Organizational Culture Quiz: What Type Of Company Culture Do You Have?

Who Desires The Social Organizational Culture? 

The employees who most desire the Social culture come from Marketing departments, followed by HR and Administration. While this type of organizations culture tends to get the most plaudits in the press, and is generally considered a strong culture, it turns out that not everyone actually prefers this workplace culture. People whose primary motivation is Affiliation are far more likely to enjoy the Social culture as their dominant culture. But for people who are less affiliative, and more power or achievement driven, are less likely to enjoy or thrive in this type of workplace. While the business press often considers this the most healthy culture, the reality is that that not every function or department desires this company culture. If people don't place high value on personal relationships with their colleagues, for example, this culture is less likely to succeed.

Who Desires The Dependable Organizational Culture? 

As we might expect, the employees who most desire the Dependable culture come from Operations and Support Services. These are employees more likely to be motivated by Achievement and Security, and who will prize consistency, predictability, and a task culture. When a company has a strong organizational culture focused on dependability and consistency, it's often because the founder or company history was focused on operational excellence as their primary strategy and competitive advantage.

Who Desires The Enterprising Organizational Culture? 

The employees who most desire the Enterprising culture come from Sales, followed by Marketing and IT. This is the most open culture in the sense that advancing one's career requires having great ideas and talent, not formal power within an organizational structure or strong personal relationships. This is also the company culture that an organization attempts to create when they talk about creating a culture change. Rarely does an organization say they want more structure; most often they desire more of an adhocracy culture where anyone at any level can make suggestions and generate breakthrough innovations. 

Who Desires The Hierarchical Organizational Culture? 

Given that most articles about company culture are written by leaders from HR, it's understandable that a hierarchy culture gets short shrift in the literature. But there are people, from myriad departments, who actually desire this type of organisational culture. People who desire this culture tend to come from Operations, Administration, Support Services and Finance. This make sense, especially when we consider that these are functions that are more likely to value shared assumptions about clear role definitions, titular power structures, and who in an organization's culture is actually making decisions. Because these power structures are so embedded, this is the company where an organizational culture change will be the most difficult. Typically a significant cultural change in this type of organization will require a mammoth turnover of leaders and even some employees.

VIDEO OVERVIEW OF ORGANIZATIONAL CULTURE

how to improve company culture

Culture change starts by measuring the corporate culture that your employees most desire (you can't improve a company culture without employee feedback). Sadly, it's not uncommon for a CEO or senior leaders to want one type of culture while the vast majority of the workforce wants a drastically different culture. 

For example, imagine that senior leadership wants to create a Social Culture, where employees get together outside of work, have great friends, and socialize with one another. Now, further imagine that a majority of employees aren't there to make new friends; they want to climb the corporate ladder, build their resumes, and move up or leave. 

That's a case where improving the culture isn't about fixing specific processes, rather it's about not forcing a certain type of corporate culture onto a group of employees who really don't like that type of culture.

The only way to avoid these kinds of dysfunctional corporate cultures is for leaders to assess the type of organizational culture that their employees actually want and then build the culture around the majority opinion. You can't do this in the abstract, it's vital to assess the current company culture and the extent to which that fits what employees want.

Strong organizational cultures are those where there is shared value on issues like whether people should be competitive or collaborative, or whether the work environment should be creative & free-flowing or logical & regimented.

For example, if the workforce is going to experience far higher employee engagement with an Enterprising Corporate Culture, then, even though it will mean adjusting some leadership behavior, that's what the company should strive to be. In general, a positive culture is one that is fully synchronized between the culture that employees want and the culture that leaders and human resources are trying to build.

words to describe company culture

It's possible to identify an organizational culture just by looking at the words a company uses to describe itself. Here are a few words that are often associated with each of the four organizational cultures:

WORDS OFTEN ASSOCIATED WITH A SOCIAL CULTURE
Social, friendly, collaborative, camaraderie, fun, emotional wellbeing, friendships, employee engagement, employee experience, trust, flexibility, playful

WORDS OFTEN ASSOCIATED WITH A DEPENDABLE CULTURE
 Methodical, dependable, process, safety, predictable, stable, teams, stable, clear roles

WORDS OFTEN ASSOCIATED WITH AN ENTERPRISING CULTURE
Enterprising, entrepreneurial, meritocracy, creativity, intelligence, best ideas, move fast, adventure, innovation

WORDS OFTEN ASSOCIATED WITH A HIERARCHICAL CULTURE
 Hierarchical, traditional, power, structure, roles, corner office, competitive, up or out, corporate

How A New Employee Can Assess An Organization's Culture

Step 1: Ask the hiring manager about a time when an employee at the company displayed a great attitude.
An easy way to assess the corporate culture of your potential future employer is to ask for a specific example of a time when one of their current employees displayed having the right attitude for this particular company. A gentle way to ask this might sound like this: "If you think of a current employee who really represents the right attitude for this culture, could you tell me about a specific time they did something that really exemplifies having the right attitude?"

A key bit of career advice for any potential new hire is to understand the shared values around what is (or is not) successful behavior at that company.

Step 2: Be wary if they can’t give you a specific example.
The best bosses recognize their employees' accomplishments, but a shocking number of leaders don't actively recognize their high performers. In fact, in a recent study on the dismal state of the performance appraisal, only 28% of people believe that their leader always recognizes their accomplishments. Meanwhile, 54% believe that their leader never, rarely or occasionally recognizes their accomplishments. While that data is scary, it actually gives you a great way to test whether your potential employer has a strong company culture. If they struggle to provide you with a concrete example of when one of their employees did something great (exemplifying the right attitude and fitting into the company culture), it stands to reason that they're probably not going to recognize your accomplishments or that the company has an especially weak culture.

Step 3: Ask about a time when an employee at the company displayed the wrong attitude.
After accomplishing the previous two steps, it's possible that you won't need step three. In other words, if you've already discovered that this potential new company is probably a poor corporate culture for you, don't try to convince yourself otherwise by asking questions until you get an answer you like. However, assuming that you'd still like some more evidence about whether you will fit into the organizational culture, ask them about employees that have (or had) the wrong attitude.

company culture interview questions

How can you tell if someone will actually be a fit for your particular workplace culture? Two interview questions are particularly effective for determining if someone is going to be a cultural fit.

Interview Question #1: Could you tell me about a time you didn't agree with your boss?

