What Is Organisational Culture?

By Indeed Editorial Team

Updated 6 November 2022 | Published 6 June 2021

Updated 6 November 2022

Published 6 June 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.

Every organisation has a unique personality, just like individuals. This unique personality of an organisation is the culture. Organisational culture is either built and maintained by founders to grow their organisation in a particular direction or develops over time from the interactions of people working in the organisation. Organisational culture is essential for developing the traits necessary for success. It defines how individuals behave and function when working together. The main goal of companies is to foster a productive, healthy and positive culture.

In this article, we will discuss what organisational culture is, its importance, characteristics and types of organisational cultures.

What Is Organisational Culture?

Organisational culture is a system of values, shared beliefs, practices and attitudes that govern every employee's action. It is a company's personality and the collection of traits that define a company's foundational values. Every organisation has a unique culture and encompasses both written and unwritten rules developed over time. It is the culture that gives a company a sense of direction.

Why Is Organisational Culture Important?

A strong and positive culture appeals to the top talent and helps companies recruit the best individuals. Learning more about the culture helps you understand whether the company shares the same core values as you or not. It is the culture that governs a healthy working environment and motivates you to perform to your best potential. Here are a few significant reasons why learning about organisational culture is important when seeking a new job:

  • Ensures effective onboarding: Companies with strong culture give preference to effective onboarding for training new employees. From workplace training and orientation to performance management, onboarding helps new employees excel at work. It also helps employees understand the company's core values.

  • Creates a healthy team environment: Communicating the core values helps organise the workflows and motivates team members to work together.

  • Recognises top performers: Everyone loves working in a healthy environment. Employees leave companies where they feel their talent does not receive recognition and their efforts go unappreciated.

  • Increases productivity: Culture governs a company's structure and brings together team members with similar skill sets. When such people work together, they are more likely to overcome the difficulties of complex projects. This increases workplace productivity and performance.

  • Decreases attrition: When culture aligns with core values and mission statements, employees are less likely to resign. Employees who feel valued, recognised and respected will put in their best efforts.

Related: Types of Workplace Training: Definitions and Examples

Characteristics Of Organisational Culture

Every company has its own set of characteristics associated with its culture. While some may prefer teamwork and trust, others may prefer the psychological safety of individuals above everything. Here are a few characteristics of organisational culture you should know to decide whether the company's culture is a good fit when searching for a new job:

Trust and integrity

A culture of trust and integrity impacts corporate administration quality, creates a good work environment and fosters an environment where team members find it easy to express their viewpoints. Both are essential for teams that rely on each other for making decisions and interpreting results. When there is transparency and honesty in the company, trust and integrity will automatically prevail.

Teamwork

It comprises communication, collaboration and respect between team members. When everyone in the team works in cohesion and supports each other, it creates a positive work environment. This translates to happier workplaces, where everyone works toward achieving a common goal.

Precision

This is a distinctive characteristic of organisational culture. Such organisations give keen attention to details for providing an enriching experience to the customers. A culture that gives importance to precision expects the employees to complete work with accuracy.

Innovation

Creating a culture of innovation means providing a work environment where employees have some autonomy to think and come up with new ways of solving a given problem. A culture that supports innovation helps companies get better and move forward.

Performance

The foundation of a performance culture is self-discipline and it means creating a work environment where every employee engages with the business. When employees are engaged, they motivate each other to perform, which results in higher productivity and profitability.

Related: How to Practise Self-Discipline in the Workplace

Types Of Organisational Cultures

The culture decides how employees behave among themselves and with people outside of the company. As every organisation is unique, so are the cultures. Here are a few types of cultures:

1. Clan culture

This culture is people-focussed because the company feels like a family. The family-like culture ensures a friendly and collaborative work environment. In such a culture, an organisation values employees and gives topmost priority to communication. This type of culture emphasises that employees play an essential role in making business decisions.

Helping each other with work, playing games outside office hours, going for team lunch and celebrating everyone's memories are a few attributes that define a clan culture. Companies with a clan culture give importance to teamwork and mentorship above everything else. Start-ups and small companies exhibit a clan culture.

2. Adhocracy culture

This culture finds its roots in innovation and represents a risk-taking culture. Such a culture creates an innovative, creative and dynamic environment where employees can take chances and experiment with new ideas. The company views the leaders as inspirational innovators and calculated risk-takers ready to challenge assumptions.

Organisations exhibiting an adhocracy culture are always working hard to launch new products and expand their business. For employees, this culture keeps them motivated to outperform and come up with breakthrough innovations. Technology companies often exhibit an adhocracy culture because they develop new products regularly.

3. Market culture

This culture is market-driven and prioritises profitability. Organisations that exhibit a market culture focus on achievement, competition and getting the job done. These organisations use competition to motivate both leaders and employees. These result-oriented organisations measure success based on market and stock results instead of the employees' internal satisfaction. In a market culture, employees work to achieve a defined goal. Larger corporations that are already industry leaders in their market exhibit market culture.

4. Hierarchy culture

The workplace adheres to all rules and regulations of a corporate structure. Leaders expect employees to follow all procedures and formal rules. Such organisations give importance to uniformity and efficiency in everything they do. Hierarchy cultures have a fixed and set way of doing things that makes organisations risk-averse and stable. Moreover, these organisations have well-defined processes that cater to the organisation's primary objective. Hierarchy culture is excellent for organisations where safety is a prime concern. Such organisations hesitate to take risks. These include government organisations, healthcare and aviation companies.

Identifying Organisational Culture

When searching for a job, it is necessary to understand the culture of that company. Often, cultures that are a fit for one individual may not be for others. For example, an innovative work culture is an excellent place for a developer, but a salesperson may find a competitive culture more appealing.

Here are a few significant ways of identifying the culture of a company:

  • Through informational interviews, ask the current employees about the work culture

  • Talk with partners, customers and other people associated with the company

  • Search the social media pages, videos and other online platforms to understand their culture

  • Visit the website of the company to gather relevant details

Another way to identify a company's culture is during the job interview. Try arriving early than the scheduled time to observe how current employees interact with one another. Moreover, during your interview, ask questions that will help you judge whether the culture is the best fit for you or not. Here are a few questions that help in identifying the culture:

  • Ask how the company is different from its competitors. When answering this question, the interviewer is likely to enlist the positive aspects of working with them. This gives you insightful information on the core values and work culture.

  • Ask the arrival and departure times of current employees. This question helps get insights into the work-life balance you can expect.

  • Ask what they like about the company. This question gives meaningful answers when you direct it to an interviewer who is also a member of the team you are likely to work with. Based on their answers, you can understand the possible growth opportunities and the working environment.

  • Ask what qualities helped the previous employee excel in this role. With this question, you can understand the traits and qualities essential for working at the company.

  • Ask what interviewers would like to change about the company. When you steer your discussion positively, this question can help you discover a few negative aspects of working with the company.


Related:

  • What Is A Data-Driven Culture? (And How To Develop One)

  • What Is Organisational Behaviour? (Examples And Advantages)

  • Culture Fit Interview Questions (With Tips To Answer Them)

  • What Is Corporate Culture? (Definition And Different Types)

  • Organisational Skills: Definition and Examples


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