What defines the term "organizational culture"?

The term "organizational culture" is best defined as the shared values, beliefs, and norms that shape behavior and practices within the organization. This concept encompasses the underlying assumptions and unwritten rules that guide how employees interact with each other and how they approach their work. It reflects the organization's identity and can significantly influence employee engagement, motivation, and overall performance.

Understanding organizational culture is crucial because it impacts every aspect of a company, from decision-making processes to how change is implemented. A strong organizational culture aligns with a company's goals and can enhance its effectiveness by promoting a cohesive work environment. It cultivates a sense of belonging and can drive the collective behavior of employees, influencing how they collaborate and innovate.

In contrast, formal policies and procedures, the structure of management, and legal compliance measures, while important to the operational framework of a company, do not encompass the intrinsic values and social dynamics that define its culture. These elements can be seen as the skeleton of the organization, serving to provide structure and guidelines, but they do not capture the essence of what makes an organization unique in terms of its people and interactions. Thus, focusing on shared values and beliefs is key to fully understanding and defining organizational culture.