Leaders who embrace a free flowing and creative workplace culture are far more likely to be receptive to employees who disagree with them. Leaders in those cultures are also more likely to more openly consider the honest feedback and ideas of their people.

When you ask this interview question, you'll quickly hear whether the candidate is okay with a boss who is not receptive to disagreement (like would be experienced in a Hierarchical culture), and whether they require the kind of open-exchange that would occur in a Social or Enterprising culture.

The second interview question for assessing culture fit is:

Interview Question #2: Could you tell me about a time your idea or opinion was rejected?

Enterprising cultures, for example, need out of the box thinkers to thrive, but not every idea is viable. An employee who acts out every time their idea gets passed over creates an unhealthy dynamic that will damage an entrepreneurial culture. By contrast, someone who admits that they didn't follow the right procedures or build sufficient political capital in order to get their idea accepted is likely a better fit for a Dependable or Hierarchical culture.

ADDITIONAL THOUGHTS ON ORGANIZATIONAL CULTURE

Understanding and Strengthening Organizational Culture for Performance

Organizational culture is more than just a buzzword; it’s the lifeblood of any successful company. It’s reflected in every decision, behavior, and interaction that takes place within a workplace. Whether defined by company culture statements or measured by organizational culture dimensions, culture in a company is important not just for its people but for its long-term performance.

This article explores the core aspects of corporate culture, providing workplace culture examples, highlighting organizational culture change examples, and explaining how leaders can use culture change management to build stronger, more cohesive environments.

Defining Organizational Culture

At its core, organizational culture is the set of shared values, beliefs, and norms that influence how employees behave and interact. It shapes the organizational norms that guide decision-making and defines characteristics of organizational culture, such as collaboration, creativity, or strict adherence to processes. To explain organizational culture, one can think of it as the invisible thread that binds the people, goals, and processes of a company together.

The Four Dimensions of Organizational Culture

Extensive research has identified four primary types of corporate cultures. Each type has its strengths and potential pitfalls:

Social Culture A relaxed and collaborative environment where relationships thrive. Employees value trust and cooperation, and professional boundaries may blur. While this culture fosters camaraderie, it might not suit high-stakes, detail-intensive industries.

Dependable Culture Predictability and processes are at the heart of dependable cultures. Employees excel in environments where standards are clear, and following protocols is essential. This is a great fit for organizations prioritizing precision and safety, such as healthcare or manufacturing.

Enterprising Culture Creativity and competitive spirit drive enterprising cultures. Meritocracy reigns, and the best ideas take precedence over rank. Employees who thrive in this culture often describe it with words like "dynamic," "adventurous," and "innovative."

Hierarchical Culture Traditional and structured, this culture relies on clear roles and power dynamics. People who value stability and clarity often flourish in hierarchical organizations. Critics may call it rigid, but for many, it offers predictability and a clear path to success.

Each culture type offers valuable workplace culture examples and underscores why no single culture is inherently better than another. Instead, companies must align their cultural dimensions with their goals, employees' preferences, and industry requirements.

Why Consistency in Culture Matters

One of the key aspects of corporate culture is its consistency. Employees are significantly more engaged when company culture statements align with the lived experience of the workplace. For example, if a company claims to value bold innovation but operates with cautious, compliance-driven processes, the disconnect can erode trust and engagement.

A real-life example illustrates this: Leaders at a self-described innovative tech company identified their culture using words to describe work culture like "fast," "bold," and "innovative." However, employees used words like "political," "compliance," and "cautious." This disparity highlights the importance of aligning leadership's vision with employees' experiences.

How to Strengthen Organizational Culture

Strengthening organizational culture for organizational performance begins with understanding your current culture. Leaders must assess employee perceptions, as they often differ significantly from managerial perspectives. A simple yet effective approach is to add open-ended questions about culture to employee engagement surveys. This can reveal hidden truths and provide a roadmap for actionable improvements.

Here are some strategies for creating a strong corporate culture:

Define Clear Values: Successful cultures begin with clearly defined values. These values must be actionable and integrated into daily operations. Avoid vague platitudes; instead, focus on specifics that resonate with your workforce.

Ensure Consistency Across Teams: Each department may have its unique micro-culture, but these should not contradict the overarching culture. For example, the Enterprising Culture might dominate in sales, while the Dependable Culture could suit operations.

Practice Authentic Leadership: Leaders must model the behaviors and decisions that reflect the desired culture. Hypocrisy, such as promoting collaboration while rewarding cutthroat competition, undermines trust.

Addressing Culture Change

Culture change management is a delicate yet essential process for companies undergoing transformation. The decision to change culture should never be made lightly. Organizational culture change examples abound where mismatched visions led to chaos rather than improvement.

One way to approach culture change is by identifying pain points. For instance, if employees feel disengaged because of unclear roles, shifting towards a Dependable Culture might resolve the issue. Conversely, if innovation stalls due to rigid processes, an Enterprising Culture could inject much-needed creativity.

The Role of Negative Examples

Not all cultural discussions revolve around positive workplace culture examples. Understanding what makes a company with bad culture is equally instructive. These environments often exhibit traits like micromanagement, toxic competition, or lack of accountability.

Using synonyms for work environment such as "toxic workplace" or "unsupportive climate," it’s crucial to recognize these warning signs and address them proactively. Failure to do so can result in disengagement, high turnover, and reputational damage.

The Importance of Cultural Fit in Hiring

Hiring for cultural fit is as critical as hiring for skills. Whether evaluating new hires or promoting internal candidates, understanding their alignment with organizational norms can significantly influence performance. This does not mean hiring only those who mirror current employees but ensuring that individuals can thrive in the existing culture.

Examples of Successful Cultural Alignment

One standout example involves a financial firm that transitioned from a Hierarchical Culture to a Dependable Culture. The shift required transparency, training, and a strong commitment to new processes. Employees initially resistant to change found renewed purpose as they adapted to a culture that valued predictability and fairness.

Similarly, in tech companies, cultural dimensions often shift toward Enterprising Cultures. Employees in such environments often cite work culture examples like meritocracy and innovation as the defining characteristics of organizational culture.

Key Takeaways

Organizational culture is not static. It evolves alongside a company’s goals, people, and market conditions. From analyzing organizational norms to embracing culture change management, the path to a strong corporate culture requires introspection and action.

