A successful corporate culture is crucial for the efficiency, productivity and general well-being of employees in an organization. This overview is dedicated to the most important organizational culture models and their importance for organizations.
The importance of a healthy corporate culture cannot be underestimated. It influences employee loyalty, motivation, innovative strength and the performance of a company. Take a look at our article Organizational Corporate Culture: Basics to 6-Step Roadmap to find out more.
We will look at the most prominent organizational culture models. These models offer different approaches to developing a healthy corporate culture, and we will highlight their pros and cons to help readers choose the model that best suits their organization. After all, corporate culture is not only a competitive advantage, but also the key to long-term success. Fancy more concrete examples? We’ve taken a closer look at the 10+ best-known examples of corporate culture from renowned companies. ๐
- Schein’s Three-Level Model
- Hofstede’s Cultural Dimensions
- Denison’s Organizational Culture Model
- Cameron and Quinn’s Competing Values Framework
- Handy’s Cultural Types
- Bonus: The Iceberg Model
1. Scheinโs Three-Level Model
Schein’s three-level model of culture provides an in-depth analysis of organizational culture by dividing it into three interrelated levels: Artifacts, Espoused Values and Fundamental Assumptions. Each of these levels contributes to shaping organizational culture in different ways.
Artifacts
This level represents the obvious and visible aspects of the corporate culture. They are comparable to the tip of the iceberg that is visible above the surface of the water. Artifacts include things like rituals, symbols, business practices and the visible organizational structure. For example, regular team meetings or an open office concept can serve as artifacts that indicate cultural traits. While these external features provide initial clues to an organization’s culture, they can often be ambiguous or misleading, as they can be easily manipulated to give a desired impression.
Espoused Values
At the next level, we look at the stated values and norms that are officially propagated by the organization. These values are usually set out in mission statements, mission statements and official documents. These are the ideals and principles that the organization claims to follow. An example could be the emphasis on ethics and sustainability, which is clearly emphasized in corporate communications. However, there is often a discrepancy between espoused values and actual practice, which is one of the challenges of analyzing corporate culture.
Basic assumptions
The deepest and most difficult level to grasp are the fundamental assumptions. These are the deeply rooted, often unconscious beliefs and values that significantly influence the behavior of employees in the organization. These assumptions are so self-evident that they are rarely questioned. They can relate to issues such as the way power and authority are perceived, how conflicts are handled or how decisions are made. An example of underlying assumptions could be that hierarchy and command and obedience are seen as the only acceptable leadership style, and this influences all activities in the organization.
Advantages and disadvantages:
- โ In-depth analysis
- โ Differentiated view
- โ
Precise analysis of the culture
- โ Complex
- โ Subjective
- โ Time-consuming
Video: Company culture according to Schein
2. Hofstedeโs Cultural Dimensions
Hofstede’s cultural dimensions provide an important framework for examining cultural differences and their impact on organizations and societies. These dimensions, developed by Geert Hofstede, emphasize the different values and attitudes that prevail in different cultures. Each dimension contributes to the formation of cultural identity and influences the behavior of individuals and groups in organizations. Here is a detailed look at each dimension:
- Power Distance: This dimension describes the extent to which a culture accepts inequality and power differences. In cultures with high power distance, there is a strong hierarchy and subordinates are expected to show respect and obedience to superiors. In cultures with low power distance, hierarchies are flatter and communication between employees and superiors is more open.
- Individualism vs. Collectivism: This dimension refers to the extent to which individuals in a culture prioritize themselves over the community. In individualistic cultures, the emphasis is on personal freedom, self-responsibility and individual achievement. In contrast, collectivist cultures emphasize community, family ties and cooperation.
- Masculinity vs. Femininity: This dimension looks at how strongly a culture emphasizes gender roles. Masculine cultures are characterized by emphasized differences between the sexes, competition and striving for success. Feminine cultures emphasize social responsibility, caring and the reduction of gender differences.
- Uncertainty Avoidance: This dimension refers to a culture’s ability to tolerate uncertainty and change. In cultures with high uncertainty avoidance, there are strict rules, a low tolerance for deviation and a pronounced fear of the unknown. In cultures with low uncertainty avoidance, the acceptance of uncertainty and change is higher.
- Long-Term Orientation vs. Short-Term Orientation: This dimension looks at whether a culture has a long-term or short-term time horizon. Long-term oriented cultures focus on thrift, perseverance and the fulfillment of future goals. Short-term oriented cultures place more value on traditions, immediate rewards and maintaining the status quo.
- Indulgence vs. Restraint: This dimension describes a culture’s relationship to indulgence and self-control. Cultures with high indulgence tend to value pleasure and leisure, while cultures with high self-control prefer self-discipline and restraint.
Advantages and disadvantages:
- โ Intercultural communication
- โ Instructions for management
- โ Identifying and resolving conflicts
- โ Does not include individual variations
- โ Does not take change into account
- โ Does not cover all factors
Strengthening corporate culture
Only a strong culture is a good culture. We work with our clients on complex challenges relating to corporate culture that may also be relevant to you and your team. Find out more about our Workshops on culture and team development.
3. Denisonโs Organizational Culture Model
Denison’s Organizational Culture Model provides a useful structure for analyzing and improving corporate culture. This model is divided into four main dimensions:
Mission
The mission represents the overarching goal and vision of the organization. It is crucial that the mission is clear and inspiring, as it sets the direction and motivates employees. A clear mission helps employees understand the purpose of their work and identify with the organization’s goals.
