Unit-I: Introduction

 Concept and Importance

 Historical perspectives
 Key elements
 OB model
 Communication in organization- purpose and process

Unit-II: Organization design and culture

 Principles and dimensions of Organization design
 Types of Organization design
 Organization culture: concept
 Types of Organization culture
 Impact of Organization culture on performance
 Diversity at workplace
 Unit-1

Concept and Importance

 Organizational behavior is the academic study of how people interact within groups
and its principles are applied primarily in attempts to make businesses operate more
effectively.
 The study of organizational behavior includes areas of research dedicated to
improving job performance, increasing job satisfaction, promoting innovation, and
encouraging leadership and is a foundation of corporate human resources.
 Organizational behavior is embedded in human resources such as employee
retention, engagement, training, and culture.
 Organizational behavior is a subset of organizational theory which studies a more
holistic way of structuring a company and managing its resources.
Concept of Organisational Behaviour
Organisational Behaviour is based on several fundamental principles that relate to the
nature of people and organizations. The fundamental principles of OB include:
1. Individual Uniqueness: Stemming from psychological principles, this concept
acknowledges that from birth, each person is distinct, shaped by unique
experiences that further differentiate them from others. Individuals vary across
multiple dimensions, including intelligence, physical attributes, personality,
learning abilities, and communication skills. It is the individual who bears
responsibility and makes decisions, while a group’s power is latent until its
members act in concert.
2. The Entirety of a Person: This notion suggests that an organization hires not
merely the skills of an individual but also their preferences, biases, and personal
history. One’s domestic life is intertwined with their professional existence,
necessitating that organizations provide a conducive work environment that
promotes both professional and personal growth and fulfillment.
3. Causality in Behavior: Unseemly behaviour in an individual often has
underlying causes, which could range from domestic issues to challenges in
punctuality. When such behaviour surfaces, it is incumbent upon managers to
discern the root cause and address it effectively.
4. Respect for Individual Dignity: Every person, irrespective of their position,
deserves to be treated with respect and dignity. This principle emphasizes the
importance of recognizing and valuing each job, thereby fostering the
improvement of individual aspirations and capabilities. It stands in opposition to
the notion of treating employees merely as economic instruments.
5. The organization as a social entity: Organizations function as complex social
systems, a concept derived from sociological studies. These systems are subject
to both social and psychological norms that dictate organizational activities.
Within an organization, there exists a blend of formal and informal social
structures, emphasizing the organization’s capacity for dynamic evolution over
maintaining rigid relationships. Each component within this system relies on the
others for its function.
6. Shared interests among organizational participants: The principle of mutual
interest underscores the symbiotic relationship between individuals and
organizations. Organizations come into existence and persist through a shared
interest among their members. Individuals join organizations to fulfill their
personal ambitions, while organizations depend on individuals to achieve their
collective goals. A lack of shared interest can lead to disarray within the group.
Conversely, a unified purpose galvanizes members to collaboratively address
organizational challenges rather than casting blame.
7. Holistic concept: The holistic approach to organizational behaviour synthesizes
the aforementioned six principles into a comprehensive framework. This
perspective examines the interplay between individuals and organizations,
considering the full spectrum of personal, group, organizational, and societal
dimensions. It involves taking into account the diverse viewpoints within an
organization to grasp the factors shaping behaviour. Rather than isolating
specific incidents or issues, this approach evaluates them within the broader
context that they influence and are influenced by.
Importance of Organizational Behavior
The pivotal importance of organizational behavior for businesses and organizations is
mentioned below.

Better Communication Channels and Protocols

Organizations thrive on effective communication. In essence, organizational behavior is

crucial in enhancing communication channels and protocols. Knowing the preferred modes
and means of communication among employees according to their preferences and needs
gives organizations effective information for establishing communication channels that are
suitable for all. Such knowledge promotes a sense of unity and allows information to flow
efficiently within an organization.

