Understanding National and Organisational Culture and why it’s crucial for Effective Leadership

Culture is an intricate social phenomenon that shapes how groups of people think, behave, and interact. It is learned rather than inherited and provides the shared rules, meanings, and expectations that guide collective life. From how we greet others to how we negotiate, make decisions, or conduct business, culture influences nearly every aspect of human interaction.

Within professional and management contexts, two forms of culture are particularly important: national culture and organisational culture. While they operate at different levels, they are deeply interwoven each influencing and constraining the other.

National Culture

National culture refers to the shared system of values, beliefs, and behavioural norms among people within a nation or society. It is shaped by history, education, religion, language, geography, and institutions that collectively define "how things are done here." Individuals internalise cultural norms early in life, and by adolescence, these values are deeply embedded.

Characteristics

National culture manifests in how societies view authority, manage uncertainty, communicate, and define individual or collective identity. For instance, differences in communication style direct versus indirect or attitudes toward hierarchy often reflect deeper national cultural orientations.

Because national culture arises from generational transmission and institutional influence, it is remarkably stable. Social or technological developments can lead to gradual evolution, but rarely to rapid transformation. Scholars note that cultural change at the national level often takes decades or even centuries to occur (House et al., 2004).

Scope and expression

National culture is best observed when comparing groups from different societies. At the individual level, personality or situational factors dominate; at the group or population level, consistent patterns emerge. These patterns explain, for example, why workplace behaviour in one country may differ markedly from another, even under identical organisational policies.

Organisational Culture

Organisational culture is the collective system of shared meanings, practices, and assumptions that characterise life within an organisation. It encompasses how members relate to one another, approach their work, and engage with the external environment.

A widely used framework describes three interrelated layers:

Espoused values - formally expressed principles, strategies, and goals;

Underlying assumptions - invisible, taken-for-granted beliefs that guide behaviour (Schein & Schein, 2017).

Visible practices express underlying beliefs, and shared beliefs shape everyday behaviours.

Dynamics and measurement

Unlike national culture, organisational culture is comparatively malleable. It evolves through leadership actions, strategy, policies, and shared experience. Culture change can occur within months or years particularly when new leadership or business challenges demand different behaviours.

Organisational culture can also be measured more directly, through employee surveys, ethnographic observation, or behavioural audits. These tools assess how well "the way things are done" aligns with strategic goals.

Functionality

A functional culture supports organisational strategy and performance, whereas a misaligned culture can hinder communication, innovation, and employee engagement. Successful organisations deliberately shape their cultures through consistent leadership behaviours and reinforcement systems (Cameron & Quinn, 2011).

How they differ

Dimension	National Culture	Organisational Culture
Basis	Deep-seated values and social norms	Shared organisational practices and routines
Formation	Socialisation through family, education, and institutions	Leadership influence, structure, strategy, and shared experience
Visibility	Evident in broad, comparative contexts	Visible in daily workplace behaviours and rituals
Change rate	Slow; generational	Faster; can shift within years
Level of analysis	Societal (macro)	Organisational or group (meso)
Measurement	Comparative cultural indices, sociological research	Cultural audits, surveys, and behavioural analysis

In summary, national culture shapes what people value and expect; organisational culture shapes how those values are enacted in daily work life.

Interconnection between the two

Though analytically distinct, national and organisational cultures are interdependent. National culture provides the context in which organisations operate it influences how employees interpret organisational messages, accept authority, and engage with change. Conversely, strong organisational cultures can moderate or adapt national tendencies, particularly within multinational firms.

Key relationships include:

Interpretive filters

• Employees interpret organisational practices through their national cultural lens. For instance, a participative leadership style may be embraced in one country but seen as indecisive in another.

Constraints and adaptation

• National culture sets parameters for what organisational practices will be effective. Multinationals often adapt headquarters' policies to local expectations, blending global and local norms.

Cultural integration

• Over time, global organisations develop hybrid cultures a consistent core philosophy combined with localised practices that resonate with national values.

Change dynamics

• Organisational culture can evolve faster than national culture, but sustainable change requires alignment with underlying cultural values. Employees rarely maintain practices long-term if those practices conflict with their ingrained beliefs.

Research shows that national culture moderates how organisational culture affects outcomes such as job satisfaction, innovation, and employee commitment (Taras, Kirkman & Steel, 2010).

This interdependence highlights the importance of cultural sensitivity in global leadership and change management.

Implications for Leaders

Leaders working across borders must understand both the fixed and flexible aspects of culture. National culture sets the "rules of the game," while organisational culture defines the "style of play." Effective leaders recognise when differences are value-based and when they are practice-based.

When driving change, it is more productive to adjust organisational practices than to attempt to change employees' core values. Sustainable cultural transformation depends on respecting national identities while designing organisational systems that align with them.

In essence diagnose both the current organisational culture and the national contexts of employees.

Design change initiatives that respect local value systems.

Reinforce new practices consistently through leadership, structure, and incentives.

Monitor and adjust to ensure continued alignment between practice and purpose.

To sum up

National and organisational cultures differ in scope, depth, and speed of change but they are intertwined in practice. National culture shapes what people value; organisational culture translates those values into collective action. The best leaders and organisations recognise this interplay and harness it building cultures that respect diversity, align with context, and enable people to thrive together.

References

Cameron, K. S., & Quinn, R. E. (2011). Diagnosing and Changing Organisational Culture: Based on the Competing Values Framework (3rd ed.). Jossey-Bass.

House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., & Gupta, V. (Eds.). (2004). Culture, Leadership, and Organisations: The GLOBE Study of 62 Societies. SAGE Publications.

Mansaray, E. E. (2020). The Connection Between National Culture and Organisational Culture: A Literature Review. Journal of Human Resource and Sustainability Studies, 8(1), 1–12.

Schein, E. H., & Schein, P. A. (2017). Organisational Culture and Leadership (5th ed.). Wiley.

Taras, V., Kirkman, B. L., & Steel, P. (2010). Examining the Impact of Culture’s Consequences: A Three-Decade, Multilevel, Meta-Analytic Review of Hofstede’s Cultural Value Dimensions. Journal of Applied Psychology, 95(3), 405–439.

Trompenaars, F., & Hampden-Turner, C. (2012). Riding the Waves of Culture: Understanding Diversity in Global Business (3rd ed.). McGraw-Hill.

Tsui, A. S., Nifadkar, S. S., & Ou, A. Y. (2007). Cross-National, Cross-Cultural Organisational Behavior Research: Advances, Gaps, and Recommendations. Journal of Management, 33(3), 426–478.