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Definition: Corporate culture from The AMA Dictionary of Business and Management

Complex of attitudes, practices, beliefs, norms, and ethical standards held by a corporation and its executives, which colors and governs behavior. The culture determines what kinds of behavior and lifestyles management will accept and what they will proscribe.

Summary Article: Organizational Culture
from Key Concepts in Work

An organization's culture is often seen as manifested in its policies and practices and the understandings, language, behaviour and attitudes of organizational members. The history of the organization and the influence of its founders and/or key position holders are widely judged to be important influences on shaping the organization's culture. In turn, this culture is reflected in the characteristic style that a company displays.

In the 1980s, the culture of work organizations became the focus of attention for many management theorists and consultants. The most visible form of this was Peters and Waterman's book In Search of Excellence (1982) in which they argued that the success of particular organizations could be attributed to the ‘excellence’ of their strong corporate cultures. The prescriptive element in Peters and Waterman, and many managerial consultants that followed them, was that cultures could be managed and modified: that the right leadership, holding the right values and beliefs, could change the culture and inculcate those values and beliefs throughout the organization. The outcome was portrayed as a positive effect on levels of employee commitment, productivity and performance. In this way, cultures were viewed as potential sources of enhanced management control, capable of being shaped and harnessed in pursuit of greater organizational effectiveness.

This view of organizational culture as both unified and amenable to modification has been reflected in a number of high-profile ‘culture change’ programmes. In the UK, for example, one of the most prominent of these involved British Airways, which sought to transform itself from a lack-lustre and loss-making state-owned airline to a profitable, customer-focused and market-sensitive private company, partly through a culture-change programme or, more accurately, a series of such programmes over two decades (see Grugulis and Wilkinson, 2002 and Höpfl, 1993). This way of viewing organizational culture is attractive partly because of its simplicity - the notion that underlying an organization's activities is an embedded set of values and beliefs that are reflected in the organization's policies and practices and surface in the attitudes and behaviour of its workforce.

However, this approach to organizational culture is based on a series of implicit assumptions and, since Peters and Waterman's contribution to this field, these assumptions have been subjected to more thorough interrogation. These assumptions include, first, that organizations are characterized by a single and enduring culture that underpins the organization's values and beliefs. Second, that, while being embedded in the organization and intrinsic to that organization, this culture is open to manipulation - that it can be managed and shaped with the goal of improving organizational success. Third, that the culture of the organization has a consistent effect on how people think and behave: that by altering the culture, employees can be motivated to deliver higher performance, improved customer service and so on.

As a result, other writers in this field have adopted perspectives very different to that of Peters and Waterman, critical in particular of the way organizational culture is portrayed as an integrated and common set of values and beliefs that permeate every level of the organization and these are open to manipulation by management.


Joanne Martin (1992; Martin and Frost, 1996) identifies three schools of thought or alternative perspectives on organizational culture. The first - the ‘integration’ perspective - is the one outlined above: that organizations are characterized by single, common cultures created and sustained by key position holders during the history of the organization. The second perspective - termed the ‘differentiation’ perspective - is based on the notion that organizations are characterized by not one but by several sets of values and beliefs, each tied to particular subcultures within the organization. These subcultures may reflect different sources of differentiation within organizations, such as occupation, grade, gender, age, ethnicity or location. The argument here is that members of each of these subcultures share interests in common, but that these are not jointly held across all the subcultures. Thus, for example, lower-grade employees, by the nature of their location within the work hierarchy, are unlikely to be guided by exactly the same values, beliefs and views of the organization as those held by the senior management. Alternatively, in an organization such as a hospital, the values and beliefs of the professional medical staff are unlikely to be wholly consistent with the values and beliefs of the hospital's managerial staff. The values and beliefs of the former are more likely to give primacy to patient care, while the latter will place a relatively greater value on efficiency and cost.

This differentiation perspective continues a long-standing interest by organizational sociologists in the development and maintenance of occupational subcultures and the role played by factors such as socialization into the occupational group and how the values of the group are transmitted. For Turner (1971: 1):

A subculture is a distinctive set of meanings shared by a group of people … [that] … is maintained by ensuring the newcomers to a group undergo a process of learning or socialisation. This process links the individual to the values of the group and generates common motives, common reaction patterns and common perceptual habits.

Thus, the general argument for writers such as Turner, and later writers on culture that fall within the differentiation perspective, is that the organization comprises a number of subcultures that hold values and beliefs in common, but that these differ across subcultures. This perspective undermines both the view that organizations have a single embracing culture and the notion that the culture can be shaped by those in senior positions.

