Importance of organizational culture

Importance of organizational culture

The success and general well-being of your business, your employees, and your customers are greatly influenced by your organization’s culture. Consider the reasons why the culture of your organization is the way it is and why it must remain that way (or change).

Organizational culture reveals a great deal about an organization’s methods and the events it hosts. It is based on the company’s published and unwritten policies. Employees eventually form bonds with one another and begin to identify with the system, advancing the culture and implementing appropriate adjustments when needed. Thus, an organization’s current culture can influence whether it is worthwhile to work there, and the correct culture attracts new people.

What is organizational culture?

What is organizational culture?

Organizational culture is one in which all team members’ behavior is influenced and guided by the values, expectations, and practices that make up the organization. Consider it as the assortment of characteristics that define your business. While a dysfunctional workplace culture brings out tendencies that can impede even the most successful firms, a great workplace culture showcases beneficial features that result in enhanced performance.

Press releases or policy statements don’t build culture; consistent and genuine behavior does. When you observe how a CEO handles a crisis, how a team adjusts to changing client needs, or how management corrects an employee who makes a mistake, you can observe the business culture in action.

Related: Organizational Culture Definitions: Complete Guide

Organizational culture examples

A workplace may have any one of numerous organizational culture types. These are outlined below:

Workplace Culture

Employees that are part of a task culture emphasize success and task completion. High-performing teams prioritize getting things done and keeping deadlines in this setting.

Culture of Power

An organization with a strong leadership culture is committed to following a capable boss. The values and actions of the employees are influenced by this person. The ideas and opinions of the workforce are significantly influenced by the boss. Small businesses, where the entrepreneur has already committed a considerable amount of time and money to realize their vision, are particularly prone to having a power culture.

Role Culture

Typically, a role culture operates in highly organized settings. The formal methods establish the

attitudes and values prevalent in the workplace. This culture is probably present in government agencies, law offices, insurance businesses, and financial organizations.

Cultural Background

The personal values and interests of employees shape their cultures. A service provider is more likely to see repeat customers if it encourages staff to get to know consumers by learning something about their personalities (while avoiding subjects deemed too contentious).

Importance of organizational culture

  1. Having a strong organizational culture allows you to retain your top talent

It shouldn’t come as a surprise that staff members who feel like they belong to a community rather than just a cog in the machine are more inclined to stick with your business. That is what the majority of job seekers seek in an employer.

Any high performer will tell you that the people are what keep them at their organization. It’s due to the strong appeal of people-centered business culture. It enhances engagement, offers a distinctive employee experience, and strengthens the sense of community among your workforce. Hiring for cultural fit is one strategy for luring great performers who are innate culture champions.

  1. An effective culture facilitates onboarding

The culture of your organization may also serve as a unifying factor there. This is especially true for recent workers who, more often than not, have given the culture they are joining a lot of attention. Your company’s culture must begin with onboarding because it will serve as a sort of compass for them.

George Bradt, in a Forbes article, elaborates further: “People struggle in new professions because they don’t fit well, don’t perform well, or don’t adapt well to future changes. Your onboarding procedure should take into account their needs if you have properly hired new hires and centered the organization around their needs (so they can do real work), hasten their advancement (so they can deliver and adapt), and incorporate them into the organization (so they fit culturally).”

  1. Your culture transforms your company into a team

Successful organizational cultures unite and maintain alignment across your workforce. When your culture is obvious, people from various viewpoints can unite behind it for a common goal. Your company’s culture establishes standards for how employees should act, collaborate, and perform as a team.

In this manner, culture can help to blur the lines between siloed teams, direct decision-making, and enhance overall workflow. On the other hand, a poisonous organizational culture has the power to have the exact opposite effect.

  1. Culture affects productivity and employee happiness

According to reports, corporate culture directly affects performance and, more crucially, the happiness of your staff. To solve both of these issues, a healthy culture strikes the right balance based on shared business values.

Does your organization place such a high value on performance that you feel that your physical and emotional well-being is being neglected? There may be certain circumstances in which it won’t be an issue, but in most situations, it will hurt your business.

“Employee wellbeing techniques have the potential to deliver significant advantages to employees and employers alike, but they need to be implemented in the right way for the right reasons,” writes Paul Barrett, summarizing the situation nicely and at the proper moment. They must be built holistically by a business culture that supports their success if they are to be effectively successful. That entails accommodating management practices, flexible work arrangements, and an open culture that gives workers a voice and some influence over the workplace environment.

