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What is Organizational Culture?

By S. Ashraf
Updated May 16, 2024
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Organizational culture is a concept developed by researchers to explain the values, psychology, attitudes, beliefs, and experiences of an organization. Generally speaking, it is viewed as the shared norms and values of individuals and groups within an organization. This set of mutual understandings controls the way individuals interact with each other within the organization as well as with customers, suppliers, and other stakeholders existing outside the boundaries of the organization.

The topic of organizational culture has been studied by researchers from diverse fields. Purely academic fields such as sociology and anthropology as well as applied disciplines such as management science and organizational behavior have offered their perspectives on what it is. Although it might not be possible for one definition to suit all fields, there is general agreement among researchers on various aspects of this type of culture.

The managers and executives within an organization have a significant impact on the culture because of their role in making decisions, but they are not the only members of the work community. In reality, all employees contribute to the norms of the group. Culture, in the environment of the workplace, is the result of the weaknesses, strengths, life experiences, and education of everyone who is part of the workforce.

The culture of an organization also is molded by its mission. For example, a university’s culture is different from that of the military, a hospital, or a for-profit company. Understanding the culture of a specific enterprise is made more difficult by the fact that there is no single culture. Instead, complex organizations also reflect the culture of the sub-groups within them. Individuals might adhere to the core values and beliefs of the organization, but they also belong to sub-groups or cultures that form along the lines of occupational duties, professional skills, age, union membership, etc.

Organizational culture is both formal and informal. A flow chart indicating authority lines or a human resources manual might define the formal culture. Informal culture, though, is revealed in such things as bulletin board content, decorations in individual work areas, the arrangement of furniture, newsletters, clothing worn, how employees interact in meetings or collaborate, and the workplace stories that are repeated.

The hiring of new employees is another area in which the culture of the organization plays a role. In the interviewing process, questions often are directed to explore whether or not the candidate would be a good fit in the organization's culture. It is a powerful element that shapes all facets of work.

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Discussion Comments
By dbuckley212 — On Dec 24, 2010

In my workplace, we had a mandatory party to attend and nobody really wanted to be there. It was a very awkward "party." Later, when the managers realized they were trying to formalize the informal aspect of our organizational culture, they made a marked effort to keep the formal culture within work hours. Now our workplace enjoys a strong formal and informal culture, which makes working relations that much more enjoyable.

By Armas1313 — On Dec 22, 2010

Organizational culture development is often facilitated naturally at an informal level in the form of inside jokes, employee relations, and other forms of non-workplace conversations. Developing a formal organizational culture is the responsibility of the workplace leaders, and may take the form of pep rallies, rules, or outreach on the part of employers. When developing a good organizational culture, it is important to allow the informal culture to develop on its own and to make sure that a good line is drawn between formal and informal.

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