What does organizational culture comprise?

Organizational culture fundamentally consists of the shared beliefs, values, and norms that shape how members of an organization interact with each other and with stakeholders outside the organization. It encompasses the underlying assumptions and collective understanding that guide behavior and decision-making within a company.

These beliefs and values serve as a framework for employees, influencing their attitudes and actions. For example, a culture that prioritizes innovation encourages risk-taking and creativity among staff, while a culture focused on efficiency may emphasize processes and compliance.

In contrast, the other options describe different aspects or tools that organizations may use. A system of rules and regulations establishes formal guidelines but does not capture the essence of culture, which is more about the informal norms and shared meanings among employees. Similarly, performance appraisal methods and strategic planning techniques may be influenced by the organizational culture, but they do not encompass what culture itself is about. Thus, focusing on shared beliefs and values provides a more holistic understanding of what organizational culture truly entails.