What is organisational culture?

Professor Andreea Gorbatai explains how culture is often an overlooked factor in scale-up success

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When discussing organisational culture, we often refer to ‘strong’ cultures and ‘toxic’ cultures, to ‘customer-centric’ cultures and ‘innovative’ cultures. We attribute organisational successes and failures to organisational culture, yet the very definition of culture is often illusive and fuzzy in our minds.

Professor Edgar Schein, a prominent researcher at the American MIT Sloan School of Management, has been studying organisational culture for over five decades, and he describes it as a ‘set of basic assumptions that define what to pay attention to, what things mean, how to react emotionally to what is going on, and what actions to take in various kinds of situations in an organisation’.

So, basically put, organisational culture is ‘how things are done around here’. This comprises the type of behaviour that gets people promoted or fired, what we prioritise when our decisions involve trade-offs and the things we pride ourselves on in relation to our colleagues. But organisational culture is also things that are said and done despite the fact that sometimes they are not aligned with the organisation’s mission or goals.

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What is organisational culture?

Professor Andreea Gorbatai clarifies the concept of organisational culture. She delves into the elements that determine your company’s culture and she explains how culture is often an overlooked factor in scale-up success.

As an entrepreneur, it is important to know that your start-up’s culture will be based on largely three main factors, all of which are rather difficult to observe without some dedication and self-awareness.

  • Firstly, as a leader of your organisation, your own preferences and personality, the way you deal with unpredictability and conflict in your founding team, the behaviours you are comfortable or uncomfortable with, the behaviours and beliefs you highlight and those you downplay and ignore, will set the tone for how the rest of the organisation acts, and for what newly hired employees are taught to do to succeed in your organisation.
  • Secondly, your industry standards or your very own past work experience will define how things are done in your organisation. Very often you will do things not necessarily because you like doing them in a certain way but because ‘this is the way they are done’ – based on your prior jobs, on your own culture, on your own expectations or on the expectations that your employees or co-founders have, based on their prior work experience.
  • And thirdly, your organisational culture will be affected by the imprint of environmental constraints at the time that you got started. Very much like a young child who learns from their family and community what things to focus on, and which things are not important, young organisations are affected by the climate they are founded in. Was funding plentiful and encouraging a lot of perks and exploratory research? Did your organisation go through very rough times, barely surviving? Were you celebrated for your idea, or did you fight against the wind to succeed when you started?

Main takeaway

Very much like living organisms, organisations absorb learnings from their environment and their leadership about what are the important things to pay attention to, and what is the best way to do things at work. Most importantly they internalise trade-offs that worked while the organisation was in its nascent stages, but they might become obsolete as your organisation is starting to scale up. So while very often these were the ‘right’ things to do when the organisation got off the ground and was going through some difficult times, they are, more often than not, out-of-sync with the current business context or your current strategic priorities. Knowing what your organisational culture is, living that culture and inspiring your organisation to follow through, and putting the culture in the service of your strategic goals, are all important and often overlooked factors in scale-up success.

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Andreea Gorbatai

Andreea Gorbatai

Associate Professor of Entrepreneurship