ORGANIZATIONAL CULTURE: Definition, Types and Ultimate Guide

organizational culture

Every organization has a culture, whether company leadership intentionally creates and maintains it or allows it to develop on its own. The culture of an organization defines how individuals work and perform within it, making organizational culture a critical component of a company’s ultimate success. Many businesses strive to build productive cultures that generate a positive work environment.
In this article, we’ll look at what organizational culture is, how companies create it, and the various types and subcultures of organizational culture.

What is Organizational Culture?

Organizational culture is the set of beliefs, values, and interaction styles that define an organization’s environment. Organizational culture encompasses a company’s or business’s fundamental values. It also represents an organization’s expectations and philosophy, as well as the experiences of its employees and executives, and is frequently used to determine the group’s future orientation.

What is the Importance of Organizational Culture?

The culture of a business controls numerous aspects, from how decisions are made to how people interact. Learning more about your company’s culture will help you determine whether your workplace shares your values. Understanding your own basic beliefs in the context of your organization’s culture will also help you assess whether your workplace will be a positive environment for you.
Companies can express their organizational culture in a variety of ways:

  • How a firm or organization conducts its operations and treats its employees and customers
  • How much discretion employees are allowed in making decisions
  • The manner in which information is communicated to employees and customers
  • Employee dedication to creating a high-quality product or service

What are the Types of Organizational Culture?

Each company has its own culture, but most fall into one or more of the following types:

#1. Clan Culture

If you compare your workplace culture to that of a family, your workplace may have a clan culture. People in these surroundings are friendly, responsible, and respectful. Companies frequently urge employees to regard their executives as mentors. These businesses place a premium on employee involvement and team building.

Smaller businesses demonstrate clan culture more frequently than larger businesses. These firms will declare that they value the well-being and health of all team members while both challenging and motivating them.

A clan culture may also prioritize the human resources department of an organization. As a result, these firms frequently pursue long-term HR strategies that stress inclusion and teamwork. They place a premium on tradition and devotion.

#2. Adhocracy Culture

An adhocracy culture can be found in a corporation that values creativity and innovation. Companies with this culture are more likely to have an inventive, dynamic, and creative work environment.
Employees in these environments are often encouraged to experiment with and try new ideas. The company’s leaders are viewed as calculated risk-takers.
Organizations with an adhocracy culture want to grow their business and create new products. They assess success by their ability to predict market demands and offer solutions that meet those objectives.

#3. Market Culture

An organization that emphasizes market culture completes tasks promptly and efficiently. Competition is frequently used in these firms to drive both executives and staff.
People in a market culture organize their labor to contribute to specific aims. Organizations with a market culture base their success on stock and market performance.

#4. Hierarchy Culture

In a hierarchical culture, the workplace strictly conforms to stringent institutional processes. Leaders in these firms strongly urge staff to follow all procedures correctly. In their pursuit of results, these businesses place a premium on efficiency and consistency.
Process control and systematic problem-solving assist these businesses in operating efficiently. This type of organizational culture is common in bureaucratic organizations. Members of the company adhere to corporate procedures in order to produce consistent or assured results.

Qualities of a Great Organizational Culture

Every organization’s culture is distinct, and it’s critical to preserve what makes your company special. However, the cultures of high-performing firms typically reflect the following characteristics, which you should strive to cultivate:

  • Alignment occurs when the company’s aims and the motivations of its personnel all pull in the same direction. Exceptional businesses work to ensure that their vision, purpose, and goals are always in sync.
  • Public kudos, a thank-you card, or a promotion are all examples of appreciation. A culture of gratitude is one in which all team members routinely recognize and praise others for their accomplishments.
  • Trust is essential in any organization. When there is a trusting culture, team members may express themselves and rely on others to support them when they try something new.
  • Performance is critical because strong firms foster a business-oriented culture. Talented employees in these companies encourage one another to succeed, resulting in increased profitability and production, as shown above.
  • Resilience is an important characteristic in highly dynamic circumstances where change is constant. A resilient culture teaches leaders how to anticipate and respond to change with ease.
  • Teamwork entails collaboration, communication, and mutual respect among team members. Employees will get more done and feel happier if everyone on the team encourages one another.
Read Also: Top 2023 Most Effective Team Building Exercises
  • Integrity, like trust, is essential for all teams that rely on one another to make decisions, evaluate results, and establish alliances. This facet of culture relies heavily on honesty and transparency.
  • Innovation motivates organizations to make the most of available technology, resources, and markets. A culture of innovation requires you to think creatively about all parts of your organization, including your own cultural initiatives.
  • Psychological safety gives employees the confidence they need to take risks and deliver honest feedback. Remember that psychological safety begins with the team, not the individual, so managers must take the lead in creating a secure workplace in which everyone feels comfortable contributing. Now that you know what a great culture looks like, let’s talk about how to create one in your company.

Eight Steps To Creating a High-performing Organizational Culture.

Developing and implementing a plan with defined objectives that you can work toward and measure is required for creating a great organizational culture. The eight stages outlined below should serve as a road map for establishing a culture of continuity that will provide long-term advantages to your organization.

#1. Recognize excellence

Recognizing all team members’ efforts has a far-reaching, beneficial impact on organizational culture. When everyone on the team celebrates the accomplishments of others, individuals begin to comprehend how they fit into a larger picture. Even the most jaded employees want to know that their effort is appreciated, and they notice when it isn’t – 76 percent of employees don’t feel particularly recognized by superiors. Experts believe that when a firm makes employee appreciation a part of its culture, key metrics such as employee engagement, retention, and productivity rise.

Making acknowledgment a part of your culture entails making it a regular occurrence, rather than something reserved for important achievements or work anniversaries. Encourage team members to practice both monetary and social recognition on a regular basis. Consistently providing social recognition has a tremendous commercial impact: organizations that invest in social recognition are four times more likely to boost stock prices, twice as likely to enhance NPS scores, and twice as likely to improve individual performance.

Read Also: EMPLOYEE RECOGNITION: Ultimate Guide To Employee Recognition Programs

Monetary recognition is also valuable. Consider a point-based recognition program that allows employees to effortlessly accumulate large point balances. Instead of being handed a generic mug or years of service certificate that will collect dust on a shelf, they’ll enjoy looking forward to redeeming their points for a gift that is individually important to them.

Recognition should be clearly linked to business values and specific acts in order to encourage other cultural attributes. After all, 92 percent of employees feel that being recognized for a specific action increases their likelihood of repeating that behavior in the future.

Last but not least, leadership must take center stage in your recognition efforts since they establish the cultural tone for the entire organization. Include a recognition talk track in your leadership training and share top recommendations with managers on how and why to honor others.

#2. Allow employees to speak up.

It is critical to creating a culture that values input and fosters employee voice, as failure to do so can result in lost income and demotivated staff.

To begin, you must collect feedback using the appropriate listening technologies, such as pulse surveys and workplace chatbots, that allow employees to easily convey how they are feeling in the moment. Then, examine the results to determine what is and isn’t working in your organization, and act on those discoveries while they are still relevant. This not only strengthens your culture, but also leads to benefits such as increased employee satisfaction and profitability.

According to a Clutch survey, 68 percent of employees who receive regular feedback are satisfied with their positions, and Gallup discovered that firms with managers who got feedback on their strengths had an 8.9 percent higher profit.

In addition to the methods indicated above for getting input, make sure you’re paying attention to more subtle forms of feedback that can identify cultural shortcomings. Pay attention to body language, for example, as it can reveal a lot even when staff isn’t eager to discuss. When working with a remote team, video conferencing can help maintain this nonverbal communication channel open. Managers should view all interactions with employees as opportunities to acquire and respond to feedback while also serving as trusted coaches.

#3. Make your leaders culture ambassadors.

