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What Is Organizational Culture?

Companies have to create environments in which their employees are motivated to deliver excellent results each day in order to operate efficiently. Organizational culture is considered to be among the crucial components that help businesses operate because it helps create a unified vision of objectives and targets. This paper aims to define organizational culture, identify types of culture, examine approaches to communicating it, and research changes that can occur.

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What is Organizational Culture?

Both within a society and in the environment of companies the concept of culture describes a complex structure of shared values that transpire to daily actions. The Cambridge Dictionary (n.d.) defines culture as “the way of life, especially the general customs and beliefs, of a particular group of people at a particular time” (para. 1). Therefore, this definition applies to companies as well because they employ people who interact and communicate within a particular timeframe and should have a unified understanding of the business’s objectives.

Definition of Organizational Culture

While the previous paragraph explains the general meaning of this concept, it is necessary to determine whether there are particular features applicable to this model in terms of private companies. Organizational culture has many definitions depending on a specific perspective from which an author regards this phenomenon. According to Naranjo-Valencia, Jiménez-Jiménez, and Sanz-Valle (2016), “organizational culture can be defined as the values, beliefs and hidden assumptions that the members of an organization have in common” (p. 30).

Moreover, the authors argue that innovation cannot be executed without proper culture. Pang (2017) states that the notion can be viewed as a specific approach a business takes towards its operations. Thus, organizations depend on culture because it defines the internal processes and interactions that occur in a particular environment.

Moreover, leaders who disregard this element of organizational structure can not benefit from enhanced efficiency and adequate cooperation, which will be discussed in detail in the next section of this paper. Groysberg, Lee, Price, and Cheng (2018) state that “strategy and culture are among the primary levers at top leaders’ disposal in their never-ending quest to maintain organizational viability and effectiveness” (para. 1). While the first component is a formalized reflection of goals and responsibilities, the second is an intangible representation of norms within a firm.

How is Organizational Culture Created and Communicated?

It is evident that organizational cultures a crucial component of any company. Executives can leverage this by developing an appropriate culture that inspires employees to work towards the set goals. Firstly, it is necessary to clearly define the mission of business in question and using that information as well as strategic plans to create culture. Additionally, leaders should pay specific attention to ensuring that newcomers correctly comprehend the existing culture, which can be done through training.

While executives are responsible for ensuring that a company has adequate culture, it should be noted that it defines the approaches that leaders can take towards their work and communication with followers. Both Forbes Communication Council (2017) and Pang (2017) emphasize the importance of communicating culture to employees through vision and mission statements. Other materials that managers can distribute are manuals and policy statements. However, these do not guarantee that all staff members comprehend the culture appropriately.

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A better method of ensuring a proper understanding of culture is through the actions of executives. Pang (2017) states that “the culture of a business has a significant impact on its performance in the marketplace” (para. 1). However, without a commitment from top-level leaders employees would not be as eager to perform tasks well. Additionally, strategies that can encourage behaviors that correspond to a particular culture should be encouraged through rewards.

Personal Culture and Market Culture

The two primary types of culture in companies are personal and market, which imply a different approach to managing people and achieving strategic objectives. Personal culture refers to a structure in which individuals that work for an organization are considered to be more valuable than the business itself. From this perspective, a horizontal structure is the most suitable for establishments that apply this approach. The downside of this model is that it can organizations may face difficulties with sustaining and growing their operations. Additionally, if key people of a film decide to leave, such a company would be unable to proceed with its services and obtain revenue.

In this regard, market culture can be as considered a drastically different approach. In this model, competition and achievements are the primary objectives of work for people. It can be argued that this method allows organizations to avoid issues that can occur in the previously described personal culture model. Due to the fact that results are prioritized, the problem with this model is that the value of individuals is inevitably connected to the benefit that they bring for a company.

Adaptive Culture and Adhocracy Culture

The next two types of organizational culture are adaptive and adhocracy, which can be applied in industries that require constant innovation and adjustments of approaches. Adaptive culture implies that changes in how business functions are part of the daily operations, and thus they occur regularly and without difficulties. This is especially important for industries that are subjected to many altercations within their environment because employees can change their daily tasks efficiently.

