to create an appropriate corporate culture to help it reach its goals. Otherwise, a bad fit can lead to employee disengagement and poor performance.

To create a successful corporate culture, keep these things in mind:

Determine Core Values: What is your vision for your company culture? What words do you want to come to mind when someone mentions your company? Your core values should be clear and concise.

Establish Realistic Goals: You can’t create or change a culture overnight. The best company cultures develop organically over time – with a little bit of encouragement. Set realistic goals and keep track of your progress.

Promote Employee Involvement: Collect feedback with employee engagement surveys. Use this information to learn how to encourage greater participation and collaboration.

Hire The Right People: Do you have an idea of what kind of corporate culture you want? Then hire people who fit that description. Establishing an engaging culture is challenging when everyone has a different working style.

Give Positive Feedback: Encouragement or appreciation can impact productivity and job satisfaction.

Reward Success: Companies with the best cultures celebrate each person’s contributions. Do it regularly and publicly. It makes people feel seen and heard.

Be Flexible: Encourage employee freedom and flexibility in the office. Perhaps they can adjust their working hours to suit their own schedule or work from home on certain days.

Encourage Open Communication: Employee communication is important. Listen to your employees. If they feel that you value their thoughts and opinions, they’ll be happier, which will rub off on others.

Summary

The right culture is one where everyone feels valued, respected, and listened to. It’s one where everyone has the opportunity to grow and succeed. It’s a culture that encourages and nurtures collaboration, trust, and a sense of belonging. Culture is the way employees work together every day to get more done and get more happy.