Consistency
Consistency refers to the unity and clarity of values and practices within the organization. It is important that the values set out in the organization’s mission and principles are reflected in the daily activities and decisions of employees. A lack of consistency can lead to confusion and conflict.
Participation
The participation dimension deals with the extent to which employees are involved in decision-making processes. A high level of participation means that employees are actively involved in shaping strategies and decisions, which can strengthen commitment and identification with the organization. At the same time, it enables the integration of different perspectives, which can improve the quality of decision-making.
Customization
Adaptability is of crucial importance as it describes the organization’s ability to manage change and adapt to new circumstances and market conditions. Organizations that demonstrate adaptability are better able to respond to new opportunities and challenges. This often requires the promotion of a learning and innovation climate.
Advantages and disadvantages:
- โ Holistic analysis
- โ Measurable criteria
- โ Guidelines for improvements
- โ Complex
- โ Dependant on surveys
- โ External factors not taken into account
4. Cameron und Quinnโs Competing Values Framework
Cameron and Quinn’s Competing Values Framework is a powerful model for analyzing organizational cultures that identifies and emphasizes four main cultures. Each of these cultures has its own distinctive characteristics and priorities:
- Clan culture: This culture emphasizes collaboration and teamwork. In a clan culture, employees are often connected to each other like a “family”. Here, the development of common values and relationships, the sharing of knowledge and experience as well as an informal working atmosphere are at the forefront. Hierarchical structures are less pronounced and value is placed on maintaining relationships and employee satisfaction.
- Adhocracy culture: Adhocracy culture is innovative, flexible and experimental. It promotes creativity and openness to change. In this culture, employees are encouraged to develop new ideas and take risks. It is a culture that is particularly suited to organizations that operate in fast-paced and constantly changing environments.
- Hierarchy culture: The hierarchy culture emphasizes control, efficiency and clear structures. In this culture, there are clear hierarchies, processes and clear responsibilities. The focus is on efficiency and results orientation. Organizations with a hierarchy culture value clear rules and structures to ensure that tasks are completed effectively.
- Market culture: The market culture is competitive and results-oriented. The focus here is on competition, achieving goals and maximizing economic success. This culture promotes performance, a focus on results and a willingness to operate in competitive markets. Employees are encouraged to deliver outstanding performance. More about the different organizational structures.
Advantages and disadvantages:
- โ Versatile
- โ Clear cultural identification
- โ Strategic adjustment
- โ Subjective
- โ Oversimplification of reality
- โ Does not take all factors into account
5. Handyโs Cultural Types
Handy’s culture types provide a focused look at the different types of organizational cultures and how they shape the way organizations work and behave. Here are the descriptions of each culture type:
Power culture
The power culture is characterized by a strong concentration of power in the organization. Authoritarian and hierarchical behavior is encouraged here. Decisions are usually made from the top down and the emphasis is on asserting power and control. Employees in a power culture can often find themselves in a more hierarchical and disciplined environment where command and obedience play a central role.
Task culture
In a task culture, the focus is on tasks, efficiency and goal orientation. Here clear goals are set and employees are expected to pursue these goals effectively and without distractions. There is often an emphatically professional environment in which the focus is on performance and task completion. The aim here is to complete tasks precisely and efficiently.
Personal culture
The people culture focuses on the needs and satisfaction of employees. Here, great importance is placed on the relationships between employees and on creating a supportive and pleasant working environment. Employees in a people culture often feel part of a close-knit community in which personal needs and social interaction play an important role.
Role culture
In a role culture, the emphasis is placed on compliance with rules and procedures. Clear structures and defined roles are expected here. The organization follows a clear set of rules and employees are guided by their specific tasks and functions. This type of culture is particularly common in highly regulated or bureaucratic organizations.
Advantages and disadvantages:
- โ Simplicity
- โ Can improve teamwork
- โ Clear cultural identification
- โ Subjective
- โ Oversimplification of reality
- โ Does not take all factors into account
Bonus: The Iceberg Model
Although the iceberg model is mainly used in fields such as psychology, social sciences or communication sciences, it can also be helpful in understanding the culture of a company.
The iceberg model is a metaphor that illustrates that corporate culture is similar to an iceberg. A large part of it lies beneath the surface and is not immediately visible, while only a small part rises above it and is visible. This model illustrates that there are visible and invisible elements in a corporate culture.
- Visible elements: The visible elements of corporate culture are easily recognizable and include things like company missions, values, symbols, rituals and the way employees dress or how the office is designed. These aspects are comparatively easy to identify.
- Invisible elements: However, the invisible elements that lie beneath the surface are just as important, if not more so. These include the deeply rooted beliefs, values, norms and assumptions that shape the behavior of employees and the decision-making processes in the company. These invisible elements are often difficult to recognize, require time and empathy to understand, and can have a significant impact on the way the company works and its success.
The iceberg model emphasizes that companies that want to develop a healthy and effective culture should not only address the visible aspects, but also understand and promote the invisible elements of culture. A positive company culture can promote employee satisfaction, engagement and ultimately the success of the company.
Advantages and disadvantages:
- โ Deeper understanding of culture
- โ Long-term success
- โ Holistic view
- โ Complex
- โ Subjective
- โ Time-consuming
