Continuing the discussion around Organizational Culture that I started with my well-received White Paper-Blog, “20 Ways to Create Positive, Passionate, and Productive Corporate Cultures,” it’s important for leaders also to understand the “sub-cultures” that inevitably exist within organizations.

Given the challenging business environment over the past several years, I have witnessed numerous companies be acquired, as well as seen many companies struggle financially. As some of these organizations emerge from these changing, difficult times, the leadership is also seeing the emergence of distinct and strong “sub-cultures” – sometimes for the better and sometimes for the worse.

Additionally, over the past 8 weeks, I have consulted with two companies with significantly under-performing divisions/business units. In both scenarios, the challenged businesses happen to be housed in separate buildings away from the rest of the corporate team. And both of these CEOs are questioning whether the underlying stubborn and defeatist “sub-cultures” that have formed came about, in part, because of the physical separation from the “winning” part of the companies. The CEOs acknowledge that the communication with these groups has not been optimal.

It’s understood that the organizational culture provides employees with a reliable means of interpreting what may be for them a highly ambiguous work environment. And it is true that an organization may have many different cultures or sub-cultures, or even no discernible dominant culture at the organizational level; not every group develops a palpable culture.

Many sociologists believe that an overarching organizational culture is simply the coming together, or composite, of all of the company’s distinct sub-cultures. And it is perfectly normal and common for individuals to classify themselves into groups based on how they identify their work – to develop sub-groups as they mature. Cultural dynamics are ultimately a reflection of group dynamics, and recognizing the cultural unit is essential to identifying and understanding the culture.

As organizations grow, sub-cultures can become very specific and defined; they can be felt and articulated by everyone in the organization. Oftentimes, they bring an otherwise absent aspect of diversity and pride to an organization. A successful sub-culture – one with unique ideology, values and norms – clearly demonstrates how its idiosyncrasies are aligned with the core ideologies, values and norms of the organization’s overarching culture.

At times, however, sub-groups can develop as opposition within an organization. Rather than a healthy sub-culture, this is a counter-culture group which goes against the company’s core values. As you examine your organization’s various sub-cultures — particularly if your company is under-performing or suffering from negative cultural issues – determine whether there is a deliberate counter-culture force within your organization. Significant communication gaps often are at the root of counter-culture groups.

Differentiators | The Creation of Sub-Cultures

What kind of circumstances or differentiators account for the creation of sub-cultures?

Functional Areas of Differentiation – Sub-cultures frequently form based on functional expertise and the biases employees bring with respect to the stature of their functional domain, biased knowledge of company events, biased perspectives of cause and effect, and behaviors common to that function. Like-minded people often stick together; they gravitate toward what they “know,” which includes specific nomenclature. They can become accustomed to a “we” versus “them” mindset. Accounting, manufacturing, engineering, and IT can easily develop sub-cultures.

Product Differentiation – If your organization has multiple product lines, sub-cultures commonly form within each product group.

Different Divisions / Different Performance – As with product, any differences in corporate or business focus and performance can lead to sub-culture formation.

Geographic Decentralization – While easy to understand how sub-cultures form in global organizations with completely different geographic locations and different business environments (differences in local markets, local cultures, laws, labor, materials, etc.), as discussed above,  sub-cultures tend to form even when one common geography houses a campus with several different buildings. Under-performing business units or functional areas isolated or housed in buildings separate from corporate/HQ can struggle mightily culturally, as they can feel less important, cut off from vital information, and ostracized. The larger organization can even begin to label the separated group as less-than-competent when they are isolated. I’ve seen this happen time and again as communication breaks down. I have also seen several MN companies thrive when they were brought together under one roof.

Hierarchical Differentiation – In a vast hierarchy with many layers of bureaucracy, sub-cultures almost always form.

Mergers and Acquisitions / Joint Ventures / Alliances – Mergers attempt to blend or integrate the companies. In acquisitions, the smaller company often has/forms a sub-culture. It takes a significant cultural effort at the top to assimilate cultures when there is no shared history – it’s easy for one to feel inferior or threatened. There have been many disastrous acquisitions due to cultural mismatch. What are the cultural risks inherent in any merger or acquisition? How do the overall leadership goals and philosophies match or clash? Take the time up front for cultural due diligence to avoid crisis/disaster/failure. There is no excuse for not being informed about your company’s culture, and the acquisition target’s culture.

Observing and Assessing Sub-Cultures

What are your sub-cultures’ major characteristics? How do they identify themselves, and how does this impact their productivity and pride as a group? Do they dress differently? Are their work spaces furnished differently? Do they take separate breaks? Always be sensitive to sub-cultures – How have they formed? Why do they exist? What are the positive, as well as the negative, aspects? Make sure your sub-cultures share common goals, common language, and common procedures.  They must remain closely aligned with the overarching ideology, norms and values of the company’s leadership.

Healthy sub-cultures share leaderships’ conceptualizations of how tasks should be accomplished; how employees can advance and take on greater responsibility; how employees interact with each other; the ways in which change is accepted and accomplished; and how new knowledge is acquired and perpetuated. Distinct, healthy sub-cultures are organizationally aligned in their understanding of how they must perform to produce successful and acceptable results and outcomes.

Newcomers and Sub-Cultures

As new employees join your company, what do you teach them about the culture? Sub-cultures can be useful to newcomers as they “learn the ropes.” Clearly, it can be very useful for a high-potential manager to rotate through various departments and areas. This is because the close interaction with senior co-workers, peers, supervisors, and subordinates enables strong communication regarding “how we do things around here.” If the sub-group is closely aligned with the broader organization, this is an extremely positive point of assimilation. It is important to remember that during these initial interactions with newcomers, the established employees are sharing critical information around norms and roles, values, nomenclature, and identities.

Summary and Conclusions

Leaders actively seeking to influence their organization’s culture must consider sub-cultures. The major point here is to make sure that you are integrating and linking your sub-cultures into the broader, intended cultural objectives. Accept and foster productive sub-cultures while consistently communicating how employees must perform in order for the organization to be successful.

The leader’s overall cultural messages should be clear and strong enough to address ambiguities that are beyond the scope of any sub-culture to explain to employees. Cultural messages must specifically take into consideration the cultural ambiguities inherent in certain sub-culture practices within the organization, while resisting the temptation to eliminate a sub-culture’s distinctive identities.


Kristi LeBlanc is the Executive Vice President and Managing Director, N.A. Consumer Practice, with “Top-5” executive search firm, DHR International. She is also the founder and CEO of Living with Certainty™ LLC where she is a workshop presenter, keynote speaker, and organizational consultant with a focus on developing positive leaders and positive corporate cultures. To learn more visit DHR International  or email Kristi at


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