Creating a Comfortable Work

Employees’ wellness and productivity are directly influenced by the workplace environment.
The use of OB analysis facilitates the creation of a positive and enabling environment for
work to be carried out. Team communication and collaboration are greatly facilitated when
employees operate smoothly, regardless of whether in a conventional office or remotely.
Understanding OB is crucial, especially during a period of disruption like the COVID-19
pandemic, to allow organizations to embrace changes and maintain high employee
engagement and satisfaction levels.

Influencing Management Style

Organizational behavior provides insights into how employees respond to different

management styles. Through OB, one can determine whether an organization’s orientation
leans towards autocratic or a supporting approach matching the organization’s values and
aspirations. With this information, leaders are enabled to develop suitable policies,
communication mechanisms, and incentives that increase employees’ performance, promote
trust, and create healthy relationships between management and employees.
Building a Winning People Strategy

When employees feel positive about their work culture and working environment, they tend
to perform better in organizations. To develop a winning people strategy, one must know how
to cultivate employee growth while maintaining a healthy working environment.
Organizational behavior is critical in this regard as it focuses on enhancing relations between
employees, effective communication, and other employee-centric approaches. This practice
assists organizations in establishing workplaces that help employees perform better than
expected so that they are recognized and motivated while making them feel valued.

Influencing Human Resource Strategies

Maximizing the value of an organization’s human capital requires effective HR strategies. By

utilizing these strategies, HR professionals can focus on target groups who may require
assistance, particularly in situations where work-life balance is challenged, which has become
more challenging with the growing trend of working remotely. Using the OB data, HR may
implement motivational tools targeting the individual needs of each employee, improving
their working experience and satisfaction and as a result, they are more likely to retain their
employees and become more productive.

Conflict Resolution

Successful organizations are known for their ability to solve conflicts proactively. If analysed
early enough, organizational behavior provides opportunities for businesses to deal with
possible conflicts before they escalate. An understanding of behavioral dynamics can help
foresee or avoid undesirable outcomes of conflicts. This method safeguards the integrity of an
environment where everyone is active and available for their tasks without being distracted
by conflicts.

Historical perspectives
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Key elements
The Key Elements Of Organizational Behavior

To learn about organizational behavior would take up probably a whole college semester. But
regardless of how much material there is, there are four key elements to keep in mind when
applying organizational behavior theory to the workplace. They are people, structure,
technology, and environment.

PEOPLE

People refer to the employees working in your organization. They work either in groups or
individually and make up the whole working structure. Because the “people” element of
organizational behavior is regarded as the most important factor in a business, you should
take notice of how you treat them. There is no alternative in the quality of an employee. They
help to achieve the organization’s objectives. Learn to manage and treat them properly and in
return, your business will thrive. It’s important that you pay as much individual attention to
employees as you can. Learning how each one behaves will allow you to know how to treat
them in the workplace.

STRUCTURE

Structure relates to the roles and relationships of those in an organization. It’s important that
an employee’s role in the structure is clearly defined to them. It will lead to more work
efficiency and employees can avoid confusion. Due to engaging employees in work that fits
their skills, business goals are likely to happen.

TECHNOLOGY

With the necessary technology added to your business’ production, tasks can be performed
more effectively. Without it, work would be very difficult to perform. Its presence makes
business tasks easy not only for employees but also for you. It doesn’t just supply different
machines, tools, and resources, but also different methods to accomplish work. How much
technology you require depends on how much work needs to be done. Technology provides
an important role in work quality and reducing production costs. But be cautious of how
much technology interferes in the workplace. It can place a restriction on your employees’
freedom.
ENVIRONMENT

Finally, there is the business environment. With it, you must keep in mind both internal and
external factors. Organizations aren’t able to thrive on their own and they and the
environmental factors surrounding it include government, society, family, and even other
organizations. Organizational culture refers to the internal environment within your business
structure. The external environment will pertain to political, social, cultural, and economic
factors. Make sure to study all these factors properly for the benefit of your business and
make necessary changes where you see fit.

