You found our article on organizational culture: definition, examples, & best practices.
Organizational culture is the rules, values, beliefs, and philosophy that dictate team members’ behavior in a company. The culture consists of an established framework that guides workplace behavior. Examples include integrity, teamwork, transparency, and accountability. The purpose of organizational value is to differentiate your organization from others and act as a model for decision-making processes.
This article includes:
- definition of organizational culture
- types of organizational culture
- organizational culture examples
- organizational culture best practices
- importance of organizational culture
- workplace culture examples
Let’s get started.
Definition of organizational culture
Organizational culture refers to the shared values, beliefs, norms, behaviors, and practices that characterize a particular workplace or company. This culture is the collective personality of an organization that shapes the way employees interact, make decisions, and approach their work. Essentially, corporate culture serves as a blueprint for how business is done within the organization and influences the overall work environment and employee experiences.
At its core, company culture reflects the company’s history, leadership style, and values. These cultural elements create a sense of identity and belonging among employees, as they collectively align their actions with the established norms and expectations. Office culture can be explicit, with clearly defined and communicated values. Alternatively, this culture can be implicit, existing in the unspoken behaviors and attitudes of employees. Either way, this system greatly influences employee perceptions of roles, camaraderie, collaboration, problem-solving approaches, and the organization’s external reputation.
Understanding and managing this culture is crucial because it directly affects employee engagement, performance, and overall organizational success. A positive and healthy culture can foster employee satisfaction, motivation, and loyalty, increasing productivity and innovation. On the other hand, a toxic or misaligned culture can result in high turnover, internal conflicts, and hindered performance. Organizations that actively shape their culture tend to have a more engaged and cohesive workforce. In turn, this system helps firms navigate challenges and adapt to changes more effectively.
Several factors can determine your company’s culture, including the following.
1. Leadership Principles
Leadership principles are like the guiding rules that leaders follow to shape an organization’s culture. Good leaders are honest, open, and accountable. These supervisors encourage open communication and value different ideas. Additionally, good leaders believe in the strength of a diverse team. Strong leaders inspire and empower their teams, setting an example of continuous learning and adaptability, which promotes a culture of growth and resilience. In essence, leadership principles are the foundation of an organization’s culture.
2. Type of Business
The type of business greatly influences its organizational culture. For example, a tech startup often fosters an innovative and agile culture that encourages experimentation and risk-taking. In contrast, a more traditional, established company may prioritize stability and hierarchy. Similarly, service-oriented businesses often focus on customer-centric cultures, while creative industries emphasize individuality and creative expression. Regardless of the business type, the firm’s values and practices shape the culture, influencing how employees interact, collaborate, and innovate within the organization.
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3. Clients and Staff
Clients and staff significantly impact work values. Clients influence culture by shaping products, services, and communication based on their preferences. Positive client experiences foster excellence and innovation, while challenges can prompt cultural shifts. Staff contribute to culture through values, behaviors, and collaboration. Engaged employees create a culture of teamwork and dedication, with leadership playing a key role. Prioritizing employee well-being cultivates a culture of empowerment and growth.
Types of organizational culture
According to professors Robert Quinn and Kim Cameron at the University of Michigan, there are four main workplace culture types. These types are the Adhocracy Culture, Clan Culture, Hierarchy Culture, and Market Culture.
1. Adhocracy Culture
This culture type is characterized by innovation, risk-taking, and adaptability. Organizations with an adhocracy culture value creativity, experimentation, and a dynamic approach to problem-solving. These firms thrive in fast-changing environments and encourage employees to explore new ideas and initiatives. Flexibility and a willingness to take calculated risks are key features of this culture.
For instance, Google is known for its adhocracy culture. The company encourages employees to pursue innovative ideas and projects, even allowing them to dedicate some of their work time to personal initiatives. This culture of experimentation and risk-taking has led to the development of products and services beyond its core search engine, such as Google Maps and Google Glass.
2. Clan Culture
Clan culture centers around collaboration, teamwork, and a sense of community. Organizations with a clan culture prioritize employee engagement, open communication, and mutual support. There is a familiar atmosphere where employees often refer to each other as a “family.” This culture values employee well-being, personal growth, and long-term relationships.
Zappos, an online shoe and clothing retailer, is often cited as an example of clan culture. The company places a strong emphasis on employee happiness and engagement. The firm’s core values include “Deliver WOW Through Service” and “Build a Positive Team and Family Spirit.” Zappos’ commitment to creating a positive and collaborative work environment is a hallmark of clan culture.
3. Hierarchy Culture
Hierarchy culture is characterized by structure, stability, and a strong focus on processes. Organizations with this culture type have clear lines of authority, well-defined roles, and standardized procedures. These firms often value efficiency, predictability, and maintaining stability through established protocols.
