Company Culture: Definition, Benefits and Strategies

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In the context of companies, culture is a word thrown around on entrepreneurship blogs and business management articles. If your employer is a young company or a modern startup, it might even be talked about openly in the office. What is company culture, though?

Company culture is a term that broadly refers to the personality of a company that defines the environment in which employees work. It includes facets like the company’s mission, its goals, values, ethics, and the expectations it has from its employees.

The Harvard Business Review tells us that culture guides employees’ discretionary behaviour, where there is no handbook for a particular situation. When unprecedented circumstances arise, like a new type of service request, employees are consciously and subconsciously influenced by the work culture of the company while handling them. It tells employees whether and how to take new ideas to the boss, and whether problems are to be hidden or surfaced. When the CEO is absent in the room, which is most of the time, culture tells us, employees, what to do.

Strategies, tactics and qualities may differ from company to company, but the general aim is to make the working environment more productive and conducive to happiness. Employees are also more likely to enjoy their time in the workplace when they fit in with the company culture and develop strong relationships with coworkers. This can also benefit employers because workplace happiness is directly tied to employee longevity and loyalty.

While many businesses have a relatively traditional and formal management style, some have a team-based culture with employee participation on all levels. Newer companies are on the rise where the workplace is casual; rules and regulations are few. 

With a traditional management style, there may not be opportunities to advance without going through a promotion, transfer or some formal process, since responsibilities are clearly defined. At a casual workplace, employees can often take on new projects or roles besides their fixed ones. 

Howard H. Stevenson, described by Forbes magazine as Harvard Business School’s “lion of entrepreneurship”, believes that maintaining an effective culture is so important that it, in fact, trumps even strategy.

From an employer’s perspective, an organizational culture that is progressive and allows freedom has greater chances of attracting talented people. A rigid and regressive structure, on the other hand, attracts mediocre employees leading to mediocre performance and greater turnover.

Companies all over the world have evolved several strategies to build and maintain a good, strong and open company culture. In fact, hiring processes which were formerly influenced by expertise and experience related criteria are now more rigid since they include criteria that relate to the company culture. This is due to the fact that they believe that employees represent their companies even outside of work and influence perceptions about the company and their image in the public. Employees who share their company’s values are thus preferred over those who are simply qualified and can perform well.

Company culture also decides how much of an impact the employees of a company have on its direction and outlook. Generally, companies tend to limit the discretionary freedom of their employees as they get bigger. Key decisions involve to lesser degrees the employees and more the upper management. Employees simply start following instructions, taking orders and performing tasks.

Employees can identify deliberate attempts by a company to facilitate a working company culture when they come up with events, programs, workshops, team lunches, games, health-clubs, etc. Additionally, a company attempting to immerse its employees in a collective goal and motivate them towards a larger purpose is a classic sign of a belief in strong workplace culture. 

In other words, trust in the employees and encouraging employee ownership are the pillars of good company culture. 

The Society for Human Resource Management states that “The key to a successful organization is to have a culture based on a strongly held and widely shared set of beliefs that are supported by strategy and structure. When an organization has a strong culture, three things happen: Employees know how top management wants them to respond to any situation, employees believe that the expected response is the proper one, and employees know that they will be rewarded for demonstrating the organization’s values.”

It also stresses on the importance of having a strong organizational culture, fostered by HR to ensure its high-performance, continuity and success. According to the society, an effective culture is a common denominator among the most successful companies. Ineffective culture can also bring down a company and its leadership, leading to employee disengagement, poor customer relations and lower profits, it adds.

It clearly defines the role of HR in this context. Being a role model for a company’s beliefs, HR must reinforce organizational values, ensuring that ethics are defined, understood and practised, enabling feedback channels, providing continuous training, sustaining reward and recognition systems, encouraging empowerment and teams, recognizing and solving individual and organizational problems and issues.

Providing a sort of glossary in relation to company culture, it gives terms like aggressive, customer-focused, innovative, fun, ethical, research-driven, technology-driven, process-oriented, hierarchical, family-friendly and risk-taking. 

A company’s values largely determine its ensuing culture. Whether it is outcome-oriented, people-oriented or team-oriented, things that it emphasizes and rewards, attention to detail, stability, innovation, and so on form some of these values. These values can manifest in several ways – big and small – that can tilt the organization’s culture and even lead to subcultures within.

Thus, considerations of company culture are paramount for both an employer and employee; care must be taken from both sides to ensure there is a fit before and during employment.

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