  1. Your brand identity is enhanced by corporate culture

To differentiate your business from the competitors, you want to create a strong corporate culture. As opposed to one product, the corporate brand describes the entire organization. For instance, the company name or brand comes to mind before any of the items whether you think of “Apple,” “Nike,” or “Tesla.” This illustration demonstrates the value of a strong brand identity.

For instance, a soft drink manufacturer’s organizational culture will be significantly dissimilar from that of an insurance company. The insurance provider will present itself to customers as a reliable source for all their insurance requirements. The soft drink company’s brand will emphasize the enjoyment of recreational activities.

  1. The company’s values are identified by its culture

    One of the most significant advantages of organizational culture is this concept. What is the primary function of the company? What types of clients does it cater to? How does it approach achieving its objectives? The responses to those queries aid in defining the corporate culture.

    Each company’s culture might be compared to a unique personality. There are variations among them. The corporate culture must complement the goods and services the business offers. An auto repair shop could wish to emphasize the importance of having experts who can identify issues immediately. Accident repair shops inform clients about their loaner automobile service and offer to deal with the insurance company on their behalf.

    1. Organizational cultures are under the control of the companies and they can assess them and make the required adjustments

    One of the advantages of corporate culture that businesses can take advantage of is the ability to change. To evaluate the current state of the corporate culture, they can conduct a cultural audit. This procedure offers a way to assess the company culture as it stands now, identifies any gaps, and develop a strategy to solve any issues. The following components may be part of the cultural audit:

    Define the culture of your business

    Do all your staff members understand the corporate culture? How is the business culture introduced to new team members?


    Find out how well employees are aware of the corporate culture. Send them a survey about the employee experience. Include explicit inquiries about your brand’s values to gauge how well they are perceived.


    Even the most robust company culture can be lost if managers and staff members don’t constantly act by these ideals. When members of your team fail to consistently demonstrate these principles, what can you do to remind them of their importance?

    1. The workplace culture can inspire employees to become passionate supporters

    An advantage of having a supportive organizational culture is being able to motivate employees to act as brand ambassadors. Employees are interested in earning nice perks and a fair wage for their work. When they go to work, they want to believe that what they do matters. By fostering the corporate culture at work and in their free time, people can feel important.

    Recognizing employees who perform their jobs well is the first step in developing employee advocates. Give them frequent and open praise. Always give fair credit to others. In promotional materials and on the company blog, highlight your personnel. Get a quote from them regarding what they enjoy and regarding a job at the organization.

    1. The corporate culture affects the physical and mental health of employees

    The health of employees is directly impacted by organizational culture. The physical and emotional facets of wellness are both a part of overall health. Employees are more likely to perform effectively if they are encouraged to maintain a healthy work-life balance. It might be conceivable to work late on occasion and still perform well at work. Most individuals would concur that workers who are exhausted, overburdened with work, or stressed out will not perform well.

    They are more likely to experience physical ailments or work-related injuries. These workers are more likely to experience anxiety, depression, or other mental illnesses. When there is a positive corporate culture, employees are at ease obtaining the right medical attention for their health problems. They are aware of what their employer wants.

    1.  A healthy workplace is supported by healthy cultures

    Successful workplace culture is essential to running a successful company. Workflow management for employees is guided by organizational culture. It will be simpler for team members to update one another on how their tasks are doing. As a result, it is more probable that entire projects will be finished.

    Guidelines for how employees should interact with one another are also provided by healthy cultures. Customers and suppliers must abide by these rules as well. Employees can concentrate on their tasks with fewer interruptions when expectations are well conveyed.

    1.  All employees benefit from a level playing field thanks to organizational culture

    When the culture of a firm is strong, all employees are given fair treatment. Nobody is victimized by bullying or given special treatment. Employees carry out their duties and assist other employees as needed. Everyone is aware that other staff will occasionally step in for them.

    Working as a team includes having this cooperative attitude. No one takes advantage of the arrangement since everyone values their coworkers’ willingness to pitch in when needed. No one feels overburdened when everyone works together to complete the task at hand.

