Organizational culture is one of the fundamental factors influencing the functioning and success of modern enterprises. It is a system of values, practices, and norms that shapes behaviors, decisions, and interactions at all levels of the organization. As recent research shows, a well-built organizational culture can significantly increase employee engagement, productivity, and overall business results.
Four Main Models of Organizational Culture
Research indicates the existence of several dominant types of organizational cultures, which can be observed in contemporary enterprises. It is worth noting that in practice, organizations often exhibit traits of various models simultaneously.
Clan Culture
Clan culture, also known as collaborative culture, resembles the operation of a family business. It is characterized by a strong sense of community, shared goals and values, and encouragement for active participation in the life of the organization.
“Enterprises with a dominant clan culture operate more like a large family. Instead of procedures, defined processes, market competition, and a focus on profit, clan culture focuses on engagement in the life of the company, teamwork, and caring for the well-being of employees.”
Practical example: Pixar, the producer of hits such as “Finding Nemo”, “Toy Story”, and “Monsters, Inc.”, is an excellent example of an organization with a clan culture that has achieved spectacular market success. Pixar focuses on collaboration, continuous development, and learning from each other. Employees feel both special and part of a larger whole.
Hierarchy Culture
Hierarchy culture is characterized by a formalized structure, bureaucratization, and adherence to established procedures and rules. It is inward-focused and guarantees a sense of safety and stability.
“Hierarchy culture is associated with predictability, uniformity, high efficiency, effective coordination, precise processes, strict adherence to schedules, and limited interpersonal contact. You can find it especially in government offices or large international corporations.”
Practical example: Traditional financial institutions, such as major banks, often adopt a hierarchy culture, where clearly defined procedures and a decision-making chain ensure stability and minimize risk. In such organizations, employees know exactly who makes decisions and what the career paths are.
Market Culture
Market culture is oriented towards achieving tasks, meeting set goals, and attaining high financial results as well as gaining market share.
“The organization is made up of a motivated and ambitious team, whose members compete with each other on the way to victory. For such a company, what matters most is the constant desire to win, efficiency, competitiveness, and consistently shaping its position in the industry.”
Practical example: Companies such as Goldman Sachs or McKinsey are known for their market culture, where high performance and achieving ambitious business goals are strongly rewarded. Employees in such organizations are typically results-oriented and view their work through the lens of measurable achievements.
Adhocracy Culture
Adhocracy culture emphasizes innovation and risk-taking. Leaders encourage employees to think boldly, experiment, and push boundaries without the fear of failure.
“It can also be called a culture of creation, focused on building something meaningful and impactful. In such environments, employees have the freedom to explore new ideas, and leadership not only supports them but actively drives them.”
Practical example: Tech companies like Google and Tesla are examples of adhocracy culture, where employees are encouraged to experiment, and failure is seen as a valuable lesson rather than something to be feared. At Google, the famous “20% time” program allowed employees to dedicate part of their work time to personal projects, which led to the creation of products like Gmail and Google News.
What Makes Organizational Culture Effective?
Research conducted by MIT Sloan Management Review and Glassdoor, analyzing 1.4 million employee reviews, revealed that the most important predictor of a positive assessment of organizational culture is the sense of respect among employees. This factor turned out to be 17.9 times more significant than any other aspect.
According to research published in Harvard Business Review, “Teams with a strong sense of shared purpose and values achieve a 17% increase in performance compared to teams that lack this sense.”
Johnson, Robertson, and Cooper (2018) identified four key elements of organizational culture that influence employee well-being:
- Work and its content (job demands, access to resources, communication flow)
- Relationships at work and beyond (relationships with colleagues, support)
- Meaning and purpose of work (clarity of professional goals, sense of value and purpose)
- Leadership and management (manager’s influence on the group, impact of management style)
Best Organizational Cultures in the World
Google’s Culture of Innovation
Google has long been an example of an organizational culture that promotes innovation and creativity. The company creates an environment where employees can experiment and take calculated risks. Studies show that this approach fosters both innovation and employee satisfaction.
Practical example: At Google, the rule is that failure is acceptable if it leads to learning. Employees are encouraged to experiment and share even imperfect ideas, which has led to the creation of many groundbreaking products. Google also offers numerous workplace amenities such as free meals, gyms, and relaxation rooms, supporting a culture of well-being.
