Organizational culture is the shared values, beliefs, attitudes, and behaviors that shape the way people work together in a company. It is formed over time through a combination of various factors, including the company's history, leadership style, employee interactions, and external influences. Understanding how organizational culture is formed is essential for leaders who want to create a positive and productive work environment.

One of the primary factors that shape organizational culture is the company's history. Every organization has a unique story, and this history can influence the way people work together. For example, a company that was founded by a group of entrepreneurs may have a culture that values risk-taking and innovation. On the other hand, a company that has been around for decades may have a culture that values stability and tradition.

Leadership style is another critical factor that shapes organizational culture. The way leaders interact with employees and the decisions they make can have a significant impact on the company's culture. For example, a leader who values transparency and open communication may create a culture that encourages employees to speak up and share their ideas. In contrast, a leader who is more authoritarian may create a culture where employees are hesitant to speak up for fear of retribution.

Employee interactions are also crucial in shaping organizational culture. The way people communicate and work together can influence the overall culture of the company. For example, a company where employees collaborate and work together as a team may have a culture that values teamwork and cooperation. In contrast, a company where employees work in silos and don't communicate with each other may have a culture that values individual achievement over teamwork.

External influences can also shape organizational culture. For example, changes in the market or industry can impact the culture of a company. If a company is experiencing financial difficulties, it may create a culture of fear and uncertainty. In contrast, a company that is doing well may have a culture that values innovation and growth.

So how exactly is organizational culture formed? It is a complex process that involves many different factors. Here are some of the key steps involved in the formation of organizational culture:

1. Articulating values and beliefs

One of the first steps in forming organizational culture is articulating the values and beliefs that will guide the company. This may involve creating a mission statement or a set of core values that all employees are expected to uphold.

2. Hiring and onboarding

The hiring and onboarding process is critical in shaping organizational culture. Companies that prioritize cultural fit during the hiring process are more likely to attract employees who share the company's values and beliefs. During the onboarding process, new employees should be introduced to the company's culture and given the tools and resources they need to succeed.

3. Leadership and management

Leadership and management play a crucial role in shaping organizational culture. Leaders should model the behavior they want to see from employees and hold themselves accountable for upholding the company's values and beliefs. They should also create a sense of psychological safety where employees feel comfortable speaking up and sharing their ideas.

4. Communication and collaboration

Communication and collaboration are essential in creating a positive and productive work environment. Companies should encourage open and honest communication and create opportunities for employees to collaborate and work together as a team.

5. Rewards and recognition

Rewards and recognition can reinforce the company's values and beliefs and help shape organizational culture. Companies should reward employees who demonstrate behaviors that align with the company's culture and recognize employees who go above and beyond.

6. Continual reinforcement

Organizational culture is not something that can be created overnight. It requires continual reinforcement and commitment from everyone in the company. Companies should regularly assess their culture and make adjustments as needed to ensure that it remains aligned with the company's values and beliefs.

Organizational culture is formed through a combination of various factors, including the company's history, leadership style, employee interactions, and external influences. Understanding how organizational culture is formed is essential for leaders who want to create a positive and productive work environment. By articulating values and beliefs, prioritizing cultural fit during the hiring process, modeling the behavior they want to see from employees, encouraging open and honest communication, and continually reinforcing the company's culture, leaders can create a culture that supports employee engagement, productivity, and growth.