Whether crafting company culture statements, exploring company culture theories, or aligning values across teams, leaders must remain vigilant in fostering environments where all employees can thrive. With the right approach, culture can be the cornerstone of sustained organizational success.

Organizational Culture: Theories, Trends, and Impact on Performance, Innovation, and Change

Organizational culture refers to the shared values, beliefs, and assumptions that shape how members of an organization behave and work together. It has often been described as “the unseen force” driving employee behaviors and decisions. Edgar Schein, a foundational theorist, defines organizational culture as “a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid”. In essence, culture encompasses both visible elements (like rituals, symbols, practices) and deeply ingrained, unconscious assumptions. A strong organizational culture can foster unity and purpose, helping teams navigate complexity and change. In recent years, both researchers and business leaders have increasingly recognized culture as a critical driver of business outcomes and a key focus area for strategic management. This report provides a deep dive into classic and contemporary frameworks of organizational culture, and examines how culture influences organizational performance, innovation/adaptability, and change management. Key insights and empirical findings from the past decade (2015–2025) are emphasized, drawing on both academic studies and practitioner publications.

Foundational Theories of Organizational Culture

Early work on organizational culture established core concepts and models that remain influential. Two foundational perspectives came from Edgar Schein and Geert Hofstede:

Schein’s Three Levels of Culture

Schein’s model (first developed in the 1980s) views culture as operating on three levels. At the surface are artifacts – the visible, tangible aspects of culture such as dress code, office layout, rituals, and slogans. Beneath that are espoused values – the stated norms and values, strategies, and goals of the organization. Deepest are the basic underlying assumptions – the unconscious, taken-for-granted beliefs and mental models that truly guide behavior. Schein argues that these underlying assumptions form the essence of culture and must be understood to truly grasp how an organization functions. For example, a company might openly espouse innovation, but if the basic assumption is that “mistakes are punished,” employees will avoid risk-taking. Schein’s framework highlights that visible practices can be deceptive without probing the deeper layers of shared assumptions.

Hofstede’s Cultural Dimensions

Geert Hofstede is best known for his research on national cultures, but he also identified dimensions of organizational culture. In a 1990 study, Hofstede and colleagues found that organizational cultures (at least within one multinational company’s units) differed mainly in practices (shared ways of doing things) rather than basic values. They outlined six dimensions of organizational practices: process-oriented vs. results-oriented, employee-oriented vs. job-oriented, professional vs. parochial, open vs. closed systems, tight vs. loose control, and pragmatic vs. normative orientations. For instance, a process-oriented culture emphasizes following established routines and risk avoidance, whereas a results-oriented culture focuses on outcomes and achievement of goals. An employee-oriented culture stresses personal well-being and cooperation, in contrast to job-oriented cultures that prioritize task performance even at the expense of employees. These dimensions provided an early quantitative framework for comparing organizational cultures across units or firms. Hofstede’s work underscored that internal organizational culture can be systematically measured and is distinct from (though influenced by) broader national culture values.

Deal and Kennedy’s Typology

Around the same time, Terrence Deal and Allan Kennedy (1982) proposed one of the earliest typologies of corporate culture. They argued that two marketplace factors – the degree of risk in the business and the speed of feedback on decisions – drive four distinct culture types. Tough-Guy, Macho Culture involves high risk and fast feedback (e.g. police, sports teams) and tends to be individualistic and aggressive. Work-Hard/Play-Hard Culture (low risk, fast feedback) emphasizes high-energy action and customer service (often found in sales-driven companies). Bet-Your-Company Culture (high risk, slow feedback) is common in industries like oil or aerospace – big bets are placed and decisions play out over long periods. Process Culture (low risk, slow feedback) characterizes bureaucracies focused on how things are done rather than outcomes. This framework, while somewhat simplistic, drew attention to how the nature of the business environment can shape internal culture. It also introduced the idea of naming culture “types” that managers could recognize.

Handy’s Four Cultures

Charles Handy (1985) similarly described four organizational culture archetypes. Power Culture (a “club” culture) centers on a strong central figure or core that wields decision-making power; Role Culture is bureaucratic with authority defined by roles (often represented as a Greek temple structure of pillars of functions); Task Culture is team- and project-oriented, valuing expertise and results (often depicted as a net or matrix); and Person Culture is one where individuals are the focal point (common in consultancies or academic departments). Handy’s framework, like Deal & Kennedy’s, gave managers a vocabulary to discuss culture, though it was more descriptive than diagnostic.

Competing Values Framework (CVF)

Developed by Robert Quinn and John Rohrbaugh (1983) and later elaborated by Cameron & Quinn (1999), the CVF became a highly influential model for assessing culture. It identifies two key axes of cultural values: internal focus vs. external focus and flexibility vs. stability. Crossing these axes yields four ideal culture types:

Clan Culture – Internal & Flexible: A collaborative, family-like culture. Clan cultures emphasize teamwork, employee involvement, and consensus. They value mentorship, open communication, and loyalty. Such organizations prioritize cohesion and morale, often leading to high employee satisfaction and loyalty.

Adhocracy Culture – External & Flexible: A creative, innovative culture. Adhocracies value entrepreneurship, adaptability, and risk-taking. They thrive in dynamic environments by being agile and seizing new opportunities. This culture type fosters innovation and quick adaptation to market changes.

Market Culture – External & Stable: A competitive, results-driven culture. Market-oriented firms focus on goals, targets, and external success metrics (market share, profitability). The emphasis is on winning and outperforming competitors, with a hard-driving, ambitious atmosphere.

Hierarchy Culture – Internal & Stable: A controlled, process-oriented culture. Hierarchies value efficiency, consistency, and formal procedures. They have clear chains of command and standardized routines (often found in large, mature or regulated organizations).

The CVF not only provides a way to diagnose an organization’s dominant culture type, but also links culture to specific effectiveness criteria. In a meta-analysis of 94 studies, Hartnell et al. (2011) found that clan, adhocracy, and market cultures each had positive (but different) relationships with effectiveness outcomes, such as employee satisfaction, innovation, and financial performance respectively. (Hierarchy culture showed weaker or negative relationships with certain outcomes in dynamic environments.) The CVF remains widely used in both research and practice (e.g. via the Organizational Culture Assessment Instrument) to assess culture and its alignment with strategic goals.

