What is Organizational Culture?

Organizational culture is defined as the underlying beliefs, assumptions, values and ways of interacting that contribute to the unique social and psychological environment of an organization.


Organizational culture transformation takes place when the organization starts a process to pull together its core values, and vision to obtain its cultural goals.

Organizational Culture Definition and Characteristics

Organizational culture includes an organization’s expectations, experiences, philosophy, as well as the values that guide member behavior, and is expressed in member self-image, inner workings, interactions with the outside world, and future expectations. Culture is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid (The Business Dictionary).

Culture also includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits (Needle, 2004).

Simply stated, organizational culture is “the way things are done around here” (Deal & Kennedy, 2000).

While the above definitions of culture express how the construct plays out in the workplace, other definitions stress employee behavioral components, and how organizational culture directly influences the behaviors of employees within an organization.

Under this set of definitions, organizational culture is a set of shared assumptions that guide what happens in organizations by defining appropriate behavior for various situations (Ravasi & Schultz, 2006). Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. Also, organizational culture may influence how much employees identify with their organization (Schrodt, 2002).

In business terms, other phrases are often used interchangeably, including “corporate culture,” “workplace culture,” and “business culture.”

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Business leaders are vital to the creation and communication of their workplace culture. However, the relationship between leadership and culture is not one-sided. While leaders are the principal architects of culture, an established culture influences what kind of leadership is possible (Schein, 2010).

Leaders must appreciate their role in maintaining or evolving an organization’s culture. A deeply embedded and established culture illustrates how people should behave, which can help employees achieve their goals. This behavioral framework, in turn, ensures higher job satisfaction when an employee feels a leader is helping him or her complete a goal (Tsai, 2011). From this perspective, organizational culture, leadership, and job satisfaction are all inextricably linked.

Leaders can create, and also be created or influenced by, many different workplace cultures. These differences can manifest themselves is a variety of ways including, but not limited to:


Person Culture and Market Culture

How members of an organization conduct business, treat employees, customers, and the wider community are strong aspects of person culture and market culture. Person culture is a culture in which horizontal structures are most applicable. Each individual is seen as more valuable than the organization itself. This can be difficult to sustain, as the organization may suffer due to competing people and priorities (Boundless, 2015). Market cultures are results-oriented, with a focus on competition, achievement, and “getting the job done” (ArtsFWD, 2013).

Adaptive Culture and Adhocracy Culture

The extent to which freedom is allowed in decision making, developing new ideas and personal expression are vital parts of adaptive cultures and adhocracy cultures. Adaptive cultures value change and are action-oriented, increasing the likelihood of survival through time (Costanza et al., 2015). Adhocracy cultures are dynamic and entrepreneurial, with a focus on risk-taking, innovation, and doing things first (ArtsFWD, 2013).

Power Culture, Role Culture, and Hierarchy Culture

How power and information flow through the organizational hierarchy and system are aspects of power cultures, role cultures, and hierarchy cultures. Power cultures have one leader who makes rapid decisions and controls the strategy. This type of culture requires a strong deference to the leader in charge (Boundless, 2015). Role cultures are where functional structures are created, where individuals know their jobs, report to their superiors, and value efficiency and accuracy above all else (Boundless, 2015). Hierarchy cultures are similar to role cultures, in that they are highly structured. They focus on efficiency, stability, and doing things right (ArtsFWD, 2013).

Task Culture and Clan Culture

How committed employees are towards collective objectives are parts of task cultures and clan cultures. In a task culture, teams are formed with expert members to solve particular problems. A matrix structure is common in this type of culture, due to task importance and the number of small teams in play (Boundless, 2015). Clan cultures are family-like, with a focus on mentoring, nurturing, and doing things together (ArtsFWD, 2013).

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Organizational culture is not stagnant. Members of an organization develop a shared belief around “what right looks like” as they interact over time and learn what yields success and what doesn’t. When those beliefs and assumptions lead to less than successful results, the culture must evolve for the organization to stay relevant in a changing environment.

Changing organizational culture is not an easy undertaking. Employees often resist change and can rally against a new culture. Thus, it is the duty of leaders to convince their employees of the benefits of change and show through collective experience with new behaviors that the new culture is the best way to operate to yield success.

Cummings & Worley (2004) proposed six guidelines for culture change:

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