Corporate culture represents the key factor to a success and longevity of a company and it is a tacit social order of an organization. It is trying to successfully shape attitudes and behaviors in a wide-ranging and durable way. It’s everywhere and anywhere and it impacts company operations, strategic planning, and ultimately the overall performance of your business.
It is first mentioned by Elliott Jacques, a corporate psychologist, researcher, and consultant, and he identified the phenomenon and labeled it in his 1951 book, The Changing Culture of a Factory.
All types of companies, for-profit and non-profit or even government agencies have that sense of self that we now call corporate culture.
Importance
Culture is a group phenomenon, and it cannot simply be shown through the average of individual characteristics. Every company has its own vision and mission. Leaders are there to develop a set of rules for achieving the aforementioned visions, and employees are there to help incorporate those by bringing their diverse abilities and skills to the table. In order to reach its goal, the company’s aim is to bring the employees together and help drive everyone in the organization forward.
Corporate culture and its role
- Good company culture propels employees’ engagement ratings and makes them feel that their contribution is valuable.
- Employees will look for companies and organizations where they fit and feel valued and heard, thus that way they will decrease the turnover rates.
- Before joining a company, job seekers will evaluate the corporate culture and will base their decision on that in order to stay and work there.
Policies and core values
On one hand company culture is influenced by the rules, policies, and procedures that are established by a business owner, and on the other hand, we have ideas that set the tone for corporate culture by espousing the company’s core values. Some of the most popular core values include honesty, accountability, passion, fun, diversity, and leadership.
Just discussing and promoting these rules does not impact the corporate culture itself, but that happens when employees demonstrate and live the values in their day-to-day interactions.
An organization’s culture also greatly determines how it reacts to change, evolution and crises.
Company culture promoted through internal communication
Building a sense of organizational culture and implementing diversity initiatives isn’t easy. Everything starts with effective internal communications, thus creating an effective internal communication strategy will propel positivity and relations in an organization. When companies create opportunities to collaborate, embrace different perspectives and promote employee well-being, everyone benefits.
Corporate Culture and its types
There are 4 main types of corporate culture considered the most prominent ones
Clan culture
Clan culture- in other terms also known as collaborative culture, and it revolves around teamwork. Managers are there to guide, help, and advise and not to be authoritarian “bosses’’ that only give instructions without any assistance. There are some advantages and disadvantages of this type. There is for example mutual enjoyment while working together, but it is also very difficult to maintain this type as the company grows.
Adhocracy culture
Adhocracy culture- its primary goal is risk-taking, so employees are highly encouraged to take risks and try to find the ‘next big thing’. This type of corporate culture is usual for start-up companies. There are some advantages and disadvantages of this type. High risk means high reward and greater potential. It can also mean a lack of stability due to the number of new initiatives.
Market culture
Market culture- a results-oriented bent that values competition and achievement. There are some advantages and disadvantages of this type too. A competitive atmosphere encourages employees to work hard and reach goals. It can also put a lot of pressure to perform well and they can feel stressed.
Hierarchy culture
Hierarchy culture- a hierarchy culture (also known as a “control culture”) applies to work environments that are more structured and process-oriented. There’s no space for a lot of freethinking and innovation. There are some advantages and disadvantages of this type. The company remains stable, but the work culture is very inflexible.
Examples of successful corporate cultures
A couple of companies around the world have articulated the kind of corporate culture they want to have. And then built their objectives around it very successfully.
- Google centers its culture on fun and collaborative environment
- IKEA, that has a corporate culture based on equality and inclusiveness
- Zappos uses an open management philosophy called Holacracy, where authority and decision-making is distributed through a holarchy of self-organizing teams.
The Link Between Culture and Outcomes
Building and maintaining a corporate culture can happen organically. Corporate cultures that focus on people tend to have a strategy that relies upon experimentation, risk-taking, and flexibility. Corporate cultures that focus on processes and performance tend to have a strategy that relies upon maximizing internal efficiencies to execute performance goals.
Other Key Components of a Great Corporate Culture
Mutual respect
Mutual respect– if the staff does not respect each other, team members will believe that their culture is not one worth contributing to. Conflicts are encouraged in healthy workplaces, but mutual respect is essential to allowing a culture to grow and thrive.
Individual and team trust
Individuals and teams trust-your a company’s potential will hit the roof if there is trust flowing throughout the organization. Without trust, the corporate culture vanishes little by little every day.
Decision-making
Decision-making– the practice where some decision-making channels exist aside from leadership committees is a great sign of trust.
Results-orientation
Results-orientation-Nothing is more powerful than completing large projects as a team. When a results-driven mindset fuels the company, it promotes organizational processes and programs that matter.
Get Employees Involved in the Process
Get Employees Involved in the Process– it is difficult to measure and track corporate culture’s effectiveness. One way to improve it is by engaging the employees in the process. You can also collect feedback by using employee engagement surveys.
Developing a culture of learning
Developing a culture of learning – The learning is geared toward improving employee performance and supporting personal and professional growth. When team members grow within a learning culture, they develop improvement mindsets and try to improve performance and share knowledge with their teams, which can positively impact the health and future success of an organization.
Meaning and purpose
Meaning and purpose- more than any other benefits, your employees want to know that the role they play in your organization matters significantly.
Approachable leadership team
Approachable leadership team – when a newly hired employee can freely speak their mind in front of executive team members, it states that everyone in the company is together involved in all the processes.
Safety
Safety- your employees and team members prefer physical safety and must be convinced that they are valued, safe, and cared for at any point in time.
Understanding company culture is one aspect of being a successful employer. Building it is another.
To build a solid company culture, you must take a holistic and integrated approach. Understanding what defines your company’s culture and how you can develop and nurture that culture will help you to build a great place to work and a growing and thriving business.
Leading companies with culture might be one of the most important sources of sustainable competitive advantages.
