Understanding and Developing Organizational Culture

A strong organizational culture aligns employees with company values, ensuring consistent behavior and recognition. Effective hiring, training, and reward programs reinforce this culture, driving company success.

By Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Have a quick question? I answered nearly 1500 FAQs.

Introduction

A well-defined and broadly accepted set of values underpinned by a framework and strategy constitutes the foundation of a profitable firm. Three things take place in an organization with a robust culture: Workers are aware of how the top leadership expects them to react in any given circumstance, they think that the anticipated course of action is the right course of action, and they are aware that they can expect recognition for upholding the company goals.

Employers play a critical role in maintaining a strong culture. This begins with finding and hiring candidates who will align with the company’s beliefs and flourish there. It also involves creating training, performance management, and orientation programs that spell out and emphasize the company’s key principles and making sure that workers who genuinely exemplify the values receive the proper recognition and rewards.

The following topics are included in this toolkit:

  • How crucial it is to have a solid corporate culture.
  • The part that employers play in developing a culture of high performance.
  • Definitions of culture inside organizations.
  • Elements that influence the culture of a company.
  • Factors should be taken into account when developing and overseeing firm culture.
  • Procedures to guarantee an organization’s culture’s success and continuation.
  • Global organizational culture-related concerns, legal matters, technology, evaluation, and communications.

Background

The appropriate behavior inside a company is determined by its culture. Shared values and beliefs that have been developed by leadership and then disseminated and reinforced via a variety of channels make up this culture, which in turn shapes employee attitudes, actions, and comprehension. Every action taken by an organization is framed by its organizational culture. There isn’t a single culture template that works for every firm because circumstances and industries differ greatly from one another.

The most prosperous businesses all share a strong corporate culture. At the highest levels, there is agreement on cultural principles that prioritize the company and its objectives over the interests of individual members. Effective leaders actively embrace their cultures on a daily basis and make a point of sharing them with both current staff and potential new hires. They have no trouble articulating their beliefs and how they establish and govern their organizations.

On the other hand, a weak culture has the power to destroy a company and its executives. The improper culture can have a detrimental effect on the bottom line as seen by disgruntled workers, high staff turnover, bad customer relations, and decreased profitability.

Culture-related problems are common in acquisitions and mergers. After a merger, even efficiently functioning organizational cultures might turn dysfunctional. According to research, cultural issues account for two out of every three merger failures. To create a shared foundation for the future, cultures must be redefined, and blended, and their disparities must be addressed.

Business integration has evolved in recent years due to the rapid pace of acquisitions and mergers. Fulfilling certain corporate objectives has become the primary focus of mergers, rather than integrating cultures. A strong company culture will automatically emerge during a merger, according to some experts, if the proper business strategy and objectives are in place.

Business Case

A company’s principles and ideals need to be strongly held and broadly accepted in order for the culture of the organization to enhance overall performance. It also has to give the company a tactical competitive edge. Increased collaboration and confidence, fewer conflicts, and more effective decision-making are all advantages of having a strong culture.

Together with an overwhelming feeling of connection with the company, culture fosters an informal control system and a common sense of importance among staff members. Workers in companies with clearly defined cultures may also utilize these businesses’ cultures as justification for their own workplace conduct.

The development and maintenance of organizational culture is mostly the responsibility of company leaders. Executives frequently struggle in their careers or leave because they struggle to integrate into the social environment of the company. C-suite managers should therefore be able to blend in with the corporate culture in addition to possessing the necessary talents when they are hired by organizations.

Organizational Culture: What Is It?

First and foremost, an employer has to have a solid grasp of both the general definition of culture and the unique culture of their company. An organization’s core values are derived from fundamental presumptions regarding the following:

  • The nature of the people. Are human beings essentially good or terrible, changeable or unchangeable, proactive or reactive? Beliefs regarding the proper interactions and management of suppliers, employees, and consumers stem from these fundamental presumptions.
  • The interaction between the organization and its surroundings. What is the definition of the organization’s constituency and business?
  • Appropriate feelings. Which feelings ought to be supported in being expressed and which ones ought to be repressed?
  • Effectiveness: Which measures demonstrate the health of the company and each of its constituent parts? The efficacy of an organization is contingent upon the alignment of its culture with a suitable business plan and structure.

