Organizational Culture

What Is Organizational Culture?

Organizational culture is the cultureOpens in new window that exists in an organization—something akin to a societal culture. It is composed of the shared philosophy, ideology, values, assumptions, beliefs, hopes, perceptions, behaviors, and norms that create unity across the organization.

This culture involves the mission and vision of the organization, and directly influences the way people and groups within the organization interact through each other and with parties outside the organization.

At the most basic level, organizational culture defines the assumptions that employees make as they carry out their work; it defines “the way the organization functions.” In other words, it is the unseen and unobservable force that is always behind the organizational activities that can be seen and observed.

According to Kilmann et al. (1985), “Culture is to the organization what personality is to the individual—a hidden, yet unifying theme that provides meaning, direction, and mobilization.”An organization’s culture is a powerful force which persists through reorganizations and even the departure of key personnel.

Types of Organizational Culture

According to the competing value framework, there are four principal types of organizational cultures and six dimensions to the cultures. In this framework, there are implications associated with each cultural type as described below:

  1. The Clan Culture
    This cultural type is full of shared values and common goals, with an atmosphere of collectivity and mutual assistance, which stresses empowerment and member growth. This cultural type has a strong sense of family, where teamwork is emphasized and the leaders are mentors. Loyalty, cohesiveness, and participation are key components of success. The overall organizational focus is on the maintenance of stability.
    — The Perception of Quality: Mapping Product and Service Quality to Consumer ..., by George N. Kenyon, Kabir C. Sen
  2. The Adhocracy Culture
    This cultural type gives its members tremendous latitude to grow on their own as long as their actions are consistent with organizational goals. The leaders within the culture are characterized as entrepreneurs who are driven by innovation and finding new ideas. The overall organization focus is on gaining market share and maximizing external developing opportunities. Individuals are recognized and rewards for creativity and innovation.
    — The Perception of Quality: Mapping Product and Service Quality to Consumer ..., by George N. Kenyon, Kabir C. Sen
  3. The Market Culture
    This cultural type is outwardly focused (e.g., on market transactions). Its main goal is to maximize profits through market competition. This culture stresses effectiveness in achieving the goal. Internal competition between members is common and is perceived as a development tool, and success is based upon individual achievement.
    — The Perception of Quality: Mapping Product and Service Quality to Consumer ..., by George N. Kenyon, Kabir C. Sen
  4. The Hierarchy Culture
    This cultural type operates on a clear structure, standardized rules and procedures, strict control, and well-defined responsibilities. Internal stability is paramount and is maintained through adherence to set of rules. Success is measured by task accomplishment in accordance with procedures and avoidance of destabilizing activities.
    — The Perception of Quality: Mapping Product and Service Quality to Consumer ..., by George N. Kenyon, Kabir C. Sen

Differences Between Organizational Culture & Organizational Climate

The meaning of organization climate is a relatively enduring quality of the internal environment that is experienced by its members, influences their behavior, and can be described in terms of the values of a particular set of characteristics of the organization.

Although both culture and climate deal with social context in organization and also aim at influencing behavior of organizational members, the concept of “organizational climate” is different from that of “organizational culture”.

Meudell and Gadd (1994) suggest that although a strong culture is important, an organization will be successful only if an appropriate climate is created. The following is a summary of the primary differences between organizational culture and climate (Barker in Verwey & Du Plooy-Cilliers 2002, Denision 1996, Neher 1997).

  • Culture involves deep underlying assumptions, individual meaning and members’ views of the organization; whereas climate wields greater emphasis on members’ perspectives on observable practices and procedures that are closer to the surface of the organization’s life.
  • While culture refers to the deep structure of organizations which is rooted in the values, beliefs and assumptions held by members, climate is rooted in the organization’s value system presenting social environments in relatively static terms.
  • Culture is concerned with the nature of expectations while climate is concerned with whether or not these expectations are met.
  • Culture refers to the patterns of belief, values, norms, and expectations shared by members of the organization while climate refers to meaningful interpretations or perceptions of members of an organization.
  • While culture describes how the organization is depicted and what it is all about; climate focuses on the employees’ perceptions of what the organization is about.

Closely aligned with organizational culture is organizational structureOpens in new window, the framework within which an organization arranges its lines of authority and communication, and delineates duties and obligations. Learn more here.Opens in new window