Organizational culture is a concept developed by researchers to explain the values, psychology, attitudes, beliefs and experiences of an organization. Generally speaking, it is viewed as the shared norms and values of individuals and groups within an organization. Through this set of mutual understandings, organizational culture controls the way individuals interact with each other within the organization as well as with customers, suppliers and other stakeholders existing outside the boundaries of the organization.

The topic of organizational culture has been studied by researchers from diverse fields. Purely academic fields such as sociology and anthropology as well as applied disciples such as management science and organizational behavior have offered their perspectives on what it is. Although it might not be possible for one definition to suit all fields, there is general agreement among researchers on various aspects of organizational culture.

The managers and executives within an organization have a significant impact on the culture because of their role in making decisions, but they are not the only members of the work community. In reality, all employees contribute to the culture. Culture, in the environment of the workplace, is the result of the weaknesses, strengths, life experiences and education of everyone who is part of the organization’s workforce.

The culture of an organization also is molded by its mission. For example, a university’s culture is different from that of the military, a hospital or a for-profit company. Understanding the culture of a specific enterprise is made more difficult by the fact that there is no single culture. Instead, complex organizations also reflect the culture of the sub-groups within them. Individuals might adhere to the core values and beliefs of the organization, but they also belong to sub-groups or cultures that form along the lines of occupational duties, professional skills, age, union membership, etc.

Organizational culture is both formal and informal. A flow chart indicating authority lines or a human resources manual might define the formal culture. Informal culture, though, is revealed in such things as bulletin board content, decorations in individual work areas, the arrangement of furniture, newsletters, clothing worn, how employees interact in meetings or collaborate and the workplace stories that are repeated.

The hiring of new employees is another area in which the culture of the organization plays a role. In the interviewing process, questions often are directed to explore whether or not the candidate would be a good fit in the organization's culture. Organizational culture is a powerful element that shapes all facets of work.