Culture is a vague term that frequently refers to an unclear element within an institution. There is no widely agreed definition of culture, despite the fact that organizational culture has been the subject of a great deal of scholarly writing. Rather, the literature presents a wide range of opinions about what organizational culture actually is.

Numerous factors, such as corporate festivities, internal messaging, leadership practices, and communication methods, might indicate an organization’s culture. It is not unexpected that there are many different names used to describe different cultures given the multitude of components that make up culture. The terms aggressive, customer-oriented, inventive, playful, moral, process-oriented, research-driven, technology-driven, hierarchical, welcoming to families, and risk-taking are frequently used to characterize cultures.

Organizations may find it difficult to be consistent in their messaging regarding culture since culture is hard to define. Workers could also find it challenging to recognize and discuss perceived cultural differences with one another.

Factors Influencing the Culture of an Organization

Speaking of their areas as unique work environments, organizational executives frequently discuss the peculiar aspects of their corporate cultures. Nevertheless, companies with distinctive cultures like Disney and Nordstrom are uncommon.

The cultures of the majority of companies are not that dissimilar. A shared set of cultural values is typically shared by enterprises, even those in very different industries, like manufacturing and healthcare. In the private sector, for instance, most businesses aim to expand and boost sales. The majority try to show compassion for others and work well in teams. The majority are competitive for money and share of the market, therefore they are motivated rather than laid back. The following are a few of the cultural traits that set the majority of companies apart.

  1. Values

Commonly held values form the foundation of organizational cultures. Organizations must choose which values to prioritize; none are right or wrong. Among these shared ideals are:

  • An emphasis on results. Highlighting successes and outcomes.
  • Focus on people. Putting up demands for equity, tolerance, and individual respect.
  • A focus on teamwork. Valuing and promoting cooperation.
  • A keen eye for details. Placing importance on accuracy and using an analytical approach to circumstances and issues.
  • Calmness. Keeping a steady trajectory and offering security.
  • Creativity. Promoting risk-taking and exploration.
  • Passion. Igniting an intense spirit of rivalry.
  1. Level of Organizational Structure

How much the organization regards established lines of authority determines how hierarchical it is. The three different levels of structure are “low”—having vague job descriptions and acknowledging that people question authority—and “moderate,” which has an established framework but accepts that people frequently work beyond formal channels. “High” is characterized by an established organizational framework and a belief that individuals will operate through official avenues.

A high-hierarchical organization is typically slower to respond to changes and more rigid than a low-hierarchical organization.

  1. Level of urgency

The speed of decision-making and creativity inside a company is determined by its level of urgency. While the market forces some firms to pick their level of urgency, others are forced to adopt it.

Project completion speed and responsiveness to a shifting market are critical components of a high-urgency culture. Projects go at a decent speed when there is a modest amount of urgency. Individuals who work with a low sense of urgency prioritize quality over speed and work carefully and consistently. Strong urgency is associated with a fast-paced, aggressive management style within the organization. An organization that embraces a more deliberate management style is typically more systematic in nature.

  1. Individual focus or goal focus

Tasks and people are typically valued in ways that are dominant in organizations. Strong people orientations lead to decision-making where people are prioritized and the company’s efficiency and output are seen as being driven by their people. A company that prioritizes tasks and procedures over other considerations and feels that productivity and performance are primarily determined by effectiveness and quality is known as a task-oriented organization.

Certain businesses can be able to select the individuals and job orientations they want. However, some may need to adjust their orientation to suit the demands of their sector, past problems, or current operational procedures.

