An organization’s culture doesn’t pop out of thin air and, once established, it rarely fades away. An organization’s customs, traditions, and general way of doing things are largely due to what it has done before and how successful it was in doing it. This leads us to the ultimate source of an organization’s culture: the founders. Founders have a vision of what the organization should be, and the firm’s initial small size makes it easy to impose that vision on all members.

Culture creation occurs in three ways. Founders hire and keep only employees who think and feel the same way they do. They may indoctrinate and socialize employees to their way of thinking and feeling. Or, the founders’ own behavior encourages employees to identify with them and internalize their beliefs, values, and assumptions. When the organization succeeds, the founders’ personalities become embedded in the culture.