Question

Define and give examples of the four types of organizational culture found in MNC’s. Include advantages/disadvantages of each.

Answer 1

There are the following four kinds of cultures found in the multinational organization:

1. The clan culture,

2. The adhocracy culture,

3. The market culture, and

4. The hierarchy culture.

1.

The clan culture: It is a tribe or family-like culture. It promotes teamwork. Members of this organizational culture see themselves as a large family. The organization is bound by the traditions, values, and commitments and the leader acts as a mentor to the employees. It is the least competitive culture.

Example: Tom's of Maine is an example of a clan culture.

Advantages: It has the following advantages:

i. It provides a supportive environment to the employees,

ii. Culture is rich in values, and

iii. It brings success to the organization.

Disadvantages: It has the following disadvantages:

i. Lack of diversity,

ii. Lack of authority, and

iii. Lack of dissent.

2. The adhocracy culture: It is a positive energy and creativity-based culture. In this culture, employees are encouraged to take risks and think out of the box and leaders are seen as visionaries. The core values are based on dexterity and change. The organization promotes research and innovation.

Example: Facebook is an example of the adhocracy culture.

Advantages: It has the following advantages:

i. It promotes creativity and innovation,

ii. Individuals feel independent, and

iii. Flexible work environment.

Disadvantages: It has the following disadvantages:

i. Lack of risk management,

ii. High dependence on technology, and

iii. Lack of clear communication.

3.

The market value: This culture is built on dynamic market conditions. Employees are expected to achieve material results. The leaders are tough, demanding, and achievement seeking. The purpose of the organization is to beat the rival companies and achieve a competitive advantage.

Example: General Electric is an example of market culture.

Advantages: It has the following advantages:

i. Achievement-oriented workforce,

ii. Highly competitive culture, and

iii. Everyone is pushed to go the extra mile.

Disadvantages: It has the following disadvantages:

i. Lack of a supportive environment.

ii. Lack of innovation.

4. The hierarchy culture: The organization heavily relies on efficiency and predictability. The procedures are strict. The work environment is formal. It has a clearly defined corporate levels and structure.

Example: McDonald's is an example of the hierarchy culture.

Advantages: It has the following advantages:

i. Obvious nature of authority and responsibilities,

ii. More secure work-environment, and

iii. Departmental Loyalty.

Disadvantages: It has the following disadvantages:

i. May cause a lack of support or collaboration,

ii. The centralized power structure, and

iii. May reduce internal innovation.