Pixar’s Culture of Collaboration
As mentioned earlier, Pixar is an excellent example of clan culture, where collaboration and learning from each other are key. Research confirms that a culture valuing support, collaboration, and trust positively impacts employee well-being.
Practical example: At Pixar, every employee, regardless of position, can suggest changes to films in production. Moreover, the company organizes regular “Brain Trust meetings” where creators share their projects in early stages and receive honest, constructive criticism from colleagues. This practice has contributed to the extraordinary quality of Pixar’s films.
Patagonia’s Culture of Social Responsibility
Patagonia, an outdoor clothing company, is known for its strong organizational culture based on environmental and social values. Research shows that companies with a strong sense of social responsibility enjoy greater employee engagement.
Practical example: Patagonia encourages its employees to engage in environmental activism by offering paid time off for participation in ecological actions. The company also donates 1% of its annual revenue to support environmental organizations. These values are deeply embedded in the daily work and business decisions of the company, attracting employees with similar values.
Microsoft’s Learning Culture under Satya Nadella
Since Satya Nadella became CEO in 2014, Microsoft has undergone a transformation in its organizational culture towards promoting continuous learning and development. This change is often cited as an example of successful cultural transformation in a large organization.
Practical example: Nadella introduced the “growth mindset” philosophy as the foundation of Microsoft’s new culture. Employees are encouraged to continuously learn, experiment, and learn from failures. The company shifted from its former culture of internal competition to collaboration and innovation, which contributed to a significant increase in the company’s value.
Challenges for Organizational Culture in the Hybrid Work Era
The COVID-19 pandemic and the widespread adoption of remote work have created new challenges for organizational cultures. Gartner’s research indicates that only 24% of hybrid and remote employees declare attachment to their organization.
“Hybrid and remote work have not necessarily changed our organizational culture, but they have affected how we experience it. The time when employers hung slogans about corporate cultural values on the walls is gone, as hybrid and remote employees spend 65% less time in the office than before the pandemic,” comments Alexia Cambon, HR director at the Gartner Institute.
Companies must find new ways to build and sustain organizational culture in a distributed environment. Research suggests three approaches: building culture through work itself, creating emotional bonds, and strengthening relationships within teams.
Practical example: GitLab, which has operated as a fully remote organization from the beginning, created an extensive organizational culture manual available online for all employees. It contains detailed information about the company’s values, processes, and expectations. GitLab also organizes regular virtual integration events and encourages teams to have informal online meetings to build social bonds despite the lack of physical presence.
Practical Recommendations for Building an Effective Organizational Culture
Based on scientific research and examples of best practices, the following recommendations can be formulated:
- Prioritize respect and psychological safety – MIT Sloan Management Review research has shown that the sense of respect is the most important factor influencing the assessment of organizational culture.
- Align culture with business strategy – Culture should support the strategic goals of the organization. As research from the Journal of Applied Psychology indicates, aligning culture with strategy increases organizational effectiveness.
- Build a culture based on values – Clearly defined and authentically practiced values create the foundation of a strong organizational culture.
- Adapt management practices to culture – Studies confirm that practices such as empowerment, delegation of authority, and focus on collaboration positively impact employee well-being.
- Engage leaders as culture ambassadors – Organizational culture is built at every level of the organization, but it is particularly important to involve board members and leaders.
Practical example: Netflix created the famous “Culture Deck” – a presentation describing the company’s organizational culture, which became so popular that it was viewed millions of times worldwide. Netflix clearly defines its values, such as honesty, responsibility, and innovation, and then consistently implements practices that support these values. For example, the company is known for its “unlimited vacation” policy, which reflects its culture based on trust and results, rather than time management control.
Summary
The best organizational cultures in the world are characterized by authenticity, alignment with the company’s strategic goals, and the ability to adapt in a changing business environment. Scientific research clearly shows that a strong organizational culture has a significant impact on employee engagement, well-being, and business results.
In the face of global changes in work styles, organizations must rethink how to build and maintain their culture. Those that find effective ways to cultivate values and build community in a hybrid environment will have a competitive advantage in attracting and retaining talent.
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