Organization culture is a set of values that organization members share regarding the functioning and existence of their organization. The actual characteristics of a particular culture are often difficult to define. Even employees in the same organization may describe their culture differently. In part, these different descriptions might reflect their individual experiences and the meanings ascribed to those experiences.2

Organization culture is not established all at once by a manager but, rather, develops slowly over time. Basically, organization culture can be thought of as the personality of the organization and a description of how the organization functions. As such, organization culture has dimensions such as organizational rituals, special language, norms, and habits. An organization’s culture can be characterized by describing such dimensions. When management understands the significance of all such dimensions, it can use the dimensions to develop an organization culture that is beneficial to the firm.3

At times, organization culture may seem to include an almost endless list of considerations, and managers can become frustrated trying to accurately define their organization’s cultures. To help define a culture, research suggests that managers ask a few basic questions:4

1. Do people innovate and take risks?

2. Are people attentive to detail?

3. Are people focused on the outcomes of what they do?

4. Is the organization sensitive to people?

5. Do people function as a team?

6. Are people in the organization aggressive?

7. Are people focused on maintaining the status quo?

Although discussions regarding organization culture seem to assume that only one culture exists within an organization, in fact, many subcultures can exist within an organization. An organization subculture is a mini-culture within an organization that can reflect the values and beliefs of a specific segment of the organization that is formed along lines such as established departments or geographic regions. Managers must be aware of the subcultures that exist and know how to manage them because subcultures can negatively or positively affect management efforts, such as organizational planning.5 In managing organization culture, managers sometimes have a tendency to manage only the dominant organization culture, the shared values about organizational functioning held by the majority of organization members.6 In managing organization culture, it’s normally advisable for managers to consider the characteristics and potential influence of the organization’s dominant culture as well as those of the subcultures.

Understanding and managing organization culture have become extremely important issues in order for modern managers to achieve organizational success. According to Michael Porter, a professor at Harvard Business School, organization culture is such an important issue that managers should not only take it seriously as a sound idea but should also embed it into organizational strategy to help build a competitive advantage.7 Many management writers believe that an important prerequisite to organizational success is a manager’s thorough understanding of organization culture concepts. Only through such an understanding can a manager begin to have an impact on encouraging the behavior of organization members that will lead to organizational success.8