Why Organisational Culture Matters
What is organisational culture? Why does it matter? How can your company work out what their culture is and instill it in your employees and staff?
What is Organisational Culture?
An organisation’s culture consists of the attitudes and behaviours that are displayed in its workplace. Organisational culture affects employee interactions, how decisions are made and how invested members of the organisation are in its success.1
Ben Horowitz terms business culture as ‘how people react when you’re not in the room’. This is reflective of the idea that a strong company culture imprints itself on the work that is carried out under its name.
We all generally know intuitively what a company’s culture is or ‘feels like’ to us, but there have been attempts to be more analytical about the ways to understand the culture of organisations.
Organisational Culture Models
Charles Handy’s Model of Organisational Culture
Irish philosopher and thinker in organisational theory, Charles Handy identified four distinct types of organisational cultures2:
- Power Culture
Characterised by centralised power. - Role Culture
Has well-defined roles and responsibilities. - Task Culture
Driven by collaboration and team-based problem-solving - Person Culture
Where the individual and their goals are more prioritised than the organisation.
Edgar Schein’s Model of Organisational Culture
Professor at the MIT Sloan School of Management, and thinker and writer in the field of organisational management and culture, Edgar Schein was also one the early proponents of the idea of psychological safety. He defined organisational culture as consisting of 3 levels3:
- Artefacts
Things about the organisation that you can see. Branding, policies, tools. - Espoused Values
How people would describe the organisation. Missions, goals, values. - Underlying Assumptions
Unspoken, hard to articulate, underlying beliefs about the organisation.
Why is Organisational Culture Important?
Over the last few years there has been an increased focus on company culture. In fact, 76% of employees say organisational culture is important for them to be effective in their jobs.
According to Bain & Company, “companies that exhibit a winning culture, that have a strong internal compass and inspire their employees” are 3.7 times more likely to be business performance leaders. It is also predicted the Chief Purpose office will be the next C-Suite role. These insights alone are evidence that culture matters and that it is something your organisation needs to focus on.
How Can An Organisation Map Its Culture?
Organisations should consider what their mission, vision and company values are. Then consider how this filters down into their everyday practices, such as the hiring processes, their meetings and their company’s rituals.
To map out your organisation’s culture, try using our culture canvas.