OB model

MODELS OF ORGANISATIONAL BEHAVIOUR

The five models of organizational behaviour are the:

 autocratic model,
 custodial model,
 supportive model,

 collegial model

 system model.

Autocratic model
Autocratic model is the model that depends upon strength, power and formal
authority. In an autocratic organisation, the people (management/owners) who manage the
tasks in an organisation have formal authority for controlling the employees who work under
them. These lower-level employees have little control over the work function. Their ideas and
innovations are not generally welcomed, as the key decisions are made at the top
management level.
The guiding principle behind this model is that management/owners have enormous business
expertise, and the average employee has relatively low levels of skill and needs to be fully
directed and guided. This type of autocratic management system was common in factories in
the industrial revolution era.
One of the more significant problems associated with the autocratic model is that the
management team is required to micromanage the staff – where they have to watch all the
details and make every single decision. Clearly, in a more modern-day organisation, where
highly paid specialists are employed an autocratic system becomes impractical and highly
inefficient

custodial model,
The custodial model is based around the concept of providing economic security for
employees through wages and other benefits – that will create employee loyalty and
motivation.
In some countries, many professional companies provide health benefits, corporate cars,
financial packaging of salary, and so on – these are incentives designed to attract and retain
quality staff.
The underlying theory for the organisation is that they will have a greater skilled workforce,
more motivated employees, and have a competitive advantage through employee knowledge
and expertise.

supportive model,

Unlike the two earlier approaches, the supportive model is focused around aspiring
leadership. It is not based upon control and authority (the autocratic model) or upon
incentives (the custodial model), but instead tries to motivate staff through the manager-
employee relationship and how employees are treated on a day-to-day basis.
Quite opposite to the autocratic model, this approach states that employees are self-motivated
and have value and insight to contribute to the organisation, beyond just their day-to-day role.
The intent of this model is to motivate employees through a positive workplace where their
ideas are encouraged and often adapted. Therefore, the employees have some form of “buy-
in” to the organisation and its direction.

Collegial model
 The collegial model is based around teamwork – everybody working as colleagues
(hence the name of the model). The overall environment and corporate culture need to be
aligned to this model, where everybody is actively participating – is not about status and job
titles – everybody is encouraged to work together to build a better organisation.
The collegial model is quite effective in organisations that need to find new approaches –
marketing teams, research and development, technology/software – indeed anywhere the
competitive landscape is constantly changing and ideas and innovation are key competitive
success factors.

System model.
The final organisational model is referred to as the system model. This is the most
contemporary model of the five models discussed in this article. In the system model, the
organisation looks at the overall structure and team environment, and considers that
individuals have different goals, talents and potential.
The intent of the system model is to try and balance the goals of the individual with the goals
of the organisation. Individuals obviously want good remuneration, job security, but also
want to work in a positive work environment where the organisation adds value to the
community and/or its customers.
The system of model should be an overall partnership of managers and employees with a
common goal, and where everybody feels that they have a stake in the organization
Communication in organization- purpose and process

Business communication is important to managers as it helps them carry out their basic
functions within the organization. They should have all the information pertaining to the
specific tasks as well as the entire organization and must then seek to communicate this
information to the employees of the organization. They should seek to communicate their
goals to their subordinates in order to make sure every member of the organization is
working to achieve the goals of the organization.

A great part of the time spent by a manager in an organization is devoted to

communication. Whether that communication is face to face or using some other channel, it
takes up a healthy chunk out of the manager’s day.

The purpose of business communication can be summarized into a few main functions:

Motivation

Managers need to communicate to employees the tasks they need to carry out, the timelines
of these tasks, and the manner in which the tasks should be carried out. However,
communication isn’t just about allowing them to do this. It is also about allowing them to
do it in a way that motivates the employees to work harder and better. A good
communicator knows how to lace their message with just the right amount of motivation to
make the receiver genuinely want to accept the message.