Adhocracy is an entrepreneurial strategy that values an individual’s creativity and utilization of new approaches. The ability to create and develop new products, services, or management techniques are the crucial components of this strategy. Consecutively, this approach implies risk-taking and exploration of new abilities. It can be argued that this culture type is the most appropriate one for modern day information technology companies and startups.

Power Culture, Role Culture, and Hierarchy Culture

Power culture can be characterized as a type, which uses the leader’s authority. The power that leads to formal leadership in such company is held in by a few people (Driskill, 2019). They are capable of making decisions that would affect each component of such a company. Similarly to market culture, achievements are the focus of work when evaluating employees’ contributions. The issue with this approach is highlighted by Driskill (2019) who states that while this method can help make decisions quickly and adjust operations following market demands. However, the issue is that the risk of such an environment becoming toxic is high.

Role culture is highly regulated and each in such company knows his or her responsibilities and tasks. Major decisions in such structure are made by people in managerial positions (Driskill, 2019). While the environment of such companies implies that all staff members should perform their tasks well because they are fully aware of what should be done, the process of decision-making is usually long due to bureaucracy.

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Thus, such organizations are unlikely to make strategic decisions that imply risk and struggle with adopting new approaches. Next, as the name of this approach suggests, hierarchy culture focuses on formal interactions within an organization. The structure of the company is the primary element that coordinates the work relationships within this environment. Additionally, the leaders prioritize long-term operations and thus, the planning for execution of each task is thorough. Such settings are highly predictable in terms of decisions that such companies make.

Task Culture and Clan Culture

Task culture is oriented towards creating an environment in which projects are prioritized. Thus, the primary objective is to create an ecosystem in which tasks are done through proper planning and preparation. Driskill (2019) states that this method is facilitated through the creation of teams that are responsible for a particular project. Expert power is the most critical element for leaders in this case. Depending on a specific outline, different members of the organization can take leadership. Based on the information it can be concluded that this approach focusses on results as well.

Clan culture is a structure in that values internal relationships and mentoring of newcomers. Driskill (2019) compares this structure to tribes, which implies that such organizations function using informal connections. In addition, it means that the competition prevalent in market culture is mitigated. Arguably, this can lead to a worse completion of tasks, although Driskill (2019) emphasizes that loyalty that is the basis of this approach ensures proper motivation for employees.

Other issues connected to this model are inadequate diversity because the process of hiring new members to such companies can be biased. Both of these approaches focus on the commitment of staff members towards achieving goals that the company’s leaders set. However, the distinct difference is that in task-oriented environments the knowledge and skills of individuals have a crucial role. Clan culture, on the other hand, emphasizes the process of mentoring new members, which can lead to a disregard for their actual capabilities.

How and Why Does Organizational Culture Change?

Inevitably, due to changes in the industry or other alterations such as political or economic issues, organizations have to adapt their approaches to operations to be more efficient. In this case, changing the culture is necessary because, as was described before, each model is suitable for a particular strategy and target in regards to employee performance. Groysberg et al. (2018) state that “the best leaders we have observed are fully aware of the multiple cultures within which they are embedded, can sense when change is required, and can deftly influence the process” (para. 5).

Alternatively, culture can evolve as the leaders, and other members of organizations gain new knowledge and identify what approaches lead to successful operations and an increase in revenue. The following paragraphs describe the process of culture change and components that contribute to it.

Top Management Vision

The first step is to critically examine the existing culture and deciding which model would correspond to the current conditions better. The C-level executives are responsible for ensuring that the existing culture corresponds to the type of tasks and goals that a company wants to achieve because this element directly affects the outcomes of work. Groysberg et al. (2018) emphasize the connection between culture and strategy; therefore, the first step in the process of changing the company’s approaches is to develop new objectives by creating and stating new vision and mission.

