What Is Organizational Culture? And Why Should We Care? (2022)

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(Video) What is Company Culture and Why Do we Care

If you want to provoke a vigorous debate, start a conversation on organizational culture. While there is universal agreement that (1) it exists, and (2) that it plays a crucial role in shaping behavior in organizations, there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change.

This is a problem, because without a reasonable definition (or definitions) of culture, we cannot hope to understand its connections to other key elements of the organization, such as structure and incentive systems. Nor can we develop good approaches to analyzing, preserving and transforming cultures. If we can define what organizational culture is, it gives us a handle on how to diagnose problems and even to design and develop better cultures.

Beginning May 1, 2013, I facilitated a discussion around this question on LinkedIn. The more than 300 responses included rich and varied perspectives and opinions on organizational culture, its meaning and importance. I include several distinctive views below, illustrated by direct quotes from the LinkedIn discussion thread — and then I offer my own synthesis of these views. (There often were multiple postings with similar themes, so these are simply early selections; unfortunately it was not possible to acknowledge everyone who made helpful contributions.)

“Culture is how organizations ‘do things’.” — Robbie Katanga

Culture is consistent, observable patterns of behavior in organizations. Aristotle said, “We are what we repeatedly do.” This view elevates repeated behavior or habits as the core of culture and deemphasizes what people feel, think or believe. It also focuses our attention on the forces that shape behavior in organizations, and so highlights an important question: are all those forces (including structure, processes, and incentives) “culture” or is culture simply the behavioral outputs?

“In large part, culture is a product of compensation.” — Alec Haverstick

(Video) What is Organizational Culture?

Culture is powerfully shaped by incentives. The best predictor of what people will do is what they are incentivized to do. By incentives, we mean here the full set of incentives — monetary rewards, non-monetary rewards such as status, recognition and advancement, and sanctions — to which members of the organization are subject. But where do incentives come from? As with the previous definition, there are potential chicken-and-egg issues. Are patterns of behavior the product of incentives, or have incentives been shaped in fundamental ways by beliefs and values that underpin the culture?

“Organizational culture defines a jointly shared description of an organization from within.” — Bruce Perron

Culture is a process of “sense-making” in organizations. Sense-making has been defined as “a collaborative process of creating shared awareness and understanding out of different individuals’ perspectives and varied interests.” Note that this moves the definition of culture beyond patterns of behavior into the realm of jointly-held beliefs and interpretations about “what is.” It says that a crucial purpose of culture is to help orient its members to “reality” in ways that provide a basis for alignment of purpose and shared action.

“Organizational culture is the sum of values and rituals which serve as ‘glue’ to integrate the members of the organization.” — Richard Perrin

Culture is a carrier of meaning. Cultures provide not only a shared view of “what is” but also of “why is.” In this view, culture is about “the story” in which people in the organization are embedded, and the values and rituals that reinforce that narrative. It also focuses attention on the importance of symbols and the need to understand them — including the idiosyncratic languages used in organizations — in order to understand culture.

“Organizational culture is civilization in the workplace.” — Alan Adler

(Video) 20 Dec 2017 SDS DR VENGA What is Organizational Culture? and Why Should We Care?

Culture is a social control system. Here the focus is the role of culture in promoting and reinforcing “right” thinking and behaving, and sanctioning “wrong” thinking and behaving. Key in this definition of culture is the idea of behavioral “norms” that must be upheld, and associated social sanctions that are imposed on those who don’t “stay within the lines.” This view also focuses attention on how the evolution of the organization shaped the culture. That is, how have the existing norms promoted the survival of the organization in the past? Note: implicit in this evolutionary view is the idea that established cultures can become impediments to survival when there are substantial environmental changes.

“Culture is the organization’s immune system.” — Michael Watkins

Culture is a form of protection that has evolved from situational pressures. It prevents “wrong thinking” and “wrong people” from entering the organization in the first place. It says that organizational culture functions much like the human immune system in preventing viruses and bacteria from taking hold and damaging the body. The problem, of course, is that organizational immune systems also can attack agents of needed change, and this has important implications for on-boarding and integrating people into organizations.