The Sharing of Information

Communication represents the cogs in the wheels of an organization that allow information
to flow from one place to another. In order for decisions to be made more effectively within
the organization, there should first be a smooth flow of information. That way, the major
decision-makers know that the decisions they are making have taken all of the facts into
consideration and are up to date.

Socialization

Business isn’t all about work. Sometimes it is also about play and getting people to open up
and simmer down. Communication helps with the socialization aspect of business as well.
It is a normal part of human nature that we will always want to open up and communicate
when we are in the presence of other individuals. Whether it is regular banter between
employees or socialization for the purpose of networking at business parties,
communication makes it possible for business people to talk to each other casually in social
settings and is involved in creating goodwill in business communication.

Control

One of the key functions of a manager is control. Typically, a manager will want to control
the behaviors and actions of the employees within an organization. However, these
employees are not robots, and they cannot be controlled or be coerced to do anything. That
is where communication comes in. To get your employees to do anything, you have to
communicate what you want to your employees.

Process of communication

The communication process consists of the following elements:

(i) Sender: The person who conveys the message is known as the sender or communicator.
He may be a speaker, a writer or an actor.
(ii) Message: It is the subject matter of communication. It may consist of facts, information,
ideas, opinions, etc. It exists in the mind of the sender.
(iii) Encoding: The sender translates the message into words, gestures or other symbols,
which he feels will make the receiver understand the message.
(iv) Channel or media: The encoded message is transmitted through some medium, which is
known as the communication channel.
E.g.: Speaking, writing, phone call, internet, etc.
(v) Decoding: It means the process of conversion of symbols into the message by the
receiver.
(vi) Receiver: The person, who receives the message, is called the receiver. The receiver may
be a listener, reader or viewer.
(vii) Feedback: The receiver sends his response to the sender of the message. Such a response
is known as feedback.
(viii) Noise: It means an obstruction or hindrance in the communication process

Unit-II: Organization design and culture

Principles and dimensions of Organization design

Principles of Organization Design:

Organizational design is the process of aligning an organization's structure, processes, and
systems to achieve its goals and objectives. The principles of organizational design include:

 Alignment with Strategy: Organizational design should be aligned with the

organization's strategy, mission, and goals. The design of the organization should
support its strategic objectives, and the structure should enable the organization to
achieve its goals effectively.

 Clear Roles and Responsibilities: The roles and responsibilities of each position in
the organization should be clearly defined to ensure accountability and avoid
confusion. This helps to ensure that everyone knows what is expected of them, and
who they are accountable to.

 Optimal Span of Control: The span of control should be optimal to ensure effective
communication, supervision, and decision-making. This means that managers should
have the appropriate number of subordinates reporting to them, based on the nature of
the work and the level of responsibility.

 Flexibility: Organizational design should be flexible to accommodate changing

market conditions, technology, and customer needs. This means that the organization
should be adaptable and able to respond to changes in the external environment
quickly.

 Efficiency: Organizational design should aim to minimize costs, reduce waste, and
increase productivity. This means that the organization should be structured in a way
that enables it to operate efficiently, with minimal duplication of effort and resources.

In addition to these principles, there are several key factors that organizations should consider
when designing their structure:

 Size: The size of the organization can impact the design of the structure. Smaller
organizations may have a flatter structure, while larger organizations may have a
more hierarchical structure.

 Geographic dispersion: If the organization operates in multiple locations, the design

of the structure should take into account the need for coordination and communication
across different locations.

 Complexity of work: The design of the structure should be appropriate for the
complexity of the work that the organization performs. More complex work may
require a more specialized structure.

 Organizational culture: The design of the structure should be consistent with the
organization's culture. For example, if the organization values collaboration and
teamwork, the structure should support this by promoting cross-functional
communication and collaboration.

