Bad Corporate Subcultures: How to Identify and Fix Them

Bad Corporate Subcultures are Unaligned
Even companies with high performing organizational cultures have to recognize that corporate subcultures are not necessarily uncommon or bad.  We define bad corporate subcultures as work environments that are misaligned with the company’s strategic priorities or that undermine the company’s core values.

Why Subcultures Emerge in the Workplace
In small companies or tightly knit teams, subcultures are rare. Everyone works closely toward a clearly defined goal, which naturally fosters alignment in behaviors, values, and ways of working. Shared objectives create cohesion, making it easier to maintain consistent business practices across the organization.

As companies grow, however, subcultures often begin to emerge. These can develop consciously — through deliberate team structures or specialized roles — or unconsciously, as groups adapt to their unique challenges and responsibilities. Over time, these subgroups cultivate their own team norms, behaviors, and values that are tailored to the specific objectives they must achieve.

While these subcultures serve functional purposes, they typically differ in meaningful ways from the broader corporate culture. Recognizing their existence — and understanding the forces that shape them — is essential for leaders who aim to balance team autonomy with organizational alignment.

Can Corporate Subcultures Create Challenges?
For some leaders, acknowledging that a single, uniform workplace culture rarely exists can be uncomfortable. Yet, within reason, corporate subcultures serve a valuable purpose. They give teams a distinctive identity, fostering a sense of belonging that can strengthen engagement and support the organization’s overall goals.

Problems arise when a subculture’s values, behaviors, or belief systems clash with strategic priorities or the desired corporate culture. In these cases, what once promoted cohesion within a group can become a barrier to alignment, slowing progress and undermining organizational objectives. Recognizing and managing these dynamics is essential to ensure subcultures enhance — rather than hinder — success.

An Example of Healthy Corporate Subcultures
One of our high tech clients is laser-focused on being the market leader in their space with new products and services that are continuously beyond what exists today.  Accordingly, their go-to-market strategy and overall corporate culture are based on innovation, pushing the envelope, making big strategic bets, testing alternatives, embracing risk, and learning from mistakes.

But a portion of their operations team is purposefully misaligned from a cultural perspective by having an explicit culture of planning, education, risk mitigation, prevention, and safety.  The same is true of their finance and HR departments in terms of respecting specific rules and regulations.  While both departments can innovate in some areas, it is in the organization’s best interests that certain corporate subcultures exist and are purposefully misaligned.

The “Us vs. Them” Trap
When a corporate subculture conflicts with the broader organizational culture — undermining strategic priorities or core company values — it often fosters an “Us vs. Them” mentality. This divide is not only unhealthy, it erodes collaboration, trust, and overall organizational effectiveness, creating friction that can stall progress at every level.

How to Avoid Bad Corporate Subcultures that Can Sabotage Success

1. Know Your Current Culture
   Before directing how people should think, behave, or work, invest the time to thoroughly assess your organization’s existing culture. Too many leaders attempt culture change without a clear understanding of the current dynamics—and the results often fall short.
2. Recognize Subcultures
   Some teams naturally develop subcultures that complement the broader organizational culture. Effective leaders acknowledge these nuances, allowing groups to operate in ways that fit their specific roles and objectives while still aligning with the company’s core values.
3. Watch for Dysfunction
   Be alert for subcultures that become disruptive or confrontational. Patterns of conflict, misaligned priorities, or declining performance are signals to investigate. In most cases, fostering team interdependence and collaboration is the key to maintaining high performing teams.
4. Change the Dynamic
   A toxic subculture cannot be ignored. Leaders must act decisively — whether through management changes, team restructuring, or targeted interventions — to prevent harmful behaviors from taking root. Addressing issues early ensures that every part of the organization contributes positively to its strategic goals.

The Bottom Line
Corporate subcultures are a natural part of any organization. Exceptional leaders recognize their value, accommodating them when they support team identity and performance—while acting decisively if they hinder strategic objectives or compromise the overall health of the company’s culture.

To learn more about how to align cultures to create high performance, download The 3 Levels of a High Performance Culture Leaders Must Get Right

Tristam Brown

Tristam Brown is an executive business consultant and organizational development expert with more than three decades of experience helping organizations accelerate performance, build high-impact teams, and turn strategy into execution. As CEO of LSA Global, he works with leaders to get and stay aligned™ through research-backed strategy, culture, and talent solutions that produce measurable, business-critical results. See full bio.