Organizational culture encompasses the shared norms, values, and behaviors—observed in schools, not-for-profit groups, government agencies, sports teams, and businesses—reflecting their core values and strategic direction. Alternative terms include business culture, corporate culture and company culture. The term corporate culture emerged in the late 1980s and early 1990s. It was used by managers, sociologists, and organizational theorists in the 1980s.

Organizational culture influences how people interact, how decisions are made (or avoided), the context within which cultural artifacts are created, employee attachment, the organization's competitive advantage, and the internal alignment of its units. It is distinct from national culture or the broader cultural background of its workforce.

A related topic, organizational identity, refers to statements and images which are important to an organization and helps to differentiate itself from other organizations. An organization may also have its own management philosophy. Organizational identity influences all stakeholders, leaders and employees alike.

Organizational Culture (OC) serves as a foundational set of beliefs shaped by the members of an orga¬nization through external adaptation or internal integration (Schein, 1992). Various definitions exist, without consensus. Lesley Willcoxson and Bruce Millett note that organizational cultures can be described in similar ways to wider forms of culture such as national culture. Some of the definitions offered include:

Schein’s model identifies three levels of culture: Artifacts – Artifacts and behaviours are the most visible aspects of organizational culture, including physical layout, dress codes, rituals, and observable actions. Espoused values – Espoused values are the stated principles and ideals that organizations promote, often found in mission statements and leadership communications. Basic underlying assumptions – These are deeply rooted beliefs that are often unconscious and taken for granted, shaping how people think and behave within the organization. They develop over time and become embedded in the culture, rarely questioned.

The concept of organizational culture emerged in the late 20th century, drawing from sociology, anthropology, and psychology. Its formal introduction into management studies is often credited to Andrew Pettigrew’s (1979) article, which framed culture as a system of shared meanings, rituals, and myths within organizations. In the early 1980s, the idea gained traction through influential works such as Corporate Cultures by Deal and Kennedy (1982) and In Search of Excellence by Peters and Waterman (1982), which emphasized culture as a key driver of organizational success for high-performers.

A pivotal influence on the development of organizational culture, particularly in the post-WWII era, was the rise of Japanese industrial methodologies. Following World War II, Japan’s adoption of practices such as Total Quality Management (TQM), continuous improvement (Kaizen), and employee involvement, championed by figures like W. Edwards Deming, transformed not only Japanese industry but also inspired Western organizations to shift from rigid, hierarchical structures to more team-based, quality-focused, and customer-oriented cultures. This cross-pollination of management philosophies bridged Eastern and Western approaches, shaping leadership, employee engagement, and strategic planning worldwide (Denison & Mishra, 1995).

As the 21st century progressed, organizational culture continued to evolve in response to globalization, technological advances, and shifting workforce demographics. The digital revolution introduced new communication tools and flattened hierarchies, enabling more collaborative and agile work environments. The rise of knowledge work and the gig economy further diversified organizational forms and cultural expressions.