From Hobbiton to Performance: Overcoming Contradictions in Czech Companies
Mar 10, 2025
The Czech Republic is sometimes compared to Hobbiton. Quiet, beer, monoculture, no news, conservatism, cottage, people who know each other, just the ideal image of the Shire. The former mayor of Prague described this hobbit town on platform X as his model of an ideal world. The Czech Republic is one of the safest countries, with the highest standard of living, beautiful nature, and rich history. At the same time, a history that has determined our DNA as a 'subjugated nation' since 1306, when the Přemyslids died by the sword, until 1989, when we could finally take a breath and discover that we do not have anyone to define ourselves against, not to complain that Švejk as the mascot of our culture does not work. That we have freedom and, like teenagers, will have to find ourselves in it and grow into strong, self-confident citizens who know how to take care of themselves. And that they will have to do something about it their whole lives. A successful culture is recognized by its high adaptability to the surrounding environment; it does not evaluate it but can rationally describe it and respond to it quickly and flexibly. Corporate culture works in exactly the same way. It analyzes facts, scenarios, and adapts to external market conditions. It doesn't talk much, but it acts.
The Czech Republic is dominated by a clan-hierarchical culture
At Kogi, we work with a model of competing cultures that describes four types of cultures that are so different from each other that they cannot be managed simultaneously, and it is necessary for management to realize what mix it currently has and what it needs for further success in the market. Then we work together on what changes we need to make, what barriers to remove, and what to set up so that people in the company behave as the target culture requires, allowing the company to achieve its goals.
Clan culture – collaboration, family environment, emphasis on relationships, long-term orientation towards people.
Innovative culture – innovation, dynamism, creativity, risk-taking, focus on new opportunities.
Hierarchical culture – bureaucracy, formal structure, rules, stability, emphasis on efficiency.
Market culture – competitiveness, focus on performance, results, profit, orientation towards shareholders/customers.
Almost all Czech companies encounter a similar phenomenon – Hobbiton within us. In other words, a strong clan-hierarchical culture within us.
Cameron and Quinn, the authors of the competing cultures model OCAI, state that a company with a strong clan culture and a weak market culture operating in a highly competitive, aggressive industry may have great difficulties surviving due to the mismatch between culture and environment. This could be problematic for Czech companies.
What do the research findings say?
Scientists Miluše Balková and Tsolmon Jambal from the Department of Human Resource Management, Faculty of Business Strategy, University of Technology and Economics in České Budějovice, conducted extensive research entitled Evaluation of Organizational Culture in Enterprises in the Czech Republic Using OCAI between 2019-2021. The research included 926 organizations of sizes micro (1-9 employees), small (10-49), medium (50-249), and large (249+ employees).
Their findings can be summarized as follows:
In Czech companies with 1 to 249 employees, the dominant clan culture prevails.
In all companies, there was a preference for strengthening clan culture at the expense of market culture.
What percentage of companies prefer clan culture? Micro 41%, small 39%, medium 34%, large 32%
What percentage of companies prefer market culture? Micro 17%, small 18%, medium 20%, large 20%
From our experience, we know that this research corresponds to reality. When we at Kogi conducted research in 2020 with the research agency g82 among 1000 employees aged 18-65 in Czech companies, we found a clear preference for clan culture and a weak market culture. The most satisfied and motivated people were in a clan-hierarchical culture, with responsibility either as a team, that is, WE, or outside the process, that is, THEY. The least satisfied and motivated people were in a market-innovative culture with the responsibility of ME. This culture is represented by countries like the United States and Singapore.
According to our research, companies with foreign participation have the highest proportion of market culture, as they transfer their national culture through corporate values and principles of behavior to employees in the Czech Republic.
CEOs want to build companies with market-innovative culture
Since 2020, we have gone through three enormous crises in the Czech Republic that have had a fundamental impact on the entire market:
the COVID-19 pandemic,
the energy crisis,
inflation and the decline in real wages.
Companies in the Czech Republic have probably never experienced so many crises in succession in their history. And this reflects the thinking of C-level management. In discussions about the suitable target culture that we have with CEOs during changes to their corporate cultures, almost all CEOs lean towards strengthening market culture and, in second place, innovative culture. They perceive the increasingly large gap between clan-oriented Europe and aggressive Asia and the USA, where a market-innovative culture focused on customer success is the driver of success.
The problem remains our national culture and, consequently, the culture of the employees who work in companies.
Although the shift towards a market and innovative culture brings many advantages, it encounters deeply rooted national traditions. Czech society – as also expressed in pre-election surveys (for example, the NMS Market Research) – continues to prefer a conservative model where a strong state and hierarchical arrangement ensure social security: 'Czech voters most often tend towards a strong, conservatively-minded state that will take care of their welfare.' This mismatch between global trends and domestic expectations creates a dilemma for companies on how to reconcile modern market demands with traditional employee values.
Do you recognize in the article problems that also trouble your company? What to do about it? Call us. We have completed over 50 successful transformations where this discord has been resolved and turned corporate culture into a competitive advantage that ensures all stakeholders meet their goals.
Source: BALKOVÁ, Miluše and Tsolmon JAMBAL. Evaluation of organizational culture in enterprises in the Czech Republic using OCAI.Frontiers in Psychology. Lausanne, Switzerland: Frontiers Media SA, 2023, vol. 14, Unspecified, pp. 1-11. ISSN 1664-1078.