Learn About Organizational Culture

By Indeed Editorial Team

Published January 22, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Much like humans, every organization has a personality and it is known as organizational culture. The culture of an organization sets the tone for a company. It tells potential employees what they can expect and sets clients' expectations. In this article, we discuss the most pressing questions about organizational culture.

What is organizational culture?

Organizational culture includes a set of principles, expectations, ethics and customs. These four traits make up an organization's psychological and social personality. From top executives to entry-level staff, these traits help guide the behavior of the members.

An organization's culture is reflected in members' connection with the outside world. It can be observed in their self-image, work and how they interact with one another and stakeholders.

Related: What Is Organizational Culture?

Characteristics of organizational culture

Seven fundamental characteristics make up organizational culture. These include:

1. Financial stability

Financial stability is the first level in the hierarchy. It refers to a company's focus on financial security for all members involved. It includes revenue success, corporate growth, profit margins and a growing client base.

2. Harmonious relationships

The second level in the hierarchy stresses the importance of harmony between people in the organization. Members who work together harmoniously have open communication. They are loyal to each other and the environment is often characterized by optimal employee and client satisfaction.

3. High performance

High performance is a developmental level. It includes a culture where best practices, quality and pride in work are critical traits. This level involves figuring out what the company and what its members do best. It also asks how they can use their highest attributes to excel.

4. Continuous renewal and learning

Level four in the hierarchy of organizational culture focuses on continuous renewal and learning. It is about keeping innovation a primary goal within the organization. The level requires changing with the times to move forward. Setting and reaching new goals are part of this level, as well as encouraging members to grow.

5. Building an internal community

This level requires members to share common values and a sense of purpose. A robust internal community demands a level of creativity, trust and passion. Open communication between members to collaborate towards a common goal is a critical value too.

6. Making a difference

Making a difference is when an organization with a clear vision of its values and purposes connects with other organizations. Together, the organizations work towards making a difference in the world.

7. Service to humanity and the planet

At this level, an organization will have reached the top of the hierarchy. It is here that an organization will consider its social responsibility. It does so by considering its impact on future generations. The seventh level is when members will use compassion, ethics and wisdom on a larger scale to promote internal changes. These changes will help a company safeguard future generations.

Related: 8 Reasons Why Organizational Culture is Important

How to create organizational culture

You can create an influential organizational culture in the workplace with the following five steps. These include:

1. Review the current company culture

Whether or not it was intentionally created, your company already has a culture. Recognizing its positive and negative traits is the first step to creating the company culture you are hoping for. For example, as a sales company, your culture may lead successful sales pitches. However, the company could also hold an unhealthy competition between the sales teams.

Some ways you can recognize your current company culture include:

  • Observing your interactions with employees

  • Observing interactions between members

  • Going over your existing work guidelines on culture and values

  • Going over current practices such as promotions, recruitment and performance management

  • Asking employees why they would recommend their work environment

  • Asking employees what changes they would like to see

  • Using internal surveys to analyze questions regarding current company culture

  • Reviewing the current retirement rate and turnover of your company

2. Conduct research

Once you know where your organizational culture can improve, it is time to learn from others. You can learn through other companies that have successful company cultures. If loyalty and friendship are lacking between employees, you might launch a program. Members from different departments could be paired together once a week during lunch. It is a way to foster new friendships and potentially new collaborations.

3. Work with stakeholders

Having people at the top promoting the company's culture is the best way of getting employees to emulate these values. This step entails informing leaders about the most critical value of the organizational culture. They must understand why it is essential to the company.

If you convince the leaders, you can establish the steps to emulate these principles. Be prepared to arm leaders with practical strategies on how they can do this. For example, if you hope to see more openness between members, leaders must also do the same.