  1. Functional focus

Every company prioritizes particular functional areas. Marketing, business processes, development and research, engineering, and services are a few domains where functional orientations can be found. For instance, a cutting-edge company renowned for its R&D can be fundamentally driven by a functional perspective on the field. Depending on its past decisions and how it is perceived in the industry, a hotel corporation may prioritize operations or services.

Workers in the business from various functions may believe that the people who work in the areas they specialize in are the individuals who run the company. Leaders in organizations need to be aware of what the majority of workers consider to be the functional direction of the company.

  1. Subcultures within organizations

A variety of subcultures can coexist with the prevailing culture in any organization. Individuals or groups that may follow customs and rituals distinct from the remainder of the company might form subcultures that serve to emphasize and reinforce the organization’s basic principles. Subcultures may also be quite problematic.

Regional cultures, for instance, frequently diverge from the corporate culture that the upper management strives to impose. A culture that prioritizes team building may not be compatible with an aggressiveness that is widespread in that field. Alternatively, if the country’s culture prioritizes hierarchy and demands subservience to authority, a company that is based on egalitarianism may have difficulties. Companies have to acknowledge these variations and deal with them head-on.

Establishing and Maintaining Organizational Culture

An organization’s leadership, as well as the behaviors and principles that are attributed to previous accomplishments, often mold the culture of the business over time. Executives and management can effectively manage a company’s culture by demonstrating cultural knowledge. It takes deliberate work to maintain aspects of a culture that enhance organizational efficiency.

  1. The way culture evolves

Upon entering an organization, one is greeted with its visible culture—its traditions, customs, rituals, ethical standards, symbols, and overall way of doing things. Most often, the elements that have contributed to the organization’s past success have shaped its contemporary culture.

An organization’s initial culture is often greatly influenced by its founders. As time passes, standards of behavior emerge that align with the ideals of the organization. For instance, in some businesses, disagreements are resolved hierarchically and discreetly behind the scenes, whereas in others, problems are hashed out loudly and publicly to build broad consensus.

Even though most firms have a natural culture, powerful cultures frequently start with a process known as “values blueprinting,” which includes an open discussion with officials from all areas of the company. An organization may form a values committee with direct access to the leadership once the culture has been framed. This group maintains the ideal culture in its entirety. Employing individuals who possess the necessary skills while upholding the values is the first step toward making values blueprinting successful for firms.

  1. Keeping a culture alive

The first step in managing an organization’s culture is figuring out its “artifacts,” or organizational cultural characteristics. The main operational procedures, business practices, and beliefs that define an organization’s daily operations are called artifacts.

One strategy to begin managing culture is to recognize these characteristics and evaluate their significance in relation to current company goals. A culture’s distinctive characteristics can be found using three general concepts:

  • Social Culture: This speaks about the duties and responsibilities of the group members. It is a research investigation of power dynamics in any group, including those arising from class differences.
  • Material Culture: Examining things that members of a group create or accomplish as well as how they collaborate and assist one another in trading necessary commodities and services are all part of this.
  • Ideological Culture: This has to do with a group’s core principles, beliefs, and ambitions. It encompasses the moral and intellectual rules that direct people’s day-to-day activities and relationships.

Prior to addressing culture management, managers and leaders in a company should educate themselves on the characteristics that are shared by all companies. To control the culture of their company, they should then do the following actions:

  • Determine recurring elements or characteristics, taking into account those from the perspective of the material, social, and ideological cultures inside an organization.
  • To evaluate the authenticity, importance, and currency of important artifacts, gather groups of staff members—representatives from all organizational levels, departments, and locations.
  • Give those characteristics a thorough evaluation in terms of their underlying common presumptions, attitudes, and beliefs.
  • Recap results and distribute them to all attendees to get more feedback.
  • Make a plan of action for cultural management. The strategy should correct any characteristics that could impede a company’s progress and strengthen those that promote organizational effectiveness or corporate growth.

An organization’s leaders and founders are usually the source of common assumptions and opinions. Frequently, assumptions and ideas are accepted without question because they have been effective; otherwise, the organization and its leaders wouldn’t be functioning in their current roles. Nevertheless, these viewpoints may now be out of date and could impede future opportunities for growth.

