The Clan Culture

The clan culture has a primary focus on the involvement and participation of the organization’s members and on rapidly changing expectations from the external environment.

More than any other, this culture focuses on meeting the needs of employees as the route to high performance.

Involvement and participation create a sense of responsibility and ownership and, hence, greater commitment to the organization.

In a clan culture, an important value is taking care of employees and making sure they have whatever they need to help them be satisfied as well as productive.

Although many companies in the software industry emphasize values associated with an adaptability cultureOpens in new window, SAS InstituteOpens in new window has been highly successful with a strong clan culture, as described in the following In Practice example.

IN PRACTICE
In January 2009 alone, America’s largest companies laid off 160,000 employees, and more massive layoffs followed. But Jim Goodnight, the co-founder and CEO of SAS Institute, the leader in business analytics software, made a clear and definite promise to his 11,000 employees in early 2009: “There will be no layoffs.”

At SAS, people truly are considered the company’s most valuable asset, and the cultural values emphasize respect, equality, and caring for employees. Every employee — whether an engineer, an administrative assistant, a food service worker, or a landscaper — is treated the same. The company doesn’t outsource any functions, so that people feel secure in their jobs. The role of managers is to support the needs of lower-level employees. One reflection of how much a company cares for its people is the array of benefits it offers, and SAS goes over the top. It pays 90 percent coverage of health insurance premiums, has a free on-site medical clinic, a 66,000-square-foot fitness center, a low-cost on-site child care center, a summer camp for children, and a work-life center with a staff of eight social workers. Employees have flexible work schedules, unlimited sick days, and three weeks of paid vacation (not including the week between Christmas and New Year’s). The company also provides other services to “eliminate stress and attract talent,” such as an on-site hair and nail salon, a car detailing service, a restaurant and bakery, and break rooms stocked with snacks and beverages.

“The value of SAS walks out of the building at 5 every night,” says Goodnight. “My job is to make sure they want to come back.” Turnover at SAS is around 2 percent, the lowest in the industry. Even when the economy was booming and there were five jobs for every skilled worker in the software industry, SAS averaged 5 percent turnover, compared to 20 percent industry-wide. SAS has been on the list of Fortune magazine’s “100 Best Companies to Work For” every year since it was first compiled and ranked Number 1 in both 2010 and 2011.

The clan culture at SASOpens in new window has helped the company thrive and continue to grow even during the economic downturn. Industry analysts say the exceptionally low turnover enabled SAS to save hundreds of million of dollars a year that other companies had to spend in recruiting and training new people when the labor market was right.

  1. Daniel R. Denison and Aneil K. Mishra, “Toward a Theory of Organizational Culture and Effectiveness,” Organization Science 6, no. 2 (March–April 1995), 204-223.
  2. Robert E. Quinn, Beyond Rational Management: Mastering the Paradoxes and Competing Demands of High Performance (San Francisco: Jossey-Bass, 1988).
  3. Mohamed Hafar, Wafi Al-Karaghouli, and Ahmad Ghoneim, “An Empirical Investigation of the Influence of Organizational Culture on Individual Readiness for Change in Syrian Manufacturing Organizations,” Journal of Organizational Change Management 27, no 1 (2014) 5–22.
  4. Harrison, Michael I. 2005. Diagnosing Organizations: Methods, Models, and Processes. Thousand Oaks, CA: Sage Publications, 29
  5. Scott, W. Richard, and Gerald F. Davis. 2007. Organizations and Organizing: Rational, Natural, and Open Systems Perspectives. Upper Saddle River, NJ: Pearson-Prentice Hall, 78.
  6. Jr. 2002. Organization & Management Problem Solving: A Systems and Consulting Approach. Thousand Oaks, CA: Sage Publications, 20.