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What is Organizational Culture?

Organizational Culture

It’s safe to say that defining “organizational culture” isn’t necessarily black-and-white.  As Michael D. Watkins writes in the Harvard Business Review, “While there is universal agreement that (1) it exists, and (2) that it plays a crucial role in shaping behavior in organizations, there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change.”


This, understandably, is problematic.  After all, how can you expect to analyze something you can’t begin to define?  How can you find the value in something so nebulous?  And, at the end of the day, how can you ultimately improve a “culture” without a clear foundation?


To prove our point, here are several definitions:


  • “The unique social and psychological environment of an organization” – Business Dictionary
  • “The sum of values and rituals which serve as ‘glue’ to integrate the members of the organization” – Richard Perrin, Harvard Business Review
  • “The shared assumptions, values, and beliefs that guide the actions of its members” – Reference for Business


While each of these definitions share key characteristics, they overlap like a Venn diagram – each with their own unique attributes, as well.  One LinkedIn discussion forum on the topic turned back 300+ responses, each similar yet distinct from the three spotlighted above. 


So, maybe the bottom line is this: Organizational Culture can’t be summed up in one sentence, but rather is a complex, constantly-evolving entity with countless interpretations.  At the heart of each explanation is the idea that a culture is defined by values, behaviors, beliefs, customs, and actions.  But, furthermore, here are our five key takeaways to describe other aspects to consider when trying to harness the power of Organizational Culture to lead your company to the best future possible:


  1. Cultures are not immune or indistinct from our global culture.  After all, a company is made up of its people, who are – as much as we’re willing to admit or deny it – a product of their own societal cultures.  This overlap with the outside world inevitably creates its own set of challenges and rewards, especially for global organizations.
  2. Sub-cultures exist – and can be inherently valuable.  Just like how “Organizational Culture” can’t be simplified to one all-encompassing definition, neither can an entire organization be simplified to one culture.  As Rolfe Winkler, with the Wall Street Journal, said, “It over simplifies the situation in large organizations to assume there is only one culture… and it’s risky for new leaders to ignore the sub-cultures.”  Various factors – previous acquisitions, different business units’ functions, or varied leadership styles, to name a few – can influence the cultures within a large organization – and this isn’t necessarily a bad thing!  As long as the sub-cultures don’t present obvious counter-productiveness, the power of this diversity can be beneficial to any size organization, and helpful in easing any future mix-ups, procurements, etc., because, ultimately…
  3. Cultures are dynamic.  Almost nothing within a company is ever static – including (and especially) culture.  Due to internal and external factors, an organization’s culture is always evolving and, hopefully, improving.  This is also a reminder that bettering culture is never an end-destination, but rather a constant process of discovering and developing.
  4. Culture is influenced by leadership.  While the relationship between leadership and organizational culture is certainly a two-way street – with many analysts going so far as to say leadership is a product of an organizational culture – we believe that strong and competent leaders have the power to influence the culture of their organization, rather than vice versa.  It’s a belief integral to the services we offer at Assessment+: Powerful and transformational leaders are ones who create passionate, engaged, and driven workers who identify with the shared values and goals of their company.
  5. Whichever way you define it, Organizational Culture is vital and influential to the projected road map of a company.  It affects how dedicated employees are towards shared objectives, thereby affecting both employee- and organization-wide performance and productivity.