In the discussion, there were also some important observations pushing against the view of culture as something that it is unitary and static, and toward a view that cultures are multiple, overlapping, and dynamic.

“Organizational culture [is shaped by] the main culture of the society we live in, albeit with greater emphasis on particular parts of it.” — Elizabeth Skringar

Organizational culture is shaped by and overlaps with other cultures — especially the broader culture of the societies in which it operates. This observation highlights the challenges that global organizations face in establishing and maintaining a unified culture when operating in the context of multiple national, regional and local cultures. How should leaders strike the right balance between promoting “one culture” in the organization, while still allowing for influences of local cultures?

(Video) Why Should We Care about Culture?

“It over simplifies the situation in large organizations to assume there is only one culture… and it’s risky for new leaders to ignore the sub-cultures.” — Rolf Winkler

The cultures of organizations are never monolithic. There are many factors that drive internal variations in the culture of business functions (e.g. finance vs. marketing) and units (e.g. a fast-moving consumer products division vs. a pharmaceuticals division of a diversified firm). A company’s history of acquisition also figures importantly in defining its culture and sub-cultures. Depending on how acquisition and integration are managed, the legacy cultures of acquired units can persist for surprisingly long periods of time.

“An organization [is] a living culture… that can adapt to the reality as fast as possible.” — Abdi Osman Jama

Finally, cultures are dynamic. They shift, incrementally and constantly, in response to external and internal changes. So, trying to assess organizational culture is complicated by the reality that you are trying to hit a moving target. But it also opens the possibility that culture change can be managed as a continuous process rather than through big shifts (often in response to crises). Likewise, it highlights the idea that a stable “destination” may never — indeed should never — be reached. The culture of the organization should always be learning and developing.

These perspectives provide the kind of holistic, nuanced view of organizational culture that is needed by leaders in order to truly understand their organizations — and to have any hope of changing them for the better.

FAQs

What is Organisational culture and why should we care? ›

Organizational culture refers to a company's mission, objectives, expectations and values that guide its employees. Businesses with an organizational culture tend to be more successful than less structured companies because they have systems in place that promote employee performance, productivity and engagement.

Why is organizational culture important essay? ›

Organizational culture and change are important aspects of achieving organizational success. They are valuable to aspiring managers in the public sector because of several reasons. They encourage innovation, improve employee performance, and enhance the efficiency of an organization.

Why should you care about company culture? ›

For those who want to talk bottom line, here it is: Having a caring company culture impacts the company's profits in a clear, positive way. The more your employees feel appreciated and valued, the harder they work to succeed, and thus help the company succeed.

What is the meaning of organizational culture? ›

Background. An organization's culture defines the proper way to behave within the organization. This culture consists of shared beliefs and values established by leaders and then communicated and reinforced through various methods, ultimately shaping employee perceptions, behaviors and understanding.

What is organizational culture and examples? ›

The organizational culture definition relates to the structure of an organization such as a company or non-profit and the values, sociology, and psychology of that organization. Some examples of organizational culture include philosophy, values, expectations, and experiences.

Why organizational culture is important conclusion? ›

Conclusions. The culture within an organization is very important, playing a large role in whether it is a happy and healthy environment in which to work. In communicating and promoting the organizational ethos to employees, their acknowledgement and acceptance of it can influence their work behavior and attitudes.

What are the impact of organizational culture? ›

Organizational culture affects all aspects of your business, from punctuality and tone to contract terms and employee benefits. When workplace culture aligns with your employees, they're more likely to feel more comfortable, supported, and valued.

Why is culture important? ›

In addition to its intrinsic value, culture provides important social and economic benefits. With improved learning and health, increased tolerance, and opportunities to come together with others, culture enhances our quality of life and increases overall well-being for both individuals and communities.

How do you answer the company culture question? ›

How to answer "Describe your ideal company culture."
  1. Prepare your answer in advance. Before your interview, think about what you feel contributes to a positive work environment. ...
  2. Research the company. ...
  3. Focus on two to three important traits in your answer. ...
  4. Be honest. ...
  5. Explain how you can contribute to the company culture.

