The Relationship Between Organizational Culture and Team Development

Much is said about the importance of organizational culture in the organization, and this is no accident. With a solid and well-defined culture, it is possible for an organization to become increasingly prosperous and respected in its segment.

Organizational culture is defined in different ways by individuals. A considerable percentage of the population has a distorted understanding of what culture truly entails. Most people believe that organizational culture is concerned with how your company appears from the public’s perspective. This may include the general dress code, the layout of an office, the publicized mission statement, and any employee privileges that are public knowledge. While these are frequently regarded as extensions of company culture, they are not the only defining principles of organizational culture. So, what exactly is organizational culture?


Organizational Culture

Organizational culture in clear terms is the set of beliefs and values ​​that are legitimized in the corporate environment. Basically, it’s the way things are done within an organization. The verbal and silent behavioral patterns and mindsets, the mission and objectives, as well as values, leadership and employee expectations, structured performance management, and overall engagement levels, all contribute to organizational culture. Businesses can provide consistency and direction, guide decisions and actions, fuel the workforce, and help them reach their full potential by developing a strong culture.


How Important Is Organizational Culture?

Peter Drucker, considered the father of modern management, once said that ‘a company’s culture eats strategy for breakfast.’ With this statement, we can imagine how significant it is for an organization to build a culture of excellence.

The organizational culture is a reflection of the ethics and morals that the company has, it naturally guides the paths to be followed. Another important aspect of the presence of this solid presence is the development of human capital. As it is a moral and ethical alignment, the culture demonstrates to employees what the company’s expectations are and what its way of acting is, all without underestimating individual characteristics and respecting each one’s positioning. The presence of this structure also establishes an environment that promotes healthy competition, supporting personal goals while seeking to achieve the company’s needs.

The result is that a healthier environment is, at the same time, a space for promoting productivity, since employees stop worrying about external issues and start dedicating their actions to the tasks to be performed.


How Is Teamwork Improved by Organizational Culture?

To understand how culture affects team performance, we must first examine various types of organizational cultures. There are four types of company cultures based on the Decision Making and Reward Structure dimensions.

  1. Adhocracy Culture

This type of culture adheres to the “move fast and break things” philosophy that has become popular among many startups. It may also be referred to as the creative culture. This type of culture fosters a very entrepreneurial work environment in which leaders encourage their employees and teams to be creative, take risks and think outside the box. This adaptable organizational structure fosters a great deal of innovation, learning, and growth for both teams in an organization and the organization as a whole.


The primary goal of these companies, which focus on research and development and professional services, is to outperform the competition through the use of innovations.


  1. Clan Culture

In this organizational culture, there’s a lot of emphasis placed on teamwork, togetherness, consensus, and decision-making based on a shared vision of desired outcomes. The clan culture provides a very friendly working environment where factors such as rapport, morale, participation, and consensus play a central role. In terms of leadership, managers are seen as mentors, rather than dummies who only give instructions and reprimands.


The primary distinction between adhocracy and clan culture is that the former prioritizes trustworthiness and teamwork over creativity and risk-taking. The emphasis here is on marketing and customer service, as these businesses frequently regard user satisfaction as a success metric.


  1. Market Culture

For companies that foster this type of culture, winning is paramount. To put it simply, people want to win and achieve their goals. Based on sales and product development, it’s the perfect environment for skilled and crafty poachers. Because the emphasis is on results, a market culture is also known as a “compete culture.” Leaders are driven by personal and team accomplishments and are focused on beating the competition in order to meet the company’s success metrics. It can be a stressful environment, but it can also be rewarding when hard work pays off with tangible, measurable results. It all boils down to success.


  1. Hierarchy Culture

A hierarchy culture, also known as a “control culture”, applies to more structured and process-oriented work environments. Instead of a lot of innovation and freethinking, most activities and decisions are dictated by existing procedures.

Leaders are in place to ensure that their teams run like well-oiled machines, and they prioritize stability, results, and dependable delivery.


Effect of Organizational Culture on Team Performance

Organizational culture affects all aspects of your business, from punctuality and tone to contract terms and employee benefits. When workplace culture aligns with your employees, they’re more likely to feel more comfortable, supported, and valued.

Different cultures suit various types of teams, and each team can succeed or fail depending on the way things are done within the company. But a strong organizational culture always has a positive impact on teams and their performance at work. In various studies, the results show that team function differently depending on the dominant culture in the organization.

Let’s discuss how closely a team can feel the effect of the organizational culture.

  • Shared Values and Beliefs

Corporate culture gives employees the leverage to share common values and beliefs that significantly affect teamwork and actions in the direction of specific goals. Employees benefit from clarity and shared values because they can better understand their employers’ expectations and see the big picture. When employees discover the meaning of their work, they become more engaged, motivated, and productive.

  • Interpersonal Relationships and Collaboration

Culture influences not only performance but also interpersonal relationships among employees. If the culture is one of collaboration, team members will tend to behave in ways that benefit the team as a whole. Employees who work in teams with strong interpersonal connections are more likely to produce excellent work and cope better in stressful situations. Network culture promotes socialization; employees know and like one another, and helping others is valued in this culture. And mercenary culture promotes high levels of solidarity and agreement on goals, but at the same time, success and results are put above everything else.

  • Team Motivation

Employee motivation and unity are improved when a team and individual success is recognized and rewarded on time. A high level of recognition results in higher levels of future support and connection. Recognition also helps teams feel more connected to one another thereby working together for the organization. corporate cultures that recognize such as birthdays and work anniversaries play a great role in increasing team members’ connection.

Other influences of positive organizational culture on team development includes;

  • There’s clarity in communication and expectations among teams because nearly everything is prescribed.
  • Teams working together experience a greater sense of security and inclusiveness.
  • Significant amounts of innovation and growth among teams.
  • Increased psychological safety, which means teams are more willing to try new things.

The key is to understand your company’s current culture and where they want to go. Perhaps you reviewed one of the above organizational culture types and wondered where you fit in, or you’re just unsure of where you stand, the truth is that you can’t make changes or improvements to your organizational culture unless you know where to begin. But how do you figure it out? No worries, that’s why we are here, you only need to engage our services at iCentra to help you figure it out.

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