Strategies for Developing Culture

An organization that conducts a thorough assessment of its culture can then develop strategies, policies, and programs that uphold and reinforce its basic goals and values. All members in synchronized organizations are motivated and united by the same basic qualities or beliefs, which extend from the top management to individual participants.

A high-performance corporate culture can be created and maintained using a variety of strategies, such as performance management plans, hiring procedures, onboarding initiatives, and recognition programs. Making optimal use of these technologies and resource allocation decisions is the largest issue.

  1. Hiring Practices

A company can leverage its culture by using effective hiring methods. Although abilities are still the main consideration in hiring, employees are inclined to perform better when their personality meshes well with the company culture.

However, the cost of hiring people who don’t fit well and leaving them quickly might range from 50% to 150% of the annual compensation of the post. Regretfully, one in three recently employed workers depart either freely or unwillingly within one year of employment, and this percentage has been rising noticeably in recent times.

Among the hiring procedures used to guarantee cultural fit are:

  • Examining the individual components of the organization’s mission, vision, and values declarations. Focusing on activities that enhance these areas should be the focus of interview questions. Candidates should exhibit a natural extent, for instance, if the company operates with plenty of energy, in order to get hired.
  • Doing an interview with a cultural fit. Pose inquiries that invite feedback on company ideals like integrity or honesty. The likelihood of a candidate succeeding during an interview is likely to be low if the description of their worst job ever seems to align with the company.
  • Postponing talking about the corporate culture. Keep culture a secret from applicants. Let them share their insights and beliefs with you first. To assess if they are a good fit for the company, this strategy will provide more honest answers.
  • It is imperative to ensure that the hiring process involves a minimum of three individuals. Views and hearings vary among individuals. It’s easier to comprehend the candidate for employment when different viewpoints are taken into account.

There are disadvantages to looking for workers who will blend in perfectly. The most common error an organization may make when trying to draw in candidates is to present a false impression of itself. Upon realizing they have been duped, newly hired employees will likely leave and morale will drop while they are still there.

People may be less inclined to act negatively toward others who resemble them, which is another potential disadvantage. Therefore, if they embrace the cultural values, average workers have a higher chance of keeping their jobs. Similarly, analysts assert that while comfort levels inside a business are perceptible when the environment is in sync, excessive comfort can lead to complacency and groupthink.

  1. Onboarding initiatives

The greatest employee onboarding procedure instructs new hires about the standards, values, and ideal behaviors of the company. Companies need to ensure that new hires have initial job experiences that support the culture and assist them in integrating into the social networks within the company.

  1. Programs for rewards and recognition

Key tools that companies can utilize to encourage staff members to operate in a way that aligns with the values and culture of the company are these programs. Bonuses, for instance, ought to emphasize teamwork rather than individual achievement if cooperation is a basic value. Those who best represent the company’s principles should also be highlighted by employers.

  1. Programs for Performance Management

Colleagues with similar goals and values typically perform better than those in less cohesive workplaces. By offering an evaluation instrument that educates staff members about appropriate behavior and by clearly defining expectations, performance management initiatives have a significant impact on corporate culture.

Communications

Employees may be prompted to engage in harmful behaviors like embezzlement or may find it easier to justify them if they receive contradictory signals about the company culture. Scholars have observed that cultural disparities can also lead to employees becoming disheartened, thinking that management is lying, questioning assertions made by superiors, and being less motivated to work hard.

Companies may be spending a lot of effort and money developing a culture, but they might not be seeing the same returns. This is particularly likely if rank-and-file workers, managers, and leaders all have different opinions about the company’s culture. Thus, employers have a need to make certain that the company conveys its beliefs to all workers in an understandable and consistent manner.

