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Organizational culture refers to a system of shared assumptions, values, and beliefs that define for a group of people who they are and how they do things. Organizational Socialization is the process by which organizations maintain and pass on values to new organizational members. Why does organizational culture matters? 1. Organizations that have a strong culture benefit from it as a competitive advantage. 2. Culture, shared values within organizations may be related to increased performance. 3. It is an effective control mechanism for dictating employee behavior than organizational rules and regulations.