Appy Pie - What is organizational culture and why it matters

Creating the Organization You Love: The Importance of Organizational Culture

Abhinav Girdhar
By Abhinav Girdhar | Last Updated on February 28th, 2024 7:36 am | 4-min read

A business is like a massive machine, with each bit doing its own for the collective benefit of all. A machine needs to be well-greased to function properly and avoid frictional damage. Similarly, an organization also needs a similar fluid to ease out tensions between each of its cogs. The work culture of an organization acts as that grease.Appy Pie - What is organizational culture and why it mattersSince the time of the industrial revolution, organizational culture has come a long way. Before the advent of the modern era, workers’ rights, labor rules, etc., were farfetched concepts and most people lived in a ‘You work, you ate’ economy. However, over time, a new workforce with more modern outlooks and ethics rose. Humans, as a collective, became more united and more ‘sorted’. Worker rights and the existence of labor unions led to the creation of what we term today as organizational culture. Unlike the original days of the industry, workers started working in a single place for long periods, from years to decades. This simple change led to an evolution of what a workplace is. Work culture has slowly grown to become an extremely important part of how a company functions. Unlike the old days, work culture can almost be equated to the success of a company.For us to understand, the importance of work culture, we must begin by defining it properly. So far, I’ve given you a concise look at how work culture has evolved. Let us go deeper and try to understand what work culture is.

Defining organizational culture

The definition of organizational culture is relatively simple. It is the social environment of your workplace. An organizational or work culture is naturally formed as a business grows. It cannot be defined in business terms since its nature is dependent on the emotional and social natures of its employees. No matter how big or small a business is, its work culture is one of the most important metrics in its success. Organizational culture is created by itself over time. It’s not something that can be forced. Historically speaking, forcing culture never ends well. That fact holds true for businesses too. 2 out of 3 mergers fail due to different work cultures of the merging organizations. At the deepest level, an organization’s culture is based on values derived from a few assumptions based on the following:
  • Human Nature: Are people in your company inherently good or bad, proactive, or reactive?

  • The organization’s relationships and business practices: How does it interact with its customers, its partners, etc?

  • Appropriate emotions: How free are employees to be themselves? What types of feelings are encouraged around the workplace?

  • Effectiveness: How successful the organization and its individuals are? Is the workplace doing well? An organization will only be successful if it can balance both growth and culture. Tip the scale to one side and the company suffers.

The Importance of Organizational Culture

A strong culture is common among successful businesses. As your company grows, culture starts playing a vital role in your company’s success. A good organizational culture allows you to unite your employees towards a business’s goal. A good organizational culture will:
  • Raise standards
  • Tap into the full potential of the employees
  • Keep everyone happy
  • Improve customer relations
  • Raise brand reputation
  • Unite people to work together
  • Give a Sense of Direction to an Organization …and most important of all,
  • Give it an ‘Identity’

What Creates Company Culture?

Just like other aspects of a business, work culture is something that starts at the top. A good leader will likely create a good work culture. Organizational cultures begin with the very beliefs, goals, and aspirations of its leaders. In fact, a company’s culture is a good metric to understand the kind of leadership that runs it. The values of the business, the unspoken rules its leadership follow, and the environment they work best in, tend to define the future culture of an organization The next most important component of good company culture is the HR department. More importantly, it’s the lead of the HR department since he/she nurtures that company culture. All readers who work for corporates know, what a sour note a bad HR can be. Essentially speaking, HR acts as the caretaker of company culture. Since they also hire employees, HR is indirectly responsible for the evolution of said culture.You’ll be surprised to know that most good companies have certain common characteristics and components in their work cultures. Yes, the cultures might be different, but they share similar undertones. These components are:
  • Values: Values define a company. The values set by its leaders is what the employees will follow. Bad leaders will have bad employees.

  • Degree of Hierarchy: The structure of a company’s hierarchy and the flexibility it practices directly contribute to a company’s culture. As a rule of thumb, faster developing organizational cultures have more flexible hierarchies.

  • Appy Pie - What is organizational culture and why it matters
  • Degree of Urgency: How fast an organization attends to important matters can define its culture well. A company that pushes decisions fast tends to be more market-driven, a company with slower decision-making usually prioritizes quality over efficiency.

  • Subcultures: Subcultures are cultures formed within the dominant culture of a company. These are formed among a group of individuals within the company. They directly contribute to the overall culture of a company.

  • Time: Time solves all things. The important component of creating your company culture is time. Many business leaders understand the importance of a good workplace but try to rush into it. Your culture should develop over time. No amount of forced corporate events and publicized meetings will create a good culture. Let your employees develop it on their own.

Developing Your Organizational Culture

An organization’s customs, traditions, rituals, behavioral norms, and general way of doing things show what its culture is. The current culture for an organization is usually due to what worked in the past. But just like social culture, organizational culture needs to evolve. Founders have a massive impact on your culture. It is observed that over time, the founding values that were laid down tend to have the largest impact on company culture. However, it can be changed by taking on new values with time. Even if the founding members actively stay away from developing a culture, a culture develops naturally among employees.

Organizational ‘Artifacts’

One of the most important ways to sustain a company’s culture is through organizational artifacts. They involve core business activities, the philosophies behind them, and the processes that categorize and characterize how a business functions every day. Once you identify what these traits are, you can tweak them to improve your company’s culture. These artifacts include roles, responsibilities, and impact of teams, how people work and support each other, and ideologies followed by specific team leaders. Managing these artifacts and tweaking them should be the responsibility of the HR teams of a company. There are other activities that HR can do to develop a good organizational culture. These include onboarding programs, specific hiring practices, rewards for good employees, etc.


I hope I was able to explain the essentials of company culture. This blog was difficult to create. But then again, company culture isn’t exactly a tangible concept. In the end, all I can say is that having a workplace that is flexible with its rules is one of the best ways to create a good company culture. Before I go, there’s one last thing. Do you know that you can create your very own internal apps? You can leverage smartphones to smoothen out internal processes with a company app for your employees. The best part is that you can make them without coding. Check out Appy Pie’s App Builder today!

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Abhinav Girdhar

Founder and CEO of Appy Pie