Metrics

Developing solid strategies to advance corporate objectives and goals requires evaluating organizational culture. However, how can one quantify something that could be as difficult to define as culture? Organizations can evaluate culture by carrying out the following actions after determining its essential components, which include values, the level of hierarchy, and people- and task-oriented behaviors:

  1. Provide a tool for cultural evaluation. Employees of the company should be able to evaluate the organization using this tool based on important cultural factors as well as on areas of the company not included in the assessment.

    2. Carry out the evaluation. Respondents to the survey ought to represent all organizational levels, departments, divisions, and geographic locations.

    3. Examine and discuss the assessment results. Discussing points of disagreement and agreement on the organizational culture is a good idea for managers and leaders.

  2. Hold focus groups for employees. The agreement of top management executives regarding company culture does not guarantee that employees share that perspective.
  3. Talk about culture until you reach an agreement on important points. Consider the question “Who are we?” & “What sets us what we are?” Businesses who realize that their present spot is not where they’d like to be might need to consider changing the organization to adopt a new culture.

Additionally useful in identifying cultural inconsistencies are cultural audits, 360-degree feedback, and assessments. The inconsistency can then be eliminated by leaders. Examine the amount of time staff members spend at customer locations, the amount of time they spend interacting with consumers, the type of training they get in customer service, and other signs that the business’s culture places a strong emphasis on customer service.

Legal Issues

If employers prioritize cultural fit throughout the process of hiring and selecting employees, they may be open to discrimination lawsuits if they do not exercise caution. Employers must take care to prevent discrimination against applicants who aren’t “just like” their hiring managers through recruiting procedures and hiring choices based on cultural fit.

Employers also need to be mindful that some organizational cultures—such as those that are strongly patriarchal or dominated by men—may have a tendency to maintain differences in pay, promotions, and other employment-related aspects. Anti-discrimination regulations may be broken by those differences.

Global Issues

Employees may be more impacted by their country’s culture than by their company’s, according to research. In order to guarantee that management and corporate procedures are suitable and will work well in those nations, organizational executives should be aware of the cultural values of the nations in which their organizations operate. In multinational businesses, organizational governance initiatives should take into account cultural differences across nations.

Within national cultures, workers have varying expectations of their administrators, and managers need to be able to adapt to these differences in expectations and respond to them accordingly. In some nations, the global organization’s prospects of success could be fatally compromised if those expectations are not fulfilled.

Global corporate mergers make these problems much more complicated. The ability of the combined organization to facilitate meaningful and insightful conversations about the newly formed company amongst individuals with diverse cultural backgrounds is critical to the success of multinational mergers.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment Law

Most recent blogs:

Is Working 32 Hours Considered Full-Time

Is Working 32 Hours Considered Full-Time?

Working 32 to 40 hours per week is typically considered full-time in California, but eligibility for benefits depends on employer policies. Overtime laws require higher pay for shifts exceeding eight hours, with additional regulations for breaks, benefits, and independent contractors.
What Does the California Sick Time Law Require

What Does the California Sick Time Law Require?

California law mandates that employers provide paid sick leave to eligible employees, with accrual requirements and usage limits outlined by state regulations. Employers must track sick leave, inform employees, and comply with both state and local sick leave laws to avoid penalties.
When Does Quid Pro Quo Harassment Occur

When Does Quid Pro Quo Harassment Occur?

Quid pro quo harassment occurs when someone in power seeks sexual favors in exchange for job benefits or protection. Employers must enforce policies, conduct investigations, and create a safe workplace to prevent and address this misconduct.
Is It Better to Receive Pay Bimonthly or Biweekly

Is It Better to Receive Pay Bimonthly or Biweekly?

Biweekly and bimonthly payroll schedules impact paycheck frequency, financial planning, and overtime calculations. Choosing the right schedule depends on company needs, industry norms, and legal requirements.
What Is a Nonexempt Position and How It Differs from an Exempt Role

What Is a Nonexempt Position and How It Differs from an Exempt Role?