Organizational Culture Frameworks and Theories

Schein's Levels of Culture (1985, 2010)

Key Concepts and Dimensions: Three levels: Artifacts (visible symbols, rituals), Espoused Values (stated norms, strategies), Basic Assumptions (deep, unwritten beliefs) Notable Aspects: Emphasizes that underlying assumptions drive observable behavior. Highlights difficulty of changing culture without addressing deep assumptions.

Hofstede's Organizational Culture Dimensions (1990)

Key Concepts and Dimensions: Six dimensions of organizational practices: e.g. Process vs. Results orientation, Employee vs. Job orientation, Open vs. Closed system, Tight vs. Loose control, etc. Notable Aspects: Provided a quantitative way to compare organizational cultures. Showed that organizations vary more in practices (habits, routines) than in core values. Useful for internal culture audits and cross-unit comparisons.

Deal & Kennedy's Types (1982)

Key Concepts and Dimensions: Four culture types based on risk level and feedback speed: Tough-Guy Macho; Work-Hard/Play-Hard; Bet-Your-Company; Process Notable Aspects: One of the first popular culture typologies. Underscored that industry conditions (like risk) influence culture. Gave intuitive "tribal" names for managers to recognize their culture.

Handy's Four Cultures (1985)

Key Concepts and Dimensions: Power Culture (centralized power), Role Culture (bureaucratic roles), Task Culture (team/project focus), Person Culture (individual-centric) Notable Aspects: Illustrated that different org structures tend to breed different cultures. Useful for understanding how authority and structure interact with culture (e.g. startups vs. bureaucracies).

Competing Values Framework (Quinn & Cameron, 1999)

Key Concepts and Dimensions: Two axes -- Internal vs. External focus, Flexibility vs. Stability -- yield four culture types: Clan, Adhocracy, Market, Hierarchy. Notable Aspects: Highly influential model linking culture to performance. Clan/adaptive cultures tend to support employee satisfaction and innovation, while market cultures drive competitive performance. Used in many organizational assessments (e.g., OCAI survey).

Groysberg's 8 Culture Styles (2018)

Key Concepts and Dimensions: Eight styles plotted on axes of people interactions (independent vs. interdependent) and response to change (flexible vs. stable): Caring, Purpose, Learning, Enjoyment, Results, Authority, Safety, Order. Notable Aspects: Integrates many prior models. Provides a nuanced view -- most organizations are a mix of styles. Emphasizes aligning culture with strategy and leadership to drive outcomes. Gained popularity via Harvard Business Review as a practical guide for leaders.

Denison's Culture Model (1990, 2000s)

Key Concepts and Dimensions: Four key cultural traits: Involvement, Consistency, Adaptability, Mission. Each corresponds to an aspect of performance (e.g. adaptability -> innovation, mission -> financial clarity). Notable Aspects: Based on research linking culture and business results. Often used in consulting to assess how culture traits (like empowerment or consistency of values) correlate with metrics like ROI, sales growth, quality, etc. Emphasizes balance: e.g., a strong mission and high adaptability for long-term success.

Contemporary Trends and Developments (2015–2025)

In the past decade, the study and practice of organizational culture have evolved to address new business realities. Several key trends and frameworks have emerged:

Culture as a Strategic Asset

There is growing recognition that culture is not a “soft” topic but a core driver of competitive advantage. A 2018 Harvard Business Review feature titled “The Leader’s Guide to Corporate Culture” signaled this shift. Groysberg et al. (2018) argue that when aligned with strategy and leadership, a strong culture drives positive organizational outcomes, and conversely, a strong but misaligned culture can undermine performance. Top executives and boards now discuss culture in the context of strategy execution and risk management. For example, incidents like the Wells Fargo fake-accounts scandal and the Volkswagen emissions fraud (mid-2010s) highlighted how a toxic or misaligned culture can precipitate ethical and performance crises. On the positive side, companies like Microsoft under Satya Nadella demonstrated how intentional culture change (toward a “growth mindset” culture of learning) can revitalize performance and innovation. In surveys, senior leaders increasingly cite culture as one of the key levers to drive organizational effectiveness and transformation.

Emphasis on Innovation, Agility, and Learning Culture

With accelerating technological change and market disruption, organizations have focused on building cultures that promote agility and innovation. This has brought concepts like psychological safety and learning organization to the forefront. Harvard professor Amy Edmondson’s work on psychological safety (popularized in her 2019 book The Fearless Organization) underlines that employees must feel safe to speak up, experiment, and fail in order for innovation to flourish. Google’s internal research (Project Aristotle) similarly found psychological safety to be the top factor in high-performing teams. Culturally, this translates to norms of openness, trust, and tolerance for failure – a shift from more conservative cultures of the past. Empirical studies back this up: a 2016 study in the Journal of Organizational Behavior found that organizations with cultures emphasizing flexibility, autonomy, and support for risk-taking had higher rates of innovation than those with rigid, hierarchical cultures. Many firms have adopted practices like hackathons, cross-functional collaboration, and “fail fast” philosophies to embed these values. The concept of an “agile culture” – one that encourages quick decision-making, adaptability, and iterative learning – has become a buzzword, especially in tech and digital transformations. Researchers have noted that adaptability (an aspect of culture in models like Denison’s and CVF’s adhocracy) is increasingly critical for organizations to respond to rapid change.

Purpose, Values, and Inclusivity

In the 2015–2025 period, there has been a marked rise in companies articulating a purpose beyond profits and emphasizing values such as diversity, inclusion, and social responsibility. This is partly driven by workforce demographics (Millennials and Gen Z employees expect value alignment and meaningful work) and partly by public pressure for corporate accountability. Practitioner surveys (e.g. Deloitte’s Global Human Capital Trends) have repeatedly found culture and purpose to be top priorities for organizations. According to Deloitte’s 2020 report, organizations with inclusive, collaborative cultures are 8× more likely to achieve better business outcomes. Inclusive culture – where diverse employees feel valued and able to contribute – correlates with higher engagement and innovation. Companies are also increasingly measuring and monitoring culture in real time (through employee surveys, Glassdoor reviews, sentiment analysis) as a way to manage risks and boost engagement. The MIT Sloan Management Review, for instance, launched the “Culture 500” project (2019) using AI to analyze employee reviews and quantify company cultures on values like agility, collaboration, and customer orientation. This reflects a trend of applying data analytics to the traditionally qualitative realm of culture.

