The 4 Types of Organizational Culture | Clan, Adhocracy, Market & Hierarchy

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.

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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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