Top Management Commitment

Secondly, the executives of an organization should display readiness for the changes, which should transpire to its employees because they can witness the application of new values. This can be achieved through actions so that staff members could observe the changes and become accustomed to the new culture. This would ensure that the leaders of the company respect the culture and are ready to perform their daily tasks in regards to it.

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Model Culture Change at the Highest Level

Similarly to the previous step, this component requires particular attention from managers of a firm. People should showcase the values that the company aims to nurture within its internal environment at managerial positions, which would communicate the change correctly. As was previously discussed communication of culture through actions is the best method. In this regard, the role of change agents who facilitate the adoption of new approaches to operations is crucial.

Modify the Organization to Support Organizational Change

The fourth step requires a critical examination of the current components that enable operations and identifying which of those should be changed to suit the new culture better. Particular types of organizational cultures imply a specific structure of processes and interactions within a business. For instance, adhocracy requires flexibility while role culture is based on formal relationships. The leaders should change the existing elements for the new model to be adopted.

Select newcomers and terminate deviants

Next, a strategy for hiring and terminating employees should be in place. In some cases, particular individuals are not able to fit in with the new approach.

Asli (2016) states that this step is connected to human resource functions and determines whether newly hired individuals can adapt to the selected culture model. The process of firing individuals should be tailored towards the new values as well. However, culture change helps performance results, thought enabling better performance and efficiency; thus some individuals have to be terminated.

An executive has to create approaches for mitigating risks of the new model for developing ethical and legal sensitivity. Asli (2016) states that in most cases, a severe change in a company’s culture would result in fear of uncertainty and insecurity for the staff members. This should be mitigated through ethical and legal considerations. Asli (2016) recommends applying the method of periodic evaluation for determining if this strategy helps minimize the conflict between new culture and employees. This can help ensure a smooth transition towards a new model.

Organizational Subcultures

Subcultures may exist in any company regardless of the model that it applies. Faller, de Kinderen, Constantinidis (2016) conducted a study by examining several companies in Europe and identifying how subcultures affect productivity and achievement of results. The authors concluded that both differences and similarities in the subcultures of a company’s department could lead to a decrease in the efficiency of enterprise architecture.

This can be due to difficulties in communicating information between different structural elements that are guided by varied organizational environments. For instance, issues may arise if departments prefer to work in isolation from others, or if one of the teams uses this approach while others interact. Therefore, identifying them and ensuring that they can communicate with each other is crucial.


Overall, a thriving organizational culture has several benefits for companies. Firstly, leaders can enhance their commitment towards achieving their strategic goals through proper culture. Secondly, every company develops a particular environment, and improper models can lead to reduced motivation and an inability to perform tasks efficiently. Due to this reason, executives can leverage culture to ensure better work efficiency. Finally, this element shapes the behaviors and interactions within an organization, and employees can benefit from this by assuming particular roles and fulfilling tasks.


Asli, G. (2016). Organizational change management strategies in modern business. Hershey, PA: IGI Global.

Culture. (n.d.). In Cambridge Dictionary. Web.

Driskill, G. W. (2019). Organizational culture in action: A cultural analysis workbook (3rd ed.). New York, NY: Routledge.

Faller, H., de Kinderen, S., Constantinidis, K. (2016). Organizational subcultures and enterprise architecture effectiveness: Findings from a case study at a European airport company. 2016 49th Hawaii International Conference on System Sciences (HICSS), Koloa, HI, 2016, pp. 4586-4595. Web.

Forbes Communication Council. (2017). Telling your company’s culture story. Forbes. Web.

Groysberg, B., Lee, J., Price, J., & Cheng, J. Y. (2018). The leader’s guide to corporate culture. Web.

Naranjo-Valencia, J., Jiménez-Jiménez, D., & Sanz-Valle, R. (2016). Studying the links between organizational culture, innovation, and performance in Spanish companies. Revista Latinoamericana De Psicología, 48(1), 30-41. Web.

Pang, K. (2017). Are you nurturing a positive company culture? Communication is the key. Web.

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