What is Organizational Culture and Why is it Important?

Table of Contents

Employers must begin by developing a thorough understanding of both general culture and their organization’s specific culture. At its most fundamental level, an organization’s culture is founded on values derived from the following fundamental assumptions:


  • The human condition- Are individuals intrinsically good or evil, malleable or immutable, proactive or reactive? These fundamental assumptions form the basis for beliefs about how employees, customers, and suppliers should interact and be managed.
  • The relationship between the organization and its environment- What are the organization’s business and constituency definitions?
  • Appropriate emotional responses- Which emotions should individuals be encouraged to express and which should be repressed?
  • Effectiveness-Which metrics indicate the health of the organization and its constituents? A business will be effective only if its culture is supported by a sound business strategy and a structure that is both business and culture-appropriate.


The culture of an organization establishes the proper way to conduct oneself within the organization. This culture is defined by shared beliefs and values that are established by leaders and then communicated and reinforced via a variety of channels, ultimately shaping employee perceptions, behaviours, and understanding. The organizational culture establishes the context for all of an enterprise’s activities. Due to the significant differences in industries and situations, there is no one-size-fits-all culture template that meets the needs of all organizations.


A strong culture is a defining characteristic of the most successful businesses. All have a shared understanding of cultural priorities, and those values are centred on the organization and its objectives, not on individuals. Successful business leaders live their cultures every day and make a point of communicating their cultural identities to employees and prospective new hires. They are crystal clear about their values and how those values define and govern their organizations.


Culture is a nebulous concept that is frequently misunderstood as an undefined characteristic of an organization. Although there is substantial academic literature on organizational culture, there is no widely accepted definition of culture. Rather than that, the literature expresses a diversity of perspectives on what organizational culture is.


Organizational culture takes many forms, including leadership behaviours, communication styles, internally distributed messages, and corporate celebrations. Given the complexity of culture, it’s unsurprising that terms used to describe distinct cultures vary widely. The terms aggressive, customer-focused, innovative, fun, ethical, research-driven, technology-driven, process-oriented, hierarchical, family-friendly, and risk-taking are frequently used to describe cultures.


Due to the difficulty of defining culture, organizations may struggle to maintain consistency in their messages about culture. Additionally, employees may struggle to identify and communicate perceived cultural inconsistencies.


The Influences on an Organization’s Culture


Organizational leaders frequently speak about their companies’ unique cultures, describing their domains as unique places to work. However, organizations like Disney and Nordstrom, which are well-known for their distinct cultures, are relatively uncommon.


The majority of corporate cultures are quite similar. Even organizations operating in seemingly disparate industries such as manufacturing and health care frequently share a core set of cultural values. For instance, the majority of private-sector businesses desire growth and increased revenue. Most strive to be collaborative and show concern for others. The majority are driven, rather than relaxed, by a desire for revenue and market share. The following are some of the cultural characteristics that most organizations share.




Values that are universally shared are at the heart of organizational cultures. None are correct or incorrect, but organizations must choose which values to emphasise. Among these universal values are the following:


  • A focus on the end result. Emphasizing accomplishments and outcomes.
  • A focus on people. Insisting on fairness, tolerance, and individual respect.
  • A sense of community. Collaboration is emphasised and rewarded.
  • An eye for detail. Precious precision and an analytical approach to situations and problems.
  • Stability. Assuring security and adhering to a predetermined course.
  • Innovation. Encouraging experimentation and taking calculated risks.
  • Aggressiveness. Stimulating an irascible spirit of competition.


Onboarding Process


Onboarding educates new employees about their employer’s value system, organizational norms, and desired organizational behaviours. Employers must assist newcomers in becoming integrated into the organization’s social networks and ensure that they have early job experiences that reinforce the culture.

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