Related: 7 Ways Organizational Culture and Leadership are Connected

4. Implement changes

It would be best if you implemented changes in an organizational culture across all departments and levels. An excellent way of implementing change is by sending everyone a detailed document. Remember to highlight the benefits that employees can expect. Being transparent about the fresh changes is critical for this step, as is being consistent. For better results, get employees to help during implementation. You can do so by organizing meetings where anyone can ask questions.

5. Monitor results

Once change is implemented, you must continue to monitor your organizational culture to ensure things are on track. You can measure effectiveness by tracking the turnover rate. An influential organizational culture has a low turnover rate. You can track the effectiveness by using surveys or conducting interviews. Remember to use the feedback given to fix any issues.

How do you communicate and promote organizational culture?

Consistency in your behavior is critical to communicate and promote organizational culture. In doing so, other members can emulate your actions. The following are 12 ways you can communicate and promote organizational culture:

  • Lead with core values: You must reflect an organizational culture through your behavior. This includes every interaction, from meetings to emails.

  • Recognize exemplary behavior: Acknowledge members when they reflect the company culture. Give them rewards or acknowledgement.

  • Thank members: Rewards are an excellent incentive, but so is thanking members for their performance. You can do so in public or via other forms of communication Thanking members will encourage them to continue pursuing the organizational culture's value.

  • Create reminders: Use communication tools such as posters to refresh company values.

  • Create internal communication platform**s:** Provide employees with the right tools and directions. You can use templates, policies and protocols.

  • Promote communication: Encourage employees from different departments to get together and bond.

  • Be a great listener: Promote two-way communication with employees. You can do so by actively listening when they provide feedback.

  • Keep everyone informed: Use tools such as pop-up notifications to keep employees informed. Share company news and reinforce the organization's values.

  • Appoint ambassadors: Get employees talking. Appoint ambassadors to deliver the internal message to the right people.

  • Encourage team conversations: Organize regular team meetings. Allow members to discuss principles and ways to ensure everyone is exemplifying them.

  • Cultivate traditions: Traditions help reinforce company culture and create a sense of community.

  • Share success: Let employees and the rest of the world know that your company is doing well. It is a way to boost morale and encourage member engagement.

How can organizational culture change, and why?

An organizational culture can change even without a strategic plan. Six principal reasons can change the organizational culture of a company. These include:

  • A spin-off from a parent company: A corporate spin-off must adopt a leaner entrepreneurial culture. It should be one that represents the new organization.

  • A new CEO: The new CEO could bring inherited principles from a past organization.

  • Changing customer requirement**s:** When customers speak out, a company's culture must change too. This could mean a change in leadership, delivery, price or another trait.

  • Globalization: Company culture may need to change to respect globalization.

  • A disruptive change in the market the company serves: When drastic changes occur in the market, a company's culture must change too. It will need to adapt to an alternative model and reach a wider audience.

  • A merger or acquisition: When two organizations merge, cultures will blend. Leaders need to recognize the values they must hold on to and what to let go.

What are the types of organizational culture?

There are four main types of organizational culture that you can consider when developing the company culture for your organization. These include:

1. Clan culture

Teamwork and mentorship are the primary focus of clan culture. This type of organizational culture is people-focused. Here, collaborative work environments are essential and everyone is valued. Clan culture leads to high rates of employee engagement, thanks to its highly flexible environment.

2. Adhocracy culture

Innovation is the primary focus of adhocracy culture. Such environments encourage employees to take a risk and break the mold when necessary to develop cutting-edge work. This culture leads to high-profit margins. Organizations that adopt this company culture enjoy notoriety for their work.

3. Market culture

A market culture values growth and competition over other traits. Companies that adopt this type of culture prioritize profitability, stability and success. Here, members are externally focused and the common goal is to work toward the bottom line.

4. Hierarchy culture

This type of company culture values stability and structure. It mainly focuses on the organization's internal and the importance of integration. Organizations adopting this type of culture have traditional corporate hierarchy systems. They have several tiers and a focus on the organization's primary objectives.

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