What Is Corporate Culture?

By Indeed Editorial Team

Updated November 9, 2022 | Published May 17, 2021

Updated November 9, 2022

Published May 17, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

When looking for new job opportunities, there are plenty of things to consider. For example, what the position is, how much it pays and the benefits you receive. However, you should also look at the corporate culture to decide whether you would enjoy working there. You spend so much of your time at work that it's important to ensure the environment has a healthy culture and shares your values. In this article, we look at what corporate culture is and its different types, and we provide some examples of what makes great corporate culture.

Related: How to Learn More About a Company's Culture

What is corporate culture?

Corporate culture, or company culture, refers to a company's beliefs, behaviours, ethics, vision and work environment. It determines how employees and management interact in the workplace. Every company has a different culture, as traditions, company size, industry, products, international trade and personal beliefs can influence it.

You can determine a company's culture in several ways. For example, a company's business hours, office setup, employee benefits, hiring decisions, turnover, dress code, client satisfaction and treatment of clients and employees are all indicators of a company's culture.

A company's corporate culture is not always clearly defined, but many organizations now choose to outline it by creating a company culture statement. This can be valuable to both prospective employees and clients to ensure they share the company's ethics, vision and values. If a company has written a culture statement, it will be easy to find when researching them.

Companies that define their corporate culture are dedicated to creating a healthy working environment and are proud of their corporate culture. This is a good sign that the employer has their employees' best interests at heart.

Types of corporate culture

As several variables can influence corporate culture, there are no clearly defined types. However, there are some common styles of corporate culture you may encounter when looking for a new job, including the following:

Hierarchy culture

Hierarchy company culture is one of the most common and indicates a top-down view of the organization. This means they rank employees according to levels of importance and power. Hierarchal culture has several levels of management that make rules, decisions and procedures and take accountability for “lower-ranking” employees. An example of hierarchy company culture is the Canadian government, with the prime minister being the highest-ranking employee, followed by the deputy prime minister, cabinet ministers and so on.

Related: Everything You Need to Know About the Hierarchy of a Company

Market culture

Market company culture values external relationships. This includes relationships with suppliers, customers and investors. Market culture is highly business-oriented and profit-motivated. It focuses on building external relationships to earn more money as a measure of success. Market culture creates a competitive environment, which suits those who enjoy a bit of competition. Companies focused on driving sales often have this type of corporate culture.

Clan culture

Clan company culture values participation and solidarity to succeed. Companies with this culture prefer shared goals and values to ensure teamwork and open communication come easily. There are fewer management levels in this structure, so employees are more connected and build stronger relationships with managers. Any industry can use clan company culture to foster a supportive, team-oriented environment.

Adhocracy culture

Adhocracy company culture comes from the term "ad hoc," which means to act as necessary. Adhocracy culture focuses on innovation and constant development, encouraging employees to think about the next best thing to meet the ever-changing demands of society. For example, companies like Tesla and Apple are always releasing new and improved products to keep consumers interested. Companies that have adhocracy culture value risk-taking, creativity, innovation and initiative from the entire team.

Caring culture

As the name suggests, companies that place their employees' well-being above everything else are categorized as having a caring company culture. These workplaces value supportive, welcoming team members and use collaboration and teamwork to thrive. Any industry can implement a caring company culture to show their employees they value them.

As you can see, it's difficult to clearly define different corporate culture structures as some companies don't fall under these categories, and some combine different cultures to create unique environments that suit their specific business.

Related:

  • A Guide to Different Types of Organizational Culture

  • What Is Company Culture? (With a List of Different Types)

  • 18 of the Best-Paying Jobs That Are Independent to Consider

Signs of a great corporate culture

Finding an organization with a corporate culture you can thrive in is important as a positive work environment relates to your overall job satisfaction. When you're searching for a new workplace, look for these signs of good company culture:

Creating a fun workplace

Although there is a belief that you can't mix business with pleasure, work can still be fun. Regardless of the industry, companies should aim to make employees look forward to coming to work by creating a welcoming environment. Simply adding games to the break room, creating weekly events like pot lucks or pizza parties or offering benefits packages are all ways to improve corporate culture. Employees that work in fun environments work harder because they can tell their employer actually cares about them.

Related: Fun Activities at Work to Increase Employee Engagement

Hosting social events

A sign of good corporate culture is when an organization hosts social events for employees. Hosting events like parties, outings and meals is a great way for companies to bring their employees together. It boosts morale and gives employees an opportunity to build stronger relationships with one another outside of work.

Listening

Companies that have a hierarchal system still need to prioritize listening to their employees. Making employees feel valued by hearing their opinions, ideas and needs is important when fostering a cohesive workplace. Listening ensures that there isn't a huge divide between management and employees, making everyone feel like a crucial part of the team.

Encouraging open communication

Open communication is important for any company to succeed. Employees should be able to share ideas and discuss problems with anyone in the company. This motivates people to come up with new ideas and question processes to improve them. Having open communication also facilitates excellent teamwork.

Related: What is Corporate Development? (Types and Strategies)

Being flexible

Flexibility can be hard to find in many industries, but companies should aim to be as flexible as possible. Flexibility can include allowing employees to choose their own hours, wear what they want to the office or work from home if they can. Giving employees freedom and flexibility makes them more productive and willing to work.

Trusting staff

No employee appreciates micromanagement, so it's important that companies trust their employees to do their jobs properly. This allows employees to become more independent and perform well.

Hiring the right people

Companies should focus on hiring people they believe are a good fit with the company's culture and values. This ensures that everyone agrees and can work towards common goals.

Related: How to Answer "What Did You Like Least About Your Job?"

Having a cultural ambassador

Some companies may have trouble defining and expressing their company culture, but hiring a cultural ambassador makes it easier. Cultural ambassadors demonstrate the organization's values and beliefs to new employees to help the company grow and improve.

Setting goals

Many people thrive in environments where they feel challenged so they can grow. One of the best ways to provide this growth is to encourage employees to set goals. It can be an individual or team goal, as long as it gives people something to work towards. Ensuring employees have all the tools and resources they need to meet their goals encourages development.

Positive feedback

Giving employees feedback ensures they learn and grow from their mistakes. The key is sharing constructive feedback to keep them motivated. Positive feedback makes employees much happier and more productive as they strive for further encouragement.

Rewarding success

Another great way to motivate employees is to reward their success. This can be done in a number of ways, like celebrating yearly milestones publicly, offering monetary rewards for reaching certain goals or giving employees awards like "employee of the month." It's important that companies recognize everyone's achievements equally to ensure no one feels discouraged.

Offering practical perks

Employees are more willing to work for a company that offers practical perks. This includes discounts to nearby restaurants, access to fitness centers, or discounts on the company's own products. Offering these types of benefits make employees appreciate their position more.

Some signs of healthy corporate culture are hard to pinpoint before you start working for an organization. This is why it's important to research the company before you apply or before you accept an interview. See what current or past employees say about the company and its culture to gauge whether it's an environment you would thrive in.

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