What is a good organizational culture? ›

A great organizational culture is what the organization believes in and stands for. Organizations must have strong recognition for their employees' efforts and make them feel part of something bigger and better. A healthy working environment can transform an employee into an advocate.

What 3 words describe the culture of a company? ›

Common Words to Describe Company Culture
  • Agile.
  • Collaborative.
  • Fast-paced.
  • Flexible.
  • Inclusive.
  • Passionate.
7 Jun 2022

Who defined organizational culture? ›

Social psychologist Geert Hofstede believed that while national cultures are based on deeply held values, organizational cultures are more concerned with practices. The repetition of those practices or behaviors within a workplace help to define the organization's culture.

What is an organizational culture what are its characteristics? ›

Organizational culture = A system of shared meaning held by members that distinguishes the organization from other organizations. Key Characteristics of an Organizational Culture: Innovation and risk taking. The degree to which employees are encouraged to be innovative and take risks. Attention to detail.

What is the most important part of a company culture? ›

The single best predictor of a company's culture score is whether employees feel respected at work. Respect is not only the most important factor, it stands head and shoulders above other cultural elements in terms of its importance.

What are 4 types of organizational culture? ›

They identified 4 types of culture – clan culture, adhocracy culture, market culture, and hierarchy culture. You can take the Organizational Culture Assessment Instrument (OCAI) to assess your organization's culture in just 15 minutes and make strategic changes to foster an environment that helps your team flourish.

How do you create a strong organizational culture? ›

6 Steps to Building a Strong Company Culture
  1. Start with a purpose.
  2. Define a common language, values and standards.
  3. Lead by example.
  4. Identify your (cultural) ambassadors.
  5. Be truthful and always communicate.
  6. Treat people right.
22 Jun 2016

How do you develop organizational culture? ›

10 Tips to Improve Your Company's Organizational Culture
  1. Create and communicate meaningful values. ...
  2. Conduct proper selection. ...
  3. Improve orientation and onboarding. ...
  4. Enable and empower employees. ...
  5. Engage employees all year round. ...
  6. Coach employees. ...
  7. Communicate effectively with employees.
24 Sept 2019

Why is organizational culture important for a business to effectively formulate its strategy? ›

Your culture transforms your company into a team

The culture at your organization sets expectations for how people behave and work together, and how well they function as a team. In this way, culture can break down the boundaries between siloed teams, guide decision-making, and improve workflow overall.

How does organizational culture impact the change process? ›

Resistance can be overcome, at least in part, through the use of organizational culture. If the change strengthens the underlying values of a culture, then members of the culture are more likely to accept the change. The use of cultural rituals and sagas also helps to make change more palpable to an organization.

How does organizational culture improve performance? ›

In simple terms, a positive work culture promotes productivity, engagement, and improved employee experience. A hostile work culture, in contrast, can affect productivity levels, increase turnover rate, and lead to employees feeling disconnected from their work and workplace.

How does organizational culture affect employees? ›

Company culture is powerful: it can impact sales, profits, recruiting efforts and employee morale, whether positively or negatively. A great company culture attracts people who want to work or do business with a company. It can inspire employees to be more productive and positive at work while reducing turnover.

What is the biggest impact on organizational culture? ›

Effective leadership is one of the greatest fundamentals to building great organizational cultures. A leader can be anyone who has influence or authority, regardless of title, and leaders set the tone for organizational culture.

What is the most important in culture? ›

Language is one of the most important parts of any culture. It is the way by which people communicate with one another, build relationships, and create a sense of community. There are roughly 6,500 spoken languages in the world today, and each is unique in a number of ways.

How does culture influence us? ›

Our culture shapes the way we work and play, and it makes a difference in how we view ourselves and others. It affects our values—what we consider right and wrong. This is how the society we live in influences our choices. But our choices can also influence others and ultimately help shape our society.

What is popular culture in your own words? ›

Popular culture is the set of practices, beliefs, and objects that embody the most broadly shared meanings of a social system. It includes media objects, entertainment and leisure, fashion and trends, and linguistic conventions, among other things.