Overall, effective organizational design is critical to the success of any organization. By

aligning the structure, processes, and systems with the organization's strategy and goals, and
ensuring clarity around roles and responsibilities, optimal span of control, flexibility, and
efficiency, the organization can achieve its objectives and remain competitive in a rapidly
changing environment.
Dimensions of Organizational Design:
Organizational design is the process of aligning an organization's structure, processes, and
systems to achieve its goals and objectives. The dimensions of organizational design include:

1. Structure: The structure of the organization defines how different units, departments,
and functions are organized and how they interact with each other. The structure
should be designed to facilitate communication and collaboration, promote efficiency
and effectiveness, and enable the organization to achieve its goals.
There are several different types of organizational structures, including hierarchical, matrix,
network, and flat. The choice of structure will depend on the organization's size, complexity,
and the nature of the work that it performs.

2. Processes: The processes of the organization refer to how work is carried out and
how different activities are coordinated. Effective processes are critical to ensuring
that work is carried out efficiently and effectively, and that resources are utilized
optimally.
Processes should be designed to be clear, well-defined, and consistent, with clearly defined
roles and responsibilities, and appropriate workflows and procedures. This includes processes
for decision-making, communication, and coordination across different parts of the
organization.

3. Systems: The systems of the organization refer to the technology, tools, and resources
used to support and enable work. This includes software, hardware, and other tools
that are used to support communication, collaboration, and other business processes.
Systems should be designed to be flexible, scalable, and user-friendly, with the ability to
support the organization's goals and objectives. This includes selecting the right technology
and tools, as well as implementing effective training and support programs to ensure that
employees are able to use the systems effectively.

4. Culture: The culture of the organization refers to the shared values, beliefs, and
norms that guide behavior and decision-making. The culture of the organization is
critical to its success, as it shapes how employees behave, interact, and make
decisions.
Culture should be designed to be consistent with the organization's goals and values, and
should be reinforced through training, communication, and leadership. This includes
developing a strong sense of shared purpose and values, as well as creating an environment of
trust, transparency, and collaboration.

5. People: The people dimension of organizational design includes aspects such as

recruitment, training, development, and performance management. This includes
hiring and retaining the right people with the right skills and experience, and ensuring
that they are trained, developed, and managed effectively.
Types of Organization design

Functional Organizational Design: This is the most traditional and common type of
organizational design. It groups employees based on their functions or specialized skills, such
as marketing, finance, human resources, and operations. Each functional area operates
independently and has its own hierarchy.
Divisional Organizational Design: In this design, the organization is divided into self-
contained divisions or business units, each responsible for a specific product, service, or
geographic region. Each division has its own functional areas, such as marketing, finance,
and operations, which support the division's unique needs.
creates a dual reporting structure where employees report to both a functional manager and a
divisional manager. It is useful for organizations that need to balance both functional
expertise and project or product focus.
Team-Based Organizational Design: This design emphasizes cross-functional teams that
work together on specific projects or goals. Teams are self-managed and have the authority to
make decisions. This design promotes collaboration, communication, and innovation.
Network Organizational Design: This design involves the use of strategic partnerships,
outsourcing, and subcontracting to create a network of external organizations that work
together to achieve a common goal. It allows organizations to focus on their core
competencies while leveraging the expertise of external partners.
Virtual Organizational Design: This design is characterized by a geographically dispersed
workforce that collaborates electronically. Virtual organizations rely heavily on technology
and communication tools to connect and coordinate their activities.
Flat Organizational Design: In this design, there are few or no levels of middle
management. Decision-making authority is decentralized, and employees have more
autonomy and responsibility. It promotes faster communication, a more agile decision-
making process, and a flatter hierarchy.
Hierarchical Organizational Design: This design is characterized by multiple levels of
management and a clear chain of command. Decision-making authority flows from top to
bottom, and there is a well-defined hierarchy of power and control.
It's important to note that organizations can combine elements from different designs or
create hybrid structures to suit their specific needs. The choice of organizational design
depends on factors such as the organization's size, goals, industry, culture, and external
environment

Organization culture: concept

Every organisation has a unique personality, just like individuals. This unique personality of
an organisation is the culture. Organisational culture is either built and maintained by
founders to grow their organisation in a particular direction or develops over time from the
interactions of people working in the organisation. Organisational culture is essential for
developing the traits necessary for success. It defines how individuals behave and function
when working together. The main goal of companies is to foster a productive, healthy and
positive culture.

