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How Can We Define Organisational Culture?

12 Dec 2019 - Blog, Events, News

What is organisational culture? Why does it matter to a business and how do you know when you need to shake things up?

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 different types. We’ll then go on to explore red flags that indicate you need to undergo an organisational culture change.

How We like to Define Organisational Culture at People Insight

Why Is Organisational Culture Important? What Does It Impact?

Types of Organisational Culture

How to Know When You Need an Organisational Culture Change

How We like to Define Organisational Culture at People Insight

One way of defining organisational culture is by its 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. Organisational culture 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. But 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. However, although organisational change is necessary at times, it is also one of the hardest things to alter in an organisation.

To perhaps oversimplify the concept, we define organisational culture as “the way things are done around here.”

Why Is Organisational Culture Important? What Does It Impact?

HubSpot has suggested organisational culture is paramount when it comes to attracting and retaining talented people. Company culture is a huge factor when it comes to the employee experience. You could describe it as the “vibe” employees get when they are part of your organisation. Organisational culture can either energise or drain 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:

Different Types of Organisational Culture

According to business professors Robert E. Quinn and Kim S. Cameron of the University of Michigan, there are four types of organisational culture. Organisations can be a combination of these cultures.

How to Know When You Need an Organisational Culture Change

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 it’s time your company implements organisational culture change:

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. The results could yield success.

At People Insight, our experts can help you assess your company’s employee experience and organisational culture, to help you achieve measurable and meaningful business change. Get in touch today about our employee survey programmes.

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