What is the importance of company culture?

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There are various definitions and approaches to building a company culture, depending on the size of your organisation and the industry you operate in. A relatively common definition is having shared goals, values, attitudes, practices, and aesthetics amongst the employees of a company. This can apply across an entire organisation, and specific offices or teams may even develop their own variations of the overarching company culture.

It’s important to remember that business culture does not necessarily need to be dry or overly focused on merely boosting productivity and efficiency. Rather the best types of company cultures are the ones that make employees anticipate coming to work on a good note, and help to increase the day-to-day satisfaction of your employees, colleagues, and coworkers. 

Building a distinct organisational culture also has other benefits including significantly boosting employee morale, creating shared modes of communication and understanding across departments, and conveying a united and clear vision and mission to your target audience or customers. These also have long-term positive effects on a business by helping to encourage cross-department cooperation, and increase revenue streams through building customer trust in your business and products.

This article will discuss some of the different types of company culture an organisation might seek to foster, and how developing a consistent and positive culture in a workplace can bring your business benefits in the future.

The four types of organisational culture in a company

Business owners and managers who are embracing a people-focused approach to workplace dynamics are seeing the importance of company culture as a good way to motivate employees and make the workplace a welcoming space for all.

Merely delegating the process of building and developing your organisational structure and culture to your human resources (HR) team is not enough. Creating a strong and defined company culture takes intentional thought and innovative ideas that prioritise the day-to-day welfare and performance of employees. At the same time, it should also help your employees and colleagues be seen in a professional light.

Each business and organisation is different and will need their own unique type of organisational culture to succeed. Researchers Kim Cameron and Robert Quinn from the University of Michigan have identified four types of company culture you could adapt and implement to suit your organisation.

1. Adhocracy culture

Adhocracy culture combines necessity and bureaucracy. This form of company culture enables organisations to maintain flexibility in day-to-day operations while ensuring a rough structure is still adhered to. Adhocracy gives individuals time and attention to voice ideas and generally involves the whole team when making decisions. 

This form of company culture tends to work best with smaller companies, as larger companies might find it difficult and time-consuming to get input from each staff member during the decision-making process.

2. Clan culture

Clan culture refers to a tightly-knit company culture. This type is found in businesses run by families or friend groups, and tends to adopt a flat hierarchy. Instead, all employees are seen as equal in decision-making and close interpersonal ties may also be taken into consideration.

Benefits of clan culture include high employee collaboration, high employee engagement, and strong customer service. While mixing interpersonal ties with work may have the potential to destabilise the company, some mutually-agreed structures can be implemented to prevent the personal and professional lives of employees from getting overly intertwined. That way, close-knit employees can still remain focused on business pursuits and overcome challenges when expanding beyond their current realm and industry.

3. Hierarchy culture

Hierarchy culture is a more corporate form of company culture that is more prevalent in the standard business or workplace. This type of organisational culture is based heavily on structure, proper procedure, and following a chain of command

While flexibility and creativity are not as strongly prioritised in this type of organisational culture, the greater attention to structure allows larger businesses in particular to operate more methodically. Proactive initiatives to invite meaningful input and feedback from employees can also enable the company to better adapt to industry trends and give employees more opportunities for participation in decision-making.

4. Market culture

Market culture means a company focuses on ensuring high profit margins and keeping updated on current and upcoming trends to stay ahead of competitors in the industry. They may also encourage results-oriented projects and research with an intention to out-innovate the competition.

Examples of major companies employing market culture include Tesla and Amazon. This type of company culture strongly emphasises product quality and customer service to retain customer loyalty. While it also has the potential to affect employees’ day-to-day stress, managers and upper management can take the lead in offering high-value incentives or benefits to improve employee satisfaction.

Building a corporate culture in Malaysia

In Malaysia, the benefits of building a strong and defined organisational culture can have positive impacts beyond just creating a good work environment for your employees and staff. 

Developing a recognisable company culture can also help strengthen your relationship with current and potential consumers and customers alike by incorporating aspects of it into your social media posts and customer engagement. This can take the form of sharing behind-the-scenes posts about day-to-day happenings at the office, featuring the own voices of your employees on your social media channels, or posting about unique events such as staff retreats. This increases the relatability of your brand image, fostering customer trust and loyalty that can increase your outreach and revenue in the long run.

Case study: FashionValet

One such brand that has developed a relatable brand identity through its company culture is FashionValet, run by Vivy Yusof. As one of the most successful entrepreneurs in Malaysia, Vivy Yusof has used social media and e-commerce sites to her advantage when showcasing her one-of-a-kind workplace culture and brand persona. This has mainly been through affirming her own personal branding as a fashion influencer in the modest fashion sphere, allowing her to build strong relationships with the women who follow her for fashion inspiration.

The approach taken by Vivy Yusof also adopts some key features of clan culture, with elements of adhocracy culture interwoven. The day-to-day organisational culture at FashionValet is often described by former or current staff as motivational, dynamic, and positive, with a keen focus on teamwork and personal accountability. This has in turn created positive impressions of the brand in the mind of consumers, making the latter more likely to tailor their purchasing decisions accordingly.

Case study: Perfect Diary

With the growth of social media’s importance to a brand’s long-term success today, businesses should also look beyond their team of employees when establishing a company culture. Including consumers or Key Opinion Consumers/Leaders (KOCs/KOLs) when crafting your organisational culture allows you to create a brand identity and marketing strategy that personalises and humanises your company to your intended audience.

The KOCs or KOLs subsequently engaged as part of your marketing outreach should represent your company’s values, vision, and mission, transforming them into external ‘ambassadors’ of your internal company culture. One such brand that has grown their consumer following through a type of community-based company culture is Perfect Diary. The China-based makeup company has consistently partnered with KOCs and KOLs in Malaysia to drive brand awareness and sales of their products, particularly through micro-influencers. Micro-influencers typically have between 10,000 to 50,000 followers on their social media platforms and are characterised by working within niche industries or interests, as well as their high audience engagement rates.

Because audience members feel a deeper sense of connection to these micro-influencers, Perfect Diary is able to leverage aspects of clan culture to make the micro-influencers’ audience feel like part of Perfect Diary’s consumer base. This builds a sense of community with Perfect Diary, increasing the chance that consumers will use or purchase their products in the future.

How do I build an organisational culture in my business?

Firstly, understand that your company’s organisational culture doesn’t just affect internal employee and staff relations, but will also inform how your company presents itself to the public. Establish your company’s mission, values, brand identity, and how you want to be perceived by the general public

After doing so, understand the size of your company and figure out which company culture style works best for yourself and your staff. This will likely be a process that takes some time, and can be resource-intensive depending on how big your company is and how much of an existing company culture may already exist. Companies that are building their organisational culture from scratch, for example, may find it easier to establish certain ground rules at the start but may have to adjust them over time. Whereas companies that are trying to change or implement certain aspects of company culture may encounter resistance from employees.

Finally, show off your business’ company culture on the social media platform of your choice, as it will help generate brand awareness and relatability for your organisation. Many well-known global companies such as DHL aren’t just known and recognised by the public for their products and services, but for certain aspects of their organisational culture that make them unique and memorable. This should be done as natively as possible, with the goal to make your company seem personable and relatable to the consumer public while still building a great place to work for all employees and staff

When done right, the benefits of strong company culture are numerous and can be a defining feature in setting your business apart from the competition.