Importance of organizational culture

1. Increased employee engagement
A work environment that possesses organizational culture is driven by purpose and clear
expectations. This motivates and inspires employees to be more engaged in their work duties
and interactions with others. It also leads to high levels of workforce engagement, which
drives productivity. Having a strong connection to an organization and its people creates an
atmosphere of positivity that is hard to ignore.
2. Decreased turnover
People who feel valued and respected at a company are less likely to leave it. That's why it's
essential for brands to foster a winning organizational culture that supports their core values
and mission statement. Happy employees mean less turnover, which saves companies time
and money in the hiring process. Companies that achieve a strong culture must take steps to
maintain and improve it.
3. Elevated productivity
When employees have the resources and tools they need to succeed, it helps increase
productivity and performance levels overall. Organizational culture impacts the structure of a
workplace in ways that bring people of the same skill set together. Those who share similar
backgrounds and skills may work more quickly together when tackling company
4. Strong brand identity
A company's organizational culture represents its public image and reputation. People make
assumptions about businesses based on their interactions within and outside of the company.
If it lacks organizational culture or has a weak image, customers may hesitate to do business
with anyone who is associated with the brand. Businesses with a strong brand identity tend to
attract more business and job candidates with similar values who support their mission.
5. Transformational power
Not all businesses have the power to transform ordinary employees into total brand
advocates, but those with a strong organizational culture do. Companies that recognize their
employees' efforts and celebrate team successes are more likely to notice a change in
employees as they experience a sense of accomplishment.
6. Top performers
Companies that promote community in the workplace are more likely to retain their best
employees. People who are great at their jobs and know the value of their skills commonly
leave negative work environments where they feel undermined and unappreciated.
Organizational culture builds a high-performance culture that strengthens the work of people
within the company, resulting in a positive employee experience
7. Effective onboarding
More and more, businesses with an organizational culture are relying on effective onboarding
practices to train new hires. Onboarding practices that include orientation, training and
performance management programs help new employees access the right resources and better
transition into their roles. This promotes employee longevity and loyalty and reduces the
amount of frustration some employees experience when they don't have the information
needed to do their job well. Onboarding is a great way for companies to ensure new hires
understand the core values of their business.
8. Healthy team environment
Organizational culture helps improve workflows and guides the decision-making process. It
also helps teams overcome barriers of ambiguity. Team members who are informed and
knowledgeable about certain processes are often more motivated to finish projects. Having a
clear culture that unifies employees and promotes organized work structures helps people
work together with purpose.

improve organizational culture

1. Communicate well
Knowing how to communicate well is the best way to improve organizational culture.
Miscommunication is the main reason people become unsatisfied with their jobs and start
looking for other opportunities. Help your team have a better experience by doing your part
to communicate well. When sending emails and contributing to meetings, try to share your
ideas in the clearest possible way. Sometimes it helps to provide people with the background
information of an issue or give specific examples. When people seem confused, look for
ways to simplify your message.
2. Listen to concerns and ideas
If you're in a leadership position, provide your employees with a public (or anonymous)
platform that makes it easy for them to share their opinions. Encourage one-on-one meetings
with team members to allow them to speak openly, yet privately about sensitive concerns.
Letting employees know they can come to you when they have questions helps them feel
valued.
3. Encourage feedback
If you notice that a certain aspect of the company needs improvement, take time to provide
feedback regarding the issue and encourage others to do the same. Some companies have
policies in place that dictate the process of giving feedback, while others are more relaxed.
When leaving feedback, keep your communication professional and honest. Provide details
and offer possible solutions to any problems the company is facing.

4. Be consistent
Being consistent in your leadership efforts helps people experience a sense of stability. Once
a company's organizational structure is in place, do your best to maintain processes and
procedures. Treat everyone in the same professional manner and avoid giving preferential
treatment.