Hybrid Work and Digital Culture

The COVID-19 pandemic (2020–2021) forced a sudden shift to remote and hybrid work, challenging organizations to sustain their cultures virtually. Trends in 2021–2025 include fostering “digital culture” – one that maintains trust, collaboration, and employee engagement even when colleagues are physically apart. Managers have had to find new ways to inculcate values and norms via digital communication, virtual team-building, and more explicit reinforcement of culture (since informal osmosis is weaker when remote). Many organizations also emphasized well-being and resilience as cultural values during this period, recognizing burnout and mental health as threats to long-term performance. Indeed, McKinsey’s 2023 update to its Organizational Health Index added factors like inclusivity, agility, and employee well-being as key components of a healthy culture. Thus, the concept of what constitutes a “high-performance culture” has broadened to include support for employees’ holistic needs and adaptability to new ways of working.

New Frameworks and Tools

Alongside these trends, new culture frameworks have been proposed or gained traction. One prominent example is the eight cultural styles framework by Groysberg et al. (mentioned above), which provided leaders a practical map of culture on two axes (people-orientation and change-orientation). The eight styles – Caring, Purpose, Learning, Enjoyment, Results, Authority, Safety, Order – distilled a lot of academic research into a usable typology. For instance, caring and purpose styles correspond to cultures that emphasize collaboration, trust, and altruistic values, whereas results and authority styles reflect achievement and competitive drive. The HBR article also offered guidance such as: “In a dynamic, uncertain environment, in which organizations must be more agile, a learning culture gains importance”. Another insight was that strong cultures are beneficial only if aligned to strategy – a misaligned strong culture can become a liability (for example, a traditionally rigid culture hindering a needed digital transformation). Consulting firms have likewise developed their own culture assessment tools (e.g., PwC’s Katzenbach Center with the “Global Culture Survey”, or OCAI Online’s tools) and change methodologies, often building on the classic frameworks but updated for modern contexts (like digital transformation or merger integrations).

In summary, the past decade’s developments show a convergence between academic knowledge and practitioner focus: both highlight that culture can be deliberately shaped (managed) to support strategic objectives, and both emphasize new cultural attributes like agility, innovation, inclusion, and learning as crucial for success in today’s environment. We next examine in detail how organizational culture impacts key business outcomes – performance, innovation, and change – drawing on recent empirical evidence.

Impact of Organizational Culture on Performance and Effectiveness

A substantial body of research has established that organizational culture has significant effects on organizational performance and effectiveness. Culture acts as an “organizational immune system,” influencing employee behavior and decision-making in ways that can boost or undermine results. Key findings linking culture and performance include:

• General Performance and Financial Outcomes: Meta-analyses and large-scale studies indicate a strong correlation between certain cultural attributes and financial performance. A recent meta-analysis (148 studies) confirmed that “organizational culture is an important predictor of organizational effectiveness”, even when accounting for other factors like leadership and HR practices. In other words, culture has a unique, measurable impact on outcomes such as productivity, quality, customer satisfaction, and profitability. McKinsey & Company’s long-running research on organizational health echoes this: they report that organizational health (a concept analogous to a healthy, aligned culture) “remains the best predictor of value creation and a sustainable source of competitive advantage”, with healthy organizations delivering 3× higher long-term total returns to shareholders compared to unhealthy ones. This was based on their Organizational Health Index database covering thousands of firms. Similarly, Kotter and Heskett’s classic 11-year study (published 1992) found that companies with adaptive, strategically appropriate cultures significantly outperformed those without, in revenue growth, stock price, and net income. Recent data continues to reinforce that a “strong” culture – meaning one that is widely shared and deeply ingrained – aligned with the company’s strategic goals, correlates with higher growth and profitability.

• Employee Engagement and Productivity: One mechanism by which culture drives performance is through employee attitudes and behavior. A positive culture tends to increase employee engagement, which in turn improves productivity and retention. Gallup’s global surveys have consistently shown that highly engaged teams (often nurtured by a supportive culture) are substantially more productive. For example, Gallup data cited by Deloitte indicates that teams with high engagement – a hallmark of positive culture – are 21% more profitable on average than teams with low engagement. Engaged employees put in discretionary effort, suggest process improvements, and deliver better customer service, all of which drive better business outcomes. Furthermore, culture impacts turnover: an unhealthy or toxic culture drives talent away, whereas a healthy culture can be a key differentiator in retaining and attracting top talent. An analysis in Harvard Business Review found that companies with high employee engagement (often a result of a trust-based, inclusive culture) experienced 25% lower employee turnover and 20% higher performance compared to peers. These human capital outcomes directly translate to financial metrics by reducing hiring costs and maintaining institutional knowledge.

• Quality and Operational Performance: Culture influences how work is done on a day-to-day basis. For instance, a culture that emphasizes excellence, accountability, and continuous improvement will likely enforce higher quality standards and operational efficiency. Many manufacturing and healthcare organizations have found that shaping a “safety culture” or “quality culture” (where employees share assumptions about the paramount importance of safety/quality) leads to measurable reductions in defects or errors. In contrast, cultures that neglect these values may see more incidents and variability in performance. Studies in high-reliability industries (like aviation, healthcare) demonstrate that a culture of safety – characterized by open communication about errors, non-punitive responses to failure, and shared vigilance – correlates with lower accident rates and better reliability outcomes. Thus, culture can be a leading indicator of operational performance even in non-financial terms.

• Adaptability and Long-Term Success: Cultures that encourage learning and adaptability tend to make organizations more resilient and better performing over the long run. Research by Denison and Mishra (1995) found that adaptability (the degree to which a culture can change in response to external conditions) was strongly associated with sales growth and innovation, while consistency and mission clarity were linked to profitability and ROI. This suggests that an optimal culture balances internal consistency with external adaptability. In today’s turbulent business environment, a rigid culture can hurt performance when market conditions shift. By contrast, organizations with flexible, learning-oriented cultures can seize new opportunities and survive disruptions, which ultimately leads to superior long-term performance (even if it sometimes means sacrificing short-term efficiency). Indeed, McKinsey’s research during the COVID-19 crisis found that companies which had “resilient” cultures – characterized by trust, adaptability, and a can-do spirit – navigated the pandemic’s challenges more effectively and recovered faster, as reflected in performance metrics.

