Organizational culture helps build a company’s external brand image while bolstering internal employee engagement and retention. In fact, a Gallup survey shows those who strongly agree they feel connected to their organization’s culture are:
- 4x as likely to be engaged at work
- 5.8x as likely to strongly agree they’d recommend their employer as a great place to work
- 43% less likely to be job searching
In addition, the survey shows a positive organizational culture is an effective tool for beating burnout. Read on to learn all about building a positive and effective organizational culture.
What is Organizational Culture?
Organizational culture is the mission, vision, and expectations that guide how people interact and work within a company. It influences everything from decision-making to workplace dynamics, creating a sense of identity and purpose for employees. For example, a company with a collaborative culture may prioritize open communication and team-based problem-solving, while one with an innovative culture might emphasize risk-taking and creative thinking.
Types of Organizational Culture
Organizational culture can reflect different approaches to leadership, collaboration, and goal achievement. By understanding the types of organizational culture, companies can identify the values and practices that best support their mission and industry requirements.
While there are several definitions of corporate culture or organizational culture, Kim Cameron and Robert Quinn from the University of Michigan created a culture typology that defined the four most common organizational culture types:
Clan Culture
In a clan culture, belonging is driven by a sense of mission, loyalty, and collaboration within a close-knit organization. It fosters a family-like environment where employees are highly valued and encouraged to work together.
Example: Google
Industries/Business Types: Tech, retail, startups, family companies
Adhocracy Culture
In this type of culture, the company remains focused on innovation, rapid iteration, and a willingness to take risks. It is characterized by creative problem-solving and a focus on staying ahead in competitive markets.
Example: Apple
Industries/Business Types: Tech, research, fashion, startups
Hierarchy Culture
Hierarchy culture — what some would refer to as traditional or corporate — relies on structure, rules, and established processes to maintain efficiency and consistency. It is rooted in a chain of command.
Example: McDonald’s
Industries/Business Types: Government, finance, legacy brands
Market Culture
Market culture is results-oriented, focusing on achieving goals, staying competitive, and meeting external demands. It emphasizes productivity and often ties success to measurable outcomes.
Example: Amazon
Industries/Business Types: Retail, sales, consulting
Why Organizational Culture is Important
Organizational culture is the backbone of modern business, shaping how employees experience their work environment and how companies achieve their goals. In today’s evolving workplace, initiatives like diversity, equity, and inclusion (DEI), hybrid work models, and employee engagement strategies thrive when supported by a culture of excellence. A well-defined culture not only fosters collaboration and innovation, but also creates a sense of belonging, which results in retaining top talent and motivating employees to perform at their best.
Gallup shows that a strong organizational culture has resulted in the following for its clients:
- 50-point increase in employee engagement over three years
- 25% growth in workforce over three years
- 85% net profit increase over five years
A strong organizational culture can help solve for:
- High turnover
- Employee burnout
- Lack of alignment with company goals
- Poor communication and collaboration
As cited above, with a strong culture, employees are more engaged and less likely to be job searching. They’re also 62% less likely to be burned out at work often or always, according to Gallup research.
In addition, strong cultures prioritize open communication channels and teamwork, breaking down silos and creating an environment where ideas flow freely and collaboration drives innovation. And when a culture is based on company values and objectives, employees understand their roles within the bigger picture, fostering alignment with organizational goals. This clarity and shared purpose drives motivation, accountability, and overall performance.
MORE: Check out a research-based approach to positive work culture.
Examples of Good Organizational Culture
The following organizational culture examples showcase companies known for their strong culture. Gain inspiration and practical tips to implement in your own workplace from the examples below.
Google is very intentional about building a culture where everyone belongs and thrives together. The company takes targeted action toward DEI issues like disability inclusion, gender equity, and LGBTQ+ inclusion, among others. In addition, the company values creativity and innovation. Employees are encouraged to think outside the box and contribute to projects that align with their passions.
Paycor
This isn’t just our opinion; Paycor recently won five Culture Excellence awards from Top Workplaces. The awards are based on employee feedback. Paycor was awarded for its approachable leadership, flexible work culture, competitive pay, comprehensive benefits, and innovation. Paycor’s core values include taking care of each other, doing the right thing, and having fun along the way.
