What is meant by organizational culture?

Organisational culture is the way that things are done in an organisation, the unwritten rules that influence individual and group behaviour and attitudes. Factors which can influence organisational culture include: the organisation's structure, the system and processes by which work is carried out, the behaviour and attitudes of employees, the organisation’s values and traditions, and the management and leadership styles adopted.

A number of management thinkers have studied organisational culture and attempted to classify different types of culture. The following approaches may be helpful in assessing and understanding the culture of an organisation, but also illustrate its inherent complexity. Observers should recognise that an organisation’s culture can be viewed from multiple angles, and that its characteristics can be reflected in a number of overlapping dimensions.

It is often difficult to specify what exactly drives a particular culture, but easier to observe its effects – for example, the culture of an informal small software company may be quite different from that of a large financial corporation and different again from that of a hospital or a university. It can take years for new joiners to fully understand and absorb the culture, or this may happen relatively rapidly – the extent to which the organisation has a successful ‘on-boarding’ approach will be important here. However, in certain circumstances, an influx of new employees, especially at senior levels, can modify the existing culture.

In practice it should also be recognised that while an organisation may have an ‘umbrella’ culture – broadly defining how things should be done and what is acceptable – subsidiary cultures can emerge based on work roles or other allegiances. Inevitably culture is experienced and interpreted subjectively by individuals in the context of their own beliefs, and also their perspective on the organisation - some facets may have more relevance for some people than others depending on their roles. 
(CMA DECEMBER – 2012 EXAMINATION)