• Caveat – Culture Strength vs. Strategic Fit: While a strong culture generally promotes performance by creating alignment (the whole organization rowing in the same direction), it’s crucial that the culture’s values fit the business context and strategy. A famous Peter Drucker-attributed maxim is “culture eats strategy for breakfast,” implying that no matter how good a strategy is, it will fail if the culture cannot support it. However, the inverse is also true: the right culture can turbocharge a strategy. For example, a strategy of customer-centricity will succeed only if the culture truly values customer service and empowers frontline staff. If there’s misalignment – say, a company needs to innovate but has a conservative, risk-averse culture – performance will suffer because employees’ habits and assumptions conflict with what the firm is trying to achieve. Researchers have documented cases where strong cultures became liabilities when industries changed: e.g., a once-successful culture emphasizing discipline and precision might hinder speed and creativity when the market shifts to favor innovation. Thus, the strategic relevance of cultural traits is a key factor. The highest-performing organizations deliberately cultivate cultural attributes that reinforce their competitive strategy (whether that is agility, service excellence, innovation, or efficiency).

In summary, abundant evidence shows that culture is not just an abstract concept – it has tangible impacts on hard metrics like revenue, profit, quality, and shareholder value. As one 2021 meta-analysis concluded, a “knowledge-friendly organizational culture is positively related to both financial and non-financial performance” of firms. The management implication is clear: leaders must treat culture as a critical asset or risk factor for performance. By measuring it, aligning it with strategy, and actively managing it, organizations can unlock substantial performance gains.

Culture as a Catalyst for Innovation and Adaptability

Innovation – the lifeblood of competitive advantage in many industries – is deeply influenced by organizational culture. Culture sets the tone for how readily new ideas are generated, shared, and implemented within a company. Key points on the culture-innovation link include:

• Risk-Taking and Experimentation: A culture that tolerates risk and views failure as a learning opportunity is far more conducive to innovation than one focused on blame and status quo. Innovative companies like Google or Netflix often attribute their success to cultural norms that empower employees to take initiative and challenge conventions. In cultural terms, this means low “power distance” (employees of all levels feel free to contribute ideas) and encouragement of dissent or debate. Academic research supports this: Organizations classified as adhocracy or clan cultures (flexible, open) tend to exhibit higher innovation outputs (new products, patents) because they encourage brainstorming, cross-pollination of ideas, and collective learning. A 2016 study (cited above) found that firms with cultural values of autonomy, flexibility, and support for risk achieved greater innovation rates. Psychological safety, as noted, is a critical cultural ingredient. When employees feel safe to voice wild ideas or admit mistakes, the organization can learn and innovate faster. In contrast, cultures with rigid hierarchies or fear of failure tend to stifle the creative thinking needed for innovation.

• Learning Culture and Knowledge Sharing: Innovation requires continuous learning – scanning the environment for new technologies, learning from past projects, and quickly spreading insights internally. Cultures that value knowledge sharing, curiosity, and professional growth provide fertile ground for adaptability. For example, learning organizations (a concept popularized by Peter Senge) deliberately instill habits of reflection and knowledge transfer among employees. Empirical work on knowledge-friendly cultures has shown that such cultures boost not only innovation but also overall performance. They do so by breaking down silos and encouraging collaboration across departments, so that novel solutions emerge from diverse inputs. In practice, this might look like encouraging communities of practice, internal wikis, innovation labs, and rewarding employees who coach or teach others. Companies with strong learning cultures also tend to partner more with external sources (universities, startups) to bring in fresh ideas – a behavior aligned with an open culture mindset.

• Adaptability and Agility: Adaptability is the capacity to respond quickly to change – whether that is shifting customer preferences, new regulations, or disruptive competitors. Cultural adaptability means that employees are not bound by rigid rules or “the way we’ve always done it,” but rather feel comfortable adjusting processes and roles as needed. In an adaptive culture, change is seen as opportunity, not threat. Traits include openness to new information, empowerment of employees to make decisions, and proactive sensing of trends. During the 2020–2021 pandemic, organizations with adaptive cultures pivoted rapidly (e.g., manufacturers repurposing factories to make PPE, retailers moving to e-commerce) and fared better than those that were culturally inflexible. Clan and adhocracy cultures generally rate high on adaptability – clan because of internal trust and teamwork that helps rally around change, and adhocracy because of an external focus on new opportunities. Even traditionally bureaucratic organizations (hierarchies) have recognized the need to inject more agility into their culture. For instance, the U.S. military in recent years has promoted a culture of “mission command” – pushing decision authority down and encouraging initiative – to become more agile in dynamic combat environments. Business organizations likewise use agile methodologies (scrums, sprints) not just as processes but as culture-change levers to make the workplace more iterative and customer-focused. Research by McKinsey (2021) found that companies scoring high on cultural agility and resilience were significantly more likely to succeed in large-scale innovations (like digital transformations) than those with low scores.

• Creative Climate and Ideation: Beyond risk tolerance, certain cultural elements specifically spur creativity. For example, a culture of diversity and inclusion can lead to more innovative ideas because a diverse workforce brings a wider range of perspectives to problem-solving. A study of innovation in global companies (HBR, 2019) noted that inclusive team climates, where diverse voices are heard, correlate with higher market innovation (measured by revenue from new products). Enjoyment as a cultural style – one of Groysberg’s eight – is described as a fun-loving, light-hearted work atmosphere. This might seem trivial, but an enjoyment culture can spark creativity by reducing stress and encouraging playful experimentation. Many tech firms deliberately weave play into their culture (office games, humorous communication) to stimulate out-of-the-box thinking. Also, collaborative cultures (high teamwork) tend to outperform siloed ones in innovation because complex innovations often require integrating knowledge from different fields. Deloitte research emphasizes that collaborative cultures lead to better outcomes, as teams that build on each other’s ideas produce more innovative solutions.

• Cultural Alignment with Innovation Strategy: It’s important to note that different kinds of innovation (and industry contexts) may call for different cultural strengths. For radical, disruptive innovation, a freewheeling adhocracy culture might be ideal. For incremental, process innovation (say, in a high-volume manufacturing setting), a blend of a market culture (performance focus) with a learning mindset might be more effective to systematically implement improvements. A study of German and Thai SMEs (2020) found that entrepreneurial orientation was bolstered by certain cultural traits like openness and future-orientation, which in turn improved firm performance. The key takeaway is that culture must align with the type of innovation a firm seeks: e.g., a pharma R&D division benefits from a curiosity-driven, low-control culture, whereas an operations department might innovate best under a culture emphasizing efficiency and problem-solving discipline. Managers should diagnose which cultural attributes are helping or hindering innovation. If creativity is lacking, perhaps the culture is too punishment-oriented or too focused on short-term results (common in results/authority dominated cultures). Shifting those norms – for instance, celebrating lessons from failures or giving time for exploratory projects (like Google’s famous “20% time”) – can gradually shift culture to be more innovative.

