Most people in the world of business agree organisational culture (also known as company culture, corporate culture or workplace culture) exists and is hugely influential in shaping a company. However, a degree of confusion still exists in this area. There is no universally-accepted definition for “organisational culture,” which poses a bit of a problem. After all, if we can’t adequately define organisational culture, we can’t fully explore and understand how it influences employee behaviour, the employee experience and company productivity.
Below, we’ll share our preferred definition of organisational culture. We’ll also cover why it is so important and the 8 different types. We’ll then go on to explore red flags that indicate you need to undergo an organisational culture change.
For those of you who enjoy an interactive quiz, answer the questions below to find out what culture best suits your organisation!
Related: How to carry out a company culture assessment
One way of defining organisational culture is by the shared beliefs, expectations, language, customs, habits and attitudes of its employees, as well as the company’s underlying values, norms and standards. Organisational culture also dictates how the company interacts with the outside world, how it treats its employees and how it conducts business. It even extends to marketing and advertising practices.
Organisational culture contributes to a company’s psychological and social environment. In turn, this environment profoundly impacts the overall employee experience and employee engagement levels. Organisational culture expresses itself in the company’s reputation and branding, and this can have a huge effect on recruitment efforts. The company culture will also determine how new ideas develop in a business and how information flows through its hierarchy.
Every company has a unique organisational culture, although it is developed over time and is usually evolving in one way or another. While all organisational cultures should have a solid foundation, they should be able to adapt and change. Change helps the company advance and compete in challenging times.
To perhaps oversimplify the concept, we at People Insight like to define organisational culture as “the way things are done around here.” New joiners to an organisation quickly learn the way things are, or are not, done and it is the sum of these behaviours that make up culture.
Organisational culture is a huge factor when it comes to the employee experience. It can work to either energise or drain and disengage employees. It can be either inspirational — or demotivational. Organisational culture affects presenteeism, absenteeism, productivity and performance.
Research suggests organisational culture has a direct or indirect bearing on the following:
Understanding this, it’s definitely worth the time cultivating the right type of culture. While no two cultures are the same, there are certain characteristics we can use to group certain companies together. Below, we’ll look at eight types of company culture and what defines them. Check out our list below — what is the culture of your organisation?
Related: 12 Motivating company culture quotes you’ll love
Assessing and describing company culture can feel like a daunting task. Thankfully, we have found a way to make it simpler. Our Cultivate framework allows organisations to assess and make sense of employee attitudes and behaviours to define current and aspirational culture. Evolved from the Competing Values Framework, our framework describes eight organisational culture styles against two axes, representing flexibility and focus.
Culture styles on the top half of the wheel enable flexibility and allow organisations to be more adaptable to the external environment, favouring autonomy. Styles on the bottom half are focussed, favouring clarity and control.
Styles on the right-hand side have an external orientation looking to the market and changes in the external environment, whilst those on the left are internally focussed on employees and processes.
Whilst cultures are a blend unique to each organisation, it is possible to identify common traits that formulate one of eight styles. Cultivate enables an informed discussion about the best styles and necessary trade-offs when setting your culture ambition.
Here are the eight organisational culture styles according to our Cultivate framework. Which one describes your culture?
Within cultures such as this, belonging, trust and sense of community are emphasised. A family-like atmosphere develops where sense of care, wellbeing and work-life balance are favoured.
Famous example: Patagonia, the outdoor clothing company, is well-known for its strong focus on creating an inclusive culture. The company promotes a family-like atmosphere by offering extensive benefits, such as on-site childcare, paid maternity and paternity leave and flexible work arrangements. Patagonia also emphasises community and environmental responsibility, making employees feel a deep sense of belonging and shared values. Their “Let My People Go Surfing” policy, which allows employees to adjust their schedules to surf or engage in outdoor activities, exemplifies their commitment to work-life balance and wellbeing.
If you have cultivated a Supportive company culture, you’ll notice there is always a helping hand to be found amongst colleagues. Collaboration, shared responsibility and personal development feature strongly.
Famous example: Google is famous for its supportive work environment, which encourages collaboration and personal development. The company’s open-office spaces, availability of shared resources and encouragement of knowledge-sharing are integral to its culture. Google’s “20% time” initiative, which allows employees to spend 20% of their time working on personal projects, is a great example of how the company supports creativity and personal growth. Google also provides mentorship programs, extensive learning opportunities and a strong focus on teamwork, making it a supportive environment for employees.
Maintaining stability is favoured above all else within this organisational culture. This is established through careful risk management and minimisation of uncertainty. Predictability, reliability and incremental change approaches are favoured, which offers peace of mind to employees.
Famous example: IBM is a great example of a stable culture. Over its more than 100-year history, IBM has maintained a focus on consistency, reliability and incremental change. Its corporate structure emphasises careful risk management and long-term strategy over rapid, disruptive changes. This stability is attractive to employees who value predictability and a clear path for professional development. IBM’s conservative approach to innovation and structured decision-making processes illustrate its stability-oriented culture.
