Corporate culture refers to the shared values, beliefs and meanings among members of the organization. Culture is resistant to change or control; it is also difficult to manage. Just as every individual has a personality, every company has a distinct culture. Many companies credit their success and survival to their strong corporate culture. However, a dysfunctional corporate culture can lead to serious challenges.

Knowledge-Sharing Barrier

In today's dynamic competitive market, companies need to develop and share new knowledge to solve competitive problems. There is a link between sharing knowledge and solving business problems. A dysfunctional culture is a barrier to effective knowledge sharing and organizational learning.

Self-Interest and Commitment

It is in the interest of the company to develop a culture of loyalty and cooperation. However, a hierarchical authority structure sets employees vying for more power and compensation. This can create unnecessary internal competition and distract from attaining organizational goals.

Corporate Governance

Sometimes in response to intense competitive pressure or corporate greed, companies develop a culture that condones unethical and immoral competitive behavior. Many corporate scandals are rooted in the mentality that the only focus of the business should be on winning the competitive race at any cost. Defining competitive tactics at the gray area between the unethical and the illegal can lead to regulatory backlash and the demise of the business.


Analyzing corporate culture is difficult because employees are subject to different cultural influences. Subgroups in the company may have their own cultures. Plurality of cultures in an organization is accentuated when there is less interaction between different groups. Conflicting values in the organization can reduce synergies between different departments and ultimately reduce organizational effectiveness.

Invisible Culture

Corporate culture has both visible and invisible levels. The visible level of culture includes mottoes, dress codes and physical settings. The invisible level includes underlying values, beliefs and attitudes. It is easy to ignore the invisible level of culture, but this level has an important impact on organizational change efforts.