In sum, organizational culture can be either a springboard or a stumbling block for innovation and adaptability. The past decade’s volatility has proven that companies with the right cultural DNA – encouraging exploration, learning, and agility – are far better positioned to innovate continuously and adapt to shocks. As one consultant quipped, “culture eats change for breakfast, too.” If you need your organization to innovate or pivot, you likely need to nurture the cultural conditions for innovation: trust, openness, curiosity, and empowerment. Those that succeed in doing so have a strong advantage in today’s fast-changing markets.

Culture in Change Management and Transformation

Managing organizational change – whether it’s a merger integration, a digital transformation, or a shift in strategy – invariably runs up against culture. Peter Drucker’s aphorism “culture eats strategy for breakfast” is often cited in the change context to emphasize that no transformation can succeed unless the culture evolves to support it. Insights on culture’s role in change and transformation include:

• Culture as a Barrier or Enabler of Change: Numerous surveys point to culture as the #1 barrier to successful change. For example, a 2020 Capgemini research report reiterated that “culture is a top barrier to successful digital transformation” in organizations. Rigid cultural norms – like aversion to new ideas, departmental silos, or deference to hierarchy – can cause employees to resist new initiatives, even if leadership has a clear strategic mandate. Conversely, a culture that values adaptability, trust, and continuous improvement will embrace change more readily. In practice, many large transformation efforts (ERP implementations, restructuring, etc.) have failed not due to flawed technology or design, but because the cultural mindset and behaviors didn’t change. Employees might continue doing things “the old way,” or leaders might send mixed messages that undercut the change. Modern change management approaches thus heavily focus on the cultural dimension – sometimes even dubbing transformations as “culture change programs.” Leaders identify desired behaviors and values, role-model them, and embed them through communications and incentive systems. The McKinsey 5 “Bold Moves” for culture transformation (2020) emphasize things like engaging informal influencers, crafting inspiring change stories, and personalizing the change for individuals – all aimed at shifting mindsets and norms alongside systems. When culture and change are aligned, employees feel the transformation is happening by them and for them (a positive, participative experience) rather than to them.

• Mergers & Acquisitions: Cultural incompatibility is notorious for derailing mergers and acquisitions. When two companies with distinct cultures come together, the clash can lead to talent exodus, infighting, and loss of productivity – undermining the strategic intent of the deal. Recognizing this, recent M&A best practices call for a culture integration plan as a core part of merger planning. Groysberg et al. note that “in a merger, designing a new culture on the basis of complementary strengths can speed up integration and create more value”. Rather than letting one culture steamroll the other (or, worse, ending up with a fragmented hybrid), successful integrations actively shape a third culture that intentionally draws from the best of both legacy organizations. For instance, when a highly innovative startup is acquired by a larger bureaucratic firm, the challenge is to protect the startup’s creative culture while instilling enough structure from the larger firm to scale operations – a delicate balance. Case studies (e.g., Disney-Pixar, Amazon-Whole Foods) show that respecting cultural differences and addressing them openly in the integration process leads to far smoother change than ignoring culture and focusing only on systems and financials. Many practitioners use tools like cultural assessments and employee pulse surveys during M&A to monitor integration progress and identify hot spots of cultural friction.

• Transformation Leadership and Alignment: Change management research emphasizes the critical role of leaders at all levels in guiding culture during transformations. Leaders set the cultural tone through their actions: if they do not “walk the talk” of the desired culture, employees will quickly become cynical about the change. John Kotter’s classic 8-step change model (updated in 2012) stresses creating a guiding coalition and anchoring new approaches in the culture as final steps – meaning that lasting change only happens when new behaviors become the new norm. In practice, companies driving transformation often establish a “cultural steering team” or deploy internal change agents to reinforce cultural messages, celebrate quick wins that exemplify the new culture, and identify remnants of the old culture that need addressing. For example, if a company is transforming to be more customer-centric, it might highlight stories of employees going above and beyond for customers, update recognition programs to reward customer-focused behaviors, and eliminate policies that hinder customer service (like overly rigid return policies) to send a cultural signal.

• Empirical Outcomes: Does attention to culture really improve change success rates? There is evidence suggesting yes. McKinsey’s global surveys on transformations find that companies who explicitly address culture and behavior change are much more likely to achieve their transformation goals. One McKinsey study (2020) found that organizations in the top quartile of “healthy cultures” (per their OHI index) were 2.5 times more likely to successfully execute a transformation than those in the bottom quartile. Moreover, culture can amplify or dampen the impact of other change initiatives: for instance, implementing a new technology without a collaborative, learning-oriented culture often means the technology gets underutilized or resisted. On the other hand, in a culture that encourages mastery and continuous improvement, employees will proactively find ways to make the most of new tools. The strong statistical association between culture and transformation success has led to the mantra that “transformation is 10% technical and 90% cultural.” While that ratio is figurative, it underscores that the soft aspects often dictate hard outcomes in change projects.

Cultural Change Techniques

Changing culture is notoriously difficult – it often requires unlearning deeply held assumptions. However, the past decade has seen more systematic experimentation with cultural change techniques. Some approaches include:

o Behavioral Rituals: Leaders introduce new rituals or practices that embody the desired culture. For example, to instill a culture of transparency, a CEO might start holding monthly all-hands meetings where any employee can ask questions (“ask me anything” sessions). Over time, this can chip away at a secretive culture.

o Symbolic Actions: Management may take high-profile actions to signal culture change – e.g., removing corner offices to break down hierarchy, or changing the dress code from suit-and-tie to casual to symbolize a more relaxed, tech-friendly culture.

o Training and Dialogue: Many firms use workshops or story circles to discuss the current culture versus desired culture. Having employees openly discuss “the way we do things here” can surface the implicit assumptions that need challenging. This collective reflection can be a turning point, as people recognize cultural issues and commit to change together.

o Revising Artefacts: Company artifacts like mission statements, core values posters, onboarding materials, and HR policies are revised to align with the new culture. This ensures that new hires and veterans alike get consistent cues about what behaviors are expected. However, it’s crucial that these aren’t just words on paper – they must be reinforced by actual management decisions (who gets promoted, what gets praised or reprimanded, etc.).

o Incentives and Accountability: Embedding cultural objectives into performance management can accelerate change. For example, a manager’s bonus might partly depend on employee engagement scores (to reinforce a culture of people development), or teams might be given innovation targets (to promote a culture of innovation). Holding leaders accountable for role-modeling the culture is also key – some organizations include a “culture fit” evaluation in 360-degree reviews for executives.