The success of your organization in developing a healthy workplace culture is in the hands of team leaders and managers. For example, if your company culture stresses specific principles but your leadership team does not embody them — or even exhibits behaviors that contradict them — the effort is undermined. Members of the team will see the discrepancy between declared values and experienced behavior. They may even begin to imitate undesirable behaviors because they believe management has praised those actions.

Your leadership team may contribute to the culture you require by making it a priority in all aspects of their work lives. They must communicate the organization’s culture and values freely and honestly, and they must be prepared to incorporate employee feedback into their cultural advocacy activities. Leaders require their employees’ perspectives on culture; while 76% of executives believe their firm has a well-communicated value system, just 31% of employees concur. Employees will emulate leaders who demonstrate your culture.

#4. Follow your company’s values.

The values of your organization form the cornerstone of its culture. While developing a goal statement is a good start, living by company values entails incorporating them into all aspects of your organization. This covers terms of support, HR rules, benefit programs, and even out-of-office efforts such as volunteering. Your employees, partners, and customers will notice and appreciate the fact that your company lives its principles every day. You can also praise employees for acts that embody your values to demonstrate that they are more than just words and incentivize employees to create the value-based culture that you desire.

#5. Make connections among team members.

Building a resilient workplace culture necessitates strong links between team members, but with more remote and terse communication, forming those bonds can be difficult. Even when working remotely, encouraging cooperation and participating in team-building events are two excellent strategies to bring your team together and enhance communication.

Look for and support shared personal interests among team members, especially those from different generations who might otherwise find it difficult to relate to one another. This can open up new avenues for comprehension and empathy, which are critical for better communication, creativity, and even conflict resolution.

#6. Concentrate on learning and development.

Employees who are constantly learning and firms who invest in employee development create great workplace cultures. Training initiatives, coaching, and giving staff new tasks are all excellent methods to demonstrate your commitment to their success.

A learning culture has a huge business influence. According to Find Courses’ most recent benchmark study, businesses with highly engaged employees are 1.5 times more likely to prioritize soft skills development. It was also shown that organizations with revenue growth in the previous fiscal year were twice as likely to adopt innovative learning technology and three times more likely to raise their learning and development expenses.

#7. Keep culture in mind from the start.

Internal disagreement is likely when an employee’s perspective does not match your corporate culture. Organizations should hire for culture and reinforce it during and after the onboarding process. Values must be shared and practices and processes must be taught.

When hiring, ask questions on cultural fits, such as what matters to the candidate and why they want to work for your company. However, these questions should not be the only ones considered when evaluating a candidate, as the finest firms retain an open mind to varied ideas that can help keep their culture fresh.

Building social interactions should also be prioritized during the onboarding process so that workers have the information needed to understand your company’s culture and values. These relationships will remain throughout the employee’s term at the organization, ensuring that cultural values are constantly reinforced.

#8. Make the employee experience more personalized.

Because your employees, like modern consumers, want individualized experiences, you must focus on ways to enable each team member to identify with your culture. Pulse surveys and employee journey mapping are excellent tools for determining what your employee’s value and what their ideal business culture looks like. Take what you’ve learned and modify your activities to personalize your team’s employee experience. When you start treating your staff with the same care that you do your clients, you will undoubtedly create a culture that drives everyone in your firm.


Your organizational culture reveals a lot about your team and what you value, and job searchers can tell almost immediately. You’re not alone if you’re unsure where your company ranks on this list. Cameron and Quinn created an assessment instrument to assist businesses in determining their organizational culture.

After assessing your current organizational culture, consider what genuinely matters to your organization: Where are you aligned? What are your areas for growth?
Take measures to change your organizational culture if you believe it would benefit your company and employees. While this may vary depending on the organization, you should generally begin by defining and examining the current culture, financial goals, company structure, mission, and fundamental values. Then, on a regular basis, assess your culture and the progress you’ve achieved toward your organizational culture objectives.


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