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4 Types of Company Culture: Which One Do You Follow?

Is your office becoming your second home? Do you have a lot of friends at your workplace? Well! It may be because of the unique work culture of your company. Learn more about the different types of company culture that decides everything from employee satisfaction to the company’s brand image. 


How often have you come across the web page that explains a company’s work culture while you are applying for jobs? Is it essential to know what kind of culture a company follows?


 Experts believe that company culture affects all the aspects of a company. Brand perception, employee-employer relationship, morale, job satisfaction, and willingness of stakeholders to associate with the organization; everything depends on the culture the company has adopted. 


So, it goes on to say that it is quite essential for employees to know what kind of work culture they will be working in. 

In simple words, company culture is the kind of work environment at the organization, set of core values the company believes, and instills in its business. Here we will touch upon the 4 types of company culture, their merits and drawbacks, so you know which one your company follows.


  1. Collaborative Culture – 


This is an informal and friendly style of working where co-workers are regarded as an extended family. This is also referred to as a clan culture. In this type of workplace culture, the company gives importance to teamwork rather than focussing on individual achievements. They drive the feeling of togetherness in everything they do.


There is open communication among the team members irrespective of the hierarchical levels. Work relationships, employee participation, morale, and solidarity have predominance over other considerations.


In this work culture, you will come across your superiors more as your mentors and counselors than as strict taskmasters. 


Advantages of the Collaborative Culture


  • Employees will have high morale, which will lead to excellent performance.
  • Open communication among different levels will give way to new ideas.
  • Collective ownership and responsibility.




  • Unnecessary emotions get better out of relationships.
  • Difficult to draw a line between professional and personal life


Even with these drawbacks, many companies have found success in following this type of culture. However, this also depends on the type of business you are dealing with. Most customer-facing retail companies adopt this friendly work culture to keep their employees at the peak of their performance.


2. Competing Culture – 


As the name suggests, this is a more rigid and tough culture that gives more importance to results. In this type of culture, achieving the organizational goals is given more importance than looking at a people-centric approach.  It is a cut-throat competitive environment in this type of work culture where all that matters is a success.


You will be working under an extremely pressurized environment if your company has this market-driven culture. Superior – subordinate relationships can be very complex and of a formal tone. Employees are given definite goals and deadlines without any room for delays or extensions.


The rewards in these types of working environments will also be high and measurable. 


Advantages of the market-driven culture 


  • Employees are more result-oriented and focussed on their goals.
  • Competition among peers will yield better results for the company as a whole.
  • Companies can expect more solid and measurable performance.




  • Can lead to a hostile environment in the workplace.
  • Micro-managing may lead to loss of employee morale.
  • Employees tend to experience a lot of stress and pressure 


Companies that work in regulated environments or have many statutory regulations to comply with follow this type of working style. Professionals who are quite ambitious and love working with strict deadlines often excel well in these environments. 


3. Hierarchical Culture – 


This is probably one of the oldest work cultures that have successfully made its way even to the 21st century. A company with a well-defined top-down control organization structure is said to follow a hierarchical workplace culture. Here the company lays more emphasis on the levels, authority, segregation of duties, etc. This work culture will suit companies that have clearly defined structure and authority levels. 

There are policies and guidelines for every activity with little or no room for free-thinking and innovation. 


Superiors more or less work like task-masters to get the work done, and there is an increased focus on the timely accomplishment of goals, stable performance, and reliability. 


Advantages of the Hierarchy Culture


  • Well defined and structured work environment.
  • A clear picture of expectations from employees.
  • Predictable and stable results.




  • No room for flexibility.
  • Changes and innovation are frowned upon.
  • Rigid work environment often leads to low employee morale.


Even though this type of company culture does not have a people-driven approach, it is often favored by Government institutions. Organizations that are supposed to have a more formal way of working tend to adopt this work culture to get the best out of their employees. 


4. Free Spirit Culture or Horizontal Company Culture – 


Now is the age of the start-ups where like-minded professionals collaborate to explore the market’s untapped potentials. Per se, the whole set up is experimental in nature and ever-evolving. 


Such organizations will not work well with a defined structure or level. This is where the horizontal culture comes into light. It is perfect for the informal set-up where designations or titles do not matter. People are driven by the ideas of the leaders to pursue success in the organization. 


Accountability is a voluntary concept, and there is no direct authority to enforce this in the company. Here communication between the CEO or the line staff can happen at the desk or over an E-mail. There is no definite channel of communication between the levels.


Advantages of Horizontal Company Culture


  • Ample opportunities to innovate and evolve.
  • No rigid structures or authority levels.
  • A more informal and friendly atmosphere to work in.




  • Suffers from a lack of clarity and direction.
  • Not ideal for large organizations.


This experimental work style best suits young companies who have just entered the market or firms that have an ideal combination of creative skills and managerial abilities. Fashion based companies, tech start-ups are often found using this style of working. This type of work environment also allows to improve company culture based on feedback and results. 




We have discussed the four major types of work cultures that exist today. It is also interesting to note that companies most often tend to follow a mix of some of the above to achieve their goals and keep their people happy. Which type of culture to follow completely depends on the type of business, the people it deals with, and other external factors such as regulation, market, etc. Whatever be the type of culture, company culture training is a mandatory requirement to help employees understand and adapt to particular work culture. 



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