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What is Organisational Culture?

'Organisational Culture' refers to the shared values, beliefs, customs, practices, and behaviours that define an organisation's identity. Organizational culture is the essence of an organisation and is influenced by its leadership, employees, and external factors. The characteristics of organisational culture play a crucial role in shaping an organisation's success, employee engagement, and overall performance. 

The components of organizational culture include:

  1. The methods by which the organization approaches its business, interacts with its employees, serves its customers, and engages with the broader community,
  2. The degree to which autonomy is granted for decision-making, fostering innovation, and expressing individuality,
  3. The manner in which authority and information are distributed through its hierarchical structure, and
  4. The level of dedication employees have towards achieving common goals.

In this article, we will explore the seven essential characteristics of organisational culture and provide insights on how to create a positive and thriving culture within your organisation.


Importance Of Organisational Culture

Organisational culture is the backbone of a company, shaping its identity and guiding the behavior of its members. It plays a crucial role in enhancing performance, fostering collaboration, attracting and retaining talent, and aligning the organization's goals and values. 

A strong and positive culture can boost employee morale, customer satisfaction, innovation, and adaptability, making it a vital element in the overall success and competitiveness of an organization. In essence, organisational culture is a unifying force that brings together various aspects of the organization, creating a cohesive and effective working environment.

Seven Characteristics of Organisational Culture

Shared Values: 

The core values of an organisation are the foundation of its culture. Shared values provide a sense of direction, purpose, and identity to employees. Organisations with strong shared values tend to have a more cohesive workforce and can make decisions faster. HR professionals should involve employees in developing the core values of the organisation and ensure that they align with the company's mission and vision.


Organisations with a strong culture are adaptable and can quickly respond to changes in the industry or the market. The ability to adapt to new circumstances ensures that the organisation remains competitive and can seize new opportunities. HR professionals should encourage an environment that is open to change and experimentation, where employees feel comfortable sharing new ideas and challenging existing practices.

Clear Communication: 

Communication is a strong and essential characteristics of organisational culture. Clear communication ensures that everyone understands the organisation's goals, values, and expectations. HR professionals should provide regular feedback to employees, ensure that communication channels are open and transparent, and encourage dialogue and collaboration among team members.

Employee Involvement: 

Organisations with strong cultures encourage employee involvement in decision-making processes. Involved employees tend to have higher job satisfaction and are more committed to the organisation's success. HR professionals should encourage employee involvement by soliciting feedback, providing opportunities for training and development, and empowering employees to take ownership of their work.

Strong Leadership: 

Leaders play a crucial role in shaping an organisation's culture. Leaders should embody the organisation's core values, provide direction, and inspire employees to achieve the organisation's goals. HR professionals should ensure that the organisation has a strong leadership team that is aligned with the company's values and culture.

Recognition and Rewards: 

Employees need to feel recognized and appreciated for their contributions to the organisation. Recognition and reward programs can help to reinforce the organisation's core values and promote a positive culture. HR professionals should establish a recognition and reward program that aligns with the organisation's goals and values.

Diversity and Inclusion: 

Diversity and Inclusion are also strong characteristics of organisational culture. A strong organisational culture embraces diversity and promotes inclusion. Organisations that value diversity tend to have higher levels of innovation and creativity. HR professionals should ensure that the organisation has a diverse workforce and promote an inclusive environment where all employees feel valued and respected.

Signs of Good and Bad Organisational Culture


Characteristics of Good Organisational Culture:

Positive Work Environment:

A good organisational culture fosters a positive and enjoyable work environment where employees feel comfortable, supported, and respected.

Clear Communication:

One of the important characteristics of good organisational culture is clear and open communication between all organisation members, from top-level executives to entry-level employees.

Support for Employee Growth:

A good organisational culture supports employee growth and development by providing opportunities for training, mentorship, and career advancement.

Strong Leadership:

A good organisational culture is led by strong, ethical, and compassionate leaders. They lead by example and inspire others to do their best.

Teamwork and Collaboration:

A good organisational culture values teamwork and collaboration and encourages employees to work together to achieve common goals.

Flexibility and Adaptability:

A good organisational culture is flexible and adaptable to changing circumstances. It encourages employees to be creative and innovative in their work.

Focus on Results:

A good organisational culture values results and focuses on achieving measurable goals and objectives.

Characteristics of Bad Organisational Culture:

Toxic Work Environment:

One of the top characteristics of bad organisational culture? A toxic work environment where employees feel unsupported, disrespected, and unhappy.

Poor Communication:

A bad organisational culture has poor communication, with unclear expectations and lack of transparency, causing confusion and frustration among employees.

Lack of Support for Employee Growth:

A characteristic of bad organisational culture neglects employee growth and development, resulting in a disengaged workforce with limited opportunities for career advancement.

Weak Leadership:

A bad organisational culture is led by weak, unethical, and disengaged leaders who fail to inspire and motivate employees.

Individualism and Competition:

A bad organisational culture values individualism and competition over teamwork and collaboration, resulting in a cut-throat work environment that breeds resentment and mistrust.

Resistance to Change:

One of the key characteristics of bad organisational culture is resistant to change and innovation. This results in stagnation and an inability to adapt to new challenges.

Focus on Process over Results:

A bad organisational culture values process over results. This leads to a lack of accountability and a failure to achieve meaningful goals.


Dos and Don'ts of Creating a Positive Organisational Culture:


  • Involve employees in developing the organisation's core values
  • Encourage an environment that is open to change and experimentation
  • Provide regular feedback to employees
  • Empower employees to take ownership of their work
  • Establish a recognition and reward program that aligns with the organisation's goals and values
  • Promote diversity and inclusion in the workplace


  • Impose values on employees without their input
  • Resist change or experimentation
  • Ignore feedback from employees
  • Micromanage employees or limit their autonomy
  • Rely solely on monetary rewards to motivate employees
  • Discriminate or exclude employees based on their background, race, gender, or other factors

Overall, creating a positive organisational culture is essential for the success of any organisation. By doubling down on the key characteristics, like fostering a supportive and inclusive work environment, prioritizing employee growth and development, and valuing teamwork and collaboration, HR professionals can help their organisations thrive and achieve their goals.


Q. How do you measure the effectiveness of an organizational culture in driving employee engagement and overall performance?

A. Organizations measure culture's impact through employee satisfaction surveys and performance metrics. Feedback is collected regularly. This helps in understanding employees' alignment with the company's values. Performance data is then compared with engagement levels. As a result, a clear link between culture, engagement, and performance emerges. This process guides improvements.

Q. Can you provide specific examples of companies that have successfully transformed their organizational culture and the steps they took to achieve this change?

A. Tata Group and Infosys are prime examples in India. Tata Group emphasized ethics and social responsibility, strengthening trust and loyalty. Infosys focused on innovation and employee empowerment, leading to high engagement. Both companies engaged in transparent communication and provided continuous learning opportunities. Their cultures evolved, becoming benchmarks in their industries. These steps have proven effective in transforming their organizational cultures.

Q. How does organizational culture impact the recruitment and retention of employees, and what strategies can HR professionals employ to use culture as a tool for attracting and retaining top talent?

A. A strong culture attracts candidates who share similar values and enhances retention by fostering a sense of belonging. HR can highlight the company's culture in job postings and interviews to attract like-minded individuals. For retention, creating a culture of recognition, development, and work-life balance is key. These strategies ensure employees feel valued and see growth opportunities, making them more likely to stay.