What is organisational culture in health care? ›

Organisational culture represents the shared ways of thinking, feeling, and behaving in healthcare organisations. Healthcare organisations are best viewed as comprising multiple subcultures, which may be driving forces for change or may undermine quality improvement initiatives.

How does organizational culture affect the quality of nursing care and patient outcomes? ›

We found that overall, positive organisational and workplace cultures were consistently associated with a wide range of patient outcomes such as reduced mortality rates, falls, hospital acquired infections and increased patient satisfaction.

How organizational culture can affect ethical health care management practices? ›

Quality of care suffers when an organization does not practice ethical behavior. Administrators, doctors and other health care workers provide ineffective care when their priorities become skewed. Care eventually is eroded when the organization's culture promotes greed and power over patient-centered care.

Why is organizational culture important for a business to effectively formulate its strategy? ›

Your culture transforms your company into a team

The culture at your organization sets expectations for how people behave and work together, and how well they function as a team. In this way, culture can break down the boundaries between siloed teams, guide decision-making, and improve workflow overall.

Why is organization important in healthcare? ›

Despite the number of nonorganized physicians, however, healthcare delivery organizations play a critical role because of their ability to drive practice trends, set standards, and influence smaller practices by sharing information, resources, and guidelines.

How do you think organisational culture affects healthcare quality and improvement? ›

Your workplace culture embodies the shared standards, expectations and values that influence all team members and their actions. A positive workplace culture can lead to motivated employees and better patient outcomes.

How can organisational culture impact on patients and staff? ›

Having a shared organisational culture offers employees a sense of unity and understanding towards each other. In the context of healthcare, it offers a framework and a set of guiding values to create, implement and evaluate the delivery of the best possible care to patients, carers and staff.

What factors impact the culture of an organization in a positive manner? ›

The following factors influence workplace culture at any given business:
  • Leadership and management. ...
  • Company policies and value statements. ...
  • Workplace practices. ...
  • People. ...
  • Workplace environment. ...
  • Purpose-driven company culture. ...
  • Effective communication. ...
  • A culture of feedback.
5 Aug 2020

What are five strategies that nurses can use to support a culture of value based care? ›

These five strategies for implementing value-based care are a good place to start.
  • Identify high-risk patients. In a value-based care arrangement, it's important to identify high-risk patients. ...
  • Address gaps in care. ...
  • Leverage technology to track care. ...
  • Communicate with other clinicians. ...
  • Share data securely.
30 Sept 2021

How does leadership influence organizational culture in healthcare? ›

Leaders can reinforce organizational values by helping their people grow and develop through goal setting, opportunities, and recognition. Elevate employees through frequent one-on-ones and regular two-way feedback. When employees have open and ongoing dialogue about their work, their trust in their leader strengthens.

How does Organisational culture influence decision-making? ›

So, the organizational culture influences decisions by its members and the way in which it influences its members' acceptance or rejection of the decision. That means when the manager making decision, he or she must consider more thing to ensure the decision can work out efficient.

What is the relationship between organizational culture and ethics? ›

Whereas ethics inspire organizations to act in goodwill in lieu of legal repercussions, the company's tone or organizational culture is observable human behavior fashioned by the values, habits, beliefs, and norms as people operate throughout the workday.

How does organizational culture influence ethical decision-making? ›

The culture of a company influences the moral judgment of employees and stakeholders. Companies that work to create a strong ethical culture motivate everyone to speak and act with honesty and integrity. Companies that portray strong ethics attract customers to their products and services.

What is an example of a strong organizational culture? ›

Publix Super Markets, Southwest Airlines and Adobe are just some examples of strong organizational culture.

What is a strong organizational culture? ›

A strong culture is one which is deeply embedded into the ways a business or organisation does things. With a strong culture, employees and management understand what is required of them and they will try to act in accordance with the core values.

What is the most important part of a company culture? ›

The single best predictor of a company's culture score is whether employees feel respected at work. Respect is not only the most important factor, it stands head and shoulders above other cultural elements in terms of its importance.

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