As people work together to accomplish goals, groups develop into organizations. As goals become more specific and longer-term, and work more specialized, organizations become both more formal and institutionalized. Organizations tend to take on a life of their own and widely held beliefs, values, and practices develop, differentiating one organization from another and often affecting the organization's success or failure. In the early 1980s, management scholars began attempting to describe these belief systems, which they referred to as organizational or corporate cultures.

Interest in organizational cultures was further created by William Ouchi's 1981 best-seller, Theory Z: How American Business Can Meet the Japanese Challenge. Ouchi considered organizational culture to be a key determinant of organizational effectiveness. In 1982 two other best-sellers, Terrance Deal and Allan Kennedy's Corporate Cultures: The Rites and Rituals of Corporate Life and Thomas Peters and Robert Waterman's In Search of Excellence, supported the idea...