Ever heard a company employee say “this is how we do it here”? Such statements simply tell that the action or process in question is a result of the company culture - whether it is engraved in an SOP or not. And that is exactly how a company culture should work.

Company culture, otherwise known as corporate culture, is intended to create a desired environment and evoke specific feelings. In general, it tries to dictate how a company reads situations, how it responds to these situations, and even how it determines the results of its engagements in these situations. 

What is company culture?

Company culture refers to the comprehensive summary of behaviour, morales, values, and standards existent within a particular company. This, together, fits into what the company brand is. It also dictates the kind of experience that the customers or clients outside a company and the workers or staff within a company feel. 

Positive vs toxic company culture

Certain cultures or cultural elements in our regular societies are undeniably toxic. This could be hard language, bias and judgemental beliefs or perceptions, as well as unethical values. Just as toxic culture exists within societies, it also equally exists within companies - which could be referred to as smaller societies themselves. 

In this section, we’ll look at the difference between these positive and toxic company cultures and we’ll proceed by pointing out examples we can relate to. 

Positive company cultures

A positive company culture is one that is ideal. It is healthy, ethical, and beneficial to a company and its individual staff. This positive culture benefits not just a company or business but also the community within which such a company operates and by extension, the world all over. 

Founders, executives, staff and stakeholders must all ensure that they embrace a positive company culture within their organization. This is important for three major reasons.

The first is that it protects a business’s staff, and the clients or customers they serve from negative experiences and mental or physical trauma. Secondly, a positive company culture makes for increased cooperation and productivity. 

In addition, having good, positive company culture also helps businesses carve a decent public image for themselves. Everyone from customers to former employees will likely have an upbeat review for such a business and this will earn them public trust which always translates to increased patronage. 

‍Negative company cultures

We’ve mentioned that companies can develop or operate negative cultures just as much as positive ones. That being said, these negative cultures may not necessarily oppose ethical or moral standards - like you might think.

Instead, they may simply create strain on employees or whole organization or make it difficult to achieve effective processes or precise company goals. 

The 4 types of company culture

When building a company, it is important to choose what you want to have as your corporate culture. 

Clan culture

The clan company culture creates a setting that is less official and more cordial in nature. Basically, the entire company behaves like a clan. Everyone here feels attached beyond the chords of sharing an office environment or working on a project together. 

The way the clan company culture works is that superiors, for example departmental heads, act like guides or mentors to subordinates who could be staff or even interns. They make themselves easily accessible and they provide clear explanations or task demonstrations when the need arises. 

This work culture is best for small-sized organizations. The larger a company gets, the more difficult it becomes for superiors or supervisors to keep in touch with lower level employees, and to maintain a warm, cordial relationship with these employees. 

For its advantages, the clan culture encourages quick and open communication between all levels of an organization. Secondly, the culture’s theme of togetherness helps to keep everyone highly motivated at their job.   

Adhocracy culture

In the adhocracy company culture, there is a constant highlight for risks and unconventional opportunities. These two things represent the major behaviour in this setting. But taking risks could easily ruin a company, especially if these risks are not properly analyzed.

Therefore, companies that embrace the adhocracy culture need to set clear process paths or end points to help direct their risk taking decisions and this is done by defining the objectives or goals for every risk or opportunity. 

The advantages of adhocracy company culture is that it pushes employees and entire organizations to stay active and to continuously develop new and usual ideas. Along with this, employees are welcomed to suggest new ideas.

This behavior stands out from other cultures where most or all directives and ideas are birthed by executives and passed down to employees who are scarcely allowed any chance to give their input.

The adhocracy culture, by its nature, encourages participation and builds a good team spirit since employees feel that they are an important part of the decision making process. 

Secondly, companies that embrace the adhocracy culture are flexible and critical unlike regular ones. This means that they appreciate ideas and so they go over them differently from how a regular company would.