    1.  Employees perform at their highest level when their workplace is positive

    Employees want challenges that will push them to excel and develop in their chosen fields. For them to feel confident enough to take professional risks by expressing their ideas with peers and management, a healthy culture is the ideal setting.

    They might even recommend that they take charge of a project so that they can gain some actual leadership experience (with their manager close by to offer advice). Everyone aspires to achievement and success for the business.

    Types of organizational culture

    There are four main organizational culture types. Adhocracy, clan, hierarchy, and market cultures are the four types of organizational cultures that most business leaders identify with. Every organizational culture is different and has perks. 

    Related: Elements of organizational culture

    A company’s culture evolves through time and is susceptible to change due to a variety of circumstances, including organizational restructuring, market expansion, or increasing growth. The four corporate culture types all play a role in most firms, with the following as their main influences:

    The Adhocracy Culture

    Adhocracy culture is adaptable and places a strong emphasis on continuous innovation and advancement. This culture, which is frequently observed in start-up and technology organizations, involves upper management encouraging every employee—regardless of level or position—to discuss ideas and contribute to product development. Adhocracy-based organizations move quickly and undergo frequent change. The management encourages personnel to challenge the company’s and the sector’s status quo while encouraging risk-taking.

    Because of the fierce competition and frequent changes in the market, this corporate culture suits digital businesses and tech start-ups well. The culture might change to a more organized framework as smaller start-ups expand into larger businesses. Adhocracy may then continue to have an impact on specific business divisions, such as research and development or advertising. You should promote idea sharing and brainstorming if you wish to create an adhocracy culture. Teams can foster a risk-taking and creative mentality by rewarding unique ideas.

    Clan Tradition

    Clan culture, also known as family culture, is team-oriented and characterized by intimate ties based on a shared hobby or objective. Clan cultures, which are most common in small and family-run firms, offer a welcoming atmosphere where all workers are treated equally. 

    No of their rank or position, team members are valued by the proprietors of a clan culture organization. Employees collaborate to embrace change and move the organization toward its goals in this people-focused work environment. Employees are at ease providing management and their peers with candid feedback.

    Because these businesses are frequently family-owned, a great emphasis is placed on mentoring or apprenticeship programs where leaders teach future generations of employees their skills, abilities, and knowledge. Excellent customer service is a result of high employee involvement within a clan culture, which also increases employee retention and job happiness. 

    You should emphasize the staff and learn what they value most if you want to create a clan culture. It’s essential to foster an atmosphere of open communication so that team members can express their ideas and help the business succeed.

    Hierarchy Culture

    The culture of hierarchy is extremely structured and process-oriented. Hierarchy culture, which is frequently observed in large enterprises, offers open business processes and levels of authority. The highest executive levels make decisions for the organization, and there is a distinct line between management and employees. 

    People who live in hierarchical cultures are aware of their place in the organizational structure, and their job responsibilities are well-defined. Additionally, the management of the organization streamlines commercial operations by outlining written policies and guidelines for compliance.

    In a hierarchical culture, daily operations are prioritized over employee relations and feedback. Through the thoughtful management of risks, this type of culture develops a reliable and effective company. This corporate culture has some drawbacks, such as a lack of reactivity, agility, and adaptability. 

    Employees may consequently feel unappreciated and unmotivated to offer original ideas. You need to build and implement extremely specific procedures and organizational frameworks for your staff to adhere to foster a hierarchy culture. Additionally, you should concentrate on setting distinct short- and long-term goals.

    Market Behavior

    Market culture places a significant emphasis on beating the competition and focuses on profit margin and market share. This culture is frequently observed in big businesses with a strong online presence because it actively chases financial success. 

    Meeting quotas and achieving sales goals are valued as indicators of success in a culture where management places a strong emphasis on results. There is a continuing need for product and service innovation and improvement, with a focus on external consumer satisfaction. Internal rivalry is highly valued in a company with a market culture.

    Employees that do well receive financial incentives and opportunities for advancement from management. Since there is less emphasis on job satisfaction than in other corporate cultures, one drawback of this corporate culture is employee burnout brought on by high-performance expectations. 

    It’s important to assess each role inside the firm to create a market culture. By identifying the key performance indicators, or KPI, for each role, you can make sure that every employee is up to par. The promotion of market culture is aided by the development of reward schemes, such as cash incentives.

