Understanding Market Culture: An Explanation With Examples

This article explores what market culture is, key characteristics of market culture, benefits, disadvantages, and tips for successfully implementing market culture.

What is market culture?

Market Culture is an internal workplace management theory designed to ultimately achieve external results, the goal being to drive increased profits and to outperform the competition. By fostering an internal corporate culture (the 'Market Culture') that encourages inter-workforce competition, the theory is that motivation and employee output and focus will be increased, which will drive external results and profit.

It is usual for the competition element of a market culture to include benefits or accolades available to those employees who display the right traits or achieve specific goals. It is typical for these to benefit the organization more than the individual employee and often a successful market culture is at the expense of employee wellbeing.

It is common for corporate workplaces to have a very identifiable market culture that marks out the purpose and ideology of the organization. The majority of successful large businesses will have an identifiable market culture and are typical across sectors such as big tech, media, entertainment, and travel.

Understanding the theory of market culture will allow leaders and business owners to decide what is best for their workplace and how to implement their own market culture.

Characteristics of market culture

There are four cultures (collaborate, control, create, and compete) set out in the Competing Values Framework often cited as one of the most well-known organizational culture classifications.

Competition

Competition, both internally and externally, is a key characteristic of market culture.

By fostering an environment where 'doing things fast[er]' and 'in competition' is valued and rewarded, a successful market culture will reward each employee when they do whatever tasks they do quickly, and crucially, faster and better than the next employee.

Results

Where organizations rely on competition, results go hand-in-hand as the yardstick by which competition is measured. A company with a strong market culture will likely have many metrics by which performance is analyzed and may create league tables to rank employees and departments, by performance, output, sales, or other metrics, with consequences for those at the bottom and rewards for those at the top.

Customers

Businesses with strong market cultures often put their customers' needs first, with all aspects of performance culture targeting the interests of the customer. This could include product selection, in-store or online experience, delivery methods and time frames, customer UX, customer service, and so on.

Benefits of market culture

The benefits of a strong market culture to the organization are primarily financial, in that the overall profit of the company is strong and increased. There are however internal benefits to the business as well, which include:

• Improvement: Where competition is fostered, the theory is that the business will continue to make improvements, be this to internal processes or external to the product, or online offerings. While the net result will be customer and profit-focused, the benefit to the business internally is that it should reduce superfluous processes and administrative tasks by continually assessing and improving.
• Productivity: Where employees' actions are continuously scrutinized and in competition with each other, the theory is that this will increase employee productivity and decrease wasted time.
• Motivation and Ambition: In theory, increased competition will allow a motivated and ambitious workforce to flourish, which should be self-perpetuating. By constantly reviewing and analyzing performance and removing those at the bottom who are unmotivated and underperforming, it should create a workforce performing at its best. This should also create motivated and high-performing teams and departments striving to do their best and outperform each other.
• Agility: Where market culture is embraced, organizations should be able to react faster to external factors which can give a competitive advantage.

Disadvantages of market culture

In contrast, the advantages of market culture are often in reality only advantages to the organization and might not benefit the employees. An overly competitive and scrutinized workplace can be an unpleasant workplace and may not allow all employees to flourish.

Certain personality types will be favored by this kind of corporate culture and this can be toxic for those that do not naturally conform to these behaviors. Market culture can foster presenteeism, and unhealthy competition and while some employees will arrive at the top, many more will burn out, drop out, or simply have to be fired.

Market culture also brings with it costs - the personal cost of the stress of at best competitive day-to-day working environment, at worst toxic and destructive - but also the environmental and financial costs of innovating, investing in tech, and staying ahead of the competition. There are also costs associated with maintaining a strong compensatory and pay strategy to reward employees financially.

Examples of market cultures

The following companies are notable for their distinctive market culture styles.

Amazon

Amazon, the e-commerce tech platform, is known for its hyper-competitive approach to customer service and aggressive policies relating to staff shifts and remuneration, particularly those working in Amazon warehouses and at the point-of-delivery level. At a corporate level, employees are encouraged to take risks, explore ideas, and seek out, possibly exploit, data-driven approaches to driving increasingly efficient online retail services, as well as solutions offered by technology.

Bluecore

Blucore is a retail marketing company reputed for its ethical treatment of staff while disrupting the traditional marketing sector. Using a data-driven approach, Bluecore utilizes data to provide customer insights to best drive sales. Similar in part to Amazon, Bluecore provides only the e-commerce platform, not the product delivery. Bluecore scores highly in employee satisfaction surveys and management are complemented for its honesty and ethical stance in its business practices.

General Electric

General Electric has been reputed for its customer-centric approach that its market culture mirrors. The organization's success is built on its ability to adapt and change to customer requirements. Customer expectations are ascertained and programs are built so that employees make these needs central to their workflow.

How to successfully implement a market culture

The following tips will help employers and HR teams to implement a market culture in their organization:

Pay and compensation

How will employees be rewarded? A compensation strategy will include basic pay, a bonus structure, and other incentive schemes. It should also consider other monetary-based opportunities such as funding coaching, learning, or extracurricular activities such as vacations for top-selling staff. Will this be tied to targets or organizational profit?

Targets and metrics framework

Be clear as to the strategy that you will use to track your organization, teams, and employees to ascertain whether they have reached their goals and targets. Using KPIs (key performance indicators) and OKRs (objectives and key results) will allow managers and HR staff to track performance using a metric framework that is standardized across the organization.

Appraisals

Your appraisal strategy will outline how you will assess employee contributions against your metrics and targets framework. Tailor appraisals to match your strategy, which might favor a continuous improvement approach. Whatever your strategy it should allow providing data-driven metrics that tie in with your pay and compensation approach.

Strong talent attraction program for hires

Hire the right people who will respond well to the competitive nature of the workplace. Revisit all hiring communications and job descriptions and ensure it articulates the corporate culture, and ensure talent attraction programs are identified and targeted using a talent assessment framework.

Leadership pipeline or program

Strong leaders are essential for strong market culture. Keep current leaders motivated with coaching and training. Ensure retention of those more junior employees that score highly and have the right identified traits by offering a leadership pipeline with additional management training, and even sponsored MBAs or similar.

Measure customer satisfaction

Understand the client or customer and then ensure your employees do too. Creating opportunities to reward your employees for exceptional client satisfaction closes a virtuous circle.