Clear roles, responsibilities and governance are emphasised within an Ordered culture, and it is important that established rules and procedures are followed. Centralised decision-making and hierarchy are important.
Famous example: McDonald’s operates within a highly-ordered and structured organisational culture. With clearly defined roles, responsibilities and procedures across its global network of franchises, the company emphasises standardisation and control. Every aspect of operations, from food preparation to customer service, is governed by strict protocols to ensure consistency. Centralised decision-making and a rigid hierarchy help maintain this ordered culture.
Goal-driven cultures are characterised by a relentless pursuit of ambitious goals and an emphasis on high performance. Decisive action and clear performance targets are all-important.
Famous example: Tesla embodies a goal-driven culture, led by CEO Elon Musk’s ambitious vision to accelerate the world’s transition to sustainable energy. The company is known for setting aggressive targets, such as launching electric cars into space or achieving mass production of electric vehicles at a speed that defies industry norms. Tesla’s culture is characterised by high-performance expectations, clear goals and a focus on constant innovation. Employees are encouraged to work at a fast pace and challenge the status quo to meet these lofty (some might argue too lofty) objectives.
Within a Competitive culture, strong focus is placed on winning in the marketplace and outstripping competitors to become a dominant leader. Understanding and meeting customer needs to gain competitive advantage are emphasised.
Famous example: Amazon is well-known for its highly competitive culture, where success is measured by dominating the marketplace and outpacing competitors. The company places a strong emphasis on meeting customer needs through innovation and operational efficiency. Amazon’s “Leadership Principles” include values like “Customer Obsession” and “Deliver Results,” which encourage employees to work hard to achieve the company’s ambitious goals. Employees are encouraged to compete, both internally and externally, to drive performance and innovation.
This culture prioritises being flexible in approach and able to change rapidly to navigate dynamic environments. Autonomy and continuous improvement are favoured and environments tend to be exciting and stimulating.
Famous example: Netflix’s culture is built on autonomy, flexibility and responsibility. The company’s famous “Freedom and Responsibility” policy allows employees to work with minimal oversight, trusting them to make decisions in the best interest of the company. Netflix avoids micromanagement and empowers employees to own their work. This autonomy allows the company to pivot quickly and adapt to changing industry conditions, such as the shift from DVD rentals to streaming.
Finally, a Curious organisational culture places a strong focus on taking risks and experimenting with new ideas at work. Problem-solving, innovation, creativity and curiosity are favoured and high-risk, high-reward projects are likely to feature.
Famous example: 3M, the multinational conglomerate known for products like Post-it Notes and Scotch Tape, has a long history of nurturing a curious, innovation-driven culture. The company encourages risk-taking and experimentation, allowing employees to spend a portion of their time on projects that might not be directly related to their core job responsibilities. 3M’s “15% Rule” gives employees the freedom to explore new ideas, which has led to some of its most successful products. This culture of curiosity promotes creativity, problem-solving and innovation within the organisation.
As we mentioned before, organisational culture is fluid. Over time, you will get a better grasp of what works for your company, what yield the best results — and what organisational processes, traditions or beliefs have resulted in disengagement and a lack of productivity. At times, companies will also need to adapt as a result of changes in their industry beyond their control. We can see this in the way the financial sector has had to navigate transformational change.
Below are just a few signs that your organisational culture is no longer working for you and it’s time to shake things up:
A change in business strategy often requires a subsequent shift in company culture. When a company alters its strategic direction — whether it’s expanding into new markets, adopting new technologies or focusing on innovation — it usually requires new ways of thinking, acting and decision-making from employees. For example, if a business moves from a hierarchical structure to a more collaborative model, its culture must evolve to support openness, trust and shared responsibility. Failing to adapt the company culture to align with new strategic goals can lead to misalignment, resistance and a lack of engagement, ultimately undermining the success of the strategy. If you’re looking to support employees through change, a change management survey can provide everything you need to ensure employee engagement doesn’t plummet.
This is a sign your company is either too stressful or too mismanaged for employees to remain for an extended period. Perhaps they are feeling unfulfilled, disengaged or under-appreciated. Whatever the case, when you are beginning to experience higher than average levels of turnover, you should consider carrying out an employee engagement survey, or perhaps a comprehensive employee lifecycle survey, to uncover the root cause. These surveys will help you determine the best course of action going forward.
Organisations with a positive culture experience generally experience greater levels of productivity and performance. On the other hand, performance dips often stem from cultural misalignment, where employees do not feel supported or valued.
If you notice plummeting levels of employee engagement or morale, or that productivity is suffering, you should address the reasons why. More than likely, something (or several things) in your organisation need to change.
Is your product or service not selling? This could be a result of an issue with company culture or organisational structure. Getting to the root cause, or causes, of this might be a challenge, but it could allow for incredible growth and long-term success.
Of course, organisational change is never an easy undertaking. Your employees might resist the change. But if implemented properly, leaders can encourage employees to support (and even get excited about) change.
At People Insight, our experts can help you understand how to assess organisational culture and achieve measurable and meaningful business change. Contact us today about our employee survey programmes and to arrange a free demo of our platform.
