Definition · HR operations and employee relations
Organizational Culture
Definition
Organizational culture is the set of shared assumptions, values and habits that shape how people in an organization actually behave: how decisions get made, what gets rewarded, how mistakes are handled and how people treat each other. It's what employees do when nobody is checking the handbook, and it often differs from the values on the website.
Also called: Company culture, Workplace culture, Corporate culture
Three levels of culture
Edgar Schein, the MIT researcher whose model most HR programs still use, described culture at three levels:
- Artifacts: what you can see and hear. Office layout, dress, how meetings run, the language people use, what the break room looks like.
- Espoused values: what the organization says it values. Mission statements, values posters, the code of conduct.
- Basic underlying assumptions: the unspoken beliefs people act on. "Hitting the number matters more than how you hit it." "Nobody gets promoted from the night shift."
The third level is the real culture. When espoused values and underlying assumptions conflict, employees follow the assumptions, and they lose trust in the stated values.
Types of organizational culture
The most widely used typology is the Competing Values Framework from Kim Cameron and Robert Quinn, which sorts cultures by two tensions (flexibility vs stability, internal vs external focus) into four types:
- Clan: collaborative, team-oriented, people-focused. Common in smaller firms and mission-driven organizations.
- Adhocracy: entrepreneurial, experimental, tolerant of risk. Common in startups and R&D groups.
- Market: competitive, results-driven, focused on targets and customers. Common in sales organizations.
- Hierarchy: structured, process-driven, focused on consistency and control. Common in regulated industries, government and large operations.
No organization is one type, and none is better in the abstract. A contact center serving a bank needs a lot of hierarchy (compliance, scripts, QA) and benefits from some clan (peer support for difficult calls). Problems come from mismatches, such as a hierarchy culture trying to move like a startup.
Where culture shows up for HR
Culture is easiest to see in the systems HR runs:
- Hiring: who gets hired, and whether "fit" means shared values or shared backgrounds. See culture fit for the risks of using it loosely.
- Onboarding: whether new hires are welcomed and taught, or left to figure it out.
- Performance and promotion: what behaviors actually get rewarded.
- Discipline: whether rules apply equally to top performers.
- Communication: whether bad news travels up. Teams with strong psychological safety surface problems early.
Together these shape the employee experience, which is how employees feel culture day to day.
Culture in multi-site and frontline organizations
Large employers rarely have one culture. A retailer with 300 stores has 300 local cultures, each set mostly by the store manager. A BPO with sites in three countries will see different norms around hierarchy, feedback and overtime. Headquarters' culture statements reach frontline employees mainly through supervisors.
That's why site-level data matters. Compare engagement, early turnover, absenteeism and internal promotion rates by site and by manager. A site with 60% 90-day turnover while peers run at 30% usually has a local culture problem, often a single manager, more than a pay or labor-market problem.
How to change organizational culture
Culture changes slowly and mostly through behavior, not slogans:
- Decide which behaviors must change, specifically. "Supervisors coach after every QA evaluation" is actionable; "be more collaborative" isn't.
- Change what's rewarded: promotion criteria, bonuses, recognition.
- Change who leads: the managers you promote are the culture's loudest signal.
- Fix systems that contradict the values: a stated value of work-life balance alongside mandatory unpaid after-hours chats won't stick.
- Measure through surveys, exit and stay interviews, and outcome data.
Expect a year or more before employees believe the change is real.
Legal and fairness notes
A culture that tolerates demeaning jokes or favoritism isn't just unpleasant; it can create liability for a hostile work environment under Title VII and state laws. Using "culture fit" to screen out candidates can produce disparate impact if it becomes a proxy for age, race, national origin or other protected characteristics. Tie hiring and promotion decisions to documented, job-related criteria.
Frequently asked questions
What is organizational culture in simple terms?
It's how things really work in an organization: the shared beliefs, values and habits that shape how people behave, make decisions and treat each other.
What are the four types of organizational culture?
In the Competing Values Framework, they are clan (collaborative), adhocracy (innovative), market (competitive) and hierarchy (structured). Most organizations mix several.
What is the difference between company culture and workplace culture?
They're often used interchangeably. Company culture usually refers to the organization as a whole, while workplace culture can mean the culture of a specific site, team or office.
How do you measure organizational culture?
Use employee surveys, focus groups, exit and stay interviews, and outcome data such as turnover, internal promotion rates and complaints, broken down by team and site.
Can organizational culture be changed?
Yes, but slowly. Change what gets rewarded, who gets promoted and which systems contradict the desired behavior. Statements alone rarely change culture.