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What Is Company Culture? Types, And Building A Successful Work Culture

  • By basitahmaddar
  • March 25, 2024
  • 5 mins read
what is company culture
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    In today’s competitive job market, attracting top talent requires more than just offering competitive salaries and benefits. Company culture plays a critical role, in defining the values, behaviors, and environment in which employees work and interact. For modern candidates, a positive culture is essential, as they seek supportive and inclusive workplaces. Therefore, organizations must prioritize and understand what is company culture, to attract and retain top-tier talent effectively.

    In this article, we’ll define what is company culture, clear up some misunderstandings about it, and give practical tips on how to build a great culture in your organization.

    Also Read: Company Core Value Examples to Guide Your Organization

    What Are The Misconceptions About Company Culture? 

    Before understanding what is company culture, let’s clear up some common misconceptions surrounding it:

    Core Values Alone

    Core values are undeniably important, yet they’re just one piece of the puzzle. It’s insufficient for companies to merely articulate their values, they must actively integrate them into their everyday practices. Failure to do so can create a divide between stated values and actual behaviors, leading to skepticism among employees.

    Perks and Benefits

    While flashy perks like free lunches or game rooms can seem appealing, they alone don’t define a company’s culture. True culture is rooted in deeper values, norms, and behaviors that shape the workplace environment and interactions among employees.

    Sole Criterion for Hiring

    Although hiring for cultural fit has gained traction, it shouldn’t be the sole focus. Overemphasizing cultural fit can result in a lack of diversity and limited perspectives within the organization. Instead, companies should aim for a balanced approach, seeking candidates who align with the company’s values while also bringing diverse skills and experiences to the team.

    Also Read: Decoding FAANG: Unraveling the Secrets of Tech Giants’ Hiring Tactics

    What Is Company Culture? 

    Company culture isn’t just about having a set of rules, it’s like the vibe or atmosphere within a company that everyone contributes to, from the newest employee to the big boss. It’s about living out the values of the company every day, like being curious, respectful, and working well together. A good culture also means making sure everyone is feeling good and supported at work.

    To make your company’s culture even better, think about diversity and inclusion. That’s about making sure everyone, no matter where they come from or what they’re like, feels comfortable and included at work. When people can be themselves and learn from each other in a safe environment, it makes work more enjoyable and helps everyone do their best.

    Also Read: Reasons Why Employee Development Is Key

    What Are The Types Of Company Culture?

    Now that you understand what is company culture, let’s dive into the various types of cultures that companies typically have:

    Clan (Collaborative) Culture

    In a clan culture, the focus is on people, fostering a highly collaborative environment where every individual feels valued. Communication is key, and there’s a strong emphasis on teamwork and mentorship. Clan cultures often encourage innovation and adaptability, breaking down barriers between executives and employees.

    Adhocracy Culture

    Adhocracy culture thrives on innovation and flexibility, constantly seeking the next big breakthrough. It values risk-taking, individuality, and creativity, prioritizing the development and implementation of new ideas. Success is measured by market growth and company achievements, making it ideal for industries that require constant adaptation and change.

    Market Culture

    Market culture is results-oriented, focusing on external success and the bottom line. It prioritizes meeting targets, achieving quotas, and delivering results to stakeholders. In this culture, competition and performance are highly valued, often leading to a structured environment with clear goals and expectations.

    Hierarchy Culture

    In a hierarchy culture, there’s a strong emphasis on tradition and stability, with well-defined processes and clear direction. Risk-taking is often discouraged, and adherence to established protocols is prioritized. There’s typically a strict chain of command and multiple layers of hierarchy between executives and employees, promoting stability and uniformity within the organization.

    Also Read: What Is Parental Leave?

    How Does Company Culture Make The Difference? 

    Apart from knowing what is company culture and its various types, here’s why it holds significant importance in today’s organizational landscape:

    Attracting Top Talent

    Company culture acts as a powerful magnet for top talent, with 40 percent of job seekers prioritizing colleagues and culture when assessing career opportunities. Furthermore, companies that showcase their culture on platforms like LinkedIn enjoy a remarkable 67 percent increase in engagement.

    Retaining Valuable Employees

    Actively cultivating a positive culture leads to a 40 percent higher employee retention rate. This highlights that culture isn’t merely about initial attraction but plays a pivotal role in nurturing loyalty and commitment among employees, thus reducing turnover and preserving valuable talent within the organization.

    Fostering Engagement

    Employees immersed in a positive company culture are 3.8 times more likely to be engaged at work. Creating an environment where individuals feel valued, supported, and connected instills a sense of purpose and motivation, driving higher levels of engagement and productivity throughout the organization.

    Driving Performance

    Highly engaged teams outperform their counterparts by 17 percent in productivity, 10 percent in customer ratings, and 21 percent in profitability. A strong culture fuels employee morale, collaboration, and innovation, laying the foundation for enhanced performance and sustainable success.

    Also Read: The Ultimate Guide to Becoming a Better Interviewer

    How To Build A Successful Company Culture? 

    Building a successful company culture is no small task, but it’s achievable for any organization. Here’s how to make it happen:

    Establish Company Core Values

    Core values are more than just words on paper; they guide everything a company does. For instance, Meta’s value of “Move Fast” drives its ambitious projects and innovation. Squarespace’s commitment to “Be the customer” ensures a focus on product excellence. Uber’s value of “Do the right thing. Period.” was reaffirmed through leadership changes. When core values are put into practice, they become the foundation of a healthy culture.

    Set Company Culture Goals

    Every business has a fundamental goal beyond quarterly KPIs. Airbnb aims to “Create a world where anyone can belong anywhere,” Google strives to “Build for everyone,” and Zappos seeks to “Live and deliver WOW.” These aspirational messages resonate deeply with employees, aligning their goals with those of the company and driving exceptional outcomes.

    Involve Your Entire Team

    The attitude of an organization’s workforce profoundly influences its culture. Appreciating your team’s efforts, understanding their motivations, and offering support are crucial. Providing opportunities for personal and professional growth keeps employees engaged and motivated, fostering a positive culture.

    Follow Company Culture Best Practices

    Implementing culture initiatives deliberately is essential. Lead by example, reinforce desired behaviors, and provide constructive feedback. Recognizing employees who embody the company’s culture reinforces its importance and drives positive outcomes.

    Also Read: How To Create A Job Description For A Software Developer?


    In conclusion, building a strong company culture demands effort, but the rewards are worth it. If your current culture lacks passion, seize the opportunity to make improvements. Creating a workplace where everyone thrives is achievable with the right focus on core values, meaningful goals, team involvement, and best practices. Investing in company culture is investing in future success.

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