Leadership & Management

What Is Organizational Culture?

By Beth Osborne for RallyBright

February 6, 2020

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The culture of an organization is critical to its ability to attract, engage and retain employees. Defining exactly what it is and instilling it isn’t easy. The way your organization operates is its organizational culture and includes shared beliefs, values and assumptions.

How Would You Describe Your Culture?

One of the first questions a prospective employee or new hire may ask is: “What’s your culture like?” You may have a lot of different responses to this question, such as “Everybody’s friendly,” or “We embrace innovation and new ideas.”

Those initial thoughts and words are what build organizational culture. Simply put, organizational culture is a combination of behaviors, values, vision and mission that all contribute to a company’s environment.

Organizational culture is unique to every company because of different experiences, expectations and philosophies. It has a significant impact on all aspects of a business.

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In looking at behaviors, it’s the actions that support the values. You can say that autonomy is a value, but if you don’t provide employees the opportunity to make any decisions that impact them, then that value isn’t being upheld.

Importantly, for your culture to be consistent, your values and the behaviors of your leaders have to be in alignment.

The Impact of Organizational Culture

In many scenarios, culture’s foundation is a shared collection of assumptions. Those assumptions are then verified or not by the interactions and appropriate behaviors in the workplace. Culture has a significant effect not only on your employees and their desire to remain engaged and loyal, but also on your customers and partners.

If your culture is toxic, this bleeds into everything you do. It can torpedo your company’s ability to grow and survive. If your culture is positive, however, you are more likely to keep employees and customers satisfied.

Creating Organizational Culture

Culture is always evolving based on internal and external elements. As with most aspects of business, culture begins at the top. Leaders set the tone of workplace culture. While executives are the “architects” of culture, all employees contribute to it with their actions, attitudes and feedback.

The biggest challenge to developing and maintaining a strong, healthy culture also relies mostly on leadership teams. This means that those making the big decisions must be connected to what’s happening throughout the organization. They need to be intimately familiar with the collective enterprise’s structure. It’s only by being present and seeking continuous improvement that leadership actually leads. In turn, this commitment on the part of leaders typically translates to higher job satisfaction and lower turnover across an organization.

Why Does a Strong Culture Matter?

We’ve already discussed the benefits of having a strong culture, but here are three specific things that happen when one is in place:

  • Your employees are aware of how the leadership team expects them to respond to situations
  • Team members believe that the expected response is the right one
  • Employees know they will be rewarded for living the values of the culture

Thinking about your own workplace, are these things occurring? Are they true?

Having a strong culture is something that successful companies have in common. It isn’t just luck or a great product that has made them. There is clear consensus at the top, and because the leaders model the values, the employees truly buy into the pillars of the culture.

Developing a strong culture is something that should be a priority for any company. But what type of organizational culture is right for your workplace?

Types of Organizational Culture

One popular organizational culture framework, the Competing Values Framework (developed at the University of Michigan in 1981), identifies the following four types of organizational cultures:

Clan Culture

This type of culture is considered to be “family-like,” wherein the emphasis is on collaboration, involvement and teamwork. Loyalty and tradition are also two main ideas in clan culture. Smaller companies are more likely to embody clan culture because it focuses on everybody knowing one another.

Adhocracy Culture

Adhocracy culture is one where creativity and innovation are prized. It promotes freedom and autonomy. Adhocracy culture praises employees for thinking way outside the box and not being risk-averse. Consequently, many tech companies, including Apple, embrace adhocracy culture.

Market Culture

Market culture is all about getting stuff done. Many of the motivations for this type of workplace are beating competitors, and leaders often have high expectations for production. These types of companies want to win.

Hierarchy Culture

This is the most traditional type of culture where strict institutional procedures are obeyed. Such a culture therefore also welcomes efficiency and uniformity. It’s about following the rules and delivering excellence in products and services while also keeping costs low.

Organizational Culture & Resilience

Resilience is a key driver of a healthy and sustainable organizational culture. At RallyBright, we’ve studied culture and how it impacts team performance and cohesion. As a result, team resilience is a concept we emphasize to help improve organizational culture.

Team resilience consists of having a clear and shared purpose, deep team connections, external and internal alignment with stakeholders, optimistic attitudes and accountable performance. All of these elements are vital in organizational culture, no matter which type your company has in place. Similarly, they all directly relate to values, beliefs and behaviors. Finally, they are all measurable, meaning you can identify and improve areas that need attention.

If your organizational culture is weak, chaotic, or destructive, then it’s time to redefine it. Taking that step offers you the opportunity to have happier employees, more satisfied customers and better results.

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