Organizational Culture

… a core concept in Governance and Institutions and Atlas100

organizationalcultureConcept description

Business Dictionary (reference below), defines organizational culture as the values and behaviors that contribute to the unique social and psychological environment of an organization.

The Dictionary goes on to say:

“Organizational culture includes an organization’s expectations, experiences, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid. Also called corporate culture, it’s shown in

  1. the ways the organization conducts its business, treats its employees, customers, and the wider community,
  2. the extent to which freedom is allowed in decision making, developing new ideas, and personal expression,
  3. how power and information flow through its hierarchy, and how committed employees are towards collective objectives.

“It affects the organization’s productivity and performance, and provides guidelines on customer care and service, product quality and safety, attendance and punctuality, and concern for the environment.”

Writing in the Harvard Business Review (reference below), Michael Watkins says:

“If you want to provoke a vigorous debate, start a conversation on organizational culture. While there is universal agreement that (1) it exists, and (2) that it plays a crucial role in shaping behavior in organizations, there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change.”

Following a LinkedIn discussion with more than 300 responses, Watkins draws a number of conclusions, including:

“Culture is powerfully shaped by incentives. The best predictor of what people will do is what they are incentivized to do. By incentives, we mean here the full set of incentives – monetary rewards, non-monetary rewards such as status, recognition and advancement, and sanctions – to which members of the organization are subject. But where do incentives come from? … Are patterns of behavior the product of incentives, or have incentives been shaped in fundamental ways by beliefs and values that underpin the culture?”

“Culture is a carrier of meaning. Cultures provide not only a shared view of “what is” but also of “why is.” In this view, culture is about “the story” in which people in the organization are embedded, and the values and rituals that reinforce that narrative. It also focuses attention on the importance of symbols and the need to understand them – including the idiosyncratic languages used in organizations – in order to understand culture.”

“Culture is a social control system. Here the focus is the role of culture in promoting and reinforcing “right” thinking and behaving, and sanctioning “wrong” thinking and behaving. Key in this definition of culture is the idea of behavioral “norms” that must be upheld, and associated social sanctions that are imposed on those who don’t “stay within the lines.”

“Finally, cultures are dynamic. They shift, incrementally and constantly, in response to external and internal changes. So, trying to assess organizational culture is complicated by the reality that you are trying to hit a moving target. But it also opens the possibility that culture change can be managed as a continuous process rather than through big shifts (often in response to crises). Likewise, it highlights the idea that a stable “destination” may never – indeed should never – be reached. The culture of the organization should always be learning and developing.”

Atlas topic, subject, and course

Organizational Design and Behaviour (core topic) in Governance and Institutions and Atlas100 Governance and Institutions.


Business Dictionary, organizational culture, at, accessed 11 October 2016.

Michael Watkins (2013), What Is Organizational Culture? And Why Should We Care? 15 May 2013, at, accessed 11 October 2016.

Page created by: Ian Clark, last modified on 11 October 2016.

Image: Global NP Solutions, Three Ways Organizational Culture Influences Innovation, at, accessed 11 October 2016.