The third perspective identified by Martin - termed the ‘fragmentation’ perspective - takes issue with the idea of any values and beliefs being enduring and held in common either throughout the organization (the integration perspective) or separately by individual subcultures (the differentiation perspective). In this third perspective, any consensus that develops in regard to values and beliefs existing in an organization is seen to be much more transient and issue-specific. Organizational members may come to share similar values and beliefs about specific issues for a particular time, but overall no clear, consistent or enduring culture exists, either across the organization as a whole or within particular subcultures. Thus, this view maintains that no consensus exists or persists as to what the underlying values and beliefs of the organization consist of.

What makes Martin's analysis of the three perspectives even more interesting is her argument that, rather than representing mutually exclusive alternatives from which to view organizational culture, all three perspectives may be relevant to understanding organizational culture. By studying organizations extensively enough (partly by studying them at a number of different levels), she argues that elements and evidence consistent with all three perspectives could be identified: that is, the existence of certain organization-wide values and objectives; evidence of subcultures holding conflicting opinions about what is important; and some issues that are ambiguous and generate multiple interpretations.


Another important theme in the study of organizational culture concerns the effects of external influences, in particular, the impact of national variation. Research on this question is particularly associated with the work of Hofstede (2001) who explored national influences on organizational culture initially through a study of IBM subsidiaries located throughout the world. Hofstede identified distinct national differences in the subsidiaries, which he linked back to differences in the national cultures in which the subsidiaries were located. The main variations he identified were: the degree of willingness of members to accept hierarchy and an unequal distribution of power and prestige (a dimension that he termed ‘power distance’); differences in requirements for rules and standardization (a dimension he termed ‘uncertainty avoidance’); the degree of independence and individualism exhibited (‘individualism v. collectivism’); and the degree of separation of gender roles (‘masculinity v. femininity’). As Hatch and Cunliffe (2006: 185) discuss, in later research Hofstede identified a fifth dimension of national cultural difference, termed ‘long-term v. short-term orientation’, reflecting the finding that in some contexts, for example, there is a greater emphasis on the long-term rewards from effort invested and a greater emphasis on tradition and long-term commitments than in cultures characterized by a more short-term orientation.


Earlier portrayals of single, pervasive organizational cultures are now generally seen to have given insufficient recognition to the potential for different groups within organizations to generate their own distinct subcultures. Similarly, exhortations to managers to effect changes to the culture in order to encourage greater employee commitment made assumptions about the accessibility of the culture to modification, the homogeneity of that culture and the anticipated links between the underlying culture and employees’ behaviour. In subsequent research, each of these assumptions has been questioned and judged to be problematic.

In practice, it appears more likely the case that organizational cultures are less consistent than first discussed, with some elements shared by different groups at particular points in time, while others are fragmented and held only partially by different subgroups or not at all. In addition, while dimensions of the culture may be open to influence and modification (for example, the ‘safety culture’ within an organization or a ‘long work hours’ culture - see Presenteeism), other aspects may be less accessible to change. Further, even those aspects that may be modifiable will not necessarily have a predictable or long-term effect on employees’ behaviour.

See also:

labour process, management, motivation and commitment, organizations: networks and alliances, teamworking.

  • Grugulis, I.; Wilkinson, A. (2002) ‘Managing culture at British Airways: hype, hope and reality’, Long Range Planning, 35 (2): 179-94.
  • Hatch, M. J. with Cunliffe, A. L. (2006) Organization Theory: Modem, Symbolic and Postmodern Perspectives. Oxford University Press Oxford.
  • Hofstede, G. (2001) Culture's Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations, 2nd edn. Sage Thousand Oaks, CA.
  • Höpfl, H. (1993) ‘Culture and commitment: British Airways’, in D. Gowler; K. Legge; C. Clegg (eds), Case Studies in Organizational Behaviour and Human Resource Management.Paul Chapman London, pp. 117-38.
  • Martin, J. (1992) Cultures in Organizations: Three Perspectives. Oxford University Press New York.
  • Martin, J.; Frost, P. (1996) ‘The organizational culture war games: a struggle for intellectual dominance’, in S. R. Clegg; C. Hardy; W. R. Nord (eds), Handbook of Organization Studies.Sage London, pp. 599-621.
  • Peters, T.; Waterman, R. (1982) In Search of Excellence: Lessons from America's Best Run Companies. Harper & Row New York.
  • Turner, B. A. (1971) Exploring the Industrial Subculture. Macmillan London.
  • © Paul Blyton and Jean Jenkins 2007

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