Various business management theorists have introduced models of the types of corporate culture because there is no one common theory of the different models of organizational culture. It is mainly because businesses are very different in the ways that they operate.
John Kotter and James Heskett proposed a theoretical model of corporate culture that includes two types of corporate culture such as adaptive cultures and inert cultures regarding attitudes towards adaptability to change.
Dimensions of corporate culture by John Kotter and James Heskett
Every business organization has its own mix of the following dimensions of corporate culture including:
- Adaptability. The ability to change and respond to external forces effectively.
- Integration. The degree to which employees work together collaboratively and share common goals.
Types of corporate culture by John Kotter and James Heskett
Based on different mix of dimensions, the following types of organizational culture can emerge:
- Adaptive cultures. These cultures are receptive to change and outward looking not being willing to accept change. They exist in business organizations that hold positive values of any change to their culture, therefore adapt themselves to changing circumstances. Management and employees are encouraged to be entrepreneurial and take risks as there is no culture of blame. Decisions in adaptive cultures are decentralized. Employees do things in the different way and have power to make any decisions. As adaptive cultures are proactive to changes, they exist in innovative organizations such as Google.
- Inert cultures. These cultures are resistant to change and inward looking being willing to accept change. They exist in business organizations that hold negative values of any change to their culture, therefore adapt themselves to changing circumstances. Management and employees encourage disinterest and opposition to be entrepreneurial and take risks as there is culture of blame. Decisions in adaptive cultures are centralized. Employees do things in the same way and have no power to make any decisions. As inert cultures are reactive to changes, they exist in bureaucratic organizations such as Bank of China.
Four cultural types according to John Kotter and James Heskett include:
- Fragmented culture. Low on both adaptability and integration, leading to inefficiency and poor performance.
- Authoritarian culture. High on adaptability but low on integration, driven by strong leadership but potentially lacking employee buy-in.
- Clan culture. High on integration but low on adaptability, fostering collaboration but potentially resistant to change.
- Market culture. High on both adaptability and integration, characterized by flexibility, collaboration, and a strong focus on performance.
It is important to note that these are just two types of corporate culture, and in reality, most companies will have a culture that is a mix of these types. The best type of corporate culture for a company will depend on a variety of factors, such as the company’s industry, size, and stage of development.