Types of Organization culture

Organizational culture, or company culture, is the shared values, attitudes and practices that
make up the identity of an organization. It largely shapes employee behavior and interactions
within a company.
TYPES OF ORGANIZATIONAL CULTURE

 Clan Culture: emphasizes collaboration across teams and a horizontal structure.

 Adhocracy Culture: allows individuals to share ideas and encourages the company
to take risks.
  Market Culture: focuses on financial success and how each employee contributes to
revenue.
 Hierarchy Culture: emphasizes career paths and provides clear managerial
processes.
TYPE 1: CLAN CULTURE

Primary Focus: Mentorship and teamwork.

Motto: “We’re all in this together.”

About Clan Culture: A clan culture is people-focused in the sense that the company feels
family-like. This is a highly collaborative work environment where every individual is valued
and communication is a top priority. Clan culture is often paired with a horizontal structure,
which helps to break down barriers between the C-suite and employees, and it
encourages mentorship opportunities. These companies are action-oriented and embrace
change, a testament to their highly flexible nature.

Advantages of Clan Culture: Clan cultures boast high rates of employee engagement, and
happy employees make for happy customers. Because of its highly adaptable environment,
there’s a great possibility for market growth within a clan culture.

Disadvantages of Clan Culture: A family-style corporate culture is difficult to maintain as

the company grows. Plus, with a horizontal leadership structure, day-to-day operations can
seem cluttered and lacking direction.

TYPE 2: ADHOCRACY CULTURE

Primary Focus: Risk-taking and innovation.

Motto: “Risk it to get the biscuit.”

About Adhocracy Culture: Adhocracy cultures are rooted in innovation and adaptability.
These are the companies that are on the cutting-edge of their industry — they’re looking to
develop the next big thing before anyone else has even started asking the right questions. To
do so, they need to take risks. Adhocracy cultures value individuality in the sense that
employees are encouraged to think creatively and bring their ideas to the table. Because this
type of organizational culture falls within the external focus and differentiation category, new
ideas need to be tied to market growth and company success.

Advantages of Adhocracy Culture: An adhocracy culture contributes to high profit margins

and notoriety. Employees stay motivated with the goal of breaking the mold. Plus, with a
focus on creativity and new ideas, professional development opportunities are easy to justify.

Disadvantages of Adhocracy Culture: Risk is risk, so there’s always a chance that a new
venture won’t pan out and may even hurt your business. Adhocracy cultures can also foster
competition between employees as the pressure to come up with new ideas mounts.

TYPE 3: MARKET CULTURE

Primary Focus: Competition and growth.

Motto: “We’re in it to win it.”

About Market Culture: Market culture prioritizes profitability. Everything is evaluated with
the bottom line in mind; each position has an objective that aligns with the company’s larger
goal, and there are often several degrees of separation between employees and leadership
roles. These are results-oriented organizations that focus on external success rather than
internal satisfaction. A market culture stresses the importance of meeting quotas, reaching
targets and getting results.

Advantages of Market Culture: Companies that boast market cultures are profitable and
successful. Because the entire organization is externally focused, there’s a key objective
employees can get behind and work toward.

Disadvantages of Market Culture: On the other hand, because there’s a number tied to
every decision, project and position within the company, it can be difficult for employees to
meaningfully engage with their work and live out their professional purpose. There is also
risk for burnout in this aggressive and fast-paced environment.
TYPE 4: HIERARCHY CULTURE

Primary Focus: Structure and stability.

Motto: “Get it done right.”

About Hierarchy Culture: Companies with hierarchy cultures adhere to the traditional
corporate structure. These are companies focused on internal organization by way of a clear
chain of command and multiple management tiers that separate employees and leadership. In
addition to a rigid structure, there’s often a dress code for employees to follow. Hierarchy
cultures have a set way of doing things, which makes them stable and risk-averse.

