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Organisational culture

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What is Organisational culture?

Organisational culture is the collection of shared values, beliefs, attitudes, norms, and behaviours that define how people work together and make decisions within a company. It shapes everything from daily interactions and communication styles to how challenges are approached and how success is celebrated. Culture is often described as “the way things are done around here” and is reflected in both formal systems and unwritten rules.

Key takeaways

1
Defines company identity

Organisational culture is the “personality” of a business, influencing how employees interact, how customers perceive the brand, and how the company responds to change.

2
Core elements
  • Values and beliefs: The guiding principles that influence behavior and decision-making.
  • Norms and practices: The day-to-day routines and rituals, both formal and informal.
  • Symbols and language: Shared language, stories, and symbols that reinforce culture.
  • Leadership style: The tone set by leaders and managers shapes expectations and behaviors.

3
Not static

Culture evolves, shaped by leadership, company history, business goals, and external factors. Deliberate efforts are needed to maintain or change it.

4
Types of organisational culture

Common types include clan (collaborative), adhocracy (innovative), hierarchy (structured), and market (results-oriented).

Why does organisational culture matter?

A strong organisational culture enhances employee engagement and retention by fostering job satisfaction and loyalty, which in turn helps attract and retain top talent. It also drives motivation, collaboration, and innovation, leading to improved performance and productivity. Additionally, culture shapes the company’s reputation among customers and partners, influencing its long-term success and providing the resilience needed to adapt to change and seize new opportunities.

The organisational culture development process

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1
Define core values and vision

Clarify the beliefs and principles that will guide the organisation.

2
Align leadership and behaviors

Ensure leaders model and reinforce the desired culture.

3
Communicate and embed values

Integrate culture into policies, onboarding, recognition, and daily practices.

4
Gather feedback and measure culture

Use surveys and feedback to assess alignment and identify areas for improvement.

5
Evolve and adapt

Continuously refine culture to support business goals and respond to change.

Impact on business and people

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Employee experience: Fosters belonging, satisfaction, and engagement

Collaboration: Encourages teamwork, open communication, and innovation

Recruitment & retention: Attracts and keeps talent aligned with company values

Business performance: Drives productivity, adaptability, and competitive edge

Impact on financial statements

Real-world examples

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Case study: Microsoft’s cultural transformation

When Satya Nadella became CEO in 2014, Microsoft shifted from a rigid, siloed culture to one focused on collaboration, learning, and a growth mindset. Nadella encouraged employees to embrace curiosity and risk-taking, prioritized diversity and inclusion, and broke down internal barriers. This cultural shift led to improved morale, greater innovation, and strong business results, demonstrating the power of intentional culture change.

Frequently asked questions about organisational culture?

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Values, beliefs, norms, symbols, language, leadership style, and everyday behaviors.
Through employee surveys, interviews, focus groups, and observation of behaviors and practices.
It shapes employee engagement, performance, retention, and the company’s brand and adaptability.