    Additional organizational cultures

    A culture of results

    A results culture places a strong emphasis on completing objectives, hitting deadlines, and producing the best outcomes possible. A results culture connects management and people behind a common shared aim of achievement. 

    Success comprises not only employee productivity and accomplishment but also the performance and profitability of the firm. Employees and business leaders alike set specific goals and collaborate to help the organization achieve its overall goals. A results-oriented culture places greater emphasis on objectives and results than on the methods used to get there.

    Culture of Safety

    A safety culture emphasizes reducing risk and being ready for anything that might happen. Management and staff place a high emphasis on strategic planning and well-considered actions in a safety culture. 

    Employees who work in an environment that values safety feel safe and secure even when things are changing because the organization develops backup plans for various contingencies. Businesses with a safety culture frequently use analysts to assess past data before formulating plans. Additionally, they invest a lot of money in research and development to evaluate risk management, test for feasibility, and safety tests.

    Government Culture

    Employees that follow orders and processes benefit from strong leadership provided by an authority culture. Supervisors who use a top-down management approach set out specific goals and expectations for their employees. 

    Employees can execute competently within the constraints because they are aware of the different levels of authority. Employees who work hard and go above and beyond the call of duty might get promotions in an authority culture, which also promotes internal competitiveness.

    Caring Society

    A compassionate organizational culture places a strong emphasis on the welfare of its workers to promote fidelity and retention. The firm leadership places a strong emphasis on cultivating relationships with employees and fostering a climate of cooperation and respect. 

    Employee participation is encouraged at all management levels, and employees often receive a wide range of rewards from the business. Examples include employee pricing or staff discounts, health and wellness advantages, and staff appreciation activities.

    Discovering Culture

    To advance the company, a learning corporate culture emphasizes research, innovation, and creativity. Employees thrive in this kind of setting because management supports skill growth and discovery. 

    A corporation with a learning culture encourages ongoing learning and development. As a result, goods and services are continuously improving and winning over new clients. In this cultural setting, employees who appreciate education and learning opportunities flourish.

    Characteristics of organizational culture

    Every organization has a unique culture, just like various communities do. People who belong to the same community have the same values, practices, and beliefs. Like this, those that share the same organizational culture do so in terms of their views, presumptions, and values. As a result, it is accurate to argue that organizational culture is comparable to community culture. Below are the various aspects of organizational culture. Understanding these traits will aid you in understanding the culture and guiding principles of your organization.

     Structure of the organization

     Structure of the organization

    An organization’s organizational structure also reflects its organizational culture. Various organizations adhere to various structures. For instance, some firms have a hierarchical structure with a correct hierarchy of information flow, and the authority to make decisions rests with the top managers. The work of the employees is overseen by their direct managers.

    On the other hand, some businesses have a flat hierarchy in which every person is employed at the same level. In this form of organizational culture, nobody is in charge. An employee’s ability to make decisions is determined by them rather than by their position in the organization. One of the most important talents for a candidate is thought to be the capacity for teamwork.

    Rule stability or orientation

    Rule stability or orientation

    Organizational cultures that are rule-oriented adhere to the set of rules. When a company is founded, certain rules are decided from the outset. To do even a small amount of work, all these organizations’ personnel are expected to abide by these rules. These organizations place a high value on laws and regulations and are typically averse to changing them.

    Bureaucratic organizations are frequently those that adhere to rule-oriented organizational culture. In these organizations, innovation is at an all-time low, and even simple tasks take a long time to complete. Most organizations in the public sector have a rule-oriented organizational culture.

    These organizations consistently produce goods and services and are less interested in making excessive profits. Organizations that are unaffected by shifting market conditions should have a rule-oriented organizational culture.

    Result Oriented

    A culture focused on results indicates that the organization’s management is only interested in the outcomes. They don’t care what techniques are employed to achieve the desired results. Organizational cultures that focus on results are most common in modern businesses. Due to the fierce competition in the market today, many organizations have had to modernize their outdated working practices to maximize output and make a profit.

    Because employees are free to generate fresh, creative ideas to increase earnings, innovation flourishes in result-driven firms. One of the most challenging organizational cultures to work in is the result-oriented culture. Such organizations constantly demand performance and the generation of fresh ideas from their employees. This causes most of the stress experienced by such organizations’ personnel. 

