What Is Organizational Culture, and How Can You Ensure You’re Cultivating the Right One?

As a leader, understanding and developing organizational culture is an important part of your business’ success.


When you consider the office spaces and corporate headquarters of some of the most successful companies of the 21st century, it can be easy to get the wrong impression of what makes a successful workplace culture.

To be clear, what makes an organization’s culture is not the visible aspects of the company, such as an open-office space, mini bar, or a fully functional tank sitting in the parking lot (yes, this is a real thing at Oakley). These are merely artifacts of culture. And while they can reinforce your company’s culture, they can just as easily give a false impression about the nature of the work environment.

What is culture and how is it formed?

So what, then, is culture and how can you foster one that aligns with your company’s needs? Culture is a system of shared values and assumptions that guide and influence the way members of an organization behave.

Values refer to the principles and standards of behavior the organization and its members hold (or at least claim to hold).

Assumptions, on the other hand, reflect members’ underlying and largely taken for granted beliefs about the nature of reality (e.g., the role of the organization as a socially responsible entity, the need for transparency, or the importance of collaboration for success.). And it is these shared assumptions that truly determine an organization’s culture.

… to shape the company culture you desire, you need to ensure that those individuals who you’re promoting to leadership roles hold values that are consistent with the culture you want to cultivate.

Although there are many factors that can shape the pattern of values and assumptions that will emerge among your workforce, here are some of the most important determinants to keep in mind as you set out to build a company culture that aligns with the purpose and needs of your company.

Culture is a function of your organization’s structure

As your company begins to grow, one of the first questions you will need to begin asking yourself is how to organize and coordinate work amongst your growing workforce.

Such decisions, however, also invariably shape your company’s culture.

For example, establishing formal channels of communication, multiple levels of managerial roles, and a top-down decision-making hierarchy is not only likely to influence existing and future members’ shared understanding about the nature of the work environment, but will likely attract individuals who prefer such a traditional, bureaucratic organization, and deter those looking for a less formal organization that allows them more autonomy and participation in decision-making.

Culture is a function of the policies and practices you institute

As a manager, the policies and practices you establish can help reinforce or detract from the type of culture you’re hoping to develop. One clear example is your company’s hiring practices.

Establishing clear criteria for the type of employee values you need in order to reinforce your company’s mission, developing metrics to assess applicants’ for these values, and standardizing the selection process, are just a few ways your hiring practices stand to influence how effective you will be at cultivating the type of culture you desire.

Accordingly, making sure the policies and practices you set in your company align with the desired culture should be a top priority.

Culture is a function of your organization’s leadership

Organizational culture is also shaped by those individuals in your company who hold a position of power and influence. As research suggests, employees tend to defer to those around them, such as their direct supervisors, for information regarding appropriate and inappropriate behavior.

This “monkey-see, monkey-do” reality of organizational life means that to shape the company culture you desire, you need to ensure that those individuals who you’re promoting to leadership roles hold values that are consistent with the culture you want to cultivate. After all, these individuals will help set the tone for how the rest of your workforce will think and behave.

Culture is a function of your (the founder’s) values and beliefs

Finally, one of the most important determinants of your company’s culture is, well, you. As the founder, you likely started your company with a particular philosophy in mind about human nature and the role of business in society.

For example, perhaps you held the belief that the key to a successful organization is the need for all members to be involved in decisions and contribute to the success of the organization. This philosophical view is likely to influence who and how you hire, the policies you institute, and how you coordinate work among your workforce. It, therefore, becomes particularly important to ensure that you carefully reflect on your values and deeply held beliefs, as they will serve as the foundation for your organization’s culture.

Rather than focusing on the physical manifestations of culture, such as having a foosball table or gaming room in the office space, focus on those factors that actually create and enhance the company culture you’re striving to develop.


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