Advantages of Hierarchy Culture: With internal organization as a priority, hierarchy

cultures have clear direction. There are well-defined processes that cater to the company’s
main objectives.

Disadvantages of Hierarchy Culture: The rigidity of hierarchy cultures leaves little room
for creativity, making these companies relatively slow to adapt to the changing marketplace.
The company takes precedence over the individual, which doesn’t necessarily encourage
employee feedback.

FLEXIBILITY AND INNOVATION

ADHOCRACRY
FOCUS THE CLAN CULTURE CULTURE
INTERNAL FOCUS AND
EXTERNAL
AND
INTEGRATION HIERARCHY
CULTURE MARKET CULTURE

STABILITY AND CONTROL

Other Types of Organizational Culture

PURPOSE CULTURE

Purpose culture focuses on a company’s mission and core values. These aspects drive the
culture. Often companies with this culture will have a mission of changing an industry or
community for the better. One example of this can be seen in Patagonia’s mission statement:
“We’re in business to save our home planet.”

COACHING CULTURE

In a company with a coaching culture senior leadership is responsible for mentoring their
employees and ensuring that individuals advance in their careers. Various coaching
techniques, such as providing assessments on specific projects or one-on-one meetings where
expectations and personal goals are discussed, typically drive this style of culture.

ACCOUNTABILITY CULTURE

Accountability culture means that everyone within the organization, including the CEO and
senior leadership, are responsible and held accountable for their own actions and
performance. This can look like employees taking ownership of their mistakes and openly
questioning how they can learn from them as well as recognizing colleagues when they have
excelled in their role.

LEARNING CULTURE

Companies with a learning culture put a special emphasis on learning and development
opportunities. These organizations often have company-wide workshops and encourage
employees to learn skills outside of what is immediately required for their role,
providing stipends for various educational opportunities.
Impact of Organization culture on performance

Employee Engagement: An organization culture that values and respects its employees can
lead to higher levels of employee engagement. Engaged employees are more committed to
their work, have higher job satisfaction, and are more likely to stay with the organization for
a longer time.
Communication: A strong organizational culture encourages open communication, both
within the organization and with external stakeholders. Effective communication leads to
better collaboration, increased trust, and better decision-making, which ultimately leads to
improved performance.
Innovation: An organization culture that encourages innovation and creativity can lead to the
development of new products and services, which can increase revenue and market share.
When employees feel comfortable sharing their ideas and taking risks, they are more likely to
come up with innovative solutions.
Performance Management: An organization culture that focuses on performance
management can lead to higher levels of accountability and better performance. When
employees know what is expected of them and are held accountable for their performance,
they are more likely to meet or exceed expectations.
Diversity and Inclusion: An organization culture that values diversity and inclusion can lead
to increased innovation, better decision-making, and improved performance. When
employees feel that their differences are valued and respected, they are more likely to bring
their unique perspectives to the table and contribute to the success of the organization.

Diversity at workplace

Increased Innovation: When people from different backgrounds come together, they bring
unique perspectives and experiences that can lead to new and innovative ideas. A diverse
workforce can lead to increased creativity and innovation, which can give an organization a
competitive advantage.

Improved Problem-Solving: When employees come from different backgrounds and have
different experiences, they can bring different approaches to problem-solving. This can lead
to more effective problem-solving and decision-making in the workplace.
Increased Employee Satisfaction: Employees who feel valued and included in the
workplace are more likely to be satisfied with their jobs. A diverse workforce can help
employees feel that they are part of a team and that their contributions are valued, leading to
increased job satisfaction and employee retention.

Improved Customer Relations: A diverse workforce can help an organization better

understand and relate to its customers, who may also be diverse. Employees from different
backgrounds can provide insights into the needs and preferences of different customer
casements, which can help an organization develop more effective products and services.

Compliance with Regulations: Many countries have laws and regulations that require
organizations to have diverse workforces. By having a diverse workforce, organizations can
comply with these regulations and avoid legal issues.