The Four Types of Organizational Cultures
Every organization is different, and all of them have a unique culture to organize groups of people. Yet few people know that every organization actually combines a mix of four different types of organizational culture under one leading cultural style, according to research by business professors Robert E. Quinn and Kim S. Cameron at the University of Michigan.
IAAW utilizes the Organizational Culture Assessment Instrument (OCAI), a validated survey method to assess current and preferred organizational cultures. The OCAI is based on Quinn and Cameron’s Competing Values Framework Model, which has been used by over 12,000 companies worldwide.
The framework explains how the four organizational cultures compete with one another. The four parameters of the framework include internal focus and integration vs. external focus and differentiation, and stability and control vs. flexibility and discretion.
Based on these parameters, the framework breaks organizational cultures into four distinct quadrants or cultural types: The Clan Culture, the Adhocracy Culture, the Market Culture, and the Hierarchy Culture. Quinn and Cameron discovered that flexible organizations are more successful than rigid ones because the best organizations are able to manage the competition between cultures while activating each of the four value sets when needed.
To determine what type of organizational culture you belong to, here is a summary of the four types and their specific qualities:
The Clan Culture: This culture is rooted in collaboration. Members share commonalities and see themselves are part of one big family who are active and involved. Leadership takes the form of mentorship, and the organization is bound by commitments and traditions. The main values are rooted in teamwork, communication and consensus. A prominent clan culture is Tom’s of Maine, the maker of all-natural hygiene products. To build the brand, founder Tom Chappell focused on building respectful relationships with employees, customers, suppliers and the environment itself.
The Adhocracy Culture: This culture is based on energy and creativity. Employees are encouraged to take risks, and leaders are seen as innovators or entrepreneurs. The organization is held together by experimentation, with an emphasis on individual ingenuity and freedom. The core values are based on change and agility. Facebook can be seen as a prototypical adhocracy organization, based on CEO Mark Zuckerberg’s famous admonition to, “Move fast and break things – unless you are breaking stuff, you are not moving fast enough.”
The Market Culture: This culture is built upon the dynamics of competition and achieving concrete results. The focus is goal-oriented, with leaders who are tough and demanding. The organization is united by a common goal to succeed and beat all rivals. The main value drivers are market share and profitability. General Electric under ex-CEO Jack Welch is a good example of this culture. Welch vowed that every G.E. business unit must rank first or second in its respective market or face being sold off. Another example of the market culture is software giant Oracle under hard-driving Executive Chairman Larry Ellison.
The Hierarchy Culture: This culture is founded on structure and control. The work environment is formal, with strict institutional procedures in place for guidance. Leadership is based on organized coordination and monitoring, with a culture emphasizing efficiency and predictability. The values include consistency and uniformity. Think of stereotypical large, bureaucratic organizations such as McDonald’s, the military, or the Department of Motor Vehicles.
The OCAI research reveals that it’s rare for companies to share equal traits from all four cultural types, with no single dominant type. However, it is likely that departments within an organization may exhibit subdominant traits, such as the accounting department having a mainly Hierarchy/Control culture, while the development team is shaped by more of an Adhocracy/Creativity culture.
Defining any one culture is difficult because it is based on a complex combination of people’s shared attitudes, beliefs, assumptions and behaviors. Leaders can use the OCAI survey to gain insights into the dominant culture of their organization, and to assess the gaps between their current culture and the preferred culture.
You can only change or instill a culture by first classifying it and understanding it. The OCAI and Competing Values Framework can serve as powerful tools to make empirical comparisons of an organizational culture before and after any major change initiative, reorganization, or merger.