IBM is an example of a company with a hierarchy culture. With a history of engineering and technology, IBM emphasizes structured processes and a clear chain of command. The company’s approach to innovation is often more planned and methodical, focusing on research and development driven by a defined hierarchy of expertise.
4. Market Culture
The market culture emphasizes competition, results, and achievement. Organizations with a market culture prioritize goals, performance metrics, and the bottom line. These firms encourage individual initiative, assertiveness, and a strong focus on delivering customer value. This culture type is often associated with a results-driven and competitive environment.
Amazon is a prime example of a market culture. The company is highly results-oriented and customer-focused, prioritizing efficiency, productivity, and competitive success. Amazon’s leadership principles, such as “Customer Obsession” and “Bias for Action,” underscore its market-driven approach to decision-making and achieving results.
Organizational culture examples
Adopting a positive team spirit affects a company’s success. It is little wonder why several companies develop cultures that align with their goals. Here are five examples of companies with great work cultures.
Netflix has an admirable work culture. The entertainment company is popular for its culture that emphasizes people over process. At Netflix, all employees can participate actively in important decision-making processes. There are no inhibiting rules, and staff members can communicate freely and directly. Netflix chooses employees based on integrity, teamwork, passion, humility, innovation, and selflessness.
Microsoft has a commendable work culture mainly focused on a growth mindset. The company is popular for employees dedicating their skills, time, and money to help make a difference in the world. This difference contributes to employee diversity and inclusion, considering Microsoft has employees from all backgrounds and walks of life working to ensure customer satisfaction.
Patagonia, an outdoor apparel and gear company, is renowned for its commitment to environmental sustainability and social responsibility. The company’s work culture deeply aligns with its core values, which include advocating for environmental causes and encouraging employees to live purposeful lives. A sense of purpose and a mission-driven approach to business categorize Patagonia’s culture. The firm encourages employees to participate in environmental activism, and the company supports their involvement through initiatives such as paid environmental internships.
Salesforce, a leading customer relationship management software company, is known for its Ohana culture. This system emphasizes inclusivity, philanthropy, and community engagement. The company’s strong commitment to social impact is reflected in its 1-1-1 model, where it donates 1% of its equity, time, and products to charitable causes. Salesforce fosters a culture of innovation and creativity by encouraging employees to think outside the box and take risks. The company’s work culture promotes continuous learning through its Trailhead platform, which offers various courses and resources for skill development.
Adobe is a multinational software company and has cultivated a culture of creativity, innovation, and employee development. The company’s culture encourages employees to explore their passions and experiment with new ideas. Adobe’s “Kickbox” initiative provides employees with resources to pursue innovative projects, fostering a culture of experimentation and risk-taking. The company promotes diversity and inclusion and provides platforms for employees to share their unique perspectives. Adobe also values work-life balance, offering various programs to support employees’ well-being. This culture of creativity and employee support has contributed to Adobe’s reputation as a leader in creative software and a desirable workplace for creative professionals.
Nordstrom, a high-end fashion retailer, has a strong customer service culture and commitment to employee empowerment. The company values a customer-centric approach and empowers employees to make decisions that prioritize customer satisfaction. Nordstrom’s culture is built on trust and autonomy, allowing employees to take ownership of their roles and contribute to the company’s success. The company also focuses on employee development, offering opportunities for advancement and growth within the organization.
7. Wegmans Food Markets
Wegmans is a regional supermarket chain known for its culture of employee development, community engagement, and work-life balance. The company places a strong emphasis on treating employees like family and providing growth opportunities. Wegmans offers extensive training programs, mentorship opportunities, and pathways for advancement within the organization. The company’s culture features a supportive and collaborative environment. Leaders encourage employees to excel and contribute to the community. Wegmans also prioritizes employee well-being through initiatives such as flexible work schedules and wellness programs.
Organizational culture best practices
Many companies seek best practices to help adopt a healthy culture. However, this process involves more than printing your new values on the office handbook, distributing it to employees, and expecting an instant change. Adopting a thriving work culture does not work like magic. Rather, culture building requires consistency and a roadmap that helps build these best practices. Here are useful organizational cultural best practices to help you rebrand your company culture.
1. Communicate with your Employees
Communicating with your employees is the first step in adopting a healthy work culture. You should discover what employees like or dislike about the work process, leadership, and environment. You should also find out what motivates team members and redesign the existing work culture that is not serving these needs. Similarly, it would help if you encouraged employees to engage more in decision-making. If you can get employees to feel great working with you, then there is a high chance you will notice an increase in productivity.
2. Encourage Creativity and Innovation
A company that encourages employees to be risk-takers, creative, or innovative will likely experience more growth. A single idea may be all you need to launch your company to the next level, and it could be sitting in an employee’s head. You can make a difference in your corporate culture by encouraging employees to undertake personal tasks that align with the company’s goals.
