The Difference Between Organizational Culture and

Organizational Structure
You can maintain full control over the organizational structure of your business and you can also
exert a strong influence over the company culture. Business owners need to understand the
difference between the two because these aspects of your business can have a major influence on
the firm's success or failure.

Basics

The organizational culture of a business reflects the mentality, work ethic and values of the

company's owners and employees. Some firms are regarded as having a cut-throat culture in which

employees aggressively compete for promotions and bonuses without regard to one another's

feelings. Other firms have a family-friendly culture or a culture that encourages creativity.

The term "organizational structure" refers to the actual framework of a company. In the United

States, you register your business as a sole proprietorship, partnership, corporation or as a another

type of entity. Your choice of structure has a direct impact on the firm's tax liability and the way that

day-to-day operations are handled.

Control

You decide on your company's structure when you first start operations. Aside from choosing to

register as a corporation or some other type of entity, you also decide how to arrange the chain of

command. You can maintain tight control with a centralized structure or you can give departmental

managers a degree of autonomy.

Initially, you also get to determine your firm's corporate culture because the culture starts to develop

after you have your first interactions with employees and clients. Although you can set the tone by

trying to create a relaxed culture or a sale-focused culture, your employees' attitude toward work

also has an impact on the culture. If you try to create a warm work environment but the managers

that report to you mistreat their employees, then, despite your own efforts, your firm will have a

hostile or negative organizational culture.

Change

The corporate culture of a business can change at any time. You can effect some change by relaxing rules, or

implementing new policies and procedures that are designed to impact the day-to-day work environment. The
culture can also change if a large number of employees leave because the new employees may not share the

same ideals and values as the outgoing employees.

The organizational structure of a business can change, though this becomes harder as a business expands. You

can change a sole proprietorship into a corporation by filing papers with your state, and you can eliminate

levels of management in a corporation to streamline the structure. However, you cannot turn a huge

corporation back into a sole proprietorship. Major firms tend to have similar management structures because

logistically you need a certain number of supervisors when you have large numbers of employees.

Tangible

Structures are tangible, which means that anyone can determine that you operate a corporation by checking

your state's business registry. Managers and supervisors are further evidence of the firm's organizational

makeup. People can criticize the structure or recommend changes, but no one can deny that the structure exists.

Perceptions of a firm's organizational culture are not always based on tangible facts. Disgruntled customers or

employees may spread misinformation about a firm and this can cause other people to develop a negative

impression of a firm. You can try to dispute such misinformation but you cannot always back up descriptions

of a culture with tangible facts.