Which of the following types of companies is most likely to be organized as an adhocracy?

One of the building blocks of any exceptional organization is a superb culture. Culture is defined as the beliefs, values, and behaviors that determine how an organization’s people interact and behave both inside and outside the organization. Previously, I discussed how organizations utilize their history and the After Action Review (post #33 ) to enhance their culture.

It is useful to understand what type of corporate culture is dominant in your organization. University of Michigan business professors Robert E. Quinn and Kim S. Cameron developed the Organizational Culture Assessment Instrument (OCAI) as a way to assess organizational culture. Working with over 12,000 companies, their research determined that there were four predominant company cultures: clan, adhocracy, market, and hierarchy. While each organization has a dominant culture, every organization exhibits its own unique combination of the four types.

Corporate Culture Types

Clan Culture

Clan cultures are a friendly, collaborative cultures that are like a large family, or clan, where people have a lot in common. This type of culture likes to “do things together.” The clan culture favors flexibility with an internal focus. People in these organizations form strong bonds of loyalty, tradition, and congruence. Examples of companies that may have a clan culture include Ben and Jerry’s, Pixar, and Love’s Travel Stops.

Adhocracy Culture

The base of this culture is the concept of “ad hoc.” An adhocracy culture is a dynamic and innovative environment where employees are willing to take chances and leaders are typically seen as inspirational innovators willing to challenge assumptions and take risks. An adhocracy favors flexibility while staying externally focused. This type of culture likes to “do it first.” The core values of the culture are change and agility. Examples of companies that may have an adhocracy culture are Tesla and DoorDash.

Market Culture

A market culture is a culture in which the goal is to get down to business, get work done, and achieve results. This is often a competitive environment, even among coworkers. The market culture emphasizes stability while staying externally focused. This type of culture likes to “get the job done.” These companies goal is to make as much profit and capture as much market share as possible. Companies that may have a market culture include Amazon and historically, Ford Motor Company under Henry Ford.

Hierarchy Culture

Hierarchy cultures emphasize process and procedure. Leaders ensure that the employees follow the “company way” — the tried and true ways of doing business. This type of culture likes to “do things right.” The companies focus on following the rules and guidelines to reduce costs and make few mistakes. Many of the military units I were part of had a strong hierarchy culture. Other organizations that may have a hierarchy culture are NASA, ExxonMobil, and General Electric.

The battalion I commanded in Afghanistan had six companies each with its unique combination of cultures. Angel Company was more of an adhocracy and wanted to lead the way. Battlehard Company was more of a clan, tackling problems together. Choppin’ Company was more of a market, get the job done, culture. And finally, the Forward Support Company was a hierarchy — they needed to follow the rules to provide logistical support to all the other organizations.

There’s no correct organizational culture for a small or medium sized business, non-profit organization, or sports team. Each culture type promotes some forms of behavior while inhibiting others. Some are well suited to rapid change and growth, while others work better to slowly, incrementally develop the organization. As your organization evolves it may begin as an adhocracy as a start-up and then transition to a market or hierarchy when it is larger.

Knowing what type of culture your organization has is an important step in growing and developing it. Two questions to ask yourself and your team — what type of culture predominates in your organization? And is it the type of culture that will help you grow and develop your organization going forward?

Conclusion

If you’d like more ideas on how to improve the culture in your organization take a look at Chapter 15 in my book, Grow Your Grit, available for sale at Amazon. Or reach out to me here to start the discussion about how to use these lessons and others to help improve yourself or your team’s culture, leadership, or grit.

The assumptions, beliefs, values, and ways of interaction that define an organization’s environment are referred to as organizational culture. To be successful in the long run, every organization needs an endgame that helps shape its structure and culture.

No two companies function the same way and each, irrespective of the size, has its unique way of doing things. Each company has its own identity defined by its goals and ways of functioning that serve said goals. What businesses observe from their environment and the experiences they earn through their activities form the basis of their beliefs and assumptions. And it is these ideas that are then brought on to the workplace.

For businesses that are just starting, it’s essential to identify an organizational culture that serves as a guiding light for employees and leads them to great success. Without an organizational culture, businesses will find it difficult to rally their employees and work towards their goals.

To establish a solid organizational culture that aligns with the type of company you wish to be and your goals, you first need to be aware of the different types of organizational culture. Here’s a look at the 4 types of organizational culture prevalent currently.

Adhocracy Culture

Adhocracy culture is a culture of taking risks. The focus here is on organization leaders’ business strategy being inventive and imaginative. This culture is designed to inspire innovators who embrace difficulties, take chances, and are willing to disrupt organizational norms.

Features of Adhocracy Culture:

• At every level of the organization, there is a common dedication to innovation.
• Businesses with an adhocracy culture enjoy a competitive advantage in the marketplace.
• The environment in an adhocracy culture is completely inclusive and all ideas are welcome and encouraged.

Clan Culture

A clan culture is a form of business atmosphere that is similar to that of a family, where everyone’s opinions and ideas are appreciated. Clan cultures are sometimes compared to a large family since they are amicable and collaborative. When making any corporate choice, this type of culture stresses the importance of employee consensus. The elements of clan culture include helping each other during working hours, eating meals together, coming together as a team to celebrate successes, and sharing each other’s joyful memories.

Features of Clan Culture:

• This type of culture is conducive to increased productivity and company growth.
• Transparency and straightforward communication are the mainstays of clan culture. Every member feels free to express their thoughts and opinions.
• Employees are praised for their hard work and constructively criticized to help them improve

Hierarchy Culture

A regimented and hierarchical work atmosphere are the defining characteristics of Hierarchy Culture. In this type of organizational culture, leaders take pride in their well-organized and efficient coordination between the different functions. The most important thing here is to keep the organization running smoothly without any hassles. In Hierarchy Culture, the organization is held together by formal rules and policies. Stability and outcomes are the long-term objectives, which are closely linked to the overall efficiency and seamless execution of everyday tasks.

Features of Hierarchy Culture:

• Employees working in companies with a hierarchical culture feel safer, are always paid on time, and have a better chance of staying in their jobs in the long run.
• In a hierarchy culture, promotional benefits include unique advanced status and compensation, which are both powerful motivators for workers.
• Employees rise through the ranks by putting in regular effort and hard work in a certain function. They are more likely to reach expert status in that one field if they concentrate only on their task.

Market Culture

Market culture is results-oriented, competitive, and market-based. This culture is driven by outcomes, and it works tirelessly to penetrate the market and gain the most market share possible. This culture is especially prevalent in larger organizations, where executives are tenacious, forceful, and have high expectations from their employees. Employees are given difficult goals to meet and are pushed to complete them at all costs. Employee performance is regularly monitored, and it’s not uncommon for them to be rewarded and reprimanded as a result. In this type of organizational culture, getting the job done is paramount.

Features of Market Culture-

• In a market culture, goals are designed to be met. If they aren’t met for some reason, new approaches to achieving them are investigated.
• Employees are continually pushed to go above and above, and their leaders motivate and encourage them to do so.
• In a market culture, employees are prepared to respond to market changes to maintain market share and stay ahead of the competition.

The culture of a company is no longer defined by surface-level factors. Most importantly, employees now care about a company’s values, the presence of capable and humane leaders, and a clear progression path. The 4 types of organizational culture mentioned above each feature specific types of elements designed to make the workplace better.

Vani

In her free time Vani loves storytelling and helping talent meet their aspirations. She has been a part of enterprise, growth stage startups & VC firms. She is driven to make stories and startups matter.

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