How Culture is Formed

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An organisation’s culture doesn’t pop out of thin air. Once established, it rarely fades away. So, what forces influence the creation of a culture? What reinforces and sustains these forces once they are in place?

When an organisation is born, a tremendous burst of energy is released as members struggle to make it work. A corporate culture seems to form rather quickly, based on the organisation’s mission, setting, and requirements for success: high-quality, efficiency, product reliability, customer service, innovation, hard work, and loyalty. The culture captures everyone’s drive and imagination. As the reward systems, policies, and work procedures are formally documented, they suggest what kinds of behaviour and attitudes are important for success.

An organisation’s current customs, traditions, and general way of doing things, are largely due to what it has done before and the degree of success it has had with those endeavours. This leads us to the ultimate source of an organisation’s culture: its founders.

The founders of an organisation, traditionally, have a major impact on that organisation’s early culture. They have a vision of what the organisation should be. They are unconstrained by previous customs or ideologies. The founders ideologies (while important in shaping culture) cannot compete with actions of key individuals forever. For example, the founder’s objectives, principles, values, and especially behaviour, provide important clues as to what is really wanted from all employees, both now and in the future. Carrying on in the traditions of the founder, other top executives affect culture of the company by their example.

Employees take note of all critical incidents that stem from management action – such as the time that so-and-so was accoladed for doing a good job when not asked to do it beforehand, or the time that another worker was fired for publicly disagreeing with the company’s position. Incidents such as these become an enduring part of the company folklore, indicating what the corporation really wants, what really counts in getting ahead or, alternatively, how to stay out of trouble. They are the unwritten rules of the game.

At first, a culture may be very functional. But, in time, it becomes a separate entity, independent of its initial purpose. The culture becomes distinct from the formal strategy, structure, and reward systems, of the organisation. In a similar vein, culture becomes distinct from workers and even top managers. All members of the organisation are taught to follow the cultural norms without questioning them. After employees have been around for a few years, they have already learned the ropes. Even new top executives who vow that things will be different, find out – often the hard way – how culture is “bigger” and more powerful than they are. A top manager can get individual commitments to some new policy from his subordinates, but after they walk out the office door and once again become part of the corporate culture, the boss finds the new plan bitterly opposed.