Organizational culture refers to a system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behaviour (Chatman & Eunyoung, 2003; Kerr & Slocum, 2005). These values have a strong influence on employee behaviour as well as organizational performance.

In fact, the term organizational culture was made popular in the 1980s when Peters and Waterman’s best-selling book In Search of Excellence made the argument that company success could be attributed to an organizational culture that was decisive, customer-oriented, empowering, and people-oriented.


An organization’s culture may be one of its strongest assets or its biggest liability. In fact, it has been argued that organizations that have a rare and hard-to-imitate culture enjoy a competitive advantage (Barney, 1986).

Culture, or shared values within the organization, may be related to increased performance. Researchers found a relationship between organizational cultures and company performance, with respect to success indicators such as revenues, sales volume, market share, and stock prices (Kotter & Heskett, 1992; Marcoulides & heck, 1993)

In addition to having implications for organizational performance, organizational culture is an effective control mechanism dictating employee behaviour. Culture is a more powerful way of controlling and managing employee behaviours than organizational rules and regulations.


Organizational culture consists of some aspects that are relatively more visible, as well as aspects that may lie below one’s conscious awareness. Organizational culture can be thought of as consisting of three interrelated levels (Schein, 1992).

At the deepest level, below our awareness, lie basic assumptions. These assumptions are taken for granted and reflect beliefs about human nature and reality.

At the second level, values exist. Values are shared principles, standards, and goals.

Finally, at the surface, we have artefacts, or visible, tangible aspects of organizational culture. For example, in an organization, a basic assumption employees and managers share might be that happy employees benefit their organizations. This might be translated into values such as egalitarianism, high-quality relationships, and having fun. The artefacts reflecting such values might be an executive “open door” policy, an office layout that includes open spaces and gathering areas equipped with pool tables, and frequent company picnics.


Organizational culture is a system of shared assumptions, values, and beliefs that helps individuals understand which behaviours are and are not appropriate within an organization. Cultures can be a source of competitive advantage for organizations. Strong organizational cultures can be an organizing as well as a controlling mechanism for organizations. And finally, organizational culture consists of three levels: assumptions that are below the surface, values, and artefacts.



Power Culture

  • Power culture is associated with autocratic leadership.
  • Power is concentrated in the centre of the organisation.
  • Decisions can be made quickly as so few people are involved in making them.
  • Managers are judged by results rather than the means used to obtain them.
  • Autocratic leadership and hierarchical structures are features of organisations with a power culture
  • Motivational methods are likely to focus on financial incentives and bonuses to reward exceptional performance (which can encourage risky short -term decision –making; think Enron).

Role Culture

  • Role culture is associated with bureaucratic organisations.
  • Staff operate within the rules and show little creativity.
  • The structure of the organisation is well defined and each individual has clear delegated authority.
  • Power and influence come from a person’s position within the organisation.
  • Decision -making is often slow and risk-taking is frowned upon.
  • Tall hierarchical structures are used in organisations with a powerful role culture.

Task Culture

  • Groups are formed to solve particular problems, and lines of communication are similar to a matrix structure.
  • Such teams often develop a distinctive culture because they have been empowered to take decisions.
  • Team members are encouraged to be creative and there may be a strong team spirit which can lead to a very motivating environment (meeting workers’ intrinsic needs).

Person Culture

  • There may be some conflict between individual goals and those of the whole organisation, but this is the most creative type of culture.
  • There is no emphasis on teamwork as each individual is focused on their own tasks and projects.
  • This type of culture can be found in a scientific research environment or in professional partnerships (say, lawyers and architects).
  • Individuals who thrive in this type of environment will often find it difficult to work effectively in a more structured organisation.

Entrepreneurial Culture

  • In this culture, success is rewarded, but failure is not necessarily criticized since it is considered a consequence of enterprise and risk-taking.
  • This is a culture usually found in flexible organisational structures.
  • Motivation levels are likely to be high among people who enjoy the challenge of innovative risk- taking.

Johnson and Scholes (1988) described a cultural web, identifying a number of elements that can be used to describe or influence Organizational Culture:

The Paradigm: What the organization is about; what it does; its mission; its values

  • Control Systems: The processes in place to monitor what is going on. Role cultures would have vast rulebooks. There would be more reliance on individualism in a power culture.
  • Organizational Structures: Reporting lines, hierarchies, and the way that work flows through the business.
  • Power Structures: Who makes the decisions, how widely spread is power, and on what is power based?
  • Symbols: These include organizational logos and designs, but also extend to symbols of power such as parking spaces and executive washrooms.
  • Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary.
  • Stories and Myths: build up about people and events, and convey a message about what is valued within the organization.

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