    Either fairness or People-oriented

    Companies that value their employees have a people-oriented organizational culture. An organization becomes a people’s organization if its organizational culture is people-oriented. People adore working for organizations that exhibit this quality. These organizations place a strong emphasis on how a specific choice will affect the people who work there

    These businesses treat their workers with respect and decency. Benefits like bonuses and promotions are mainly offered to employees depending on how well they work for the company. These companies think that if they care about their staff, then the staff would care about them as well. 

    People-oriented workplace culture is preferred by most employees because it promotes work-life harmony. Due to their workplace cultures that value people, these organizations have minimal employee turnover and successfully recruit top talent.

    Concentration on or a focus on details

    Organizational culture is characterized by a focus on details. To give their customers a better experience, the company thus pays little attention to information. Both hospitality organizations and e-commerce businesses frequently exhibit this aspect of organizational culture. Hotels and restaurants pay attention to what they order to give consumers a better experience in the future.

    By paying attention to even the smallest things, they ensure that their consumers have a comfortable experience and come back to them repeatedly rather than visiting their rivals.

    For instance, a hotel might keep track of a guest’s preferences for meals and accommodations in its computer system and utilize that data to offer the guest’s preferred services upon their return.

    E-commerce websites keep track of the information about clients’ most recent orders as well as the information about the products they have visited to send them offers on those items. Businesses may give their customers a convenient and quick shopping experience by paying attention to the little things. This aspect of organizational culture not only enhances business practices but also aids businesses in making more money.



    Competition-oriented organizations have an organizational culture that values outperforming and fiercely challenging their rivals. Such organizations’ fundamental objective is to remain competitive leaders. As they conduct business and compete with one another, these organizations disregard laws and regulations. These organizations are also referred to as aggressive organizations because of this organizational cultural trait.

    This indicates that these businesses are aggressive in their commercial practices. Even when they are financially successful, organizations that prioritize competition find themselves in difficult situations. Because it has had to contend with numerous lawsuits brought by its rivals over the years, the Microsoft corporation is known for having an organizational culture that is focused on competitiveness.

    Innovation Oriented

    Organizational cultures that place a strong focus on innovation and fresh thinking. These organizations readily incorporate fresh concepts into their working methods. The “No-boss” concept is adhered to, and all employees are at the same level in organizations with an innovation-focused organizational culture. Innovation is the only thing that is valued and recognized.

    Top managers in innovative organizations don’t make decisions like they do in conventional ones. The decision-making authority of a new employee is equal to that of an employee who has been with the company for five years.

    Google is at the top of the list of businesses with an innovation-focused organizational culture. 20% of each employee’s working hours are allowed to be dedicated to self-selected initiatives at Google. Google’s strategy encourages innovation to flourish within the company.

    Team-oriented organizational culture

    Team-oriented organizational culture

    Team-oriented organizational culture is another name for collaboration-oriented organizational culture. Employees in these organizations cooperate and help one another out during trying times. The entire team, not just one person, is given credit for a project’s success or a creative work strategy.

    Employees in this type of organizational culture are helpful and supportive. Organizations that value collaboration employs people’s skills to complete tasks quickly. Additionally, in organizations that value teamwork, candidates who are not suited for a collaborative work environment are not hired. One of the most important talents for a candidate is thought to be the capacity for teamwork.

    Conflict Management

    Conflict Management

    Different organizational cultures use a variety of approaches to handle employee conflict. For instance, in certain organizations, workers are urged to resolve their disagreements through open communication, whereas in other organizations, major issues are brought before a special committee for settlement.

    An organization’s effectiveness is significantly impacted by how disagreements are handled within the organization.

    Patterns of Communication

    Patterns of Communication

    Every firm relies heavily on communication. Various organizations use various communication techniques. For instance, the formal hierarchical model of communication is the most widely used design. As a result, information moves through the company in a hierarchical hierarchy as opposed to flat organizations, where knowledge is shared through free-form communication.

     Degree of support by management

    Degree of support by management

    In some organizational cultures, management backs its workers and offers assistance as needed. Employees in this kind of company enjoy good working ties with management. Better management will result in better staff performance.

    However, in certain organizations, management’s function is to assign work to workers and then expect them to finish it within the allotted time.

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