They are also open to permanently adjusting their strategy or operations if they find a better way to it. Moreover, adhocracy cultured companies do a lot of tests and experiments to determine what works and what doesn’t. 

Market culture

Market culture is a type of company culture in which profit making and positive or productive results are prioritised over anything else. Companies that apply this culture are highly competitive. As that is the case, these companies seek employees who are self driven and know how to reach a specified target. 

An environment like this can be stressful for many employees. The reason is that, day in and day out, employees are required to put in their very best even when it is unconducive for them. Worst still, their efforts are not typically appreciated if it does not produce desired results. 

You will find small and new companies adopting the market culture in their quest to grow and reach specific milestones in their industry. The specific niche of a business could also serve as a determining factor in its adoption of values and behaviour peculiar to this culture. 

Whatever the reason for choosing it, market cultured companies are usually successful. This stands as one of the major advantages. However, it also typically results in a toxic work environment.

The reason is that constant pressure on employee performance creates mental and physical strain which could lead to burn out or a complete breakdown. 

Hierarchy culture

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Hierarchy culture is the norm in a typical office or company setting. Here, you have a CEO or departmental head and their vice, assistant, or secretary. Moving on, there would be a number of other executives placed in descending order of their authority, and further down the hierarchy, regular staff or employees. 

The structure in a hierarchy culture can be thought of as a ladder with executives at the top, supervisors at the middle, and employees or workers at the bottom.

As time passes, workers and supervisors can move up the ladder to become supervisors or executives respectively, depending on how hardworking they are, how much experience they gather, and how much knowledge or skills they have. 

A major disadvantage of the hierarchy culture is that operations take longer before they are executed because they have to pass through a lot of channels.

For instance, when the CEO gives an operational instruction, it might have to go through their secretary, get verified or approved by other executives, and then move on to one or more levels of supervisors who would then pass it down to the workers or employees who it is intended for.

Nevertheless, the culture makes it quick and easy to report or troubleshoot problems since employees know exactly who to go to. 

How does company culture affect growth and performance?

It is clear by now that the corporate culture of a business can significantly impact its performance, and in the long term, its growth. Let’s look at how this happens in each of the four types of corporate cultures. 

‍Performance and growth impact of clan culture

As we mentioned, the clan culture is best suited for small sized companies. This small size allows supervisors to connect with lower level employees in building a positive mentorship relationship. With this relationship in place, employees can easily ask for directions with tasks.

They will also feel more comfortable about reporting operational issues and finally, they will find it easy to accept and implement corrections or feedback. 

‍Performance and growth impact of adhocracy culture

The performance and growth of a company that uses adhocracy culture can be really stunted if their approach doesn’t turn out well. However, these kinds of companies can also find a lucky break through an opportunity or a new approach they come up with.

When this happens, they may experience explosive growth. 

‍Performance and growth impact of market culture

Market culture presents an environment that could easily become harmful to employees within an organisation. However, despite its effect on workers, the company culture has a positive side in that it forces high performance and rapid, expansive growth of a company. 

‍Performance and growth impact of hierarchy culture

Performance in a workplace with hierarchy culture is moderate to high. What this means is that the team or company can optimise their performance. For example, when there is a short chain of command or if everyone along the chain of commands responds promptly.

On the other hand, performance can be hampered if one or more people in the hierarchy responds poorly in generating or passing down information.  

Conclusion

To sum everything up, some corporate cultures work best for small companies while others work for large companies. In the same manner, some corporate cultures create a positive impact while others create a negative impact.

This feeling which a corporate culture evokes could be limited to a company’s workforce or it could be widespread and reach a business’s clients and customers.

Also, it is important to note that the absence of a corporate culture might lead to vices and corrupt practices within an organisation. 

An advice for young founders who may be wondering how to avoid negative cultures is to carefully determine what culture would work best for their company. A good place to start is looking at some of the  successful companies within the same industry and what company culture they imbibed.

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