Zappos
Zappos thrives on a customer-centric and fun culture. The company prioritizes exceptional customer service and creates a workplace that celebrates individuality and positivity. The company created Zappos Insights for people to learn more about its top notch culture.
Patagonia
Patagonia embodies a purpose-driven culture focused on sustainability and environmental activism. Employees are deeply connected to the company’s mission to protect the planet. The company prioritizes flexibility and work-life balance.
Southwest
If you’ve ever taken a Southwest flight, you’ve experienced their culture at work. The company operates a little differently than its peers, encouraging employees to have fun at work. One of its core values is serving people, including coworkers (or as they call them, cohearts) and customers.
How to Improve Organizational Culture
To improve organizational culture, companies must focus on creating an environment where employees feel valued, engaged, and aligned with the organization’s mission. Improving culture involves deliberate actions that promote communication, trust, and shared goals. By taking consistent steps to foster a positive culture, organizations can enhance morale, productivity, and overall performance.
- Define Core Values
- Foster Open Communication
- Recognize and Reward Employees
- Provide Growth Opportunities
- Lead by Example
1. Define Core Values
According to a LinkedIn survey, 82% of U.S. employees say it’s important for them to work for a company with values aligned to their own. Clearly articulating values allows workers to understand what the company stands for, while establishing a cultural foundation. Employees are more engaged when they know the company’s purpose and how their work contributes to it.
2. Foster Open Communication
Create channels for transparent communication between leadership and employees, whether through town halls, 1:1s, or anonymous surveys — or ideally, a mix of all of the above and more. Encourage feedback, listen to concerns, and act on suggestions. Open communication builds trust, strengthens relationships, and ensures employees feel heard and valued.
3. Recognize and Reward Employees
Celebrate employee achievements and recognize contributions to reinforce positive behaviors. Acknowledging hard work shows employees you value them. This boosts morale, fosters loyalty, and motivates teams to continue performing at their best.
4. Provide Growth Opportunities
Invest in employee development through training, mentorship, and career advancement opportunities. When employees see a path for growth, they feel more motivated and committed to the organization, positively impacting culture.
5. Lead by Example
Lastly, make sure leadership showcases company values in every interaction and decision they make. Culture starts at the top, and employees quickly become disillusioned if there’s a disconnect between what leaders say and what they do. When leaders embody the company’s values, employees are more likely to follow suit.
Organizational Culture Best Practices
Improving organizational culture doesn’t have to be complicated. By adopting straightforward strategies and remaining consistent, businesses can create a positive and productive environment. These organizational culture best practices are designed to help leaders build trust, encourage collaboration, and foster employee satisfaction. Start small, and over time, these tips will have a lasting impact on your organization’s culture.
- Establish diverse interview panels for all hiring processes to ensure multiple perspectives in candidate evaluation.
- Create mentorship programs to help employees connect, learn, and grow from experienced team members.
- Encourage cross-departmental projects to break down silos and build stronger connections across teams.
- Develop clear pathways for career advancement, outlining how employees can grow within the organization.
- Establish an employee recognition program that celebrates achievements in real-time, such as “Employee of the Month” or peer nominations.
- Provide anonymous suggestion boxes or virtual platforms to gather input on company policies or workplace improvements.
- Regularly solicit feedback on the company culture itself, showing employees that their voices shape the organization’s direction.
- Implement flexible working arrangements that include core collaboration hours while allowing employees to adjust their schedules around personal commitments.
- Create interest-based employee resource groups (ERGs) that bring together people with shared backgrounds or interests, fostering community within the larger organization.
How Paycor Helps
Paycor empowers organizations to build winning culture with tools like pulse surveys that give employees a voice and provide employers with the tools they need to capture, analyze, and respond to feedback. The recognition tool, part of Payor Talent Development, helps teams celebrate accomplishments and milestones. For example, Plains Commerce Bank utilized it to increase employee engagement and build a stronger company culture.
Efficient HR solutions give HR leaders back time, which can be better focused on evaluating benefits and strategic initiatives that improve the workplace.
Download a free Employee Engagement Survey Template for a tool to measure sentiment and improve culture at your organization.
