Likewise, the culture of businesses can also be described as either loose or tight. There is no wrong or right culture, but your employees need to feel comfortable with the company culture in order to be happy at work. When they feel like their company’s culture is a good fit for them, they may be more productive and have better professional relationships with coworkers. According to Gallup, 51 percent of the American workforce is not engaged in the company that they work for. The Engagement Institute states that this type of disengagement may cost companies as much as $550 billion each year.
Meanwhile, approximately 47 percent of people who are looking for a new job company culture as a primary reason, according to Hays. You may have more control over the culture in your organization than you might think. CultureIQ states that executive leadership has been identified as a driving force for company culture in 83 percent of businesses.
Should your company have a loose or tight culture? The owner’s personal preference and managerial decisions will determine this, and there is no right or wrong option. Both loose and tight cultures have their pros and cons. A closer look at each one may help you define the culture that you want to create.
Loose company culture
A loose company culture fosters creativity and values free thinking. Workers are given the freedom to explore new ideas and even to experiment within limits. This type of culture generally is a good fit for many people because workers do not feel as though they must conform to company goals. Managers allow workers to handle their tasks as mature adults rather than micromanaging them. In many cases, a loose company culture has a flexible work environment. For example, telecommuting is more common in a loose company culture.
Zappos is a reputable online retailer that is based in Las Vegas, and it is a perfect example of how a successful company with a loose culture is run. Employees are given exceptional freedom in the workplace. All 1,500 employees have created their own job titles. They all feel free to work independently, but they know that their opinions are valued. Employees report to teams rather than to a specific manager, and they are encouraged to develop new skills through a badge system. Even in the call center, freedom reigns. Call center reps are not required to speak with a script or to monitor how much time they spend on a call.
Here are some of the advantages of running a business with a loose company culture:
- A loose company culture usually creates a pleasant work environment. Productivity may be high because employees do not stress about being micromanaged and are able to work from home sometimes.
- Employees feel respected and valued, and this is reciprocated from the employees to the company as a whole.
- Innovation and creativity are fostered in this type of environment. Workers are given the freedom to solve their own problems.
- Middle management does not force workers to follow a specific protocol. Instead, they look for innovation and recognize it as a positive force.
- Workers may be better able to cope with unexpected events that develop over the course of regular business activities.
Of course, there are also some disadvantages of this type of organizational structure:
- These companies may not be as efficient as possible because employees do not have a clearly defined structure. At times, they may veer off track and focus on tasks that are not critical to the business.
- Replacing employees can be challenging because duties for a vacancy are not clearly defined.
- Because managers and employees may both not take responsibility for problems, accountability may be difficult. This also makes discipline and penalties more challenging.
- While productivity and creativity can be high in this type of work environment, some workers may gravitate toward being careless and even lazy.
- Generally, a loose coupling may lead to inconsistency in the workplace.
Tight company culture
In a company with tight coupling, employees are carefully supervised on a daily basis. Employees and middle management alike may feel pressure to justify their actions and to define how their actions are in line with company objectives.
These companies typically have layered hierarchies and a clear protocol for communication up and down the chain of command. There is usually a dress code. These businesses are typically focused on numbers and analysis, and they are averse to taking risks.
GE is a perfect example of a company with a tight culture. It was founded in 1892, and it is run with strict and traditional managerial practices that have not changed much from its early days. In many cases, local car dealerships and banks are also run with a traditional, tight corporate culture. There are clearly defined roles, and workers are expected to complete responsibilities in a pre-determined way.
Here are some benefits of this type of company culture to consider:
- Because job duties and processes are clearly defined, companies with a tight coupling may be more efficient. Everyone knows exactly who should be doing what throughout the day.
- With clearly defined responsibilities, accountability is not usually a problem. When a mistake is made, it is usually clear who was responsible.
- Because managers and employees may both not take responsibility for problems, accountability may be difficult. This also makes discipline and penalties more challenging.
- Employees follow a clear set of rules and regulations. These rules ensure that the company’s growth stems from a well-designed and thoughtfully executed plan.
- It may be easier to identify redundancies in this type of work environment.
The main disadvantages include:
- The tight coupling can create a stale and even boring work environment. Employees may resent being micromanaged, and they may feel as though their contributions are not valued. Upper management must make a special effort to define the company’s mission and to ensure that employees know their important role in fulfilling that mission.
- Because innovative problem solving is not valued or fostered, companies with this type of culture may have trouble adapting to change or dealing with substantial problems.
- Innovative and creative workers may not feel valued, and they may be more likely to quit.
- Employees may feel combative about being micromanaged.
- Companies with a rigid structure may not have the flexibility necessary to adapt quickly to changes.
The best of both worlds
As you can see, there are exceptional pros and cons to both structures. Finding a balance between these two culture types may be ideal for some businesses. Innovation can be combined with moderated risk-taking. Employees may have a list of fixed responsibilities, but their innovative ideas may be welcome. Accountability, productivity and employee retention can be properly addressed through a healthy balance.
Identifying your current culture’s pros and cons can help you to determine areas that may need to evolve in the coming months.
About the author:
Jen McKenzie is a self-employed author hailing from New York, NY. She writes extensively on business, education and human resource topics. When Jennifer is not at her desk working, you can usually find her hiking or taking a road trip with her two dogs. You can reach Jennifer on Twitter.
