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Organizational Culture: What It Is and Why It Matters

Posted by HRdownloads on Sep 16, 2016 2:08:13 PM

People outside your company often ask employees what it’s like to work there. In effect, they are asking you what your corporate culture is. Is your answer positive? Have you really thought about answering this in more than cursory detail? More importantly, what kind of value can the right corporate culture bring your company?

Organizational or corporate culture refers to the values and behaviours that contribute to the unique social and psychological environment of an organization. Your corporate culture consists of everything that makes up your organization, including its vision, mission, values, expectations, experiences, philosophies, attitudes, and beliefs. Importantly, it establishes how you conduct business; treat your employees, customers, and stakeholders; and how you interact with your community.

The right kind of culture for your organization can create a positive working environment with high engagement and productivity. It also allows for management to move new processes forward, align organizational goals with business strategy, and improve your bottom line. Employee engagement levels can also affect your corporate culture. For suggestions on how to build engagement levels, download the Employee Engagement Policy.

So, what does your corporate culture look like? Every company will have an overriding or dominant culture. Although no list can be truly comprehensive, seven of the major cultural types and their drawbacks are listed below. Think about how your corporate culture affects your bottom line.


7 Types of Corporate Culture

1. Historical Culture

A historical culture means an organization has been around for a long time. Employees tend to do things the way they have always been done and change is often resisted. Long-term service is normal and promotions are often linked to seniority. Exclusive inner groups may form that are hard for newcomers to join. This culture does not work well for individuals who want to move up quickly and make change.

2. Collaborative Culture

In a collaborative culture, decisions are made by group consensus. This culture often changes very slowly and involves everyone in the decision. No position holds any real power, as everything is done through group co-operation. This culture does not work well for fast-paced, quick thinkers who like to make their own decisions and work independently.

3. Independent Culture

In an independent culture, employees often work alone. They take responsibility and exhibit accountability for their own tasks, direct their own work, and manage the load. This culture does not work well for individuals who need support and a lot of direction.

4. Social Culture

In a social culture, staff members work in groups, communicate regularly, and spend time throughout the day catching up both professionally and personally. It can give new employees an immediate warm and fuzzy feeling, but it can also reject individuals who do not fit with the norms or lack similar interests. This culture doesn’t work well for individuals who are private, keep to themselves, and prefer to build relationships with a few people rather than all people.

5. Supportive Culture

In a supportive culture, employees work together and help each other out. The line in the job description about “other duties as requested” is a constant reality. During projects, an all-hands-on-deck approach reigns, and no job duty is beneath anyone. This culture doesn’t work well for individuals who need specific tasks and prefer to know what is expected and work within their realm of knowledge.

6. Hierarchical Culture

In a hierarchical culture, staff members are separated based on power and position. This type of organization is driven from the top down. Lower-rung staff members are often discouraged from providing feedback and are expected to follow company direction. This culture does not work well for individuals who are innovative, question processes, or want to share new ideas.

7. Fresh Culture

A fresh culture is an organization that is relatively new. This organization is constantly changing and employees are expected to roll with the punches. New employees can move up the ladder quickly based on the value they add to the company. This type of culture would not be a good fit for someone who likes consistency and a working environment with little change.

Final Thought

The seven types of organizational culture described within this article will help you get started in analysing your culture, and provide you with a framework to identify your strengths and areas where you could improve. Understanding these basics is a major step and will help guide you in assessing what may be needed to improve your culture. You can try building your employees engagment levels as a starting point. For suggestions on how to increase your employee engagement, download our Employee Engagement Policy!

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Topics: Employee Engagement, Organizational Culture, HR Management

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