Organizational culture is present in every business or nonprofit and affects every aspect of its operations, yet it is extremely difficult to define. Some believe that it depends primarily on patterns of action that are observable within an organization, while others point to shared values that provide team cohesion.

Research suggests that organizational culture is all this and moreOpens in a new window or tab. It is the order that lets employees know what to expect and what their managers expect from them. It is a framework through which managers and executives lead, and it is the character behind the branding concepts that define a product for a customer. It is even the organizational mission that can attract or deter an investor.

Describing and defining organizational culture

Every organization’s culture is a little bit different than the others, but most of them fall into one of four categories. Understanding these categories can help you to make employment decisions, either for yourself or as a hiring professional, and can assist you in skillfully leading an organization.

Clan Culture

Clan culture means that the organization functions like a large family or tribe in which members share the same values and pursue the same goals. Connection and consensus within the group are highly valued and competition is de-emphasized.


Clan culture helps each member of a team to feel valued and supported, which means that a sense of empowerment can thrive. Knowing that they have their “work family” behind them, employees can take individual initiative without feeling isolated.


Some experts believe that because clan culture so heavily emphasizes shared values, employees may feel uncomfortable speaking upOpens in a new window or tab with contrasting opinions. In time, this can limit the creative potential of the organization.

Adhocracy Culture

Adhocracy values the ability to respond to changeOpens in a new window or tab. A company with an adhocracy culture values those employees that can be flexible in their process and proactively adapt to changing circumstances, goals or industry norms.


An adhocracy culture allows employees to think outside the box. Less bound by rules and tradition, the adhocracy can shift with changing times and innovate readily.


Because an adhocracy focuses so keenly on adaptation and responding to current circumstances, there can be a lack of structure that can leave expectations unclear and job roles less well-defined.

Market Culture

Market culture focuses on achievement at an individual levelOpens in a new window or tab. It encourages competitiveness not only with external entities but between employees as well. Individual performance is the most significant factor in employee compensation, advancement and termination decisions.


By rewarding performance at the individual level, a company can encourage each member to be as productive as possible. If it works, this can mean more growth for the organization and feelings of accomplishment for the employee.


Rewarding individual performance can certainly make employees work hard, but it can also lead to hard feelings within teams. In worst case scenarios, it can also motivate less than ethical behavior and undermine trust.

Hierarchy Culture

As one might guess, hierarchy culture emphasizes levels of rank and responsibilityOpens in a new window or tab. Those at the top have authority over those in levels beneath them, and employees at all levels are expected to follow specific processes. There is usually a great deal of active supervision and an expectation that subordinates will follow the directions set by superiors.


A hierarchy culture has clear expectations for each job title. Employees understand the chain of command and who is reporting to whom, so time isn’t wasted discussing how to perform a certain task. The result can be greater productivity and smoothness of operations.


A hierarchical culture can inhibit the ability of employees to innovate and self-direct. Without the freedom of each person to make individual decisions, a company can be limited to the ideas of its highest levels of leadership.

Learning more – the value of an MBA

Today’s business leaders need to be able to interpret a company’s culture. This kind of macro knowledge is crucial to the ability to spearhead an organization, but it is difficult to obtain except through formal education. For those in the working world, however, the time to get a graduate degree can be hard to find.

D’Youville offers an accelerated online MBA program that lets professionals keep their jobs while earning their degrees quickly and affordably. Don’t put your future on hold. Contact D’Youville today and get yourself on the path to leadership success.

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