This master thesis covers the topic of generational differences and its role for shaping organizational culture and development of subcultures in a public hospital. Nowadays, when our surroundings and especially technology is constantly changing, we have enormous quantity of information emerging on daily basis that change the way we do things, live our lives and do our work. Some people, especially generations of Millennials (born 1981 – 1996) or Generation Z (born 1997 – 2012) who grew up with internet, computers and smartphones will easily adapt to the challenges that the working and social environment puts on them. New information systems, infrastructures, fast changing business processes, different way of communication are not too big problem for these “younger” employees, but for the majority of people who are older: Baby Boomers (born 1946 – 1964) or Generation X (born 1965 – 1980), new changes in their working environment are a big problem; and that problem is not just theirs- it becomes a problem for whole organization, especially for new employees who look up to the “older” colleges. Many of newly employed young people are “forced” to take on patterns of behavior and working habits of their senior colleges because senior employees, especially in public organizations, have authority based on their tenure so automatically, they think that their way of doing things is the best. This reflects on the entire organizational culture, work output and creates grounds for the emerging subcultures. In this master thesis is explored the generation gap and the views of different generations on current and preferred organizational culture. Data is collected with an on-line distributed OCAI questionnaire developed by Cameron and Quinn (2011). Respondents are employees with full-time employment in a public hospital, including both medical and non-medical employees. The results show what kind of organizational culture has formed in the hospital and what kind of culture most of employee’s desire. Additionally, both existing and preferred culture are analyzed by taking into consideration employee generations, to check the role of generations in culture perpetuation and creation of subcultures. The findings show that Clinical hospital center has a strong culture, dominantly hierarchy culture.