Czechia is sometimes compared to the Shire. Peace and quiet, beer, a monoculture, no surprises, conservatism, a countryside cottage, people who all know each other — basically the ideal image of Rivendell. A former mayor of Prague once described this little hobbit town on the platform X as his model of an ideal world. Czechia is one of the safest countries in the world, with one of the highest standards of living, beautiful nature, and a rich history — a history that shaped our DNA as a “subjugated nation,” stretching from 1306, when the male line of the Přemysl dynasty died out, all the way to 1989, when, after a long time, we could finally breathe again and realize we had no one left to define ourselves against, no one to complain to, and that Švejk as the mascot of our culture no longer fit. That we now had freedom, and like teenagers, we'd have to find ourselves within it and grow into strong, confident citizens capable of taking care of themselves — and that this would take a lifetime of effort. A successful culture is one with high adaptability to its surrounding environment; it doesn't judge that environment, but describes it rationally and responds to it quickly and flexibly. Corporate culture works exactly the same way. It analyzes facts and scenarios, and adapts to external market conditions. It doesn't talk so much — it acts.
At Kogi, we work with the Competing Values Framework, which describes 4 types of culture so different from one another that it's impossible to manage them all at once. Management first needs to become aware of what mix of these cultures it currently has, and what mix it needs for future success in the market. From there, we work together on what changes need to be made, what barriers need to be removed, and which ones need to be put in place instead, so that people in the company behave the way the target culture requires — allowing the company to achieve its goals.
- Clan culture — collaboration, a family-like environment, an emphasis on relationships, a long-term focus on people.
- Innovative culture — innovation, dynamism, creativity, risk-taking, a focus on new opportunities.
- Hierarchy culture — bureaucracy, formal structure, rules, stability, an emphasis on efficiency.
- Market culture — competitiveness, a focus on performance, results, profit, and orientation toward shareholders or customers.
In almost every Czech company, we run into a similar phenomenon — the Shire within us. In other words, a strong clan-hierarchy culture within us.
Cameron and Quinn, the authors of the OCAI competing values model, note that a company with a strong clan culture and a weak market culture, operating in a highly competitive, aggressive industry, can struggle significantly to survive because of the mismatch between its culture and its environment. That can be a real problem for Czech companies.
Researchers Miluše Balková and Tsolmon Jambal, from the Department of Human Resource Management at the Faculty of Corporate Strategy of the Institute of Technology and Business in České Budějovice, carried out an extensive study titled “Evaluation of Organizational Culture in Enterprises in the Czech Republic Using OCAI” between 2019 and 2021. The study covered 926 organizations of micro (1–9 employees), small (10–49), medium (50–249), and large (249+ employees) size.
Their findings can be summed up as follows:
- In Czech companies with 1 to 249 employees, a dominant clan culture prevails
- Across all companies, there was a preference for strengthening clan culture at the expense of market culture.
- How many 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 own experience, we know this research matches reality. When Kogi ran a study with research agency g82 in 2020 among 1,000 employees aged 18–65 at Czech companies, the results showed a clear preference for clan culture and a weak preference for market culture. The most satisfied and motivated people were in a clan-hierarchy culture, with responsibility resting either with the team — “WE” — or outside the process entirely — “THEM.” The fewest satisfied and motivated people were in a market-innovative culture with individual responsibility — “I.” This kind of culture is represented, for example, by the United States and Singapore.
According to our research, the highest share of market culture is found at companies with foreign ownership, which carry their national culture over into corporate values and behavioral principles for employees in Czechia.
Since 2020, Czechia has been through 3 huge crises that had a major impact on the entire market:
- the COVID-19 pandemic,
- the energy crisis,
- inflation and a decline in real wages.
Companies in Czechia have probably never experienced this many crises in a row in their entire history. And that shows in the thinking of C-level management. In the discussions we have with CEOs about the right target culture when transforming their corporate cultures, almost all of them lean toward strengthening market culture, and innovative culture as a second priority. They increasingly notice clan-oriented Europe falling further behind aggressive Asia and the US, where a market-innovative, customer-focused culture is a driver of success.
The problem remains our national culture — and, by extension, the culture of the employees working at these companies.
Although the shift toward market and innovative culture brings a number of benefits, it runs into deeply rooted national tradition. Czech society — as shown even in pre-election surveys (such as research by NMS Market Research) — continues to prefer a conservative model, where a strong state and hierarchical structure guarantee social security: “Czech voters most often lean toward a strong, conservatively oriented state that will take care of providing for them.” This mismatch between global trends and domestic expectations creates a dilemma for companies: how to align modern market demands with employees' traditional values.
Do you recognize the problems in this article as ones your own company is dealing with too? What can you do about it? Give us a call. We've completed more than 50 successful transformations where we managed to resolve exactly this kind of tension and turn corporate culture into a competitive advantage that helps every stakeholder achieve 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, unnumbered, pp. 1-11. ISSN 1664-1078.
$Full publication listing/$