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Organizational Culture

What is Organizational Culture?

Organizational Culture describes the collection of values, expectations, and practices that direct and inform the members of the organization’s actions. Essentially, it is the collection of traits which make your company your company – the culture that contributes to the unique social and psychological environment of an organization. Whilst a good Organizational Culture exemplifies positive characteristics and leads to better performance, a dysfunctional culture brings out qualities that can hinder even the biggest and most successful organizations. Organizational Culture is created through consistent and authentic behaviours and can be witnessed, for example, in the CEO’s response to a crisis, or a manager’s correction of the employee who makes a mistake.

The importance of Organizational Culture

Organizational Culture affects all areas of business activity, from tone of voice to employee benefits. One of the most significant areas affected by Organizational Culture is attracting and retaining talent by outperforming the competition. Studies show that 77% of business professionals consider a company’s culture before applying. Furthermore, almost half of employees said that they would leave their current job for a lower-paying role at an organization with a better culture. Organizational Culture is one of the top gauges of employee satisfaction and one of the principal reasons that 65% of employees stay in their job.

The Sub-Cultures of Organizational Culture

  1. Person Culture and Market Culture: the way in which members of an organization conduct business, treat employees, customers, and the wider community.

  2. Adaptive Culture and Adhocracy Culture: the extent to which freedom is allowed in decision making, developing new ideas and personal expression.

  3. Power Culture, Role Culture, and Hierarchy Culture: the way in which power and information flow through the organizational hierarchy and system.

  4. Task Culture and Clan Culture: the way in which committed employees act towards collective objectives.

How and why does Organizational Culture change?

An Organization’s Culture is never stagnant. Employees of an organization develop a common belief about what a good culture looks like as they interact over time and learn which actions yield success and which don’t. When beliefs and actions start leading to lesser successful results, the Organization’s Culture must evolve and improve. However, this is not an easy task. Employees often resist change and can fight against a new culture. It is therefore the duty of the organization’s leaders to convince their employees of its benefits and assurance in its yielding success.

Learn more about Organizational Culture

Understanding and Developing Organizational Culture

What is Organizational Culture and Why Should We Care?

10 Ways to Create the Organizational Culture Your Company Needs

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