Finally, it’s worth noting that culture change typically lags other changes – it can take years for deeply rooted behaviors to evolve, even if structures and processes are altered overnight. Patience and persistence are necessary; as one CEO quipped, “We changed our strategy and org chart quickly, but the culture change is like tending a garden – ongoing.” Many transformations falter because initial enthusiasm wanes before the culture truly shifts. To combat this, organizations that succeed often monitor culture metrics continuously (via surveys or KPIs related to behavior) and treat culture as an ongoing priority, not a one-time project.

Conclusion

Organizational culture profoundly shapes a company’s performance, capacity for innovation, and ability to implement change. Classic theorists like Schein and Hofstede laid the foundation for understanding culture’s layers and dimensions, while recent frameworks and research have built a richer picture of how culture can be aligned with strategy to drive results. In the past decade, perhaps no insight has been more reinforced than this: culture is a tangible driver of business outcomes, not an abstract ideal. When leaders cultivate a culture that fits their strategic aims – be it a culture of innovation, quality, customer-centricity, or agility – the payoff is evident in the bottom line and long-term organizational health. Conversely, neglecting culture can sabotage the best-laid plans, as cultural resistance or misalignment acts like friction against progress.

Crucially, culture is not static. As we have seen, many organizations have transformed their cultures in recent years to become more adaptive, inclusive, and innovative in response to external pressures. They have done so by diagnosing their current culture, defining a clear target culture, and systematically reinforcing new norms and values through leadership actions and HR systems. The mix of academic rigor and practical insights now available – from meta-analytic evidence linking culture to outcomes, to hands-on frameworks like the CVF and the 8 culture styles – provides managers with better tools than ever to understand and shape culture.

For managers and practitioners, the key takeaways include:

• Know Your Culture: Use surveys, focus groups, and observation to truly understand your organization’s cultural strengths and weaknesses. What beliefs and values are actually driving behavior? This awareness is the first step to leveraging or changing culture.

• Align Culture with Strategy: Be intentional in fostering cultural elements that support your strategic objectives. For example, if customer experience is strategic, build a customer-centric culture at every level. If innovation is critical, cultivate openness and risk-taking.

• Lead by Example: Culture change starts at the top. Leaders must embody the desired values in their everyday actions – nothing erodes a cultural message faster than leadership hypocrisy. Conversely, visible commitment by leaders to cultural values (like admitting their own mistakes to encourage learning) can powerfully shape norms.

• Reinforce Continuously: Embed culture into hiring, onboarding, training, recognition, and even firing decisions. People notice what gets rewarded or punished. Over time, consistent reinforcement creates a self-sustaining culture as new members are socialized into “how we do things here.”

• Stay Adaptive: Finally, treat culture as a dynamic capability. The “right” culture today may not be right tomorrow if the environment shifts. Organizations that periodically refresh their cultural assumptions – while preserving core values that are timeless – will be more resilient and successful.

In conclusion, organizational culture is both a foundation and a frontier of management. It is foundational in that it undergirds every aspect of organizational life – structure, strategy execution, employee behavior, and so on. Yet it is also a frontier because our understanding of how to intentionally evolve culture continues to grow, especially with new challenges like digital disruption and remote work. By learning from both the timeless principles and the latest insights (2015–2025 and beyond), leaders can harness culture as a powerful force for positive change, driving high performance, fostering innovation, and successfully navigating the turbulent waters of transformation.

Sources:

1. Schein, E.H. Organizational Culture and Leadership (2010, 4th ed.), and foundational definition.

2. Hofstede, G. (1990). Six dimensions of organizational culture (process vs. results, etc.).

3. StatPearls Encyclopedia (2025) – Overview of organizational culture frameworks.

4. Deal, T. & Kennedy, A. (1982). Corporate Cultures – four types based on risk and feedback.

5. Quinn, R. & Cameron, K. (1999). Diagnosing and Changing Organizational Culture – Competing Values Framework.

6. Hartnell, C. et al. (2011). Meta-analysis on culture & effectiveness (CVF types and outcomes).

7. Groysberg, B. et al. (2018). “The Leader’s Guide to Corporate Culture,” Harvard Business Review – eight culture styles and alignment insights. 8. McKinsey & Co. (2024). “Organizational health is still the key to long-term performance” – finding that healthy culture yields 3× higher TSR.

9. Liu, G. et al. (2021). “Knowledge-friendly organizational culture and performance: A meta-analysis,” Journal of Business Research – culture positively linked to financial and non-financial performance.

10. ansrsource (2023). “Using Organizational Culture to Fuel Innovation and Engagement” – cites Deloitte 2020 finding on inclusive cultures (8× more likely better outcomes) and Gallup on engagement (21% more profit); also highlights psychological safety for innovation.

11. Deloitte (2020). Global Human Capital Trends – importance of culture and purpose (inclusive, collaborative cultures drive outcomes).

12. Capgemini Research Institute (2020). Digital Culture Report – culture is top barrier in digital transformation.

13. McKinsey (2020). “Five bold moves to transform culture” – techniques for rapid culture change. 14. Edmondson, A. (2019). The Fearless Organization – concept of psychological safety for innovation.

 15. Bogale, A.T. & Debela, K.L. (2024). “Organizational culture: a systematic review,” Cogent Business & Management – recent research highlights culture’s impact on workplace dynamics and innovation.

16. Harvard Business Review Analytic Services (various, 2016–2022) – studies linking high-engagement culture to performance (e.g., lower turnover, higher productivity).

 17. McKinsey (2014). “The hidden value of organizational health” – earlier evidence on culture/health and performance.

 18. Russell Reynolds (2018). “Digital Pulse” survey – noted cultural challenges as biggest impediment to digital change.

19. Katzenbach, J. (2018). The Critical Few – approach to identifying and changing critical cultural behaviors.

20. (Additional citations inline) – including references etc., as provided throughout the report.