Types of Organizational Cultures That Will Help Organisation To Achieve Profitability

Types of Organizational Cultures That Will Help Organisation To Achieve Profitability

InThere are various definitions of organizational culture which in general define the way how organizations function or behave. In the era of digital technology, the definition of organizational culture has evolved as compared to the past. Gotham Culture defines organizational culture as “the underlying beliefs, assumptions, values, and ways of interacting that contribute towards the unique social and psychological environment of an organization.”

Different organizations have different types of organizational cultures. Members of the organization adapt the culture to maintain decorum. The culture of the organization also reflects its mission, and vision. A great organizational culture is one of the factors that contributes towards the success of the business. The companies who have a healthy and strong organizational culture are more likely to experience revenue growth as compared to the organizations who lack a proper culture. The culture in the organization keeps the employees aligned and focused towards the goals and objectives of the company.

Importance of Organizational Culture

Organizational culture is of utmost importance in organizations because it helps them to grow revenue and become profitable in the longer run. The culture of the company has an impact on all aspects of business. Hence, a strong organizational culture creates a workplace where employees are aligned towards the goals of the company. The reasons why organizational culture is important are as follows;

  • Fosters a strong workplace environment
  • Attracts talented individuals and helps the company outperform their competitors.
  • Increases employee satisfaction in organizations
  • Helps the company meet its objectives

Other than the importance of organizational culture, there are different qualities of organizational culture which makes employees choose a company with good organizational culture over a company offering a handsome amount of salary. The qualities of organizational cultures are below;

When an organization has a strong yet accommodating organizational culture, it promotes trust, teamwork, innovation, alignment, integrity and performance. All these factors are vital to the growth of the organization where the employees rely on each other, motivate each other and respect each other. It fosters a culture of appreciation as well which further motivates the employees and contributes towards their increased satisfaction.

Types of Organizational Culture

Let’s explore the 4 different types of organizational cultures adapted by different companies to organize their employees and subordinates.

According to Robert Quinn and Kim Cameron at University of Michigan Ann Arbor, there are four different kinds of organizational cultures. All of these cultures encourage and promote some sort of behavior.

 

Clan Culture

Clan culture values the views, opinions and ideas of everyone equally. This culture is a family-type of corporate culture which encourages friendliness, and a collaborative culture among the employees. Clan cultures exist in both traditional and digital organizations where the company believes in nurturing employees with the help of mentoring programs and interpersonal communication. This is because employee engagement, mentoring and employee commitment empowers employees. This subsequently boosts employee productivity and loyalty towards the organization. Some of the key features of clan culture are as follows;

  • Increased transparency and enhanced communication
  • Promotes employee productivity and boosts loyalty
  • Culture of appreciation prevails

However, there is some criticism of this kind of organizational culture. The critics say that organization with clan culture lacks diversity and cohesiveness.

Adhocracy

The second type of organizational is Adhocracy culture. Organizations that encourage risk-taking and innovation adopt adhocracy culture. These kinds of cultures are said to be dynamic and entrepreneurial. There are some organizations where innovators are working who are ready to take risks and break down the conventional organizational assumptions. Regardless of their position and role in the organization, the employees contribute towards the success of the organization. The key features of this culture are as follows;

  • Shared commitment
  • Promoted innovation
  • Increased competitive advantage in the organization
  • Fosters an inclusive environment where all suggestions and opinions are openly welcomed

Market

Organizations that are market-competitive, results oriented and excessively competitive adopt market culture. This type of culture is more suitable for digital organizations where there are high performing employees. The leaders in such organizations are tough and demanding because they focus solely on achieving concrete results. The main drivers of value in the organization are share and profitability. Majority of the sales organizations adopt this kind of culture as salespeople are also highly motivated with big rewards and compensation. The key features of market culture are as follows;

  • Ensure fulfilment of goals 
  • Leaders inspire and motivate their employees
  • Helps in achieving concrete results
  • Lastly, ready for any change in order to stay ahead of the market competition

Hierarchy

A formal organizational culture represented by a structured hierarchy of people is called hierarchal organizational culture. The main objective is to promote the smooth functioning of the organization. Organization assigns roles and responsibilities to individuals, howeber, the position of power is consolidated at the top of the organization. Powerful people are at the top such as the top management whereas powerless employees are at the bottom of the hierarchy. Key features of hierarchical culture are as follows;

  • Increased employee security
  • Timely salary
  • Rewards and promotion to consistent and hard working employees 
  • Monetary and non-monetary benefits to employees

Every organization must incorporate organizational cultures to streamline the business processes and day to day operations. As a result, a highly developed organisational culture helps the company to achieve its goals and objectives while increasing employee satisfaction and commitment.

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