3. Create a Diverse Workspace
Companies like Microsoft did not just become influential overnight. Diversity is a major part of workplace culture. You can incorporate diversity by creating a fun and inclusive workspace where workers from different walks of life can collaborate on impactful projects. By encouraging an equitable onboarding process, you can create a diverse company culture that encompasses all employees and gives them a sense of belonging. You can also conduct confidential surveys or meetings where employees candidly communicate their feelings.
4. Hire Employees With Similar Values
To promote a long-lasting and successful business culture, hiring workers with similar values is one practice you should take seriously. You cannot sustain a positive work culture if new hires think and act differently from existing employees. Hiring based on qualifications or talent is not enough. You should also pay attention to your worker’s personal beliefs and principles, like honesty, innovation, passion, and creativity. You should ensure employees have what it takes to treat clients in a way that mirrors the company’s culture. Before hiring new staff, these questions should always be on your mind.
5. Recognize and Reward Culture-Aligned Behavior
Recognizing and rewarding culture-aligned behavior is like a boost for the right workplace atmosphere. When leaders praise employees for showing the values that the company believes in, it makes a big impact. Sometimes, this praise can be public, like in team meetings, or it can be in private one-on-one talks. Sometimes, managers can offer actual rewards like bonuses, making the connection between good behavior and appreciation even stronger. Doing this process consistently creates a cycle where leaders encourage good behavior, and workers begin to act accordingly.
6. Let Leadership Reflect the Company’s Culture
If you want a healthy company culture, then you must model it yourself. It is advisable to access your personal values and work behavior to ensure they align with the new work culture you want. Your HR team and other high-ranking executives should also mirror these new values. For instance, you cannot encourage punctuality in employees when you are always the last to arrive at work. Healthy culture practices work when team members obey the rules and regulations. Your employees tend to follow suit if the leadership structure embraces this healthy work culture.
7. Invest in Employee Development
Investing in employee development is like putting effort into helping employees grow. For instance, offer training and chances to learn new skills. Also, show employees how they can move up in the company to give them a reason to work hard. Implementing mentoring programs where experienced employees guide newer ones and discuss performance can also help. When companies take care of work skills and overall well-being and balance, it shows they really care about employees. These steps build a culture where employees want to stay, work hard, and succeed together.
Importance of organizational culture
Aside from increasing a company’s success rate, corporate culture produces a well-structured and highly functional workspace. Here are some reasons why culture is important for every company.
1. Improves Your Brand Identity
A company’s culture influences its inner workings and how others see it, affecting its reputation. A positive corporate culture should focus on more than just satisfying your employees. Your culture can also be a great marketing strategy because customers who share similar values will want to do business with you. A workplace culture speaks volumes and helps you stand out from your competitors.
2. Boosts Customer Satisfaction
Customer satisfaction is a vital pillar of a successful business climate. When employees care about customer needs and the company prioritizes quality, it leads to loyal customers who spread the word. A culture that focuses on customer satisfaction encourages employees to go beyond meeting expectations, striving to exceed them. This belief leads to repeat business and bolsters the organization’s reputation and market presence.
3. Encourages Ethical Behavior
Ethical behavior forms the moral compass of a robust office culture. When a company values honesty, openness, and integrity, it creates a workplace where employees consistently choose what is right. An ethical culture emphasizes that the means are just as important as the ends, guiding employees to act ethically even when faced with challenges. Such a culture builds trust with customers, partners, and stakeholders while also ensuring compliance with laws and regulations. Ethical behavior is the backbone of an organization’s credibility and long-term success.
4. Retains Employees
It is rare for employees to quit a company that caters to their emotional and physical well-being. A strong culture builds an employee experience that eliminates the need to quit. Some of the most influential companies have the best performers in their industries as employees. These companies have created a workspace that values every skill and helps employees reach their full potential. Besides, a good environment reduces the turnover rate and human and financial resources depletion.
5. Fosters a Healthy Workspace
A great team atmosphere eliminates disputes, chaos, or animosity between team members. A healthy culture encourages a collaborative atmosphere where employees work to achieve the company’s goals. A workspace that caters to workers’ needs and sees others as more than just colleagues is important for a company to stand out from others. A healthy workspace accelerates the decision-making process, fuels purpose, and outlines clear expectations. Therefore, you can expect top-notch results that will benefit both the company and its customers.
Organizational culture is one of many factors that determine a company’s success. A company’s culture greatly influences the perception of others about you and your team. Thankfully, this article provides a concise overview of corporate culture and its importance. Learning about the different types and best practices can shape your current work culture for the best.
Next, check out our guide to creating a strong remote work culture.