A nonexempt position in California qualifies for overtime pay, meal breaks, and other labor protections under state and federal law. Exempt positions typically involve higher salaries, independent responsibilities, and different legal requirements for benefits and compensation.
What Are Employee Rights When Calling in Sick

What Are Employee Rights When Calling in Sick?

Employees calling in sick have legal protections that vary by state, including paid leave laws, FMLA, ADA, and workers' compensation. Understanding workplace policies and proper notification procedures helps ensure compliance while maintaining job security.

Can Managers Receive Tips in California? No.

Can Managers Receive Tips in California? No. Under California law, a manager cannot take any part of a tip that's left for an employee. This means that you can't be forced to share your tips with the manager, supervisor, or owner of the business.  In California, when an employer or another supervisor or manager takes an employee's tips, it is considered a wage and hour violation.

Can Managers Take Tips In California?

No, in California, it is strictly prohibited for your manager to take tips that are intended for employees. California labor laws clearly state that tips are the sole property of the employees to whom they are given, and managers, supervisors, or employers cannot collect, share, or deduct any portion of these gratuities.

Lawyer Answers FAQ: California Lunch Break Law and Meal Break Law

Most California workers must receive the following breaks: An uninterrupted 30-minute unpaid meal break when working more than five hours in a day. As a general rule, and insofar as practicable, the rest break must be in the middle of each four-hour work period.

When did tips become taxable?

Tips became taxable in 1965 when legislation extending Social Security coverage to tips (for both taxation and the calculation of retirement benefits), required a tipped employee to report monthly all such tips received in one or more written statements furnished to his employer.
Is Job Abandonment Considered a Resignation in California

Is Job Abandonment Considered a Resignation in California?

Job abandonment in California is viewed as voluntary resignation when employees fail to notify their employer after extended absences. Employers should implement clear policies, address legitimate exceptions, and follow labor laws to manage job abandonment appropriately

California Lunch Break Law [2025]

This article answers common questions, such as "How many hours do you have to work to get a lunch break?" and "Can I work 6 hours without a lunch break in California?" Under California law, employees must be provided with no less than a thirty-minute lunch break when the work period is more than five hours. In California, an employer may not employ an employee for a work period of more than five hours per day without providing the employee with a lunch break.
Overtime - Understanding California’s laws and employee rights

Overtime: Understanding California’s laws and employee rights

California's overtime laws require non-exempt employees to receive extra pay for working over 8 hours a day or 40 hours a week. Employees must be compensated at 1.5 times their regular rate for hours beyond these limits and double pay for excessive hours on the 7th consecutive workday.

Why would someone ask for their personnel file?

Employees who believe they have been fired as a result of unlawful discrimination, retaliation, or harassment will often request their personnel file. Those files may contain information that helps you prove discrimination, harassment, or other civil rights violations.

Can You Refuse to Work If You Haven’t Been Paid?

Legally, you may have the right to refuse work if your employer hasn't paid you because it is constructive termination and wage theft by the employer. If your employer hasn't paid you, should should review your contract before not working.

What Happens If I Don’t Get Paid on Payday?

If you don't get paid on payday, contact an employment attorney immediately and ask for help getting the wages owed to you. Alternatively, if the regular payday for the last pay period an employee worked has passed and the employee has not been paid, contact the Department of Labor's Wage and Hour Division or the state labor department. 

How long can an employer not pay you?

Your employer must pay you on pay day if you did not resign or fired from your job. If you're fired from your job, you must be paid the same day. If you quit your job, you must be paid within 3 days. 

Do You Get Paid for Training? 

In California, employees are generally entitled to be paid for training as long as its job-related and mandated by the employer.

Is Unpaid Training Legal in California?

Yes, unpaid training is illegal in California. California employers must pay for mandatory training. Employees not paid for meetings or job training can sue for unpaid training.

Is It Illegal To Not Pay Overtime?

Yes, it is illegal for employer to not pay overtime. Overtime pay is 1.5 times an employee's regular rate of pay. Not all employees are eligible for overtime.

Contact our attorney.

Please tell us your story:

4 + 3 = ?