There are many different types of organisational culture. What works and is appropriate for one business will differ from another. Many businesses incorporate different elements of culture, creating their own unique set of cultural markers.
Organisational culture refers to the values, approaches, style, attitude and behaviour that characterises an organisation.
As there are so many different elements of organisational culture, four experts undertook a literature review to create eight distinct types of organisational culture. This review took place a few years ago now, but these 8 types of organisational culture are still highly relevant to businesses in 2022. The type of culture you wish to foster in your business is dependent on various factors ranging from industry to location, but it will fit into one of these 8 types.
The 8 types of organisational culture can be plotted against two dimensions. The first is the way people interact (ranging from independent to interdependent). The second is how the company responds to change (ranging from stability to flexibility).
When you plot the 8 types of organisational culture against these dimensions, they form a circle. It’s worth realising that these types of organisational culture can also apply to the individual leader, as well as the organisation as a whole. There is no right or wrong, but different cultural types have advantages and disadvantages in different settings and scenarios.
Caring cultures foster and rely on collaboration and trust between their workers. The focus is distinctly on teamwork and balanced skills to bring about results. Relationships are important, and the environment is warm and welcoming. Fairness, loyalty and decency are considered pillars of workplace interactions. Interestingly, many Western businesses rate themselves highly as having a caring culture.
The Walt Disney Company is given as the prime example of the caring type of organisational culture.
Purpose-driven cultures are focused on making progress with sustainable change and the greater good. They are characterised by their altruism, which is enabled through collaboration. They are highly flexible. Employees are united by their commitment to the organisation’s purpose and goals. These businesses inspire their workers through prioritising positive impact in a way which then generates profits and/or success. Employees are often characterised by their compassionate and empathic natures.
The example of a purpose-driven culture in the literature review is Whole Foods. John Mackey, founder and CEO at Whole Foods says, “Most of the greatest companies in the world also have great purposes… Having a deeper, more transcendent purpose is highly energising for all of the various interdependent stakeholders.”
Similarly flexible, like purpose-driven cultures, the learning culture differs in that there is a stronger focus on innovation and creativity. Employees are known for their curiosity and their tenacity for experimentation and exploration. Knowledge is highly valued and overall, the workplace is inventive. The sub-culture of brainstorming will be common in organisations with a strong learning culture. Many of these organisations view success in the form of new inventions and innovations.
The example given for a learning culture is Tesla, where Elon Musk made clear he valued imaginative employees where failure and mistakes were welcomed.
Light-hearted workplaces where spontaneity is valued exhibit the enjoyment culture. These workplaces evidence playful approaches and in return, there are high levels of employee engagement. These are exciting places to work and this is driven by inspiring and fun leadership. Morale is typically high and employee turnover is low. There is stimulation and humour wending its way through every aspect of the workplace. Employees have a high degree of autonomy and independence.
This is a very unique type of organisational culture, only applying to around 2% of companies. The online retailer, Zappos, is given as the example of the enjoyment culture.
In the results culture, workers are similarly independent-thinkers and autonomous, like they are with the more playful enjoyment culture. However, the overriding focus is on goals and results, and this puts a cap on the spontaneous and fun aspects. The vast majority of organisational cultures sit within this area or at least share many aspects of this style.
Outcome-orientation is the central tenet of the results culture and everything is driven towards success. As such, these organisations are characterised by merit-based systems and approaches and everyone knows and works towards their own goals, as well as those of the organisation overall.
An example of the results culture is GSK, the pharmaceutical giant.
Perhaps once the central organisational culture, and now only applying truly to a handful of organisations, particularly those emanating from countries such as Japan and China, is the authority culture. Here, there is a culture of control and unrelenting competition. Leaders are typically authoritative. Decisiveness is critical.
Huawei is a good example of authority culture. Ren Zhengfei, CEO of Huawei underpinned authority culture by saying, “In the battle with lions, wolves have terrifying abilities. With a strong desire to win and no fear of losing, they stick to the goal firmly, making the lions exhausted in every possible way.”
Unsurprisingly, safety cultures are risk-averse. They are highly aware of potential dangers and challenges. Indeed, often their success and reputational standing is directly impacted by their ability to be risk-conscious and pragmatic. Employees in these organisations work together in protective ways through careful and thorough planning. There is a focus on caution and realistic strategizing. Unlike in a learning culture, employees are rewarded more for being safe and careful in their endeavours.
Lloyd’s of London is a good example of the safety culture, where risks are identified, exposed and mitigated as a central part of organisational culture.
A sizeable number of organisations have an order culture, around 15%. These businesses have a methodical and structured culture. Employees know the rules and they stick to them, working within procedures and protocols. Cooperation between employees is vital, along with the ability to follow the direction of leaders.
Organisations within industries characterised by a high degree of regulation often rely on an order culture. The primary example given is the Securities and Exchange Commission (SEC).
There is no ‘best’ type of organisational culture. It will depend on your unique organisation. In most cases, cultures are hybrids, with aspects from various different types. However, refining the organisation’s culture can be vital for achieving the desired organisational outcomes. Understanding what will work best in your organisation and why is crucial.
Knowing which types of organisational culture will be most appropriate for your organisation also helps with identifying the best potential leaders for the organisation. Aligning the characteristics of the leaders with the organisation helps to spread this throughout the organisation, to greatest effect.
At Eagle Headhunters, we help you understand your existing and desired organisational culture so that we can help you evaluate potential leaders in line with this. This will drive organisational success going forwards. Get in touch.